North Dakota
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45-0311232
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(State or other jurisdiction of
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(I.R.S. Employer Identification No.)
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incorporation or organization)
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Title of securities to be Registered
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Amount to be Registered
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Proposed maximum Offering price (1)
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Proposed maximum aggregate offering price(1)
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Amount of registration fee
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||||||||||||
Common shares of beneficial interest, no par value
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100,000 | (2) | $ | 9.46 | $ | 946,000 | $ | 109.00 |
(1)
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Estimated solely for the purpose of calculating the registration fee, in accordance with paragraphs (c) and (h) of Rule 457 under the Securities Act, using the average of the high and low prices of the common shares of beneficial interest of the Company on the NASDAQ Global Market on April 1, 2011 (within 5 business days prior to filing this registration statement).
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(2)
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Represents the number of shares of the Company’s common shares of beneficial interest issuable under the Company’s employee Retirement Plan (the “Plan”). This registration statement also covers an indeterminate number of additional shares issuable to prevent dilution in the event of stock splits, stock dividends or similar adjustments of the Company’s outstanding common shares of beneficial interest.
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(a)
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the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2010 (excluding Item 8 which has been updated by Form 8-K filed with the Commission on March 14, 2011), filed with the Commission on July 14, 2010; and the Plan’s Annual Report on Form 11-K for the year ended April 30, 2009, filed with the Commission on June 3, 2010.
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(b)
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The Company’s Quarterly Reports on Form 10-Q for the quarterly periods ended July 31, 2010, October 31, 2010, and January 31, 2011, respectively, filed with the Commission on September 9, 2010, December 10, 2010 and March 14, 2011;
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(c)
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The Company’s Current Reports on Forms 8-K (excluding any information furnished but not filed thereunder) filed with the SEC on July 1, 2010; August 18, 2010; September 23, 2010; October 28, 2010; November 19, 2010, December 10, 2010 and March 14, 2011; and
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(d)
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The description of the Company’s common shares of beneficial interest contained in the Company’s Registration Statement on Form 10 (File No. 0-14851) dated July 29, 1986, as amended by the Amended Registration Statement on Form 10, dated December 17, 1986, and the Second Amended Registration Statement on Form 10, dated March 12, 1987.
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Exhibit No.
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Description
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4.1
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Articles of Amendment and Third Restated Declaration of Trust of Investors Real Estate Trust
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4.2
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Third Restated Trustees’ Regulations (Bylaws)
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5.1
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Opinion of Pringle & Herigstad, P.C.
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5.2*
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Opinion letter, dated March 31, 2008, issued by the Internal Revenue Service to First Western Bank & Trust, the prototype sponsor of the form of plan document used for the Investors Real Estate Trust 401(k) Retirement Plan
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23.1
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Consent of Deloitte & Touche LLP
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23.2
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Consent of Pringle & Herigstad, P.C. (included in Exhibit 5.1)
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99.1
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Investors Real Estate Trust Retirement Plan
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INVESTORS REAL ESTATE TRUST
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By:
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/s/ Timothy P. Mihalick |
Name:
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Timothy P. Mihalick
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Title:
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President & Chief Executive Officer (Principal Executive Officer)
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Signature
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Title
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Date
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/S/ Jeffrey L. Miller
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||
Jeffrey L. Miller
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Trustee and Chairman
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December 8, 2010
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/S/ Stephen L. Stenehjem
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||
Stephen L. Stenehjem
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Trustee and Vice Chairman
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December 8, 2010
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/S/ Edward T. Schafer
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||
Edward T. Schafer
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Trustee
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December 8, 2010
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/S/ W. David Scott
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||
W. David Scott
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Trustee
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December 8, 2010
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/S/ Patrick G. Jones
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Patrick G. Jones
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Trustee
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December 8, 2010
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/S/ Charles W. Morgan
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Charles W. Morgan
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Trustee
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December 8, 2010
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/S/ John T. Reed
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John T. Reed
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Trustee
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December 8, 2010
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/S/ John D. Stewart
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John D. Stewart
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Trustee
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December 8, 2010
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/S/ Thomas A. Wentz, Jr.
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Trustee, Senior Vice President and
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Thomas A. Wentz, Jr.
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Chief Operating Officer
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December 8, 2010
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/S/ Timothy P. Mihalick
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Trustee, President and Chief Executive Officer
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Timothy P. Mihalick
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(Principal Executive Officer)
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December 8, 2010
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/S/ Diane K. Bryantt
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Senior Vice President and Chief Financial Officer
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Diane K. Bryantt
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(Principal Financial and Accounting Officer)
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December 8, 2010
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By:
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IRET Properties, a North Dakota Limited Partnership, Plan Administrator
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/s/Timothy P. Mihalick
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Name:
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Timothy P. Mihalick
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Title:
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President & Chief Executive Officer
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Exhibit Number:
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Description of Exhibit
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4.1
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Articles of Amendment and Third Restated Declaration of Trust of Investors Real Estate Trust (incorporated by reference to the Company’s Current Report on Form 8-K, filed with the SEC on September 19, 2007).
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4.2
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Third Restated Trustees’ Regulations (Bylaws) (incorporated by reference to the Company’s Current Report on Form 8-K, filed with the SEC on May 16, 2007).
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5.1
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Opinion of Pringle & Herigstad, P.C.
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5.2*
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Opinion letter, dated March 31, 2008, issued by the Internal Revenue Service to First Western Bank & Trust, the prototype sponsor of the form of plan document used for the Investors Real Estate Trust 401(k) Retirement Plan.
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23.1
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Consent of Deloitte & Touche LLP
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23.2
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Consent of Pringle & Herigstad, P.C. (included in Exhibit 5.1)
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99.1
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Investors Real Estate Trust Retirement Plan
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ACP Test Safe Harbor Matching Contributions
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1
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Actual Contribution Percentage (ACP)
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1
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Actual Deferral Percentage (ADP)
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1
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Adopting Employer
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1
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Adoption Agreement
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1
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ADP Test Safe Harbor Contributions
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1
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Alternate Payee
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1
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Annual Additions
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1
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Annuity Starting Date
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1
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Basic Matching Contributions
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2
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Basic Plan Document
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2
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Beneficiary
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2
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Break in Eligibility Service
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2
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Break in Vesting Service
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2
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Catch-Up Contributions
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2
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Code
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2
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Compensation
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2
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Contributing Participant
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4
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Contribution Percentage
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4
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Contribution Percentage Amounts
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4
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Custodian
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4
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Deductible Employee Contributions
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4
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Deemed IRA
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4
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Deemed IRA Contributions
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4
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Deemed IRA Participant
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4
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Defined Contribution Dollar Limitation
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4
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Designated Beneficiary
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4
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Determination Date
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5
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Determination Period
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5
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Direct Rollover
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5
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Directed Trustee
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5
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Disability
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5
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Discretionary Trustee
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5
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Distribution Calendar Year
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5
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Domestic Relations Order
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5
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Earliest Retirement Age
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5
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Early Retirement Age
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5
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Earned Income
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5
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Effective Date
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5
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Elapsed Time
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6
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Election Period
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6
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Elective Deferrals
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6
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Eligibility Computation Period
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6
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Eligible Employee
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7
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Eligible Employer for SIMPLE 40 l(k) Plan
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7
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Eligible Participant
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7
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Eligible Retirement Plan
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7
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Eligible Rollover Distribution
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7
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Employee
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7
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Employer
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8
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Employer Contribution
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8
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Employer Money Purchase Pension Contribution
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8
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Employer Target Benefit Pension Contribution
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8
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Employer Profit Sharing Contribution
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8
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Employment Commencement Date
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8
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Enhanced Matching Contributions
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8
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Entry Dates
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8
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ERISA
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8
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Excess Aggregate Contributions
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8
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Excess Annual Additions
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8
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Excess Contributions
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8
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Excess Elective Deferrals
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8
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Fiduciary
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9
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Forfeiture
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9
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||
Fund
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9
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Highest Average Compensation
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9
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Highly Compensated Employee
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9
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Hours of Service
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9
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Indirect Rollover
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10
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Individual Account
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10
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Investment Fiduciary
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10
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Investment Fund
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10
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IRA Holder
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10
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IRA Trustee (or Custodian)
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10
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Key Employee
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10
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Leased Employee
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10
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Life Expectancy
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10
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Limitation Year
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11
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Master or Prototype Plan
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11
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Matching Contribution
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11
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Maximum Permissible Amount
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11
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Month of Eligibility Service
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11
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Nondeductible Employee Contributions
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11
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Normal Retirement Age
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11
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Owner-Employee
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11
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Participant
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11
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Participant's Benefit
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11
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Permissive Aggregation Group
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12
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Plan
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12
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Plan Administrator
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12
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Plan Sequence Number
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12
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Plan Year
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12
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Pre-Age 35 Waiver
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12
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Pre-Tax Elective Deferrals
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12
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Present Value
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12
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Prior Plan
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12
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Projected Annual Benefit
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12
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Prototype Sponsor
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12
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Qualified Domestic Relations Order
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13
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Qualified Election
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13
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Qualified Joint and Survivor Annuity
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13
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Qualified Matching Contributions
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14
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Qualified Nonelective Contributions
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14
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Qualified Preretirement Survivor Annuity
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14
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Qualifying Contributing Participant
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14
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Qualifying Employer Real Property
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14
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Qualifying Employer Security(ies)
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14
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Qualifying Participant
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14
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Recipient
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14
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Required Aggregation Group
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14
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Required Beginning Date
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14
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Roth Elective Deferrals
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15
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Roth IRA
|
15
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Safe Harbor CODA
|
15
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Safe Harbor Nonelective Contributions
|
15
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Self-Employed Individual
|
15
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Separate Fund
|
15
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Severance from Employment
|
15
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SIMPLE 40 l(k) Year
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15
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SIMPLE IRA
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15
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Spouse
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15
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Straight Life Annuity
|
15
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Taxable Wage Base
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15
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Termination of Employment
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15
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Top-Heavy Plan
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15
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Traditional IRA
|
16
|
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Trustee
|
16
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Valuation Date
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16
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Vested
|
16
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Vested Account Balance
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16
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Year of Eligibility Service
|
16
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Year of Vesting Service
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16
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|
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||
SECTION ONE: EFFECTIVE DATES
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16
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SECTION TWO: ELIGIBILITY REQUIREMENTS
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16
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2.01
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Eligibility to Participate
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16
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2.02
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Plan Entry
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17
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2.03
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Transfer To or From Ineligible Class
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17
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2.04
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Return as a Participant After Break in Eligibility Service
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17
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2.05
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Determinations Under This Section
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17
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5.05
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Terms of Employment
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17
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SECTION THREE: CONTRIBUTIONS
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18
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3.01
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Elective Deferrals
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18
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3.02
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Matching Contributions
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20
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3.03
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Safe Harbor CODA
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20
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3.04
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Employer Contributions
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21
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3.05
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Qualified Nonelective Contributions
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28
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3.06
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Qualified Matching Contributions
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29
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3.07
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Rollover Contributions
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29
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3.08
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Transfer Contributions
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29
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3.09
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Deductible Employee Contributions
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30
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3.10
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Nondeductible Employee Contributions
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30
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3.11
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Other Limitations on SIMPLE 401(k) Contributions
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30
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3.12
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Limitation on Allocations
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30
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3.13
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Actual Deferral Percentage Test (ADP)
|
32
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3.14
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Actual Contribution Percentage Test (ACP)
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33
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3.15
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Deemed IRAs
|
35
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SECTION FOUR: VESTING AND FORFEITURES
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39
|
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4.01
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Determining the Vested Portion of Participant Individual Accounts
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39
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4.02
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100 Percent Vesting of Certain Contributions
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41
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4.03
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Forfeitures and Vesting of Matching Contributions
|
42
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SECTION FIVE: DISTRIBUTIONS AND LOANS TO PARTICIPANTS
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42
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5.01
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Distributions
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42
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5.02
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Form of Distribution to a Participant
|
46
|
5.03
|
Distributions Upon the Death of a Participant
|
46
|
5.04
|
Form of Distribution to Beneficiaries
|
47
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5.05
|
Required Minimum Distribution Requirements
|
47
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5.06
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Annuity Contracts
|
50
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5.07
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Distributions in-Kind
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50
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5.08
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Procedure for Missing Participants or Beneficiaries
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50
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5.09
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Claims Procedures
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50
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5.10
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Joint and Survivor Annuity Requirements
|
51
|
5.11
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Liability for Withholding on Distributions
|
52
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5.12
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Distribution of Excess Elective Deferrals
|
52
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5.13
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Distribution of Excess Contributions
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53
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5.14
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Distribution of Excess Aggregate Contributions
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53
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5.15
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Recharacterization
|
54
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5.16
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Loans To Participants
|
54
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SECTION SIX: DEFINITIONS
|
55
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SECTION SEVEN: MISCELLANEOUS
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55
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7.01
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The Fund
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55
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7.02
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Individual Accounts
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56
|
7.03
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Powers and Duties of the Plan Administrator
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56
|
7.04
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Expenses and Compensation
|
57
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7.05
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Information from Employer
|
57
|
7.06
|
Plan Amendments
|
58
|
7.07
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Plan Merger or Consolidation
|
59
|
7.08
|
Permanency
|
59
|
7.09
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Method and Procedure for Termination
|
59
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7.10
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Continuance of Plan by Successor Employer
|
59
|
7.11
|
Failure of Plan Qualification
|
59
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7.12
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Governing Laws and Provisions
|
60
|
7.13
|
State Community Property Laws
|
60
|
7.14
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Headings
|
60
|
7.15
|
Gender and Number
|
60
|
7.16
|
Standard of Fiduciary Conduct
|
60
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7.17
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General Undertaking of all Parties
|
60
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7.18
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Agreement Binds Heirs, Etc
|
60
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7.19
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Determination of Top-Heavy Status
|
60
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7.20
|
Inalienability of Benefits
|
61
|
7.21
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Bonding
|
61
|
7.22
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Investment Authority
|
62
|
7.23
|
Procedures and Other Matters Regarding Domestic Relations Orders
|
64
|
7.24
|
Indemnification of Prototype Sponsor
|
64
|
7.25
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Military Service
|
64
|
SECTION EIGHT: TRUSTEE AND CUSTODIAN
|
65
|
|
8.01
|
Financial Organization as Custodian
|
65
|
8.02
|
Trustee
|
67
|
8.03
|
Compensation and Expenses
|
69
|
8.04
|
No Obligation to Question Data
|
69
|
8.05
|
Resignation
|
69
|
8.06
|
Degree of Care-Limitations of Liability
|
70
|
8.07
|
Indemnification of Trustee and Custodian
|
71
|
8.08
|
Miscellaneous
|
71
|
SECTION NINE: ADOPTING EMPLOYER SIGNATURE
|
71
|
A.
|
General Definition
|
1.
|
W-2 wages - Compensation is defined as information required to be reported under Code Sections 6041, 6051, and 6052 (wages, tips, and other compensation as reported on Form W-2). Compensation is further defined as wages within the meaning of Code Section 3401 (a) and all other payments of compensation to an Employee by the Employer (in the course of the Employer's trade or business) for which the Employer is required to furnish the Employee a written statement under Code Sections 6041(d), 6051(a)(3), and 6052. Compensation must be determined without regard to any rules in Code Section 3401 (a) that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Code Section 3401(a)(2)).
|
2.
|
Section 3401 (a) wages - Compensation is defined as 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 340I(a)(2)).
|
3.
|
415 safe-harbor compensation - Compensation is defined as wages, salaries, and fees for professional services and other amounts received (without regard to whether or not an amount is paid in cash) for personal services actually rendered in the course of employment with the Employer maintaining the Plan to the extent that the amounts are includible in gross income (including, but not limited to, commissions paid to 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 Treasury Regulation 1.62-2(c)), and excluding the following:
|
|
a.
|
Employer contributions to a plan of deferred compensation which are not includible in the Employee's gross income for the taxable year in which contributed, or employer contributions under a simplified employee pension plan to the extent such contributions are deductible by the Employee, or any distributions from a plan of deferred compensation;
|
|
b.
|
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;
|
|
d.
|
Other amounts which received special tax benefits, or contributions made by the Employer (whether or not under a salary reduction agreement) towards the purchase of an annuity contract described in Code Section 403(b) (whether or not the contributions are actually excludable from the gross income of the Employee).
|
a.
|
relates to the provision of child support, alimony payments, or marital property rights to a spouse, former spouse, child, or other dependent of a Participant, and
|
A.
|
Special Rules Where Elapsed Time Method is Being Used
|
|
a.
