sv8pos
As
filed with the Securities and Exchange Commission on May 8, 2008
Registration No. 33-88962
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE
AMENDMENT NO. 1
TO
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
COMSTOCK RESOURCES, INC.
(Exact name of registrant as specified in its charter)
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Nevada
(State or other jurisdiction of
incorporation or organization)
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94-1667468
(I.R.S. Employer
Identification No.) |
5300 Town and Country Boulevard
Suite 500
Frisco, Texas 75034
(Address of Principal Executive Offices) (Zip Code)
Comstock Resources, Inc. 401(k) Profit Sharing Plan
(Full title of the plan)
M. Jay Allison
President and Chief Executive Officer
5300 Town and Country Blvd., Suite 500
Frisco, Texas 75034
(972) 668-8800
(Name, address and telephone number, including area code, of agent for service)
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See the definitions of
large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2
of the Exchange Act. (Check one):
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Large accelerated filer o
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Accelerated filer þ |
Non-accelerated filer o
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Smaller reporting company o |
(Do not check if a smaller reporting company) |
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EXPLANATORY NOTE
The Registration Statement on Form S-8 (Registration No. 33-88962) (the Registration
Statement) of Comstock Resources, Inc., a Nevada corporation (Comstock), pertaining to the
registration of shares of common stock, par value $0.50 per share, of Comstock (the Comstock
Common Stock) issuable under the terms of Comstocks 401(k) Profit Sharing Plan (the Plan), to
which this Post-Effective Amendment No. 1 relates, was originally filed with the Securities and
Exchange Commission on January 30, 1995.
We are amending the Form S-8 because of an amendment to the Plan. We have included as Exhibit
4.1 to this Post-Effective Amendment No. 1 to the Registration Statement the current version of the
Plan, amended and restated, effective as of April 1, 2008.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has
reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has
duly caused this Post-Effective Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Frisco, State of Texas, on May
7, 2008.
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COMSTOCK RESOURCES, INC.
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By: |
/s/ M. Jay Allison
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M. Jay Allison |
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President and Chief Executive Officer
(Principal Executive Officer) |
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Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been
signed by the following persons in the capacities and on the dates indicated.
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Signature |
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Title |
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Date |
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/s/ M. Jay Allison
M. Jay Allison
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President, Chief Executive Officer,
Chairman of the Board of Directors,
Director (Principal Executive Officer)
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May 7, 2008
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/s/ Roland O. Burns
Roland O. Burns
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Senior Vice President, Chief Financial
Officer, Director (Principal Financial
and Accounting Officer)
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May 7, 2008
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Director
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May 7, 2008
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/s/ David W. Sledge
David W. Sledge
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Director
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May 7, 2008
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*By: /s/ M. Jay Allison
M. Jay Allison
Attorney-in-Fact
EXHIBITS
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Exhibit No. |
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Description |
4.1*
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Comstock Resources, Inc. 401(k) Profit Sharing Plan |
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24.1+
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Power of Attorney of certain officers and directors of the Registrant |
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* |
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Filed herewith. |
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Previously filed as Exhibit 24.1 to the Registration Statement on Form S-8 filed with the Securities and
Exchange Commission by the Registrant on January 30, 1995. |
exv4w1
Exhibit 4.1
DEFINED CONTRIBUTION
PLAN DOCUMENT
ADP, Inc.
Retirement Services Division
Louisville, KY
Mid Market
Table of Contents
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TAB |
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ARTICLE I DEFINITIONS |
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1 |
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ARTICLE II ADMINISTRATION |
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15 |
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2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER |
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15 |
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2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY |
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16 |
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2.3 ALLOCATION AND DELEGATION OF RESPONSIBILITIES |
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16 |
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2.4 POWERS AND DUTIES OF THE ADMINISTRATOR |
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16 |
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2.5 RECORDS AND REPORTS |
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17 |
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2.6 APPOINTMENT OF ADVISERS |
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17 |
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2.7 INFORMATION FROM EMPLOYER |
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18 |
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2.8 PAYMENT OF EXPENSES |
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18 |
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2.9 MAJORITY ACTIONS |
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18 |
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2.10 CLAIMS PROCEDURE |
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18 |
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ARTICLE III ELIGIBILITY |
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19 |
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3.1 CONDITIONS OF ELIGIBILITY |
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19 |
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3.2 EFFECTIVE DATE OF PARTICIPATION |
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19 |
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3.3 DETERMINATION OF ELIGIBILITY |
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19 |
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3.4 TERMINATION OF ELIGIBILITY |
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20 |
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3.5 REHIRED EMPLOYEES AND BREAKS IN SERVICE |
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20 |
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3.6 ELECTION NOT TO PARTICIPATE |
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21 |
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3.7 CONTROL OF ENTITIES BY OWNER-EMPLOYEE |
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21 |
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ARTICLE IV CONTRIBUTION AND ALLOCATION |
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21 |
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4.1 FORMULA FOR DETERMINING EMPLOYERS CONTRIBUTION |
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21 |
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4.2 TIME OF PAYMENT OF EMPLOYERS CONTRIBUTION |
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21 |
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4.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS |
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22 |
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4.4 MAXIMUM ANNUAL ADDITIONS |
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27 |
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4.5 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS |
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31 |
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4.6 ROLLOVERS |
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32 |
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4.7 PLAN-TO-PLAN TRANSFERS FROM QUALIFIED PLANS |
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33 |
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4.8 VOLUNTARY EMPLOYEE CONTRIBUTIONS |
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34 |
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4.9 QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTIONS |
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34 |
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4.10 DIRECTED INVESTMENT ACCOUNT |
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35 |
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4.11 INTEGRATION IN MORE THAN ONE PLAN |
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36 |
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4.12 QUALIFIED MILITARY SERVICE |
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37 |
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ARTICLE V VALUATIONS |
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37 |
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5.1 VALUATION OF THE TRUST FUND |
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37 |
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5.2 METHOD OF VALUATION |
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37 |
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ARTICLE VI DETERMINATION AND DISTRIBUTION OF BENEFITS |
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37 |
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6.1 DETERMINATION OF BENEFITS UPON RETIREMENT |
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37 |
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6.2 DETERMINATION OF BENEFITS UPON DEATH |
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37 |
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6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY |
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39 |
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6.4 DETERMINATION OF BENEFITS UPON TERMINATION |
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39 |
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6.5 DISTRIBUTION OF BENEFITS |
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6.6 DISTRIBUTION OF BENEFITS UPON DEATH |
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45 |
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6.7 TIME OF DISTRIBUTION |
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6.8 DISTRIBUTION FOR MINOR OR INCOMPETENT BENEFICIARY |
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6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN |
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6.10 IN-SERVICE DISTRIBUTION |
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49 |
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TAB |
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6.11 ADVANCE DISTRIBUTION FOR HARDSHIP |
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6.12 SPECIAL RULE FOR CERTAIN PROFIT SHARING PLANS |
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6.13 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION |
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6.14 DIRECT ROLLOVERS |
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6.15 TRANSFER OF ASSETS FROM A MONEY PURCHASE PLAN |
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6.16 ELECTIVE TRANSFERS OF BENEFITS TO OTHER PLANS |
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52 |
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ARTICLE VII TRUSTEE; LIFE INSURANCE; LOANS TO PARTICIPANTS |
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53 |
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7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE |
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53 |
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7.2 LIFE INSURANCE |
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7.3 LOANS TO PARTICIPANTS |
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54 |
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ARTICLE VIII AMENDMENT, TERMINATION AND MERGERS |
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56 |
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8.1 AMENDMENT |
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8.2 TERMINATION |
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8.3 MERGER, CONSOLIDATION OR TRANSFER OF ASSETS |
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57 |
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ARTICLE IX TOP HEAVY PROVISIONS |
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9.1 TOP HEAVY PLAN REQUIREMENTS |
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9.2 DETERMINATION OF TOP HEAVY STATUS |
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57 |
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ARTICLE X MISCELLANEOUS |
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59 |
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10.1 EMPLOYER ADOPTIONS |
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10.2 PARTICIPANTS RIGHTS |
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59 |
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10.3 ALIENATION |
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10.4 CONSTRUCTION OF PLAN |
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60 |
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10.5 GENDER AND NUMBER |
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60 |
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10.6 LEGAL ACTION |
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10.7 PROHIBITION AGAINST DIVERSION OF FUNDS |
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60 |
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10.8 EMPLOYERS AND TRUSTEES PROTECTIVE CLAUSE |
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10.9 INSURERS PROTECTIVE CLAUSE |
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61 |
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10.10 RECEIPT AND RELEASE FOR PAYMENTS |
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61 |
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10.11 ACTION BY THE EMPLOYER |
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61 |
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10.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY |
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61 |
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10.13 HEADINGS |
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10.14 APPROVAL BY INTERNAL REVENUE SERVICE |
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62 |
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10.15 UNIFORMITY |
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62 |
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10.16 PAYMENT OF BENEFITS |
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62 |
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ARTICLE XI PARTICIPATING EMPLOYERS |
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62 |
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11.1 ELECTION TO BECOME A PARTICIPATING EMPLOYER |
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11.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS |
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63 |
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11.3 DESIGNATION OF AGENT |
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63 |
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11.4 EMPLOYEE TRANSFERS |
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63 |
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11.5 PARTICIPATING EMPLOYERS CONTRIBUTION AND FORFEITURES |
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63 |
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11.6 AMENDMENT |
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63 |
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11.7 DISCONTINUANCE OF PARTICIPATION |
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64 |
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11.8 ADMINISTRATORS AUTHORITY |
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64 |
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11.9 PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE |
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64 |
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ARTICLE XII CASH OR DEFERRED PROVISIONS |
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64 |
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12.1 FORMULA FOR DETERMINING EMPLOYERS CONTRIBUTION |
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64 |
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12.2 PARTICIPANTS SALARY REDUCTION ELECTION |
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65 |
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12.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS |
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67 |
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12.4 ACTUAL DEFERRAL PERCENTAGE TESTS |
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69 |
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12.5 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS |
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71 |
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TAB |
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12.6 ACTUAL CONTRIBUTION PERCENTAGE TESTS |
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74 |
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12.7 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS |
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77 |
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12.8 SAFE HARBOR PROVISIONS |
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80 |
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12.9 ADVANCE DISTRIBUTION FOR HARDSHIP |
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82 |
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iii
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 ACP means the Actual Contribution Percentage determined pursuant to Section 12.6(e).
1.2 Act means the Employee Retirement Income Security Act of 1974, as it may be amended from
time to time.
1.3 ADP means the Actual Deferral Percentage determined pursuant to Section 12.4(e).
1.4 Administrator means the Employer unless another person or entity has been designated by
the Employer pursuant to Section 2.2 to administer the Plan on behalf of the Employer.
1.5 Adoption Agreement means the separate agreement which is executed by the Employer and
sets forth the elective provisions of this Plan and Trust as specified by the Employer.
1.6 Affiliated Employer means any corporation which is a member of a controlled group of
corporations (as defined in Code Section 414(b)) which includes the Employer; any trade or business
(whether or not incorporated) which is under common control (as defined in Code Section 414(c))
with the Employer; any organization (whether or not incorporated) which is a member of an
affiliated service group (as defined in Code Section 414(m)) which includes the Employer; and any
other entity required to be aggregated with the Employer pursuant to Regulations under Code Section
414(o).
1.7 Anniversary Date means the last day of the Plan Year.
1.8 Annuity Starting Date means, with respect to any Participant, 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.
1.9 Beneficiary means the person (or entity) to whom all or a portion of a deceased
Participants interest in the Plan is payable, subject to the restrictions of Sections 6.2 and 6.6.
1.10 Code means the Internal Revenue Code of 1986, as amended.
1.11 Compensation with respect to any Participant means one of the following as elected in
the Adoption Agreement:
(a) Information required to be reported under Code Sections 6041, 6051 and 6052 (Wages,
tips and other compensation as reported on Form W-2). Compensation means wages, within the
meaning of Code Section 3401(a), and all other payments of compensation to an Employee by
the Employer (in the course of the Employers trade or business) for which the Employer is
required to furnish the Employee a written statement under Code Sections 6041(d), 6051(a)(3)
and 6052 Compensation must be determined without regard to any rules under Code Section
3401(a) that limit the remuneration included in wages based on the nature or location of the
employment or the services performed (such as the exception for agricultural labor in Code
Section 3401(a)(2)).
(b) Code Section 3401(a) Wages. Compensation means an Employees wages within the
meaning of Code Section 3401(a) for the purposes of income tax withholding at the source but
determined without regard to any rules that limit the remuneration included in wages based
on the nature or location of the employment or the services performed (such as the exception
for agricultural labor in Code Section 3401(a)(2)).
(c) 415 Safe-Harbor Compensation. Compensation means 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 salespersons, compensation for
services on the basis of a percentage of profits, commissions on insurance premiums, tips,
bonuses, fringe benefits, and reimbursements, or other expense allowances under a
nonaccountable plan (as described in Regulation 1.62-2(c))), and excluding the following:
(1) Employer contributions to a plan of deferred compensation which are not
includible in the Employees gross income for the taxable year in which contributed,
or Employer contributions under a simplified employee pension plan to the extent
such contributions are excludable from the Employees gross income, 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 receive special tax benefits, or contributions made by the
Employer (whether
or not under a salary reduction agreement) towards the purchase of an annuity contract
described in Code Section 403(b) (whether or not the contributions are actually excludable from the gross income
of the
Employee).
However, Compensation for any SelfEmployed Individual shall be equal to Earned Income.
Compensation shall include only that Compensation which is actually paid to the Participant during
the Plan Year.
Notwithstanding the above, unless otherwise specifically elected in the Adoption Agreement,
Compensation shall include all of the following types of elective contributions and all of the
following types of deferred compensation:
(a) Elective contributions that are made by the Employer on behalf of a Participant
that are not includible in gross income under Code Sections 125, 402(e)(3), 402(h)(1 )(B),
403(b), and for Plan Years beginning on or after January 1,2001 (or as of a date, no earlier
than January 1, 1998, as specified in an addendum to the Adoption Agreement), 132(f)(4);
(b) Compensation deferred under an eligible deferred compensation plan within the
meaning of Code Section 457(b); and
(c) Employee contributions (under governmental plans) described in Code Section
414(h)(2) that are picked up by the employing unit and thus are treated as Employer
contributions.
For Plan Years beginning on or after January 1, 1989, and before January 1, 1994, the annual
Compensation of each Participant taken into account for determining all benefits provided under the
Plan for any Plan Year shall not exceed $200,000. This limitation shall be adjusted by the
Secretary at the same time and in the same manner as under Code Section 415(d), except that the
dollar increase in effect on January 1 of any calendar year is effective for Plan Years beginning
in such calendar year and the first adjustment to the $200,000 limitation is effective on January
1, 1990.
2
For Plan Years beginning on or after January 1, 1994, Compensation in excess of $150,000 (or
such other amount provided in the Code) shall be disregarded for all purposes other than for
purposes of salary deferral elections. Such amount shall be adjusted by the Commissioner for
increases in the cost-of-living in accordance with Code Section 401(a)(17)(B). The cost-of-living
adjustment in effect for a calendar year applies to any determination period beginning in such
calendar year. If a determination period consists of fewer than twelve (12) months, the $150,000
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 twelve (12).
If Compensation for any prior determination period is taken into account in determining a
Participants 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.
Notwithstanding the foregoing, except as otherwise elected in a non-standardized Adoption
Agreement, the family member aggregation rules of Code Sections 401 (a)(17) and 414(q)(6) as in
effect prior to the enactment of the Small Business Job Protection Act of 1996 shall not apply to
this Plan effective with respect to Plan Years beginning after December 31, 1996.
If, in the Adoption Agreement, the Employer elects to exclude a class of Employees from the
Plan, then Compensation for any Employee who becomes eligible or ceases to be eligible to
participate during a determination period shall only include Compensation while the Employee is an
Eligible Employee.
If, in connection with the adoption of any amendment, the definition of Compensation has been
modified, then, except as otherwise provided herein, for Plan Years prior to the Plan Year which
includes the adoption date of such amendment, Compensation means compensation determined pursuant
to the terms of the Plan then in effect.
Compensation shall not include any amount of severance pay or payments for accrued vacation
received after a Participant separates from service from the Employer (and any Participating
Affiliates) and such amounts shall be disregarded for all purposes under the Plan.
1.12 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 contract purchased hereunder, the Plan provisions shall
control.
1.13 Designated Investment Alternative means a specific investment identified by name by the
Employer (or such other Fiduciary who has been given the authority to select investment options) as
an available investment under the Plan to which Plan assets may be invested by the Trustee pursuant
to the investment direction of a Participant.
1.14 Directed Investment Option means a Designated Investment Alternative and any other
investment permitted by the Plan and the Participant Direction Procedures to which Plan assets may
be invested pursuant to the investment direction of a Participant.
1.15 Early Retirement Date means the date specified in the Adoption Agreement on which a
Participant or Former Participant has satisfied the requirements specified in the Adoption
Agreement (Early Retirement Age). A Participant shall become fully Vested upon satisfying such
requirements if the Participant is still employed at the Early Retirement Age.
A Former Participant who separates from service after satisfying any service requirement but
before satisfying the age requirement for Early Retirement Age and who thereafter reaches the age
requirement contained herein shall be entitled to receive benefits under this Plan (other than any
accelerated vesting and allocations of Employer Contributions) as though the requirements for Early
Retirement Age had been satisfied.
3
1.16 Earned Income means 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 made by the Employer to a qualified plan to the extent deductible under Code Section
404. In addition, net earnings shall be determined with regard to the deduction allowed to the
taxpayer by Code Section 164(f), for taxable years beginning after December 31, 1989.
1.17 Elective Deferrals means the Employers contributions to the Plan that are made
pursuant to a Participants deferral election pursuant to Section 12.2, excluding any such amounts
distributed as excess annual additions pursuant to Section 4.5. Elective Deferrals shall be
subject to the requirements of Sections 12.2(b) and 12.2(c) and shall, except as otherwise provided
herein, be required to satisfy the nondiscrimination requirements of
Regulation 1.401(k)-1 (b)(2),
the provisions of which are specifically incorporated herein by reference.
1.18 Eligible Employee means any Eligible Employee as elected in the Adoption Agreement and
as provided herein. With respect to a non-standardized Adoption Agreement, an individual shall not
be an Eligible Employee if such individual is not reported on the payroll records of the Employer
as a common law employee. In particular, it is expressly intended that individuals not treated as
common law employees by the Employer on its payroll records are not Eligible Employees and are
excluded from Plan participation even if a court or administrative agency determines that such
individuals are common law employees and not independent contractors. Furthermore, with respect to
a non-standardized Adoption Agreement, Employees of an Affiliated Employer will not be treated as
Eligible Employees prior to the date the Affiliated Employer adopts the Plan as a Participating
Employer.
Except as otherwise provided in this paragraph, if the Employer does not elect in the Adoption
Agreement to include Employees who became Employees as the result of a Code Section 41 0(b)(6)(C)
transaction, then such Employees will only be Eligible Employees after the expiration of the
transition period beginning on the date of the transaction and ending on the last day of the first
Plan Year beginning after the date of the transaction. A Code Section 410(b)(6)(C) transaction is
an asset or stock acquisition, merger, or similar transaction involving a change in the Employer of
the Employees of a trade or business that is subject to the special rules set forth in Code Section
41 0(b)(6)(C). However, regardless of any election made in the Adoption Agreement, if a separate
entity becomes an Affiliated Employer as the result of a Code Section 41 0(b)(6)(C) transaction,
then Employees of such separate entity will not be treated as Eligible Employees prior to the
date the entity adopts the Plan as a Participating Employer or, with respect to a standardized
Adoption Agreement, if earlier, the expiration of the transition period set forth above.
If, in the Adoption Agreement, the Employer elects to exclude union employees, then Employees
whose employment is governed by a collective bargaining agreement between the Employer and
employee representatives under which retirement benefits were the subject of good faith
bargaining and if two percent (2%) or less of the Employees covered pursuant to that agreement are
professionals as defined in Regulation 1.41 0(b)-9, shall not be eligible to participate in this
Plan. For this purpose, the term employee representatives does not include any organization more
than half of whose members are employees who are owners, officers, or executives of the Employer.
If, in the Adoption Agreement, the Employer elects to exclude non-resident aliens, then
Employees who are non-resident aliens (within the meaning of Code Section 7701(b)(1)(B)) who
received no earned income (within the meaning of Code Section 91 1(d)(2)) from the Employer which
constitutes income from sources within the United States (within the meaning of Code Section
861(a)(3)) shall not be eligible to participate in this Plan.
1.19 Employee means any person who is employed by the Employer. The term Employee shall
also include any person who is an employee of an Affiliated Employer and any Leased Employee deemed
to be an Employee as provided in Code Section 4 14(n) or (o).
1.20 Employer means the entity specified in the Adoption Agreement, any successor which
shall maintain this Plan and any predecessor which has maintained this Plan. In addition, unless
the context means otherwise, the term Employer shall include any Participating Employer (as
defined in Section 11.1) which shall adopt this Plan.
4
1.21 Excess Aggregate Contributions means, with respect to any Plan Year, the excess of:
(a) The aggregate Contribution Percentage Amounts (as defined in Section 12.6)
actually made on behalf of Highly Compensated Participants for such Plan Year and taken into
account in computing the numerator of the ACP, over
(b) The maximum Contribution Percentage Amounts permitted by the ACP test in Section
12.6 (determined by hypothetically reducing contributions made on behalf of Highly
Compensated Participants in order of their Contribution Percentages beginning with the
highest of such percentages).
Such determination shall be made after first taking into account corrections of any Excess
Deferrals pursuant to Section 12.2 and then taking into account adjustments of any Excess
Contributions pursuant to Section 12.5.
1.22 Excess Compensation means, with respect to a Plan that is integrated with Social
Security (permitted disparity), a Participants Compensation which is in excess of the integration
level elected in the Adoption Agreement.
However, if Compensation is based on less than a twelve (12) month determination period,
Excess Compensation shall be determined by reducing the integration level by a fraction, the
numerator of which is the number of full months in the short period and the denominator of which is
twelve (12).
1.23 Excess Contributions means, with respect to any Plan Year, the excess of:
(a) The aggregate amount of Employer contributions actually made on behalf of Highly
Compensated Participants for such Plan Year and taken into account in computing the
numerator of the ADP, over
(b) The maximum amount of such contributions permitted by the ADP test in Section 12.4
(determined by hypothetically reducing contributions made on behalf of Highly Compensated
Participants in order of the actual deferral ratios, beginning with the highest of such
ratios).
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 Deferrals previously distributed to such affected Highly Compensated
Participant for the Participants taxable year ending with or within such Plan Year.
1.24 Excess Deferrals means, with respect to any taxable year of a Participant, those
elective deferrals (within the meaning of Code Section 402(g)) that are includible in the
Participants gross income under Code Section 402(g) to the extent such Participants elective
deferrals for the taxable year exceed the dollar limitation under such Code Section. Excess
Deferrals 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 Participants taxable year in which the Excess Deferral was made. Additionally,
for purposes of Sections 4.3(f) and 9.2, Excess Deferrals shall continue to be treated as Employer
contributions even if distributed pursuant to Section 12.2(e). However, Excess Deferrals of
Non-Highly Compensated Participants are not taken into account for purposes of Section 12.4
1.25 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.
1.26 Fiscal Year means the Employers accounting year.
5
1.27 Forfeiture means, with respect to a Former Participant who has severed employment, that
portion of the Participants Account that is not Vested.
A Forfeiture will occur on the earlier of:
(a) The last day of the Plan Year in which a Former Participant who has severed
employment with the Employer incurs five (5) consecutive 1-Year Breaks in Service, or
(b) The distribution of the entire Vested portion of the Participants Account of a
Former Participant who has severed employment with the Employer. For purposes of this
provision, if the Former Participant has a Vested benefit of zero, then such Former
Participant shall be deemed to have received a distribution of such Vested benefit as of the
year in which the severance of employment occurs.
The term Forfeiture shall also include amounts deemed to be Forfeitures pursuant to any other
provision of this Plan.
1.28 Former Participant means a person who has been a Participant, but who has ceased to be
a Participant for any reason.
1.29 414(s) Compensation means any definition of compensation that satisfies the
nondiscrimination requirements of Code Section 414(s) and the Regulations thereunder. The period
for determining 414(s) Compensation must be either the Plan Year or the calendar year ending with
or within the Plan Year. An Employer may further limit the period taken into account to that part
of the Plan Year or calendar year in which an Employee was a Participant in the component of the
Plan being tested. The period used to determine 4 14(s) Compensation must be applied uniformly to
all Participants for the Plan Year.
1.30 415 Compensation means, with respect to any Participant, such Participants (a) Wages,
tips and other compensation on Form W-2, (b) Section 3401(a) wages or (c) 415 safe-harbor
compensation as elected in the Adoption Agreement for purposes of Compensation. 415 Compensation
shall be based on the hill Limitation Year regardless of when participation in the Plan commences.
Furthermore, regardless of any election made in the Adoption Agreement, with respect to Limitation
Years beginning after December 31, 1997, 415 Compensation shall include any elective deferral (as
defined in Code Section 402(g)(3)) and any amount which is contributed or deferred by the Employer
at the election of the Participant and which is not includible in the gross income of the
Participant by reason of Code Section 125, 457, and, for Limitation Years beginning on or after
January 1, 2001 (or as of a date, no earlier than January 1, 1998, as specified in an addendum to
the Adoption Agreement), 132(f)(4). For Limitation Years beginning prior to January 1, 1998, 415
Compensation shall exclude such amounts.
Except as otherwise provided herein, 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 terms of the Plan then in effect.
1.31 Highly Compensated Employee means, an Employee described in Code Section 414(q) and the
Regulations thereunder, and generally means any Employee who:
(a) was a five percent (5%) owner as defined in Section 1.37(c) at any time during
the determination year or the look-back year; or
(b) for the look-back year had 415 Compensation from the Employer in excess of
$80,000 and was in the Top-Paid Group for the look-back year. The $80,000 amount is
adjusted at the same time and in the same manner as under Code Section 415(d), except that
the base period is the calendar quarter ending September 30, 1996.
If this Plan is an amendment and restatement of an existing plan into the form of this
prototype plan, for Plan Years commencing after December 31, 1996 but prior to the Plan Year in
which the original amendment and
6
restatement occurs, as reflected in the Adoption Agreement, the Employer may have elected not
to limit Highly Compensated Employees to those in the Top-Paid Group for the look-back year.
The determination year means the Plan Year for which testing is being performed and the
look-back year means the immediately preceding twelve (12) month period. However, if this Plan is
an amendment and restatement of an existing plan into the form of this prototype plan, for Plan
Years commencing after December 31, 1996 but prior to the Plan Year in which the original amendment
and restatement occurs, as reflected in the Adoption Agreement, the Employer may have elected that
for purposes of (b) above, the look-back year was the calendar year beginning within the twelve
(12) month period immediately preceding the determination year. Notwithstanding the preceding
sentence, if the calendar year data election is effective with respect to a Plan Year beginning in
1997, then for such Plan Year 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 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.
A highly compensated former employee is based on the rules applicable to determining highly
compensated employee Status as in effect for that determination year, in accordance with
Regulation 1.414(q)-1T, A-4 and IRS Notice 97-45 (or any superseding guidance).
In determining whether an employee is a Highly Compensated Employee for a Plan Year beginning
in 1997, the amendments to Code Section 414(q) stated above are treated as having been in effect
for years beginning in 1996.
For purposes of this Section, for Plan Years beginning prior to January 1, 1998, the
determination of 415 Compensation shall be made by including amounts that would otherwise be
excluded from a Participants gross income by reason of the application of Code Sections 125,
402(e)(3), 402(h)(1)(B) and, for Plan Years beginning on or after January 1, 2001 (or as of a
date, no earlier than January 1, 1998, as specified in an addendum to the Adoption Agreement),
132(f)(4), and, in the case of Employer contributions made pursuant to a salary reduction
agreement, Code Section 403(b).
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 Section 911(d)) from the Employer
constituting United States source income within the meaning of Code Section 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 Sections 414(n)(2) and 414(o)(2)
shall be considered Employees unless such Leased Employees are covered by a plan described in Code
Section 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 Employers retirement plans.
1.32 Highly Compensated Participant means any Highly Compensated Employee who is eligible to
participate in the component of the Plan being tested.
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 (these hours will be credited to the Employee for the computation
period in which the duties are performed); (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, incapacity (including disability), jury duty, lay-off, military duty
or leave of absence) during the applicable computation period (these hours will be calculated and
credited pursuant to Department of Labor regulation 2530.200b-2 which is incorporated herein by
reference); (3) each hour for which back pay is awarded or agreed to by the Employer without regard
to mitigation of damages (these hours will be credited to the Employee for the computation period
or periods to which the award or agreement pertains rather than the computation period in which the
award, agreement or payment is made). The same Hours of Service shall not be credited both under
(1) or (2), as the case may be, and under (3).
7
Notwithstanding (2) 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 workers
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. Furthermore, for purposes of (2) above, 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.
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 Section 4 14(n) or 414(o) and the
Regulations thereunder. Furthermore, the provisions of Department of Labor regulations
2530.200b-2(b) and (c) are incorporated herein by reference.
Hours of Service will be determined on the basis of the method elected in the Adoption
Agreement.
1.34 Insurer means any legal reserve insurance company which has issued or shall issue one
or more Contracts or Policies under the Plan.
1.35 Investment Manager means a Fiduciary as described in Act Section 3(38).
1.36 Joint and Survivor Annuity means an annuity for the life of a Participant with a
survivor annuity for the life of the Participants spouse which is not less than fifty percent
(50%), nor more than one-hundred percent (100%) of the amount of the annuity payable during the
joint lives of the Participant and the Participants spouse which can be purchased with the
Participants Vested interest in the Plan reduced by any outstanding loan balances pursuant to
Section 7.3.
1.37 Key Employee means an Employee as defined in Code Section 416(i) and the Regulations
thereunder. Generally, any Employee or former Employee (as well as each of such Employees or
former Employees Beneficiaries) is considered a Key Employee if the individual, at any time during
the Plan Year that contains the Determination Date (as defined in Section 9.2(c)) or any of the
preceding four (4) Plan Years, has 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 Section 416) having annual 415 Compensation greater than fifty
percent (50%) of the amount in effect under Code Section 41 5(b)(1 )(A) for any such Plan
Year;
(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 Section 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 Section 318) both more than one-half percent (1/2%) interest and the
largest interests in the Employer;
(c) a five percent (5%) owner of the Employer. Five percent (5%) owner means any
person who owns (or is considered as owning within the meaning of Code Section 318) more
than five percent (5%) of the value 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; and
(d) a one percent (1%) owner of the Employer having annual 415 Compensation from the
Employer of more than $150,000. One percent (1%) owner means any person who owns (or is
8
considered as owning within the meaning of Code Section 318) more than one percent (1%)
of the value 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 Code Sections 4 14(b), (c), (m) and (o) shall be treated as separate employers. In
determining whether an individual has 415 Compensation of more than $150,000, 415 Compensation from
each employer required to be aggregated under Code Sections 4 14(b), (c), (m) and (o) shall be
taken into account. Furthermore, for purposes of this Section, for Plan Years beginning prior to
January 1, 1998, the determination of 415 Compensation shall be made by including amounts that
would otherwise be excluded from a Participants gross income by reason of the application of Code
Sections 125, 402(e)(3), 402(h)(1)(B) and, for Plan Years beginning on or after January 1, 2001 (or
as of a date, no earlier than January 1, 1998, as specified in an addendum to the Adoption
Agreement), 132(f)(4), and, in the case of Employer contributions made pursuant to a salary
reduction agreement, Code Section 403(b).
1.38 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 in the
Adoption Agreement for the Normal Retirement Date, a Participants actual retirement after having
reached the Normal Retirement Date.
1.39 Leased Employee means, effective with respect to Plan Years beginning on or after
January 1, 1997, any person (other than an Employee of the recipient Employer) who, pursuant to an
agreement between the recipient Employer and any other person or entity (leasing organization),
has performed services for the recipient (or for the recipient and related persons determined in
accordance with Code Section 414(n)(6)) on a substantially full time basis for a period of at least
one year, and such services are performed under primary direction or control by 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. Furthermore, Compensation for a Leased Employee shall only include
Compensation from the leasing organization that is attributable to services performed for the
recipient Employer.
A Leased Employee shall not be considered an employee of the recipient Employer if: (a) such
employee is covered by a money purchase pension plan providing: (1) a nonintegrated employer
contribution rate of at least ten percent (10%) of compensation, as defined in Code Section
415(c)(3), but for Plan Years beginning prior to January 1, 1998, including amounts contributed
pursuant to a salary reduction agreement which are excludable from the employees gross income
under Code Sections 125, 402(e)(3), 402(h)(1)(B), 403(b), or for Plan Years beginning on or after
January 1, 2001 (or as of a date, no earlier than January 1, 1998, as specified in an addendum to
the Adoption Agreement), 132(f)(4), (2) immediate participation, and (3) full and immediate vesting;
and (b) leased employees do not constitute more than twenty percent (20%) of the recipient
Employers no highly compensated workforce.
1.40 Limitation Year means the Plan Year. All qualified plans maintained by the Employer
must use the same Limitation Year Furthermore, unless there is a change to a new Limitation Year,
the Limitation Year will be a twelve (12) consecutive month period. In the case of an initial
Limitation Year, the Limitation Year will be the twelve (12) consecutive month period ending on the
last day of the Plan Year. If the Limitation Year is amended to a different twelve (12) consecutive
month period, the new Limitation Year must begin on a date within the Limitation Year in which
the amendment is made.
1.41 Net Profit means, with respect to any Fiscal Year, the Employers net income or profit
for such Fiscal Year determined upon the basis of the Employers 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.
1.42 Non-Elective Contribution means the Employers contributions to the Plan other than
Elective Deferrals, any Qualified Non-Elective Contributions and any Qualified Matching
Contributions. Employer matching contributions which are not Qualified Matching Contributions shall
be considered a Non-Elective Contribution for purposes of the Plan.
9
1.43 Non-Highly Compensated Participant means any Participant who is not a Highly
Compensated Employee. However, if pursuant to Sections 12.4 or 12.6 the prior year testing method
is used to calculate the ADP or the ACP, a Non-Highly Compensated Participant shall be determined
using the definition of Highly Compensated Employee in effect for the preceding Plan Year.
1.44 Non-Key Employee means any Employee or former Employee (and such Employees or former
Employees Beneficiaries) who is not, and has never been, a Key Employee.
1.45 Normal Retirement Age means the age elected in the Adoption Agreement at which time a
Participants Account shall be nonforfeitable (if the Participant is employed by the Employer on or
after that date).
1.46 Normal Retirement Date means the date that the Participant attains his or her Normal
Retirement Age.
1.47 1-Year Break in Service means, if the Hour of Service Method is elected in the Adoption
Agreement, the applicable computation period during which an Employee or former Employee has not
completed more than 500 Hours of Service. Further, solely for the purpose of determining whether an
Employee has incurred a 1-Year Break in Service, Hours of Service shall be recognized for
authorized leaves of absence and maternity and paternity leaves of absence. 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 1-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 the number of Hours of Service needed to prevent the Employee from incurring a 1-Year Break
in Service.
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 an absence from work for any period by
reason of the Employees pregnancy, birth of the Employees 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.
If the Elapsed Time Method is elected in the Adoption Agreement, a 1-Year Break in Service
means a twelve (12) consecutive month period beginning on the severance from service date or any
anniversary thereof and ending on the next succeeding anniversary of such date; provided, however,
that the Employee or former Employee does not perform an Hour of Service for the Employer during
such twelve (12) consecutive month period.
1.48 Owner-Employee means a sole proprietor who owns the entire interest in the Employer or
a partner (or member in the case of a limited liability company treated as a partnership or sole
proprietorship for federal income tax purposes) who owns more than ten percent (10%) of either the
capital interest or the profits interest in the Employer and who receives income for personal
services from the Employer.
1.49 Participant means any Eligible Employee who has satisfied the requirements of Section
3.2 and has not for any reason become ineligible to participate further in the Plan.
1.50 Participant Directed Account means that portion of a Participants interest in the Plan
with respect to which the Participant has directed the investment in accordance with the
Participant Direction Procedures.
1.51 Participant Direction Procedures means such instructions, guidelines or policies, the
terms of which are incorporated herein, as shall be established pursuant to Section 4.10 and
observed by the Administrator and applied and provided to Participants who have Participant
Directed Accounts.
10
1.52 Participants Account means the account established and maintained by the Administrator
for each Participant with respect to such Participants total interest under the Plan resulting
from (a) the Employers contributions in the case of a Profit Sharing Plan or Money Purchase Plan,
and (b) the Employers Non-Elective Contributions in the case of a 401(k) Profit Sharing Plan.
Separate accountings shall be maintained with respect to that portion of a Participants Account
attributable to Employer matching contributions and to Employer discretionary contributions made
pursuant to Section 12.1(a)(3)
1.53 Participants Combined Account means the total aggregate amount of a Participants
interest under the Plan resulting from Employer contributions (including Elective Deferrals).
1.54 Participants Elective Deferral Account means the account established and maintained by
the Administrator for each Participant with respect to such Participants total interest in the
Plan resulting from Elective Deferrals. Amounts in the Participants Elective Deferral Account are
nonforfeitable when made and are subject to the distribution restrictions of Section 12.2(c).
1.55 Participants Rollover Account means the account established and maintained by the
Administrator for each Participant with respect to such Participants interest in the Plan
resulting from amounts transferred from another qualified plan or conduit Individual Retirement
Account in accordance with Section 4.6.
1.56 Participants Transfer Account means any account or accounts separately established and
maintained by the Administrator for each Participant with respect to the total interest in the Plan
resulting from amounts transferred to this Plan from a direct plan-to-plan transfer in accordance
with Section 4.7.
1.57 Period of Service means the aggregate of all periods commencing with an Employees
first day of employment or reemployment with the Employer or an Affiliated Employer and ending on
the first day of a Period of Severance. The first day of employment or reemployment is the first
day the Employee performs an Hour of Service. An Employee will also receive credit for any Period
of Severance of less than twelve (12) consecutive months. Fractional periods of a year will be
expressed in terms of days.
Periods of Service with any Affiliated Employer shall be recognized. Furthermore, Periods of
Service with any predecessor employer that maintained this Plan shall be recognized. Periods of
Service with any other predecessor employer shall be recognized as elected in the Adoption
Agreement.
In determining Periods of Service for purposes of vesting under the Plan, Periods of Service
will be excluded as elected in the Adoption Agreement and as specified in Section 3.5.
In the event the method of crediting service is amended from the Hour of Service Method to the
Elapsed Time Method, an Employee will receive credit for a Period of Service consisting of:
(a) A number of years equal to the number of Years of Service credited to the Employee
before the computation period during which the amendment occurs; and
(b) The greater of(l) the Periods of Service that would be credited to the Employee
under the Elapsed Time Method for service during the entire computation period in which the
transfer occurs or (2) the service taken into account under the Hour of Service Method as of
the date of the amendment.
In addition, the Employee will receive credit for service subsequent to the amendment
commencing on the day after the last day of the computation period in which the transfer occurs.
1.58 Period of Severance means a continuous period of time during which an Employee is not
employed by the Employer. Such period begins on the date the Employee retires, quits or is
discharged, or if earlier, the twelve (12) month anniversary of the date on which the Employee was
otherwise first absent from service.
In the case of an individual who is absent from work for maternity or paternity reasons, the
twelve (12) consecutive month period beginning on the first anniversary of the first day of such
absence shall not constitute a
11
one year Period of Severance. For purposes of this paragraph, an absence from work for
maternity or paternity reasons means an absence (a) by reason of the pregnancy of the individual,
(b) by reason of the birth of a child of the individual, (c) by reason of the placement of a child
with the individual in connection with the adoption of such child by such individual, or (d) for
purposes of caring for such child for a period beginning immediately following such birth or
placement.
1.59 Plan means this instrument (hereinafter referred to as Automatic Data Processing
Defined Contribution Plan Basic Plan Document #02) and the Adoption Agreement as adopted by the
Employer, including all amendments thereto and any addendum which is specifically permitted
pursuant to the terms of the Plan.
1.60 Plan Year means the Plans accounting year as specified in the Adoption Agreement.
Unless there is a Short Plan Year, the Plan Year will be a twelve-consecutive month period.
1.61 Pre-Retirement Survivor Annuity means an immediate annuity for the life of a
Participants spouse, the payments under which must be equal to the benefit which can be provided
with the percentage, as specified in the Adoption Agreement, of the Participants Vested interest
in the Plan as of the date of death. If no election is made in the Adoption Agreement, the
percentage shall be equal to fifty percent (50%). Furthermore, if less than one hundred percent
(100%) of the Participants Vested interest in the Plan is used to provide the Pre-Retirement
Survivor Annuity, a proportionate share of each of the Participants accounts shall be used to
provide the Pre-Retirement Survivor Annuity.
1.62 Qualified Matching Contribution means any Employer matching contributions that are made
pursuant to Sections 12.5 and 12.7.
1.63 Qualified Matching Contribution Account means the account established hereunder to
which Qualified Matching Contributions are allocated. Amounts in the Qualified Matching Contribution
Account are nonforfeitable when made and are subject to the distribution restrictions of Section
12.2(c).
1.64 Qualified Non-Elective Contribution means the Employers contributions to the Plan that
are made pursuant to Sections 12.5 and 12.7.
1.65 Qualified Non-Elective Contribution Account means the account established hereunder to
which Qualified Non-Elective Contributions are allocated. Amounts in the Qualified Non-Elective
Contribution Account are nonforfeitable when made and are subject to the distribution restrictions
of Section 12.2(c).
1.66 Qualified Voluntary Employee Contribution Account means the account established
hereunder to which a Participants tax deductible qualified voluntary employee contributions made
pursuant to Section 4.9 are allocated.
1.67 Regulation means the Income Tax Regulations as promulgated by the Secretary of the
Treasury or a delegate of the Secretary of the Treasury, and as amended from time to time.
1.68 Retired Participant means a person who has been a Participant, but who has become
entitled to retirement benefits under the Plan.
1.69 Retirement Date means the date as of which a Participant retires for reasons other than
Total and Permanent Disability, regardless of whether such retirement occurs on a Participants
Normal Retirement Date, Early Retirement Date or Late Retirement Date (see Section 6.1).
1.70 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.
12
1.71 Shareholder-Employee means a Participant who owns (or is deemed to own pursuant to Code
Section 318(a)(l)) more than five percent (5%) of the Employers outstanding capital stock during
any year in which the Employer elected to be taxed as a Small Business Corporation (S Corporation)
under the applicable Code sections relating to Small Business Corporations.
1.72 Short Plan Year means, if specified in the Adoption Agreement, a Plan Year of less than
a twelve (12) month period. If there is a Short Plan Year, the following rules shall apply in the
administration of this Plan. In determining whether an Employee has completed a Year of Service (or
Period of Service if the Elapsed Time Method is used) for benefit accrual purposes in the Short
Plan Year, the number of the Hours of Service (or months of service if the Elapsed Time Method is
used) required shall be proportionately reduced based on the number of days (or months) in the
Short Plan Year. The determination of whether an Employee has completed a Year of Service (or
Period of Service) for vesting and eligibility purposes shall be made in accordance with Department
of Labor regulation 2530.203-2(c). In addition, if this Plan is integrated with Social Security,
then the integration level shall be proportionately reduced based on the number of months in the
Short Plan Year.
1.73 Super Top Heavy Plan means a plan which would be a Top Heavy Plan if sixty percent
(60%) is replaced with ninety percent (90%) in Section 9.2(a). However, effective as of the first
Plan Year beginning after December 31, 1999, no Plan shall be considered a Super Top Heavy Plan.