|
any distribution that is one of a series of substantially equal periodic payments (paid at least annually) made for the life (or Life Expectancy) of the Recipient or the joint lives (or joint life expectancies) of the Recipient and the Recipient's Designated Beneficiary, or for a specified period often years or more;
|
|
b.
|
any distribution to the extent such distribution is required under Code Section 401(a)(9);
|
|
c.
|
the portion of any other distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities);
|
|
d.
|
any hardship distribution described in Plan Section 5.01(C)(2): and
|
|
e.
|
any other distribution(s) that is reasonably expected to total less than $200 during a year.
|
|
a.
|
the aggregate Contribution Percentage Amounts taken into account in computing the numerator of the Contribution Percentage actually made on behalf of Highly Compensated Employees for such Plan Year, over
|
|
b.
|
the maximum Contribution Percentage Amounts permitted by the ACP test (determined by hypothetically reducing contributions made on behalf of Highly Compensated Employees in order of their Contribution Percentages beginning with the highest of such percentages).
|
|
a.
|
the aggregate amount of Employer Contributions actually taken into account in computing the ADP of Highly Compensated Employees for such Plan Year, over
|
|
b.
|
the maximum amount of such contributions permitted by the ADP test (determined by hypothetically reducing contributions made on behalf of Highly Compensated Employees in order of the ADPs, beginning with the highest of such percentages).
|
A.
|
General Rules for Crediting Hours of Service
|
1.
|
Each hour for which an Employee is paid, or entitled to payment, for the performance of duties for the Employer. These hours will be credited to the Employee for the computation period in which the duties are performed; and
|
2.
|
Each hour for which an Employee is paid, or entitled to payment, by the Employer on account of a period of time during which no duties are performed (irrespective of whether the employment relationship has terminated) due to vacation, holiday, illness, incapacity (including Disability), layoff, jury duty, military duty or leave of absence. No more than 501 Hours of Service will be credited under this paragraph for any single continuous period (whether or not such period occurs in a single computation period). Hours under this paragraph shall be calculated and credited pursuant to Labor Regulation Section 2530.200b-2 which is incorporated herein by this reference.
|
3.
|
Each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by the Employer. The same Hours of Service will not be credited both under paragraph (1) or paragraph (2), as the case may be, and under this paragraph (3). 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.
|
4.
|
Solely for purposes of determining whether a Break in Eligibility Service or a Break in Vesting Service has occurred in a computation period (the computation period for purposes of determining whether a Break in Vesting Service has occurred is the Plan Year or other vesting computation period described in the definition of a Year of Vesting Service), an individual who is absent from work for maternity or paternity reasons shall receive credit for the Hours of Service which would otherwise have been credited to such individual but for such absence, or in any case in which such hours cannot be determined, eight Hours of Service per day of such absence. For purposes of this paragraph, an absence from work for maternity or paternity reasons means an absence 1) by reason of the pregnancy of the individual. 2) by reason of a birth of a child of the individual, 3) by reason of the placement of a child with the individual in connection with the adoption of such child by such individual, or 4) for purposes of caring for such child for a period beginning immediately following such birth or placement. The Hours of Service credited under this paragraph shall be credited 1) in the Eligibility Computation Period or Plan Year or other vesting computation period described in the definition of a Year of Service in which the absence begins if the crediting is necessary to prevent a Break in Eligibility Service or a Break in Vesting Service in the applicable period, or 2) in all other cases, in the following Eligibility Computation Period or Plan Year or other vesting computation period described in the definition of a Year of Service.
|
5.
|
Hours of Service will be credited for employment with other members of an affiliated service group (under Code Section 414(m)), a controlled group of corporations (under Code Section 414(b)), or a group of trades or businesses under common control (under Code Section 414(c)) of which the Adopting Employer is a member, and any other entity required to be aggregated with the Employer pursuant to Code Section 414(o) and the regulations thereunder.
|
6.
|
Where the Employer maintains the plan of a predecessor employer, service for such predecessor employer shall be treated as service for the Employer. If the Employer does not maintain the plan of a predecessor employer, service for such predecessor employer will not be treated as service for the Employer unless specifically elected in the Adoption Agreement.
|
8.
|
Hours of Service shall apply unless the Adopting Employer has indicated in the Adoption Agreement that a method other than Hours of Service will be used for determining service.
|
B.
|
Changes In Methods of Crediting Service
|
|
b.
|
the Participant's Compensation for the current Limitation Year and all other relevant factors used to determine benefits under the Plan will remain constant for all future Limitation Years.
|
1.
|
that creates or recognizes the existence of an Alternate Payee's rights to, or assigns to an Alternate Payee the right to, receive all or a portion of the benefits payable with respect to a Participant under the Plan, and
|
1.
|
the name and last known mailing address (if any) of the Participant and the name and mailing address of each Alternate Payee covered by the order,
|
2.
|
the amount or percentage of the Participant's benefits to be paid by the Plan to each such Alternate Payee, or the manner in which such amount or percentage is to be determined,
|
3.
|
does not require benefit to an Alternate Payee that are required to be paid to another Alternate Payee under another order previously determined to be a Qualified Domestic Relations Order.
|
1.
|
on or after the date on which the Participant attains (or would have attained) the earliest retirement age as defined in Code Section 414(p)(4)(B),
|
3.
|
in any form in which such benefits may be paid under the Plan to the Participant (other than in a Qualified Joint and Survivor Annuity) with respect to the Alternate Payee and their subsequent spouse.
|
(a)
|
the Required Beginning Date of a Participant is April 1 of the calendar year following the calendar year in which the Participant attains age 70½;
|
(b)
|
the Required Beginning Date of a Participant is April 1 of the calendar year following the calendar year in which the Participant attains age 70½ , except that benefit distributions to a Participant (other than a five-percent owner) with respect to benefits accrued after the later of the adoption or effective date of an amendment to the Plan that implements the changes to the Required Minimum Distribution rules of this Definition must commence by the later of the April 1 of the calendar year following the calendar year in which the Participant attains age 70½ or retires; or
|
(c)
|
the Required Beginning Date of a Participant is April 1 of the calendar year following the later of the calendar year in which the Participant attains age 70!/2 or the calendar year in which the Participant retires except that benefit distributions to a five-percent owner must commence by the April 1 of the calendar year following the calendar year in which the Participant attains age 70!/2;
|
(1)
|
any Participant (other than a five-percent owner) attaining age 70½ after 1995 may elect by the April 1 of the calendar year following the year in which the Participant attained age 70½, (or by December 31, 1997, in the case of a Participant attaining age 70½ in 1996) to defer distributions until the calendar year following the calendar year in which the Participant retires. If no such election is made the Participant will begin receiving distributions by April 1 of the calendar year following the year in which the Participant attained age 70½ (or by December 31, 1997, in the case of a Participant attaining age 70½ in 1996);
|
(2)
|
any Participant (other than a five-percent owner) attaining age 70½ before 1997 may elect to stop distributions and recommence by April 1 of the calendar year following the year in which the Participant retires. To satisfy the Joint and Survivor Annuity Requirements described in Section 5.10, the requirements in Notice 97-75, Q&A-8. must be satisfied for any Participant who elects to stop distributions. There is either (as elected by the Employer in the Adoption Agreement)
|
A.
|
Union Employees - Employees included in a unit of Employees covered by a collective bargaining agreement between the Employer and Employee representatives, if retirement benefits were the subject of good faith bargaining and if two percent or less of the Employees who are covered pursuant to that agreement are professionals as defined in Treasury Regulation I.410(b)-9. For this purpose, the term "Employee representatives" does not include any organization in which more than half of the members are Employees who are owners, officers, or executives of the Employer.
|
|
B.
|
Non-resident Aliens - Employees who are non-resident aliens (within the meaning of Code Section 7701(b)(l)(B)) who received no earned income (within the meaning of Code Section 91 l(d)(2)) from the Employer which constitutes income from sources within the United States (within the meaning of Code Section 861(a)(3)).
|
|
C.
|
Acquired Employees - Employees who became Employees as the result of certain acquisitions or dispositions as described under Code Section 410(b)(6)(C). Such Employees will be excluded from participation during the transition period beginning on the date of the change in the members of the group and ending on the last day of the first Plan Year beginning after the date of the change. A transaction under Code Section 410(b)(6)(C) is an asset or stock acquisition, merger, or similar transaction involving a change in the employer of the employees of a trade or business.
|
|
A.
|
Plan Restatement - If this Plan is an amendment or restatement of a Prior Plan, each Employee who was a Participant in the Prior Plan before the Effective Date shall continue to be a Participant in this Plan.
|
|
B.
|
Effective Date - An Employee will become a Participant in the Plan as of the Effective Date if the Employee has met the eligibility requirements of Plan Section 2.01 as of such date. After the Effective Date, each Employee will become a Participant on the first Entry Date coinciding with or following the date the Employee satisfies the eligibility requirements of Plan Section 2.01, unless the Adopting Employer selects retroactive Entry Dates in the Adoption Agreement.
|
|
C.
|
Notification - The Plan Administrator shall notify each Employee who becomes eligible to be a Participant under this Plan and shall furnish the Employee with the enrollment forms or other documents which are required of Participants. Such notification shall be in writing (or in any other form permitted under rules promulgated by the IRS or DOL). The eligible Employee shall execute such forms or documents and make available such information as may be required in the administration of the Plan.
|
|
A.
|
Employee Not A Participant Before Break - If an Employee incurs a Break in Eligibility Service before satisfying the Plan's eligibility requirements, such Employee's Years of Eligibility Service before such Break in Eligibility Service will not be taken into account.
|
|
B.
|
Employee A Participant Before Break-If a Participant incurs a Break in Eligibility Service, such Participant shall continue to participate in the Plan, or, if terminated, shall participate immediately following the date of reemployment, except as set forth in Plan Section 2.04(C).
|
|
C.
|
Rehire Hold-Out Rule - If elected in the Adoption Agreement, Years or Months of Eligibility Service that occur before a Break in Eligibility Service shall not be taken into account until the Participant (without regard to whether the Participant is Vested) has satisfied the Plan's Years or Months of Service Requirement after returning to employment. The Years or Months of Eligibility Service for purposes of the rehire hold-out rule will be measured in the same manner as the original Eligibility Computation Period except that it shall commence on the Participant's reemployment commencement date. The reemployment commencement date is the first day on which the Participant is credited with an Hour of Service for the performance of duties after reemployment. If a Participant completes the Years or Months of Eligibility Service requirements following reemployment in accordance with this paragraph, their active participation will be reinstated as of the reemployment commencement date. Notwithstanding the foregoing, Plan Section 2.04(B) will apply to Elective Deferrals.
|
|
A.
|
Requirements To Enroll As A Contributing Participant - Each Employee who satisfies the eligibility requirements specified in the Adoption Agreement for either Pre-Tax Elective Deferrals or Roth Elective Deferrals, if applicable, may enroll as a Contributing Participant with respect to the type of Elective Deferral for which they have satisfied the eligibility requirements, on the first Entry Date coinciding with or following the date the Employee satisfies the eligibility requirements, or if applicable, the first Entry Date following the date on which the Employee returns to the eligible class of Employees pursuant to Plan Section 2.03. A Participant who wishes to enroll as a Contributing Participant must deliver (either in writing or in any other form permitted by the IRS and the DOL) a salary reduction agreement (or agreement to make Nondeductible Employee Contributions) to the Plan Administrator except as set forth in Plan Section 3.01(E) below. Except for occasional, bona fide administrative considerations as set forth in the Treasury Regulations, contributions made pursuant to such election cannot precede the earlier of 1) the date on which services relating to the contribution are performed, and 2) the date on which the Compensation that is subject to the election would be payable to the Employee in the absence of an election to defer. Any limits on Elective Deferrals designated by the Employer in Adoption Agreement Section Three may be determined either periodically throughout the Plan Year (e.g., each payroll period) or at the end of the Plan Year so long as the determination is made in a uniform and nondiscriminatory manner.
|
|
B.
|
Ceasing Elective Deferrals - Except as otherwise provided in the Adoption Agreement, a Participant may cease Elective Deferrals (or Nondeductible Employee Contributions) and thus withdraw as a Contributing Participant as of any such times established by the Plan Administrator in a uniform and nondiscriminatory manner by revoking the authorization to the Employer to make Elective Deferrals (or Nondeductible Employee Contributions) on their behalf. A Participant who desires to withdraw as a Contributing Participant shall give notice of withdrawal to the Plan Administrator at least 30 days (or such shorter period as the Plan Administrator shall permit in a uniform and nondiscriminatory manner) before the effective date of withdrawal. A Participant shall cease to be a Contributing Participant upon their Termination of Employment, or on account of termination of the Plan. Notwithstanding anything in this Plan to the contrary, each Employee who has entered into a salary reduction agreement under a SIMPLE 401(k) Plan may terminate such agreement at any time during the year.
|
|
C.
|
Return As A Contributing Participant After Ceasing Elective Deferrals - Except as otherwise provided in the Adoption Agreement, a Participant who has withdrawn as a Contributing Participant in Plan Section 3.01(B) (or because the Participant has taken a hardship distribution pursuant to Plan Section 5.01(C)(2)(b)) may not again become a Contributing Participant until the first day of the Plan Year and the first day of the seventh month of the Plan Year following such withdrawal, unless the Plan Administrator, in a uniform and nondiscriminatory manner, permits withdrawing Participants to resume their status as Contributing Participants sooner (provided that Participants who take withdrawals pursuant to Plan Section 5.01(C)(2)(b) shall be subject to the conditions of that Section).
|
|
D.
|
Changing Elective Deferral Amounts - A Contributing Participant or a Participant who has met the eligibility requirements in the Adoption Agreement but who is not currently making Elective Deferrals (or Nondeductible Employee Contributions), may modify their salary reduction agreement (or agreement to make Nondeductible Employee Contributions) to increase or decrease (within the limits placed on Elective Deferrals or Nondeductible Employee Contributions in the Adoption Agreement) the amount of their Compensation deferred into the Plan or change the type of their future Elective Deferrals (Roth or Pre-Tax), if applicable. Except as otherwise provided in the Adoption Agreement, such modification may be made as of such times established by the Plan Administrator in a uniform and nondiscriminatory manner. A Contributing Participant who desires to make such a modification shall complete and deliver (either in writing or in any other form permitted by the IRS and the DOL) a new salary reduction agreement (or agreement to make Nondeductible Employee Contributions to the Plan Administrator). The Plan Administrator may prescribe such uniform and nondiscriminatory rules it deems appropriate to cam' out the terms of this Plan Section 3.01(D).
|
|
E.
|
Automatic Elective Deferrals and Automatic Elective Deferral Increases
|
|
1.
|
Automatic Elective Deferrals - Each Employee who satisfies the eligibility requirements specified in the Adoption Agreement for Elective Deferrals will be given a reasonable opportunity to enroll as a Contributing Participant. Notwithstanding the foregoing, if the Adopting Employer so elected in the Adoption Agreement, eligible Employees who fail to provide the Employer a salary reduction agreement indicating either 1) their desire not to make Elective Deferrals, or 2) the amount or percentage of Compensation to be deferred, will automatically have the amount or percentage of Compensation listed in the Adoption Agreement withheld from their Compensation and contributed as an Elective Deferral. Elective Deferrals for such Contributing Participants shall continue at the rate specified in the Adoption Agreement until 1) the Contributing Participant provides the Employer a salary reduction agreement (either in writing or in any other form permitted under rules promulgated by the IRS and the DOL) to the contrary, or unless 2) the Employer reduces or ceases Elective Deferrals for such Participant pursuant to Plan Section 3.13(B)(8), or 3) Elective Deferrals are increased in accordance with Plan Section 3.01(E)(2). Contributions made pursuant to this Plan Section 3.01(E) will be characterized as Pre-Tax Elective Deferrals unless designated as Roth Elective Deferrals in the Adoption Agreement and will not be characterized as Nondeductible Employee Contributions.
|
|
2.
|
Automatic Elective Deferral Increases - If the Adopting Employer so elects in the Adoption Agreement, the Elective Deferral percentage or amount for Contributing Participants will be adjusted automatically by the Employer in the increments and time periods stated in the Adoption Agreement. Automatic Elective Deferral increases will be initiated by the Adopting Employer only for those Contributing Participants who fail to provide the Employer a salary reduction agreement on or before the date indicated in the Adoption Agreement and who are automatically enrolled pursuant to this Plan Section 3.01(E)(1) unless otherwise elected on the Adoption Agreement. In addition to the foregoing, the Plan Administrator, in a uniform and nondiscriminatory manner, may establish operational procedures to enable all Contributing Participants, including those who were not automatically enrolled as Contributing Participants pursuant to Plan Section 3.01(E)(1), to elect to have their Elective Deferrals automatically increased.
|
|
F.
|
Pre-Tax vs. Roth Elective Deferrals - If the Adopting Employer so elects in the Adoption Agreement, each Employee who enrolls as a Contributing Participant may specify whether their Elective Deferrals are to be characterized as Pre-Tax Elective Deferrals, Roth Elective Deferrals, or a specified combination. A Contributing Participant's election will remain in effect until superseded by another election. Elective Deferrals contributed to the Plan as one type, either Roth or Pre-Tax, may not later be reclassified as the other type. A Contributing Participant's Roth Elective Deferrals will be deposited in the Contributing Participant's Roth Elective Deferral subaccount in the Plan. No contributions other than Roth Elective Deferrals and properly attributable earnings will be credited to each Contributing Participant's Roth Elective Deferral account, and gains, losses, and other credits or charges will be allocated on a reasonable and consistent basis to such subaccount.
|
|
G.
|
Catch-up Contributions - Unless elected otherwise in the Adoption Agreement, all Employees who are eligible to make Elective Deferrals under this Plan and who are age 50 or older by the end of their taxable year will be eligible to make Catch-up Contributions. Catch-up Contributions are not subject to the limits on Annual Additions under Code Section 415. are not counted in the ADP test, and are not counted in determining the minimum allocation under Code Section 416 (but Catch-up Contributions made in prior years are counted in determining whether the Plan is top-heavy). Provisions in the Plan relating to Catch-up Contributions apply to Elective Deferrals made after 2001.
|
|
H.
|
Elective Deferrals to a SIMPLE 401(k) Plan - Notwithstanding anything in this Plan to the contrary, if the Employer is an Eligible Employer for SIMPLE 401(k) Plans and has established a SIMPLE 401(k) Plan, each Eligible Employee may deliver (either in writing or in any other form permitted by the IRS and the DOL) a salary reduction election and have their Compensation reduced for the SIMPLE 401(k) Year in any amount selected by the Employee subject to the limitation described below. The Employer will make Elective Deferral contributions to this Plan in the amount by which the Employee's Compensation has been reduced.
|
|
I.
|
SIMPLE 401(k) Notice Requirements - The Employer will notify each Eligible Employee before the 60-day election period described in Plan Section 3.01(H) that they can complete a salary reduction agreement or modify a prior salary reduction agreement during that period. The notification must indicate whether the Employer will provide the three-percent Matching Contribution or a two-percent nonelective contribution described in Plan Section 3.02.
|
|
3.02
|
MATCHING CONTRIBUTIONS
|
|
A.
|
ADP Test Safe Harbor Contributions - The Employer will make the ADP Test Safe Harbor Contributions, if any, indicated in the Adoption Agreement on behalf of each Eligible Employee unless such contributions are otherwise limited in the Adoption Agreement. If the Adopting Employer so provides in the Adoption Agreement, the ADP Test Safe Harbor Contributions will be made to the defined contribution plan indicated in the Adoption Agreement and not to this Plan. However, even though another plan is listed in the Adoption Agreement, such contributions will be made to this Plan unless 1) each Eligible Employee under this Plan is also eligible under the other plan, and 2) the other plan has the same Plan Year as this Plan. The Employer may make ADP Test Safe Harbor Contributions at the same time as it contributes Elective Deferrals or at any other time as permitted by law and regulation. The proper ADP Test Safe Harbor Contribution amount may be determined by the Employer at any time during a Plan Year, including, but not limited to, such time as ADP Test Safe Harbor Contributions are delivered to the Trustee (or Custodian, if applicable)) or at the end of the Plan Year so long as the amount of ADP Test Safe Harbor Contributions is determined in a uniform and nondiscriminatory manner.
|
|
B.
|
ACP Test Safe Harbor Matching Contributions - In addition to the ADP Test Safe Harbor Contributions described in the Definition Section of the Plan, the Employer will make the ACP Test Safe Harbor Matching Contributions, if any, indicated in the Adoption Agreement on behalf of each Eligible Employee for the Plan Year. The Employer may make ACP Test Safe Harbor Contributions at the same time as it contributes Elective Deferrals or at any other time as permitted by law and regulation. The proper ACP Test Safe Harbor Contribution amount may be determined by the Employer at any time during a Plan Year, including, but not limited to, such time as ACP Test Safe Harbor Contributions are delivered to the Trustee (or Custodian, if applicable) or at the end of the Plan Year so long as the amount of ACP Test Safe Harbor Contributions is determined in a uniform and nondiscriminatory manner.
|
|
C.
|
Notice Requirement - At least 30 days, but not more than 90 days, or any other reasonable period before the beginning of the Plan Year (or such other times if permitted by the IRS), the Employer will provide each Eligible Employee a comprehensive notice of the Employee's rights and obligations under the Plan, written in a manner calculated to be understood by the average Eligible Employee. If 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 90 days before the Employee becomes eligible but not later than the date the Employee becomes eligible. Notwithstanding the foregoing, the Employer may change this notice requirement pursuant to rules promulgated by the IRS.
|
|
D.
|
Election Periods - In addition to any other election periods provided under the Plan, each Eligible Employee may make or modify a deferral election during the 30-day period immediately following receipt of the notice described in Plan Section 3.03(C) above. Notwithstanding the foregoing, the Employer may change the election periods described above pursuant to rules promulgated by the IRS.
|
|
A.
|
Obligation to Contribute - Except as otherwise indicated in the Adoption Agreement, the Employer may contribute an amount to be determined from year to year. If this Plan is a profit sharing plan, the Employer may, in its sole discretion, make contributions without regard to current or accumulated earnings or profits unless otherwise indicated in the Adoption Agreement.
|
|
B.
|
Allocation Formula and the Right to Share in the Employer Contribution
|
|
1.
|
General - Except as otherwise indicated in the Adoption Agreement, Employer Profit Sharing Contributions shall be allocated to all Qualifying Participants using a pro rata allocation formula. Under the pro rata allocation formula, Employer Profit Sharing Contributions shall be allocated to the Individual Accounts of Qualifying Participants in the ratio that each Qualifying Participant's Compensation for the Plan Year bears to the total Compensation of all Qualifying Participants for the Plan Year. The Employer Contribution for any Plan Year will be deemed allocated to each Participant's Individual Account as of the last day of that Plan Year. Notwithstanding the foregoing, Employer Profit Sharing Contributions, Employer Money Purchase Pension Contributions, and Employer Target Benefit Pension Contributions shall be allocated to the Plan on behalf of each Participant who has incurred a Disability and who is a non-Highly Compensated Employee if so specified in the Adoption Agreement.
|
|
2.
|
Special Rules for Integrated Plans -
|
|
a.
|
Excess Integrated Allocation Formula - If the Adopting Employer has selected the excess integrated allocation formula in the Adoption Agreement, subject to the overall permitted disparity limits, Employer Profit Sharing Contributions shall be allocated as follows (the Employer may start with Step 3 if this Plan is not top-heavy).
|
|
Step 1.
|
Employer Profit Sharing Contributions shall first be allocated pro rata to Qualifying Participants in the manner described in Plan Section 3.04(B)(1). The percent so allocated under Step 1 shall not exceed three percent of each Qualifying Participant's Compensation.
|
|
Step 2.
|
Any Employer Profit Sharing Contributions remaining after the allocation in Step 1 shall be allocated to each Qualifying Participant's Individual Account in the ratio that each Qualifying Participant's Compensation for the Plan Year in excess of the integration level bears to all Qualifying Participants' Compensation in excess of the integration level, but not in excess of three percent of each Qualifying Participant's Compensation. For purposes of this Step 2, in the case of any Qualifying Participant who has exceeded the cumulative permitted disparity limit described below, such Qualifying Participant's total compensation for the Plan Year will be taken into account.
|
|
Step 3.
|
Any Employer Profit Sharing Contributions remaining after the allocation in Step 2 shall be allocated to each Qualifying Participant's Individual Account in the ratio that the sum of each Qualifying Participant's total Compensation and Compensation in excess of the integration level bears to the sum of all Qualifying Participants' total Compensation and Compensation in excess of the integration level, but not in excess of the applicable profit sharing maximum disparity rate as described below. For purposes of this Step 3, in the case of any Qualifying Participant who has exceeded the cumulative permitted disparity limit described below, two times such Qualifying Participant's total compensation for the Plan Year will be taken into account.
|
|
Step 4.
|
Any Employer Profit Sharing Contributions remaining after the allocation in Step 3 shall be allocated pro rata to Qualifying Participants in the manner described in Plan Section 3.04(B)(1).
|
|
b.
|
Base Integrated Allocation Formula - If the Adopting Employer has selected the base integrated allocation formula in the Adoption Agreement, subject to the overall permitted disparity limits, Employer Profit Sharing Contributions shall be allocated as follows. The Base Integrated Allocation Formula is not available for years in which the Plan is top heavy.
|
|
Step 1.
|
Employer Profit Sharing Contributions shall first be allocated to each Qualifying Participant's Individual Account in the ratio that the sum of each Qualifying Participant's total Compensation and Compensation in excess of the integration level bears to the sum of all Qualifying Participants' total Compensation and Compensation in excess of the integration level, but not in excess of the non-top heavy profit sharing maximum disparity rate as described below.
|
|
Step 2.
|
Any Employer Profit Sharing Contributions remaining after the allocation in Step 1 shall be allocated pro rata to Qualifying Participants in the manner described in Plan Section 3.04(B)(1).
|
|
c.
|
Maximum Disparity Rate - If the Adopting Employer has selected the integrated contribution or allocation formula in the Adoption Agreement, the integration level shall be defined in the Adoption Agreement. If the Adopting Employer has selected the integrated contribution or allocation formula and no integration level is selected in the Adoption Agreement, the Taxable Wage Base will be the integration level. The maximum disparity rate shall be determined in accordance with the following table.
|
Integration Level
|
Money Purchase
|
Top-Heavy Profit Sharing
|
Non-Top-Heavy Profit Sharing
|
|||||||||
Taxable Wage Base (TWB)
|
5.7 | % | 2.7 | % | 5.7 | % | ||||||
More than $0 but not more than 20 percent of TWB
|
5.7 | % | 2.7 | % | 5.7 | % | ||||||
More than 20 percent of TWB but not more than 80 percent of TWB
|
4.3 | % | 1.3 | % | 4.3 | % | ||||||
More than 80 percent of TWB but less than TWB
|
5.4 | % | 2.4 | % | 5.4 | % |
|
d.
|
Annual overall permitted disparity limit: Notwithstanding the preceding paragraphs, for any Plan Year this Plan benefits any Participant who benefits under another qualified plan or simplified employee pension, as defined in Code Section 408(k), maintained by the Employer that provides for permitted disparity (or imputes disparity), if this is a profit sharing plan, Employer Profit Sharing Contributions and forfeitures shall be allocated to the account of each Qualifying Participant in the ratio that such Qualifying Participant's total Compensation bears to the total Compensation of all Qualifying Participants. If this Plan is a money purchase pension plan, Employer Money Purchase Pension Contributions shall be made to the account of each Qualifying Participant in an amount equal to the excess contribution percentage multiplied by the Participant's total Compensation.
|
|
e.
|
Cumulative permitted disparity limit: Effective for Plan Years beginning on or after January 1, 1995, the cumulative permitted disparity limit for a Participant is 35 total cumulative permitted disparity years. Total cumulative permitted years means the number of years credited to the Participant for allocation or accrual purposes under this Plan, any other qualified plan or simplified employee pension plan (whether or not terminated) ever maintained by the Employer. For purposes of determining the Participant's cumulative permitted disparity limit, all years ending in the same calendar year are treated as the same year. If the Participant has not benefited under a defined benefit or target benefit plan for any year beginning on or after January' 1> 1994, the Participant has no cumulative disparity limit.
|
|
4.
|
Minimum Coverage Test - This paragraph shall apply to any nonstandardized Plan if, for any Plan Year, the Plan fails to satisfy the ratio percentage test described in Code Section 410(b)(l) as of the last day of any such Plan Year. The ratio percentage test is satisfied if, on the last day of the Plan Year, taking into account all Employees, or former Employees who were employed by the Employer on any day during the Plan Year, either the Plan benefits at least 70 percent of Employees who are not Highly Compensated Employees or the Plan benefits a percentage of Employees who are not Highly Compensated Employees which is at least 70 percent of the percentage of Highly Compensated Employees benefiting under the Plan. A Participant is treated as benefiting under the Plan for any Plan Year during which the Participant received or is deemed to receive an allocation in accordance with Code Section 1.410(b)-3(a). If the Plan fails the ratio percentage test, the Employer Contribution for the Plan Year will be allocated to Participants in the first class of Participants set forth below. If the Plan still fails, then the Employer Contribution will also be allocated to Participants in the next class and each succeeding class until the Plan satisfies the minimum coverage requirements. A class shall be covered only if necessary to satisfy those requirements. The classes, in order of priority, are as follows.
|
|
a.
|
Participants who are still employed on the last day of the Plan Year who have completed 90 percent of the number of Hours of Service to otherwise be a Qualifying Participant or Qualifying Contributing Participant, if applicable;
|
|
b.
|
Participants who are still employed on the last day of the Plan Year who have completed 80 percent of the number of Hours of Service to otherwise be a Qualifying Participant or Qualifying Contributing Participant, if applicable:
|
|
c.
|
Participants who are still employed on the last day of the Plan Year who have completed 70 percent of the number of Hours of Service to otherwise be a Qualifying Participant or Qualifying Contributing Participant, if applicable;
|
|
d.
|
Participants who are still employed on the last day of the Plan Year who have completed 60 percent of the number of Hours of Service to otherwise be a Qualifying Participant or Qualifying Contributing Participant, if applicable;
|
|
e.
|
Participants who are still employed on the last day of the Plan Year who have completed 50 percent of the number of Hours of Service to otherwise be a Qualifying Participant or Qualifying Contributing Participant, if applicable;
|
|
f.
|
Any Participant still employed on the last day of the Plan Year;
|
|
g.
|
Participants who are not employed on the last day of the Plan Year because the Participant has died, incurred a Disability, or attained Normal Retirement Age;
|
|
h.
|
Participants who are not employed on the last day of the Plan Year who have completed at least 1,000 Hours of Service during the Plan Year:
|
|
i.
|
Participants who are not employed on the last day of the Plan Year who have completed at least 750 Hours of Service for the Plan Year;
|
|
j.
|
Participants who are not employed on the last day of the Plan Year who have completed at least 500 Hours of Service for the Plan Year.
|
5.
|
Special Rule for Owner-Employees - If this Plan provides contributions or benefits for one or more Owner-Employees, contributions on behalf of any Owner-Employee may be made only with respect to the Earned Income of such Owner- Employee.
|
6.
|
Inclusion of Ineligible Employees - If any Employee who is not a Qualifying Participant is erroneously treated as a Qualifying Participant during a Plan Year, then, except as otherwise provided in Plan Section 3.04(F), the Employer will not be eligible to receive any portion of the contribution erroneously allocated to the Individual Account of the ineligible Employee. The Employer must correct the inclusion of ineligible employees using any method permitted under the Employee Plans Compliance Resolution System (EPCRS) or allowed by the IRS or DOL under regulations or other guidance. The EPCRS is currently described in IRS Revenue Procedure 2006-27.
|
7.
|
Exclusion of Eligible Participant - If the Plan is a profit sharing plan, and if in any Plan Year, any Participant is erroneously excluded and discovery of such exclusion is not made until after the Employer Contribution has been made and allocated, then the Employer must contribute for the excluded Participant the amount, including earnings thereon, which the Employer would have contributed for the Employee. The Employer must correct the exclusion of eligible employees using any method permitted under the Employee Plans Compliance Resolution System (EPCRS) or allowed by the IRS or DOL under regulations or other guidance. The EPCRS is currently described in IRS Revenue Procedure 2006-27.
|
8.
|
Cross-Tested Allocation Formula - If elected by the Adopting Employer in the Adoption Agreement, the Employer will determine the total amount of Employer Profit Sharing Contributions for each Plan Year and either (1) allocate such total amount to Participant groups (the "participant group allocation method"), or (2) allocate such total amount using age weighted allocation rates (the "age weighted allocation method"). Employer Profit Sharing Contributions will be allocated to each Qualifying Participant.
|
|
a.
|
Participant Group Allocation (New Comparability) Method - lf the Employer has elected the Participant group allocation method in the Adoption Agreement, either each Participant will constitute a "separate allocation group" for purposes of allocating Employer Profit Sharing Contributions or Participants will be divided into groups specified on the Adoption Agreement. Only a limited number of allocation rates (defined below) is permitted, and the number of allocation rates cannot be greater than the maximum allowable number of allocation rates. The maximum allowable number of allocation rates is equal to the sum of the allowable number of allocation rates for eligible non-Highly Compensated Employees and the allowable number of allocation rates for eligible Highly Compensated Employees. The allowable number of allocation rates for eligible Highly Compensated Employees is equal to the number of eligible Highly Compensated Employees, limited to 25. The allowable number of non-Highly Compensated Employee allocation rates depends on the number of eligible non-Highly Compensated Employees, limited to 25.