1.74 Taxable Wage Base means, with respect to any Plan Year, the contribution and benefit
base under Section 230 of the Social Security Act at the beginning of such Plan Year.
1.75 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.
1.76 Top Heavy Plan means a plan described in Section 9.2(a).
1.77 Top Heavy Plan Year means a Plan Year commencing after December 31, 1983, during which
the Plan is a Top Heavy Plan.
1.78 Top-Paid Group shall be determined pursuant to Code Section 414(q) and the
Regulations thereunder and generally means the top twenty percent (20%) of Employees who performed
services for the Employer during the applicable year, ranked according to the amount of 415
Compensation 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 if required
pursuant to Code Section 4 14(n) or (o). Employees who are non-resident aliens who received no
earned income (within the meaning of Code Section 91 1(d)(2)) from the Employer constituting United
States source income within the meaning of Code Section 861(a)(3) shall not be treated as
Employees. Furthermore, for the purpose of determining the number of active Employees in any year,
the following additional Employees may also be excluded, however, such Employees shall still be
considered for the purpose of identifying the particular Employees in the Top-Paid Group:
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(a) |
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Employees with less than six (6) months of service; |
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(b) |
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Employees who normally work less than 17 1/2 hours per week; |
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(c) |
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Employees who normally work less than six (6) months during a year; and |
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(d) |
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Employees who have not yet attained age twenty-one (21). |
In addition, if ninety percent (90%) 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.
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The foregoing exclusions set forth in this Section shall be applied on a uniform and
consistent basis for all purposes for which the Code Section 4 14(q) definition is applicable.
Furthermore, in applying such exclusions, the Employer may substitute any lesser service, hours or
age.
1.79 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 twelve (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.
1.80 Trustee means the person or entity named in the Adoption Agreement, or any successors
thereto.
If the sponsor of this prototype is a bank, savings and loan, trust company, credit union or
similar institution, a person or entity other than the prototype sponsor (or its affiliates or
subsidiaries) may not serve as Trustee without the written consent of the sponsor.
1.81 Trust Fund means the assets of the Plan and Trust as the same shall exist from time to
time.
1.82 Valuation Date means the Anniversary Date, each day that the New York Stock Exchange is
open for business and may include any other date or dates deemed necessary or appropriate by the
Administrator for the valuation of Participants Accounts during the Plan Year, which may include
any day that the Trustee, any transfer agent appointed by the Trustee or the Employer, or any stock
exchange used by such agent, are open for business.
1.83 Vested means the nonforfeitable portion of any account maintained on behalf of a
Participant.
1.84 Voluntary Contribution Account means the account established and maintained by the
Administrator for each Participant with respect to such Participants total interest in the Plan
resulting from the Participants after-tax voluntary Employee contributions made pursuant to
Section 4.8.
Amounts recharacterized as after-tax voluntary Employee contributions pursuant to Section 12.5
shall remain subject to the limitations of Section 12.2. Therefore, a separate accounting shall be
maintained with respect to that portion of the Voluntary Contribution Account attributable to
after-tax voluntary Employee contributions made pursuant to Section 4.8.
1.85 Year of Service means the computation period of twelve (12) consecutive months, herein
set forth, and during which an Employee has completed at least 1,000 Hours of Service (unless a
lower number of Hours of Service is specified in the Adoption Agreement).
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 initial computation period beginning after a 1-Year Break in Service shall be measured from the
date on which an Employee again performs an Hour of Service.
Unless otherwise elected in the Adoption Agreement, the succeeding computation periods shall
begin on the anniversary of the Employees employment commencement date. However, unless otherwise
elected in the Adoption Agreement, if one (1) Year of Service or less is required as a condition of
eligibility, then the computation period after the initial 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, and subsequent computation periods shall be the Plan Year. If there is a shift
to the Plan Year, an Employee who is credited with the number of Hours of Service to be credited
with a Year of Service in both the initial eligibility computation period and the first Plan Year
which commences prior to the first anniversary of the Employees initial eligibility computation
period will be credited with two (2) Years of Service for purposes of eligibility to participate.
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If two (2) Years of Service are required as a condition of eligibility, a Participant will
only have completed two (2) Years of Service for eligibility purposes upon completing two (2)
consecutive Years of Service without an intervening 1-Year Break-in-Service.
For vesting purposes, and all other purposes not specifically addressed in this Section, the
computation period shall be the period elected in the Adoption Agreement. If no election is made in
the Adoption Agreement, the computation period shall be the Plan Year.
In determining Years of Service for purposes of vesting under the Plan, Years of Service will
be excluded as elected in the Adoption Agreement and as specified in Section 3.5.
Years
of Service and 1-Year Breaks in Service for eligibility purposes will be measured on the
same eligibility computation period. Years of Service and 1-Year Breaks in Service for vesting
purposes will be measured on the same vesting computation period.
Years of Service with any Affiliated Employer shall be recognized. Furthermore, Years of
Service with any predecessor employer that maintained this Plan shall be recognized. Years of
Service with any other predecessor employer shall be recognized as elected in the Adoption
Agreement
In the event the method of crediting service is amended from the Elapsed Time Method to the
Hour of Service Method, an Employee will receive credit for Years of Service equal to:
(a) The number of Years of Service equal to the number of 1-year Periods of Service
credited to the Employee as of the date of the amendment; and
(b) In the computation period which includes the date of the amendment, a number of
Hours of Service (using the Hours of Service equivalency method elected in the Adoption
Agreement) to any fractional part of a year credited to the Employee under this Section as
of the date of the amendment.
ARTICLE II
ADMINISTRATION
2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER
(a) In addition to the general powers and responsibilities otherwise provided for in
this Plan, 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 ensure 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. The
Employer may appoint counsel, specialists, advisers, agents (including any nonfiduciary
agent) and other persons as the Employer deems necessary or desirable in connection with the
exercise of its fiduciary duties under this Plan. The Employer may compensate such agents or
advisers from the assets of the Plan as fiduciary expenses (but not including any business
(settlor) expenses of the Employer), to the extent not paid by the Employer.
(b) The Employer shall establish a funding policy and method, i.e., it shall
determine whether the Plan has a short run need for liquidity (e.g., to pay benefits) or
whether liquidity is a long run goal and investment growth (and stability of same) is a more
current need, or shall appoint a qualified person to do so If the Trustee has discretionary
authority, the Employer or its delegate shall communicate such needs and goals to the
Trustee, who shall coordinate such Plan needs with its investment policy. The communication
of such a funding policy and method shall not, however, constitute a directive to the
Trustee as to the investment of the Trust Funds. Such funding policy and method shall be
consistent with the objectives of this Plan and with the requirements of Title I of the Act.
(c) The Employer may appoint, at its option, an Investment Manager, investment adviser,
or other agent to provide direction to the Trustee with respect to any or all of the Plan
assets. Such
15
appointment shall be given by the Employer in writing in a form acceptable to the
Trustee and shall specifically identify the Plan assets with respect to which the Investment
Manager or other agent shall have the authority to direct the investment.
(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.
2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer may appoint one or more Administrators. If the Employer does not appoint an
Administrator, the Employer will be the Administrator. 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 acceptance by filing written acceptance with the Employer. An Administrator
may resign by delivering a 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. Upon the resignation or removal of an Administrator,
the Employer may designate in writing a successor to this position.
2.3 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.
2.4 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. Benefits under this Plan will be
paid only if the Administrator decides in its discretion that the applicant is entitled to them.
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 continue to
be deemed a qualified plan under the terms of Code Section 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 its duties under this Plan.
The Administrator shall be charged with the duties of the general administration of the Plan
and the powers necessary to carry out such duties as set forth under the terms of the Plan,
including, but not limited to, the following:
(a) the discretion to determine all questions relating to the eligibility of an
Employee to participate or remain a Participant hereunder and to receive benefits under the
Plan;
(b) the authority to review and settle all claims against the Plan, including claims
where the settlement amount cannot be calculated or is not calculated in accordance with the
Plans benefit formula.
16
This authority specifically permits the Administrator to settle, in compromise fashion,
disputed claims for benefits and any other disputed claims made against the Plan;
(c) 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;
(d) to authorize and direct the Trustee with respect to all discretionary or otherwise
directed disbursements from the Trust Fund;
(e) to maintain all necessary records for the administration of the Plan;
(f) to interpret the provisions of the Plan and to make and publish such rules for
regulation of the Plan that are consistent with the terms hereof,
(g) 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;
(h) 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 Plan;
(i) 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
(if the Trustee has such discretion), in a manner designed to accomplish specific
objectives;
(j) to prepare and implement 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 Plan, Code and Regulations thereunder;
(k) to assist Participants regarding their rights, benefits, or elections available
under the Plan;
(l) to act as the named Fiduciary responsible for communicating with Participants as
needed to maintain Plan compliance with Act Section 404(c) (if the Employer intends to
comply with Act Section 404(c)) including, but not limited to, the receipt and transmission
of Participants directions as to the investment of their accounts under the Plan and the
formation of policies, rules, and procedures pursuant to which Participants may give
investment instructions with respect to the investment of their accounts; and
(m) to determine the validity of, and take appropriate action with respect to, any
qualified domestic relations order received by it.
2.5 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.
2.6 APPOINTMENT OF ADVISERS
The Administrator may appoint counsel, specialists, advisers, agents (including nonfiduciary
agents) and other persons as the Administrator deems necessary or desirable in connection with the
administration of this Plan, including but not limited to agents and advisers to assist with the
administration and management of the Plan, and thereby to provide, among such other duties as the
Administrator may appoint, assistance with maintaining Plan records and the providing of investment
information to the Plans investment fiduciaries and, if applicable, to Plan Participants.
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2.7 INFORMATION FROM EMPLOYER
The Employer shall supply full and timely information to the Administrator on all pertinent
facts as the Administrator may require in order to perform its functions hereunder and the
Administrator shall advise the Trustee of such of the foregoing facts as may be pertinent to the
Trustees 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.
2.8 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, or any
person or persons retained or appointed by any Named Fiduciary incident to the exercise of their
duties under the Plan, including, but not limited to, fees of accountants, counsel, Investment
Managers, agents (including nonfiduciary agents) appointed for the purpose of assisting the
Administrator or Trustee in carrying out the instructions of Participants as to the directed
investment of their accounts (if permitted) and other specialists and their agents, the costs of
any bonds required pursuant to Act Section 412, and other costs of administering the Plan. Until
paid, the expenses shall constitute a liability of the Trust Fund. Any expenses of administration
paid out of the Trust Fund shall be paid out of such Plan accounts as may be determined by the
Administrator.
2.9 MAJORITY ACTIONS
Except where there has been an allocation and delegation of administrative authority pursuant
to Section 2.3, if there is more than one Administrator, then they shall act by a majority of their
number, but may authorize one or more of them to sign all papers on their behalf.
2.10 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 ninety (90) days
after the application is filed, or such period as is required by applicable law or Department of
Labor regulation. 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 Plans claims review procedure.
2.11 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 2.10 shall be entitled to request the
Administrator to give further consideration to the 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 such claim should be allowed, shall be filed with the Administrator no later than
sixty (60) days after receipt of the written notification provided for in Section 2.10. The
Administrator shall then conduct a hearing within the next sixty (60) days, at which the claimant
may be represented by an attorney or any other representative of such claimants choosing and
expense and at which the claimant shall have an opportunity to submit written and oral evidence and
arguments in support of the claim. At the hearing (or prior thereto upon five (5) business days
written notice to the Administrator) the claimant or the claimants 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 fill
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 sixty (60) days of receipt of the appeal (unless there has been an
extension of sixty (60) days due to special circumstances, provided the delay and the special
circumstances occasioning it are communicated to the claimant within the sixty (60) day period).
Such
18
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. Notwithstanding the preceding, to the extent any of the
time periods specified in this Section are amended by law or Department of Labor regulation, then
the time frames specified herein shall automatically be changed in accordance with such law or
regulation.
If the Administrator, pursuant to the claims review procedure, makes a final written
determination denying a Participants or Beneficiarys benefit claim, then in order to preserve the
claim, the Participant or Beneficiary must file an action with respect to the denied claim not
later than one hundred eighty (180) days following the date of the Administrators final
determination.
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
Any Eligible Employee shall be eligible to participate hereunder on the date such Employee has
satisfied the conditions of eligibility elected in the Adoption Agreement.
3.2 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee who has satisfied the conditions of eligibility pursuant to Section 3.1
shall become a Participant effective as of the date elected in the Adoption Agreement. If said
Employee is not employed on such date, but is reemployed before a 1-Year Break in Service has
occurred, then such Employee shall become a Participant on the date of reemployment or, if later,
the date that the Employee would have otherwise entered the Plan had the Employee not terminated
employment.
Unless specifically provided otherwise in the Adoption Agreement, an Eligible Employee who
satisfies the Plans eligibility requirement conditions by reason of recognition of service with a
predecessor employer will become a Participant as of the day the Plan credits service with a
predecessor employer or, if later, the date the Employee would have otherwise entered the Plan had
the service with the predecessor employer been service with the Employer.
If an Employee, who has satisfied the Plans eligibility requirements and would otherwise have
become a Participant, shall go from a classification of a noneligible Employee to an Eligible
Employee, such Employee shall become a Participant on the date such Employee becomes an Eligible
Employee or, if later, the date that the Employee would have otherwise entered the Plan had the
Employee always been an Eligible Employee.
If an Employee, who has satisfied the Plans eligibility requirements and would otherwise
become a Participant, shall go from a classification of an Eligible Employee to a noneligible class
of Employees, such Employee shall become a Participant in the Plan on the date such Employee again
becomes an Eligible Employee, or, if later, the date that the Employee would have otherwise entered
the Plan had the Employee always been an Eligible Employee. However,
if such Employee incurs a 1-Year Break in Service, eligibility will be determined under the Break in
Service rules set forth in Section 3.5.
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 pursuant to Section 2.11.
19
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 the Plan for each Year of
Service (or Period of Service, if the Elapsed Time Method is used) completed while an ineligible
Employee, until such time as the Participants Account is forfeited or distributed pursuant to the
terms of the Plan. Additionally, the Former Participants interest in the Plan shall continue to
share in the earnings of the Trust Fund in the same manner as Participants.
3.5 REHIRED EMPLOYEES AND BREAKS IN SERVICE
(a) If any Participant becomes a Former Participant due to severance from employment
with the Employer and is reemployed by the Employer before a 1-Year Break in Service occurs,
the Former Participant shall become a Participant as of the reemployment date.
(b) If any Participant becomes a Former Participant due to severance from employment
with the Employer and is reemployed after a 1-Year Break in Service has occurred, Years of
Service (or Periods of Service if the Elapsed Time Method is being used) shall include Years
of Service (or Periods of Service if the Elapsed Time Method is being used) prior to the
1-Year Break in Service subject to the following rules:
(1) In the case of a Former Participant who under the Plan does not have a
nonforfeitable right to any interest in the Plan resulting from Employer
contributions, Years of Service (or Periods of Service) before a period of 1-Year
Breaks in Service will not be taken into account if the number of consecutive 1-Year
Breaks in Service equals or exceeds the greater of (A) five (5) or (B) the aggregate
number of pre-break Years of Service (or Periods of Service). Such aggregate number
of Years of Service (or Periods of Service) will not include any Years of Service
(or Periods of Service) disregarded under the preceding sentence by reason of prior
1-Year Breaks in Service;
(2) A Former Participant who has not had Years of Service (or Periods of Service)
before a 1-Year Break in Service disregarded pursuant to (1) above, shall
participate in the Plan as of the date of reemployment, or if later, as of the date
the Former Participant would otherwise enter the Plan pursuant to Sections 3.1 and
3.2 taking into account all service not disregarded.
(c) After a Former Participant who has severed employment with the Employer incurs five
(5) consecutive 1-Year Breaks in Service, the Vested portion of such Former Participants
Account attributable to pre-break service shall not be increased as a result of post-break
service. In such case, separate accounts will be maintained as follows:
(1) one account for nonforfeitable benefits attributable to pre-break service; and
(2) one account representing the Participants Employer-derived account balance in
the Plan attributable to post-break service.
(d) If any Participant becomes a Former Participant due to severance of employment with
the Employer and is reemployed by the Employer before five
(5) consecutive 1-Year Breaks in
Service, and such Former Participant had received a distribution of the entire Vested
interest prior to reemployment, then the forfeited account shall be reinstated only if the
Former Participant repays the full amount which had been distributed. Such repayment must be
made before the earlier of five (5) years after the first date on which the Participant is
subsequently reemployed by the Employer or the close of the first period of five (5)
consecutive 1-Year Breaks in Service commencing after the distribution. If a distribution
occurs for any reason other than a severance of employment, the time for repayment may not
end earlier than five (5) years after the date of distribution. In the event the Former
Participant does repay the full amount distributed, the undistributed forfeited portion of
the Participants Account must be restored in full, unadjusted by any gains or losses
occurring subsequent to the Valuation Date preceding the distribution.
20
The source for such reinstatement may be Forfeitures occurring during the Plan Year. If
such source is insufficient, then the Employer will contribute an amount which is sufficient
to restore the Participants Account, provided, however, that if a discretionary
contribution is made for such year, such contribution will first be applied to restore any
such accounts and the remainder shall be allocated in accordance with the terms of the Plan.
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 1-Year Breaks
in Service, then such Participant will be deemed to have repaid the deemed distribution as
of the date of reemployment.
3.6 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 irrevocable and communicated to the Employer,
in writing, within a reasonable period of time before the beginning of the first Plan Year. For
standardized Plans, a Participant, or an Eligible Employee may not elect not to participate.
3.7 CONTROL OF ENTITIES BY OWNER-EMPLOYEE
Effective with respect to Plan Years beginning after December 31, 1996, if this Plan provides
contributions or benefits for one or more Owner-Employees, the contributions on behalf of any
Owner-Employee shall be made only with respect to the Earned Income for such Owner-Employee which
is derived from the trade or business with respect to which such Plan is established.
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYERS CONTRIBUTION
(a) For a Money Purchase Plan:
(1) The Employer will make contributions on the following basis. On behalf of each
Participant eligible to share in allocations, for each year of such Participants
participation in this Plan, the Employer will contribute the amount elected in the
Adoption Agreement. All contributions by the Employer will be made in cash. In the
event a funding waiver is obtained, this Plan shall be deemed to be an individually
designed plan.
(2) Notwithstanding the foregoing, with respect to an Employer which is not a
tax-exempt entity, the Employers contribution for any Fiscal Year shall not exceed
the maximum amount allowable as a deduction to the Employer under the provisions of
Code Section 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
that is deductible under Code Section 404.
(b) For a Profit Sharing Plan:
(1) For each Plan Year, the Employer may contribute to the Plan such amount as
elected by the Employer in the Adoption Agreement.
(2) Additionally, the Employer will contribute to the Plan the amount necessary, if
any, to provide the top heavy minimum allocations, even if it exceeds current or
accumulated Net Profit or the amount that is deductible under Code Section 404.
4.2 TIME OF PAYMENT OF EMPLOYERS CONTRIBUTION
Unless otherwise provided by contract or law, the Employer may make its contribution to the
Plan for a particular Plan Year at such time as the Employer, in its sole discretion, determines.
If the Employer makes a
21
contribution for a particular Plan Year after the close of that Plan Year, the Employer will
designate to the Administrator the Plan Year for which the Employer is making its contribution.
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.
(b) The Employer shall provide the Administrator with all information required by the
Administrator to make a proper allocation of the Employers contribution, if any, 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 any contributions as follows:
(1) For a Money Purchase Plan (other than a Money Purchase Plan which is integrated
by allocation):
(i) The Employers contribution shall be allocated to each Participants
Account in the manner set forth in Section 4.1 herein and as specified in
the Adoption Agreement.
(ii) However, regardless of the preceding, a Participant shall only be
eligible to share in the allocations of the Employers contribution for the
year if the conditions set forth in the Adoption Agreement are satisfied,
unless a top heavy contribution is required pursuant to Section 4.3(f). If
no election is made in the Adoption Agreement, then a Participant shall be
eligible to share in the allocation of the Employers contribution for the
year if the Participant completes more than five hundred (500) Hours of
Service during the Plan Year or who is employed on the last day of the Plan
Year.
(2) For an integrated Profit Sharing Plan allocation or a Money Purchase Plan which
is integrated by allocation:
(i) Except as provided in Section 4.3(f) for top heavy purposes and subject
to the Overall Permitted Disparity Limits, the Employers contribution
shall be allocated to each Participants Account ma dollar amount equal to
5.7% of the sum of each Participants 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 each such Participants Compensation plus 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 Disparity
Limit, the allocation set forth in this paragraph shall be based on such
Participants Compensation rather than Compensation plus Excess
Compensation.
Regardless of the preceding, 4.3% shall be substituted for 5.7% 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 5.4% shall be substituted
for 5.7% above.
(ii) The balance of the Employers contribution over the amount allocated
above, if any, shall be allocated to each Participants Account in the same
proportion that each such Participants Compensation for the Year bears to
the total Compensation of all Participants for such year.
(iii) However, regardless of the preceding, a Participant shall only be
eligible to share in the allocations of the Employers Contribution for the
year if the conditions set
22
forth in the Adoption Agreement are satisfied, unless a contribution is
required pursuant to Section 4.3(f). If no election is made in the Adoption
Agreement, then a Participant shall be eligible to share in the allocation
of the Employers contribution for the year if the Participant completes
more than five hundred (500) Hours of Service during the Plan Year or who is
employed on the last day of the Plan Year.
(3) For a Profit Sharing Plan with a non-integrated allocation:
(i) The Employers contribution shall be allocated to each Participants
Account in accordance with the allocation method elected in the Adoption
Agreement.
(ii) However, regardless of the preceding, a Participant shall only be
eligible to share in the allocations of the Employers contribution for the
year if the conditions set forth in the Adoption Agreement are satisfied,
unless a top heavy contribution is required pursuant to Section 4.3(f). If
no election is made in the Adoption Agreement, then a Participant shall be
eligible to share in the allocation of the Employers contribution for the
year if the Participant completes more than five hundred (500) Hours of
Service during the Plan Year or who is employed on the last day of the Plan
Year.
(4) Overall Permitted Disparity Limits:
Annual Overall Permitted Disparity Limit: Notwithstanding the preceding
paragraphs, if in any Plan Year this Plan benefits any Participant who
benefits under another qualified plan or simplified employee pension, as
defined in Code Section 408(k), maintained by the Employer that either
provides for or imputes permitted disparity (integrates), then such plans
will be considered to be one plan and will be considered to comply with the
permitted disparity rules if the extent of the permitted disparity of all
such plans does not exceed 100%. For purposes of the preceding sentence, the
extent of the permitted disparity 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 under Code Section 401(l) applicable to such Plan.
Notwithstanding the foregoing, if the Employer maintains two or more
standardized paired plans, only one plan may provide for permitted
disparity.
Cumulative Permitted Disparity Limit: With respect to a Participant who
benefits or has benefited under a defined benefit or target benefit plan
of the Employer, effective for Plan Years beginning on or after January 1,
1994, the cumulative permitted disparity limit for the Participant is thirty
five (35) total cumulative permitted disparity years. Total cumulative
permitted disparity years means the number of years credited to the
Participant for allocation or accrual purposes under the Plan, any other
qualified plan or simplified employee pension plan (whether or not
terminated) ever maintained by the Employer, while such plan either provides
for or imputes permitted disparity. For purposes of determining the
Participants 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 which neither
provides for nor imputes permitted disparity for any year beginning on or
after January 1, 1994, then such Participant has no cumulative disparity
limit.
For purposes of this Section, 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 1.41 0(b)-3(a).
(5) Participants who are not actively employed at the end of a Plan Year due to
death, Total and Permanent Disability or attainment of their Early Retirement Date
or Normal Retirement Date who would otherwise receive an allocation solely but for
the occurrence of such event shall be eligible to share in allocations for that Plan
Year pursuant to this Section 43(b).
23
(c) Except with respect to Participant Directed Accounts, (or as otherwise specifically
provided for in the Plan) as of each Valuation Date, before allocation of any Employer
contributions and Forfeitures, any earnings or losses (net appreciation or net depreciation)
of the Trust Fund (exclusive of assets segregated for distribution) shall be allocated in
the same proportion that each Participants and Former Participants nonsegregated accounts
bear to the total of all Participants and Former Participants nonsegregated accounts as of
such date.
(d) Participants Accounts shall be debited for any insurance or annuity premiums paid,
if any, and credited with any dividends or interest received on Contracts.
(e) On or before each Anniversary Date, any amounts which became Forfeitures since the
last Anniversary Date may be made available to reinstate previously forfeited account
balances of Former Participants, if any, in accordance with Section 3.5(d) or used to
satisfy any contribution that may be required pursuant to Section 6.9. The remaining
Forfeitures, if any, shall be treated in accordance with the Adoption Agreement. If no
election is made in the Adoption Agreement, any remaining Forfeitures will be used to reduce
any future Employer contributions under the Plan Regardless of the preceding sentences, in
the event the allocation of Forfeitures provided herein shall cause the Annual Additions
(as defined in Section 4.4) to any Participants Account to exceed the amount allowable by
the Code, an adjustment shall be made in accordance with Section 4.5. Except, however, a
Participant shall only be eligible to share in the allocations of Forfeitures for the year
if the conditions set forth in the Adoption Agreement are satisfied, unless a top- heavy
contribution is required pursuant to Section 4.3(f). If no election is made in the Adoption
Agreement, then a Participant shall be eligible to share in the allocation of the Employers
contribution for the year if the Participant completes more than five hundred (500) Hours of
Service during the Plan Year or who is employed on the last day of the Plan Year.
(f) Minimum Allocations Required for Top Heavy Plan Years: Notwithstanding the
foregoing, for any Top Heavy Plan Year, the sum of the Employers contributions and
Forfeitures allocated to the Participants Combined Account of each Non-Key Employee shall
be equal to at least three percent (3%) of such Non-Key Employees 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 (as defined in
Section 9.2(f)).However, if (i) the sum of the Employers contributions and Forfeitures
allocated to the Participants Combined Account of each Key Employee for such Top Heavy Plan
Year is less than three percent (3%) of each Key Employees 415 Compensation and (ii) this
Plan is not required to be included in a required aggregation group (as defined in Section
9.2(f)) to enable a defined benefit plan to meet the requirements of Code Section 401(a)(4)
or 410, the sum of the Employers contributions and Forfeitures allocated to the
Participants Combined Account of each Non-Key Employee shall be equal to the largest
percentage allocated to the Participants Combined 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 three percent
(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 Employers
contribution shall be allocated as follows and shall still be required to satisfy the other
provisions of this subsection:
(1) An amount equal to three percent (3%) multiplied by each Participants
Compensation for the Plan Year shall be allocated to each Participants Account. If
the Employer does not contribute such amount for all Participants, the amount shall
be allocated to each Participants Account in the same proportion that such
Participants total Compensation for the Plan Year bears to the total Compensation
of all Participants for such year.
(2) The balance of the Employers contribution over the amount allocated under
subparagraph (1) hereof shall be allocated to each Participants Account in a dollar
amount equal to three percent (3%) multiplied by a Participants Excess
Compensation. If the Employer does not
24
contribute such amount for all Participants, each Participant will be allocated a
share of the contribution in the same proportion that such Participants Excess
Compensation bears to the total Excess Compensation of all Participants for that
year. For purposes of this paragraph, in the case of any Participant who has
exceeded the cumulative permitted disparity limit described in Section 4.3(b)(4),
such Participants total Compensation will be taken into account.
(3) The balance of the Employers contribution over the amount allocated under
subparagraph (2) hereof shall be allocated to each Participants Account in a dollar
amount equal to 2.7% multiplied by the sum of each Participants 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 such Participants total Compensation plus Excess Compensation
for the Plan Year bears to the total Compensation plus Excess Compensation of all
Participants for that year. For purposes of this paragraph, in the case of any
Participant who has exceeded the cumulative permitted disparity limit described in
Section 4.3(b)(4), such Participants total Compensation rather than Compensation
plus Excess Compensation 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 Employers contributions over the amount allocated above, if
any, shall be allocated to each Participants Account in the same proportion that
such Participants 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 three percent (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 Participants Combined Account of any Key Employee shall be equal to the ratio of the
sum of the Employers 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 Participants Combined 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)
declined to make mandatory contributions (if required) or, in the case of a cash or deferred
arrangement, Elective Deferrals to the Plan.
(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 (as defined in Section 9.2(f)) which is top heavy, the Employer will not
be required (unless otherwise elected in the Adoption Agreement) to provide a Non-Key
Employee with both the fill separate minimum defined benefit plan benefit and the full
separate defined contribution plan allocations. In such case, the top heavy minimum benefits
will be provided as elected in the Adoption Agreement and, if applicable, as follows:
(1) If the 5% defined contribution minimum is elected in the Adoption Agreement:
(i) The requirements of Section 9.1 will 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 will receive
a minimum allocation of five percent (5%) of such Participants 415
Compensation from the applicable defined contribution plan(s).
25
(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 two percent (2%) of such Participants highest five (5) 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 (10).
(iii) For each Non-Key Employee who is a Participant only in this defined
contribution plan, the Employer will provide a minimum allocation equal to
three percent (3%) of such Participants 415 Compensation.
(2) If the 2% defined benefit minimum is elected in the Adoption Agreement, then 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 two percent (2%) of
such Participants highest five (5) consecutive year average of 415 Compensation for
each Year of Service while a participant in the plan, in which the Plan is top
heavy, not to exceed ten (10).
(j) For the purposes of this Section, 415 Compensation will be limited to the same
dollar limitations set forth in Section 1.11 adjusted in such manner as permitted under Code
Section 415(d).
(k) Notwithstanding anything in this Section to the contrary, all information necessary
to properly reflect a given transaction may not be available until after the date specified
herein for processing such transaction, in which case the transaction will be reflected
when such information is received and processed. Subject to express limits that may be
imposed under the Code, the processing of any contribution, distribution or other
transaction may be delayed for any legitimate business reason (including, but not limited
to, failure of systems or computer programs, failure of the means of the transmission of
data, force majeure, the failure of a service provider to timely receive values or prices,
and correction for errors or omissions or the errors or omissions of any service provider).
The processing date of a transaction will be binding for all purposes of the Plan.
(l) Notwithstanding anything to the contrary, if this is a non-standardized Plan that
would otherwise fail to meet the requirements of Code Section 410(b)(1) or 410(b)(2)(A)(i)
and the Regulations thereunder (including Regulation 1.401(a)(4)-2(b)(4)(vi)(D)(3) which
treats Participants only receiving top heavy minimums as not benefiting) because Employer
contributions would not be allocated to a sufficient number or percentage of Participants
for a Plan Year, (other than with respect to a cash or deferred arrangement or Employer
matching contribution portion of the Plan, which shall be treated as provided in Section
12.3) then the following rules may be applied:
For purposes of this subsection, an Employee is benefiting under the Plan on a
particular date if, under the Plan, the Employee is entitled to an Employer contribution or
an allocation of Forfeitures for the Plan Year.
If this subsection applies, then the Administrator will suspend the allocation
conditions for the includible Non-Highly Compensated Employees who are Participants,
beginning first with the includible Employees employed by the Employer on the last day of
the Plan Year, then the includible Employees who have the latest separation from service
during the Plan Year, and continuing to suspend the allocation conditions for each
includible Employee who incurred an earlier separation from service, from the latest to
the earliest separation from service date, until the Plan satisfies the ratio percentage
test for the Plan Year. If two or more includible Employees have a separation from
service on the same day, then the Administrator will suspend the allocation conditions for
all such includible Employees, irrespective of whether the Plan can satisfy the ratio
percentage test by accruing benefits for fewer than all such includible Employees. If the
Plan for any Plan Year suspends the allocation conditions for an includible Employee, then
that Employee will share in the allocation for that Plan Year of the Employer contribution
and Forfeitures, if any, without regard to whether the Employee has satisfied the other
allocation conditions set forth in this Section.
26
4.4 MAXIMUM ANNUAL ADDITIONS
(a)(1) If a 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 Code
Section 419(e)) maintained by the Employer, or an individual medical account (as defined in
Code Section 415(l)(2)) maintained by the Employer, or a simplified employee pension (as
defined in Code Section 408(k)) maintained by the Employer which provides Annual
Additions, the amount of Annual Additions which may be credited to the Participants
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 Participants accounts would cause the
Animal 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, and any amount in excess of the
Maximum Permissible Amount which would have been allocated to such Participant may be
allocated to other Participants.
(2) Prior to determining the Participants actual 415 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 Participants 415
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 Participants actual 415 Compensation for such Limitation Year.
(b)(1) This subsection applies if, in addition to this Plan, a Participant is covered
under another qualified defined contribution plan maintained by the Employer that is a
Master or Prototype Plan, a welfare benefit fund (as defined in Code Section 419(e))
maintained by the Employer, an individual medical account (as defined in Code Section
415(1)(2)) maintained by the Employer, or a simplified employee pension (as defined in Code
Section 408(k)) maintained by the Employer, which provides Annual Additions, during any
Limitation Year. The Annual Additions which may be credited to a Participants accounts
under this Plan for any such Limitation Year shall not exceed the Maximum Permissible
Amount reduced by the Annual Additions credited to a Participants accounts under the
other plans and welfare benefit funds, individual medical accounts, and simplified employee
pensions for the same Limitation Year. If the Annual Additions with respect to the
Participant under other defined contribution plans and welfare benefit funds maintained by
the Employer are less than the Maximum Permissible Amount and the Employer contribution
that would otherwise be contributed or allocated to the Participants 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, and any amount in excess of the Maximum Permissible Amount which
would have been allocated to such Participant may be allocated to other Participants. 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 Participants account under this Plan for the
Limitation Year.
(2) Prior to determining the Participants actual 415 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 Participants 415
Compensation for the Limitation Year, uniformly determined for all Participants
similarly situated.
(3) As soon as is administratively feasible after the end of the Limitation Year,
the Maximum Permissible Amount for the Limitation Year will be determined on the
basis of the Participants actual 415 Compensation for the Limitation Year.
27
(4) If, pursuant to Section 4.4(b)(2) or Section 4.5, a Participants 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, and then
by Annual Additions to a plan subject to Code Section 412, 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 of in the manner
described in Section 4.5.
(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 Participants Combined 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) For any Limitation Year beginning prior to the date the Code Section 4 15(e) limits
are repealed with respect to this Plan (as specified in the Adoption Agreement for the GUST
transitional rules), if the Employer maintains, or at any time maintained, a qualified
defined benefit plan covering any Participant in this Plan, then the sum of the
Participants Defined Benefit Plan Fraction and Defined Contribution Plan Fraction may
not exceed 10. In such event, 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. However, in the Adoption Agreement the Employer
may specify an alternative method under which the plans involved will satisfy the
limitations of Code Section 415(e), including increased top heavy minimum benefits so that
the combined limitation is 1.25 rather than 1.0.
(e) For purposes of applying the limitations of Code Section 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)(b): (1) rollover
contributions (as. defined in Code Sections 402(c), 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 Section 41 1(a)(7)(B) (cash-outs); (4) repayments
of distributions received by an Employee pursuant to Code Section 41 1(a)(3)(D) (mandatory
contributions); and (5) Employee contributions to a simplified employee pension excludable
from gross income under Code Section 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 Participants accounts for any
Limitation Year of (a) Employer contributions, (b) Employee contributions (except as
provided below), (c) forfeitures, (d) amounts allocated, after March 31, 1984, to an
individual medical account, as defined in Code Section 415(l)(2), which is part of a
pension or annuity plan maintained by the Employer, (e) 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
28
Code Section 41 9A(d)(3)) under a welfare benefit fund (as defined in Code Section
419(e)) maintained by the Employer and (f) allocations under a simplified employee
pension. Except, however, the Compensation percentage limitation referred to in
paragraph (f)(9)(ii) shall not apply to: (1) any contribution for medical benefits
(within the meaning of Code Section 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 Code Section 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 Section 4.5 in the Limitation
Year to reduce Employer contributions shall be considered Annual Additions for
such Limitation Year.
(2) Defined Benefit Fraction means a fraction, the numerator of which is the sum
of the Participants 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 one hundred twenty-five percent (125%) of the dollar limitation
determined for the Limitation Year under Code Sections 415(b)(1)(A) as adjusted by
Code Section 415(d) or one hundred forty percent (140%) of the Highest Average
Compensation including any adjustments under Code Section 415(b).
Notwithstanding the above, if the Participant was a Participant as of the first
day of the first Limitation Year beginning after 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 one hundred twenty-five
percent (125%) 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 Section 415 for all Limitation Years beginning before January 1, 1987.
Notwithstanding the foregoing, for any Top Heavy Plan Year, one hundred percent
(100%) shall be substituted for one hundred twenty-five percent (125%) unless the
extra top heavy minimum allocation or benefit is being made pursuant to the
Employers specification in the Adoption Agreement. However, for any Plan Year in
which this Plan is a Super Top Heavy Plan, one hundred percent (100%) shall always
be substituted for one hundred twenty-five percent (125%).
(3) Defined Contribution Dollar Limitation means $30,000 as adjusted under Code
Section 415(d).
(4) Defined Contribution Fraction means a fraction, the numerator of which is the
sum of the Annual Additions to the Participants accounts under all the defined
contribution plans (whether or not terminated) maintained by the Employer for the
current and all prior Limitation Years, (including the Annual Additions
attributable to the Participants 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 (as defined in Code
Section 4 19(e)), individual medical accounts (as defined in Code Section
415(l)(2)), and simplified employee pensions (as defined in Code Section 408(k))
maintained by the Employer), and the denominator of which is the sum of the Maximum
Aggregate Amounts for the current and all prior Limitation Years in which the
Employee had 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 one hundred twenty-five percent (125%) of the dollar
limitation determined under Code Section 415(c)(1)(A) as adjusted by Code Section
415(d) or thirty-five percent (35%) of the Participants 415 Compensation for such
year.
29
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 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
Section 415 limitation applicable to the first Limitation Year beginning on or after
January 1, 1987.
For Limitation Years beginning prior to January 1, 1987, the Annual Additions
shall not be recomputed to treat all Employee contributions as Annual Additions.
Notwithstanding the foregoing, for any Top Heavy Plan Year, one hundred percent
(100%) shall be substituted for one hundred twenty-five percent (125%) unless the
extra top heavy minimum allocation or benefit is being made pursuant to the
Employers specification in the Adoption Agreement. However, for any Plan Year in
which this Plan is a Super Top Heavy Plan, one hundred percent (100%) shall always
be substituted for one hundred twenty-five percent (125%).
(5) Employer means the Employer that adopts this Plan and all Affiliated
Employers, except that for purposes of this Section, the determination of whether an
entity is an Affiliated Employer shall be made by applying Code Section 415(h).
(6) Excess Amount means the excess of the Participants Annual Additions for the
Limitation Year over the Maximum Permissible Amount.
(7) Highest Average Compensation means the average Compensation for the three (3)
consecutive Years of Service with the Employer while a Participant in the Plan that
produces the highest average. A Year of Service with the Employer is the twelve (12)
consecutive month period ending on the last day of the Limitation Year.
(8) Master or Prototype Plan means a plan the form of which is the subject of a
favorable opinion letter from the Internal Revenue Service.
(9) Maximum Permissible Amount means the maximum Annual Addition that may be
contributed or allocated to a Participants accounts under the Plan for any
Limitation Year, which shall not exceed the lesser of:
(i) the Defined Contribution Dollar Limitation, or
(ii) twenty-five percent (25%) of the Participants 415 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 Sections 401(h) or 41
9A(f)(2)) which is otherwise treated as an Annual Addition.
If a short Limitation Year is created because of an amendment changing the
Limitation Year to a different twelve (12) consecutive month period, the Maximum
Permissible Amount will not exceed the Defined Contribution Dollar Limitation
multiplied by a fraction, the numerator of which is the number of months in the
short Limitation Year and the denominator of which is twelve (12).
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(10) 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
(ii) the Participants 415 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 subsection, straight life annuity means an annuity that
is payable in equal installments for the life of the Participant that terminates
upon the Participants death.
(g) Notwithstanding anything contained in this Section to the contrary, the
limitations, adjustments and other requirements prescribed in this Section shall at all
times comply with the provisions of Code Section 415 and the Regulations thereunder.
4.5 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
Allocation of Annual Additions (as defined in Section 4.4) to a Participants Combined
Account for a Limitation Year generally will cease once the limits of Section 4.4 he been reached
for such Limitation Year. However, if as a result of the allocation of Forfeitures, a reasonable
error in estimating a Participants annual 415 Compensation, a reasonable error in determining the
amount of elective deferrals (within the meaning of Code Section 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 1415-6(b)(6) shall be applicable, the Annual Additions under this Plan would
cause the maximum provided in Section 4.4 to be exceeded, the Excess Amount will be disposed of
in one of the following manners, as uniformly determined by the Plan Administrator for all
Participants similarly situated:
(a) Any after-tax voluntary Employee contributions (plus attributable gains), to the
extent they would reduce the Excess Amount, will be distributed to the Participant. For
purposes of this Section, gains means the gains allocable to the Participants after-tax
voluntary Employee Contributions for the Plan Year multiplied by a fraction, the numerator
of which is the Participants after-tax voluntary Employee Contributions treated as an
Excess Amount for the Plan Year and the denominator of which is the sum of the Participants
Account Balances attributable to such Employee Contributions on the first day of the Plan
Year and the Participants after-tax voluntary Employee Contributions of the Plan Year,
without regard to any income or loss occurring during that Plan Year,
(b) If, after the application of subparagraph (a), an Excess Amount still exists, any
unmatched Elective Deferrals (and for Limitation Years beginning after December 31, 1995,
any gains attributable to such Elective Deferrals), to the extent they would reduce the
Excess Amount, will be distributed to the Participant. For purposes of this Section, gains
shall be determined in the same manner as in subsection 11.3(e), except that any investment
losses shall not be taken into account;
(c) To the extent necessary, matched Elective Deferrals and Employer matching
contributions will be proportionately reduced from the Participants Account. The Elective
Deferrals (and for Limitation Years beginning after December 31, 1995, any gains
attributable to such Elective Deferrals) will be distributed to the Participant and the
Employer matching contributions (and for Limitation Years beginning after December 31, 1995,
any gains attributable to such matching contributions) will be used to reduce the Employers
contributions or to pay proper Plan expenses in the next Limitation Year;
(d) if, after the application of subparagraphs (a), (b) and (c), 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 Participants Account will be used to reduce Employer
contributions (including any allocation of
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Forfeitures) for such Participant in the next Limitation Year, and each succeeding
Limitation Year if necessary;
(e) If, after the application of subparagraphs (a), (b) and (c), 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; and
(f) If a suspense account is in existence at any time during a Limitation Year pursuant
to this Section, no investment gains and losses shall be allocated to such suspense account.
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. Except as provided in (a), (b) and (c) above, Excess Amounts may not
be distributed to Participants or Former Participants.
4.6 ROLLOVERS
(a) With the consent of the Administrator, the Plan may accept a rollover, provided
the rollover will not jeopardize the tax-exempt status of the Plan or create adverse tax
consequences for the Employer. The amounts rolled over shall be set up in a separate account
herein referred to as a Participants Rollover Account. Such account shall be fully Vested
at all times and shall not be subject to forfeiture for any reason. For purposes of this
Section, the term Participant shall include any Eligible Employee who is not yet a
Participant. In addition, for purposes of this Section the term Participant shall also
include former Employees if the Employer and Administrator consent to accept rollovers of
distributions made to former Employees from any plan of the Employer.
(b) Amounts in a Participants Rollover Account shall be held by the Trustee pursuant
to the provisions of this Plan and may not be withdrawn by, or distributed to the
Participant, in whole or in part, except as elected in the Adoption Agreement and subsection
(e) below. The Trustee shall have no duty or responsibility to inquire as to the propriety
of the amount, value or type of assets transferred, nor to conduct any due diligence with
respect to such assets; provided, however, that such assets are otherwise eligible to be
held by the Trustee under the terms of this Plan.