|
|
b.
|
Age Weighted Allocation Method – lf the age weighted allocation method is elected in the Adoption Agreement, the total Employer Profit Sharing Contribution will be allocated to each Qualifying Participant such that the equivalent benefit accrual rate for each Qualifying Participant is identical. The equivalent benefit accrual rate is the annual annuity commencing at the Qualifying Participant's testing age, expressed as a percentage of the Qualifying Participant's Compensation which is provided from the allocation of Employer Profit Sharing Contributions and forfeitures for the Plan Year, using standardized actuarial assumptions that satisfy Treasury Regulation 1.401(a)(4)-12. The Qualifying Participant's testing age is the later of Normal Retirement Age, or the Qualifying Participant's current age.
|
|
i.
|
If the age-weighted formula for allocations and the safe harbor requirements of Section 1.401(a)(4)-2(b)(3) of the Income Tax Regulations are selected in the Adoption Agreement, then, to the extent necessary, the following steps shall be taken:
|
(a)
|
Identify the Employees of the Employer who are not Highly Compensated Employees of such Employer who participate in the Plan and determine the average allocation rate for such group of Employees.
|
(b)
|
Identify the Employees of the Employer who are Highly Compensated Employees of such Employer who participate in the Plan and determine the average allocation rate for such group of Employees.
|
(c)
|
As of the date of allocation, determine that amount by which the average allocation rate for the group of Participants who are not Highly Compensated Employees is less than the average allocation rate of the group of the Participants who are Highly Compensated Employees.
|
(d)
|
Lower the aggregate allocation to all of the Highly Compensated Employees by the amount necessary to cause the average allocation rate of the Participants who are not Highly Compensated Employees (as determined after including the amount by which the Highly Compensated Employees' allocation is lowered and that is subsequently allocated to the Participants who are not Highly Compensated) to equal the average allocation rate of the Participants who are Highly Compensated Employees (as determined after the Highly Compensated Employees' allocation has been lowered).
|
(e)
|
Reallocate the aggregate amount of the contributions after the reduction in (d) above to the Participants who are Highly Compensated Employees using the allocation formula in the Adoption Agreement; provided that for purposes of this allocation, "Qualifying Participants" shall mean only those Participants who are Highly Compensated Employees and "Employer Profit Sharing Contributions" shall mean only those contributions allocated to Participants who are Highly Compensated Employees.
|
(f)
|
Reallocate the aggregate amount of the contributions after the increase in (d) above to the Participants who are not Highly Compensated Employees using the allocation formula in the Adoption Agreement: provided that for purposes of this allocation, "Qualifying Participants" shall mean only those Participants who are not Highly Compensated Employees and "Employer Profit Sharing Contributions" shall mean only those contributions allocated to Participants who are not Highly Compensated Employees.
|
|
ii.
|
If the age-weighted formula for allocations and the general test requirements of Section 1.401(a)(4)-2(c) of the Income Tax Regulations are selected in the Adoption Agreement, then, to the extent necessary, the following steps shall be taken for each rate group of the Employer which fails to satisfy the rules of that Section:
|
(a)
|
Identify the Employees of the Employer who are not Highly Compensated Employees of such Employer who participate in the Plan and who are not part of the applicable rate group because their allocation rates are too low and arrange them in order of their allocation rates from the highest to the lowest.
|
(b)
|
Identify the Highly Compensated Employees who participate in the Plan and are in the rate group and arrange them in order of their allocation rates from the highest to the lowest.
|
(c)
|
As of the date of allocation, lower the allocation of the Highly Compensated Employee with the highest allocation rate determined in (b) above. The reduction shall equal the amount which when added to the Individual Account of the individual in (a) above who has the highest allocation rate will cause that rate to be increased to equal that of the Highly Compensated Employee with respect to whom the rate group is constructed. As of the date of allocation, that reduction shall be added to such individual's Individual Account.
|
(d)
|
Repeat (c) above with respect to the individual in (a) above who has the next highest equivalent accrual rate and continue that process with the other individuals described in (a) above in the order of their allocation rates from the highest to the lowest until such rules are satisfied for the rate group. If the allocation rate of a Highly Compensated Employee is lowered under (c) above or this clause (d) to the point where it is equal to that of one or more other Highly Compensated Employees in the rate group, then any further reductions in allocations shall be apportioned between the former and latter Highly Compensated Employees in a manner that causes their allocation rates to be reduced by the same amount.
|
|
a.
|
The Plan must provide an allocation that uses broadly available allocation rates. The Plan will have broadly available allocation rates for the Plan Year if each allocation rate under the Plan is currently available during the Plan Year to a group of Employees that satisfies the requirements under Code Section 410(b) (without regard to the average benefit percentage test of Treasury Regulation 1.410(b)-5) and as otherwise specified in Treasury Regulation 1.401(a)(4)-
|
|
b.
|
The Plan satisfies a minimum allocation gateway for a plan that is not a combination of permissively aggregated defined contribution and defined benefit plans, or a plan in which the aggregated plan is not considered primarily defined benefit in character, if it otherwise satisfies Treasury Regulation 1.401(a)(4)-8(b)(l)(vi). The Plan will satisfy such gateway if:
|
|
i.
|
each non-Highly Compensated Employee who is eligible to participate has an allocation rate that is at least one-third of the allocation rate of the Highly Compensated Employee with the highest allocation rate; or
|
|
ii.
|
each non-Highly Compensated Employee who is eligible to participate receives an allocation of at least 5% of such Employee's Compensation, as defined in Code Section 415(c)(3), for the period during which the non-Highly Compensated Employee is eligible to receive an allocation under this Section.
|
|
10.
|
Minimum Allocation Gateway for New Comparability - One-Third Approach - If a selection is made in the Adoption Agreement to satisfy a minimum allocation gateway for new comparability purposes and to reallocate contributions from Highly Compensated Employees to non-Highly Compensated Employees in order to provide each a non-Highly Compensated Employee with an allocation rate which is equal to at least one-third of the allocation rate of the Highly Compensated Employee with the highest allocation rate, then, to the extent necessary, the following steps shall be taken:
|
|
a.
|
Identify the Employees of the Employer who participate in the Plan who are non-Highly Compensated Employees of such Employer and arrange them in order of their allocation rates from the highest to the lowest.
|
|
b.
|
Identify the Highly Compensated Employees of the Employer who participate in the Plan and arrange them in order of their allocation rates from the highest to the lowest.
|
|
c.
|
As of the date of allocation, lower the allocation to the Highly Compensated Employee with the highest allocation rate determined in (b) above. The reduction shall equal the lesser of (i) the amount necessary so that the non-Highly Compensated Employee with the lowest allocation rate receives an allocation equal to one-third of the allocation rate of the Highly Compensated Employee with the highest allocation rate, or (ii) the amount which would cause such Highly Compensated Employee's allocation rate to equal the allocation rate of the Highly Compensated Employee with the next highest allocation rate. As of the date of allocation, that reduction shall be added to the Individual Account of the non- Highly Compensated Employee described in (i) above.
|
|
d.
|
Repeat the procedures in (c) above until all non-Highly Compensated Employees have an allocation rate equal to at least one-third of the allocation rate of the Highly Compensated Employee with the highest allocation rate. If the allocation rate of a Highly Compensated Employee is lowered under (c) above or this clause (d) to the point where it is equal to that of the Highly Compensated Employees with the next highest allocation rate, then any further reductions in allocations shall be apportioned between the former and latter Highly Compensated Employees in a manner that causes their equivalent allocation rates to be reduced by the same amount.
|
|
e.
|
Participants whose sole allocation for a Plan Year consists of either a minimum allocation made pursuant to Plan Section 3.04(E) or a Safe Harbor Nonelective Contribution are considered benefiting for purposes of the minimum allocation gateway. Allocation rates shall include such contributions when determining whether the minimum gateway allocation has been satisfied.
|
|
11.
|
Minimum Allocation Gateway for New Comparability - Five Percent Approach - If a selection is made in the Adoption Agreement to satisfy a minimum allocation gateway under new comparability and to reallocate contributions from Highly Compensated Employees to non-Highly Compensated Employees in order to provide each non-Highly Compensated Employee with an allocation of at least 5% of such Employee's Compensation, as defined in Code Section 415(c)(3), for the period during which the non-Highly Compensated Employee is eligible to receive an allocation under this Section, then, to the extent necessary, the following steps shall be taken.
|
|
a.
|
Identify the Employees of the Employer who participate in the Plan who are non-Highly Compensated Employees of such Employer and arrange them in order of their allocation rates from the highest to the lowest.
|
|
b.
|
Identify the Highly Compensated Employees of the Employer who participate in the Plan and arrange them in order of their allocation rates from the highest to the lowest.
|
|
c.
|
As of the date of allocation, lower the allocation to the Highly Compensated Employee with the highest allocation rate determined in (b) above. The reduction shall equal the lesser of (i) the amount necessary so that the non-Highly Compensated Employee with the lowest allocation rate receives an allocation equal to 5% of such Employee's Compensation, as defined in Code Section 415(c)(3), for the period during which the non-Highly Compensated Employee is eligible to receive an allocation under this Section, or (ii) the amount which would cause such Highly Compensated Employee's allocation rate to equal the allocation rate of the Highly Compensated Employee with the next highest allocation rate. As of the date of allocation, that reduction shall be added to the Individual Account of the non- Highly Compensated Employee described in (i) above.
|
|
d.
|
Repeat the procedures in (c) above until all Employees of the non-Highly Compensated Employees have an allocation rate equal to at least 5% of such Employee's Compensation, as defined in Code Section 415(c)(3), for the period during which the each of the non-Highly Compensated Employees are eligible to receive an allocation under this Section. If the allocation rate of a Highly Compensated Employee is lowered under (c) above or this clause (d) to the point where it is equal to that of the Highly Compensated Employees with the next highest allocation rate, then any further reductions in allocations shall be apportioned between the former and latter Highly Compensated Employees in a manner that causes their equivalent allocation rates to be reduced by the same amount.
|
|
e.
|
If the allocation rate of the Highly Compensated Employees are less than 5%, either before any reallocation pursuant to this (11), or as a result of any reallocation pursuant to this (11), then for that Plan Year, the Employer Profit Sharing Contributions shall be allocated as if the Employer had elected a pro rata allocation formula (as described in Adoption Agreement Section Three).
|
|
f.
|
Participants whose sole allocation for a Plan Year consists of either a minimum allocation made pursuant to Plan Section 3.04(E) or a Safe Harbor Nonelective Contribution are considered benefiting for purposes of the minimum allocation gateway. Allocation rates shall include such contributions when determining whether the minimum gateway allocation has been satisfied.
|
|
C.
|
Allocation of Forfeitures - Forfeitures may be, at the Employer's discretion, applied first to the payment of the Plan's administrative expenses in accordance with Plan Section 7.04 or applied to the restoration of Participants' Individual Accounts pursuant to Plan Section 4.01(C)(3). Any remaining Forfeitures shall be allocated as follows:
|
1.
|
Profit Sharing Plan - If this is a profit sharing plan, unless the Adoption Agreement indicates otherwise, Forfeitures will be used to reduce Employer Contributions. Notwithstanding the foregoing, Forfeitures arising under Plan Section 3.12 (Excess Annual Additions) may be allocated to Qualifying Participants in accordance with Plan Section 3.04(B).
|
2.
|
401(k) Profit Sharing Plan - If this is a 401(k) profit sharing plan, unless the Adoption Agreement indicates otherwise, Forfeitures of Employer Profit Sharing Contributions, Matching Contributions, ACP Test Safe Harbor Matching Contributions, and Excess Aggregate Contributions shall be used to reduce Employer Contributions. Notwithstanding the foregoing, Forfeitures arising under Plan Section 3.12 (Excess Annual Additions) may be allocated to Qualifying Participants in accordance with Plan Section 3.04(B).
|
3.
|
Money Purchase Pension Plan and Target Benefit Pension Plan - If this Plan is a money purchase pension plan or a target benefit pension plan, unless the Adoption Agreement indicates otherwise, Forfeitures shall be used to reduce Employer Money Purchase Pension Contributions or Employer Target Benefit Pension Contributions to the Plan. Notwithstanding the foregoing, Forfeitures arising under Plan Section 3.12 (Excess Annual Additions), other than forfeitures arising under a target benefit plan, may be allocated to Qualifying Participants in accordance with Plan Section 3.04(B).
|
|
D.
|
Timing of Employer Contribution - Unless otherwise specified in the Plan or permitted by law or regulation, the Employer Contribution made by an Employer for each Plan Year shall be deposited with the Trustee (or Custodian, if applicable) not later than the due date for filing the Employer's income tax return for its tax year in which the Plan Year ends, including extensions thereof. Notwithstanding the foregoing, Employer Contributions may be deposited during the Plan Year for which they are being made.
|
|
E.
|
Minimum Allocation for Top-Heavy Plans - The contribution and allocation provisions of this Plan Section 3.04(E) shall apply for any Plan Year with respect to which this Plan is a Top-Heavy Plan and shall supersede any conflicting provisions in the Plan or Adoption Agreement.
|
1.
|
Except as otherwise provided in (3) and (4) below, the Employer Contributions and Forfeitures allocated on behalf of any Participant who is not a Key Employee shall not be less than the lesser of three percent of such Participant's Compensation or (in the case where the Employer does not maintain a defined benefit plan in addition to this Plan which designates this Plan to satisfy Code Section 401, the largest percentage of Employer Contributions and Forfeitures, as a percentage of the Key Employee's Compensation, as limited by Code Section 401(a)(17), allocated on behalf of any Key Employee for that year. The minimum allocation is determined without regard to any Social Security contribution. Unless the Adopting Employer, in the Adoption Agreement, elects to allocate a top-heavy contribution to Participants who are Key Employees, only Participants who are not Key Employees will be entitled to receive the minimum allocation. Notwithstanding the foregoing, if the Employer maintains a defined benefit plan in addition to this Plan and specifies in the Adoption Agreement that the minimum allocation will be made to this Plan, then except as provided in (3) and (4) below, Employer Contributions and Forfeitures allocated on behalf of any Participant who is not a Key Employee shall not be less than five percent of such Participant's Compensation. For purposes of the preceding sentences, the largest percentage of Employer Contributions and Forfeitures as a percentage of each Key Employee's Compensation shall be determined by treating Elective Deferrals as Employer Contributions. This minimum allocation shall be made even though under other Plan provisions, the Participant would not otherwise be entitled to receive an allocation, or would have received a lesser allocation for the year because of 1) the Participant's failure to complete 1,000 Hours of Service (or any comparable period provided in the Plan), or 2) the Participant's failure to make mandatory Nondeductible Employee Contributions to the Plan, or 3) Compensation less than a stated amount.
|
2.
|
For purposes of computing the minimum allocation, Compensation shall mean Compensation as provided in the Definitions Section of the Plan as limited by Code Section 401(a)(17) and shall include any amounts contributed by the Employer pursuant to a salary reduction agreement and which is not includible in gross income under Code Sections 402(g), 125, 132(f)(4), or 457. Compensation for the full Determination Year will be used in calculating the minimum allocation.
|
3.
|
The provision in (1) above shall not apply to any Participant who was not employed by the Employer on the last day of the Plan Year.
|
4.
|
The provision in (1) above shall not apply to any Participant to the extent the Participant is covered under any other plan or plans of the Employer and the Adopting Employer has provided in the Adoption Agreement that the minimum allocation or benefit requirement applicable to Top-Heavy Plans will be met in the other plan or plans.
|
5.
|
The minimum allocation required under this Section 3.04(E) (to the extent required to be nonforfeitable under Code Section 416(b)) may not be forfeited under Code Section 41 l(a)(3)(B) or 41 l(a)(3)(D).
|
6.
|
Elective Deferrals (and for Plan Years beginning before 2002, Matching Contributions) may not be taken into account for purposes of satisfying the minimum allocation requirement applicable to Top-Heavy Plans described in Plan Section 3.04(E)(1). Qualified Nonelective Contributions may, however, be taken into account for such purposes.
|
|
F.
|
Return of the Employer Contribution to the Employer Under Special Circumstances - Any contribution made by the Employer because of a mistake of fact must be returned to the Employer within one year of the contribution.
|
|
3.05
|
QUALIFIED NONELECTIVE CONTRIBUTIONS
|
A.