(c) At Normal Retirement Date, or such other date when the Participant or Eligible
Employee or such Participants or Eligible Employees Beneficiary shall be entitled to
receive benefits, the Participants Rollover Account shall be used to provide additional
benefits to the Participant or the Participants Beneficiary. Any distribution of amounts
held in a Participants Rollover Account shall be made in a manner which is consistent with
and satisfies the provisions of Sections 6.5 and 6.6, including, but not limited to, all
notice and consent requirements of Code Sections 411 (a)(11) and 417 and the Regulations
thereunder. Furthermore, such amounts shall be considered to be part of a Participants
benefit in determining whether an involuntary cash-out of benefits may be made without
Participant consent.
(d) The Administrator may direct that rollovers 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, invested as
part of the general Trust Fund or, if elected in the Adoption Agreement, directed by the
Participant.
(e) For purposes of this Section, the term qualified plan shall mean any tax
qualified plan under Code Section 401(a), or any other plans from which distributions are
eligible to be rolled over into this Plan pursuant to the Code. The term rollover means:
(i) amounts transferred to this Plan in a direct rollover made pursuant to Code Section
401(a)(31) from another qualified plan; (ii) distributions received by an Employee from
other qualified plans which are eligible for tax-free rollover to a qualified plan and
which are transferred by the Employee to this Plan within sixty (60) days following receipt
thereof; (iii) amounts transferred to this Plan from a conduit individual retirement account
provided that the conduit individual retirement account has no assets. other than assets
which (A) were previously distributed to the
32
Employee by another qualified plan (B) were eligible for tax-free rollover to a
qualified plan and (C) were deposited in such conduit individual retirement account within
sixty (60) days of receipt thereof; (iv) amounts distributed to the Employee from a conduit
individual retirement account meeting the requirements of clause (iii) above, and
transferred by the Employee to this Plan within sixty (60) days of receipt thereof from such
conduit individual retirement account; and (v) any other amounts which are eligible to be
rolled over to this Plan pursuant to the Code.
(f) Prior to accepting any rollovers to which this Section applies, the Administrator
may require the Employee to establish (by providing opinion of counsel or otherwise) that
the amounts to be rolled over to this Plan meet the requirements of this Section.
4.7 PLAN-TO-PLAN TRANSFERS FROM QUALIFIED PLANS
(a) With the consent of the Administrator, amounts may be transferred (within the
meaning of Code Section 414(1)) to this Plan from other tax qualified plans under Code
Section 401(a), provided the plan 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 Trust
or create adverse tax consequences for the Employer. Prior to accepting any transfers to
which this Section applies, the Administrator may require an opinion of counsel that the
amounts to be transferred meet the requirements of this Section. The amounts transferred may
be set up in a separate account herein referred to as a Participants Transfer Account.
Furthermore, for Vesting purposes, the Participants Transfer Account shall be treated as a
separate Participants Account.
(b) Amounts in a Participants Transfer Account shall be held by the Trustee pursuant
to the provisions of this Plan and may not be withdrawn by, or distributed to the
Participant, in whole or in part, except as elected in the Adoption Agreement and subsection
(d) below, provided the restrictions of subsection (c) below and Section 6.15 are satisfied.
The Trustee shall have no duty or responsibility to inquire as to the propriety of the
amount, value or type of assets transferred, nor to conduct any due diligence with respect
to such assets; provided, however, that such assets are otherwise eligible to be held by the
Trustee under the terms of this Plan.
(c) Except as permitted by Regulations (including Regulation 1.411 (d)-4), amounts
attributable to elective contributions (as defined in Regulation 1.401(k)-1(g)(3)),
including amounts treated as elective contributions, which are transferred from another
qualified plan in a plan-to-plan transfer (other than a direct rollover) shall be subject to
the distribution limitations provided for in Regulation 1.401(k)-1(d).
(d) At Normal Retirement Date, or such other date when the Participant or the
Participants Beneficiary shall be entitled to receive benefits, the Participants Transfer
Account shall be used to provide additional benefits to the Participant or the Participants
Beneficiary. Any distribution of amounts held in a Participants Transfer Account shall be
made in a manner which is consistent with and satisfies the provisions of Sections 6.5 and
6.6, including, but not limited to, all notice and consent
requirements of Code Sections 411(a)(11) and 417 and the Regulations thereunder. Furthermore, such amounts shall be considered
to be part of a Participants benefit in determining whether an involuntary cash-out of
benefits may be made without Participant consent.
(e) 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, invested as
part of the general Trust Fund or, if elected in the Adoption Agreement, directed by the
Participant.
(f) 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 Section 41
1(d)(6) protected benefit as described in Section 8.1(e).
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4.8 VOLUNTARY EMPLOYEE CONTRIBUTIONS
(a) For 401(k) Plans, if elected in the Adoption Agreement, each Participant who is
eligible to make Elective Deferrals may, in accordance with nondiscriminatory procedures
established by the Administrator, elect to make after-tax voluntary Employee contributions
to this Plan. For Profit Sharing Plans and Money Purchase Plans, if elected in the Adoption
Agreement, each participant who meets the eligibility requirements set forth in the Adoption
Agreement may, in accordance with nondiscriminatory procedures established by the
Administrator, elect to make after-tax voluntary Employee contributions to this Plan as of
the date elected in the Adoption Agreement. Such contributions must generally be paid to the
Trustee within a reasonable period of time after being received by the Employer.
(b) The balance in each Participants Voluntary Contribution Account shall be fully
Vested at all times and shall not be subject to Forfeiture for any reason.
(c) A Participant may elect at any time to withdraw after-tax voluntary Employee
contributions from such Participants Voluntary Contribution Account and the actual earnings
thereon 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 Sections 41
l(a)(l 1) and 417 and the Regulations thereunder. If the Administrator maintains
sub-accounts with respect to after-tax 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 the withdrawal. Forfeitures of Employer
contributions shall not occur solely as a result of an Employees withdrawal of after-tax
voluntary Employee contributions.
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 the Participant shall be
barred from making any after-tax voluntary Employee contributions for a period of twelve (12)
months after receipt of the hardship distribution.
(d) At Normal Retirement Date, or such other date when the Participant or the
Participants Beneficiary is entitled to receive benefits, the Participants Voluntary
Contribution Account shall be used to provide additional benefits to the Participant or the
Participants Beneficiary.
(e) To the extent a Participant has previously made mandatory Employee contributions
under prior provisions of this Plan, such contributions will be treated as after-tax
voluntary Employee contributions.
4.9 QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTIONS
(a) If this is an amendment to a Plan that previously permitted deductible voluntary
Employee contributions, then each Participant who made Qualified Voluntary Employee
Contributions within the meaning of Code Section 21 9(e)(2) as it existed prior to the
enactment of the Tax Reform Act of 1986, shall have such contributions held in a separate
Qualified Voluntary Employee Contribution Account which shall be fully Vested at all times.
Such contributions, however, shall not be permitted for taxable years beginning after
December 31, 1986.
(b) A Participant may, upon written request delivered to the Administrator, make
withdrawals from such Participants 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
Sections 41 1(a)(11) and 417 and the Regulations thereunder.
(c) At Normal Retirement Date, or such other date when the Participant or the
Participants Beneficiary is entitled to receive benefits, the Qualified Voluntary Employee
Contribution Account shall be used to provide additional benefits to the Participant or the
Participants Beneficiary.
34
4.10 DIRECTED INVESTMENT ACCOUNT
(a) If elected in the Adoption Agreement, all Participants may direct the Trustee as to
the investment of all or a portion of their individual account balances as set forth in the
Adoption Agreement and within limits set by the Employer. Participants may direct the
Trustee, in writing (or in such other form which is acceptable to the Trustee), to invest
their accounts in specific assets, specific funds or other investments permitted under the
Plan and the Participant Direction Procedures. That portion of the account of any
Participant that is subject to investment direction of such Participant will be considered a
Participant Directed Account. It is intended that the Plan comply with Act Section 404(c)
with respect to the investment of Participant Directed Accounts and the voting and tendering
of Employer stock pursuant to Section 4.10(g), below.
(b) The Administrator will establish a Participant Direction Procedure (which may be
contained in one or more documents or other media), 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 and
provisions that the Administrator may impose on a Participants right to direct investments.
(c) The Administrator may, in its discretion, include or exclude by amendment or other
action from the Participant Direction Procedures such instructions, guidelines or policies
as it deems necessary or appropriate to ensure proper administration of the Plan, and may
interpret the same accordingly.
(d) As of each Valuation Date, all Participant Directed Accounts shall be charged or
credited with the net earnings, gains, losses and expenses as well as any appreciation or
depreciation in the market value using publicly listed fair market values when available or
appropriate as follows:
(1) to the extent the assets in a Participant Directed Account are accounted for as
pooled assets or investments, the allocation of earnings, gains and losses of each
Participants Account shall be based upon the total amount of funds so invested in a
manner proportionate to the Participants share of such pooled investment; and
(2) to the extent the assets in a Participant Directed Account are accounted for as
segregated assets, the allocation of earnings, gains on and losses from such assets
shall be made on a separate and distinct basis
(e) Investment directions will be processed as soon as administratively practicable
after proper investment directions are received from the Participant. No guarantee is made
by the Plan, Employer, Administrator or Trustee that investment directions will be processed
on a daily basis, and no guarantee is made in any respect regarding the processing time of
an investment direction. Notwithstanding any other provision of the Plan, the Employer,
Administrator or Trustee reserves the right to not value an investment option on any given
Valuation Date for any reason deemed appropriate by the Employer, Administrator or Trustee.
Furthermore, the processing of any investment transaction may be delayed for any legitimate
business reason (including, but not limited to, failure of systems or computer programs,
failure of the means of the transmission of data, force majeure, the failure of a service
provider to timely receive values or prices, and correction for errors or omissions or the
errors or omissions of any service provider). The processing date of a transaction will be
binding for all purposes of the Plan and considered the applicable Valuation Date for an
investment transaction.
(f) If the Employer intends to operate any portion of this Plan as an Act Section
404(c) plan, the Participant Direction Procedures should provide an explanation of the
circumstances under which Participants and their Beneficiaries may give investment
instructions, including but not limited to, the following:
35
(1) the conveyance of instructions by the Participants and their Beneficiaries to
invest Participant Directed Accounts in a Directed Investment Option;
(2) the name, address and phone number of the Fiduciary (and, if applicable, the
person or persons designated by the Fiduciary to act on its behalf) responsible for
providing information to the Participant or a Beneficiary upon request relating to
the Directed Investment Options;
(3) applicable restrictions on transfers to and from any Designated Investment
Alternative;
(4) any restrictions on the exercise of voting, tender and similar rights related to
a Directed Investment Option by the Participants or their Beneficiaries;
(5) a description of any transaction fees and expenses which affect the balances in
Participant Directed Accounts in connection with the purchase or sale of a Directed
Investment Option; and
(6) general procedures for the dissemination of investment and other information
relating to the Designated Investment Alternatives as deemed necessary or
appropriate, including but not limited to a description of the following:
(i) the investment vehicles available under the Plan, including specific
information regarding any Designated Investment Alternative;
(ii) any designated Investment Managers; and
(iii) a description of the additional information that may be obtained upon
request from the Fiduciary designated to provide such information.
(g) With respect to those assets in a Participants Directed Account, the Participant
or Beneficiary shall direct the Trustee with regard to any voting, tender and similar rights
associated with the ownership of such assets (hereinafter referred to as the Stock Rights)
as follows based on the election made in the Adoption Agreement:
(1) each Participant or Beneficiary shall direct the Trustee to vote or otherwise
exercise such Stock Rights in accordance with the provisions, conditions and terms
of any such Stock Rights;
(2) such directions shall be provided to the Trustee by the Participant or
Beneficiary in accordance with the procedure as established by the Administrator and
the Trustee shall vote or otherwise exercise such Stock Rights with respect to which
it has received directions to do so under this Section; and
(3) to the extent to which a Participant or Beneficiary does not instruct the
Trustee to vote or otherwise exercise such Stock Rights, such Participants or
Beneficiaries shall be deemed to have directed the Trustee that such Stock Rights
remain nonvoted and unexercised.
(h) Any information regarding investments available under the Plan, to the extent not
required to be described in the Participant Direction Procedures, may be provided to
Participants in one or more documents (or in any other form, including, but not limited to,
electronic media) which are separate from the Participant Direction Procedures and are not
thereby incorporated by reference into this Plan.
4.11 INTEGRATION IN MORE THAN ONE PLAN
If the Employer maintains qualified retirement plans that provide for permitted disparity
(integration), the provisions of Section 4.3(b)(4) will apply. Furthermore, if the Employer
maintains two or more standardized paired plans, only one plan may provide for permitted disparity.
36
4.12 QUALIFIED MILITARY SERVICE
Notwithstanding any provisions of this Plan to the contrary, effective as of the later of
December 12, 1994, or the Effective Date of the Plan, contributions, benefits and service credit
with respect to qualified military service will be provided in accordance with Code Section 414(u).
Furthermore, loan repayments may be suspended under this Plan as permitted under Code Section
414(u)(4).
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND
The Administrator shall direct the Trustee, as of each 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 (or their contractual value in the case of a Contract or Policy) as of the Valuation Date and
may deduct all expenses for which the Trustee has not yet been paid by the Employer or the Trust
Fund.
5.2 METHOD OF VALUATION
Subject to the applicable terms of the trust agreement, 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 employment with the Employer and retire for purposes hereof on
the Participants Normal Retirement Date or Early Retirement Date. However, a Participant may
postpone the termination of 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 such Participants Retirement Date. Upon a Participants
Retirement Date or as soon thereafter as is practicable, the Administrator shall direct the
distribution, at the election of the Participant, of the Participants entire Vested interest in
the Plan in accordance with Section 6.5.
6.2 DETERMINATION OF BENEFITS UPON DEATH
(a) Upon the death of a Participant before the Participants Retirement Date or other
termination of employment, all amounts credited to such Participants Combined 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 Participants Vested accounts to the
Participants 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
Vested amounts credited to the accounts of such deceased Former Participant to such Former
Participants Beneficiary.
37
(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 Administrators
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 Participants surviving spouse. Except,
however, the Participant may designate a Beneficiary other than the spouse for the
Pre-Retirement Survivor Annuity if:
(1) the Participant and the Participants spouse have validly waived the
Pre-Retirement Survivor Annuity in the manner prescribed in Section 6.6, and the
spouse has waived the right to be the Participants Beneficiary,
(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 older as defined in Code Section 414(p) which
provides otherwise),
(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 a designation of a Beneficiary or change a
Beneficiary by filing written (or in such other form as permitted by the IRS) notice of such
revocation or change with the Administrator. However, the Participants spouse must again consent
in writing (or in such other form as permitted by the IRS) 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.
(e) A Participant may, at any time, designate a Beneficiary for death benefits, if any,
payable under the Plan that are in excess of the Pre-Retirement Survivor Annuity without the
waiver or consent of the Participants spouse. In the event no valid designation of
Beneficiary exists, or if the Beneficiary is not alive at the time of the Participants
death, the death benefit will be paid in the following order of priority, unless the
Employer specifies a different order of priority in an addendum to the Adoption Agreement,
to:
(1) The Participants surviving spouse;
(2) The Participants children, including adopted children, per stirpes
(3) The Participants surviving parents, in equal shares; or
(4) The Participants estate.
If the Beneficiary does not predecease the Participant, but dies prior to distribution of the
death benefit, the death benefit will be paid to the Beneficiarys estate.
(f) Notwithstanding anything in this Section to the contrary, if a Participant has
designated the spouse as a Beneficiary, then a divorce decree or a legal separation that
relates to such spouse shall revoke the Participants designation of the spouse as a
Beneficiary unless the decree or a qualified domestic relations order (within the meaning of
Code Section 414(p)) provides otherwise or a subsequent Beneficiary designation is made,
which again names the spouse as a Beneficiary.
(g) If the Plan provides an insured death benefit and a Participant dies before any
insurance coverage to which the Participant is entitled under the Plan is effected, the
death benefit from such insurance coverage shall be limited to the premium which was or
otherwise would have been used for such purpose.
38
(h) 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 Participants Total and Permanent Disability prior to the Participants
Retirement Date or other termination of employment, all amounts credited to such Participants
Combined Account shall become fully Vested. In the event of a Participants 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 the entire Vested interest in the Plan.
6.4 DETERMINATION OF BENEFITS UPON TERMINATION
(a) If a Participants employment with the Employer is terminated for any reason other
than death, Total and Permanent Disability, or retirement, then such Participant shall be
entitled to such benefits as are provided herein.
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 Participants 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 Participants
Combined Account be payable to such Terminated 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
Sections 411 (a)( 11) and 417 and the Regulations thereunder.
Regardless of whether distributions in kind are permitted, in the event the amount of
the Vested portion of the Terminated Participants Combined 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 such Terminated Participants 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
Participants 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 Participants 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 Participants Combined Account and then assign the Contracts to the Terminated
Participant.
Notwithstanding the above, unless otherwise elected in the Adoption Agreement, if the
value of a Terminated Participants Vested benefit derived from Employer and Employee
contributions does not exceed $5,000 (or, $3,500 for distributions made prior to the later
of the first day of the first Plan Year beginning on or after August 5, 1997, or the date
specified in the Adoption Agreement) 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 Participants spouse. A Participants Vested benefit shall not
include Qualified Voluntary Employee Contributions within the meaning of Code Section
72(o)(5)(B) for Plan Years beginning prior to January 1, 1989. Furthermore, the
determination of whether the $5,000 (or, if applicable, $3,500) threshold has been exceeded
is generally based on the value of the Vested benefit as of the Valuation Date preceding the
date of the distribution. However, if the lookback rule applies, the applicable threshold
is deemed to be exceeded if the Vested benefit exceeded the applicable threshold at the time
of any prior distribution. The lookback rule generally applies to all distributions made
prior to March 22, 1999. With respect to distributions made on or after March 22, 1999, the
lookback rule applies if either (1) the provisions of Section 6.12 do not apply or (2) a
Participant has begun to receive distributions pursuant to an optional form of benefit under
which at least one scheduled periodic distribution has not yet been made, and if the value
of the Participants benefit, determined at the
39
time of the first distribution under that optional form of benefit exceeded the
applicable threshold. However, the Plan does not fail to satisfy the requirements of this
paragraph if, prior to the adoption of this Prototype Plan, the lookback rule was applied
to all distributions. Notwithstanding the preceding, the lookback rule will not apply to
any distributions made on or after October 17, 2000.
(b) The Vested portion of any Participants Account shall be a percentage of such
Participants Account determined on the basis of the Participants number of Years of
Service (or Periods of Service if the Elapsed Time Method is elected) according to the
vesting schedule specified in the Adoption Agreement. However, a Participants entire
interest in the Plan shall be non-forfeitable upon the Participants Normal Retirement Age
(if the Participant is employed by the Employer on or after such date) or upon the
Participants attainment of Early Retirement Date, if any.
(c) For any Top Heavy Plan Year, the minimum top heavy vesting schedule 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 Code Section 41 1(a)(7)
except those attributable to Employee contributions, including benefits accrued before the
effective date of Code Section 416 and benefits accrued before the Plan became top heavy.
Further, no decrease in a Participants Vested percentage shall occur in the event the
Plans status as top heavy changes for any Plan Year.
If in any subsequent Plan Year the Plan ceases to be a Top Heavy Plan, then unless a
specific Plan amendment is made to provide otherwise, the Administrator will continue to use
the vesting schedule in effect while the Plan was a Top Heavy Plan.
(d) Upon the complete discontinuance of the Employers contributions to the Plan (if
this is a profit sharing plan) or upon any full or partial termination of the Plan, all
amounts then 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 Participants 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 Participants
nonforfeitable percentage of such Participants 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
Plans status as a Top Heavy Plan. Furthermore, if the Plans vesting schedule is amended,
then the amended schedule will only apply to those Participants who complete an Hour of
Service after the effective date of the amendment.
(f) If the Plans vesting schedule is amended, or if the Plan is amended in any way
that directly or indirectly affects the computation of the Participants 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 (or Periods of
Service if the Elapsed Time Method is elected) as of the expiration date of the election
period may elect to have such Participants nonforfeitable percentage computed under the
Plan without regard to such amendment or change. If a Participant fails to make such
election, then such Participant shall be subject to the new vesting schedule. The
Participants election period shall commence on the adoption date of the amendment and shall
end sixty (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.
40
(g) In determining Years of Service or Periods of Service for purposes of vesting under
the Plan, Years of Service or Periods of Service shall be excluded as elected in the
Adoption Agreement.
6.5 DISTRIBUTION OF BENEFITS
(a)(l) 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
Plan 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 Participants death shall continue to the spouse during the
spouses lifetime at a rate equal to either fifty percent (50%), seventy-five percent (75%) (or,
sixty-six and two-thirds percent (662/3%) if the Insurer used to provide the annuity does not offer
a joint and seventy- five percent (75%) annuity), or one hundred percent (100%) of the rate at
which such benefits were payable to the Participant. Unless otherwise elected in the Adoption
Agreement, a joint and fifty percent (50%) survivor annuity shall be considered the designated
qualified Joint arid Survivor Annuity and the normal form of payment for the purposes of this Plan.
However, the Participant may, without spousal consent, elect an alternative Joint and Survivor
Annuity, which alternative shall be equal in value to the designated qualified Joint and Survivor
Annuity. An unmarried Participant shall receive the value of such Participants benefit in the form
of a life annuity. Such unmarried Participant, however, may elect 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 fulfilling 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 (or in such other form as permitted by the IRS) during the
election period and be consented to in writing (or in such other form as permitted
by the IRS) by the Participants spouse. If the spouse is legally incompetent to
give consent, the spouses 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 spouses 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 such Participants spouse may be revoked by the Participant in
writing (or in such other form as permitted by the IRS) without the consent of the
spouse at any time during the election period. A revocation of a prior election
shall cause the Participants benefits to be distributed as a Joint and Survivor
Annuity. The number of revocations shall not be limited. Any new election must
comply with the requirements of this paragraph. A former spouses waiver shall not
be binding on a new spouse.
(3) The election period to waive the Joint and Survivor Annuity shall be the ninety
(90) day period ending on the Annuity Starting Date.
(4) For purposes of this Section, spouse or surviving spouse means the spouse or
surviving spouse of the Participant, provided that a former spouse will be treated
as the spouse or surviving spouse and a current spouse will not be treated as the
spouse or surviving spouse to the extent provided under a qualified domestic
relations order as described in Code Section 414(p).
(5) With regard to the election, except as otherwise provided herein, the
Administrator shall provide to the Participant no less than thirty (30) days and no
more than ninety (90) days before the Annuity Starting Date a written (or such other
form as permitted by the IRS) explanation of:
(i) the terms and conditions of the Joint and Survivor Annuity,
41
(ii) the Participants right to make and the effect of an election to waive
the Joint and Survivor Annuity,
(iii) the right of the Participants 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.
(6) Any distribution provided for in this Section made on or after December 31,
1996, may commence less than thirty (30) days after the notice required by Code
Section 41 7(a)(3) is given provided the following requirements are satisfied:
(i) the Administrator clearly informs the Participant that the Participant
has a right to a period of thirty (30) days after receiving the notice to
consider whether to waive the Joint and Survivor Annuity and to elect (with
spousal consent) a form of distribution other than a Joint and Survivor
Annuity;
(ii) the Participant is permitted to revoke any affirmative distribution
election at least until the Annuity Starting Date or, if later, at any time
prior to the expiration of the seven (7) day period that begins the day
after the explanation of the Joint and Survivor Annuity is provided to the
Participant;
(iii) the Annuity Starting Date is after the time that the explanation of
the Joint and Survivor Annuity is provided to the Participant. However, the
Annuity Starting Date may be before the date that any affirmative
distribution election is made by the Participant and before the date that
the distribution is permitted to commence under (iv) below; and
(iv) distribution in accordance with the affirmative election does not
commence before the expiration of the seven (7) day period that begins the
day after the explanation of the Joint and Survivor Annuity is provided to
the Participant.
(b) In the event a married Participant duly elects pursuant to paragraph (a)(2) above
not to receive the 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
Beneficiary any amount to which the Participant or Beneficiary is entitled under the Plan in
one or more of the following methods which are permitted pursuant to the Adoption Agreement:
(1) One lump-sum payment in cash or, if elected in the Adoption Agreement, in
property in the form of Employer stock that is allocated to the accounts of the
Participant at the time of the distribution;
(2) Partial withdrawals;
(3) Payments over a period certain in monthly, quarterly, semiannual, or annual cash
installments. The period over which such payment is to be made shall not extend
beyond the Participants life expectancy (or the life expectancy of the Participant
and the Participants designated Beneficiary). After periodic installments commence,
the Participant 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
(4) 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
42
lives of the Participant and the Participants designated Beneficiary) or the life
expectancy of the Participant (or the life expectancy of the Participant and the
Participants designated Beneficiary).
(c) Benefits may not be paid without the Participants and the Participants spouses
consent if the present value of the Participants Joint and Survivor Annuity derived from
Employer and Employee contributions exceeds, or has ever exceeded, $5,000 (or $3,500, for
distributions made prior to the later of the first day of the first Plan Year beginning
after August 5, 1997, or the date specified in the Adoption Agreement) and the benefit is
immediately distributable. However, spousal consent is not required if the distribution
will made in the form a Qualified Joint and Survivor Annuity and the benefit is immediately
distributable. A benefit is immediately distributable if any part of the benefit could be
distributed to the Participant (or surviving spouse) before the Participant attains (or
would have attained if not deceased) the later of the Participants Normal Retirement Age or
age 62.
If the value of the Participants benefit derived from Employer and Employee
contributions does not exceed, and has never exceeded at the time of any prior distribution,
$5,000 (or, if applicable, $3,500), then the Administrator will distribute such benefit in a
lump-sum without such Participants consent. No distribution may be made under the preceding
sentence after the Annuity Starting Date unless the Participant and the Participants spouse
consent in writing (or in such other form as permitted by the IRS) to such distribution. Any
consent required under this paragraph must be obtained not more than ninety (90) days before
commencement of the distribution and shall be made in a manner consistent with Section
6.5(a)(2). Notwithstanding the preceding, the lookback rule (which provides that if the
present value at the time of a prior distribution exceeded the applicable dollar threshold,
then the present value at any subsequent time is deemed to exceed the threshold) will not
apply to any distributions made on or after October 17, 2000.
(d) The following rules will apply with respect to the consent requirements set forth
in subsection (c):
(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 Cede Section 417;
(2) The Participant must be informed of the 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 that are required
under Section 6.5(e);
(3) Notice of the rights specified under this paragraph shall be provided no less
than thirty (30) days and no more than ninety (90) days before the Annuity Starting
Date;
(4) Written (or such other form as permitted by the IRS) consent of the Participant
to the distribution must not be made before the Participant receives the notice and
must not be made more than ninety (90) days before the Annuity Starting Date; and
(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, for Plan Years beginning
after December 31, 1996, the distribution of a Participants benefits, 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 Section 40l(a)(9) and the
Regulations thereunder (including Regulation 1.401(a)(9)-2):
(1) A Participants benefits will be distributed or must begin to be distributed not
later than the Participants required beginning date. Alternatively, distributions
to a Participant must begin
43
no later than the Participants required beginning date and must be made over the
life of the Participant (or the lives of the Participant and the Participants
designated Beneficiary) or the life expectancy of the Participant (or the life
expectancies of the Participant and the Participants designated Beneficiary) in
accordance with Regulations. However, if the distribution is to be in the form of a
joint and survivor annuity or single life annuity, then distributions must begin no
later than the required beginning date and must be made over the life of the
Participant (or the lives of the Participant and the Participants designated
Beneficiary) in accordance with Regulations
(2) The required beginning date for a Participant who is a five percent (5%)
owner with respect to the Plan Year ending in the calendar year in which such
Participant attains age 70 1/2 means April 1st of the calendar year following the
calendar year in which the Participant attains age 70 1/2. Once distributions have
begun to a five percent (5%) owner under this subsection, they must continue to be
distributed, even if the Participant ceases to be a five percent (5%) owner in a
subsequent year.
(3) The required beginning date for a Participant other than a five percent (5%)
owner means, April 1st of the calendar year following the later of the calendar
year in which the Participant attains age 70 1/2 or the calendar year in which the
Participant retires. If this is an amendment or restatement adopted after the close
of the GUST remedial amendment period of a Plan that has continued to use the
pre-SBJPA definition of required beginning date: (i) the preceding sentence shall
apply, (ii) there shall be preserved as an optional form of benefit for a
Participant other than a five percent (5%) owner the
right to elect an in-service
distribution from all accounts upon attaining age 70 1/2 and (iii) any Participant
other than a five percent (5%) owner who had previously commenced receiving
required minimum distributions may elect to stop receiving those distributions and
have them recommence in accordance with the post-SBJPA rules, provided that, when
distributions recommence, if the Plan permit annuities as a form of distribution
there shall be a new annuity starting date.
(4) If this is an amendment or restatement adopted within the GUST remedial
amendment period of a plan that contained the pre-SBJPA rules and an election is
made to use the post-SBJPA rules, then the transition rules elected in the Adoption
Agreement will apply, if any.
(5) Except as otherwise provided herein, five percent (5%) owner means, for
purposes of this Section, a Participant who is a five percent (5%) owner as defined
in Cede Section 416 at any time during the Plan Year ending with or within the
calendar year in which such owner attains age 70 1/2.
(6) Distributions to a Participant and such Participants Beneficiaries will only be
made in accordance with the incidental death benefit requirements of Code Section
401(a)(9)(G) and the Regulations thereunder.
(7) For purposes of this Section, the life expectancy of a Participant and/or a
Participants spouse (other than in the case of a life annuity) shall or shall not
be redetermined annually as elected in the Adoption Agreement and in accordance with
Regulations. If the Participant or the Participants 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 Participants
spouse shall be subject to recalculation. Life expectancy and joint and last
survivor life expectancy shall be computed using the return multiples in Tables V
and VI of Regulation Section 1.72-9.
(8) With respect to distributions under the Plan made for calendar years beginning
on or after January 1, 2001, or if later, the date specified in the Adoption
Agreement, the Plan will apply the minimum distribution requirements of Code Section
401(a)(9) in accordance with the Regulations under section 401(a)(9) that were
proposed on January 17, 2001, notwithstanding any provision of the Plan to the
contrary. This amendment shall continue in effect until the end of the last calendar
44
year beginning before the effective date of final Regulations under section
401(a)(9) or such other date as may be specified in guidance published by the
Internal Revenue Service.
However, if the date specified in the Adoption Agreement is a date in 2001 other than January
1, 2001, then with respect to distributions under the Plan made on or after such date for calendar
years beginning on or after January 1, 2001, the Plan will apply the minimum distribution
requirements of Code Section 401 (a)(9) in accordance with the Regulations under section 401(a)(9)
that were proposed on January 17, 2001, notwithstanding any provision of the Plan to the contrary.
If the total amount of required minimum distributions made to a participant for 2001 prior to the
specified date are equal to or greater than the amount of required minimum distributions determined
under the 2001 Proposed Regulations, then no additional distributions are required for such
participant for 2001 on or after such date. If the total amount of required minimum distributions
made to a participant for 2001 prior to the specified date are less than the amount determined
under the 2001 Proposed Regulations, then the amount of required minimum distributions for 2001 on
or after such date will be determined so that the total amount of required minimum distributions
for 2001 is the amount determined under the 2001 Proposed Regulations. This amendment, shall
continue in effect until the end of the last calendar year beginning before the effective date of
final Regulations under section 401(a)(9) or such other date as may be specified in guidance
published by the Internal Revenue Service.
(f) 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.
(g) Subject to the spouses 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 retirement benefits paid in an alternative method acceptable
under Code Section 401(a) as in effect prior to the enactment of the Tax Equity and Fiscal
Responsibility Act of 1982 (TEFRA).
(h) If a distribution is made to a Participant who has not severed employment and who
is not fully Vested in the Participants Account, and the Participant may increase the
Vested percentage in such account, then at any relevant time the Participants Vested
portion of the account will be equal to an amount (X) determined by the formula:
X equals P (AB plus D) 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 the
relevant time is the time at which, under the Plan, the Vested percentage in the account
cannot increase.
(i) If this is a Plan amendment that eliminates or restricts the ability of
a Participant to receive payment of the Participants interest in the Plan
under a particular optional form of benefit, then the amendment shall not
apply to any distribution with an annuity starting date earlier than the
earlier of: (1) the 90th day after the date the Participant receiving the
distribution has been furnished a summary that reflects the amendment and
that satisfies the Act requirements at 29 CFR 2520.104b-3 relating to a
summary of material modifications or (ii) the first day of the second Plan
Year following the Plan Year in which the amendment is adopted.
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 the surviving spouse. The Participants spouse may direct that
payment of the Pre-Retirement Survivor Annuity commence within a reasonable period after the
Participants 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 Normal
45
Retirement Age or age 62. However, the spouse may elect a later commencement date. Any
distribution to the Participants 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 Participants
death must be made by the Participant in writing (or in such other form as permitted by the
IRS) during the election period and shall require the spouses irrevocable consent in the
same manner provided for in Section 6.5(a)(2). Further, the spouses 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 Participants death. An earlier waiver (with spousal consent) may be made provided a
written (or such other form as permitted by the IRS) 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 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 election period, with respect to such Participant (and consistent with
Regulations), a written (or such other form as permitted by the IRS) 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;
(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; or
(4) A reasonable period ending after Code Section 401(a)(l 1) applies to the
Participant.
For purposes of applying this subsection, a reasonable period ending after the
enumerated events described in (2), (3) and (4) is the end of the two (2) year period
beginning one (1) year prior to the date the applicable event occurs, and ending one (1)
year after that date. In the case of a Participant who separates from service before the
Plan Year in which age 35 is attained, notice shall be provided within the two (2) year
period beginning one (1) year prior to separation and ending one (1) year after separation.
If such a Participant thereafter returns to employment with the Employer, the applicable
period for such Participant shall be redetermined.
(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 Section
303(e)(2) of the Retirement Equity Act of 1984.
(f) If the value of the Pre-Retirement Survivor Annuity derived from Employer and
Employee contributions does not exceed, and has never exceeded at the time of any prior
distribution, $5,000 (or, $3,500 for distributions made prior to the later of the first day
of the first Plan Year beginning after August 5, 1997, or the date specified in the Adoption
Agreement) the Administrator shall direct the
46
distribution of such amount to the Participants spouse as soon as practicable. No
distribution may be made under the preceding sentence after the Annuity Starting Date unless
the spouse consents in writing (or in such other form as permitted by the IRS). If the value
exceeds, or has ever exceeded at the time of any prior distribution, $5,000 (or, if
applicable, $3,500), an immediate distribution of the entire amount may be made to the
surviving spouse, provided such surviving spouse consents in writing (or in such other form
as permitted by the IRS) to such distribution. Any consent required under this paragraph
must be obtained not more than ninety (90) days before commencement of the distribution and
shall be made in a manner consistent with Section 6.5(a)(2). Notwithstanding the preceding,
the lookback rule (which provides that if the present value at the time of a prior
distribution exceeded the applicable dollar threshold, then the present value at any
subsequent time is deemed to exceed the threshold) will not apply to any distributions made
on or after October 17, 2000.
(g) Distributions made upon the death of a Participant prior to he or she receiving any
benefits shall be made pursuant to the election of the Participant or Beneficiary. Death
benefits may be paid to a Participants Beneficiary in one of the following optional forms
of benefits subject to the rules specified in Section 6.6(h) and the elections made in the
Adoption Agreement. Such optional forms of distributions may be elected by the Participant
in the event there is an election to waive the Pre-Retirement Survivor Annuity, and for any
death benefits in excess of the Pre-Retirement Survivor Annuity. However, if no optional
form of distribution was elected by the Participant prior to death, then the Participants
Beneficiary may elect the form of distribution:
(1) One
lump-sum payment in cash or, if elected in the Adoption Agreement, in
property in the form of Employer stock that is allocated to the accounts of the
Participant at the time of the distribution.
(2) Payment in monthly, quarterly, semi-annual, or annual cash installments over a
period to be determined by the Participant or the Participants 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) In the form of an annuity over the life expectancy of the Beneficiary.
(4) If death benefits in excess of the Pre-Retirement Survivor Annuity are to be
paid to the surviving spouse, such benefits may be paid pursuant to (1) or (2)
above, or used to purchase an annuity so as to increase the payments made pursuant
to the Pre-Retirement Survivor 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 Section 401(a)(9) and the Regulations thereunder.
(1) If it is determined, pursuant to Regulations, that the distribution of a
Participants interest has begun and the Participant dies before the entire interest
has been distributed, the remaining portion of such interest shall be distributed at
least as rapidly as under the method of distribution elected pursuant to Section 6.5
as of the date of death.
(2) If a Participant dies before receiving any distributions of the interest in the
Plan or before distributions are deemed to have begun pursuant to Regulations, then
the death benefit shall be distributed to the Participants Beneficiaries in
accordance with the following rules subject to subsections 6.6(h)(3) and 6.6(i)
below:
(i) The entire death benefit shall be distributed to the Participants
Beneficiaries by December 31st of the calendar year in which the fifth
anniversary of the Participants death occurs;
47
(ii) The 5-year distribution requirement of(i) above shall not apply to any
portion of the deceased Participants 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 (or such later date as may be prescribed by Regulations);
(iii) However, in the event the Participants spouse (determined as of the
date of the Participants death) is the designated Beneficiary, the
provisions of(ii) above shall apply except that the requirement that
distributions commence within one year of the Participants 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; 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 5-year distribution requirement of this Section shall apply as if the
spouse was the Participant.
(3) Notwithstanding subparagraph (2) above, if a Participants death benefits are to
be paid in the form of a Pre-Retirement Survivor Annuity, then distributions to the
Participants 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 5-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 Participants death. Except, however, with respect to a designated Beneficiary who is
the Participants 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, December 31st of 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 Participants death. An election by a designated
Beneficiary must be in writing (or in such other form as permitted by the IRS) 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 5-year distribution requirement
shall apply.
(j) For purposes of this Section, the life expectancy of a Participant and a
Participants spouse (other than in the case of a life annuity) shall or shall not be
redetermined annually as elected in the Adoption Agreement and in accordance with
Regulations. If the Participant 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 Participants spouse shall be subject to recalculation. Life expectancy and joint
and last survivor life expectancy shall be computed using the return multiples in Tables V
and VI of Regulation Section 1.72-9.
(k) For purposes of this Section, any amount paid to a child of the Participant will be
treated as if it had been paid to the surviving spouse if the amount becomes payable to the
surviving spouse when the child reaches the age of majority.
(l) In the event that less than one hundred percent (100%) of a Participants interest
in the Plan is distributed to such Participants spouse, the portion of the distribution
attributable to the Participants Voluntary Contribution Account shall be in the same
proportion that the Participants Voluntary Contribution Account bears to the Participants
total interest in the Plan.
(m) Subject to the spouses 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
48
have death benefits paid in an alternative method acceptable under Code Section 401(a)
as in effect prior to the enactment of the Tax Equity and Fiscal Responsibility Act of 1982
(TEFRA).
6.7 TIME OF 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, the distribution or series of payments may be made or begun on such
date or as soon thereafter as is practicable. 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 sixtieth (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 tenth (10th) anniversary of the year in which the Participant commenced
participation in the Plan; or (c) the date the Participant terminates service with the Employer.
Notwithstanding the foregoing, the failure of a Participant and, if applicable, the
Participants spouse, to consent to a distribution that is immediately distributable (within the
meaning of Section 6.5(c)), 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 OR INCOMPETENT BENEFICIARY
In the event a distribution is to be made to a minor or incompetent Beneficiary, then the
Administrator may direct that such distribution be paid to the legal guardian, or if none in the
case of a minor Beneficiary, to a parent of such Beneficiary, 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 or incompetent 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 a
spousal Beneficiary to whom Section 6.6 applies hereunder shall, at the later of the Participants
attainment of age 62 or Normal Retirement Age, remain unpaid solely by reason of the inability of
the Administrator, after diligent effort, to ascertain the whereabouts of such Participant or
Beneficiary, the amount so distributable shall be treated as a Forfeiture pursuant to the Plan.
Notwithstanding the foregoing, if (i) the value of a Participants Vested benefit derived from
Employer and Employee contributions payable pursuant to Section 6.5 does not exceed $5,000, (ii)
the benefit is payable to a Participant pursuant to Section 8.2 or a Beneficiary pursuant to
Section 6.12 or (iii) the Participant or Beneficiary had previously elected or consented to a
distribution, and in each case such benefit shall remain unpaid solely by reason of the inability
of the Administrator, after diligent effort, to ascertain the whereabouts of such Participant or
Beneficiary, the amount so held then shall be treated as a Forfeiture. Notwithstanding the
foregoing, if the distribution is a minimum required distribution under the Internal Revenue Code
as described in Sections 6.5(e) or 6.6(h) of the Plan, such amount shall be treated as a Forfeiture
as soon as practicable following the date that it is determined that the Participant or Beneficiary
cannot be located. In the event a Participant or Beneficiary is located subsequent to the
Forfeiture, such benefit shall be restored, first from Forfeitures, if any, and then from an
additional Employer contribution, if necessary. Upon Plan termination, the portion of the
distributable amount that is an eligible rollover distribution as defined in Plan Section
6.14(b)(1) may be paid directly to an individual retirement account described in Code Section
408(a) or an individual retirement annuity described in Code Section 408(b). However, regardless of
the preceding, a benefit that is lost by reason of escheat under applicable state law is not
treated as a Forfeiture for purposes of this Section nor as an impermissible forfeiture under the
Code.
6.10 IN-SERVICE DISTRIBUTION
For Profit Sharing Plans and 401(k) Plans, if elected in the Adoption Agreement, at such time
as the conditions set forth in the Adoption Agreement have been satisfied, then the Administrator,
at the election of a Participant who has not severed employment with the Employer, shall direct the
distribution in cash of up to the
49
entire Vested amount then credited to the accounts as elected in the Adoption Agreement
maintained on behalf of such Participant. Notwithstanding the foregoing, effective January 1, 2002
(or in the case of a Profit Sharing Plan or a 401(k) Plan that is first amended into the form of
this Prototype Plan after January 1, 2002, effective as of the date of such amendment), a
Participant who has not severed employment with the Employer may elect to receive a distribution of
up to the entire value of his or her Participant Rollover Account or Voluntary Contribution
Account. The minimum amount of any such distribution shall be $500. 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 Sections 411 (a)(11) and 417 and the Regulations
thereunder. Furthermore, if an in-service distribution is permitted from more than one account
type, the Administrator may determine any ordering of a Participants in- service distribution from
such accounts.
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP
(a) For Profit Sharing Plans and 401(k) Plans (except to the extent Section 12.9
applies), if elected in the Adoption Agreement, the Administrator, at the election of the
Participant, shall direct the distribution in a single sum in cash to any Participant in any
one Plan Year up to the lesser of 100% of the Vested interest of the Participants Combined
Account valued as of the last Valuation Date or 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 for an immediate and heavy financial need. The Administrator will
determine whether there is an immediate and heavy financial need based on the facts and
circumstances which may be based upon the Participants representations as described in
Section 12.9(b). An immediate and heavy financial need includes a distribution for one of
the following:
(1) Medical expenses described in Code Section 213(d) incurred by the Participant,
the Participants spouse, or any of the Participants dependents (as defined in Code
Section 152) or necessary for these persons to obtain medical care as described in
Code Section 213(d);
(2) Costs directly related to the purchase (excluding mortgage payments) of a
principal residence for the Participant;
(3) Payment of tuition, related educational fees, and room and board expenses, for
the next twelve (12) months of post-secondary education for the Participant, the
Participants spouse, children, or dependents (as defined in Code Section 152); or
(4) Payments necessary to prevent the eviction of the Participant from the
Participants principal residence or foreclosure on the mortgage on that residence.
(b) The minimum amount of a hardship distribution made pursuant to this Section 6.11
and/or Section 12.9 is $500. If a hardship distribution under Sections 6.11 and/or 12.9 is
permitted from more than one account type, the Administrator may determine any ordering of a
Participants hardship distribution from such accounts.
(c) 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 Sections 411(a)(11) and 417 and the Regulations
thereunder.
6.12 SPECIAL RULE FOR CERTAIN PROFIT SHARING PLANS
(a) Unless annuities are required to be offered under the Plan pursuant to Code Section
411(d)(6), the provisions of this Section apply to a Participant in a Profit Sharing Plan or
401(k) Plan.
50
(b) A Participant shall be prohibited from receiving a distribution in the form of a
life annuity and the Joint and Survivor Annuity provisions of Section 6.5 shall not apply,
unless the payment of benefits in such forms is required to prevent the impermissible
reduction of a Section 411 (d)(6) protected benefit described therein.
(c) Notwithstanding anything in Sections 6.2 and 6.6 to the contrary, upon the death of
a Participant, the automatic form of distribution will be a lump-sum rather than a Qualified
Pre-Retirement Survivor Annuity, and no other form of distribution shall be available.
Furthermore, the Participants spouse will be the Beneficiary of the Participants entire
Vested interest in the Plan unless an election is made to waive the spouse as Beneficiary.
The other provisions in Section 6.2 shall be applied by treating the death benefit in this
subsection as though it is a Qualified Pre-Retirement Survivor Annuity.
(d) Except to the extent otherwise provided in this Section, the provisions of Sections
6.2, 6.5 and 6.6 regarding spousal consent (and solely with respect to Section 6.6.
regarding forms of benefit) shall be inoperative with respect to this Plan.
(e)
If a distribution is one to which Code Sections 401(a)(11) and 417 do not apply,
such distribution may commence less than thirty (30) days after the notice required under
Regulation 1.411(a)(11)(c) is given, provided that:
(1) the Plan Administrator clearly informs the Participant that the Participant has
a right to a period of at least thirty (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
(2) the Participant, after receiving the notice, affirmatively elects a
distribution.
6.13 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION
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 meanings
set forth under Code Section 4l4(p).
6.14 DIRECT ROLLOVERS
(a) Notwithstanding any provision of the Plan to the contrary that would otherwise
limit a distributees election under this Section, a distributee may elect, at the time
and in the manner prescribed by the Administrator, to have any portion of an eligible
rollover distribution paid directly to an eligible retirement plan specified by the
distributee in a direct rollover.
(b) For purposes of this Section, the following definitions shall apply:
(1) An eligible rollover distribution means any distribution described in Code
Section 402(c)(4) and generally includes any distribution of all or any portion of
the balance to the credit of the distributee, except that an eligible rollover
distribution does not include: any distribution that is one of a series of
substantially equal periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the distributee or the joint lives (or joint life
expectancies) of the distributee and the distributees designated beneficiary,
or for a specified period often (10) years or more; any distribution to the extent
such distribution is required under Code Section 401(a)(9); the portion of any other
distribution(s) that is not includible in gross income (determined without regard to
the exclusion for net unrealized appreciation with respect to employer securities);
and for distributions made after December 31, 1998, any hardship distribution
described in Code Section 401(k)(2)(B)(i)(IV).
51
(2) An eligible retirement plan is an individual retirement account described in
Code Section 408(a), an individual retirement annuity described in Code Section
408(b), an annuity plan described in Code Section 403(a), or a qualified plan
described in Code Section 401(a), that accepts the distributees eligible
rollover distribution. However, in the case of an eligible rollover distribution
to the surviving spouse, an eligible retirement plan is an individual retirement
account or individual retirement annuity.
(3) A distributee includes an Employee or former Employee. In addition, the
Employees or former Employees surviving spouse and the Employees or former
Employees spouse or former spouse who is the alternate payee under a qualified
domestic relations order, as defined in Code Section 414(p), are distributees with
regard to the interest of the spouse or former spouse.
(4) A direct rollover is a payment by the Plan to the eligible retirement plan
specified by the distributee.
6.15 TRANSFER OF ASSETS FROM A MONEY PURCHASE PLAN
(a) This Section shall be effective as of the following date:
(1) for Plans not entitled to extended reliance as described in Revenue Ruling
94-76, the first day of the first Plan Year beginning on or after December 12, 1994,
or if later, 90 days after December 12, 1994; or
(2) for Plans entitled to extended reliance as described in Revenue Ruling 94-76, as
of the first day of the first Plan Year following the Plan Year in which the
extended reliance period applicable to the Plan ends. However, in the event of a
transfer of assets to the Plan from a money purchase plan that occurs after the date
of the most recent determination letter, the effective date of the amendment shall
be the date immediately preceding the date of such transfer of assets.
(b) 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 Employees
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 Section 414(1), to this Plan from a money purchase pension plan
qualified under Code Section 401(a) (other than any portion of those assets and liabilities
attributable to after-tax voluntary Employee contributions or to a direct or indirect
rollover contribution).
6.16 ELECTIVE TRANSFERS OF BENEFITS TO OTHER PLANS
(a) If a voluntary, fully-informed election is made by a Participant, then if the
conditions set forth herein are satisfied, a Participants entire benefit may be transferred
between qualified plans (other than any direct rollover described in Q&A-3 of Regulation
1.401(a)(3l)-1). As an alternative to the transfer, the Participant may elect to retain the
Participants Section 41 1(d)(6) protected benefits under the Plan (or, if the plan is
terminating, to receive any optional form of benefit for which the Participant is eligible
under the plan as required by Code Section 41 1(d)(6)). A transfer between qualified plans
may only be made pursuant to this subsection if the following additional requirements are
met:
(i) The transfer occurs at a time at which the participants benefits are
distributable. A Participants benefits are distributable on a particular
date if, on that date, the Participant is eligible, under the terms of the
Plan, to receive an immediate distribution of these benefits (e.g., in the
form of an immediately commencing annuity) from that plan under provisions
of the plan not inconsistent with Code Section 401(a);
(ii) For transfers that occur on or after January 1, 2002, the transfer
occurs at a time at which the Participant is not eligible to receive an
immediate distribution of the
52
participants entire nonforfeitable accrued benefit in a single-sum
distribution that would consist entirely of an eligible rollover
distribution within the meaning of Code Section 401(a)(31)(C);
(iii) The participant is fully Vested in the transferred benefit in the
transferee plan;
(iv) In the case of a transfer from a defined contribution plan to a defined
benefit plan, the defined benefit plan provides a minimum benefit, for each
Participant whose benefits are transferred, equal to the benefit, expressed
as an annuity payable at normal retirement age, that is derived solely on
the basis of the amount transferred with respect to such Participant; and
(v) The amount of the benefit transferred, together with the amount of any
contemporaneous Code Section 401(a)(31) direct rollover to the transferee
plan, equals the Participants entire nonforfeitable accrued benefit under
the Plan.
(b) If a voluntary, fully-informed election is made by a Participant, then if the
conditions set forth herein are satisfied, a Participants entire benefit may be transferred
between qualified defined contribution plans (other than any direct rollover described in
Q&A-3 of Regulation 1.401(a)(3l)-1). As an alternative to the transfer, the Participant may
elect to retain the Participants Section 41 l(d)(6) protected benefits under the Plan
(or, if the plan is terminating, to receive any optional form of benefit for which the
Participant is eligible under the plan as required by Code Section 41 l(d)(6)). A transfer
between qualified plans may only be made pursuant to this subsection if the following
additional requirements are met:
(i) To the extent the benefits are transferred from a money purchase pension
plan, the transferee plan must be a money purchase pension plan. To the
extent the benefits being transferred are part of a qualified cash or
deferred arrangement under Code Section 401(k), the benefits must be
transferred to a qualified cash or deferred arrangement under Code Section
40 1(k). Benefits transferred from a profit-sharing plan other than from a
qualified cash or deferred arrangement, or from a stock bonus plan other
than an employee stock ownership plan, may be transferred to any type of
defined contribution plan; and
(ii) The transfer must be made either in connection with an asset or stock
acquisition, merger, or other similar transaction involving a change in
employer of the employees of a trade or business (i.e., an acquisition or
disposition within the meaning of Regulation 1.410(b)-2(f)) or in connection
with the Participants change in employment status to an employment status
with respect to which the Participant is not entitled to additional
allocations under the Plan.
ARTICLE VII
TRUSTEE; LIFE INSURANCE; LOANS TO PARTICIPANTS
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE
The Trustee shall be specified in the Adoption Agreement Only the ADP Prototype Defined
Contribution Plan Trust Agreement or the ADP Prototype Plan Mid-Market Trust Agreement may be used
with this Plan.
7.2 LIFE INSURANCE
(a) The Trustee, at the direction of the Administrator and pursuant to instructions
from the individual designated in the Adoption Agreement for such purpose and subject to the
conditions set forth in the Adoption Agreement, shall ratably apply for, own, and pay all
premiums on Contracts on the lives of the Participants or, in the case of Profit Sharing
Plan (including a 401(k) plan), on the life of any person in whom the Participant has an
insurable interest or on the joint lives of a Participant and any person in whom
53
the Participant has an insurable interest. Any initial or additional Contract purchased
on behalf of a Participant shall have a face amount of not less than $1,000, the amount set
forth in the Adoption Agreement, or the limitation of the Insurer, whichever is greater. If
a life insurance Contract is to be purchased for a Participant or Former Participant, then
the aggregate premium for ordinary life insurance for each Participant or Former Participant
must be less than 50% of the aggregate contributions and Forfeitures allocated to the
Participants or Former Participants Combined 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, then
the aggregate premium must be 25% or less of the aggregate contributions and Forfeitures
allocated to the Participants or Former Participants Combined Account. If both term
insurance and ordinary life insurance are purchased, then the premium 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 the Participants or
Former Participants Combined Account. Notwithstanding the preceding, the limitations
imposed herein with respect to the purchase of life insurance shall not apply, in the case
of a Profit Sharing Plan (including a 401(k) plan), to the portion of the Participants
Account that has accumulated for at least two (2) Plan Years or to the entire Participants
Account if the Participant has been a Participant in the Plan for at least five (5) years.
Amounts transferred to this Plan in accordance with Section 4.6(e)(ii), (iii) or (v) and a
Participants or Former Participants Voluntary Contribution Account may be used to purchase
Contracts without limitation.
(b) The Trustee must distribute the Contracts to the Participant or Former 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 commencement of benefits. Furthermore, if a Contract is
purchased on the joint lives of the Participant and another person and such other person
predeceases the Participant, then the Contract may not be maintained under this Plan.
(c) Notwithstanding anything herein above to the contrary, amounts credited to a
Participants Qualified Voluntary Employee Contribution Account pursuant to Section 4.9,
shall not be applied to the purchase of life insurance Contracts. Furthermore, no life
insurance Contracts shall be required to be obtained on an individuals life if, for any
reason (other than the nonpayment of premiums) the Insurer will not issue a Contract on such
individuals life.
(d) 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 Participants designated Beneficiary in accordance with the distribution provisions of
Article VI. A Participants 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 that are in excess of the cash surrender value immediately prior to death. However,
the Trustee shall not pay the proceeds in a method that would violate the requirements of
the Retirement Equity Act of 1984, as stated in Article VI of the Plan, or Code Section
401(a)(9) and the Regulations thereunder. 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.
7.3 LOANS TO PARTICIPANTS
(a) If specified in the Adoption Agreement, the Administrator may direct the Trustee to
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) loans shall provide
for periodic repayment over a reasonable period of time; (6) loans shall be treated as
Participant Directed investments; and (7) the minimum amount of any loan shall be $500.
Furthermore, no Participant loan shall exceed the Participants Vested interest in the Plan.
54
(b) Loans shall not be made to any Shareholder-Employee or Owner-Employee (including an
Owner- Employees family members as defined in Code Section 267(c)(4)) unless an exemption
for such loan is obtained pursuant to Act Section 408 or such loan would otherwise not be a
prohibited transaction pursuant to Code Section 4975 and Act Section 408.
(c) An assignment or pledge of any portion of a Participants 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.
(d) If the Vested interest of a Participant is used to secure any loan made pursuant to
this Section, then the written (or such other form as permitted by the IRS) consent of the
Participants spouse shall be required in a manner consistent with Section 6.5(a), provided
the spousal consent requirements of such Section apply to the Plan. Such 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 or Former Participant
shall be taken into account in determining the amount of the death benefit or Pre-Retirement
Survivor Annuity. However, unless the loan program established pursuant to this Section
provides otherwise, no spousal consent shall be required under this paragraph if the total
interest subject to the security is not in excess of $5,000 (or, $3,500 effective for loans
made prior to the later of the first day of the first Plan Year beginning after August 5,
1997, or the date specified in the Adoption Agreement).
(e) The Administrator shall be authorized to establish a participant loan program to
provide for loans under the Plan. The loan program shall be established in accordance with
Department of Labor Regulation Section 2550.408(b)-1(d)(2) providing for loans by the Plan
to parties-in-interest under said Plan, such as Participants or Beneficiaries. In order for
the Administrator to implement such loan program, a separate written document forming a part
of this Plan must be adopted, which document shall specifically 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;
(5) the procedure under the program for determining a reasonable rate of interest;
(6) the types of collateral which may secure a Participant loan; and
(7) the events constituting default and the steps that will be taken to preserve
Plan assets in the event such default.
(f) Notwithstanding anything in this Plan to the contrary, if a Participant or
Beneficiary defaults on a loan made pursuant to this Section that is secured by the
Participants interest in the Plan, then a Participants interest may be offset by the
amount subject to the security to the extent there is a distributable event permitted by the
Code or Regulations.
(g) Notwithstanding anything in this Section to the contrary, if this is an amendment
and restatement of an existing Plan, any loans made prior to the date this amendment and
restatement is adopted shall be subject to the terms of the Plan in effect at the time such
loan was made.
(h) All outstanding loan balances will become due and payable in their entirety by the
Participant upon the occurrence of a distributable event (other than the satisfaction of the
conditions for an in-service distribution, if applicable).
55
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 that affects the rights, duties or
responsibilities of the Administrator may only be made with the Administrators written
consent. Any such amendment shall become effective as provided therein upon its execution.
(b)
The Employer may (1) change the choice of options in the Adoption Agreement; (2)
add any addendum to the Adoption Agreement that is specifically permitted pursuant to the
terms of the Plan; (3) add overriding language to the Adoption Agreement when such language
is necessary to satisfy Code Sections 415 or 416 because of the required aggregation of
multiple plans; and (4) 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 Section 4 12(d), will no
longer participate in this Prototype Plan and this Plan will be considered to be an
individually designed plan. Notwithstanding the preceding, the attachment to the Adoption
Agreement of any addendum specifically authorized by the Plan or a list of any Section
411(d)(6) protected benefits which must be preserved shall not be considered an amendment
to the Plan.
(c) The Employer expressly delegates authority to the sponsor of this Prototype Plan,
the right to amend each Employers Plan by submitting a copy of the amendment to each
Employer who has adopted this Prototype Plan, after first having received a ruling or
favorable determination from the Internal Revenue Service that the Prototype Plan as amended
qualifies under Code Section 401(a) and the Act (unless a ruling or determination is not
required by the IRS). For purposes of this Section, the mass submitter shall be recognized
as the agent of the sponsor. If the sponsor does not adopt any amendment 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) (1) Except as permitted by Regulations (including Regulation 1.411 (d)-4) or other
IRS guidance (or as provided for in this Section 8.1(e)), no Plan amendment or transaction
having the effect of a Plan amendment (such as a merger, plan transfer or similar
transaction) shall be effective if it eliminates or reduces any Section 411(d)(6) protected
benefit or adds or modifies conditions relating to Section 411 (d)(6) protected benefits
which results in a further restriction on such benefits and such Section 41 1(d)(6)
protected benefits shall be preserved with respect to benefits accrued as of the later of
the adoption date or effective date of the amendment. Section 41 1(d)(6) protected
benefits are benefits described in Code Section 411 (d)(6)(A), early retirement benefits
and retirement-type subsidies, and optional forms of benefit.
(2) Notwithstanding the foregoing, if elected in the Adoption Agreement, the Plan
shall be amended to eliminate or restrict the ability of a Participant to receive
payment of the Participants interest in the Plan under the optional forms of
benefit listed in an appendix to the Plan. Such amendment shall satisfy the
conditions in (a), (b) and (c) below:
(a) As amended, the Plan must provide a single-sum distribution form that is otherwise
identical to the optional form of benefit eliminated or restricted. For purposes of this
condition (1), a single-sum distribution form is otherwise Identical only if it is identical
in all respects to the eliminated or
56
restricted optional form of benefit (or would be identical except that it provides
greater rights to the Participant) except with respect to the timing of payments after
commencement.
(b) The amendment shall not apply to any distribution with an Annuity Starting Date
earlier than the earlier of (i) the ninetieth (90th) day after the date the Participant
receiving the distribution has been furnished a summary that reflects the amendment and that
satisfies the Act requirements at 29 CFR 2520.104b-3 (relating to a summary of material
modifications) or (ii) the first day of the second Plan Year following the Plan Year in
which the amendment is adopted.
(c) As amended, the Plan shall not permit distribution in-kind except as specifically
provided for in Section 6.5(b) and Section 6.6(g) with respect to Employer stock.
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 Combined Accounts
shall become 100% Vested and shall not thereafter be subject to forfeiture, and all
unallocated amounts, including Forfeitures, 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 that 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 Section 411 (d)(6)
protected benefits as described in Section 8.1(e).
8.3 MERGER, CONSOLIDATION OR TRANSFER OF ASSETS
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 transfer, merger
or consolidation does not otherwise result in the elimination or reduction of any Section 41
1(d)(6) protected benefits as described in Section 8.1(e).
ARTICLE IX
TOP HEAVY PROVISIONS
9.1 TOP HEAVY PLAN REQUIREMENTS
Notwithstanding anything in this Plan to the contrary, for any Top Heavy Plan Year, the Plan
shall provide the special vesting requirements of Code Section 416(b) pursuant to Section 6.4 of
the Plan and the special minimum allocation requirements of Code Section 4 16(c) pursuant to
Section 4.3(1) of the Plan. Except as otherwise provided in the Plan, the minimum allocation shall
be an Employer Non-Elective Contribution and, if no vesting schedule has been selected in the
Adoption Agreement, shall be subject to the 6 Year Graded vesting schedule described in the
Adoption Agreement.
9.2 DETERMINATION OF TOP HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any plan year beginning after December,
1983, if any of the following conditions exists:
(1) if the top heavy ratio for this Plan exceeds sixty percent (60%) and this Plan
is not part of any required aggregation group or permissive aggregation group;
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(2) if this Plan is a part of a required aggregation group but not part of a
permissive aggregation group and the top heavy ratio for the group of plans
exceeds sixty percent (60%); or
(3) if this Plan is a part of a required aggregation group and part of a
permissive aggregation group and the top heavy ratio for the permissive
aggregation group exceeds sixty percent (60%).
(b) Top heavy ratio means, with respect to a determination date:
(1) If the Employer maintains one or more defined contribution plans (including any
simplified employee pension plan (as defined in Code Section 408(k))) and the
Employer has not maintained any defined benefit plan which during the 5-year period
ending on the determination date has or has had accrued benefits, the top heavy
ratio for this plan alone or for the required aggregation group or permissive
aggregation group as appropriate is a fraction, the numerator of which is the sum
of the account balances of all Key Employees as of the determination date
(including any part of any account balance distributed in the 5-year period ending
on the determination date), 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), both computed in accordance with Code Section
416 and the Regulations thereunder. Both the numerator and denominator of the top
heavy ratio are increased to reflect any contribution not actually made as of the
determination date, but which is required to be taken into account on that date
under Code Section 416 and the Regulations thereunder.
(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 has or has had any accrued benefits, the top heavy ratio for
any required aggregation group or permissive aggregation group as appropriate is
a fraction, the numerator of which is the sum of account balances under the
aggregated defined contribution plan or plans for all Key Employees, determined in
accordance with (1) above, and the present value of accrued benefits under the
aggregated defined benefit plan or plans for all Key Employees as of the
determination date, and the denominator of which is the sum of the account
balances under the aggregated defined contribution plan or plans for all
participants, determined in accordance with (1) above, and the present value of
accrued benefits under the defined benefit plan or plans for all participants as of
the determination date, all determined in accordance with Code Section 416 and the
Regulations thereunder. The accrued benefits under a defined benefit plan in both
the numerator and denominator of the top heavy ratio are increased for any
distribution of an accrued benefit made in the 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 Code Section 416 and the Regulations thereunder for the
first and second plan years of a defined benefit plan. The account balances and
accrued benefits of a participant (i) who is not a Key Employee but who was a Key
Employee in a prior year, or (ii) who has not been credited with at least one Hour
of Service with any Employer maintaining the plan at any time during the 5-year
period ending on the determination date will be disregarded. The calculation of
the top heavy ratio, and the extent to which distributions, rollovers, and transfers
are taken into account will be made in accordance with Code Section 416 and the
Regulations thereunder. Deductible Employee contributions will not be taken into
account for purposes of computing the top heavy ratio. When aggregating plans the
value of account balances and accrued benefits will be calculated with reference to
the determination dates that fall within the same calendar year.
The accrued benefit of a participant other than a Key Employee shall be determined
under (i) the method, if any, that uniformly applies for accrual purposes under all
defined benefit plans
58
maintained by the employer, or (ii) if there is no such method, as if such benefit
accrued not more rapidly than the slowest accrual rate permitted under the
fractional rule of Code Section 41 I(b)(1)(C).
(c) Determination date means, for any Plan Year subsequent to the first Plan Year,
the last day of the preceding Plan Year. For the first Plan Year of the Plan, determination
date means the last day of that Plan Year.
(d) Permissive aggregation group means the required aggregation group of plans plus
any other plan or plans of the Employer which, when considered as a group with the required
aggregation group, would continue to satisfy the requirements of Code Sections 401(a)(4) and
410.
(e) Present value means the present value based only on the interest and mortality
rates specified in the Adoption Agreement.
(f) Required aggregation group means: (1) each qualified plan of the Employer in
which at least one Key Employee participates or participated at any time during the
determination period (regardless of whether the plan has terminated), and (2) any other
qualified plan of the Employer which enables a plan described in (1) to meet the
requirements of Code Sections 401(a)(4) or 410.
(g) Valuation date means the last day of the Plan Year.
ARTICLE X
MISCELLANEOUS
10.1 EMPLOYER ADOPTIONS
(a) Any organization may become the Employer hereunder by executing the Adoption
Agreement in a 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 or a separate agreement (including, if
elected in the Adoption Agreement, a separate trust agreement).
(b) 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.
10.2 PARTICIPANTS 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 the Employee as a Participant of this Plan.
10.3 ALIENATION
(a) Subject to the exceptions provided below and as otherwise permitted by the Code and
the Act, no benefit which shall be payable to any person (including a Participant or the
Participants 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.
59
(b) Subsection (a) shall not apply to the extent a Participant or Beneficiary is
indebted to the Plan by reason of a loan made pursuant to Section 7.3. At the time a
distribution is to be made to or for a Participants or Beneficiarys benefit, such portion
of the amount to be distributed as shall equal such indebtedness shall be paid to the Plan,
to apply against or discharge such indebtedness. If the Participant or Beneficiary does not
agree that the indebtedness is a valid claim against the Participants interest in the Plan,
the Participant or Beneficiary shall be entitled to a review of the validity of the claim in
accordance with procedures provided in Sections 2.10 and 2.11.
(c) Subsection (a) shall not apply to a qualified domestic relations order defined in
Code Section 4l4(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.
(d) Notwithstanding any provision of this Section to the contrary, an offset to a
Participants accrued benefit against an amount that the Participant is ordered or required
to pay the Plan with respect to a judgment, order, or decree issued, or a settlement entered
into, on or after August 5, 1997, shall be permitted in accordance with Code Sections
401(a)(13)(C) and (D).
10.4 CONSTRUCTION OF PLAN
This Plan shall be construed and enforced according to the Code, the Act and the laws of the
state or commonwealth in which the Employers (or if there is a corporate Trustee, the Trustees)
principal office is located (unless otherwise designated in the Adoption Agreement), other than its
laws respecting choice of law, to the extent not pre-empted by the Act.
10.5 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.
10.6 LEGAL ACTION
In the event any claim, suit, or proceeding is brought regarding the Trust and/or Plan
established hereunder to which the Trustee, the Employer or the Administrator may be a party, and
such claim, suit, or proceeding is resolved in favor of the Trustee, the Employer or the
Administrator, they shall be entitled to be reimbursed from the Trust Fund for any and all costs,
attorneys fees, and other expenses pertaining thereto incurred by them for which they shall have
become liable.
10.7 PROHIBITION AGAINST DIVERSION OF FUNDS
(a) 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 finds contributed thereto to be used for, or diverted to,
purposes other than the exclusive benefit of Participants, Former Participants, or their
Beneficiaries.
(b) In the event the Employer shall make a contribution under a mistake of fact
pursuant to Act Section 403(c)(2)(A), the Employer may demand repayment of such contribution
at any time within one (1) year following the time of payment and the Trustee shall return
such amount to the Employer
60
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.
(c) Except as specifically stated in the Plan, any contribution made by the Employer to
the Plan (if the Employer is not tax-exempt) 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 contribution may not be returned to the Employer,
but any losses attributable thereto must reduce the amount so returned.
10.8 EMPLOYERS AND TRUSTEES PROTECTIVE CLAUSE
The Employer, Administrator and Trustee, and their successors, shall not 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.
10.9 INSURERS PROTECTIVE CLAUSE
Except as otherwise agreed upon in writing between the Employer and the Insurer, an Insurer
which issues any 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 Administrator or Trustee, and shall have
no duty to see to the application of any finds paid to the Trustee, nor be required to question any
actions directed by the Administrator or 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.
10.10 RECEIPT AND RELEASE FOR PAYMENTS
Any payment to any Participant, the Participants 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 fill satisfaction of all claims
hereunder against the Trustee and the Employer
10.11 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.
10.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
The
named Fiduciaries of this Plan are (1) the Employer, (2) the Administrator, (3) the
Trustee (if agreed upon by the Employer and 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 including, but not limited to, any
agreement allocating or delegating their responsibilities, the terms of which are incorporated
herein by reference. In general, the Employer shall have the sole responsibility for making the
contributions provided for under the Plan; and shall have the sole authority to appoint and remove
the Trustee and the Administrator; to formulate the Plans finding policy and method; 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. If the Trustee has discretionary
authority, it shall have the sole responsibility of management of the assets held under the Trust
over which it has such authority, except those assets, the management of which has been assigned to
an Investment Manager or Administrator or are subject to Participant direction, each of whom shall
be solely responsible for the management of the assets assigned to it, all as specifically provided
in the Plan. Each named
61
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.
10.13 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.
10.14 APPROVAL BY INTERNAL REVENUE SERVICE
Notwithstanding anything herein to the contrary, if, pursuant to a timely application filed by
or on behalf of the Plan, the Commissioner of the Internal Revenue Service or the Commissioners
delegate should determine that the Plan does not initially quality as a tax-exempt plan under Code
Sections 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 (1) year and the Plan shall
terminate, and the Trustee shall be discharged from all further obligations. If the
disqualification relates to a Plan amendment, then the Plan shall operate as if it had not been
amended. If the Employers 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.
10.15 UNIFORMITY
All provisions of this Plan shall be interpreted and applied in a uniform, nondiscriminatory manner.
10.16 PAYMENT OF BENEFITS
Except as otherwise provided in the Plan, benefits under this Plan shall be paid, subject to
Sections 6.10, 6.11 and 12.9, only upon death, Total and Permanent Disability, normal or early
retirement, termination of employment, or termination of the Plan.
ARTICLE XI
PARTICIPATING EMPLOYERS
11.1 ELECTION TO BECOME A PARTICIPATING EMPLOYER
Notwithstanding anything herein to the contrary, with the consent of the Employer (if
applicable), any Affiliated Employer may adopt the Employers 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. The Employer may execute
his Plan on behalf of Participating Employers if it is authorized (by corporate resolution or
otherwise) to do so. Regardless of the preceding, an entity that ceases to be an Affiliated
Employer may continue to be a Participating Employer through the end of the transition period for
certain dispositions set forth in Code Section 410(b)(6)(C). In the event a Participating Employer
is not an Affiliated Employer and the transition period in the preceding sentence, if applicable,
has expired, then this Plan will be considered an individually designed plan.
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11.2 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) 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. However, the assets of the Plan shall, on an ongoing basis, be available to pay
benefits to all Participants and Beneficiaries under the Plan without regard to the Employer
or Participating Employer who contributed such assets.
(c) Unless the Employer otherwise directs, 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.
11.3 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 purposes 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 otherwise, the word Employer shall be
deemed to include each Participating Employer as related to its adoption of the Plan.
11.4 EMPLOYEE TRANSFERS
In the event an Employee is transferred between Participating Employers, accumulated service
and eligibility shall be carried with the Employee involved. 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.
11.5 PARTICIPATING EMPLOYERS 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. However, if a Participating Employer is not an Affiliated Employer (due to the transition
rule for certain dispositions set forth in Code Section 410(b)(6)(C)) then any contributions made
by such Participating Employer will only be allocated among the Participants eligible to share of
the Participating Employer. On the basis of the information furnished by the Administrator, the
Trustee may 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 Participating Employer shall immediately notify
the Trustee thereof.
11.6 AMENDMENT
Amendment of this Plan by the Employer at any time when there shall be a Participating
Employer that is an Affiliated Employer hereunder shall only be by the written action of each and
every Participating Employer (or by the action of the Employer if it is authorized (by corporate
resolution or otherwise) to do so.
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11.7 DISCONTINUANCE OF PARTICIPATION
Except in the case of a standardized Plan, any Participating Employer that is an Affiliated
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 or custodian as shall have been designated by such
Participating Employer, in the event that it has established a separate qualified retirement plan
for its employees provided, however, that no such transfer shall be made if the result is the
elimination or reduction of any Section 41 1(d)(6) protected benefits as described in 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 to purposes other than for the exclusive benefit of the employees
of such Participating Employer.
11.8 ADMINISTRATORS 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.
11.9 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
earnings or profits, or because such earnings or profits are less than the contribution which it
would otherwise have made, then, pursuant to Code Section 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 Section 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 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 XII
CASH OR DEFERRED PROVISIONS
Except as specifically provided elsewhere in this Plan, the provisions of this Article shall
apply with respect to any 401(k) Plan regardless of any provisions in the Plan to the contrary
12.1 FORMULA FOR DETERMINING EMPLOYERS CONTRIBUTION
(a) For each Plan Year, the Employer will (or may with respect to any discretionary
contributions) contribute to the Plan:
(1) The amount of the total salary reduction elections of all Participants made
pursuant to Section 12.2(a), which amount shall be deemed Elective Deferrals, plus
(2) If elected in the Adoption Agreement, a matching contribution equal to the
percentage, if any, specified in the Adoption Agreement of the Elective Deferrals of
each Participant eligible to share in the allocations of the matching contribution,
plus
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(3) If elected in the Adoption Agreement, a discretionary amount determined each
year by the Employer, which amount if any, shall be deemed an Employers
Non-Elective Contribution.
(b) Notwithstanding the foregoing, if the Employer is not a tax-exempt entity, then the
Employers contributions for any Fiscal Year may generally not exceed the maximum amount
allowable as a deduction to the Employer under the provisions of Code Section 404. 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 that
is deductible under Code Section 404. All contributions by the Employer shall be made in
cash or in such property as is acceptable to the Trustee.
12.2 PARTICIPANTS SALARY REDUCTION ELECTION
(a) Each Participant may elect to defer a portion of Compensation which would have been
received in the Plan Year, but for the salary reduction election, subject to the limitations
of this Section and the Adoption Agreement. A salary reduction 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
later 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. If the automatic election option is
elected in the Adoption Agreement, then in the event a Participant fails to make a deferral
election and does not affirmatively elect to receive cash, such Participant shall be deemed
to have made a deferral election equal to the percentage of Compensation set forth in the
Adoption Agreement. The automatic election may, in accordance with procedures established by
the Administrator, be applied to all Participants or to Eligible Employees who become
Participants after a certain date. For purposes of this Section, the annual dollar
limitation of Code Section 401(a)(17) ($150,000 as adjusted) shall not apply.
Additionally, if elected in the Adoption Agreement, each Participant may elect to defer a
different percentage or amount of any cash bonus to be paid by the Employer during the Plan Year. A
deferral election may not be made with respect to cash bonuses which are currently available on or
before the date the Participant executes such election.
The amount by which Compensation and/or cash bonuses are reduced shall be that Participants
Elective Deferrals and shall be treated as an Employer contribution and allocated to that
Participants Elective Deferral Account.
Once made, a Participants election to reduce Compensation shall remain in effect until
modified or terminated. Modifications may be made on any day, and terminations may be made at any
time. Any modification or termination of an election will become effective as soon as is
administratively feasible.
(b) The balance in each Participants Elective Deferral Account, Qualified Matching
Contribution Account and Qualified Non-Elective Contribution Account shall be fully Vested
at all times and, except as otherwise provided herein, shall not be subject to Forfeiture
for any reason.
(c) Amounts held in a Participants Elective Deferral Account, Qualified Matching
Contribution Account and Qualified Non-Elective Account may only be distributable as
provided in (4), (5) or (6) below or as provided under the other provisions of this Plan,
but in no event prior to the earlier of the following events or any other events permitted
by the Code or Regulations:
(1) the Participants separation from service, Total and Permanent Disability, or
death;
(2) the Participants attainment of age 59 1/2;
(3) the proven financial hardship of the Participant, subject to the limitations of
Section 12.9;
65
(4) the termination of the Plan without the existence at the time of Plan
termination of another defined contribution plan or the establishment of a successor
defined contribution plan 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. For this purpose, a defined contribution does not
include an employee stock ownership plan (as defined in Code Section 4975(e)(7) or
409), a simplified employee pension plan (as defined in Code Section 408(k)), or a
SIMPLE individual retirement account plan (as defined in Code Section 408(p));
(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 Section
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 Section 409(d)(3)) to an entity that is
not an Affiliated Employer with respect to a Participant who continues employment
with such subsidiary.
Distributions that are made because of (4), (5), or (6) above must be made in a lump-sum.
(d) A Participants elective deferrals made under this Plan and all other plans,
contracts or arrangements of the Employer maintaining this Plan during any calendar year
shall not exceed the dollar limitation imposed by Code Section 402(g), as in effect at the
beginning of such calendar year. This dollar limitation shall be adjusted annually pursuant
to the method provided in Code Section 4 15(d) in accordance with Regulations. For this
purpose, elective deferrals means, with respect to a calendar year, the sum of all
employer contributions made on behalf of such Participant pursuant to an election to defer
under any qualified cash or deferred arrangement as described in Code Section 401(k), any
salary reduction simplified employee pension (as defined in Code Section 408(k)(6)), any
SIMPLE IRA plan described in Code Section 408(p), any eligible deferred compensation plan
under Code Section 457, any plans described under Code Section 501(c)(18), and any Employer
contributions made on the behalf of a Participant for the purchase of an annuity contract
under Code Section 403(b) pursuant to a salary reduction agreement. Elective deferrals
shall not include any deferrals properly distributed as excess Annual Additions pursuant
to Section 4.5.
(e) If a Participant has Excess Deferrals for a taxable year, the Participant may, not
later than March 1st following the close of such taxable year, notify the Administrator in
writing of such excess and request that the Participants Elective Deferrals under this Plan
be reduced by an amount specified by the Participant. In such event, the Administrator shall
direct the distribution of 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
Participants taxable year. Any distribution of less than the entire amount of Excess
Deferrals and Income shall be treated as a pro rata distribution of Excess Deferrals and
Income. The amount distributed shall not exceed the Participants Elective Deferrals under
the Plan for the taxable year. Any distribution on or before the last day of the
Participants taxable year must satisfy each of the following conditions:
(1) the Participant shall designate the distribution as Excess Deferrals;
(2) the distribution must be made after the date on which the Plan received the
Excess Deferrals; and
(3) the Plan must designate the distribution as a distribution of Excess Deferrals.
Regardless of the preceding, if a Participant has Excess Deferrals solely from elective
deferrals 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 and the Administrator shall direct
the distribution of such Excess Deferrals in a manner consistent with the provisions of this
subsection.
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Any distribution made pursuant to this subsection shall be made first from unmatched Elective
Deferrals and, thereafter, from Elective Deferrals which are matched. Matching contributions which
relate to Excess Deferrals that are distributed pursuant to this Section 12.2(e) shall be treated
as a Forfeiture to the extent required pursuant to Code Section 401(a)(4) and the Regulations
thereunder.
For purposes of this Section, Income means the income or loss allocable to the Participants
Elective Deferrals for the taxable year multiplied by a fraction, the numerator of which is the
Participants Excess Deferrals for the taxable year and the denominator of which is the sum of(A)
the Participants Account Balances attributable to Elective Deferrals on the first day of the
taxable year and (B) the Participants Elective Deferrals for the Plan Year, without regard to any
income or loss occurring during that taxable year. However, Income for the period between the end
of the taxable year of the Participant and the date of the distribution (the gap period) is not
required to be distributed.
(f) Notwithstanding the preceding, a Participants Excess Deferrals shall be reduced,
but not below zero, by any distribution and/or recharacterization of Excess Deferrals
pursuant to Section 12.5(a) for the Plan Year beginning with or within the taxable year of
the Participant.
(g) In the event a Participant has received a hardship distribution pursuant to
Regulation 1.401(k)-1(d)(2)(iii)(B) from any other plan maintained by the Employer or from
the Participants Elective Deferral Account pursuant to Section 12.9, then such Participant
shall not be permitted to elect to have Elective Deferrals contributed to the Plan for a
period of twelve (12) months following the receipt of the distribution. Furthermore, the
dollar limitation under Code Section 402(g) shall be reduced, with respect to the
Participants taxable year following the taxable year in which the hardship distribution was
made, by the amount of such Participants Elective Deferrals, if any, made pursuant to this
Plan (and any other plan maintained by the Employer) for the taxable year of the hardship
distribution.
(h) At Normal Retirement Date, or such other date when the Participant shall be
entitled to receive benefits, the fair market value of the Participants Elective Deferral
Account shall be used to provide benefits to the Participant or the Participants
Beneficiary.
(i) If during a Plan Year, it is projected that the aggregate amount of Elective
Deferrals to be allocated to all Highly Compensated Participants under this Plan would cause
the Plan to fail the tests set forth in Section 12.4, then the Administrator may
automatically reduce the deferral amount of affected Highly Compensated Participants,
beginning with the Highly Compensated Participant who has the highest actual deferral ratio
until it is anticipated the Plan will pass the tests or until the actual deferral ratio
equals the actual deferral ratio of the Highly Compensated Participant having the next
highest actual deferral ratio. This process may continue until it is anticipated that the
Plan will satisfy one of the tests set forth in Section 12.4. Alternatively, the Employer
may specify a maximum percentage of Compensation that may be deferred by Highly Compensated
Participants.
(j) The Employer and the Administrator shall establish procedures necessary to
implement the salary reduction elections provided for herein. Such procedures may contain
limits on salary deferral elections such as limiting elections to whole percentages of
Compensation or to equal dollar amounts per pay period that an election is in effect.
12.3 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.
(b) The Employer shall provide the Administrator with all information required by the
Administrator to make a proper allocation of Employer 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 contributions as follows:
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(1) With respect to Elective Deferrals made pursuant to Section 12.1 (a)(l), to each
Participants Elective Deferral Account in an amount equal to each such
Participants Elective Deferrals for the year.
(2) With respect to the Employers matching contribution made pursuant to Section
12.1(a)(2), to each Participants Account, or Participants Qualified Matching
Contribution Account, as elected in the Adoption Agreement, in accordance with
Section 12.1(a)(2).
Except, however, in order to be entitled to receive any Employer matching
contribution, a Participant must satisfy the conditions for sharing in the Employer
matching contribution as set forth in the Adoption Agreement, provided that
Participants who are not actively employed at the end of a Plan Year due to death,
Total and Permanent Disability or attainment of their Early Retirement Date or
Normal Retirement Date who would otherwise receive an allocation solely but for the
occurrence of such event shall be eligible to share in allocations of Employer
matching contributions for that Plan Year.
(3) With respect to the Employers Non-Elective Contribution made pursuant to
Section 12.l(a)(3), to each Participants Account in accordance with the provisions
of Section 4.3(b)(2) or (3) whichever is applicable.
(c) Notwithstanding anything in the Plan to the contrary, in determining whether a
Non-Key Employee has received the required minimum allocation pursuant to Section 4.3(f)
such Non-Key Employees Elective Deferrals and matching contributions used to satisfy the
ADP tests in Section 12.4 or the ACP tests in Section 12.6
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 deferral 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 4.3(1) and
12.3(f)), Participants shall only share in the allocations of the Employers matching
contribution made pursuant to Section 12.1(a)(2), the Employers NonElective Contributions
made pursuant to Section 12.l(a)(3), and Forfeitures as provided in the Adoption Agreement.
If no election is made in the Adoption Agreement, then a Participant shall be eligible to
share in the allocation of the Employers contribution for the year if the Participant
completes more than 500 Hours of Service during the Plan Year or who is employed on the last
day of the Plan Year.
(f) Notwithstanding anything in this Section to the contrary, the provisions of this
subsection apply for any Plan Year if, in the non-standardized Adoption Agreement, the
Employer elected to apply the 410(b) ratio percentage failsafe provisions and the Plan fails
to satisfy the ratio percentage test due to a last day of the Plan Year allocation
condition or an Hours of Service (or months of service) allocation condition. A plan
satisfies the ratio percentage test if, on the last day of the Plan Year, the benefiting
ratio of the Non-Highly Compensated Employees who are includible is at least 70% of the
benefiting ratio of the Highly Compensated Employees who are includible. The benefiting
ratio of the Non-Highly Compensated Employees is the number of includible Non- Highly
Compensated Employees benefiting under the Plan divided by the number of includible
Employees who are Non-Highly Compensated Employees. The benefiting ratio of the Highly
Compensated Employees is the number of Highly Compensated Employees benefiting under the
Plan divided by the number of includible Highly Compensated Employees. Includible
Employees are all Employees other than: (1) those Employees excluded from participating in
the plan for the entire Plan Year by reason of the collective bargaining unit exclusion or
the nonresident alien exclusion described in the Code or by reason of the age and service
requirements of Article III; and (2) any Employee who incurs a separation from service
during the Plan Year and fails to complete at least 501 Hours of Service during such Plan
Year.
For purposes of this subsection, an Employee is benefiting under the Plan on a
particular date if, under the Plan, the Employee is entitled to an Employer contribution or
an allocation of Forfeitures for the Plan Year.
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If this subsection applies, then the Administrator will suspend the allocation
conditions for the includible Non-Highly Compensated Employees who are Participants,
beginning first with the includible Employees employed by the Employer on the last day of
the Plan Year, then the includible Employees who have the latest separation from service
during the Plan Year, and continuing to suspend the allocation conditions for each
includible Employee who incurred an earlier separation from service, from the latest to
the earliest separation from service date, until the Plan satisfies the ratio percentage
test for the Plan Year. If two or more includible Employees have a separation from
service on the same day, then the Administrator will suspend the allocation conditions for
all such includible Employees, irrespective of whether the Plan can satisfy the ratio
percentage test by accruing benefits for fewer than all such includible Employees. If the
Plan for any Plan Year suspends the allocation conditions for an includible Employee, then
that Employee will share in the allocation for that Plan Year of the Employer contribution
and Forfeitures, if any, without regard to whether the Employee has satisfied the other
allocation conditions set forth in this Section.