|
Qualified Nonelective Contributions Used to Satisfy Testing Requirements - Unless another allocation formula is specified in the Adoption Agreement, or in the situation in which an Employer wishes to allocate a Qualified Nonelective Contribution in addition to the allocation formula in the Adoption Agreement, Qualified Nonelective Contributions will be allocated to the Individual Accounts of non-Highly Compensated Employees who are eligible Participants following any allocation formula permitted under the law or regulation for purpose of satisfying the Actual Deferral Percentage test, the Actual Contribution Percentage test, or both. Notwithstanding the foregoing, no allocation shall be required in excess of the amount required to satisfy the Actual Deferral Percentage test, the Actual Contribution Percentage test, or both. Qualified Nonelective Contributions may be made during the Plan Year for which they are being made; however, the Employer must follow the allocation requirements set forth in this Section 3.05 and must adhere to the eligibility requirements applicable to Elective Deferrals, including a forfeiture of allocations where such eligibility requirements are not satisfied.
|
|
B.
|
Special Rules for Government Contract Plans - If the Employer so elects in the Adoption Agreement, for each Hour of Service of covered employment under a government contract, the Employer shall contribute to the Plan such Qualified Nonelective Contribution amounts for each eligible Participant as determined by the hourly rate designated for each eligible Participant's work classification on the wage determination sheet, or part thereof, as determined by the Employer pursuant to the terms of the contracts to which the Employer is a party and which are subject to the provisions of any federal, state, or municipal prevailing wage law to which the Employer is a party. In addition to any Qualified Nonelective Contribution made under this Plan Section 3.05(B), the Employer may contribute additional Qualified Nonelective Contributions to be allocated to the Individual Accounts of non-Highly Compensated Employees who are eligible Participants following any allocation formula permitted under the law or regulation for the purpose of satisfying the Actual Deferral Percentage test, the Actual Contribution Percentage test, or both, as set forth in Plan Section 3.05(A). Such additional Qualified Nonelective Contributions can be taken into account for a Plan Year for a non-Highly Compensation Employee only to the extent such contributions do not exceed 10 percent of that non-Highly Compensated Employee's Compensation.
|
|
3.06
|
QUALIFIED MATCHING CONTRIBUTIONS
|
|
3.07
|
ROLLOVER CONTRIBUTIONS
|
|
3.08
|
TRANSFER CONTRIBUTIONS
|
|
3.09
|
DEDUCTIBLE EMPLOYEE CONTRIBUTIONS
|
|
3.10
|
NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS
|
|
3.11
|
OTHER LIMITATIONS ON SIMPLE 401(K) CONTRIBUTIONS
|
|
3.12
|
LIMITATION ON ALLOCATIONS
|
|
A.
|
If the Participant does not participate in, and has never participated in another qualified plan maintained by the Employer, 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 plan (as defined in Code Section 408(k)) maintained by the Employer, which provides an Annual Addition as defined in the Definitions Section of the Plan, the following rules shall apply.
|
1.
|
The amount of Annual Additions which may be credited to the Participant's Individual Account for any Limitation Year will not exceed the lesser of the Maximum Permissible Amount or any other limitation contained in this Plan. If the Employer Contribution that would otherwise be contributed or allocated to the Participant's Individual Account would cause the Annual Additions for the Limitation Year to exceed the Maximum Permissible Amount, the amount contributed or allocated may be reduced so that the Annual Additions for the Limitation Year will equal the Maximum Permissible Amount.
|
2.
|
Before determining the Participant's actual Compensation for the Limitation Year, the Employer may determine the Maximum Permissible Amount for a Participant on the basis of a reasonable estimate of the Participant's Compensation for the Limitation Year, uniformly determined for all Participants similarly situated.
|
3.
|
As soon as is administratively feasible after the end of the Limitation Year, the Maximum Permissible Amount for the Limitation Year will be determined on the basis of the Participant's actual Compensation for the Limitation Year.
|
4.
|
If, pursuant to Plan Section 3.12(A)(3) or as a result of the allocation of Forfeitures or a reasonable error in determining a Participant's maximum Elective Deferral or any other circumstance permitted under rules promulgated by the IRS, there is an Excess Annual Addition, the excess will be disposed of as follows.
|
|
a.
|
Profit Sharing Plan - If this Plan is a profit sharing plan, the Excess Annual Additions shall be deemed Forfeitures and shall be allocated in accordance with Plan Section 3.04(C) to all Qualifying Participants that have not reached their Annual Additions limit. If all Qualifying Participants have reached their Annual Additions limit before all Excess Annual Additions have been allocated, the remaining 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.
|
|
b.
|
Money Purchase Pension Plan or Target Benefit Plan - If this Plan is either a money purchase pension plan or a target benefit plan, Excess Annual Additions shall be held unallocated in a suspense account. The suspense account shall be used to reduce future Employer Contributions made to Qualifying Participants in the next Limitation Year and succeeding Limitation Years, if necessary.
|
|
c.
|
401 (k) Pro/it Sharing Plan - If this Plan is a 401(k) profit sharing plan, any Nondeductible Employee Contributions and Elective Deferrals, plus any income allocable thereto, shall be distributed to the Participant to the extent this would reduce the Excess Annual Additions. Income allocable to such Excess Annual Additions shall be computed in a manner consistent with the manner described in Plan Section 7.02(B) (i.e., the usual manner used by the Plan Administrator for allocating income or loss to Participants' Individual Accounts).
|
|
B.
|
If, in addition to this Plan, the Participant is covered under another qualified master or prototype defined contribution plan maintained by the Employer, a welfare benefit fund maintained by the Employer, an individual medical account maintained by the Employer, or a simplified employee pension plan maintained by the Employer that provides an Annual Addition as defined in the Definitions Section of the Plan during any Limitation Year, the following rules apply.
|
1.
|
The Annual Additions which may be credited to a Participant's Individual Account under this Plan for any such Limitation Year will not exceed the Maximum Permissible Amount, reduced by the Annual Additions credited to a Participant under the other qualified Master or Prototype Plans, welfare benefit funds, individual medical account, and simplified employee pension plans for the same Limitation Year. If the Annual Additions with respect to the Participant under other qualified Master or Prototype defined contribution plans, welfare benefit funds, individual medical accounts, and simplified employee pension plans maintained by the Employer are less than the Maximum Permissible Amount, and the Employer Contribution that would otherwise be contributed or allocated to the Participant's Individual Account under this Plan would cause the Annual Additions for the Limitation Year to exceed this limitation, the amount contributed or allocated may be reduced so that the Annual Additions under all such plans and funds for the Limitation Year will equal the Maximum Permissible Amount. If the Annual Additions with respect to the Participant under such other qualified Master or Prototype defined contribution plans, welfare benefit funds, individual medical accounts, and simplified employee pension plans in the aggregate are equal to or greater than the Maximum Permissible Amount, no amount will be contributed or allocated to the Participant's Individual Account under this Plan for the Limitation Year.
|
2.
|
Before determining the Participant's actual Compensation for the Limitation Year, the Employer may determine the Maximum Permissible Amount for a Participant in the manner described in Plan Section 3.12(A)(2).
|
3.
|
As soon as is administratively feasible after the end of the Limitation Year, the Maximum Permissible Amount for the Limitation Year will be determined on the basis of the Participant's actual Compensation for the Limitation Year.
|
4.
|
If, pursuant to Plan Section 3.12(B)(3) or as a result of the allocation of Forfeitures or a reasonable error in determining a Participant's Elective Deferral or any other circumstance permitted under rules promulgated by the IRS, a Participant's Annual Additions under this Plan and such other plans would result in Excess Annual Additions for a Limitation Year, the Excess Annual Additions will be deemed to consist of the Annual Additions last allocated, except that Annual Additions attributable to a simplified employee pension plan will be deemed to have been allocated first, followed by Annual Additions to a welfare benefit fund or individual medical account, regardless of the actual allocation date.
|
5.
|
If Excess Annual Additions were allocated to a Participant on an allocation date of this Plan which coincides with an allocation date of another plan, the Excess Annual Additions attributed to this Plan will be the product of
|
(i)
|
the total Excess Annual Additions allocated as of such date, multiplied by
|
|
(ii)
|
the ratio of (a) the Annual Additions allocated to the Participant for the Limitation Year as of such date under this Plan to (b) the total Annual Additions allocated to the Participant for the Limitation Year as of such date under this and all the other qualified prototype defined contribution plans.
|
6.
|
Any Excess Annual Additions attributed to this Plan will be disposed of in the manner described in Plan Section 3.12(A)(4).
|
7.
|
If the Participant is covered under another qualified defined contribution plan maintained by the Employer, other than a Master or Prototype Plan, the provisions of Plan Section 3.12(B)(1) through 3.12(B)(6) will apply as if the other plan were a Master or Prototype Plan. In the event this method cannot be administered because of conflicting language in the other plan, the Employer must provide, through a written attachment to the Plan, the method under which the plans will limit total Annual Additions to the Maximum Permissible Amount, and will properly reduce any Excess Annual Additions in a manner that precludes Employer discretion.
|
|
C.
|
The provisions of this Plan Section 3.12 shall apply to SIMPLE 401(k) contributions made pursuant to Plan Sections 3.01(H) and 3.02.
|
|
D.
|
Adoption Agreement elections to include or exclude items from Compensation that are inconsistent with Code Section 415 and the corresponding regulations will be disregarded for purposes determining a Participant's Annual Additions limit.
|
3.13
|
ACTUAL DEFERRAL PERCENTAGE TEST (ADP)
|
|
A.
|
Limits on Highly Compensated Employees - The Actual Deferral Percentage (hereinafter "ADP") for a Plan Year for Participants who are Highly Compensated Employees for each Plan Year and the ADP for Participants who are non-Highly Compensated Employees for the same Plan Year must satisfy one of the following tests.
|
1.
|
The ADP for Participants who are Highly Compensated Employees for the Plan Year shall not exceed the ADP for Participants who are non-Highly Compensated Employees for the same Plan Year multiplied by 1.25; or
|
2.
|
The ADP for Participants who are Highly Compensated Employees for the Plan Year shall not exceed the ADP for Participants who are non-Highly Compensated Employees for the same Plan Year multiplied by 2.0 provided that the ADP for Participants who are Highly Compensated Employees does not exceed the ADP for Participants who are non-Highly Compensated Employees by more than two percentage points.
|
|
3.
|
Prior Year Testing - The ADP for a Plan Year for Participants who are Highly Compensated Employees for each Plan Year and the prior year's ADP for Participants who were non-Highly Compensated Employees for the prior Plan Year must satisfy one of the following tests.
|
|
a.
|
The ADP for a Plan Year for Participants who are Highly Compensated Employees for the Plan Year shall not exceed the prior year's ADP for Participants who were non-Highly Compensated Employees for the prior Plan Year multiplied by 1.25; or
|
|
b.
|
The ADP for a Plan Year for Participants who are Highly Compensated Employees for the Plan Year shall not exceed the prior year's ADP for Participants who were non-Highly Compensated Employees for the prior Plan Year multiplied by 2.0, provided that the ADP for Participants who are Highly Compensated Employees does not exceed the ADP for Participants who were non-Highly Compensated Employees in the prior Plan Year by more than two percentage points.
|
|
4.
|
Current Year Testing - If elected by the Employer in the Adoption Agreement, the ADP tests in this Plan Section 3.13(A)(1) and (2) above will be applied by comparing the current Plan Year's ADP for Participants who are Highly Compensated Employees with the current Plan Year's ADP for Participants who are non-Highly Compensated Employees. Once a current year testing election is made, the Employer can elect prior year testing for a Plan Year only if the Plan has used current year testing for each of the preceding five Plan Years (or if less, the number of Plan Years the Plan has been in existence) or if, as a result of a merger or acquisition described in Code Section 410(b)(6)(C)(i), the Employer maintains both a plan using prior year testing and a plan using current year testing and the change is made within the transition period described in Code Section 410(b)(6)(C)(ii).
|
|
B.
|
Special Rules
|
1.
|
A Participant is a Highly Compensated Employee for a particular Plan Year if they meet 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 they do not meet the definition of a Highly Compensated Employee in effect for that Plan Year.
|
2.
|
The ADP for any Participant who is a Highly Compensated Employee for the Plan Year and who is eligible to have Elective Deferrals (and Qualified Nonelective Contributions or Qualified Matching Contributions, or both, if treated as Elective Deferrals for purposes of the ADP test) allocated to their Individual Accounts under two or more arrangements described in Code Section 401(k) that are maintained by the Employer, shall be determined as if such Elective Deferrals (and, if applicable, such Qualified Nonelective Contributions or Qualified Matching Contributions, or both) were made under a single arrangement. If a Highly Compensated Employee participates in two or more cash or deferred arrangements that have different Plan Years, all Elective Deferrals made during the Plan Year under all such arrangements shall be aggregated. For Plan Years beginning before 2006, cash or deferred arrangements ending with or within the same calendar year shall be treated as a single arrangement. Notwithstanding the foregoing, certain plans shall be treated as separate if mandatorily disaggregated under regulations under Code Section 401(k).
|
3.
|
In the event that this Plan satisfies the requirements of Code Sections 401(k), 401(a)(4), or 410(b) only if aggregated with one or more other plans, or if one or more other plans satisfy the requirements of such Code sections only if aggregated with this Plan, then this Plan Section 3.13(B)(3) shall be applied by determining the ADP of Participants as if all such plans were a single plan. If more than 10 percent of the Employer's non-Highly Compensated Employees are involved in a plan coverage change as defined in Treasury' Regulation 1.401(k)-2(c)(4), then any adjustments to the non-Highly Compensated Employee ADP for the prior year will be made in accordance with such regulations, unless the Adopting 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.
|
4.
|
For purposes of satisfying the ADP test, Elective Deferrals, Qualified Nonelective Contributions, and Qualified Matching Contributions must be made before the end of the 12-month period immediately following the Plan Year to which contributions relate.
|
5.
|
The Employer shall maintain records sufficient to demonstrate satisfaction of the ADP test and the amount of Qualified Nonelective Contributions or Qualified Matching Contributions, or both, used in such test.
|
6.
|
The determination and treatment of the ADP amounts of any Participant shall satisfy such other requirements as may be prescribed by the Secretary' of the Treasury.
|
7.
|
If the Employer elects to take Qualified Matching Contributions into account as Elective Deferrals for purposes of the ADP test, then (subject to such other requirements as may be prescribed by the Secretary of the Treasury) the Employer may elect, in a uniform and nondiscriminatory manner, to either include all Qualified Matching Contributions in the ADP test or to include only the amount of such Qualified Matching Contributions that are needed to meet the ADP test.
|
8.
|
In the event that the Plan Administrator determines that it is not likely that the ADP test will be satisfied for a particular Plan Year unless certain steps are taken before the end of such Plan Year, the Plan Administrator may require Contributing Participants who are Highly Compensated Employees to reduce or cease future Elective Deferrals for such Plan Year in order to satisfy that requirement. This reduction shall also be required by the Plan Administrator in the event that the Plan Administrator anticipates that the Employer will not be able to deduct all Employer Contributions from its income for federal income tax purposes. If the Plan Administrator requires Contributing Participants to reduce or cease making Elective Deferrals under this paragraph, the reduction or cessation shall begin with the Highly Compensated Employee with either the largest amount of Elective Deferrals or the highest Contribution Percentage for the Plan Year (on the date on which it is determined that the ADP test will not likely be satisfied), as elected by the Plan Administrator. All remaining Highly Compensated Employees' Elective Deferrals for the Plan Year shall be limited to such amount. Notwithstanding the foregoing, if it is later determined that the ADP test for the Plan Year will be satisfied, Highly Compensated Employees shall be permitted to enroll again as Contributing Participants in accordance with the terms of the Plan.
|
9.
|
Elective Deferrals that are treated as Catch-up Contributions because they exceed a Plan limit or a statutory limit will be excluded from ADP testing. Amounts which are characterized as Catch-up Contributions as a result of the ADP test will reduce the amount of Excess Contributions distributed or Qualified Nonelective Contributions or Qualified Matching Contributions contributed to the Plan to correct an Excess Contribution.
|
10.
|
Special Rule for Early Participation - If the Plan provides that Employees are eligible to become Contributing Participants before they have completed the minimum age and service requirements in Code Section 410(a)(l)(A), and if the Plan applies Code Section 410(b)(4)(B) in determining whether the Plan satisfies the requirements in Code Section 410(b)(l), then in determining whether the Plan satisfies the ADP test, either:
|
|
a.
|
pursuant to Code Section 401(k)(3)(F), the ADP test is performed under the Plan (determined without regard to disaggregation under Treasury Regulation 1.410(b)-7(c)(3)), using the ADP for all eligible Highly Compensated Employees for the Plan Year and the ADP of eligible non-Highly Compensated Employees for the applicable year, disregarding all non-Highly Compensated Employees who have not met the minimum age and services requirements in Code Section 410(a)(l)(A); or
|
|
b.