If the Plan includes Employer matching contributions subject to ACP testing, this
subsection applies separately to the Code Section 401(m) portion of the Plan.
12.4 ACTUAL DEFERRAL PERCENTAGE TESTS
(a) The Current Year Testing method shall apply commencing with the Plan Year in which
this Plan is adopted (if it is newly adopted plan) or in which the Plan is first amended and
restated into the form of this prototype plan (if it is an amendment and restatement of an
existing plan). Under the Current Year Testing method, the Actual Deferral Percentage
(hereinafter ADP) for a Plan Year for Participants who are Highly Compensated Employees
(hereinafter HCEs) for each Plan Year and the ADP for Participants who are Non-Highly
Compensated Employees (hereinafter NHCEs) for the Plan Year must satisfy one of the
following tests:
(1) The ADP for a Plan Year for Participants who are HCEs for the Plan Year shall
not exceed the ADP for Participants who are NHCEs for the Plan Year multiplied by
1.25; or
(2) The ADP for a Plan Year for Participants who are HCEs for the Plan Year shall
not exceed the ADP for Participants who are NHCEs for the Plan Year multiplied by
2.0, provided that the ADP for Participants who are HCEs does not exceed the ADP for
Participants who are NHCEs in the Plan Year by more than two (2) percentage points.
(b) Notwithstanding the foregoing, if this Plan is an amendment and restatement of an
existing plan, and the Prior Year Testing method is elected in the Adoption Agreement for
any Plan Year prior to the Plan Year in which the Plan is first amended and restated into
the form of this prototype plan, for such Plan Years the ADP tests in (a)(1) and (a)(2),
above shall be applied by comparing the current Plan Years ADP for Participants who are
HCEs with the prior Plan Years ADP (rather than the current Plan Years ADP) for
Participants who were NHCEs for the prior Plan Year. Notwithstanding the preceding sentence,
under the Prior Year Testing method, for purposes of applying the ADP test with respect to
the first Plan Year in which the Plan permits any Participant to make Elective Deferrals,
the ADP for the prior years NHCEs shall be deemed to be three percent (3%) unless the
Employer elected (as reflected in the Adoption Agreement) to use the current Plan Years ADP
for these Participants. However, the provisions of this paragraph may not be used if the
Plan is a successor plan or is otherwise prohibited from using such provisions pursuant to
IRS Notice 98-1 (or superseding guidance).
Once made, the election to use the Current Year Testing method can only be changed if
the Plan meets the requirements for changing to the Prior Year Testing method set forth in
IRS Notice 98-1 (or superseding guidance). Furthermore, this Plan must use the same testing
method for both the ADP and ACP tests for Plan Years beginning on or after the date the
Employer adopts its Gust restated plan.
(c) This subsection applies to prevent the multiple use of the test set forth in
subsection (a)(2) above. Any HCE eligible to make Elective Deferrals pursuant to Section
12.2 and to make after-tax voluntary Employee contributions or to receive matching
contributions under this Plan or under any other
69
plan maintained by the Employer or an Affiliated Employer, shall have either the actual
deferral ratio adjusted in the manner described in Section 12.5 or the actual contribution
ratio adjusted in the manner described in Section 12.7 so that the Aggregate Limit is not
exceeded pursuant to Regulation 1.401(m)-2. The amounts in excess of the Aggregate Limit
shall be treated as either an Excess Contribution or an Excess Aggregate Contribution. The
ADP and ACP of the HCEs are determined after any corrections required to meet the ADP and
ACP tests and are deemed to be the maximum permitted under such tests for the Plan Year.
Multiple use does not occur if either the ADP or ACP of the HCEs does not exceed 1.25
multiplied by the ADP and ACP of the NHCEs.
Aggregate Limit means the sum of(i) 125 percent of the greater of the ADP of the
NHCEs for the Plan Year or the ACP of such NHCEs under the plan subject to Code Section 40
1(m) for the Plan Year and (ii) the lesser of 200% or two (2) plus the lesser of such ADP or
ACP. Lesser is substituted for greater in (i) above, and greater is substituted for
lesser after two (2) plus the in (ii) above if it would result in a larger Aggregate
Limit. If the Employer has elected in the Adoption Agreement to use the Prior Year Testing
method for any year in accordance with subsection (b), then in calculating the Aggregate
Limit for a particular Plan Year, the NHCEs ADP and ACP for the prior Plan Year, instead of
the current Plan Year, is used.
(d) A Participant is an HCE for a particular Plan Year if the Participant meets the
definition of an HCE in effect for that Plan Year. Similarly, a Participant is an NHCE for a
particular Plan Year if the Participant does not meet the definition of an HCE in effect for
that Plan Year.
(e) For the purposes of this Section and Section 12.5, ADP means, for a specific group
of Participants for a Plan Year, the average of the ratios (calculated separately for each
Participant in such group) of(1) the amount of Employer contributions actually paid over to
the Plan on behalf of such Participant for the Plan Year to (2) the Participants 4 14(s)
Compensation for such Plan Year. Employer contributions on behalf of any participant shall
include: (1) any Elective Deferrals made pursuant to the Participants deferral election
(including Excess Deferrals of HCEs), but excluding (i) Excess Deferrals of NHCEs that arise
solely from Elective Deferrals made under the plan or plans of this Employer and (ii)
Elective Deferrals that are taken into account in the ACP tests set forth in Section 12.6
(provided the ADP test is satisfied both with and without exclusion of these Elective
Deferrals); and (2) at the election of the Employer, Qualified Non-Elective Contributions
and Qualified Matching Contributions to the extent such contributions are not used to
satisfy the ACP test.
The actual deferral ratio for each Participant and the ADP for each group shall be
calculated to the nearest one-hundredth of one percent. Elective Deferrals allocated to each
Highly Compensated Participants Elective Deferral Account shall not be reduced by Excess
Deferrals to the extent such excess amounts are made under this Plan or any other plan
maintained by the Employer.
(f) For purposes of this Section and Section 12.5, a Highly Compensated Participant and
a Non-Highly Compensated Participant shall include any Employee eligible to make salary
deferrals pursuant to Section 12.2 for the Plan Year. Such Participants who fail to make
Elective Deferrals shall be treated for ADP purposes as Participants on whose behalf no
Elective Deferrals are made.
(g) In the event this Plan satisfies the requirements of Code Sections 401(a)(4),
401(k), or 410(b) only if aggregated with one or more other plans, or if one or more other
plans satisfy the requirements of such sections of the Code only if aggregated with this
Plan, then this Section shall be applied by determining the ADP of Employees as if all such
plans were a single plan. Any adjustments to the NHCE ADP for the prior year will be made in
accordance with IRS Notice 98-1 and any superseding guidance, unless the Employer has
elected in the Adoption Agreement to use the Current Year Testing method. Plans may be
aggregated in order to satisfy Code Section 401(k) only if they have the same Plan Year and
use the same ADP testing method.
(h) The ADP for any Participant who is an HCE for the Plan Year and who is eligible to
have Elective Deferrals (and Qualified Non-Elective Contributions or Qualified Matching
Contributions, or both, if treated as Elective Deferrals for purposes of the ADP test)
allocated to such Participants accounts under
70
two (2) or more arrangements described in Code Section 401(k), that are maintained by
the Employer, shall be determined as if such Elective Deferrals (and, if applicable, such
Qualified Non-Elective Contributions or Qualified Matching Contributions, or both) were made
under a single arrangement for purposes of determining such HCEs actual deferral ratio.
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. Notwithstanding the foregoing, certain plans
shall be treated as separate if mandatory disaggregated under Regulations under Code Section
401.
(i) For purposes of determining the ADP and the amount of Excess Contributions pursuant
to Section 12.5, only Elective Deferrals, Qualified Non-Elective Contributions and Qualified
Matching Contributions contributed to the Plan prior to the end of the twelve (12) month
period immediately following the Plan Year to which the contributions relate shall be
considered.
(j) Notwithstanding anything in this Section to the contrary, the provisions of this
Section and Section 12.5 may be applied separately (or will be applied separately to the
extent required by Regulations) to each plan within the meaning of Regulation
1.401(k)-1(g)(11). Furthermore, for Plan Years beginning after December 31, 1998, the
provisions of Code Section 401(k)(3)(F) may be used to exclude from consideration all
Non-Highly Compensated Employees who have not satisfied the minimum age and service
requirements of Code Section 410(a)(1)(A).
12.5 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS
(a) In the event (or, with respect to subsection (c) when the Prior Year Testing method
is being used, if it is anticipated) that for Plan Years beginning after December 31, 1996,
the Plan does not satisfy one of the tests set forth in Section 12.4, the Administrator
shall adjust Excess Contributions or the Employer shall make contributions pursuant to the
options set forth below or any combination thereof. However, if the Prior Year testing
method is being used (as provided for in Section 12.4(b)) and it is anticipated that the
Plan might not satisfy one of such tests, then the Employer may make contributions
pursuant to the options set forth in subsection (c) below.
(b) On or before the fifteenth day of the third month following the end of each Plan
Year, but in no event later than the close of the following Plan Year, the Highly
Compensated Participant allocated the largest amount of Elective Deferrals shall have a
portion of such Elective Deferrals (and Income allocable to such amounts) distributed
(and/or, at the Participants election, recharacterized as a after-tax voluntary Employee
contribution pursuant to Section 4.8) until the total amount of Excess Contributions has
been distributed, or until the amount of the Participants Elective Deferrals equals the
Elective Deferrals of the Highly Compensated Participant having the next largest amount of
Elective Deferrals allocated. This process shall continue until the total amount of Excess
Contributions has been distributed. Any distribution and/or recharacterization of Excess
Contributions shall be made in the following order:
(1) With respect to the distribution of Excess Contributions, 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;
(ii) shall be made first from unmatched Elective Deferrals and, thereafter,
simultaneously from Elective Deferrals which are matched and matching
contributions which relate to such Elective Deferrals. Matching
contributions which relate to Excess Contributions shall be forfeited unless
the related matching contribution is distributed as an Excess Aggregate
Contribution pursuant to Section 12.7;
(iii) shall be adjusted for Income; and
(iv) shall be designated by the Employer as a distribution of Excess
Contributions (and Income).
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(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 Elective Deferrals on behalf of any
Highly Compensated Participant for any Plan Year;
(iii) shall be treated as after-tax voluntary Employee contributions for
purposes of Code Section 401 (a)(4) and Regulation 1.401(k)-1(b). However,
for purposes of Sections 4.3(1) and 9.2 (top heavy rules), recharacterized
Excess Contributions continue to be treated as Employer contributions that
are Elective Deferrals. Excess Contributions (and Income attributable to
such amounts) recharacterized as after-tax voluntary Employee contributions
shall continue to be nonforfeitable and subject to the same distribution
rules provided for in Section 12.2(c); and
(iv) are not permitted if the amount recharacterized plus after-tax
voluntary Employee contributions actually made by such Highly Compensated
Participant, exceed the maximum amount of after-tax voluntary Employee
contributions (determined prior to application of Section 12.6) that such
Highly Compensated Participant is permitted to make under the Plan in the
absence of recharacterization.
(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) For Purposes of this Section, Income means the income or loss allocable to the
Participants Elective Deferrals (and, if applicable, amounts treated as Elective
Deferrals) for the Plan Year multiplied by a fraction, the numerator of which is the
Participants Excess Contributions for the Plan Year and the. denominator of which
is the sum of(A) the Participants Account Balances attributable to the Elective
Deferrals (and, if applicable, amounts treated as Elective Deferrals) on the first
day of the Plan Year and (B) the Participants Elective Deferrals (and, if
applicable, amounts treated as Elective Deferrals) for the Plan Year, without regard
to any income or loss occurring during that Plan Year. However, Income for the
period between the end of the Plan Year and the date of the distribution (the gap
period) is not required to be distributed.
(5) Excess Contributions shall be treated as Employer contributions for purposes of
Code Sections 404 and 415 even if distributed from the Plan.
(c) Notwithstanding the above, within twelve (12) months after the end of the Plan Year
(or, if the Prior Year Testing method is used, within twelve (12) months after the end of
the prior Plan Year), the Employer may make a special Qualified Non-Elective Contribution or
Qualified Matching Contribution in accordance with one of the following provisions which
contribution shall be allocated to the Qualified Non-Elective Contribution Account or
Qualified Matching Contribution Account of each Non-Highly Compensated Participant eligible
to share in the allocation in accordance with such provision. The Employer shall provide the
Administrator with written notification of the amount of the contribution being made and to
which provision it relates.
(1) A Qualified Non-Elective Contribution may be made on behalf of Non-Highly
Compensated Participants in an amount sufficient to satisfy (or to prevent an
anticipated failure of) one of the tests set forth in Section 12.4. Such
contribution shall be allocated in the same proportion that each Non-Highly
Compensated Participants 4 14(s) Compensation for the year (or
72
prior year if the Prior Year Testing method is being used) bears to the total 414(s)
Compensation of all Non-Highly Compensated Participants for such year.
(2) A Qualified Non-Elective Contribution may be made on behalf of Non-Highly
Compensated Participants in an amount sufficient to satisfy (or to prevent an
anticipated failure of) one of the tests set forth in Section 12.4. Such
contribution shall be allocated in the same proportion that each Non-Highly
Compensated Participants 414(s) Compensation for the year (or prior year if the
Prior Year Testing method is being used) bears to the total 414(s) Compensation of
all Non-Highly Compensated Participants for such year. However, for purposes of this
contribution, Non-Highly Compensated Participants who are not employed at the end of
the Plan Year (or at the end of the prior Plan Year if the Prior Year Testing method
is being used) and, if this is a standardized Plan, who have not completed more than
500 Hours of Service during such Plan Year, shall not be eligible to share in the
allocation and shall be disregarded.
(3) A Qualified Non-Elective Contribution may be made on behalf of Non-Highly
Compensated Participants in an amount sufficient to satisfy (or to prevent an
anticipated failure of) one of the tests set forth in Section 12.4. Such
contribution shall be allocated in equal amounts (per capita).
(4) A Qualified Non-Elective Contribution may be made on behalf of Non-Highly
Compensated Participants in an amount sufficient to satisfy (or to prevent an
anticipated failure of) one of the tests set forth in Section 12.4. Such
contribution shall be allocated in equal amounts (per capita). However, for purposes
of this contribution, Non-Highly Compensated Participants who are not employed at
the end of the Plan Year (or at the end of the prior Plan Year if the Prior Year
Testing method is being used) and, if this is a standardized Plan, who have not
completed more than 500 Hours of Service during such Plan Year, shall not be
eligible to share in the allocation and shall be disregarded.
(5) A Qualified Non-Elective Contribution may be made on behalf of Non-Highly
Compensated Participants in an amount sufficient to satisfy (or to prevent an
anticipated failure of) one of the tests set forth in Section 12.4. Such
contribution shall be allocated to the Qualified Non-Elective Contribution Account
of the Non-Highly Compensated Participant having the lowest 414(s) Compensation,
until one of the tests set forth in Section 12.4 is satisfied (or is anticipated to
be satisfied), or until such Non-Highly Compensated Participant has received the
maximum Annual Addition pursuant to Section 4.4. This process shall continue until
one of the tests set forth in Section 12.4 is satisfied (or is anticipated to be
satisfied).
(6) A Qualified Non-Elective Contribution may be made on behalf of Non-Highly
Compensated Participants in an amount sufficient to satisfy (or to prevent an
anticipated failure of) one of the tests set forth in Section 12.4. Such
contribution shall be allocated to the Qualified Non-Elective Contribution Account
of the Non-Highly Compensated Participant having the lowest 414(s) Compensation,
until one of the tests set forth in Section 12.4 is satisfied (or is anticipated to
be satisfied), or until such Non-Highly Compensated Participant has received the
maximum Annual Addition pursuant to Section 4.4. This process shall continue until
one of the tests set forth in Section 12.4 is satisfied (or is anticipated to be
satisfied). However, for purposes of this contribution, Non-Highly Compensated
Participants who are not employed at the end of the Plan Year (or at the end of the
prior Plan Year if the Prior Year Testing method is being used) and, if this is a
standardized Plan, who have not completed more than 500 Hours of Service during such
Plan Year, shall not be eligible to share in the allocation and shall be
disregarded.
(7) A Qualified Matching Contribution may be made on behalf of Non-Highly
Compensated Participants in an amount sufficient to satisfy (or to prevent an
anticipated failure of) one of the tests set forth in Section 12.4. Such
contribution shall be allocated to the Qualified Matching Contribution Account of
each Non-Highly Compensated Participant in the same proportion that each Non-Highly
Compensated Participants Elective Deferrals for the year bears to the total
Elective Deferrals of all Non-Highly Compensated Participants.
73
(8) A Qualified Matching Contribution may be made on behalf of Non-Highly
Compensated Participants in an amount sufficient to satisfy (or to prevent an
anticipated failure of) one of the tests set forth in Section 12.4. Such
contribution shall be allocated to the Qualified Matching Contribution Account of
each Non-Highly Compensated Participant in the same proportion that each Non-Highly
Compensated Participants Elective Deferrals for the year bears to the total
Elective Deferrals of all Non-Highly Compensated Participants. However, for purposes
of this contribution, Non-Highly Compensated Participants who are not employed at
the end of the Plan Year (or at the end of the prior Plan Year if the Prior Year
Testing method is being used) and, if this is a standardized Plan, who have not
completed more than 500 Hours of Service during such Plan Year, shall not be
eligible to share in the allocation and shall be disregarded.
(9) A Qualified Matching Contribution may be made on behalf of Non-Highly
Compensated Participants in an amount sufficient to satisfy (or to prevent an
anticipated failure of) one of the tests set forth in Section 12.4. Such
contribution shall be allocated to the Qualified Matching Contribution Account of
the Non-Highly Compensated Participant having the lowest Elective Deferrals until
one of the tests set forth in Section 12.4 is satisfied (or is anticipated to be
satisfied), or until such Non-Highly Compensated Participant has received the
maximum Annual Addition pursuant to Section 4.4. This process shall continue until
one of the tests set forth in Section 12.4 is satisfied (or is anticipated to be
satisfied).
(10) A Qualified Matching Contribution may be made on behalf of Non-Highly
Compensated Participants in an amount sufficient to satisfy (or to prevent an
anticipated failure of) one of the tests set forth in Section 12.4. Such
contribution shall be allocated to the Qualified Matching Contribution Account of
the Non-Highly Compensated Participant having the lowest Elective Deferrals until
one of the tests set forth in Section 12.4 is satisfied (or is anticipated to be
satisfied), or until such Non-Highly Compensated Participant has received the
maximum Annual Addition pursuant to Section 4.4. This process shall continue until
one of the tests set forth in Section 12.4 is satisfied (or is anticipated to be
satisfied). However, for purposes of this contribution, Non-Highly Compensated
Participants who are not employed at the end of the Plan Year (or at the end of the
prior Plan Year if the Prior Year Testing method is being used) and, if this is a
standardized Plan, who have not completed more than 500 Hours of Service during such
Plan Year, shall not be eligible to share in the allocation and shall be
disregarded.
(d) Any Excess Contributions (and Income) which are distributed on or after 2 1/2
months after the end of the Plan Year shall be subject to the ten percent (10%) Employer
excise tax imposed by Code Section 4979.
12.6 ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) The Current Year Testing method shall apply commencing with the Plan Year in which
this Plan is adopted (if it is a newly adopted plan) or in which this Plan is first amended
and restated into the form of this prototype plan (if it is an amendment and restatement of
an existing plan). Under the Current Year Testing method, the Actual Contribution
Percentage (hereinafter ACP) for Participants who are Highly Compensated Employees
(hereinafter HCEs) for each Plan Year and the ACP for Participants who are Non-Highly
Compensated Employees (hereinafter NHCEs) for the Plan Year must satisfy one of the
following tests:
(1) The ACP for a Plan Year for Participants who are HCEs for the Plan Year shall
not exceed the ACP for Participants who are NHCEs for the Plan Year multiplied by
1.25; or
(2) The ACP for a Plan Year for Participants who are HCEs for the Plan Year shall
not exceed the ACP for Participants who are NHCEs for the Plan Year multiplied by
2.0, provided that the ACP for Participants who are HCEs does not exceed the ACP for
Participants who are NHCEs in the Plan Year by more than two (2) percentage points.
74
(b) Notwithstanding the preceding, if this Plan is an amendment and restatement of an
existing plan, and the Prior Year Testing method is elected in the Adoption Agreement for
any Plan Year prior to the Plan Year in which the original amendment and restatement into
the form of this prototype plan occurs, for such Plan Years the ACP tests in (a)(1) and
(a)(2), above shall be applied by comparing the current Plan Years ACP for Participants who
are HCEs with the prior Plan Years ACP (rather than the current Plan Years ACP) for
Participants who were NHCEs for the prior Plan Year. Notwithstanding the preceding sentence,
under the Prior Year Testing method, for purposes of applying the ACP test with respect to
the first Plan Year in which the Plan permits any Participant to make Employee
contributions, provides for matching contributions, or both, the ACP for the prior years
NHCEs shall be deemed to be three percent (3%) unless the Employer has elected in the
Adoption Agreement to use the current Plan Years ACP for these Participants. However, the
provisions of this paragraph may not be used if the Plan is a successor plan or is otherwise
prohibited from using such provisions pursuant to IRS Notice 98-I (or superseding guidance).
Once made, the election to use the Current Year Testing method can only be changed if the Plan
meets the requirements for changing to the Prior Year Testing method set forth in IRS Notice 98-1
(or superseding guidance). Furthermore, this Plan must use the same testing method for both the ADP
and ACP tests for Plan Years beginning on or after the date the Employer adopts its GUST restated
plan.
(c) This subsection applies to prevent the multiple use of the test set forth in
subsection (a)(2) above. Any HCE eligible to make Elective Deferrals pursuant to Section
12.2 and to make after-tax voluntary 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 either the actual deferral ratio adjusted in the manner
described in Section 12.5 or the actual contribution ratio reduced in the manner described
in Section 12.7 so that the Aggregate Limit is not exceeded pursuant to Regulation
1.401(m)-2. The amounts in excess of the Aggregate Limit shall be treated as either an
Excess Contribution or an Excess Aggregate Contribution. The ADP and ACP of the HCEs are
determined after any corrections required to meet the ADP and ACP tests and are deemed to be
the maximum permitted under such test for the Plan Year. Multiple use does not occur if
either the ADP or ACP of the HCEs does not exceed 1.25 multiplied by the ADP and ACP of the
NHCEs.
Aggregate Limit means the sum of(i) 125 percent of the greater of the ADP of the NHCEs for
the Plan Year or the ACP of such NHCEs under the plan subject to Code Section 401(m) for the Plan
Year and (ii) the lesser of 200% or two plus the lesser of such ADP or ACP. Lesser is substituted
for greater in (i) above, and greater is substituted for lesser after two plus the in (ii)
above if it would result in a larger Aggregate Limit. If the Employer has elected in the Adoption
Agreement to use the Prior Year Testing method for any year in accordance with subsection (b), then
in calculating the Aggregate Limit for a particular Plan Year, the NHCEs ADP and ACP for the
prior Plan Year, instead of the current Plan Year, is used.
(d) A Participant is a Highly Compensated Employee for a particular Plan Year if the
Participant meets the definition of a Highly Compensated Employee in effect for that Plan
Year. Similarly, a Participant is a Non-highly Compensated Employee for a particular Plan
Year if the Participant does not meet the definition of a Highly Compensated Employee in
effect for that Plan Year.
(e) For the purposes of this Section and Section 12.7, ACP for a specific group of
Participants for a Plan Year means the average of the Contribution Percentages (calculated
separately for each Participant in such group). For this purpose, Contribution Percentage
means the ratio (expressed as a percentage) of the Participants Contribution Percentage
Amounts to the Participants 4 14(s) Compensation. The actual contribution ratio for each
Participant and the ACP for each group, shall be calculated to the nearest one-hundredth of
one percent of the Participants 4 14(s) Compensation.
(f) Contribution Percentage Amounts means the sum of(i) after-tax voluntary Employee
contributions, (ii) Employer Matching Contributions made pursuant to Section 12. 1(a)(2)
(including Qualified Matching Contributions to the extent such Qualified Matching
Contributions are not used to satisfy the tests set forth in Section 12.4), (iii) Excess
Contributions recharacterized as nondeductible voluntary Employee contributions pursuant to
Section 12.5, and (iv) Qualified Non-Elective Contributions
75
(to the extent not used to satisfy the tests set forth in Section 12.4). However,
Contribution Percentage Amounts shall not include Matching Contributions that are
forfeited either to correct Excess Aggregate Contributions or due to Code Section 401(a)(4)
and the Regulations thereunder because the contributions to which they relate are Excess
Deferrals, Excess Contributions, or Excess Aggregate Contributions. In addition,
Contribution Percentage Amounts may include Elective Deferrals provided the ADP test in
Section 12.4 is met before the Elective Deferrals are used in the ACP test and continues to
be met following the exclusion of those Elective Deferrals that are used to meet the ACP
test.
(g) For purposes of determining the ACP and the amount of Excess Aggregate
Contributions pursuant to Section 12.7, only Employer Matching Contributions (excluding
Matching Contributions forfeited or distributed pursuant to Section 12.2(e), 12.5(b), or
12.7(b)) 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
12.1(a)(2) or after-tax voluntary Employee contributions made pursuant to Section 4.7
allocated to their accounts, elective deferrals (as defined in Regulation 1402(g)-1(b)) and
qualified non-elective contributions (as defined in Code Section 401(m)(4)(C)) contributed
to any plan maintained by the Employer. Such elective deferrals and qualified non-elective
contributions shall be treated as Employer matching contributions subject to Regulation
1.401(m)-1(b)(2) which is incorporated herein by reference. The Plan Year must be the same
as the plan year of the plan to which the elective deferrals and the qualified non-elective
contributions are made.
(h) In the event that this Plan satisfies the requirements of Code Sections 401(a)(4),
401(m), or 410(b) only if aggregated with one or more other plans, or if one or more other
plans satisfy the requirements of such sections of the Code only if aggregated with this
Plan, then this Section shall be applied by determining the ACP of Employees as if all such
plans were a single plan. Plans may be aggregated in order to satisfy Code section 401(m)
only if they have the same Plan Year.
Any adjustments to the NHCE ACP for the prior year will be made in accordance with IRS Notice
98-1 and any superseding guidance, unless the Employer has elected in the Adoption Agreement to use
the Current Year Testing method. Plans may be aggregated in order to satisfy Code Section 40 1(k)
only if they have the same Plan Year and use the same ACP testing method.
(i) For the purposes of this Section, if an HCE is a Participant under two (2) or more
plans (other than an employee stock ownership plan as defined in Code Section 4975(e)(7))
which are maintained by the Employer or an Affiliated Employer to which Matching
Contributions, nondeductible voluntary Employee contributions, or both, are made, all such
contributions on behalf of such HCE shall be aggregated for purposes of determining such
HCEs actual contribution ratio. However, 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.
(j) At the discretion of the Employer, Elective Deferrals may be used to satisfy the
tests set forth in Section 12.6. If Elective Deferrals are used in one of the tests, one of
the tests set forth in Section 12.4 must be met before the Pre-Tax Contributions are so used
and the test set forth under Section 12.4 must continue to be met following the exclusion of
those Elective Deferrals that are use to satisfy the test set forth under Section 12.6.
(k) For purposes of this Section and Section 12.7, a Highly Compensated Participant and
a Non-Highly Compensated Participant shall include any Employee eligible to have Matching
Contributions made pursuant to Section 12.1(a)(2) (whether or not a deferral election was
made or suspended pursuant to Section 12.2(g)) allocated to such Participants account for
the Plan Year or to make salary deferrals pursuant to Section 12.2 (if the Employer uses
salary deferrals to satisfy the provisions of this Section) or after-tax voluntary Employee
contributions pursuant to Section 4.7 (whether or not nondeductible voluntary Employee
contributions are made) allocated to the Participants account for the Plan Year.
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(l) For purposes of this Section and Section 12.7, Matching Contribution means an
Employer contribution made to the Plan, or to a contract described in Code Section 403(b),
on behalf of a Participant on account of a nondeductible voluntary Employee contribution
made by such Participant, or on account of a Participants elective deferrals under a plan
maintained by the Employer.
(m) For purposes of determining the ACP and the amount of Excess Aggregate
Contributions pursuant to Section 12.7, only Elective Deferrals, Qualified Non-Elective
Contributions, Matching Contributions and Qualified Matching Contributions contributed to
the Plan prior to the end of the twelve (12) month period immediately following the Plan
Year to which the contributions relate shall be considered.
(n) Notwithstanding anything in this Section to the contrary, the provisions of this
Section and Section 12.7 may be applied separately (or will be applied separately to the
extent required by Regulations) to each plan within the meaning of Regulation
1.401(k)-1(g)(11). Furthermore, for Plan Years beginning after December 31, 1998, the
provisions of Code Section 401(k)(3)(F) may be used to exclude from consideration all
Non-Highly Compensated Employees who have not satisfied the minimum age and service
requirements of Code Section 41 0(a)(1)(A).
12.7 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) In the event (or, with respect to subsection (g) below when the Prior Year Testing
method is being used, if it is anticipated) that for Plan Years beginning after December 31,
1996, the Plan does not satisfy one of the tests set forth in Section 12.6, the
Administrator shall adjust Excess Aggregate Contributions or the Employer shall make
contributions pursuant to the options set forth below or any combination thereof. However,
if the Prior Year testing method is being used (as provided for in Section 12.6(b)) and it
is anticipated that the Plan might not satisfy one of such tests, then the Employer may make
contributions pursuant to the options set forth in subsection (c) below.
(b) 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 the Highly Compensated
Participant having the largest allocation of Contribution Percentage Amounts shall have a
portion of such Contribution Percentage Amounts (and Income allocable to such amounts)
distributed or, if non-Vested, Forfeited (including Income allocable to such Forfeitures)
until the total amount of Excess Aggregate Contributions has been distributed, or until the
amount of the Participants Contribution Percentage Amounts equals the Contribution
Percentage Amounts of the Highly Compensated Participant having the next largest amount of
Contribution Percentage Amounts. This process shall continue until the total amount of
Excess Aggregate Contributions has been distributed or forfeited. Any distribution and/or
Forfeiture of Contribution Percentage Amounts shall be made in the following order:
(1) Employer matching contributions distributed and/or forfeited pursuant to Section
12.5(b)(1);
(2) After-tax voluntary Employee contributions including Excess Contributions
recharacterized as after-tax voluntary Employee contributions
pursuant to Section 12.5(b)(2);
(3) Remaining Employer matching contributions.
(c) 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. However, no such Forfeiture may be allocated to a Highly Compensated
Participant whose contributions are reduced pursuant to this Section.
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(d) For the purposes of this Section, Income means the income or loss allocable to
the Participants after-tax voluntary Employee Contributions made pursuant to Section 4.7
and Employer Matching Contributions (and, if applicable, amounts treated as Matching
Contributions) for the Plan Year multiplied by a fraction, the numerator of which is the
Participants Excess Aggregate Contributions for the Plan Year and the denominator of which
is the sum of(A) the Participants Account Balances, attributable to the employee after-tax
contributions and Matching Contributions (and, if applicable, amounts treated as Matching
Contributions) without regard to any income or loss occurring during that Plan Year.
However, Income for the period between the end of the Plan Year and the date of the
distribution (the gap period) is not required to be distributed.
(e) Excess Aggregate Contributions attributable to amounts other than nondeductible
voluntary Employee contributions, including forfeited matching contributions, shall be
treated as Employer contributions for purposes of Code Sections 404 and 415 even if
distributed from the Plan.
(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 nondeductible voluntary Employee contributions due to recharacterization for the
plan year of any other qualified cash or deferred arrangement (as defined in Code Section
401(k)) maintained by the Employer that ends with or within the Plan Year or which are
treated as after-tax voluntary Employee contributions due to recharacterization pursuant to
Section 12.5.
(g) Notwithstanding the above, within twelve (12) months after the end of the Plan Year
(or, if the Prior Year Testing method is used, within twelve (12) months after the end of
the prior Plan Year), the Employer may make a special Qualified Non-Elective Contribution or
Qualified Matching Contribution in accordance with one of the following provisions which
contribution shall be allocated to the Qualified Non-Elective Contribution Account or
Qualified Matching Contribution Account of each Non-Highly Compensated eligible to share in
the allocation in accordance with such provision. The Employer shall provide the
Administrator with written notification of the amount of the contribution being made and for
which provision it is being made pursuant to.
(1) A Qualified Non-Elective Contribution may be made on behalf of Non-Highly
Compensated Participants in an amount sufficient to satisfy (or to prevent an
anticipated failure of) one of the tests set forth in Section 12.6. Such
contribution shall be allocated in the same proportion that each Non-Highly
Compensated Participants 414(s) Compensation for the year (or prior year if the
Prior Year Testing method is being used) bears to the total 4 14(s) Compensation of
all Non-Highly Compensated Participants for such year.
(2) A Qualified Non-Elective Contribution may be made on behalf of Non-Highly
Compensated Participants in an amount sufficient to satisfy (or to prevent an
anticipated failure of) one of the tests set forth in Section 12.6. Such
contribution shall be allocated in the same proportion that each Non-Highly
Compensated Participants 4 14(s) Compensation for the year (or prior year if the
Prior Year Testing method is being used) bears to the total 414(s) Compensation of
all Non-Highly Compensated Participants for such year. However, for purposes of this
contribution, Non-Highly Compensated Participants who are not employed at the end of
the Plan Year (or at the end of the prior Plan Year if the Prior Year Testing method
is being used) and, if this is a standardized Plan, who have not completed more than
500 Hours of Service during such Plan Year, shall not be eligible to share in the
allocation and shall be disregarded.
(3) A Qualified Non-Elective Contribution may be made on behalf of Non-Highly
Compensated Participants in an amount sufficient to satisfy (or to prevent an
anticipated failure of) one of the tests set forth in Section 12.6. Such
contribution shall be allocated in equal amounts (per capita).
(4) A Qualified Non-Elective Contribution may be made on behalf of Non-Highly
Compensated Participants in an amount sufficient to satisfy (or to prevent an
anticipated failure of) one of the tests set forth in Section 12.6. Such
contribution shall be allocated in equal amounts
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(per capita). However, for purposes of this contribution, Non-Highly Compensated
Participants who are not employed at the end of the Plan Year (or at the end of the
prior Plan Year if the Prior Year Testing method is being used) and, if this is a
standardized Plan, who have not completed more than 500 Hours of Service during such
Plan Year, shall not be eligible to share in the allocation and shall be
disregarded.
(5) A Qualified Non-Elective Contribution may be made on behalf of Non-Highly
Compensated Participants in an amount sufficient to satisfy (or to prevent an
anticipated failure of) one of the tests set forth in Section 12.6. Such
contribution shall be allocated to the Qualified Non-Elective Contribution Account
of the Non-Highly Compensated Participant having the lowest 414(s) Compensation,
until one of the tests set forth in Section 12.6 is satisfied (or is anticipated to
be satisfied), or until such Non-Highly Compensated Participant has received the
maximum Annual Addition pursuant to Section 4.4. This process shall continue until
one of the tests set forth in Section 12.6 is satisfied (or is anticipated to be
satisfied).
(6) A Qualified Non-Elective Contribution may be made on behalf of Non-Highly
Compensated Participants in an amount sufficient to satisfy (or to prevent an
anticipated failure of) one of the tests set forth in Section 12.6. Such
contribution shall be allocated to the Qualified Non-Elective Contribution Account
of the Non-Highly Compensated Participant having the lowest 414(s) Compensation,
until one of the tests set forth in Section 12.6 is satisfied (or is anticipated to
be satisfied), or until such Non-Highly Compensated Participant has received the
maximum Annual Addition pursuant to Section 4.4. This process shall continue until
one of the tests set forth in Section 12.6 is satisfied (or is anticipated to be
satisfied). However, for purposes of this contribution, Non-Highly Compensated
Employees who are not employed at the end of the Plan Year (or at the end of the
prior Plan Year if the Prior Year Testing method is being used) and, if this is a
standardized Plan, who have not completed more than 500 Hours of Service during such
Plan Year, shall not be eligible to share in the allocation and shall be
disregarded.
(7) A Matching Contribution may be made on behalf of Non-Highly Compensated
Participants in an amount sufficient to satisfy (or to prevent an anticipated
failure of) one of the tests set forth in Section 12.6. Such contribution shall be
allocated on behalf of each Non-Highly Compensated Participant in the same
proportion that each Non-Highly Compensated Participants Elective Deferrals for the
year bears to the total Elective Deferrals of all Non-Highly Compensated
Participants. The Employer shall designate, at the time the contribution is made,
whether the contribution made pursuant to this provision shall be a Qualified
Matching Contribution allocated to a Participants Qualified Matching Contribution
Account or an Employer Non-Elective Contribution allocated to a Participants
Non-Elective Account.
(8) A Matching Contribution may be made on behalf of Non-Highly Compensated
Participants in an amount sufficient to satisfy (or to prevent an anticipated
failure of) one of the tests set forth in Section 12.6. Such contribution shall be
allocated on behalf of each Non-Highly Compensated Participant in the same
proportion that each Non-Highly Compensated Participants Elective Deferrals for the
year bears to the total Elective Deferrals of all Non-Highly Compensated
Participants. The Employer shall designate, at the time the contribution is made,
whether the contribution made pursuant to this provision shall be a Qualified
Matching Contribution allocated to a Participants Qualified Matching Contribution
Account or an Employer Non- Elective Contribution allocated to a Participants
Non-Elective Account. However, for purposes of this contribution, Non-Highly
Compensated Participants who are not employed at the end of the Plan Year (or at the
end of the prior Plan Year if the Prior Year Testing method is being used) and, if
this is a standardized Plan, who have not completed more than 500 Hours of Service
during such Plan Year, shall not be eligible to share in the allocation and shall be
disregarded.
(9) A Matching Contribution may be made on behalf of Non-Highly Compensated
Participants in an amount sufficient to satisfy (or to prevent an anticipated
failure of) one of the tests set forth in Section 12.4. Such contribution shall be
allocated on behalf of the Non-Highly Compensated Participant having the lowest
Elective Deferrals until one of the tests set forth in
79
Section 12.4 is satisfied (or is anticipated to be satisfied), or until such
Non-Highly Compensated Participant has received the maximum Annual Addition
pursuant to Section 4.4. This process shall continue until one of the tests set
forth in Section 12.4 is satisfied (or is anticipated to be satisfied). The Employer
shall designate, at the time the contribution is made, whether the contribution made
pursuant to this provision shall be a Qualified Matching Contribution allocated to a
Participants Qualified Matching Contribution Account or an Employer Non-Elective
Contribution allocated to a Participants Non-Elective Account.
(10) A Matching Contribution may be made on behalf of Non-Highly Compensated
Participants in an amount sufficient to satisfy (or to prevent an anticipated
failure of) one of the tests set forth in Section 12.4. Such contribution shall be
allocated on behalf of the Non-Highly Compensated Participant having the lowest
Elective Deferrals until one of the tests set forth in Section 12.4 is satisfied (or
is anticipated to be satisfied), or until such Non-Highly Compensated Participant
has received the maximum Annual Addition pursuant to Section 4.4. This process
shall continue until one of the tests set forth in Section 12.4 is satisfied (or is
anticipated to be satisfied). The Employer shall designate, at the time the
contribution is made, whether the contribution made pursuant to this provision shall
be a Qualified Matching Contribution allocated to a Participants Qualified Matching
Contribution Account or an Employer Non-Elective Contribution allocated to a
Participants Non-Elective Account. However, for purposes of this contribution,
Non-Highly Compensated Participants who are not employed at the end of the Plan Year
(or at the end of the prior Plan Year if the Prior Year Testing method is being
used) and, if this is a standardized Plan, who have not completed more than 500
Hours of Service during such Plan Year, shall not be eligible to share in the
allocation and shall be disregarded.
(h) Any Excess Aggregate Contributions (and Income) which are distributed on or after
2 1/2 months after the end of the Plan Year shall be subject to the ten percent (10%)
Employer excise tax imposed by Code Section 4979.
12.8 SAFE HARBOR PROVISIONS
(a) The provisions of this Section will apply if the Employer has ejected, in the
Adoption Agreement, to use the ADP Test Safe Harbor or ACP Test Safe Harbor. If the
Employer has elected to use the ADP Test Safe Harbor for a Plan Year, then the provisions
relating to the ADP test described in Section 12.4 and in Code Section 401(k)(3) do not
apply for such Plan Year. In addition, if the Employer has also elected to use the ACP Test
Safe Harbor for a Plan Year, then the provisions relating to the ACP test described in
Section 12.6 and in Code Section 401(m)(2) do not apply for such Plan Year. Furthermore, to
the extent any other provision of the Plan is inconsistent with the provisions of this
Section, the provisions of this Section will govern.
(b) For purposes of this Section, the following definitions apply:
(1) ACP Test Safe Harbor means the method described in subsection (d) below for
satisfying the ACP test of Code Section 401(m)(2).
(2) ACP Test Safe Harbor Matching Contributions means Matching Contributions
described in subsection (d)(1).
(3) ADP Test Safe Harbor means the method described in subsection (c) for
satisfying the ADP test of Code Section 401(k)(3).
(4) ADP Test Safe Harbor Contributions means Matching Contributions and
non-elective contributions described in subsection (c)(l) below.
(5) Compensation means Compensation as defined in Section 1.11, except, for
purposes of this Section, no dollar limit, other than the limit imposed by Code
Section 401(a)(17), applies to
80
the Compensation of a Non-Highly Compensated Employee. However, solely for purposes
of determining the Compensation subject to a Participants deferral election, the
Employer may use an alternative definition to the one described in the preceding
sentence, provided such alternative definition is a reasonable definition within the
meaning of Regulation 1.414(s)-1(d)(2) and permits each Participant to elect
sufficient Elective Deferrals to receive the maximum amount of Matching
Contributions (determined using the definition of Compensation described in the
preceding sentence) available to the Participant under the Plan.
(6) Eligible Participant means a Participant who is eligible to make Elective
Deferrals under the Plan for any part of the Plan Year (or who would be eligible to
make Elective Deferrals but for a suspension due to a hardship distribution
described in Section 12.9 or to statutory limitations, such as Code Sections 402(g)
and 415) and who is not excluded as an Eligible Participant under the 401(k) Safe
Harbor elections in the Adoption Agreement.
(7) Matching Contributions means contributions made by the Employer on account of
an Eligible Participants Elective Deferrals.
(c) The provisions of this subsection apply for purposes of satisfying the ADP Test
Safe Harbor.
(1) The ADP Test Safe Harbor Contribution is the contribution elected by the
Employer in the Adoption Agreement to be used to satisfy the ADP Test Safe Harbor.
However, if no contribution is elected in the Adoption Agreement, the Employer will
contribute to the Plan for the Plan Year a Basic Matching Contribution on behalf
of each Eligible Employee. The Basic Matching Contribution is equal to (i) one-
hundred percent (100%) of the amount of an Eligible Participants Elective
Deferrals that do not exceed three percent (3%) of the Participants Compensation
for the Plan Year, plus (ii) fifty percent (50%) of the amount of the Participants
Elective Deferrals that exceed three percent (3%) of the Participants
Compensation but do not exceed five percent (5%) of the Participants
Compensation.
(2) Except as provided in subsection (e) below, for purposes of the Plan, a Basic
Matching Contribution or an Enhanced Matching Contribution will be treated as a
Qualified Matching Contribution and a Non-Elective Safe Harbor Contribution will be
treated as a Qualified Non-Elective Contribution. Accordingly, the ADP Test Safe
Harbor Contribution will be fully Vested and subject to the distribution
restrictions set forth in Section 12.2(c) (i.e., may generally not be distributed
earlier than separation from service, death, disability, an event described in
Section 401 (k)(1), or, in case of a profit sharing plan, the attainment of age 59
1/2). In addition, such contributions must satisfy the ADP Test Safe Harbor
without regard to permitted disparity under Code Section 401(l).