|
pursuant to Treasury Regulation 1.401(k)-l(b)(4), the Plan is disaggregated into separate plans and the ADP test is performed separately for all eligible Participants who have completed the minimum age and service requirements of Code Section 4IO(a)(l)(A) and for all eligible Participants who have not completed the minimum age and service requirements in Code Section 410(a)(l)(A).
|
|
C.
|
Notwithstanding the foregoing, the ADP test described above is treated as satisfied for any SIMPLE 401(k) Year in which an Eligible Employer maintains this Plan as a SIMPLE 401(k) Plan.
|
|
3.14
|
ACTUAL CONTRIBUTION PERCENTAGE TEST (ACP)
|
|
A.
|
Limits on Highly Compensated Employees - The Actual Contribution Percentage (hereinafter "ACP") for Participants who are Highly Compensated Employees for each Plan Year and the ACP for Participants who are non-Highly Compensated Employees for the same Plan Year must satisfy one of the following tests.
|
|
1.
|
The ACP for Participants who are Highly Compensated Employees for the Plan Year shall not exceed the ACP for Participants who are non-Highly Compensated Employees for the same Plan Year multiplied by 1.25; or
|
|
2.
|
The ACP for Participants who are Highly Compensated Employees for the Plan Year shall not exceed the ACP for Participants who are non-Highly Compensated Employees for the same Plan Year multiplied by 2.0, provided that the ACP for the Participants who are Highly Compensated Employees does not exceed the ACP for Participants who are non-Highly Compensated Employees by more than two percentage points.
|
|
3.
|
Prior Year Testing - The ACP for a Plan Year for Participants who are Highly Compensated Employees for each Plan Year and the prior year's ACP for Participants who were non-Highly Compensated Employees for the prior Plan Year must satisfy one of the following tests.
|
|
a.
|
The ACP for a Plan Year for Participants who are Highly Compensated Employees for the Plan Year shall not exceed the prior year's ACP for Participants who were non-Highly Compensated Employees for the prior Plan Year multiplied by 1.25; or
|
|
b.
|
The ACP for a Plan Year for Participants who are Highly Compensated Employees for the Plan Year shall not exceed the prior year's ACP for Participants who were non-Highly Compensated Employees for the prior Plan Year multiplied by 2.0, provided that the ACP for Participants who are Highly Compensated Employees does not exceed the ACP for Participants who were non-Highly Compensated Employees in the prior Plan Year by more than two percentage points.
|
|
4.
|
Current Year Testing - If elected by the Adopting Employer in the Adoption Agreement, the ACP tests in this Plan Section 3.14(A)(1) and (2), above, will be applied by comparing the current Plan Year's ACP for Participants who are Highly Compensated Employees for each Plan Year with the current Plan Year's ACP for Participants who are non-Highly Compensated Employees. Once an election to use current year testing is made, the Employer can elect prior year testing for a Plan Year only if the Plan has used current year testing for each of the preceding five Plan Years (or if lesser, the number of Plan Years the Plan has been in existence) or if, as a result of the merger or acquisition described in Section 410(b)(6)(C)(i), the Employer maintains both a plan using prior year testing and a plan using current year testing and the change is made within the transition period described in Code Section 410(b)(6)(C)(ii).
|
|
B.
|
Special Rules
|
1.
|
A Participant is a Highly Compensated Employee for a particular Plan Year if they meet 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 they do not meet the definition of a Highly Compensated Employee in effect for that Plan Year.
|
2.
|
For purposes of this Plan Section 3.14, the Contribution Percentage for any Participant who is a Highly Compensated Employee and who is eligible to have Contribution Percentage Amounts allocated to their Individual Account under two or more plans described in Code Section 401 (a), or arrangements described in Code Section 401(k) that are maintained by the Employer, shall be determined as if the total of such Contribution Percentage Amounts was made under each plan. If a Highly Compensated Employee participates in two or more such plans or arrangements that have different plan years, all Contribution Percentage Amounts made during the Plan Year under all such plans and arrangements shall be aggregated. For Plan Years beginning before 2006, 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 regulations under Code Section 401(m).
|
3.
|
In the event that this Plan satisfies the requirements of Code Sections 401(m), 401(a)(4) or 410(b) only if aggregated with one or more other plans, or if one or more other plans satisfy the requirements of such sections of the Code only if aggregated with this Plan, then this Plan Section 3.14(B)(3) shall be applied by determining the Contribution Percentage of Employees as if all such plans were a single plan. If more than 10 percent of the Employer's non-Highly Compensated Employees are involved in a plan coverage change as defined in Treasury Regulation 1.401(m)-2(c)(4), then any adjustments to the non- Highly Compensated Employee ACP for the prior year will be made in accordance with such regulations, 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(m) only if they have the same Plan Year and use the same ACP testing method.
|
4.
|
For purposes of determining the Actual Contribution Percentage test, Nondeductible Employee Contributions are considered to have been made in the Plan Year in which contributed to the Fund. Matching Contributions and Qualified Nonelective Contributions will be considered made for a Plan Year if made no later than the end of the 12-month period beginning on the day after the close of the Plan Year.
|
5.
|
The Employer shall maintain records sufficient to demonstrate satisfaction of the ACP test and the amount of Qualified Nonelective Contributions or Qualified Matching Contributions, or both, used in such test.
|
6.
|
The determination and treatment of the Contribution Percentage of any Participant shall satisfy such other requirements as may be prescribed by the Secretary of the Treasury.
|
7.
|
If the Employer elects to take Qualified Nonelective Contributions into account as Contribution Percentage Amounts for purposes of the ACP test, then (subject to such other requirements as may be prescribed by the Secretary of the Treasury) the Employer may elect, in a uniform and nondiscriminatory manner, either to include all Qualified Nonelective Contributions in the ACP test or to include only the amount of such Qualified Nonelective Contributions that are needed to meet the ACP test.
|
8.
|
If the Employer elects to take Elective Deferrals into account as Contribution Percentage Amounts for purposes of the ACP test, then (subject to such other requirements as may be prescribed by the Secretary of the Treasury) the Employer may elect, in a uniform and nondiscriminatory manner, either to include all Elective Deferrals in the ACP test or to include only the amount of such Elective Deferrals that are needed to meet the ACP test.
|
9.
|
Special Rule for Early Participation - If the Plan provides for Matching Contributions or Nondeductible Employee Contributions and provides that Employees are eligible to participate with regard to such contributions before they have completed the minimum age and service requirements in Code Section 410(a)(l)(A), and if the Plan applies Code Section 410(b)(4)(B) in determining whether the Plan meets the requirements in Code Section 410(b)(l), then in determining whether the Plan meets the ACP test, either:
|
|
a.
|
pursuant to Code Section 401(m)(5)(C), the ACP test is performed under the Plan (determined without regard to disaggregation under Treasury Regulation 1.410(b)-7(c)(3)), using the ACP for all eligible Highly Compensated Employees for the Plan Year and the ACP of eligible non-Highly Compensated Employees for the applicable year, disregarding all non-Highly Compensated Employees who have not met the minimum age and service requirements in Code Section 410(a)(l)(A); or
|
|
b.
|
pursuant to Treasury Regulation 1.401(m)-l(b)(4), the Plan is disaggregated into separate plans and the ACP test is performed separately for all eligible Participants who have completed the minimum age and service requirements in Code Section 410(a)(l)(A) and for all eligible Participants who have not completed the minimum age and service requirements in Code Section 410(a)(l)(A).
|
|
C.
|
Notwithstanding the foregoing, the ACP test described above is treated as satisfied for any SIMPLE 401(k) Year in which an Eligible Employer maintains this Plan as a SIMPLE 401(k) Plan.
|
|
3.15
|
DEEMED IRAs
|
|
A.
|
General Rules
|
1.
|
This Plan Section 3.15 shall apply if elected by the Employer in the Adoption Agreement.
|
2.
|
Unless otherwise indicated in the Adoption Agreement, each Participant may make Deemed IRA Contributions to the Participant's Deemed IRA under the Plan if the Plan allows such contributions.
|
3.
|
Unless otherwise indicated in the Adoption Agreement, Deemed IRA Contributions, if permitted by the Plan, may be made to either a Traditional IRA or a Roth IRA established as a Deemed IRA under the Plan. At the time the Deemed IRA is established, the IRA Holder shall indicate whether the Deemed IRA is a Traditional IRA or Roth IRA for tax purposes.
|
4.
|
The IRA Trustee (or Custodian) shall be subject to the reporting requirements of Code Section 408(i) with respect to all Deemed IRAs that are established and maintained under the Plan.
|
5.
|
Unless otherwise indicated in the Adoption Agreement, Deemed IRAs shall be held in the Fund established in Plan Section 7.01. When held within the Fund, the following rules shall apply:
|
|
a.
|
Separate Account - A separate account will be maintained for each Deemed IRA clearly designating the Deemed IRA as either a Traditional IRA or Roth IRA.
|
|
b.
|
Life Insurance - No Deemed IRA assets held in a separate account of the Fund shall be invested in life insurance contracts.
|
|
c.
|
Trustee - The IRA trustee (or custodian) must be either a bank or a nonbank trustee that satisfies the requirements of Code Section 408(a)(2) and the regulations thereunder. In addition, there cannot be separate trustees for each Deemed IRA included in the Fund. The Trustee (or Custodian, if applicable) of the Fund shall be the IRA trustee (or custodian) if eligible to serve in that capacity unless the Trustee (or Custodian, if applicable) appoints a bank or nonbank trustee to serve as IRA trustee or custodian.
|
|
6.
|
Deemed IRAs established pursuant to this Plan Section 3.15 must satisfy the applicable requirements of Code Sections 408 and 408A. Deemed IRA assets held within the Fund must meet the applicable requirements set forth in Plan Section 7.02. Deemed IRA assets held in separate individual trusts must meet the requirements of the separate written governing instrument establishing such Deemed IRA, and these requirements are hereby incorporated by reference, provided the governing instrument is not inconsistent with the provisions of the Plan. In the event the separate governing instrument is inconsistent with the terms of the Plan, the terms of the Plan shall control. The Plan Administrator may, through separate agreement, adopt provisions governing Deemed IRAs for the proper and efficient administration of Deemed IRA assets held in the Fund or in separate individual trusts.
|
|
7.
|
The IRA Holder's interest in the balance in this IRA is nonforfeitable at all times. No part of this IRA may be invested in collectibles (within the meaning of Code Section 408(m)) except as otherwise permitted by Code Section 408(m)(3), which provides an exception for certain gold, silver, and platinum coins issued under the laws of any state, and certain bullion.
|
|
B.
|
IRA Rules Under Code Section 408
|
|
1.
|
Provisions Governing Roth IRAs Under Code Section 408A - This Plan Section 3.15(B)(1) shall apply only if the Deemed IRA created pursuant to this Plan Section 3.15 has been designated by the IRA Holder as a Roth IRA.
|
|
a.
|
Contribution Rules.
|
|
(1)
|
Maximum Permissible Amount-Except in the case of a rollover contribution described in Code Section 408A(e), a recharacterized contribution described in Code Section 408A(d)(6), or a conversion contribution, no contributions will be accepted unless they are in cash, and the total of such contributions shall not exceed the lesser of 100 percent of the Roth IRA Holder's compensation or $3.000 for any taxable year beginning in 2002 through 2004; $4,000 for any taxable year beginning in 2005 through 2007; and $5,000 for any taxable year beginning in 2008 and years thereafter. After 2008, the applicable contribution limit may be adjusted by the Secretary of the Treasury for cost-of-living increases under Code Section 219(b)(5)(C). Such adjustments will be in multiples of $500.
|
(2)
|
Catch-up Contributions - In the case of a Roth IRA Holder who is age 50 or older by the close of the taxable year, the annual cash contribution limit is increased by $500 for any taxable year beginning in 2002 through 2005 and by $1,000 for any taxable year beginning in 2006 and years thereafter.
|
(3)
|
Regular Contribution Limit - If a Roth IRA Holder's MAGI falls within certain limits, as described in the following table, the maximum regular contribution that can be made to all the Roth IRA Holder's Roth IRAs for a taxable year is phased out ratably in accordance with the following table.
|
Filing Status
|
Full Contribution
|
Phase-Out Range Modified AGI
|
No Contribution
|
|||
Single or Head of Household
|
$95,000 or less
|
Between $95,000 and $1 10,000
|
$110,000 or more
|
|||
Joint Return or Qualifying Widow(er)
|
$150,000 or less
|
Between $150,000 and $160,000
|
$160,000 or more
|
|||
Married - Separate Return
|
$ | 0 |
Between $0 and $10,000
|
$10,000 or more
|
|
(4)
|
Conversion Contribution Limit - A conversion from a Traditional or SIMPLE IRA cannot be made to this Roth IRA if, in the year the amount is distributed from the Traditional or SIMPLE IRA:
|
(a)
|
the Roth IRA Holder is married and files a separate income tax return,
|
(b)
|
the Roth IRA Holder is not married and has MAGI in excess of $ 100,000, or
|
(c)
|
the Roth IRA Holder is married and together the Roth IRA Holder and the their spouse have MAGI in excess of $100,000.
|
(5)
|
Recharacterization - A regular contribution to a Traditional or SIMPLE IRA may be recharacterized pursuant to the rules in Treasury Regulation 1.408A-5 as a regular contribution to this Deemed IRA, subject to the limits in Plan Section 3.15(B)(l)(a).
|
(6)
|
Modified Adjusted Gross Income - For purposes of Section 3.15(B)(l)(a)(3), a Roth IRA Holder's MAGI for a taxable year is defined in Code Section 408A(c)(3)(C)(i) and does not include any amount included in adjusted gross income as a result of a conversion from a Traditional or SIMPLE IRA.
|
|
b.
|
Roth IRA Holder Distributions — No amount is required to be distributed before the death of the Roth IRA Holder for whose benefit the account was originally established. After the Roth IRA Holder's death, however, the beneficiary(ies) must begin taking distributions in accordance with Plan Section 3.15(B)(l)(c). Notwithstanding any provision of the Plan to the contrary, distributions from the Roth IRA, including rollover distributions, shall be governed by Code Section 408A(d) and the terms of the separate written governing instrument establishing such Deemed IRA.
|
|
c.
|
Beneficiary Rights - If the Roth IRA Holder dies before their entire interest is distributed to them, the entire remaining interest will be distributed as follows.
|
(1)
|
Notwithstanding any provision of the Plan to the contrary, the distribution of the Roth IRA Holder's interest in the account shall be made in accordance with the requirements of Code Section 408(a)(6). as modified by Code Section 408A(c)(5), and the Treasury Regulations thereunder, the provisions of which are herein incorporated by reference. If distributions are made from an annuity contract purchased from an insurance company, distributions thereunder must satisfy the requirements of Treasury' Regulation 1.401(a)(9)-6T (taking into account Code Section 408A(c)(5)), rather than the distribution rules in Plan Section 3.15(B)(l)(c)(2), (3), and (4).
|
(2)
|
Upon the death of the Roth IRA Holder, their entire interest will be distributed as follows.
|
(a)
|
If the designated beneficiary is someone other than the Roth IRA Holder's surviving spouse, the entire interest will be distributed, starting by the end of the calendar year following the calendar year of the Roth IRA Holder's death, over the remaining life expectancy of the designated beneficiary, with such life expectancy determined using the age of the designated beneficiary as of their birthday in the year following the year of the Roth IRA Holder's death, or, if elected, in accordance with Plan Section 3.15(B)(l)(c)(2)(c).
|
(b)
|
If the Roth IRA Holder's sole designated beneficiary is their surviving spouse, the entire interest will be distributed, starting by the end of the calendar year following the calendar year of the Roth IRA Holder's death (or by the end of the calendar year in which the Roth IRA Holder would have attained age 70'/2, if later), over such spouse's life, or, if elected, in accordance with Plan Section 3.15(B)(l)(c)(2)(c). If the surviving spouse dies before distributions are required to begin, the remaining interest will be distributed, starting by the end of the calendar year following the calendar year of the spouse's death, over the spouse's designated beneficiary's remaining life expectancy determined using such designated beneficiary's age as of their birthday in the year following the death of the spouse, or, if elected, will be distributed in accordance with Plan Section 3.I5(B)(l)(c)(2)(c). If the surviving spouse dies after distributions are required to begin, any remaining interest will be distributed over the spouse's remaining life expectancy determined using the spouse's age as of their birthday in the year of the spouse's death.
|
(c)
|
If there is no designated beneficiary, or if applicable by operation of Plan Section 3.15(B)(l)(c)(2)(a) or (b). the entire interest will be distributed by the end of the calendar year containing the fifth anniversary of the Roth IRA Holder's death (or of the spouse's death in the case of the surviving spouse's death before distributions are required to begin under Plan Section 3.15(B)(l)(c)(2)(b)).
|
(d)
|
The amount otherwise to be distributed each year under this Plan Section 3.15(B)(l)(c) is the quotient obtained by dividing the value of the IRA as of the end of the preceding year by the remaining life expectancy specified in such paragraph. Life expectancy is determined using the Single Life Table in Q&A-l of Treasury Regulation 1.401(a)(9)-9. If the distributions are being made to a surviving spouse as the sole designated beneficiary, such spouse's remaining life expectancy for a year is the number in the Single Life Table corresponding to such spouse's age in the year. In all other cases, remaining life expectancy for a year is the number in the Single Life Table corresponding to the beneficiary's age in the year specified in Plan Section 3.15(B)(2)(a) or (b) and reduced by one for each subsequent year.
|
(3)
|
The value of the Roth IRA for purposes of this Plan Section 3.15 is the prior December 31 balance adjusted to include the amount of any outstanding rollovers, transfers, and recharacterizations under Q&As-7 and-8 of Treasury Regulation 1.408-8.
|
(4)
|
If the designated beneficiary is the Roth IRA Holder's surviving spouse, the spouse may elect to treat the IRA as their own Roth IRA. This election will be deemed to have been made if such surviving spouse, who is the sole beneficiary of the Roth IRA, makes a contribution to the Roth IRA or fails to take a required distribution as a beneficiary.
|
|
2.
|
Provisions Governing Traditional IRAs Under Code Section 408 - This Plan Section 3.15(B)(2) shall only apply if the IRA created pursuant to this Plan Section 3.15 has been designated by the IRA Holder as a Traditional IRA.
|
|
a.
|
Contribution Rules.
|
|
(1)
|
Maximum Permissible Amount - Except in the case of a rollover contribution (as permitted by Code Sections 402(c), 402(e)(6), 403(a)(4), 403(b)(8), 403(b)(10), 408(d)(3), and 457(e)(16)) or a contribution made in accordance with the terms of a Simplified Employee Pension (SEP) plan as described in Code Section 408(k), no contributions will be accepted unless they are in cash, and the total of such contributions shall not exceed the lesser of 100 percent of the Traditional IRA Holder's compensation, or $3,000 for any taxable year beginning in 2002 through 2004; $4,000 for any taxable year beginning in 2005 through 2007; and $5,000 for any taxable year beginning in 2008 and years thereafter.
|
(2)
|
Catch-up Contributions - In the case of a Traditional IRA Holder who is age 50 or older by the close of the taxable year, the annual cash contribution limit is increased by $500 for any taxable year beginning in 2002 through 2005, and $1,000 for any taxable year beginning in 2006 and years thereafter.
|
(3)
|
SIMPLE IRA. - No contributions will be accepted under a SIMPLE IRA plan established by any employer pursuant to Code Section 408(p). Also, no transfer or rollover of funds attributable to contributions made by a particular employer under its SIMPLE IRA plan will be accepted from a SIMPLE IRA, that is, an IRA used in conjunction with a SIMPLE IRA plan, before the expiration of the two-year period beginning on the date the employee first participated in that employer's SIMPLE IRA plan.
|
|
b.
|
Traditional IRA Holder Distributions.
|
(1)
|
Notwithstanding any provision of the Plan to the contrary, the distribution of the Traditional IRA Holder's interest in this Traditional IRA shall be made in accordance with the requirements of Code Sections 408(a)(6) and 408(d) and the regulations thereunder, the provisions of which are herein incorporated by reference. If distributions are made from an annuity contract purchased from an insurance company, distributions thereunder must satisfy the requirements of Q&A-4 of Treasury Regulation 1.401(a)(9)-6T, rather than Plan Section 3.15(B)(2)(b)(2), (3) and (4) and (B)(2)(c). The required minimum distributions calculated for this Traditional IRA may be withdrawn from another Traditional IRA of the Traditional IRA Holder in accordance with Q&A-9 of Treasury Regulation 1.408-8.
|
(2)
|
The entire value of the account of the Traditional IRA Holder for whose benefit the account is maintained will begin to be distributed no later than the first day of April following the calendar year in which such Traditional IRA Holder attains age 70'/-> (the required beginning date) over the life of such Traditional IRA Holder or the lives of such Traditional IRA Holder and their designated beneficiary.
|
(3)
|
The amount to be distributed each year, beginning with the calendar year in which the Traditional IRA Holder attains age 701/2 and continuing through the year of death, shall not be less than the quotient obtained by dividing the value of the Traditional IRA (as modified by Plan Section 3.15(B)(2)(c)(3)) as of the end of the preceding year by the distribution period in the Uniform Lifetime Table in Q&A-2 of Treasury Regulation 1.401(a)(9)-9, using the Traditional IRA Holder's age as of their birthday in the year. However, if the Traditional IRA Holder's sole designated beneficiary is their surviving spouse and such spouse is more than 10 years younger than the Traditional IRA Holder, then the distribution period is determined under the Joint and Last Survivor Table in Q&A-3 of Treasury Regulation 1.401(a)(9)-9, using the ages as of the Traditional IRA Holder's and spouse's birthdays in the year.
|
(4)
|
The required minimum distribution for the year the Traditional IRA Holder attains age 70'/2 can be made as late as April 1 of the following year. The required minimum distribution for any other year must be made by the end of such year.
|
|
c.
|
Beneficiary Rights - If the Traditional IRA Holder dies before their entire interest is distributed to them, the entire remaining interest will be distributed as follows.
|
|
(1)
|
Death on or After Required Beginning Date - If the Traditional IRA Holder dies on or after the required beginning date, the remaining portion of their interest will be distributed as follows.
|
(a)
|
If the designated beneficiary is someone other than the Traditional IRA Holder's surviving spouse, the remaining interest will be distributed over the remaining life expectancy of the designated beneficiary, with such life expectancy determined using the beneficiary's age as of their birthday in the year following the year of the Traditional IRA Holder's death, or over the period described in Plan Section 3.15(B)(2)(c)(l)(c) if longer.
|
(b)
|
If the Traditional IRA Holder's sole designated beneficiary is the Traditional IRA Holder's surviving spouse, the remaining interest will be distributed over such spouse's life or over the period described in Plan Section 3.15(B)(2)(c)(l)(c) if longer. Any interest remaining after such spouse's death will be distributed over such spouse's remaining life expectancy determined using the spouse's age as of their birthday in the year of the spouse's death, or, if the distributions are being made over the period described in Plan Section 3.15(B)(2)(c)(I)(c), over such period.
|
(c)
|
If there is no designated beneficiary, or if applicable by operation of Plan Section 3.15(B)(2)(c)(l)(a) and (b), the remaining interest will be distributed over the Traditional IRA Holder's remaining life expectancy determined in the year of the Traditional IRA Holder's death.
|
(d)
|
The amount to be distributed each year under Plan Section 3.15(B)(2)(c)(l)(a), (b), and (c) beginning with the calendar year following the calendar year of the Traditional IRA Holder's death, is the quotient obtained by dividing the value of the Traditional IRA as of the end of the preceding year by the remaining life expectancy specified in Plan Section 3.15(B)(2)(c). Life expectancy is determined using the Single Life Table in Q&A-l of Treasury Regulation 1.401(a)(9)-9. If distributions are being made to a surviving spouse as the sole designated beneficiary, such spouse's remaining life expectancy for a year is the number in the Single Life Table corresponding to such spouse's age in the year. In all other cases, remaining life expectancy for a year is the number in the Single Life Table corresponding to the designated beneficiary's or Traditional IRA Holder's age in the year specified in Plan Section 3.15(B)(2)(c)(l)(a), (b), and (c) and reduced by one for each subsequent year.
|
|
(2)
|
Death Before Required Beginning Date - If the Traditional IRA Holder dies before the required beginning date, their entire interest will be distributed at least as rapidly as follows.
|
(a)
|
If the designated beneficiary is someone other than the Traditional IRA Holder's surviving spouse, the entire interest will be distributed, starting by the end of the calendar year following the calendar year of the Traditional IRA Holder's death, over the remaining life expectancy of the designated beneficiary, with such life expectancy determined using the age of the beneficiary as of their birthday in the year following the year of the Traditional IRA Holder's death, or, if elected, in accordance with Plan Section 3.15(B)(2)(c)(2)(c).
|
(b)
|
If the Traditional IRA Holder's sole designated beneficiary is the Traditional IRA Holder's surviving spouse, the entire interest will be distributed, starting by the end of the calendar year following the calendar year of the Traditional IRA Holder's death (or by the end of the calendar year in which the Traditional IRA Holder would have attained age 70!/z, if later), over such spouse's life, or, if elected, in accordance with Plan Section 3.15(B)(2)(c)(2)(c). If the surviving spouse dies before distributions are required to begin, the remaining interest will be distributed, starting by the end of the calendar year following the calendar year of the spouse's death, over the spouse's designated beneficiary's remaining life expectancy determined using such beneficiary's age as of their birthday in the year following the death of the spouse, or, if elected, will be distributed in accordance with Plan Section 3.15(B)(2)(c)(2)(c). If the surviving spouse dies after distributions are required to begin, any remaining interest will be distributed over the spouse's remaining life expectancy determined using the spouse's age as of their birthday in the year of the spouse's death.
|
(c)
|
If there is no designated beneficiary, or if applicable by operation of Plan Section 3.15(B)(2)(c)(2)(a) and (b), the entire interest will be distributed by the end of the calendar year containing the fifth anniversary of the Traditional IRA Holder's death (or of the spouse's death in the case of the surviving spouse's death before distributions are required to begin under Plan Section 3.15(B)(2)(c)(2)(b)).
|
(d)
|
The amount otherwise to be distributed each year under this Plan Section 3.15(B)(2)(c)(2)(a) and (b) is the quotient obtained by dividing the value of the IRA as of the end of the preceding year by the remaining life expectancy specified in such paragraph. Life expectancy is determined using the Single Life Table in Q&A-l of Treasury Regulation 1.401(a)(9)-9. If the distributions are being made to a surviving spouse as the sole designated beneficiary, such spouse's remaining life expectancy for a year is the number in the Single Life Table corresponding to such spouse's age in the year. In all other cases, remaining life expectancy for a year is the number in the Single Life Table corresponding to the beneficiary's age in the year specified in Plan Section 3.15(B)(2)(a) or (b) and reduced by one for each subsequent year.
|
(3)
|
The value of the Traditional IRA for purposes of this Section is the prior December 31 balance adjusted to include the amount of any outstanding rollovers, transfers and recharacterizations under Q&As-7 and-8 of Treasury Regulation 1.408-8.
|
(4)
|
If the designated beneficiary is the Traditional IRA Holder's surviving spouse, the spouse may elect to treat the Traditional IRA as their own Traditional IRA. This election will be deemed to have been made if such surviving spouse, who is the sole beneficiary of the Traditional IRA, makes a contribution to the Traditional IRA or fails to take required distributions as a beneficiary.
|
|
4.01
|
DETERMINING THE VESTED PORTION OF PARTICIPANT INDIVIDUAL ACCOUNTS
|
|
A.
|
Determining the Vested Portion - In determining the Vested portion of a Participant's Individual Account, the following rules apply.
|
1.
|
Employer Contributions - The Vested portion of a Participant's Individual Account derived from Employer Contributions other than Elective Deferrals is determined by applying the vesting schedule(s) selected in the Adoption Agreement (or the vesting schedule(s) described in Plan Section 4.01(B) if the Plan is a Top-Heavy Plan). In the event that there is not a vesting schedule option provided in the Adoption Agreement, a Participant shall be fully Vested in their Individual Account at all times. Notwithstanding the foregoing, a Participant with accrued benefits derived from Matching Contributions who has not completed at least one Hour of Service under the Plan in a Plan Year beginning after December 31, 2001, shall be subject to the vesting schedule in effect after January 1- 2002, unless otherwise elected by the Employer in an amendment adopting provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA).
|
2.
|
Other Contributions - A Participant is fully Vested in their rollover contributions and transfer contributions (subject to the exceptions provided in Plan Section 3.08), Elective Deferrals, Deductible Employee Contributions, Nondeductible Employee Contributions, Qualified Matching Contributions, and Qualified Nonelective Contributions and any earnings thereon. No Forfeiture will occur solely as a result of an Employee's withdrawal of such contributions. Separate accounts for such contributions shall be maintained for each Employee, including separate accounts for Pre-Tax Elective Deferrals and Roth Elective Deferrals. Each account will be credited with the applicable contributions and earnings thereon.
|
|
3.
|
Fully Vested Under Certain Circumstances - An Employee is fully Vested in their Individual Account if any of the following occurs:
|
|
a.
|
the Employee reaches Normal Retirement Age;
|
|
b.
|
the Plan is terminated or partially terminated as defined by rules promulgated by the IRS; or
|
|
c.
|
there exists a complete discontinuance of contributions under the Plan.
|
4.
|
Participants in a Prior Plan - If a Participant was a participant in a Prior Plan on the Effective Date, their Vested percentage shall not be less than it would have been under such Prior Plan as computed on the Effective Date.
|
5.
|
SIMPLE 401(k) Exception - Notwithstanding anything in this Plan to the contrary, all benefits attributable to contributions described in Plan Section 3.01(H) are nonforfeitable at all times, and all previous contributions made under the Plan are nonforfeitable as of the beginning of the SIMPLE 401(k) Year in which the SIMPLE 401(k) Plan is adopted.
|
6.
|
ADP Test Safe Harbor Contribution Exception - Notwithstanding anything in this Plan to the contrary, all benefits attributable to ADP Test Safe Harbor Contributions shall be nonforfeitable at all times.
|
7.
|
ACP Test Safe Harbor Matching Contributions - Notwithstanding anything in this Plan to the contrary, ACP Test Safe Harbor Matching Contributions will be Vested as indicated in the Matching Contributions vesting schedule in the Adoption Agreement, but, in any event, such contributions shall be fully Vested upon an Employee's attainment of Normal Retirement Age, upon the complete or partial termination of the Plan, or upon the complete discontinuance of Employer Contributions.
|
8.
|
Government Contract Contributions - Notwithstanding anything in this Plan to the contrary, contributions made by an Employer pursuant to Plan Section 3.04(B)(3) shall be nonforfeitable at all times.
|
|
B.
|
Minimum Vesting Schedule for Top-Heavy Plans - The following vesting provisions apply for any Plan Year in which this Plan is a Top-Heavy Plan.
|
|
C.
|
Termination of Employment - If a Participant incurs a Termination of Employment, any portion of their Individual Account which is not Vested shall be held in a suspense account. Such suspense account shall share in any increase or decrease in the fair market value of the assets of the Fund in accordance with Plan Section 7.02(8). The disposition of such suspense account shall be as follows.
|
|
1.
|
Cashout of Certain Terminated Participants - If the Vested value of a terminated Participant's Individual Account does not exceed $1,000 (or such other cashout level specified in the Adoption Agreement) the Vested value of the Participant's Individual Account may be paid from the Plan pursuant to Plan Sections 5.01(B)(1) and 5.04(A), subject to a uniform and non-discriminatory policy established by the Plan Administrator. The portion which is not Vested shall be treated as a Forfeiture and applied in accordance with Plan Section 3.04(C). If a Participant would have received the Vested portion of their Individual Account pursuant to the previous sentence but for the fact that the Participant's Vested Individual Account exceeded the cashout amount when the Participant terminated service, and if at a later time such Individual Account is reduced such that it is not greater than the cashout level, the Vested portion of the Participant's Individual Account will be paid from the Plan and the portion which is not Vested shall be treated as a Forfeiture and applied in accordance with Plan Section 3.04(C). For purposes of this Plan Section, if the value of the Vested portion of a Participant's Individual Account is zero, the Participant shall be deemed to have received a distribution of such Vested Individual Account.
|
2.
|
Terminated Participants Who Elect to Receive Distributions - If such terminated Participant elects to receive a distribution of the entire Vested portion of their Individual Account in accordance with Plan Section 5.01(B)(2), the portion which is not Vested shall be treated as a Forfeiture. Such Forfeiture shall be applied in accordance with Plan Section 3.04(C). If such terminated Participant elects to receive a partial distribution of their Vested Individual Account, no Forfeiture may occur until the Participant elects to receive the remaining portion of their Vested Individual Account.
|
3.