(3) At least thirty (30) days, but not more than ninety (90) days, before the
beginning of the Plan Year, the Employer will provide each Eligible Participant a
comprehensive notice of the Participants rights and obligations under the Plan,
written in a manner calculated to be understood by the average Participant. However,
if an Employee becomes eligible after the 90th day before the beginning of the Plan
Year and does not receive the notice for that reason, the notice must be provided no
more than ninety (90) days before the Employee becomes eligible but not later than
the date the Employee becomes eligible.
(4) In addition to any other election periods provided under the Plan, each
Eligible Participant may make or modify a deferral election during the thirty (30)
day period immediately following receipt of the notice described in subsection (3)
above Furthermore, if the ADP Test Safe Harbor contribution is a Matching
Contribution each Eligible Employee must be permitted to elect sufficient
Elective Deferrals to receive the maximum amount of Matching Contributions
available to the Participant under the Plan.
81
(d) The provisions of this subsection apply if the Employer has elected to satisfy the
ACP Test Safe Harbor.
(1) In addition to the ADP Test Safe Harbor Contributions, the Employer will make
any Matching Contributions in accordance with elections made in the Adoption
Agreement. Such additional Matching Contributions will be considered ACP Test
Safe Harbor Matching Contributions.
(2) Notwithstanding any election in the Adoption Agreement to the contrary, an
Eligible Participants Elective Deferrals in excess of six percent (6%) of
Compensation may not be taken into account in applying ACP Test Safe Harbor
Matching Contributions In addition, effective with respect to Plan Years beginning
after December 31, 1999, any portion of an ACP Test Safe Harbor Matching
Contribution attributable to a discretionary Matching Contribution may not exceed
four percent (4%) of an Eligible Participants Compensation.
(e) The Plan is required to satisfy the ACP test of Code Section 401(m)(2), using the
current year testing method, if the Plan permits after-tax voluntary Employee contributions
or if matching contributions that do not satisfy the ACP Test Safe Harbor may be made to
the Plan. In such event, only ADP Test Safe Harbor Contributions or ACP Test Safe Harbor
Contributions that exceed the amount needed to satisfy the ADP Test Harbor or ACP Test
Safe Harbor (if the Employer has elected to use the ACP Test Safe Harbor) may be treated
as Qualified Non-elective Contributions or Qualified Matching Contributions in applying the
ACP test. In addition, in applying the ACP test, elective contributions may not treated as
matching contributions under Code Section 401(m)(3). Furthermore, in applying the ACP test,
the Employer may elect to disregard with respect to all Eligible Participants (1) all
Matching Contributions if the only Matching Contributions made to the Plan satisfy the
ADP Test Safe Harbor Contribution (the Basic Matching Contribution or the Enhanced
Matching Contribution) and (2) if the ACP Test Safe Harbor is satisfied, Matching
Contributions that do not exceed four percent (4%) of each Participants Compensation.
12.9 ADVANCE DISTRIBUTION FOR HARDSHIP
(a) The Administrator, at the election of a Participant, shall direct the Trustee to
distribute to the Participant in any one Plan Year up to the lesser of(1) 100% of the
accounts as elected in the Adoption Agreement valued as of the last 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 distribution is
for one of the following or any other item permitted under Regulation 1.401(k)-1(d)(2)(iv):
(1) Medical expenses described in Code Section 213(d) incurred by the Participant,
the Participants spouse, or any of the Participants dependents (as defined in Code
Section 152) or necessary for these persons to obtain medical care as described in
Code Section 213(d);
(2) Costs directly related to the purchase (excluding mortgage payments) of a
principal residence for the Participant;
(3) Payment of tuition, related educational fees, and room and board expenses, for
the next twelve (12) months of post-secondary education for the Participant, the
Participants spouse, children, or dependents (as defined in Code Section 152); or
(4) Payments necessary to prevent the eviction of the Participant from the
Participants principal residence or foreclosure on the mortgage on that residence.
82
(b) No distribution shall be made pursuant to this Section unless the Administrator,
based upon the Participants 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 (to the extent the loan would not increase the hardship);
(3) The Plan, and all other plans maintained by the Employer, provide that the
Participants elective deferrals and nondeductible 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 deferrals for the Participants taxable year
immediately following the taxable year of the hardship distribution in excess of the
applicable limit under Code Section 402(g) for such next taxable year less the
amount of such Participants elective deferrals for the taxable year of the hardship
distribution.
(c) Notwithstanding the above, distributions from the Participants Elective Deferral
Account, Qualified Matching Contribution Account and Qualified Non-Elective Account pursuant
to this Section shall be limited solely to the Participants Elective Deferrals and any
income attributable thereto credited to the Participants Elective Deferral Account as of
December 31, 1988. Furthermore, if a hardship distribution is permitted from more than one
account type, the Administrator may determine any ordering of a Participants hardship
distribution from such accounts.
(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 Sections 411 (a)(11) and 417 and the Regulations
thereunder.
(e) The minimum amount of a hardship distribution made pursuant to this Section 12.9 and Section
6.11 is $500.
83
EGTRRA AMENDMENT TO THE
AUTOMATIC DATA PROCESSING
DEFINED CONTRIBUTION PLAN
ARTICLE I
PREAMBLE
1.1 |
|
Adoption and effective date of amendment. This amendment of the Automatic Data
Processing Defined Contribution Plan is adopted to reflect certain provisions of the Economic
Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) and incorporates for
administrative convenience EGTRRA amendments previously adopted prior to January 1, 2002.
This amendment is intended as good faith compliance with the requirements of EGTRRA and is to
be construed in accordance with EGTRRA and guidance issued thereunder. Except as otherwise
provided, this amendment shall b e effective as of the first day of the first Plan Year
beginning after December 31, 2001. Notwithstanding the foregoing, this amendment shall apply
with respect to any plan that is first amended and restated into the form of this Prototype
Plan after December 31, 2001, as of the dates set forth herein solely to the extent not
inconsistent with any amendment to said plan designed to comply with EGTRRA with an effective
date prior to such amendment and restatement; otherwise, the provisions of this amendment will
apply as of the date of such amendment and restatement. |
1.2 |
|
Adoption by prototype sponsor. Except as otherwise provided herein, pursuant to
Section 5,01 of Revenue Procedure 2000-20 (or pursuant to the corresponding provision in
Revenue Procedure 89-9 or Revenue Procedure 89-13), the sponsor hereby adopts this amendment
on behalf of all adopting Employers. |
1.3 |
|
Supersession of inconsistent provisions. This amendment shall supersede the
provisions of the Plan to the extent those provisions are inconsistent with the provisions of
this amendment. |
ARTICLE II
HARDSHIP DISTRIBUTIONS
2.1 |
|
Applicability and effective date. This Article shall apply for calendar years
beginning after 2001. |
2.3 |
|
Post-hardship limit on elective deferrals. In accordance with Internal Revenue
Service Notice 2002-4, the limit on the amount of a Participants Elective Deferrals under the
Plan (and elective deferrals under all other plans maintained by the Employer) in the taxable
year following the taxable year of a hardship distribution is eliminated effective for
calendar years beginning after December 31, 2001. |
ARTICLE III
CATCH-UP CONTRIBUTIONS
3.1 |
|
Applicability and effective date. This Article shall apply to a Plan if the Plan Year
is a calendar year. If this Article is applicable to a Plan in accordance with the preceding
sentence, this Article shall be effective for Plan Years beginning on or after January 1, 2002;
provided, however, that if the Plan covers only collectively bargained employees and is maintained
under one or more collective bargaining agreements between Employee representatives and one or more
Employers in effect on January 1, 2002, the effective date of this Article may be delayed if the
Employer so directs in a writing, but in no event later than the first Plan Year beginning after
the termination of said collective bargaining agreements. |
|
3.2 |
|
Catch-up Contributions. All Employees who are eligible to make Elective Deferrals and
who will attain age 50 before the close of the Plan Year shall be eligible to make catch-up
contributions in accordance with, and subject to the limitations of Section 414(v) of the Code.
Such catch-up contributions shall not be taken into account for purposes of the provisions of the
Plan implementing the required limitations of Section 402(g) and 415 of the Code. The Plan shall
not be treated as failing to satisfy the provisions of the Plan implementing the requirements of
Section 401(k)(3), 401(k)(11), 401(k)(12), 410(b), or 416 of the Code, as applicable, by reason of
the making of such catch-up contributions. Catch-up contributions shall be eligible for a Matching
Contribution. |
1
ARTICLE IV
PLAN LOANS
Plan loans for Owner-Employees or Shareholder-Employees. If the Plan permits loans to be
made to the Participants, then effective for Plan loans made after December 31, 2001, Plan
provisions prohibiting loans to any Owner-Employee or Shareholder-Employee shall cease to apply.
ARTICLE V
LIMITATIONS ON CONTRIBUTIONS (IRC SECTION 415 LIMITS)
5.1 |
|
Effective date. This Article shall be effective for Limitation Years beginning after
December 31, 2001. |
|
5.2 |
|
Maximum Annual Addition. Except to the extent permitted under Article X of this
amendment and Section 414(v) of the Code, if applicable, the Annual Addition that may be
contributed or allocated to a Participants account under the Plan for any Limitation Year
shall not exceed the lesser of: |
|
a. |
|
$40,000, as adjusted for increases in the cost-of-living under Section 415(d)
of the Code, or |
|
|
b. |
|
100 percent of the Participants compensation, within the meaning of Section
415(c)(3) of the Code, for the limitation year. |
|
|
The compensation limit referred to in Section 5.2(b) shall not apply to any contribution for
medical benefits after separation from service (within the meaning of Section 401(h) or
Section 419A(f)(2) of the Code) which is otherwise treated as an Annual Addition. |
ARTICLE VI
MODIFICATION OF TOP-HEAVY RULES
6.1 |
|
Effective date. This Article shall apply for purposes of determining whether the Plan
is a top-heavy plan under Section 416(g) of the Code for Plan Years beginning after December
31, 2001, and whether the Plan satisfies the minimum benefits requirements of Section 416(c)
of the Code for such years. This Article amends the top-heavy provisions of the Plan. |
|
6.2 |
|
Determination of top-heavy status. |
|
6.2.1 |
|
Key Employee. Key Employee means any Employee or former Employee (including any
deceased Employee) who at any time during the Plan Year that includes the determination date
was an officer of the Employer having annual compensation greater than $130,000 (as adjusted
under Section 416(i)( 1) of the Code for Plan Years beginning after December 31,2002), a
5-percent owner of the Employer, or a 1-percent owner of the Employer having annual
compensation of more than $150,000. For this purpose, annual compensation means compensation
within the meaning of Section 415(c)(3) of the Code. The determination of who is a Key
Employee will be made in accordance with Section 416(i)(l) of the Code and the applicable
regulations and other guidance of general applicability issued thereunder. |
|
6.2.2 |
|
Determination of present values and amounts. This Section 6.2.2 shall apply for
purposes of determining the present values of accrued benefits and the amounts of account
balances of Employees as of the determination date. |
|
a. |
|
Distributions during year ending on the determination date. The
present value of accrued benefits and the amounts of account balances of an Employee as
of the determination date shall be increased by the distributions made with respect
to the Employee under the Plan and any plan aggregated with the Plan under Section
416(g)(2) of the Code during the 1-year period ending on the determination date. The
preceding sentence shall also apply to distributions under a terminated plan which, had
it not been terminated, would have been aggregated with the Plan |
2
|
|
|
under Section 416(g)(2)(A)(i) of the Code. In the case of a distribution made for
reason other than separation from service, death, or disability, this provision
shall be applied by substituting 5-year period for 1-year period. |
|
b. |
|
Employees not performing services during year ending on the determination
due. The accrued benefits and accounts of any individual who has not performed
services for the Employer during the 1-year period ending on the determination date
shall not be taken into account. |
6.3 |
|
Minimum benefits |
|
6.3.1 |
|
Matching contributions. Employer matching contributions shall be taken into account
for purposes of satisfying the minimum contribution requirements of Section 416(c)(2) of the
Code and the Plan. The preceding sentence shall apply with respect to matching contributions
under the Plan, or, if the Plan provides the minimum contributions requirement shall be met in
another plan, such other plan. Employer matching contributions that are used to satisfy the
minimum contribution requirements shall be treated as matching contributions for purposes of
the actual contribution percentage test and other requirements of Section 401(m) of the Code. |
|
6.3.2 |
|
Contributions under other plans. The Employer may provide in the Adoption Agreement
that the minimum benefit requirement shall be met in another plan (including another plan that
consists solely of a cash or deferred arrangement which meets the requirements of Section
40](k)(12) of the Code and matching contributions with respect to which the requirements of
Section 401(m)(11) of the Code arc met). |
ARTICLE VII
DIRECT ROLLOVERS
7.1 |
|
Effective date. This Article shall apply to distributions made after December 31,
2001. |
|
7.2 |
|
Modification of definition of eligible retirement plan. For purposes of the direct
rollover provisions of the Plan, an eligible retirement plan shall also mean an annuity
contract described in Section 403(b) of the Code and an eligible plan under Section 457(b) of
the Code which is maintained by a state, political subdivision of a state, or any agency or
instrumentality of a state or political subdivision of a state and which agrees to separately
account for amounts transferred into such plan from this Plan. The definition of eligible
retirement plan shall also apply in the case of a distribution to a surviving spouse, or to a
spouse or former spouse who is the alternate payee under a qualified domestic relation order,
as defined in Section 414(p) of the Code. |
|
7.3 |
|
Modification of definition of eligible rollover distribution to exclude hardship
distributions. For purposes of the direct rollover provisions of the Plan, any amount
that is distributed on account of hardship shall not be an eligible rollover distribution
and the distributee may not elect to have any portion of such a distribution paid directly
to an eligible retirement plan. |
|
7.4 |
|
Modification of definition of eligible rollover distribution to include after-tax
voluntary Employee contributions. For purposes of the direct rollover provisions in the
Plan, a portion of a distribution shall not fail to be an eligible rollover distribution
merely because the portion consists of after-tax voluntary Employee contributions which are
not includible in gross income. However, such portion may be transferred only to an individual
retirement account or annuity described in Section 408(a) or (b) of the Code, or to a
qualified defined contribution plan described in Section 401(a) or 403(a) of the Code that
agrees to separately account for amounts so transferred, including separately accounting for
the portion of such distribution which is includible in gross income and the portion of such
distribution which is not so includible. |
3
ARTICLE VIII
ROLLOVERS FROM OTHER PLANS
8.1 |
|
Effective date. This Article shall apply to rollovers from other plans to the Plan
made after December 31, 2001. |
|
8.2 |
|
Rollovers from other plans. The Plan will accept rollovers of eligible rollover
distributions as defined in the Code as specified below from the following types of plans: |
|
a. |
|
a qualified plan described in section 401(a) or 403(a) of the Code; |
|
|
b. |
|
an annuity contract described in section 403(b) of the Code; and |
|
|
c. |
|
an eligible plan under section 457(b) of tile Code which is maintained by a
state, political subdivision of a state, or any agency or instrumentality of a state or
political subdivision of a state. |
|
|
In addition, the plan will accept a Participants rollover of the portion of a distribution
from an individual retirement account or annuity described in section 408{a) or 408(b) of
the Code that is eligible to be rolled over and would otherwise be includible in gross
income. |
|
|
|
Notwithstanding anything in this Section 8.2, the Plan shall not accept a rollover of
after-tax employee contributions from any plan. |
ARTICLE IX
REPEAL OF MULTIPLE USE TEST
Repeal of multiple use test. The multiple use test described in Treasury Regulation
Section 1.401(m)-2 and the Plan shall not apply for Plan Years beginning after December 31, 2001.
ARTICLE X
ELECTIVE DEFERRALS
Elective Deferrals Contribution Limitation. No Participant shall be permitted to have
elective deferrals made under this Plan, or any other qualified plan maintained by the Employer
during any taxable year, in excess of the dollar limitation contained in Section 402(g) of the Code
in effect for such taxable year, except to the extent permitted under Article III of this amendment
and Section 414(v) of the Code, if applicable.
ARTICLE XI
SAFE HARBOR PLAN PROVISIONS
Modification of Top-Heavy Rules. The top-heavy requirements of Section 416 of the Code and
the Plan shall not apply in any year beginning after December 31, 2001, in which the Plan consists
solely of a cash or deferred arrangement which meets the requirements
of Section 401(k)(12) of the
Code and matching contributions with respect to which the requirements of Section 401 (m)(11) of
the Code are met.
ARTICLE XII
DISTRIBUTION UPON SEVERANCE OF EMPLOYMENT
12.1 Effective date. This Article shall apply for distributions and transactions made
after December 31, 2001, regardless of when the severance of employment occurred.
12.2 New distributable event. A participants Elective Deferrals, Qualified Nonelective
Contributions, qualified matching contributions, and earnings attributable to these contributions
shall be distributed on account of the Participants severance from employment. However, such a
distribution shall be subject to the other provisions of the Plan regarding distributions, other
than provisions that require a separation from service before such amounts may be distributed.
4
ARTICLE XIII
INCREASE IN COMPENSATION LIMIT
Increase in Compensation limit. The annual Compensation of each Employee taken into
account in determining allocations for any Plan Year beginning after December 31, 2001, shall not
exceed $200,000, as adjusted for cost-of-living increases in accordance with Code Section
401(a)(17)(B). Annual Compensation means Compensation during the Plan Year or such other
consecutive 12-month period over which Compensation is otherwise determined under the Plan (the
determination period). The cost-of-living adjustment in effect for a calendar year applies to
annual Compensation for the determination period that begins with or within such calendar year.
ARTICLE XIV
VESTING OF EMPLOYER MATCHING CONTRIBUTIONS
14.1 |
|
Applicability. This Article shall apply to Participants with accrued benefits
derived from matching contributions without regard to whether such Participants complete an
Hour of Service under the Plan in a Plan Year beginning after December 31, 2001. This Article
shall be effective for Plan Years beginning on or after January 1, 2002; provided, however,
that if the Plan covers only collectively bargained employees and is maintained under one or
more collective bargaining agreements between Employee representatives and one or more
Employers ratified by June 7, 2001, this Article shall not be effective until the Employer has
so elected in a writing, but in no event later than the first Plan Year beginning after the
earlier of: (a) the later of (i) the date on which the last of the collective bargaining
agreements terminates (determined without regard to any extension on or after June 7,2001), or
(ii) January 1,2002; or (b) January 1, 2006. |
|
14.2 |
|
Vesting schedule. Unless, and except to the extent that, an Employer has elected a
faster vesting schedule in the Adoption Agreement, a Participants accrued benefit derived
from matching contributions shall vest in accordance with the following: |
|
14.2.1 |
|
Cliff vesting schedule. If, as of December 31, 2001, the Plan provides for a
4-year or 5-year cliff vesting schedule, a Participants accrued benefit derived from
matching contributions shall be Vested upon the Participants completion of three years
of Vesting Service. |
|
|
14.2.2 |
|
Standard seven-year graded vesting schedule. If, as of December 31, 2001,
the Plan provides for a standard seven-year graded vesting schedule as set forth
below, the Vested percentage of a Participants accrued benefit derived from matching
contributions shall be deemed in accordance with the new six-year-graded vesting
schedule set forth below. |
|
|
|
|
Standard Seven-Year Graded Vesting Schedule |
|
|
|
|
|
Vesting Service |
|
Vested Percentage |
Less than 3 years |
|
|
0 |
% |
3 years |
|
|
20 |
% |
4 years |
|
|
40 |
% |
5 years |
|
|
60 |
% |
6 years |
|
|
80 |
% |
7 years |
|
|
100 |
% |
|
|
|
New Six-Year Graded Vesting Schedule |
|
|
|
|
|
Vesting Service |
|
Vested Percentage |
Less than 2 years |
|
|
0 |
% |
2 years |
|
|
20 |
% |
3 years |
|
|
40 |
% |
4 years |
|
|
60 |
% |
5 years |
|
|
80 |
% |
6 years |
|
|
100 |
% |
5
14.2.3 Non-Standard graded vesting schedule. If, as of December 31, 2001, the
Plan provides for a graded vesting schedule other than a standard seven-year graded
vesting schedule as set forth in Section 14.2.2 which does not satisfy the minimum required
vesting under the six-year graded vesting schedule set forth in Code §411(a)(12)(B) as added
by EGTRRA, the nonforfeitable percentage of a Participants accrued benefit derived from
matching contributions shall be determined by amending the Plans existing vesting schedule
so that any Vested percentage for a given year that does not meet the minimum required
vesting under Section 411(a)(12)(B) shall be increased to the minimum required Vested
percentage in accordance with said six-year graded vesting schedule.
ARTICLE XV
ROLLOVERS DISREGARDED IN INVOLUNTARY CASH-OUTS
15.1 Applicability and effective date. This Article shall be effective for distributions
made from the Plan after December 31, 2001.
15.2 Rollovers disregarded in determining value of account balances of involuntary
distributions. For purposes of Sections 6.4, 6.5, 6.6, and 6.9 of the Plan, the value of a
Participants Vested benefit shall be determined without regard to that portion of the Vested
benefit that is attributable to rollover contributions (and earnings allocable thereto) within the
meaning of Code Sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and 457(e)(16). If the
value of the Participants Vested benefit as so determined in $5,000 or less, the Plan shall
distribute the Participants entire Vested benefit in accordance with the applicable Plan provision
as soon as practicable thereafter.
6
|
|
|
Internal Revenue Service |
|
Department of the Treasury |
Plan Description: Prototype Non-Standardized |
|
|
Profit Sharing Plan with CODA |
|
|
FN: 50397110002-003 Case: 200100826 EIN: 22-2125128 |
|
|
Letter Serial No.: K373807a
|
|
Washington, DC 20224 |
|
|
|
|
|
Contact Person: Ms. Arrington 500-00197 |
Automatic Data Processing Federal Credit Union |
|
|
|
|
Telephone Number: (202) 283-8811 |
ONE ADP BOULEVARD |
|
|
|
|
In Reference to: T:EP:RA:T3 |
|
|
|
ROSELAND, NJ 07068
|
|
Date: 05/03/2002 |
Dear Applicant:
In our opinion, the form of the plan identified above is acceptable under section 401 of the
Internal Revenue Code for use by employers for the benefit of their employees. This opinion
relates only to the acceptability of the form of the plan under the Internal Revenue Code. It is
not an opinion of the effect of other Federal or local statutes.
You must furnish a copy of this letter to each employer who adopts this plan. You are also
required to send a copy of the approved form of the plan, any approved amendments and related
documents to Employee Plans Determinations in Cincinnati at the address specified in section 9.11
of Rev. Proc. 2000-20, 2000-6 I.R.B. 553.
This letter considers the changes in qualifications requirements made by the Uruguay Round
Agreements Act (GATT), Pub. L. 103-465, the Small Business Job Protection Act of 1996, Pub. L.
104-188, the Uniformed Services Employment and Reemployment Rights Act of 1994, Pub. L. 103-353,
the Taxpayer Relief Act of 1997, Pub. L. 105-34, the Internal Revenue Service Restructuring and
Reform Act of 1998, Pub. L. 105-206 and the Community Renewal Tax Relief Act of 2000, Pub. L.
106-554. These laws are referred to collectively as GUST.
Our opinion on the acceptability of the form of the plan is not a ruling or determination as to
whether an employers plan qualifies under Code section 401(a). However, an employer that adopts
this plan may rely on this letter with respect to the qualification of its plan under Code section
401(a), as provided for in Announcement 2001-77, 2001-30 I.R.B. and outlined below. The terms of
the plan must be followed in operation.
Except as provided below, our opinion does not apply with respect to the requirements of: (a) Code
sections 401(a)(4), 401(a)(26), 401(1), 410(b) and 414(s). Our opinion does not apply for purposes
of Code section 401(a)(10)(B) and section 401(a)(16) if an employer ever maintained another
qualified plan for one or more employees who are covered by this plan. For this purpose, the
employer will not be considered to have maintained another plan merely because the employer has
maintained another defined contribution plan(s), provided such other plan(s) has been terminated
prior to the effective date of this plan and no annual additions have been credited to the account
of any participant under such other plan(s) as of any date within the limitation year of this plan.
Likewise, if this plan is first effective on or after the effective date of the repeal of Code
section 415(e), the employer will not be considered to have maintained another plan merely because
the employer has maintained a defined benefit plan(s), provided the defined benefit plan(s) has
been terminated prior to the effective date of this plan. Our opinion also does not apply for
purposes of Code section 401(a)(16) if, after December 31, 1985, the employer maintains a welfare
benefit fund defined in Code section 419(e), which provides postretirement medical benefits
allocated to separate accounts for key employees as defined in Code section 419A(d)(3).
Our opinion applies with respect to the requirements of Code section 410(b) if 100 percent of all
nonexcludable employees benefit under the plan. Employers that elect a safe harbor allocation
formula and a safe harbor compensation definition can also rely on an opinion letter with respect
to the nondiscriminiatory amounts requirement under section 401(a)(4) and the requirements of
sections 401(k) and 401(m) (except where the plan is a safe harbor plan under section 401(k)(12)
that provides for the safe harbor contribution to be made under another plan).
An employer that elects to continue to apply the pre-GUST family aggregation rules in years
beginning after December 31, 1996, or the combined plan limit of section 415(e) in years beginning
after December 31, 1999, will not be able to rely on the opinion letter without a determination
letter. The employer may request a determination letter by filing an application with Employee
Plans Determinations on Form 5307, Application for Determination for Adopters of Master or
Prototype or Volume Submitter Plans.
If you, the master or prototype sponsor, have any questions concerning the IRS processing of this
case, please call the above telephone number. This number is only for use of the sponsor.
Individual participants and/or adopting employers with questions concerning the plan should contact
the master or prototype sponsor. The plans adoption agreement must include the sponsors address
and telephone number for inquiries by adopting employers.
If you write to the IRS regarding this plan, please provide your telephone number and the most
convenient time for us to call in case we need more information. Whether you call or write, please
refer to the Letter Serial Number and File Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record. Please notify us if you modify or discontinue
sponsorship of this plan.
Sincerely yours,
Director
Employee Plans Rulings & Agreements
|
|
|
Internal Revenue Service |
|
Department of the Treasury |
Plan Description: Prototype Non-Standardized |
|
|
Profit Sharing Plan |
|
|
FN: 50397110002-003 Case: 200100822 EIN: 22-2125128 |
|
|
Letter Serial No.: K373805a
|
|
Washington, DC 20224 |
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Contact Person: Ms. Arrington 500-00197 |
Automatic Data Processing Federal Credit Union |
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Telephone Number: (202) 283-8811 |
ONE ADP BOULEVARD |
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In Reference to: T:EP:RA:T3 |
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ROSELAND, NJ 07068
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Date: 05/03/2002 |
Dear Applicant:
In our opinion, the form of the plan identified above is acceptable under section 401 of the
Internal Revenue Code for use by employers for the benefit of their employees. This opinion relates
only to the acceptability of the form of the plan under the Internal Revenue Code. It is not an
opinion of the effect of other Federal or local statutes.
You must furnish a copy of this letter to each employer who adopts this plan. You are also required
to send a copy of the approved form of the plan, any approved amendments and related documents to
Employee Plans Determinations in Cincinnati at the address specified in section 9.11 of Rev. Proc.
2000-20, 2000-6 I.R.B. 553.
This letter considers the changes in qualifications requirements made by the Uruguay Round
Agreements Act (GATT), Pub. L. 103-465, the Small Business Job Protection Act of 1996. Pub. L.
104-188, the Uniformed Services Employment and Reemployment Rights Act of 1994, Pub. L. 103-353,
the Taxpayer Relief Act of 1997, Pub. L. 105-34, the Internal Revenue Service Restructuring and
Reform Act of 1998, Pub. L. 105-206 and the Community Renewal Tax Relief Act of 2000, Pub. L.
106-554. These laws are referred to collectively as GUST.
Our opinion on the acceptability of the form of the plan is not a ruling or determination as to
whether an employers plan qualifies under Code section 401(a). However, an employer that adopts
this plan may rely on this letter with respect to the qualification of its plan under Code section
401(a), as provided for in Announcement 2001-77, 2001-30 I.R.B. and outlined below. The terms of
the plan must be followed in operation.
Except as provided below, our opinion does not apply with respect to the requirements of (a) Code
sections 401(a)(4), 401(a)(26), 401(1), 410(b) and 414(s). Our opinion does not apply for purposes
of Code section 401(a)(10)(B) and section 401(a)(16) if an employer ever maintained another
qualified plan for one or more employees who are covered by this plan. For this purpose, the
employer will not be considered to have maintained another plan merely because the employer has
maintained another defined contribution plan(s), provided such other plan(s) has been terminated
prior to the effective date of this plan and no annual additions have been credited to the account
of any participant under such other plan(s) as of any date within the limitation year of this plan.
Likewise, if this plan is first effective on or after the effective date of the repeal of Code
section 415(e), the employer will not be considered to have maintained another plan merely because
the employer has maintained a defined benefit plan(s), provided the defined benefit plan(s) has
been terminated prior to the effective date of this plan. Our opinion also does not apply for
purposes of Code Section 401(a)(16) if, after December 31, 1985, the employer maintains a welfare
benefit fund defined in Code section 419(e), which provides postretirement medical benefits
allocated to separate accounts for key employees as defined in Code section 419A(d) (3).
Our opinion applies with respect to the requirements of Code section 410(b) if 100 percent of all
nonexcludable employees benefit under the Plan. Employers that elect a safe harbor allocation
formula and a safe harbor compensation definition can also rely on an opinion letter with respect
to the nondiscriminatory amounts requirement under section 401(a)(4) and the requirements of
sections 401(k) and 401(m) (except where the plan is a safe harbor plan under section 401(k)(12)
that provides for the safe harbor contribution to be made under another plan).
An employer that elects to continue to apply the pre-GUST family aggregation rules in years
beginning after December 31, 1996 or the combined plan limit of section 415(e) in years beginning
after December 31, 1999, will not be able to rely on the opinion letter without a determination
letter. The employer may request a determination letter by filing an application with Employee
Plans Determinations on Form 5307, Application for Determination for Adopters of Master or
Prototype or Volume Submitter Plans.
If you, the master or prototype sponsor, have any questions concerning the IRS processing of this
case, please call the above telephone number. This number is only for use of the sponsor.
Individual participants and/or adopting employers with questions concerning the plan should contact
the master or prototype sponsor. The plans adoption agreement must include the sponsors address
and telephone number for inquiries by adopting employers.
It you write to the IRS regarding this plan, please provide your telephone number and the most
convenient time for us to call in case we need more information. Whether you call or write, please
refer to the Letter Serial Number and File Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record. Please notify us if you modify or discontinue
sponsorship of this plan.
Sincerely yours,
Director
Employee Plans Rulings & Agreements
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Internal Revenue Service |
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Department of the Treasury |
Plan Description: Prototype Non-Standardized Money Purchase Pension Plan |
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FN: 50397110002-003 Case: 200100824 EIN: 22-2125128 |
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Letter Serial No.: K373806a
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Washington, DC 20224 |
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Contact Person: Ms. Arrington 50-00197 |
Automatic Data Processing Federal Credit Union |
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Telephone Number: (202) 283-8811 |
ONE ADP BOULEVARD |
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In Reference to: T:EP:RA:T3 |
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ROSELAND, NJ 07068
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Date: 05/03/2002 |
Dear Applicant:
In our opinion, the form of the plan identified above is acceptable under section 401 of the
Internal Revenue Code for use by employers for the benefit of their employees. This opinion relates
only to the acceptability of the form of the plan under the Internal Revenue Code. it is not an
opinion of the effect of other Federal or local statutes.
You must furnish a copy of this letter to each employer who adopts this plan. You are also required
to send a copy of the approved form of the plan, any approved amendments and related documents to
Employee Plans Determinations in Cincinnati at the address specified in Section 9.11 of Rev. Proc.
2000-20, 2000-6 I.R.B. 553.
This letter considers the changes in qualifications requirements made by the Uruguay Round
Agreements Act (GATT), Pub. L. 103-465, the Small Business Job Protection Act of 1996, Pub. I.,
104-188, the Uniformed Services Employment and Reemployment Rights Act of 1994, Pub. L. 103-353,
the Taxpayer Relief Act of 1997, Pub. L. 105-34, the Internal Revenue Service Restructuring and
Reform Act of 1998, Pub L. 105-206 and the Community Renewal Tax Relief Act of 2000, Pub. L.
106-554. These laws are referred to collectively as GUST.
Our opinion on the acceptability of the form of the plan is not a ruling or determination as to
whether an employers plan qualifies under Code section 401(a). However, an employer that adopts
this plan may rely on this letter with respect to the qualification of its plan under Code section
401(a), as provided for in Announcement 2001-77, 2001-30 I.R.S. and outlined below. The terms of
the plan must be followed in operation.
Except as provided below, our opinion does not apply with respect to the requirements of: (a) Code
sections 401(a)(4), 401(a) (26), 401(1), 410(b) and 414(s). Our opinion does not apply for purposes
of Code section 401(a)(10)(B) and section 401(a)(16) if an employer ever maintained another
qualified plan for one or more employees who are covered by this plan. For this purpose, the
employer will not be considered to have maintained another plan merely because the employer has
maintained another defined contribution plan(s), provided such other plan(s) has been terminated
prior to the effective date of this plan and no annual additions have been credited to the account
of any participant under such other plan(s) as of any date within the limitation year of this plan.
Likewise, if this plan is first effective on or after the effective date of the repeal of Code
section 415(e), the employer will not be considered to have maintained another plan merely because
the employer has maintained a defined benefit plan(s), provided the defined benefit plan(s) has
been terminated prior to the effective date of this plan. Our opinion also does not apply for
purposes of Code section 401(a)(16) if, after December 31, 1985, the employer maintains a welfare
benefit fund defined in Code section 419(e), which provides postretirement medical benefits
allocated to separate accounts for key employees as defined in Code section 419A(d)(3).
Our opinion applies with respect to the requirements of Code section 410(b) if 100 percent of all
nonexcludable employees benefit under the plan. Employers that elect a safe harbor allocation
formula and a safe harbor compensation definition can also rely on an opinion letter with respect
to the nondiscriminatory amounts requirement under section 401(a)(4) and the requirements of
sections 401(k) and 401(m) (except where the plan is a safe harbor plan under section 401(k)(12)
that provides for the safe harbor contribution to be made under another plan).
An employer that elects to continue to apply the pre-GUST family aggregation rules in years
beginning after December 31, 1996, or the combined plan limit of section 415(e) in years beginning
after December 31, 1999, will not be able to rely on the opinion letter without a determination
letter. The employer may request a determination letter by filing an application with Employee
Plans Determinations on Form 5307, Application for Determination for Adopters of Master or
Prototype or Volume Submitter Plans.
If you, the master or prototype sponsor, have any questions concerning the IRS processing of this
case, please call the above telephone number. This number is only for use of the sponsor.
Individual participants and/or adopting employers with questions concerning the plan should contact
the master or prototype sponsor. The plans adoption agreement must include the sponsors address
and telephone number for inquiries by adopting employers.
It you write to the IRS regarding this plan, please provide your telephone number and the most
convenient time for us to call in case we need more information. Whether you call or write, please
refer to the Letter Serial Number and File Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record. Please notify us if you modify or discontinue
sponsorship of this plan.
Sincerely yours,
Director
Employee Plans Rulings & Agreements
ADDENDUM TO THE
AUTOMATIC DATA PROCESSING DEFINED CONTRIBUTION PLAN
The Automatic Data Processing Defined Contribution Plan is hereby amended by adding the following
addendum, in accordance with Revenue Procedure 2002-29 and Section 8.1(c) of the Plan:
MINIMUM DISTRIBUTION REQUIREMENTS
Section 1. General Rules
1.1. |
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Effective Date. The provisions of this addendum will apply for purposes of determining
required minimum distributions for calendar years beginning with the 2003 calendar year. |
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1.2. |
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Precedence. The requirements of this addendum will take precedence over any inconsistent
provisions of the Plan. |
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1.3. |
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Requirements of Treasury Regulations Incorporated. All distributions required under this
addendum will be determined and made in accordance with the Regulations under Code Section
401(a)(9). |
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1.4. |
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TEFRA Section 242(b)(2) Elections. Notwithstanding the other provisions of this addendum,
distributions may be made under a designation made before January 1, 1984, in accordance with
Section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act (TEFRA) and the provisions
of the Plan that relate to Section 242(b)(2) of TEFRA. |
Section 2. Time and Manner of Distribution.
2.1. |
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Required Beginning Date. The Participants entire interest will be distributed, or begin to
be distributed, to the Participant no later than the Participants Required Beginning Date. |
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2.2. |
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Death of Participant Before Distributions Begin. If the Participant dies before distributions
begin, the Participants entire interest will be distributed, or begin to be distributed, no
later than as follows: |
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(a) |
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If the Participants surviving spouse is the Participants sole designated
Beneficiary, then distributions to the surviving spouse will begin by December 31 of
the calendar year immediately following the calendar year in which the Participant
died, or by December 31 of the calendar year in which the Participant would have
attained age 701/2 , if later. |
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(b) |
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If the Participants surviving spouse is not the Participants sole designated
Beneficiary, then distributions to the designated Beneficiary will begin by December 31
of the calendar year immediately following the calendar year in which the Participant
died. |
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(c) |
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If there is no designated Beneficiary as of September 30 of the year following
the year of the Participants death, the Participants entire interest will be
distributed by December 31 of the calendar year containing the fifth anniversary of the
Participants death. |
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(d) |
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If the Participants surviving spouse is the Participants sole designated
Beneficiary and the surviving spouse dies after the Participant but before
distributions to the surviving spouse begin, this Section 2.2, other than Section
2.2(a), will apply as if the surviving spouse were the Participant. |
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For purposes of this Section 2.2 and Section 4, unless Section 2.2(d) applies, distributions
are considered to begin on the Participants Required Beginning Date. If Section 2.2(d)
applies, distributions are considered to begin on the date distributions are required to
begin to the surviving spouse under Section 2.2(a). If distributions under an annuity
purchased from an insurance company irrevocably commence to the Participant before the
Participants Required Beginning Date (or to the Participants surviving spouse |
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before the date distributions are required to begin to the surviving spouse under Section
2.2(a)), the date distributions are considered to begin is the date distributions actually
commence. |
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2.3. |
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Forms of Distribution. Unless the Participants interest is distributed in the form of an
annuity purchased from an insurance company or in a single sum on or before the Required
Beginning Date, as of the first Distribution Calendar Year distributions will be made in
accordance with Sections 3 and 4 of this addendum. If the Participants interest is
distributed in the form of an annuity purchased from an insurance company, distributions
thereunder will be made in accordance with the requirements of Code Section 401(a)(9) and the
Regulations. |
Section 3. Required Minimum Distributions During Participants Lifetime.
3.1. |
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Amount of Required Minimum Distribution For Each Distribution Calendar Year. During the
Participants lifetime, the minimum amount that will be distributed for each Distribution
Calendar Year is the lesser of: |
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(a) |
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the quotient obtained by dividing the Participants Account Balance by the
distribution period in the Uniform Lifetime Table set forth in Section 1.401(a)(9)-9 of
the Regulations, using the Participants age as of the Participants birthday in the
Distribution Calendar Year; or |
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(b) |
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if the Participants sole designated Beneficiary for the Distribution Calendar
Year is the Participants spouse, the quotient obtained by dividing the Participants
Account Balance by the number in the Joint and Last Survivor Table set forth in Section
1.401(a)(9)-9 of the Regulations, using the Participants and spouses attained ages as
of the Participants and spouses birthdays in the Distribution Calendar Year. |
3.2. |
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Lifetime Required Minimum Distributions Continue Through Year of Participants Death.
Required minimum distributions will be determined under this Section 3 beginning with the
first Distribution Calendar Year and up to and including the Distribution Calendar Year that
includes the Participants date of death. |
Section 4. Required Minimum Distributions After Participants Death.
4.1. |
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Death On or After Date Distributions Begin. |
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(a) |
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Participant Survived by Designated Beneficiary. If the Participant dies on or
after the date distributions begin and there is a designated Beneficiary, the minimum
amount that will be distributed for each Distribution Calendar Year after the year of
the Participants death is the quotient obtained by dividing the Participants Account
Balance by the longer of the remaining Life Expectancy of the Participant or the
remaining Life Expectancy of the Participants designated Beneficiary, determined as
follows: |
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(1) |
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The Participants remaining Life Expectancy is calculated using
the age of the Participant in the year of death, reduced by one for each
subsequent year. |
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(2) |
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If the Participants surviving spouse is the Participants sole
designated Beneficiary, the remaining Life Expectancy of the surviving spouse
is calculated for each Distribution Calendar Year after the year of the
Participants death using the surviving spouses age as of the spouses
birthday in that year. For Distribution Calendar Years after the year of the
surviving spouses death, the remaining Life Expectancy of the surviving spouse
is calculated using the age of the surviving spouse as of the spouses birthday
in the calendar year of the spouses death, reduced by one for each subsequent
calendar year. |
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(3) |
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If the Participants surviving spouse is not the Participants
sole designated Beneficiary, the designated Beneficiarys remaining Life
Expectancy is calculated using the age of the |
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Beneficiary in the year following the year of the Participants death, reduced
by one for each subsequent year. |
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(b) |
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No Designated Beneficiary. If the Participant dies on or after the date
distributions begin and there is no designated Beneficiary as of September 30 of the
year after the year of the Participants death, the minimum amount that will be
distributed for each Distribution Calendar Year after the year of the Participants
death is the quotient obtained by dividing the Participants Account Balance by the
Participants remaining Life Expectancy calculated using the age of the Participant in
the year of death, reduced by one for each subsequent year. |
4.2. Death Before Date Distributions Begin.
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(a) |
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Participant Survived by Designated Beneficiary. If the Participant dies before
the date distributions begin and there is a designated Beneficiary, the minimum amount
that will be distributed for each Distribution Calendar Year after the year of the
Participants death is the quotient obtained by dividing the Participants Account
Balance by the remaining Life Expectancy of the Participants designated Beneficiary,
determined as provided in Section 4.1. |
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(b) |
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No Designated Beneficiary. If the Participant dies before the date
distributions begin and there is no designated Beneficiary as of September 30 of the
year following the year of the Participants death, distribution of the Participants
entire interest will be completed by December 31 of the calendar year containing the
fifth anniversary of the Participants death. |
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(c) |
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Death of Surviving Spouse Before Distributions to Surviving Spouse Are Required
to Begin. If the Participant dies before the date distributions begin, the
Participants surviving spouse is the Participants sole designated Beneficiary, and
the surviving spouse dies before distributions are required to begin to the surviving
spouse under Section 2.2(a), this Section 4.2 will apply as if the surviving spouse
were the Participant. |
Section 5. Definitions.
5.1. |
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Designated Beneficiary. The individual who is designated as the Beneficiary under Section 6.2
of the Plan and is the designated Beneficiary under Code Section 401(a)(9) and Section
1.401(a)(9)-1, Q&A-4, of the Regulations. |
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5.2. |
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Distribution Calendar Year. A calendar year for which a minimum distribution is required. For
distributions beginning before the Participants death, the first Distribution Calendar Year
is the calendar year immediately preceding the calendar year which contains the Participants
required beginning date. For distributions beginning after the Participants death, the first
Distribution Calendar Year is the calendar year in which distributions are required to begin
under Section 2.2. The required minimum distribution for the Participants first Distribution
Calendar Year will be made on or before the Participants required beginning date. The
required minimum distribution for other Distribution Calendar Years, including the required
minimum distribution for the Distribution Calendar Year in which the Participants required
beginning date occurs, will be made on or before December 31 of that Distribution Calendar
Year. |
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5.3. |
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Life Expectancy. Life expectancy as computed by use of the Single Life Table in Section 1.401
(a)(9)-9 of the Regulations. |
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5.4. |
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Participants Account Balance. The account balance as of the last valuation date in the
calendar year immediately preceding the Distribution Calendar Year (valuation calendar year)
increased by the amount of any contributions made and allocated or forfeitures allocated to
the Account Balance as of dates in the valuation calendar year after the valuation date and
decreased by distributions made in the valuation calendar year after the valuation date. The
Account Balance for the valuation calendar year includes any amounts rolled over or
transferred to the Plan either in the valuation calendar year or in the Distribution Calendar
Year if distributed or transferred in the valuation calendar year. |
5.5 |
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Required Beginning Date. The date specified in Section 6.5(e) of the Plan. |
AMENDMENT TO THE
AUTOMATIC DATA PROCESSING
DEFINED CONTRIBUTION PLAN
PREAMBLE
1. |
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Adoption and effective date of amendment. This amendment of the Automatic Data
Processing Defined Contribution Plan (the Prototype Plan) is adopted on behalf of all
Employers to reflect the automatic rollover provisions of Section 401(a)(31)(B) of the Code
as amended by the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA). This
amendment is intended as a good faith amendment. This amendment is effective as of March 28,
2005; provided, however, that, for any plan that is first amended and restated into the form
of this Prototype Plan after March 28, 2005, this amendment shall be effective as of the date
of such amendment and restatement. |
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2. |
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Adoption by prototype sponsor. Pursuant to Notice 2005-5 and Section 8.1(c) of the
Prototype Plan, the sponsor hereby adopts this amendment on behalf of all Employers. |
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3. |
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Supersession of inconsistent provisions. This amendment shall supersede the
provisions of the Plan to the extent those provisions are inconsistent with the provisions of
this amendment. |
AMENDMENT
The Prototype Plan is hereby amended as follows:
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Notwithstanding anything in this Plan to the contrary, in the event of a mandatory
distribution to a Participant in accordance with the provisions of Section 6.4(a)
and Section 6.5(c) that is greater than $1,000, if the Participant does not elect
to have such distribution paid directly to an eligible retirement plan specified by
the Participant in a direct rollover or to receive the distribution directly in
accordance with Section 6.4(a) and Section 6.5(c), then the Administrator will pay
the distribution in a direct rollover to an individual retirement plan designated
by the Administrator. |
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If the Administrator satisfies the safe harbor requirements of ERISA Regulation
§404a-2 with respect to an amount less than or equal to $1,000 (including the
designation of an individual retirement plan willing to accept rollovers of
mandatory distributions of such lower amounts), the Administrator may adopt
administrative procedures applicable to all Participants under which the $1,000
threshold set forth in the preceding paragraph is set at an amount below $1,000. |
[INSERT ADP LOGO?]
AUTOMATIC DATA PROCESSING
DEFINED CONTRIBUTION PLAN
FINAL 401 (k) 401(m) REGULATIONS AMENDMENT
ARTICLE I
PREAMBLE
1.1 |
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Adoption of amendment. The sponsor adopts this Amendment to the Plan to reflect
certain provisions of the Final Regulations under Code Sections 401(k) and 401(m) that were
published on December 29, 2004 (hereinafter referred to as the Final 401(k) Regulations).
The sponsor intends this Amendment as good faith compliance with the requirements of these
provisions. |
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1.2 |
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Supersession of inconsistent provisions. This Amendment shall supersede the
provisions of the Plan to the extent those provisions are inconsistent with the provisions of
this Amendment. |
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1.3 |
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Application of provisions. Certain provisions of this Amendment relate to elective
deferrals of a 401(k) plan; if the Plan to which this Amendment relates is not a 401(k) plan,
then those provisions of this Amendment do not apply. Certain provisions of this Amendment
relate to matching contributions and/or after-tax employee contributions subject to Code
Section 401(m); if the Plan to which this Amendment relates is not subject to Code Section
401(m), then those provisions of this Amendment do not apply. |
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1.4 |
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Adoption by prototype sponsor. Except as otherwise provided herein, pursuant to the
provisions of the Plan and Section 5.01 of Revenue Procedure 2005-16, the sponsor hereby
adopts this Amendment on behalf of all adopting employers. |
ARTICLE II
EFFECTIVE DATE
2.1 |
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Effective Date. This Amendment is effective, and the Plan shall implement the
provisions of the Final 401(k) Regulations, with respect to Plan Years beginning after
December 31, 2005. |
ARTICLE III
GENERAL RULES
3.1 |
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Deferral elections. A cash or deferred arrangement (CODA) is an arrangement under
which eligible Employees may make elective deferral elections. Such elections cannot relate to
compensation that is currently available prior to the adoption or
effective date of the CODA.
In addition, except for occasional, bona fide administrative considerations, contributions
made pursuant to such an election cannot precede the earlier of (1) the performance of
services relating to the contribution and (2) when the compensation that is subject to the
election would be currently available to the Employee in the absence of an election to defer. |
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3.2 |
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Vesting provisions. Elective Contributions (as defined in Regulation Section
1.401(k)-6) are always fully vested and nonforfeitable. The Plan shall disregard Elective
Contributions in applying the vesting provisions of the Plan to other contributions or
benefits under Code Section 411(a)(2). However, the Plan shall otherwise take a participants
Elective Contributions into account in determining the Participants vested benefits under
the Plan. Thus, for example, the Plan shall take Elective Contributions into account in
determining whether a Participant has a nonforfeitable right to contributions under the Plan
for purposes of forfeitures, and for applying provisions permitting the repayment of
distributions to have forfeited amounts restored, and the provisions of Code Sections
410(a)(5)(D)(iii) and 411(a)(6)(D)(iii) permitting a plan to disregard certain service
completed prior to breaks-in-service (sometimes referred to as the rule of parity). |
ARTICLE IV
HARDSHIP DISTRIBUTIONS
4.1 |
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Applicability. The provisions of this Article IV apply if the Plan provides for
hardship distributions upon satisfaction of the deemed immediate and heavy financial need
standards set forth in Regulation Section 1.401(k)-1(d)(2)(iv)(A) as in effect prior to the
issuance of the Final 401(k) Regulations. |
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4.2 |
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Hardship events. A distribution under the Plan is hereby deemed to be on account of
an immediate and heavy financial need of a Participant if the distribution is for one of the
following or any other item permitted under Regulation Section 1.401.(k)-1(d)(3)(iii)(B): |
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(a) |
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Expenses for (or necessary to obtain) medical care that would be deductible
under Code Section 213(d) (determined without regard to whether the expenses exceed
7.5% of adjusted gross income); |
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(b) |
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Costs directly related to the purchase of a principal residence for the
Participant (excluding mortgage payments); |
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(c) |
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Payment of tuition, related educational fees, and room and board expenses, for
up to the next twelve (12) months of post-secondary education for the Participant, the
Participants spouse, children, or dependents (as defined in Code Section 152, and, for
taxable years beginning on or after January 1, 2005, without regard to Code Section
152(b)(1), (b)(2), and (d)(1)(B)); |
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(d) |
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Payments necessary to prevent the eviction of the Participant from the
Participants principal residence or foreclosure on the mortgage on that residence; |
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(e) |
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Payments for burial or funeral expenses for the Participants deceased parent,
spouse, children or dependents (as defined in Code Section 152, and, for taxable years
beginning on or after January 1, 2005, without regard to Code Section 152(d)(1)(B)); or |
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(f) |
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Expenses for the repair of damage to the Participants principal residence that
would qualify for the casualty deduction under Code Section 165 (determined without
regard to whether the loss exceeds 10% of adjusted gross income). |
4.3 |
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Reduction of Code Section 402(g) limit following hardship distribution. If the Plan
provides for hardship distributions upon satisfaction of the safe harbor standards set forth
in Regulation Sections 1.401(k)-1(d)(3)(iii)(B) (deemed immediate and heavy financial need) and
1.401(k)-1(d)(3)(iv)(E) (deemed necessary to satisfy immediate need), then there shall be no
reduction in the maximum amount of elective deferrals that a Participant may make pursuant to
Code Section 402(g) solely because of a hardship distribution made by this Plan or any other
plan of the Employer. |
ARTICLE V
ACTUAL DEFERRAL PERCENTAGE (ADP) TEST
5.1 |
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Targeted contribution limit. Qualified Nonelective Contributions (as defined in
Regulation Section 1.401(k)-6) cannot be taken into account in determining the Actual Deferral
Ratio (ADR) (as defined in Regulation Section 1.401(k)(6) for a Plan Year for a Non-Highly
Compensated Employee (NHCE) to the extent such contributions exceed the product of that NHCEs
Code Section 414(s) compensation and the greater of five percent (5%) or two (2) times the
Plans representative contribution rate. Any Qualified Nonelective Contribution taken into
account under an Actual Contribution Percentage (ACP) test Under Regulation Section
1.401(m)-2(a)(6) (including the determination of the representative contribution rate for
purposes of Regulation Section 1.401(m)-2(a)(6)(v)(B)), is not permitted to be taken into
account for purposes of this Section (including the determination of the representative
contribution rate under this Section). For purposes of this Section: |
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(a) |
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The Plans representative contribution rate is the lowest applicable
contribution rate of any eligible NHCE among a group of eligible NHCEs that consists
of half of all eligible NHCEs for the Plan Year (or, if greater, the lowest applicable
contribution rate of any eligible NHCE who is in the group of all eligible NHCEs for
the Plan Year and who is employed by the Employer on the last day of the Plan Year),
and |
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(b) |
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The applicable contribution rate for an eligible NHCE is the sum of the
Qualified Matching Contributions (as defined in Regulation Section 1.401(k)-6) taken
into account in determining the ADR for the eligible NHCE for the Plan Year and the
Qualified Nonelective Contributions made for the eligible NHCE for the Plan Year,
divided by the eligible NHCEs Code Section 414(s) compensation for the same period. |
Notwithstanding the above, Qualified Nonelective Contributions that are made in connection with an
Employers obligation to pay prevailing wages under the Davis-Bacon Act (46 Stat. 1494), Public Law
71-798, Service Contract Act of 1965 (79 Stat. 1965), Public Law 89-286, or similar legislation can
be taken into account for a Plan Year for and NHCE to the extent such contributions do not exceed
10 percent (10%) of that NHCEs Code Section 414(s) compensation.
Qualified Matching Contributions may only be used to calculate an ADR to the extent that such
Qualified Matching Contributions are matching contributions that are not precluded from being taken
into account under the ACP test for the Plan Year under the rules of Regulation Section
1.401(m)-2(a)(5)(ii) and as set forth in Section 7.1 of this Amendment.
|
5.2 |
|
Limitation on QNECs and QMACs. Qualified Nonelective Contributions and Qualified
Matching Contributions (as defined in Regulation Section 1.401(k)-6) cannot be taken into
account to determine an ADR to the extent such contributions, are taken into account for
purposes of satisfying any other ADP test, any ACP test, or the requirements of Treasury
Regulation Section 1.401(k)-3, 1.401(m)3, or 1.401(k)-4. |
|
|
5.3 |
|
ADR of HCE if multiple plans. The Actual Deferral Ratio (ADR) of any Participant who
is a Highly Compensated Employee (HCE) for the Plan Year and who is eligible to have Elective
Contributions (as defined in Regulation Section 1.401(k)-6) (and Qualified Nonelective
Contributions and/or Qualified Matching Contributions (as defined in Regulation Section
1.401(k)-6), if treated as Elective Contributions for purposes of the ADP test) allocated to
such Participants accounts under two (2) or more cash or deferred arrangements described in
Code Section 401(k), that are maintained by the same Employer, shall be determined as if such
Elective Contributions (and, if applicable, such Qualified Nonelective Contributions and/or
Qualified Matching Contributions) were made under a single arrangement. If an HCE participates
in two or more cash or deferred arrangements of the Employer that have different Plan Years,
then all Elective Contributions made during the Plan Year being tested under all such cash or
deferred arrangements shall be aggregated, without regard to the plan years of the other
plans. However, for Plan Years beginning before the effective date of this Amendment, if the
plans have different Plan Years, then all such cash or deferred arrangements ending with or
within the same calendar year shall be treated as a single cash or deferred arrangement. In
addition, in determining the HCEs Code Section 414(s) compensation, only compensation paid
during the Plan Year of the Plan shall be used. Notwithstanding the foregoing, certain plans
shall be treated as separate if mandatorily disaggregated under the Regulations of Code
Section 401(k). |
ARTICLE VI
ADJUSTMENT TO ADP TEST
6.1 |
|
Distribution of Income attributable to Excess Contributions. Distributions of Excess
Contributions will be adjusted for income (gain or loss), including an adjustment for income
for the period between the end of the Plan Year and the date of the distribution (the gap
period). The Administrator will determine and allocate income using the methods set forth
below: |
|
(a) |
|
Alternative method of allocating income for the Plan Year. The
Administrator will allocate income to Excess Contributions for the Plan Year by
multiplying the income for the Plan Year allocable to |
|
|
|
the Elective Contributions (as defined in Regulation Section 1.401 (k)-6) and other
amounts taken into account under the ADP test (including contributions made for the
Plan Year), by a fraction, the numerator of which is the Excess Contributions for
the Employee for the Plan Year, and the denominator of which is the sum of the: |
|
(1) |
|
Account balance attributable to Elective Contributions and
other amounts taken into account under the ADP test as of the beginning of the
Plan Year, and |
|
|
(2) |
|
Any additional amount of such contributions made for the Plan
Year. |
|
(b) |
|
Safe harbor method of allocating gap period income. The Administrator
will use the safe harbor method in this paragraph to determine income on Excess
Contributions for the gap period. Under this safe harbor method, income on Excess
Contributions for the gap period is equal to ten percent (10%) of the income allocable
to Excess Contributions for the Plan Year that is determined under paragraph (a) above,
multiplied by the number of calendar months that have elapsed since the end of the Plan
Year. For purposes of calculating the number of calendar months that have elapsed under
the safe harbor method, a corrective distribution that is made on or before the
fifteenth (15th) day of a month is treated as made on the last day of the preceding
month and a distribution made after the fifteenth day of a month is treated as made on
the last day of the month. |
6.2 |
|
Corrective contributions. If a failed ADP test is to be corrected by making an
Employer contribution, then the provisions of the Plan for the corrective contributions shall
be applied by limiting the contribution made on behalf of any NHCE pursuant to such provisions
to an amount that does not exceed the targeted contribution limits of Section 5.1 of this
Amendment, or in the case of a corrective contribution that is a Qualified Matching
Contribution (as defined in Regulation Section 1.401(k)-6), the targeted contribution limit of
Section 7.1 of this Amendment. |
ARTICLE VII
ACTUAL CONTRIBUTION PERCENTAGE (ACP) TEST
7.1 |
|
Targeted matching contribution limit. A matching contribution with respect to an
Elective Contribution (as defined in Regulation Section 1.401(k)-6) for a Plan Year is not
taken into account under the Actual Contribution Percentage (ACP) test for an NHCE to the
extent it exceeds the greatest of: |
|
(a) |
|
five percent (5%) of the NHCEs Code Section 414(s) compensation for the Plan Year; |
|
|
(b) |
|
the NHCEs Elective Contributions for the Plan Year; and |
|
|
(c) |
|
the product of two (2) times the Plans representative matching rate and the
NHCEs Elective Contributions for the Plan Year. |
For purposes of this Section, the Plans representative matching rate is the lowest matching
rate for any eligible NHCE among a group of NHCEs that consists of half of all eligible NHCEs in
the Plan for the Plan Year who make Elective Contributions for the Plan Year (or, if greater, the
lowest matching rate for all eligible NHCEs in the Plan who are employed by the Employer on the
last day of the Plan Year and who make Elective Contributions for the Plan Year).
For purposes of
this Section, the matching rate for an NHCE generally is the matching contributions made for such
NHCE divided by the NHCEs Elective Contributions for the Plan
Year. If the matching rate is not the
same for all levels of Elective Contributions for an NHCE, then the NHCEs matching rate is
determined assuming that an NHCEs Elective Contributions are equal to six percent (6%) of Code
Section 414(s) compensation.
If the Plan provides a match with respect to the sum of an NHCEs after-tax Employee contributions
and Elective Contributions, then for purposes of this Section, that sum is substituted for the
amount of the NHCEs Elective Contributions in subsections (b) & (c) above and in determining the
matching rate, and NHCEs who make either after-tax Employee contributions or Elective
Contributions are taken into account in determining the Plans
representative matching rate. Similarly, if the Plan provides a match with respect to an NHCEs
after-tax Employee contributions, but not Elective Contributions, then for purposes of this
subsection, the NHCEs after-tax Employee contributions are substituted for the amount of the
NHCEs Elective Contributions in subsections (b) and (c) above and in determining the matching
rate, and NHCEs who make after-tax Employee contributions are taken into account in determining
the Plans representative matching rate.
7.2 |
|
Targeted QNEC limit. Qualified Nonelective Contributions (as defined in Regulation
Section 1.401(k)-6) cannot be taken into account under the Actual Contribution Percentage
(ACP) test for a Plan Year for an NHCE to the extent such contributions exceed the product of
that NHCEs Code Section 414(s) compensation and the greater of five percent (5%) or two (2)
times the Plans representative contribution rate. Any Qualified Nonelective Contribution
taken into account under an Actual Deferral Percentage (ADP) test under Regulation Section
1.401(k)-2(a)(6) (including the determination of the representative contribution rate for
purposes of Regulation Section 1.401(k)-2(a)(6)(iv)(B)) is not permitted to be taken into
account for purposes of this Section (including the determination of the representative
contribution rate for purposes of subsection (a) below). For purposes of this Section: |
|
(a) |
|
The Plans representative contribution rate is the lowest applicable
contribution rate of any eligible NHCE among a group of eligible NHCEs that consists
of half of all eligible NHCEs for the Plan Year (or, if greater, the lowest applicable
contribution rate of any eligible NHCE who is in the group of all eligible NHCEs for
the Plan Year and who is employed by the Employer on the last day of the Plan Year),
and |
|
|
(b) |
|
The applicable contribution rate for an eligible NHCE is the sum of the
matching contributions (as defined in Regulation Section 1.401(m)-1(a)(2)) taken into
account in determining the Actual Contribution Ratio (ACR) (as defined in Regulation
1.401(m)-5) for the eligible NHCE for the Plan Year and the Qualified Nonelective
Contributions made for that NHCE for the Plan Year, divided by that NHCEs Code Section
414(s) compensation for the Plan Year. |
|
|
Notwithstanding the above, Qualified Nonelective Contributions that are made in connection
with an Employers obligation to pay prevailing wages under the Davis-Bacon Act (46 Stat.
1494), Public Law 71-798, Service Contract Act of 1965 (79 Stat. 1965), Public Law 89-286,
or similar legislation can be taken into account for a Plan Year for an NHCE to the extent
such contributions do not exceed 10 percent (10%) of that NHCEs Code Section 414(s)
compensation. |
|
7.3 |
|
ACR of HCE if multiple plans. The Actual Contribution Ratio (ACR) for any Participant
who is a Highly Compensated Employee (HCE) and who is eligible to have matching contributions
or after-tax Employee contributions allocated to his or her account under two (2) or more
plans described in Code Section 401(a), or arrangements described in Code Section 401(k) that
are maintained by the same Employer, shall be determined as if the total of such contributions
was made under each plan and arrangement. If an HCE participates in two (2) or more such plans
or arrangements that have different plan years, then all matching contributions and after-tax
Employee contributions made during the Plan Year being tested under all such plans and
arrangements shall be aggregated, without regard to the plan years of the other plans. In
addition, in determining the HCEs Code Section 414(s) compensation, only Compensation paid
during the Plan Year of the Plan shall be used. For plan years beginning before the effective
date of this Amendment, all such plans and arrangements ending with or within the same
calendar year shall be treated as a single plan or arrangement. Notwithstanding the foregoing,
certain plans shall be treated as separate if mandatorily disaggregated under the
Regulations of Code Section 401(m). |
ARTICLE VIII
ADJUSTMENT TO ACP TEST
8.1 |
|
Distribution of Income attributable to Excess Aggregate Contributions. Distributions
of Excess Aggregate Contributions will be adjusted for income (gain or loss), including an
adjustment for income for the period between the end of the Plan Year and the date of the
distribution (the gap period). For the purpose of this Section, income shall be determined
and allocated in accordance with the provisions of Section 6.1 of this Amendment, except that
such Section shall be applied by substituting Excess Contributions with |
|
|
Excess Aggregate Contributions and by substituting amounts taken into account under the
ACP test for amounts taken into account under the ADP test. |
|
8.2 |
|
Corrective contributions. If a failed ACP test is to be corrected by making an
Employer contribution, then the provisions of the Plan for the corrective contributions shall
be applied by limiting the contribution made on behalf of any NHCE pursuant to such provisions
to an amount that does not exceed the targeted contribution limits of Sections 7.1 and 7.2 of
this Amendment. |
ARTICLE IX
SAFE HARBOR PLAN PROVISIONS
9.1 |
|
Applicability. The provisions of this Article IX apply if the Plan uses the
alternative method of satisfying the Actual Deferral Percentage (ADP) test set forth in Code
Section 401(k)(12) (ADP Test Safe Harbor) and/or the Actual Contribution Percentage (ACP) test
set forth in Code Section 401(m)(11) (ACP Test Safe Harbor). |
|
9.2 |
|
Elimination of conditions on matching contributions. If this Plan utilizes the ACP
Test Safe Harbor provisions, (a) the Plan will be an ACP Test Safe Harbor plan, provided the
ACP Test Safe Harbor requirements are met, and (b) the Plan will not impose any allocation
conditions on matching contributions. |
|
9.3 |
|
Plan Year requirement. Except as provided in Regulation Sections 1.401(k)-3(e) and
1.401(k)3(f), and below, the Plan will fail to satisfy the requirements of Code Section
401(k)(12) and this Section for a Plan Year unless such provisions remain in effect for an
entire twelve (12) month Plan Year. |
|
9.4 |
|
Change of Plan Year. If a Plan has a short Plan Year as a result of changing its Plan
Year, then the Plan will not fail to satisfy the requirements of Section 9.3 of this Amendment
merely because the Plan Year has less than twelve (12) months, provided that: |
|
(a) |
|
The Plan satisfied the ADP Test Safe Harbor and/or ACP Test Safe Harbor
requirements for the immediately preceding Plan Year; and |
|
|
(b) |
|
The Plan satisfies the ADP Test Safe Harbor and/or ACP Test Safe Harbor
requirements (determined without regard to Regulation Section 1.401.(k)-3(g)) for the
immediately following Plan Year (or for the immediately following twelve (12) months if
the immediately following Plan Year is less than twelve (12) months). |
9.5 |
|
Timing of matching contributions. If the ADP Test Safe Harbor contribution being made
to the Plan is a matching contribution (or any ACP Test Safe Harbor matching contribution)
that is made separately with respect to each payroll period (or with respect to all payroll
periods ending with or within each month or quarter of a Plan Year) taken into account under
the Plan for the Plan Year, then safe harbor matching contributions with respect to any
elective deferrals and/or after-tax employee contributions made during a Plan Year quarter
must be contributed to the Plan by the last day of the immediately following Plan Year
quarter. |
|
9.6 |
|
Exiting safe harbor matching. The Employer may amend the Plan during a Plan Year to
reduce or eliminate prospectively any or all matching contributions under the Plan (including
any ADP Test Safe Harbor matching contributions) provided: (a) the Plan Administrator provides
a supplemental notice to the Participants which explains the consequences of the amendment,
specifies the amendments effective date, and informs Participants that they will have a
reasonable opportunity to modify their cash or deferred elections and, if applicable,
after-tax Employee contribution elections; (b) Participants have a reasonable opportunity
(including a reasonable period after receipt of the supplemental notice) prior to the
effective date of the amendment to modify their cash or deferred elections and, if applicable,
after-tax Employee contribution elections; and (c) the amendment is not effective earlier than
the later of: (i) thirty (30) days after the Plan Administrator gives supplemental notice; or
(ii) the date the Employer adopts the amendment. An Employer which amends its Plan to
eliminate or reduce any matching contribution under |
|
|
this Section, effective during the Plan Year, must continue to apply all of the ADP Test
Safe Harbor and/or ACP Test Safe Harbor requirements of the Plan until the amendment becomes
effective and also must apply for the entire Plan Year, using current year testing, the ADP
test and the ACP test. |
|
9.7 |
|
Plan termination. An Employer may terminate the Plan during a Plan Year in accordance
with Plan termination provisions of the Plan and this Section. |
|
(a) |
|
Acquisition/disposition or substantial business hardship. If the Employer
terminates the Plan resulting in a short Plan Year, and the termination is on account
of an acquisition or disposition transaction described in Code Section 410(b)(6)(C), or
if the termination is on account of the Employers substantial business hardship within
the meaning of Code Section 412(d), then the Plan remains an ADP Test Safe Harbor
and/or ACP Test Safe Harbor Plan provided that the Employer satisfies the ADP Test Safe
Harbor and/or ACP Test Safe Harbor provisions through the effective date of the Plan
termination. |
|
|
(b) |
|
Other termination. If the Employer terminates the Plan for any reason other
than as described in Section 9.7(a) above, and the termination results in a short Plan
Year, the Employer must conduct the termination under the provisions of Section 9.6
above, except that the Employer need not provide Participants with the right to change
their cash or deferred elections. |
9.8 |
|
HCEs participating in multiple plans. The rules of Code Section 401(m)(2)(B) and
Regulation 1.401(m)-2(a)(3)(ii) apply for purposes of determining the rate of matching
contributions under Regulation 1.401(m)-3(d)(4). However, a plan will not fail to satisfy the
safe harbor matching contribution requirements of the ACP Test Safe Harbor merely because an
HCE participates during the plan year in more than one plan that provides for matching
contributions, provided that: |
|
(a) |
|
The HCE is not simultaneously an eligible employee under two plans that provide
for matching contributions maintained by an employer for a plan year; and |
|
|
(b) |
|
The period used to determine compensation for purposes of determining matching
contributions under each such plan is limited to periods when the HCE participated in
the plan. |
ARTICLE X
DISTRIBUTIONS UPON PLAN TERMINATION
10.1 |
|
Distribution upon plan termination. A Participant is eligible to receive a lump sum
distribution from the Plan upon the termination of the Plan unless within twelve months of
such termination, another defined contribution plan (other than an employee stock ownership
plan as described in Code Section 4975(e) or 409, a simplified employee pension plan as
defined in Code Section 408(k), a SIMPLE IRA plan as described in Code Section 408(p), a Code
Section 403(b) plan, or a Code Section 457 plan) is established by the Employer. |
ADOPTION AGREEMENT FOR
AUTOMATIC DATA PROCESSING
NON-STANDARDIZED 401(K) PLAN
The undersigned Employer adopts Automatic Data Processing Prototype Non-Standardized 401(k) Plan
and elects the following provisions:
CAUTION: Failure to properly fill out this Adoption Agreement may result in disqualification of
the Plan.
EMPLOYER INFORMATION
(An amendment to the Adoption Agreement is not needed solely to reflect a change in the information
in this Employer Information Section.)
1. |
|
EMPLOYERS NAME, ADDRESS AND TELEPHONE NUMBER |
|
|
Name: |
Comstock Resources, Inc. |
|
|
|
Address: |
5300 Town & Country Blvd. Suite 500
Street
Frisco, TX 75034
City, State, Zip |
|
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Telephone: |
972-668-8800 |
2. |
|
Date of incorporation or date business began: 12/11/1989 |
3. |
|
EMPLOYERS TAXPAYER IDENTIFICATION NUMBER 94-1667468 |
|
a. |
|
þ Corporation (including Tax-exempt or Non-profit Corporation) |
|
|
b. |
|
¨ Professional Service Corporation |
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|
c. |
|
¨ S Corporation |
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d. |
|
¨ Limited Liability Company that is taxed as: |
|
1. |
|
¨ a partnership or sole proprietorship |
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2. |
|
¨ a Corporation |
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3. |
|
¨ an S Corporation |
|
e. |
|
¨ Sole Proprietorship |
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f. |
|
¨ Partnership (including Limited Liability) |
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g. |
|
¨ Other: |
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|
AND, the Employer is a member of (select all that apply): |
|
h. |
|
¨ a controlled group |
|
|
i. |
|
¨ an affiliated service group |
5. |
|
EMPLOYER FISCAL YEAR means the 12 consecutive month period: |
|
|
Beginning on January 1st (e.g., January 1st)
month day |
|
|
|
and ending on December 31st
month day |
|
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|
© Copyright 2001 Automatic Data Processing Federal Credit Union |
|
1 |
1
PLAN INFORMATION
(An amendment to the Adoption Agreement is not needed solely to reflect a change in the information
in Questions 9. through 11.)
6. |
|
PLAN NAME: Comstock Resources, Inc. 401(K) Profit Sharing Plan |
|
a. |
¨ |
This is a new Plan effective as of ___ (hereinafter called the
Effective Date). |
|
|
b. |
þ |
This is an amendment and restatement of a previously established
qualified plan of the Employer which was originally effective 01/01/1995 (hereinafter
called the Effective Date). The effective date of this amendment and restatement is
04/01/2008. |
|
|
c. |
¨ |
FOR GUST RESTATEMENTS: This is an amendment and restatement of a
previously established qualified plan of the Employer to bring the Plan into compliance
with GUST (GATT, USERRA, SBJPA and TRA 97). The original Plan effective date was
(hereinafter called the Effective Date). Except as specifically provided in the Plan,
the effective date of this amendment and restatement is . |
|
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|
|
(May enter a restatement date that is the first day of the current Plan Year. The
Plan contains appropriate retroactive effective dates with respect to provisions for
the appropriate laws.) |
8. |
|
PLAN YEAR means the 12 consecutive month period: |
|
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|
Beginning on January 1st (e.g., January 1st)
month day |
|
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|
and ending on December 31st
month day |
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EXCEPT that there will be a Short Plan Year: |
|
a. |
þ |
N/A |
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|
b. |
¨ |
beginning on (e.g., July 1, 2000)
month day, year |
|
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|
|
and ending on
month day, year |
9. |
|
PLAN NUMBER assigned by the Employer |
|
a. |
þ |
001 |
|
|
b. |
¨ |
002 |
|
|
c. |
¨ |
003 |
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d. |
¨ |
Other: |
|
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Name: |
J P Morgan Chase |
|
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|
Address: |
1 Chase Manhattan Plaza 19th Floor
Street
New York, NY 10005
City, State, Zip |
|
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|
Telephone: |
212-552-2888 |
|
|
An executed copy of the trust agreement between the Trustee and the Employer must be
completed in accordance with Plan Section 7.1 and attached to this Plan. The Plan and trust
agreement will be read and construed together. The responsibilities, rights and powers of
the Trustee shall be those specified in the trust agreement. |
11. |
|
PLAN ADMINISTRATORS NAME, ADDRESS AND TELEPHONE NUMBER: |
|
|
|
(If none is named, the Employer will become the Administrator.) |
|
a. |
þ |
Employer (Use Employer address and telephone number). |
|
|
b. |
¨ |
Use name, address and telephone number below: |
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Name: |
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Address: |
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Street |
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City, State, Zip |
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Telephone: |
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© Copyright 2001 Automatic Data Processing Federal Credit Union |
|
2 |
12. |
|
CONSTRUCTION OF PLAN |
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|
This Plan shall be governed by the laws of the state or commonwealth where the Employers
principal place of business is located unless another state or commonwealth is specified:
|
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ELIGIBILITY REQUIREMENTS
13. |
|
ELIGIBLE EMPLOYEES (Plan Section 1.18) |
|
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|
|
FOR ALL PURPOSES OF THE PLAN, means all Employees (including Leased Employees) EXCEPT: |
|
a. |
|
¨ N/A. No exclusions. |
|
|
b. |
|
þ The following are excluded, except that if b.3. is selected, such
Employees will be included (select all that apply): |
|
1. |
þ |
Union Employees (as defined in Plan Section 1.18) |
|
|
2. |
þ |
Non-resident aliens (as defined in Plan Section 1.18) |
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|
3. |
¨ |
Employees who became Employees as the result of a Code
Section 410(b)(6)(C) transaction (as defined in Plan Section 1.18) |
|
|
4. |
¨ |
Salaried Employees |
|
|
5. |
¨ |
Highly Compensated Employees |
|
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6. |
þ |
Leased Employees |
|
|
7. |
¨ |
Other: |
14. |
|
THE FOLLOWING AFFILIATED EMPLOYER (Plan Section 1.6) will adopt this Plan as a Participating
Employer (if there is more than one, or if Affiliated Employers adopt this Plan after the date
the Adoption Agreement is executed, attach a list to this Adoption Agreement of such
Affiliated Employers including their names, addresses and taxpayer identification numbers. |
|
|
|
NOTE: Employees of an Affiliated Employer that does not adopt this Adoption
Agreement as a Participating Employer shall not be Eligible Employees. This Plan could
violate the Code Section 410(b) coverage rules if all Affiliated Employers do not adopt
the Plan. |
|
a. |
|
þ N/A |
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b. |
|
¨ Name of First Affiliated Employer: ___ |
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Address: |
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Street |
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City, State, Zip |
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Telephone: |
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Taxpayer Identification Number:
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© Copyright 2001 Automatic Data Processing Federal Credit Union |
|
3 |
15. |
|
CONDITIONS OF ELIGIBILITY (Plan Section 3.1) |
|
|
|
Any Eligible Employee will be eligible to participate in the Plan upon satisfaction of the
conditions set forth below, if any: |
|
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|
NOTE: If the Year(s) of Service selected is or includes a fractional year, an
Employee will not be required to complete any specified number of Hours of Service to
receive credit for such fractional year. If expressed in months of service, an Employee
will not be required to complete any specified number of Hours of Service in a
particular month, unless elected in b.4. or h.4. below. |
|
|
ELIGIBILITY FOR ALL PURPOSES OF THE PLAN (EXCEPT AS ELECTED IN e.-j. BELOW FOR EMPLOYER
CONTRIBUTIONS) (select either a. OR b. and c., and if applicable, d.): |
|
|
|
a.-d., below, apply to: |
|
|
¨ |
Elective Deferrals and if applicable, Employee Voluntary Contributions |
|
|
þ |
All purposes of the Plan |
|
|
a. |
¨ |
No age or service required. (Go to e.-f. below) |
|
|
b. |
þ |
Completion of the following service requirement which is based on Years
of Service (or Periods of Service if the Elapsed Time Method is elected): |
|
1. |
þ |
No service requirement |
|
|
2. |
¨ |
1/2 Year of Service or Period of Service |
|
|
3. |
¨ |
1 Year of Service or Period of Service |
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|
4. |
¨ |
(not to exceed 1,000) Hours of Service within
(not to exceed 12) months from the Eligible Employees employment
commencement date. If an Employee does not complete the stated Hours of Service
during the specified time period, the Employee is subject to the Year of
Service requirement in b.3. above. |
|
|
5. |
¨ |
Other: (may not exceed one (1) Year of Service or
Period of Service; must be expressed in whole months) |
|
c. |
[þ] |
Attainment of age: |
|
1. |
¨ |
No age requirement |
|
|
2. |
¨ |
20 1/2 |
|
|
3. |
þ |
21 |
|
|
4. |
¨ |
Other: (may not exceed 21) |
|
d. |
¨ |
The service and/or age requirements specified above shall be waived
with respect to any Eligible Employee who was employed on and such Eligible
Employee shall enter the Plan as of such date. |
|
|
HOWEVER, DIFFERENT ELIGIBILITY CONDITIONS WILL APPLY (select one): |
|
e. |
þ |
N/A. The options selected in a-d above apply for all purposes of the Plan. |
|
|
f. |
¨ |
For purposes of all Employer contributions other than Elective Deferrals... |
|
|
If f. IS SELECTED, the following eligibility conditions apply for such purposes (select g.
OR h. and i., and if applicable j.: |
|
g. |
¨ |
No age or service requirements |
|
|
h. |
¨ |
Completion of the following service requirement which is based on Years
of Service (or Periods of Service if the Elapsed Time Method is elected): |
|
1. |
¨ |
No service requirement |
|
|
2. |
¨ |
1/2 Year of Service or Period of Service |
|
|
3. |
¨ |
1 Year of Service or Period of Service |
|
|
4. |
¨ |
(not to exceed 1,000) Hours of Service within
(not to exceed 12) months from the Eligible Employees employment
commencement date. If an Employee does not complete the stated Hours of Service
during the specified time period, the Employee is subject to the Year of
Service requirement in h.3. above. |
|
|
5. |
¨ |
1 1/2 Years of Service or Periods of Service |
|
|
6. |
¨ |
2 Years of Service or Periods of Service |
|
|
7. |
¨ |
Other: |
|
|
|
|
(may not exceed two (2) Years of Service or Periods of Service) |
|
|
|
NOTE: If more than one (1) Year of Service is elected 100% immediate vesting is required. |
|
1. |
¨ |
No age requirement |
|
|
2. |
¨ |
20 1/2 |
|
|
3. |
¨ |
21 |
|
|
4. |
¨ |
Other: (may not exceed 21) |
|
|
|
© Copyright 2001 Automatic Data Processing Federal Credit Union |
|
4 |
|
|
|
j.. ¨ The service and/or age requirements specified above shall be waived
with respect to any Eligible Employee who was employed on ___and such Eligible
Employee shall enter the Plan as of such date. |
16. |
|
EFFECTIVE DATE OF PARTICIPATION (Plan Section 3.2) |
|
|
|
An Eligible Employee who has satisfied the eligibility requirements will become a
Participant for all purposes of the Plan (except as elected in h..-p. below for Employer
contributions): |
|
|
|
a., b., c., d., e. or f .applies to: |
|
|
¨ |
Employee Deferrals and if applicable, Employee Voluntary Contributions |
|
|
|
þ |
All purposes of the Plan |
|
|
a. |
þ |
as soon as administratively feasible following the date on which such requirements are satisfied. |
|
|
b. |
¨ |
the first day of the month coinciding with or next following the date
on which such requirements are satisfied. |
|
|
c. |
¨ |
the first day of the plan year quarter coinciding with or next
following the date on which such requirements are satisfied. |
|
|
d. |
¨ |
the earlier of the first day of the seventh month or the first day of
the Plan Year coinciding with or next following the date on which such requirements are
satisfied. |
|
|
e. |
¨ |
the first day of the Plan Year next following the date on which such
requirements are satisfied. (Eligibility must be 1/2 Year of Service (or Period of
Service) or less and age must be 20 1/2 or less.) |
|
|
f. |
¨ |
other: ___, |
|
|
|
|
NOTE: If a. or f. is selected an Eligible Employee who has satisfied the maximum
age (21) and service requirements (one (1) Year or Period of Service) and who is
otherwise entitled to participate, shall commence participation no later than the
earlier of (a) 6 months after such requirements are satisfied, or (b) the first day
of the first Plan Year after such requirements are satisfied, unless the Employee
separates from service before such participation date. |
|
|
|
|
HOWEVER, different entry dates will apply (select one): |
|
|
g. |
þ |
N/A. The options elected in a.-f. above apply for all purposes of the Plan. |
|
|
h. |
¨ |
For purposes of all Employer contributions other than Elective Deferrals |
|
|
IF h. IS SELECTED, the following entry dates apply for such purposes (select one): |
|
|
i. |
¨ |
as soon as administratively feasible following the date on which such requirements are satisfied. |
|
|
j. |
¨ |
the first day of the month coinciding with or next following the date
on which such requirements are satisfied. |
|
|
k. |
¨ |
the first day of the plan year quarter coinciding with or next
following the date on which such requirements are satisfied. |
|
|
l. |
¨ |
the first day of the Plan Year in which such requirements are
satisfied. |
|
|
m. |
¨ |
the first day of the Plan Year in which such requirements are
satisfied, if such requirements are satisfied in the first 6 months of the Plan Year,
or as of the first day of the next succeeding Plan Year if such requirements are
satisfied in the last 6 months of the Plan Year. |
|
|
n. |
¨ |
the earlier of the first day of the seventh month or the first day of
the Plan Year coinciding with or next following the date on which such requirements are
satisfied. |
|
|
o |
¨ |
the first day of the Plan Year next following the date on which such
requirements are satisfied. (Eligibility must be 1/2 (or 1 1/2 if 100% immediate Vesting is
selected) Year of Service (or Period of Service) or less and age must be 20 1/2 or less.) |
|
|
p. |
¨ |
other: , |
|
|
|
|
NOTE: If i. or p. is selected, an Eligible Employee who has satisfied the maximum
age (21) and service requirements (one (1) Year or Period of Service (or more than
one (1) year if full and immediate vesting)) and who is otherwise entitled to
participate, shall commence participation no later than the earlier of (a) 6 months
after such requirements are satisfied, or (b) the first day of the first Plan Year
after such requirements are satisfied, unless the Employee separates from service
before such participation date. |
SERVICE
17. |
|
RECOGNITION OF SERVICE WITH PREDECESSOR EMPLOYER (Plan Sections 1.57 and 1.85) |
|
a. |
¨ |
No service with a predecessor Employer shall be recognized. |
|
|
b. |
þ |
Service with Bois dArc Energy, Inc. |
|
|
|
|
will be recognized except as follows (select 1. or all that apply of 2. through 4.): |
|
1. |
þ |
N/A, no limitations. |
|
|
2. |
¨ |
service will only be recognized for vesting purposes. |
|
|
3. |
¨ |
service will only be recognized for eligibility purposes. |
|
|
4. |
¨ |
service prior to ___will not be recognized. |
|
|
NOTE: If the predecessor Employer maintained this qualified Plan,
then Years of Service (and/or Periods of Service) with such predecessor
Employer shall be recognized pursuant to Plan Sections 1.57 and 1.85 and b.1.
will apply. |
|
|
|
© Copyright 2001 Automatic Data Processing Federal Credit Union |
|
5 |
18. |
|
SERVICE CREDITING METHOD (Plan Sections 1.57 and 1.85) |
|
|
|
NOTE: If no elections are made in this Question, then the Hours of Service Method will be
used and the provisions set forth in the definition of Year of Service in Plan Section 1.85
will apply. |
|
|
|
ELAPSED TIME METHOD shall be used for the following purposes (select all that apply): |
|
a. |
¨ |
N/A. Plan only uses the Hours of Service Method. |
|
|
b. |
¨ |
eligibility to participate and vesting. (If selected, skip to Question 19.) |
|
|
c. |
þ |
eligibility to participate. |
|
|
d. |
¨ |
vesting. |
|
|
NOTE: Elapsed time method should not be selected for purposes of determining eligibility to
participate if option 4. is selected under Question 15.b. |
|
|
|
HOURS OF SERVICE METHOD shall be used for the following purposes (select all that apply): |
|
e. |
¨ |
N/A. Plan only uses the Elapsed Time Method. |
|
|
f. |
¨ |
eligibility to participate in the Plan. The eligibility computation
period after the initial eligibility computation period shall... |
|
1. |
¨ |
shift to the Plan Year after the initial computation
period. |
|
|
2. |
¨ |
be based on the date an Employee first performs an Hour
of Service (initial computation period) and subsequent computation periods
shall be based on each anniversary date thereof. |
|
g. |
[þ] |
vesting. The vesting computation period shall be... |
|
1. |
þ |
the Plan Year. |
|
|
2. |
¨ |
the date an Employee first performs an Hour of Service and each anniversary thereof. |
|
|
|
NOTE: IF THE HOURS OF SERVICE METHOD IS BEING USED, the Hours of Service method will be used
for all Employees. |
|
h. |
þ |
actual hours for which an Employee is paid or entitled to payment. |
|
|
i. |
¨ |
months worked. An Employee will be credited with one hundred ninety
(190) Hours of Service if under the Plan such Employee would be credited with at least
one (1) Hour of Service during the month. |
|
|
|
|
AND, a Year of Service means the applicable computation period during which an Employee has
completed at least: |
|
|
j. |
þ |
1,000 (may not be more than 1,000) Hours of Service (if left blank, the
Plan will use 1,000 Hours of Service). |
|
|
|
© Copyright 2001 Automatic Data Processing Federal Credit Union |
|
6 |
VESTING
19. |
|
VESTING OF PARTICIPANTS INTEREST (Plan Section 6.4(b)) |
|
|
|
Vesting for Employer Contributions (except as otherwise elected in j.-q. below for matching
contributions). The vesting schedule, based on a Participants Years of Service (or Periods
of Service if the Elapsed Time Method is elected), shall be as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a. |
|
¨ |
|
100% upon entering Plan. (Required if eligibility requirement is
greater than one (1) Year of Service or Period of Service.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
b.
|
|
¨
|
|
3 Year Cliff:
|
|
|
|
|
|
|
|
c.
|
|
¨
|
|
5 Year Cliff: |
|
|
|
|
|
|
|
|
|
|
0-2 years
|
|
|
0 |
% |
|
|
|
|
|
|
|
0-4 years
|
|
|
0 |
% |
|
|
|
|
|
|
3 years
|
|
|
100 |
% |
|
|
|
|
|
|
|
5 years
|
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
d.
|
|
þ
|
|
6 Year Graded:
|
|
|
|
|
|
|
|
e.
|
|
¨
|
|
4 Year Graded: |
|
|
|
|
|
|
|
|
|
|
0-1 year
|
|
|
0 |
% |
|
|
|
|
|
|
|
1year
|
|
|
25 |
% |
|
|
|
|
|
|
2 years
|
|
|
20 |
% |
|
|
|
|
|
|
|
2 years
|
|
|
50 |
% |
|
|
|
|
|
|
3 years
|
|
|
40 |
% |
|
|
|
|
|
|
|
3 years
|
|
|
75 |
% |
|
|
|
|
|
|
4 years
|
|
|
60 |
% |
|
|
|
|
|
|
|
4 years
|
|
|
100 |
% |
|
|
|
|
|
|
5 years
|
|
|
80 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6 years
|
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
f.
|
|
¨
|
|
5 Year Graded:
|
|
|
|
|
|
|
|
g.
|
|
¨
|
|
7 Year Graded: |
|
|
|
|
|
|
|
|
|
|
1 year
|
|
|
20 |
% |
|
|
|
|
|
|
|
0-2 years
|
|
|
0 |
% |
|
|
|
|
|
|
2 years
|
|
|
40 |
% |
|
|
|
|
|
|
|
3 years
|
|
|
20 |
% |
|
|
|
|
|
|
3 years
|
|
|
60 |
% |
|
|
|
|
|
|
|
4 years
|
|
|
40 |
% |
|
|
|
|
|
|
4 years
|
|
|
80 |
% |
|
|
|
|
|
|
|
5 years
|
|
|
60 |
% |
|
|
|
|
|
|
5 years
|
|
|
100 |
% |
|
|
|
|
|
|
|
6 years
|
|
|
80 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7 years
|
|
|
100 |
% |
|
|
h. |
|
¨ |
|
Other Must be at least as liberal as either c. or g. above. |
|
|
|
|
|
|
VESTING FOR EMPLOYER MATCHING CONTRIBUTIONS |
|
|
|
The vesting schedule for Employer matching contributions, based on a Participants Years of
Service (or Periods of Service if the Elapsed Time Method is elected) shall be as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
i. |
|
þ |
|
N/A. There are no matching contributions subject to a vesting schedule
OR the schedule in a.-h. above shall also apply to matching contributions. |
|
|
|
|
|
|
j. |
|
¨ |
|
100% upon entering Plan. (Required if eligibility requirement is
greater than one (1) Year of Service or Period of Service.) |
|
|
|
|
|
|
k. |
|
¨ |
|
3 Year Cliff |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
l. |
|
¨ |
|
5 Year Cliff |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
m. |
|
¨ |
|
6 Year Graded |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
n. |
|
¨ |
|
4 Year Graded |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
o. |
|
¨ |
|
5 Year Graded |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
p. |
|
¨ |
|
7 Year Graded |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
q. |
|
¨ |
|
Other Must be at least as liberal as either l. or p. above. |
|
|
|
|
20. |
|
FOR AMENDED PLANS (Plan Section 6.4(f)) |
|
|
|
If the vesting schedule has been amended to a less favorable schedule, enter the pre-amended
schedule below: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a. |
|
þ |
|
Vesting schedule has not been amended, amended schedule is more
favorable in all years or prior schedule was immediate 100% vesting. |
|
|
|
|
|
|
b. |
|
¨ |
|
Pre-amended schedule: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
© Copyright 2001 Automatic Data Processing Federal Credit Union
|
|
7 |
21. |
|
TOP HEAVY VESTING (Plan Section 6.4(c)) |
|
|
|
If this Plan becomes a Top Heavy Plan, the following vesting schedule, based on number of
Years of Service (or Periods of Service if the Elapsed Time Method is elected), shall apply
and shall be treated as a Plan amendment pursuant to this Plan. Once effective, this
schedule shall also apply to any contributions made before the Plan became a Top Heavy Plan
and shall continue to apply if the Plan ceases to be a Top Heavy Plan unless an amendment is
made to change the vesting schedule. |
|
a. |
|
þ N/A (the regular vesting schedule already satisfies one of the minimum top heavy schedules). |
|
|
b. |
|
¨ 6 Year Graded: |
|
|
|
|
|
|
|
0-1 year
|
|
|
0 |
% |
|
|
2 years
|
|
|
20 |
% |
|
|
3 years
|
|
|
40 |
% |
|
|
4 years
|
|
|
60 |
% |
|
|
5 years
|
|
|
80 |
% |
|
|
6 years
|
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
0-2 years
|
|
|
0 |
% |
|
|
3 years
|
|
|
100 |
% |
|
|
|
d. |
|
¨ Other Must be at least as liberal as either b. or c. above. |
|
|
|
|
|
|
|
|
|
|
|
22. |
|
EXCLUDED VESTING SERVICE |
|
|
|
|
|
|
|
|
|
|
|
|
|
a. |
|
þ |
|
No exclusions. |
|
|
|
|
b. |
|
¨ |
|
Service prior to the Effective Date of the Plan or a predecessor plan. |
|
|
23. |
|
NORMAL RETIREMENT AGE (NRA) (Plan Section 1.45) means the: |
|
|
|
|
|
|
|
|
|
|
|
|
|
date of a Participants 65 birthday (not to exceed 65th). |
24. |
|
EARLY RETIREMENT DATE (Plan Section 1.15) means the: |
|
|
|
|
|
|
|
|
|
|
|
|
|
a. |
|
þ |
|
No Early Retirement provision provided. |
|
|
|
|
b. |
|
¨ |
|
date on which a Participant |
|
|
|
|
|
|
|
|
1. ¨
|
|
attains age |
|
|
|
|
|
|
|
|
2. ¨
|
|
attains age and completes at least Years of
Service (or Periods of Service) for vesting purposes. |
|
|
|
|
|
|
|
|
|
|
|
COMPENSATION |
|
|
|
|
|
|
25. |
|
COMPENSATION (Plan Section 1.11) with respect to any Participant means one of the following,
each as modified to include all amounts specified in Section 1.11: |
|
|
|
|
|
|
|
|
|
|
|
|
|
a. |
|
þ |
|
Wages, tips and other compensation on Form W-2. |
|
|
|
|
b. |
|
¨ |
|
Section 3401(a) wages (wages for withholding purposes). |
|
|
|
|
c. |
|
¨ |
|
415 safe-harbor compensation. |
|
|
|
|
|
© Copyright 2001 Automatic Data Processing Federal Credit Union |
|
8 |
|
|
|
|
|
|
|
|
|
|
|
ADJUSTMENTS TO COMPENSATION |
|
|
d. |
|
¨ |
|
N/A. No adjustments. |
|
|
e. |
|
þ |
|
Compensation shall be adjusted by: (select all that apply) |
|
|
|
|
|
|
1. þ
|
|
excluding reimbursements or other expense allowances, fringe benefits (cash or non-cash), moving expenses, deferred compensation (other than deferrals specified in 1. above) and welfare benefits |
|
|
|
|
|
|
2. þ
|
|
excluding Compensation paid during the determination period while not a Participant in the component of the Plan for which the definition is being used |
|
|
|
|
|
|
3. ¨
|
|
excluding overtime |
|
|
|
|
|
|
4. ¨
|
|
excluding bonuses |
|
|
|
|
|
|
5. ¨
|
|
excluding commissions |
|
|
|
|
|
|
6. ¨
|
|
other: |
|
|
|
|
|
|
NOTE:
|
|
Options 3., 4., 5., or 6. may not be selected if an integrated
allocation formula is selected (i.e., if 30.e. is selected). In addition, if
3., 4., 5., or 6. is selected, the definition of Compensation could violate the
nondiscrimination rules. |
CONTRIBUTIONS AND ALLOCATIONS |
26. |
|
SALARY REDUCTION ARRANGEMENT ELECTIVE DEFERRALS (Plan Section 12.2) |
|
|
|
|
|
|
|
|
|
|
|
Each Participant may elect to have Compensation deferred by: |
|
|
a. |
|
þ |
|
up to 90%. |
|
|
b. |
|
¨ |
|
from % to %. |
|
|
|
|
|
|
|
|
|
|
|
AND, Highly Compensated Employee may only elect to reduce Compensation by: |
|
|
c. |
|
þ |
|
Same limits as specified above. |
|
|
d. |
|
¨ |
|
up to %. |
|
|
e. |
|
¨ |
|
from % to %. |
|
|
|
|
|
|
|
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MAY PARTICIPANTS make a special salary deferral election with respect to bonuses? |
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f. |
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¨ |
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No. |
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g. |
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þ |
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Yes, a Participant may elect to defer up to 100% of any bonus. |
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AUTOMATIC ELECTION: Shall Participants who do not affirmatively elect to receive cash or
have a specified amount contributed to the Plan automatically have Compensation deferred? |
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h. |
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¨ |
|
No. |
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i. |
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þ |
|
Yes, by 2% of Compensation. |
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© Copyright 2001 Automatic Data Processing Federal Credit Union |
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9 |
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27. |
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401(k) SAFE HARBOR PROVISIONS (Plan Section 12.8) |
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Will the ADP and/or ACP test safe harbor provisions be used? (select a., b. or c.) |
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a. |
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þ |
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No. (If selected, skip to Question 28.) |
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b. |
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¨ |
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Yes, but only the ADP (and NOT the ACP) Test Safe Harbor provisions will be used. |
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c. |
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¨ |
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Yes, both the ADP and ACP Test Safe Harbor provisions will be used. |
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IF c. is selected, does the Plan permit matching contributions in addition to any
safe harbor contributions elected in d. or e. below? |
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1. ¨ |
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No or N/A. Any matching contributions, other than any
Safe Harbor Matching Contributions elected in d. below, will be suspended in
any Plan Year in which the safe harbor provisions are used. |
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2. ¨ |
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Yes, the Employer may make a discretionary matching
contribution in addition to any Safe Harbor Matching Contributions elected in
d. below. (If elected, complete the applicable provisions of the Adoption
Agreement relating to matching contributions (i.e., Questions 31. and 32.) that
will apply in addition to any elections made in d. below. NOTE: Question 28
must be completed so that only Elective Deferrals up to 6% of Compensation are
taken into account in applying the match set forth in that question and the
maximum discretionary matching contribution that may be made on behalf of any
Participant is no greater than 4% of Compensation.) |
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THE EMPLOYER WILL MAKE THE FOLLOWING ADP TEST SAFE HARBOR CONTRIBUTION FOR THE PLAN YEAR: |
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NOTE: |
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The ACP Test Safe Harbor is automatically satisfied if the only matching
contribution made to the Plan is either (1) a Basic Matching Contribution or (2) an
Enhanced Matching Contribution that does not provide a match on Elective Deferrals in
excess of 6% of Compensation. |
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d. |
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¨ |
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Safe Harbor Matching Contribution (select 1. or 2. AND 3.) |
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1. ¨ |
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Basic Matching Contribution. The Employer will make
Matching Contributions to the account of each Eligible Participant in an
amount equal to the sum of 100% of the amount of the Participants Elective
Deferrals that do not exceed 3% of the Participants Compensation, plus 50% of
the amount of the Participants Elective Deferrals that exceed 3% of the
Participants Compensation but do not exceed 5% of the Participants
Compensation. |
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2. ¨ |
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Enhanced Matching Contribution. The Employer will make
Matching Contributions to the account of each Eligible Participant in an
amount equal to the sum of: |
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a. ¨
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% (must be at least 100%) of the
Participants Elective Deferrals that do not exceed % (if over 6%
or if left blank, the ACP test will still apply) of the Participants
Compensation, plus |
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b. ¨
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% of the Participants Elective
Deferrals that exceed % of the Participants Compensation but do
not exceed % (if over 6% or if left blank the ACP test will still
apply) of the Participants Compensation. |
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NOTE:
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a. and b. must be completed so that, at any
rate of Elective Deferrals, the matching contribution is at least equal
to the matching contribution receivable if the Employer were making
Basic Matching Contributions, but the rate of match cannot increase as
deferrals increase. For example, if a. is completed to provide a match
equal to 100% of deferrals up to 4% of Compensation, then b. need not
be completed. |
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3. ¨ |
|
The safe harbor matching contribution will be
determined on the following basis (and Compensation for such purpose will be
based on the applicable period): |
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a. ¨
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the entire Plan Year. |
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b. ¨
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each payroll period. |
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e. |
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¨ |
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Nonelective Safe Harbor Contributions |
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The Employer will make a Safe Harbor Nonelective Contribution to the account of each
Eligible Participant in an amount equal to _____% (may not be less than 3%) of the
Employees Compensation for the Plan Year. |
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SPECIAL EFFECTIVE DATE OF ADP AND ACP TEST SAFE HARBOR PROVISIONS |
|
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f. |
|
¨ |
|
N/A. The safe harbor provisions are effective as of the later of the
Effective Date of this Plan or, if this is an amendment or restatement, the effective
date of the amendment or restatement. |
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g. |
|
¨ |
|
The ADP and ACP Test Safe Harbor provisions are effective for the Plan Year
beginning: |
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(enter the first day of the Plan Year for which the provisions are (or, for
GUST updates, were) effective and, if necessary, enter any other special effective
dates that apply with respect to the provisions). |
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|
© Copyright 2001 Automatic Data Processing Federal Credit Union |
|
10 |
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28. |
|
FORMULA FOR DETERMINING EMPLOYER MATCHING CONTRIBUTIONS (Plan Section 12.1(a)(2)) |
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|
NOTE: |
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|
If the ACP test safe harbor is being used (i.e., Question 27.c. is selected),
then this Question 28 must be completed as follows: Any matching contribution under
this Question 28 shall be limited to a discretionary matching contribution. Question 28
must also be completed so that only Elective Deferrals up to 6% of Compensation are
taken into account in applying the match set forth below and the maximum discretionary
matching contribution that may be made on behalf of any Participant is no greater than
4% of Compensation. The rate of matching contributions may not increase as the rate of
Elective Deferrals increases. |
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a. |
|
¨ |
|
N/A. There will not be any matching contributions (Skip to Question 29). |
|
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b. |
|
þ |
|
The Employer ... (select 1. or 2.) |
|
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1. ¨ |
|
may make matching contributions equal to a
discretionary percentage (which may be designated by each tier of Elective
Deferrals if applicable), to be determined by the Employer, of the
Participants Elective Deferrals. |
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2. þ |
|
will make matching contributions equal to 50% (e.g.,
50) of the Participants Elective Deferrals, plus: |
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a. þ
|
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N/A. |
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b. ¨
|
|
an additional discretionary percentage, to be determined by the Employer. |
|
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|
AND, in determining the matching contribution above, only Elective Deferrals up to
the percentage or dollar amount specified below will be matched:
(select 3. and/or 4.) |
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3. þ |
|
6% of a Participants Compensation. |
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4. ¨ |
|
a discretionary percentage of a Participants
Compensation or a discretionary dollar amount, the percentage or dollar amount
to be determined by the Employer on a uniform basis to all Participants. |
|
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|
c. |
|
¨ |
|
The Employer will make matching contributions equal to the sum of
_____% of the portion of the Participants Elective Deferrals which do not exceed
_____% of the Participants Compensation plus _____% of the portion of the
Participants Elective Deferrals which exceed _____% of the Participants Compensation
but does not exceed _____% of the Participants Compensation. |
|
|
NOTE: |
|
|
|
If c. above is elected, the Plan may violate the Code Section 401(a)(4)
nondiscrimination requirements if the rate of matching contributions increases as a
Participants Elective Deferrals or Years of Service (or Periods of Service) increase. |
|
|
PERIOD OF DETERMINING MATCHING CONTRIBUTIONS
Matching contributions will be determined on the following basis (and any Compensation or
dollar limitation used in determining the match will be based on the applicable period): |
|
|
d. |
|
þ |
|
the entire Plan Year. |
|
|
e. |
|
¨ |
|
each payroll period. |
|
|
f. |
|
¨ |
|
all payroll periods ending with or within each month within the Plan Year. |
|
|
g. |
|
¨ |
|
all payroll periods ending with or within the Plan Year quarter. |
|
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|
|
THE MATCHING CONTRIBUTION MADE ON BEHALF OF ANY PARTICIPANT for any Plan Year will not
exceed: |
|
|
h. |
|
þ |
|
N/A. |
|
|
i. |
|
¨ |
|
$_____. |
|
|
MATCHING CONTRIBUTIONS WILL BE MADE ON BEHALF OF: |
|
|
j. |
|
þ |
|
all Participants. |
|
|
k. |
|
¨ |
|
only Non-Highly Compensated Employees. |
|
|
|
© Copyright 2001 Automatic Data Processing Federal Credit Union |
|
11 |
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29. |
|
ONLY PARTICIPANTS WHO SATISFY THE FOLLOWING CONDITIONS WILL BE ELIGIBLE TO SHARE IN THE
ALLOCATION OF MATCHING CONTRIBUTIONS: |
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|
REQUIREMENTS FOR PARTICIPANTS WHO ARE ACTIVELY EMPLOYED AT THE END OF THE PLAN YEAR. |
|
|
a. o
|
|
N/A. |
|
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|
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|
b. þ
|
|
No service requirement. |
|
|
c. o
|
|
A Participant must complete a Year of Service. (Could cause the Plan to
violate coverage requirements under Code
Section 410(b).) |
|
|
d. o
|
|
A Participant must complete at least _____ (may not be more than 1,000)
Hours of Service during the Plan Year. (Could cause the Plan to violate coverage
requirements under Code
Section 410(b).) |
|
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|
|
|
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|
REQUIREMENTS FOR PARTICIPANTS WHO ARE NOT ACTIVELY EMPLOYED AT THE END OF THE PLAN YEAR |
|
|
e. o
|
|
A Participant must complete more than _____ Hours of Service (not more
than 500). |
|
|
f. o
|
|
A Participant must complete a Year of Service. (Could cause the Plan to
violate coverage requirements under Code
Section 410(b).) |
|
|
g. o
|
|
Participants will NOT share in such allocations, regardless of service.
(Could cause the Plan to violate coverage requirements under Code Section 410(b).) |
|
|
h. þ
|
|
Participants will share in such allocations, regardless of service. |
|
|
|
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|
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|
|
NOTE: Participants who are not actively employed at the end of the Plan Year due to death,
Total and Permanent Disability or Early or Normal Retirement shall be eligible to share in
the allocation of matching contributions regardless of the above conditions. |
|
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|
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|
AND, if 29.c., d., f., or g. is selected, shall the 410(b) ratio percentage fail safe
provisions apply (Plan Section 12.3(f))? |
|
|
i. þ
|
|
No or N/A. |
|
|
j. o
|
|
Yes (If selected, the Plan must satisfy the ratio percentage test of Code Section 410(b)). |
|
|
|
|
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|
|
30. |
|
FORMULA FOR DETERMINING EMPLOYERS PROFIT SHARING CONTRIBUTION (Plan Section 12.1(a)(3)) |
|
|
|
|
|
|
|
a. o
|
|
N/A. No Employer Profit Sharing Contributions may be made (other than
top heavy minimum contributions)(Skip to Question 32.) |
|
|
b. þ
|
|
Discretionary, to be determined by the Employer, not limited to current or accumulated Net Profits. |
|
|
c. o
|
|
Discretionary, to be determined by the Employer, out of current or accumulated Net Profits. |
|
|
|
|
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|
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|
|
CONTRIBUTION ALLOCATIONS |
|
|
If b. or c. above is selected, the Employers discretionary profit sharing contribution for
a Plan Year will be allocated as follows: |
|
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|
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|
|
d. o
|
|
NON-INTEGRATED ALLOCATION |
|
|
|
|
|
|
1. o |
|
In the same ratio as each Participants Compensation
bears to the total of such Compensation of all Participants. |
|
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|
2. o |
|
In the same dollar amount to all Participants (per capita). |
|
|
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|
|
3. o |
|
In the same dollar amount per Hour of Service completed by each Participant. |
|
|
|
|
|
|
4. o |
|
In the same proportion that each Participants points
bears to the total of such points of all Participants. A Participants points
with respect to any Plan Year shall be computed as follows (select all that
apply): |
|
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|
|
a. o
|
|
___ point(s) shall be allocated for
each Year of Service. However, the maximum Years of Service taken into
account shall not exceed ___(leave blank if no limit on service
applies). |
|
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|
b. o
|
|
___ point(s) shall be allocated for
each full $___ (may not exceed $200) of Compensation. |
|
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|
c. o
|
|
___ point(s) shall be allocated for each year of age as of the end of the Plan Year. |
|
|
|
© Copyright 2001 Automatic Data Processing Federal Credit Union |
|
12 |
|
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|
e. þ
|
|
INTEGRATED ALLOCATION |
|
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|
|
In accordance with Plan Section 4.3(b)(2) based on a Participants Compensation in excess of: |
|
|
|
|
|
|
1. o |
|
The Taxable Wage Base. |
|
|
|
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|
|
2. þ |
|
80.01% (not to exceed 100%) of the Taxable Wage Base. (See Note below) |
|
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|
|
3. o |
|
80% of the Taxable Wage Base plus $1.00. |
|
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|
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|
|
4. o |
|
$_____ (not greater than the Taxable Wage Base). (See Note below) |
|
|
|
|
|
|
NOTE: The integration percentage of 5.7% shall be reduced to: |
|
|
|
|
|
|
|
|
|
1. |
|
|
4.3% if 2. or 4. above is more than 20% and
less than or equal to 80% of the Taxable Wage Base. |
|
|
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|
|
2. |
|
|
5.4% if 3. is elected or if 2. or 4. above is more than 80% of the
Taxable Wage Base. |
31. |
|
REQUIREMENTS TO SHARE IN ALLOCATIONS OF EMPLOYER DISCRETIONARY PROFIT SHARING CONTRIBUTION
AND FORFEITURES |
|
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|
|
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|
|
a. o
|
|
N/A. Plan does not permit such contributions. |
|
|
b. þ
|
|
Requirements for Participants who are actively employed at the end of the Plan Year. |
|
|
|
|
|
|
1. o |
|
No service requirement. |
|
|
|
|
|
|
2. o |
|
A Participant must complete a Year of Service. (Could
cause the Plan to violate coverage requirements under Code Section 410(b).) |
|
|
|
|
|
|
3. þ |
|
A Participant must complete at least 1000 (may not be
more than 1,000) Hours of Service during the Plan Year. (Could cause the Plan
to violate coverage requirements under Code Section 410(b).) |
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
REQUIREMENTS FOR PARTICIPANTS WHO ARE NOT ACTIVELY EMPLOYED AT THE END OF THE PLAN YEAR |
|
|
c. o
|
|
A Participant must complete more than _____ Hours of Service (not more
than 500). |
|
|
d. o
|
|
A Participant must complete a Year of Service. (Could cause the Plan to
violate coverage requirements under Code
Section 410(b).) |
|
|
e. þ
|
|
Participants will NOT share in such allocations, regardless of service.
(Could cause the Plan to violate coverage requirements under Code Section 410(b).) |
|
|
f. o
|
|
Participants will share in such allocations, regardless of service. |
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
NOTE: Participants who are not actively employed at the end of the Plan Year due to death,
Total and Permanent Disability or Early or Normal Retirement will be eligible to share in
the allocations regardless of the above conditions. |
|
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|
|
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|
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|
|
|
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|
|
AND, if 31.b.2, b.3, d. or e. is selected, shall the 410(b) ratio percentage fail safe
provisions apply (Plan Section 12.3(f))? |
|
|
g. o
|
|
No or N/A. |
|
|
h. þ
|
|
Yes (If selected, the Plan must satisfy the ratio percentage test of Code Section 410(b)). |
|
|
|
|
|
|
|
|
|
|
|
|
|
32. |
|
FORFEITURES (Plan Sections 1.27 and 4.3(e)) |
|
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|
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|
|
|
|
|
|
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|
|
Forfeitures will be |
|
|
a. o
|
|
N/A. There will be no Employer contributions made under the Plan. |
|
|
b. o
|
|
used to reduce any Employer contribution. |
|
|
c. þ
|
|
allocated to all Participants eligible to share in the allocations in
the same proportion that each Participants Compensation for the Plan Year bears to the
Compensation of all Participants for such year. |
|
|
|
© Copyright 2001 Automatic Data Processing Federal Credit Union |
|
13 |
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|
|
|
33. |
|
LIMITATIONS ON ALLOCATIONS (Plan Section 4.4) |
|
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|
|
If any Participant is covered under another qualified defined contribution plan maintained
by the Employer, other than a Master or Prototype Plan, or if the Employer maintains a
welfare benefit fund, as defined in Code Section 419(e), or an individual medical account,
as defined in Code Section 415(l)(2), under which amounts are treated as Annual Additions
with respect to any Participant in this Plan: |
|
|
a. þ
|
|
N/A. The Employer does not maintain another qualified defined contribution plan. |
|
|
b. o
|
|
The provisions of Plan Section 4.4(b) will apply as if the other plan were a Master or Prototype Plan. |
|
|
c. o
|
|
Specify the method under which the plans will limit total Annual
Additions to the Maximum Permissible Amount, and will properly reduce any Excess
Amounts, in a manner that precludes Employer discretion: |
|
|
|
|
|
|
|
|
|
|
|
|
|
34. |
|
FORM OF DISTRIBUTIONS (Plan Sections 6.5, 6.6 and 6.12) |
|
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|
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|
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|
|
Distribution may be made in |
|
|
a. o
|
|
cash only (except for insurance or annuity contracts). |
|
|
b. þ
|
|
cash or ( to the extent permitted under Section 6.5 and 6.6) Employer stock. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AND, if this is an amendment to a Plan that contains forms of payment that are not otherwise
provided for under the Plan document, will all such forms of payment be eliminated in
accordance with Plan Section 8.1(e)? |
|
|
|
|
|
|
1. þ |
|
Yes, all such forms of payment will be eliminated to the extent permissible. |
|
|
|
|
|
|
2. o |
|
No, certain forms of payment described in an addendum to the plan will not be eliminated. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE: In-kind distributions, other than as provided for in this Question 34, will not be
permitted under the Plan and therefore will not be protected. |
|
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|
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|
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|
|
35. |
|
INVOLUNTARY DISTRIBUTIONS |
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
Will involuntary distributions of amounts less than $5,000 be made in accordance with the
provisions of Sections 6.4, 6.5 and 6.6? |
|
|
a. þ
|
|
Yes |
|
|
|
|
|
|
|
|
b. o
|
|
No |
|
|
|
|
|
|
36. |
|
HARDSHIP DISTRIBUTIONS (Plan Sections 6.11 and/or 12.9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a. o
|
|
No hardship distributions are permitted. |
|
|
b. þ
|
|
Hardship distributions are permitted from the following accounts (select one): |
|
|
|
|
|
|
1. þ |
|
All accounts. |
|
|
|
|
|
|
2. o |
|
Participants Elective Deferral Account, Participants
Rollover Account, and Participants Voluntary Contribution Account. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE:
|
|
Distributions from a Participants Elective Deferral Account are limited to
the portion of such account attributable to such Participants Elective Deferrals (and
earnings attributable thereto up to December 31, 1988). Hardship distributions are not
permitted from a Participants Qualified Non-Elective Account (including any 401(k)
Safe Harbor Contributions) or Qualified Matching Contribution Account. |
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37. |
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IN-SERVICE DISTRIBUTIONS (Plan Section 6.10) |
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a. o
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In-service distributions may not be made (except as otherwise elected
for Hardship Distributions or as provided for in Section 6.10). |
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b. þ
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In-service distributions may be made to a Participant who has not
separated from service provided the participant has attained age 59 1/2. |
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AND, in-service distributions are permitted from the following accounts: |
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c. þ
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All accounts. |
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d. o
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Participants Elective Deferral Account, Participants Rollover Account
and Participants Voluntary Contribution Account only. |
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NOTE:
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Distributions from a Participants Elective Deferral Account, Qualified
Matching Contribution Account and Qualified Non-Elective Account (including 401(k) Safe
Harbor Contributions) are subject to restrictions and generally may not be distributed
prior to age 59 1/2. |
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© Copyright
2001 Automatic Data Processing Federal Credit Union |
14 |
TOP HEAVY REQUIREMENTS
38. |
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TOP HEAVY DUPLICATIONS (Plan Section 4.3(i)): When a Non-Key Employee is a Participant in
this Plan and a Defined Benefit Plan maintained by the Employer, indicate which method shall
be utilized to avoid duplication of top heavy minimum benefits: (If b., c., d. or e. is
elected, f. must be completed.) |
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a. |
þ |
N/A. The Employer does not maintain a Defined Benefit Plan. (Go to next
Question) |
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b. |
o |
The full top heavy minimum will be provided in each plan (if selected,
Plan Section 4.3(i) shall not apply). |
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c. |
o |
5% defined contribution minimum. |
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d. |
o |
2% defined benefit minimum. |
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e. |
o |
Specify the method under which the Plans will provide top heavy minimum
benefits for Non-Key Employees that will preclude Employer discretion and avoid
inadvertent omissions: |
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NOTE: |
If c., d., or e. is selected and the Defined Benefit Plan and this Plan do not
benefit the same Participants, the uniformity requirement of the Section 401(a)(4)
Regulations may be violated. |
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AND, the Present Value of Accrued Benefit (Plan Section 9.2) for Top Heavy purposes shall be based on... |
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f. |
o |
Interest Rate: ___ |
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Mortality Table: ___ |
39. |
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TOP HEAVY DUPLICATIONS (Plan Section 4.3(f)): When a Non-Key Employee is a Participant in
this Plan and another defined contribution plan maintained by the Employer, indicate which
method shall be utilized to avoid duplication of top heavy minimum benefits: |
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a. |
þ |
N/A. The Employer does not maintain another qualified defined contribution plan. |
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b. |
o |
The full top heavy minimum will be provided in each plan. |
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c. |
o |
A minimum, non-integrated contribution of 3% of each Non-Key Employees
415 Compensation shall be provided in the Money Purchase Plan (or other plan subject to
Code Section 412). |
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d. |
o |
Specify the method under which the Plans will provide top heavy minimum
benefits for Non-Key Employees that will preclude Employer discretion and avoid
inadvertent omissions, including any adjustments required under Code Section 415: |
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NOTE: |
If c. or d. is selected and both plans do not benefit the same Participants,
the uniformity requirement of the Section 401(a)(4) Regulations may be violated. |
MISCELLANEOUS
40. |
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LOANS TO PARTICIPANTS (Plan Section 7.3) |
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a. |
þ |
Loans are not permitted. |
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b. |
o |
Loans are permitted. |
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IF loans are permitted (select c., if it is applicable, and complete d. and e.) |
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c. |
o |
loans will only be made for hardship or financial necessity. |
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d. |
o |
a Participant may only have ___(e.g., one (1)) loan(s) outstanding at any time. |
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e. |
o |
loans will only be permitted from the following accounts: |
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1. |
o |
All accounts. |
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2. |
o |
Participants Elective Deferral Account, Participants
Rollover Account and Participants Voluntary Contribution Account. |
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NOTE: |
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Department of Labor Regulations require the adoption of a separate written
loan program setting forth the requirements outlined in Plan Section 7.3. |
© Copyright 2001 Automatic Data processing Federal Credit Union |
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15 |
41. |
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DIRECTED INVESTMENT ACCOUNTS (Plan Section 4.10) |
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a. |
þ |
Participant directed investments are permitted for the following accounts (select all that apply): |
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1. |
þ |
All accounts. |
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2. |
o |
All accounts other than the portion of Participants
Account attributable to Employer matching contributions and Participants
Profit Sharing Account. |
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3. |
o |
All accounts other than the portion of Participants
Account attributable to Employer matching contributions. |
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4. |
o |
All accounts other than Participants Profit Sharing Account. |
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AND, will voting rights on directed investments be passed through to Participants? |
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b. |
o |
No. Employer stock is not an alternative OR Plan is not intended to comply with Act Section 404(c). |
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c. |
o |
Yes, for Employer stock only. |
42. |
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AFTER-TAX VOLUNTARY EMPLOYEE CONTRIBUTIONS (Plan Section 4.8) |
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a. |
þ |
After-tax voluntary Employee contributions will not be allowed. |
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b. |
o |
After-tax voluntary Employee contributions will be allowed. |
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AND, if b. is chosen above, each Participant may elect to make after-tax voluntary
Employees in the following amount: |
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c. |
o |
___% of Compensation. |
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d. |
o |
up to ___% of Compensation. |
GUST TRANSITION RULES
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The following questions only apply if this is a GUST restatement (i.e., Question 7.c. is
selected). If this is not a GUST restatement, then this Plan will not be considered an
individually designed plan merely because the following questions are deleted from the
Adoption Agreement. |
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43. |
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COMPENSATION |
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The family aggregation rules of Code Section 401(a)(17) as in effect under Code Section
414(q)(6) prior to the enactment of SBJPA do not apply to this Plan effective as of:
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a. |
o |
The first day of the first Plan Year beginning after 1996. |
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b. |
o |
___(may not be prior to the first day of the first Plan Year
beginning in 1997 and may not be later than the first day of the Plan Year in which
this GUST restatement is adopted). |
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NOTE: |
If family aggregation continued to apply after 1996, the Plan is not a safe
harbor plan for Code Section 401(a)(4) purposes and the Employer may not rely on the
opinion letter issued by the Internal Revenue Service that this Plan is qualified under
Code Section 401. |
44. |
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LIMITATION ON ALLOCATIONS AND TOP HEAVY RULES |
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If any Participant is a Participant in this Plan and a qualified defined benefit plan
maintained by the Employer, then the limitations of Code Section 415(e) as in effect under
Code Section 414(q)(6) prior to the enactment of SBJPA do not apply to this Plan effective
with respect to Limitation Years beginning on or after: |
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a. |
o |
N/A. The Employer does not maintain, and has never maintained, a
qualified defined benefit plan OR the provisions of Code Section 415(e) have already
been removed from this Plan OR the Plans original Effective Date was after December
31, 1999 (i.e., Code Section 415(e) never applied to the Plan). |
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b. |
o |
___(may not be prior to the first Limitation Year beginning in 2000
and may not be later than the Limitation Year in which this GUST restatement is
adopted). |
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NOTE: |
If the Code Section 415(e) limits continued to apply to Limitation Years
beginning after 1999, the Plan is not a safe harbor plan for Code Section 401(a)(4)
purposes and the Employer may not rely on the opinion letter issued by the Internal
Revenue Service that this Plan is qualified under Code Section 401. |
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AND, if b. is selected with a date that is later than the effective date of this GUST
restatement, then with respect to the Limitation Year in which this restatement is adopted,
if any Participant is a Participant in this Plan and a qualified defined benefit plan
maintained by the Employer, specify the method under which the plans involved will provide
top heavy minimum benefits for Non-Key Employees and will satisfy the limitations of Code
Section 415(e) in a manner that precludes Employer discretion: |
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c. |
o |
N/A. The effective date of the GUST restatement is the date the
provisions of Code Section 415(e) no longer apply to this Plan. |
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d. |
o |
___ |
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NOTE: |
If the top heavy minimum benefit is only provided in one plan and the Defined
Benefit Plan and this Plan do not benefit the same Participants, the uniformity
requirement of the Section 401(a)(4) Regulations may be violated. |
© Copyright 2001 Automatic Data processing Federal Credit Union |
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16 |
45. |
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INVOLUNTARY DISTRIBUTIONS |
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If the Plan provides for involuntary distributions (i.e., 35.a. is elected) then the
increase in the involuntary amount threshold from $3,500 to $5,000 became effective with
respect to distributions made on or after: |
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a. |
o |
N/A. The plan doesnt provide for involuntary distributions less than $5,000. |
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b. |
o |
August 6, 1997, or if later ___ (leave blank if not applicable). |
46. |
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MINIMUM DISTRIBUTIONS |
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The proposed Code Section 401(a)(9) Regulations issued in January 2001 apply with respect to
distributions under the Plan made for calendar years beginning on or after January 1, 2001
unless a later date is specified below: |
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a. |
o |
N/A |
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b. |
o |
The Regulations apply for calendar years beginning on or after ___. |
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AND, if b. is selected, for years prior to the date specified above, life expectancies for
minimum distributions required pursuant to Code Section 401(a)(9) shall... |
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c. |
o |
be recalculated at the Participants election. |
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d. |
o |
be recalculated. |
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e. |
o |
not be recalculated. |
47. |
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REQUIRED BEGINNING DATE TRANSITIONAL RULES (Plan Section 6.5(e)) |
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NOTE: This Section does not apply to (1) a new Plan; (2) an amendment or restatement of an
existing Plan that never contained the provisions of Code Section 401(a)(9) as in effect
prior to the amendments made by the Small Business Job Protection Act of 1996 (SBJPA); or
(3) an amendment or restatement of an existing Plan following the close of the GUST remedial
amendment period. |
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The required beginning date for a Participant who is not a five percent (5%)
owner is: |
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a. |
o |
N/A. This is a new Plan or this Plan has never included the pre-SBJPA
provisions of Code Section 401(a)(9). |
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b. o the later of the April 1 of the calendar year following the calendar year in
which the participant attains age 70 1/2 or retires. (Also select Options 1., 2., and/or 3.,
whichever is applicable. Option 3. must be selected unless the Plan permits a Participant to
request an in-service distribution from all accounts once the Participant has attained age
59 1/2. If neither Option 1. or 2. is selected, then the Plan did not utilize either of
these transition rules prior to its amendment to utilize the post-SBJPA definition of
required beginning date.) |
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1. o A Participant who had not begun receiving required minimum distributions as of
___ (not earlier than January 1, 1996) may elect to defer commencement of distributions
until retirement. |
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2. o A Participant who was already receiving required minimum distributions under the
pre-SBJPA rules as of ___(not earlier than January 1, 1996) may elect to stop receiving
distributions and have them recommence in accordance with the post-SBJPA rules. Upon the
recommencement of distributions, if the Plan permits annuities as a form of distribution
then the following will apply: |
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(i) |
o |
N/A. Annuity distributions are not permitted. |
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(ii) |
o |
a new annuity starting date upon recommencement, or |
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(iii) |
o |
no new annuity starting date upon recommencement. |
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3. o The pre-retirement age 70 1/2 distribution option is only eliminated with respect
to employees who reach age 70 1/2 in or after a calendar year that begins after the later of
December 31, 1998, or the adoption date of the amendment. |
© Copyright 2001 Automatic Data Processing Federal Credit Union
17
48. |
|
HIGHLY COMPENSATED EMPLOYEE (Plan Section 1.31) |
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a. |
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o The top-paid group election applied for purposes of determining the
Highly Compensated Employees for the following plan years: |
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1. |
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o 1997 2. o 1998 3. o 1999 4. o 2000 5. o ___ |
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b. |
|
o The calendar year election applied for purposes of determining Highly
Compensated Employees for the following plan years: |
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1. |
|
o 1997 2. o 1998 3. o 1999 4. o 2000 5. o ___ |
49. |
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ADP AND ACP TESTS. For Plan Years beginning in and prior to the Plan Year in which the
restatement is adopted, the following will apply: |
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ADP TEST: |
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a. |
|
o PRIOR YEAR TESTING: The prior year ratio will be used for the Plan Year
beginning in the year specified below. (If this election is made for the first year the
Code Section 401(k) feature is added to this Plan (unless this Plan is a successor
plan), the amount taken into account as the ADP of Non-Highly Compensated Employees for
the preceding Plan Year will be 3%.) |
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1. |
|
o 1997 2. o 1998 3. o 1999 4. o 2000 5. o ___ |
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b. |
|
o CURRENT YEAR TESTING: The current year ratio will be used for the Plan Year beginning in: |
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1. |
|
o 1997 2. o 1998 3. o 1999 4. o 2000 5. o ___
|
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ACP TEST: |
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c. |
|
o N/A. |
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d. |
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o PRIOR YEAR TESTING: The prior year ratio will be used for the Plan Year
beginning in the year specified below. (If this election is made for the first year the
Code Section 401(m) feature is added to this Plan (unless this Plan is a successor
plan), the amount taken into account as the ACP of Non-Highly Compensated Employees for
the preceding Plan Year will be 3%.) |
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1. |
|
o 1997 2. o 1998 3. o 1999 4. o 2000 5. o ___ |
|
e. |
|
o CURRENT YEAR TESTING: The current year ratio will be used for the Plan Year beginning in: |
|
1. |
|
o 1997 2. o 1998 3. o 1999 4. o 2000 5. o ___ |
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© Copyright 2001 Automatic Data Processing Federal Credit Union
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18 |
The adopting Employer may rely on an opinion letter issued by the Internal Revenue Service as
evidence that the plan is qualified under Code Section 401 only to the extent provided in
Announcement 2001-77, 2001-30 I.R.B.
The Employer may not rely on the opinion letter in certain other circumstances or with respect to
certain qualification requirements, which are specified in the opinion letter issued with respect
to the plan and in Announcement 2001-77.
In order to have reliance in such circumstances or with respect to such qualification requirements,
application for a determination letter must be made to Employee Plans Determinations of the
Internal Revenue Service.
This Adoption Agreement may be used only in conjunction with basic Plan document #02. This Adoption
Agreement, the basic Plan document and the applicable trust agreement shall together be known as
Automatic Data Processing Prototype Non-Standardized 401(k) Plan and Trust #02-003.
The adoption of this Plan, its qualification by the IRS, and the related tax consequences are the
responsibility of the Employer and its independent tax and legal advisors.
Automatic Data Processing Federal Credit Union or its designated representative will notify the
Employer of any amendments made to the Plan or of the discontinuance or abandonment of the Plan.
Furthermore, in order to be eligible to receive such notification, we agree to notify ADP, Inc., as
the designated representative of Automatic Data Processing Federal Credit Union of any change in
address.
With regard to any questions regarding the provisions of the Plan, adoption of the Plan, or the
effect of an opinion letter from the IRS, call or write:
Ms. Nikki Strausburg
ADP Retirement Services
4801 Olympia Park Plaza Drive
Ste. 2000
Louisville, KY 40241
502-329-2900
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© Copyright 2001 Automatic Data Processing Federal Credit Union
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19 |
The Employer hereby causes this Plan to be executed on
Comstock Resources, Inc.
By:
NOTE: If the Employer is authorized (by corporate resolution or otherwise) to execute the Plan on
behalf of Participating Employers, Participating Employers need not execute this Plan.
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© Copyright 2001 Automatic Data Processing Federal Credit Union
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20 |