|
Reemploved Participants Who Received Distributions - If such Participant is deemed to receive a distribution pursuant to Plan Section 4,01(C)(1) and the Participant subsequently resumes employment before the date the Participant incurs five consecutive Breaks in Vesting Service, upon the reemployment of such Participant, the Employer-derived Individual Account balance will be restored to the amount on the date of the deemed distribution. If such Participant receives a distribution pursuant to Plan Section 4.01(C)(1) or (2) and the Participant subsequently resumes employment, the Participant's Employer-derived Individual Account balance will be restored to the amount on the date of distribution if the Participant repays to the Plan the full amount of the distribution before the earlier of
|
|
4.
|
Reemploved Participants Who Did Not Receive Distributions - If such Participant neither receives nor is deemed to receive a distribution pursuant to Plan Section 4.01(C)(1) or (2) and the Participant returns to the service of the Employer before incurring five consecutive Breaks in Vesting Service, there shall be no Forfeiture. Rather, the amount in such suspense account shall be restored to such Participant's Individual Account.
|
|
D.
|
Vesting Breaks in Service
|
1.
|
Vesting of Pre-Break Accruals - Years of Vesting Service credited after a Participant incurs five consecutive Breaks in Vesting Service shall be disregarded in determining the Vested portion of such Participant's Individual Account that was accrued before the five consecutive Breaks in Vesting Service. If a Participant who has neither received a distribution nor has been deemed to receive a distribution incurs five consecutive Breaks in Vesting Service, the portion of the Participant's Individual Account which is not Vested shall be treated as a Forfeiture and applied in accordance with Plan Section 3.04(C).
|
2.
|
Vesting of Post-Break Accruals - Years of Vesting Service credited before a Break in Vesting Service shall apply for purposes of determining the Vested portion of a Participant's Individual Account that is accrued after such Break in Vesting Service. Notwithstanding the foregoing, if elected in the Adoption Agreement, Years of Vesting Service credited before a Break in Vesting Service shall not be taken into account until the Participant has completed a Year of Vesting Service after returning to employment, if applicable.
|
|
E.
|
Distribution Before Full Vesting
|
1.
|
a separate account will be established for the Participant's interest in the Plan as of the time of the distribution, and
|
2.
|
at any relevant time, the Participant's Vested portion of the separate account will be equal to an amount ("X") determined in accordance with the standard formula described below unless the Employer chooses, in a uniform and nondiscriminatory manner, to apply the alternative formula.
|
4.02
|
100 PERCENT VESTING OF CERTAIN CONTRIBUTIONS
|
4.03
|
FORFEITURES AND VESTING OF MATCHING CONTRIBUTIONS
|
5.01
|
DISTRIBUTIONS
|
|
A.
|
Eligibility for Distributions
|
1.
|
Entitlement to Distribution - The Vested portion of a Participant's Individual Account attributable to Employer Contributions (including ACP Test Safe Harbor Matching Contributions) other than those described in Plan Section 5.01(A)(2) shall be distributable to the Participant upon 1) the Participant satisfying the distribution eligibility requirements specified in the Adoption Agreement, 2) the Participant's Termination of Employment after attaining Normal Retirement Age, 3) the termination of the Plan, and 4) if the Plan designates an Early Retirement Age. the Participant's Termination of Employment after satisfying any Early Retirement Age conditions. If a Participant separates from service before satisfying the Early Retirement Age requirement, but has satisfied the service requirement, the Participant will be entitled to elect an early retirement benefit upon satisfying such age requirement. With respect to item 1) above, if the Adoption Agreement does not allow an Employer to specify distribution eligibility requirements, the Vested portion of a Participant's Individual Account shall be distributable to the Participant upon the Participant's Termination of Employment, attainment of Normal Retirement Age, Disability, attainment of age 59!/2, or the termination of the Plan. If a Participant who is entitled to a distribution is not legally competent to request or consent to a distribution, the Participant's court-appointed guardian, an attorney in fact acting under a valid power of attorney, or any other individual or entity authorized under state law to act on behalf of the Participant, may request and accept a distribution of the Vested portion of a Participant's Individual Account under this Plan Section 5.01(A).
|
2.
|
Special Requirements For Certain 40 (k) Contributions - Elective Deferrals, Qualified Nonelective Contributions, Qualified Matching Contributions, and income allocable to each are not distributable to a Participant or their Beneficiary or Beneficiaries, in accordance with such Participant's or Beneficiaries' election, earlier than upon the Participant's Severance from Employment (separation from service for Plan Years beginning before 2002), death, or Disability, except as listed below.
|
|
Such amounts may also be distributed upon any one of the following events:
|
|
a.
|
termination of the Plan without the establishment of another defined contribution plan, other than an employee stock ownership plan (as defined in Code Section 4975(e) or Code Section 409), a simplified employee pension plan (as defined in Code Section 408(k)), a SIMPLE IRA Plan (as defined in Code Section 408(p)), a plan or contract described in Code Section 403(b), or a plan described in Code Section 457(b) or (0, at any time during the period beginning on the date of Plan termination and ending twelve months after all assets have been distributed from the Plan;
|
|
b.
|
for Plan Years before 2002, disposition by a corporation to an unrelated corporation of substantially all of the assets (within the meaning of Code Section 409(d)(2)) used in a trade or business of such corporation if such corporation continues to maintain this Plan after the disposition, but only with respect to Employees who continue employment with the corporation acquiring such assets;
|
|
c.
|
for Plan Years before 2002, disposition by a corporation to an unrelated entity of such corporation's interest in a subsidiary (within the meaning of Code Section 409(d)(3)) if such corporation continues to maintain this Plan, but only with respect to Employees who continue employment with such subsidiary;
|
|
d.
|
attainment of age 59'/2 in the case of a profit sharing plan, if elected in the Adoption Agreement. Notwithstanding the foregoing, where no election is available in the Adoption Agreement, distribution of Elective Deferrals shall be permitted upon the attainment of age 59'/2; or
|
|
e.
|
existence of a hardship incurred by the Participant as described in Plan Section 5.01(C)(2)(b), if elected in the Adoption Agreement. Notwithstanding the foregoing, where no election is available in the Adoption agreement, distribution of Elective Deferrals shall be permitted upon the existence of a hardship as described in Plan Section 5.01(C)(2)(b).
|
3.
|
Distribution Request: When Distributed — A Participant or Beneficiary entitled to a distribution who wishes to receive a distribution must submit a request (either in writing or in any other form permitted under rules promulgated by the IRS and DOL) to the Plan Administrator. If required in writing, such request shall be made upon a form provided or approved by the Plan Administrator. Upon a valid request, the Plan Administrator shall direct the Trustee (or Custodian, if applicable) to commence distribution as soon as administratively feasible after the request is received, except as otherwise provided in the Adoption Agreement.
|
|
B.
|
Distributions Upon Termination Of Employment
|
|
1.
|
Individual Account Balances Less Than or Equal to Cashout Level - If the value of the Vested portion of a Participant's Individual Account does not exceed the cashout level, the following rules shall apply regarding Plan Section 4.01(C)(1). If the value of the Vested portion of a Participant's Individual Account does not qualify as an Eligible Rollover Distribution, distribution from the Plan may be made to the Participant in a single lump sum in lieu of all other forms of distribution under the Plan following the Participant's Termination of Employment in accordance with a uniform an nondiscriminatory operational schedule established by the Plan Administrator. If the value of the Vested portion of a Participant's Individual Account does not exceed $1,000 and qualifies as an Eligible Rollover Distribution, and 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 in accordance with this Section Five of the Plan, distribution shall be made to the Participant in a single lump sum in lieu of all other forms of distribution under the Plan, unless specified otherwise in the Adoption Agreement. If the value of the Vested portion of a Participant's Individual Account exceeds $1,000 and qualifies as an Eligible Rollover Distribution, and 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 in accordance with this Section Five of the Plan, distribution shall be paid by the Plan Administrator in a Direct Rollover to an individual retirement arrangement (as described in Code Section 408(a), 408(b) or 408A) designated by the Plan Administrator. Notwithstanding the foregoing, if the Participant is reemployed by the Employer before the occurrence of the distribution, no distribution will be made under this paragraph.
|
|
2.
|
Individual Account Balances Exceeding Cashout Level - If distribution in the form of a Qualified Joint and Survivor Annuity is required with respect to a Participant and either the value of the Participant's Vested Individual Account exceeds the cashout level or there are remaining payments to be made with respect to a particular distribution option that previously commenced, and if the Individual Account is immediately distributable, the Participant must consent to any distribution of such Individual Account.
|
i.
|
the Plan Administrator clearly informs the Participant that the Participant has a right to a period of at least 30 days after receiving the notice to consider the decision of whether or not to elect a distribution (and, if applicable, a particular distribution option), and
|
ii.
|
the Participant, after receiving the notice, affirmatively elects a distribution.
|
|
3.
|
Distribution Before Attainment of Normal Retirement Age - A Participant who has incurred a Termination of Employment before attaining Normal Retirement Age may elect to receive a distribution with regard to Matching Contributions, Employer Profit Sharing Contributions, Employer Money Purchase Pension Contributions, and Employer Target Benefit Pension Contributions as applicable, unless specified otherwise in the Adoption Agreement. A Participant who has incurred a Severance from Employment before attaining Normal Retirement Age may elect to receive a distribution with regard to Qualified Matching Contributions. Elective Deferrals, Qualified Nonelective Contributions and ADP Test Safe Harbor Contributions unless specified otherwise in the Adoption Agreement.
|
|
C.
|
Distributions During Employment
|
|
1.
|
In-Service Withdrawals - If this is a profit sharing plan, unless the Adoption Agreement provides otherwise, a Participant who is not otherwise eligible to receive a distribution of their Individual Account may elect to receive an in-service distribution of all or part of the Vested portion of their Individual Account attributable to Employer Contributions other than those described in Plan Sections 5.01(A)(2) and 5.01(C)(2)(b), subject to the requirements of Plan Section 5.10 and further subject to the following limits.
|
|
a.
|
Participant for Jive or more years - An Employee who has been a Participant in the Plan for five or more years may withdraw up to the entire Vested portion of their Individual Account.
|
|
b.
|
Participant for less than five years — Except as otherwise provided in the Adoption Agreement, an Employee who has been a Participant in the Plan for less than five years may withdraw only the amount which has been in their Individual Account attributable to Employer Contributions for at least two full Plan Years, measured from the date such contributions were allocated.
|
|
2.
|
Hardship Withdrawals
|
|
a.
|
Hardship Withdrawals of Matching Contributions and Employer Profit Sharing Contributions - If this is a profit sharing plan, then notwithstanding Plan Section 5.01(C)(1) (unless the Adoption Agreement provides otherwise) a Participant may elect to receive a hardship distribution of all or part of the Vested portion of their Individual Account attributable to Employer Contributions other than those described in Plan Section 5.01(A)(2), subject to the requirements of Plan Section 5.10.
|
(1)
|
the Employee has obtained all distributions, other than hardship distributions, and all nontaxable loans available under all plans maintained by the Employer;
|
(2)
|
the distribution is not in excess of the amount of an immediate and heavy financial need (including amounts necessary to pay any federal, state, or local income taxes or penalties reasonably anticipated to result from the distribution).
|
|
b.
|
Hardship Withdrawals of Elective Deferrals - Unless the Adopting Employer has elected otherwise in the Adoption Agreement, distribution of Elective Deferrals (including Qualified Nonelective Contributions and Qualified Matching Contributions that are treated as Elective Deferrals and any earnings credited to a Participant's account as of the later of December 31, 1988, and the end of the last Plan Year ending before July 1, 1989) may be made to a Participant in the event of hardship. For the purposes of this Section 5.01(C)(2)(b), hardship is defined as an immediate and heavy financial need of the Employee where the distribution is needed to satisfy the immediate and heavy financial need of such Employee. Hardship distributions are subject to the spousal consent requirements contained in Code Sections 401(a)(l 1) and 417, if applicable.
|
(1)
|
all plans maintained by the Employer provide that the Employee's Elective Deferrals (and Nondeductible Employee Contributions) will be suspended for six months (12 months for hardship distributions before 2002) after the receipt of the hardship distribution; and
|
(2)
|
for hardship distributions before 2002, all plans maintained by the Employer provide that the Employee may not make Elective Deferrals for the Employee's taxable year immediately following the taxable year of the hardship distribution in excess of the applicable limit under Code Section 402(g) for such taxable year less the amount of such Employee's Elective Deferrals for the taxable year of the hardship distribution.
|
|
D.
|
Miscellaneous Distribution Issues
|
|
1.
|
Distribution of Rollover. Transfer, and Nondeductible Employee Contributions - The following rules shall apply with respect to entitlement to distribution of rollover and transfer contributions and Nondeductible Employee Contributions.
|
|
a.
|
Entitlement to Distribution - If no election is available in the Adoption Agreement, rollover contributions (including rollovers of Nondeductible Employee Contributions) and earnings thereon may be distributed at any time upon request. If the Adopting Employer specifies in the Adoption Agreement that Rollover contributions may not be distributed at any time, such contributions will be subject to the Plan's provisions governing distributions of either Employer Profit Sharing Contributions (if this Plan is a profit sharing plan), Employer Money Purchase Pension Contributions (if this Plan is a money purchase pension plan), or Employer Target Benefit Pension Contributions (if this Plan is a target benefit pension plan). If the Adopting Employer specifies in the Adoption Agreement that transfer contributions may be distributed at any time or if no election is available in the Adoption Agreement, transfer contributions may be distributed at any time upon request subject to the restrictions below and any other restrictions required by either the Code or applicable regulations. If the Adopting Employer specifies in the Adoption Agreement that transfer contributions may not be distributed at any time, such contributions will be subject to the Plan's provisions governing distributions of either Employer Profit Sharing Contributions (if this is a profit sharing plan), Employer Money Purchase Pension Contributions (if this Plan is a money purchase pension plan), or Employer Target Benefit Pension Contributions (if this Plan is a target benefit pension plan). Notwithstanding the foregoing, to the extent that any optional form of benefit under this Plan permits a distribution before the Employee's retirement, death. Disability, attainment of Normal Retirement Age, or Termination of Employment, and before 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 or a target benefit pension plan qualified under Code Section 401(a) (other than any portion of those assets and liabilities attributable to voluntary employee contributions). In addition, if such transfers consist of Elective Deferrals or amounts treated as Elective Deferrals (including earnings thereon) from a 401(k) plan, the assets transferred shall continue to be subject to the distribution restrictions under Code Sections 401(k)(2) and 401(k)(10), unless otherwise provided in the Adoption Agreement.
|
|
b.
|
Direct Rollovers of Eligible Rollover Distributions - Notwithstanding any provision of the Plan to the contrary that would otherwise limit a Recipient's election under this Plan Section 5.01(D)(l)(b), a Recipient may elect, at the time and in the manner prescribed by the Plan Administrator, to have any portion of an Eligible Rollover Distribution that is equal to at least $500 (or such lesser amount if the Plan Administrator permits in a uniform and nondiscriminatory manner) paid directly to an Eligible Retirement Plan specified by the Recipient in a Direct Rollover.
|
2.
|
Option to Limit Frequency of In-Service Distributions - If this is a profit sharing plan and the Adopting Employer has elected to limit the number of in-service distributions in the Adoption Agreement, then a Participant will be permitted only the number of in-service distributions indicated in the Adoption Agreement during the course of such Participant's employment with the Employer. The amount which the Participant can withdraw will be limited to the lesser of the amount determined under the limits set forth in Plan Section 5.01(C) or the percentage of the Participant's Individual Account specified by the Adopting Employer in the Adoption Agreement. Distributions under this Section 5.01(D)(2) will be subject to the requirements of Plan Section 5.10.
|
3.
|
Commencement of Benefits - Notwithstanding any other provision, unless the Participant elects otherwise, distribution of benefits will begin no later than the 60th day after the latest of the close of the Plan Year in which
|
|
5.02
|
FORM OF DISTRIBUTION TO A PARTICIPANT
|
|
5.03
|
DISTRIBUTIONS UPON THE DEATH OF A PARTICIPANT
|
|
A.
|
Designation of Beneficiary - Spousal Consent - Each Participant may designate, on a form provided or approved by and delivered to the Plan Administrator, one or more primary and contingent Beneficiaries to receive all or a specified portion of the Participant's Individual Account in the event of their death. A Participant may change or revoke such Beneficiary designation by completing and delivering the proper form to the Plan Administrator. If the Participant designates a Spouse Beneficiary and the individual later ceases to be a Spouse, such designation of the individual who becomes an ex-spouse (other than by death) will be deemed void and the ex-spouse shall have no rights as a Beneficiary' unless redesignated as a Beneficiary by the Participant subsequent to becoming an ex-spouse.
|
|
B.
|
Payment to Beneficiary - If a Participant dies before the Participant's entire Individual Account has been paid to them, such deceased Participant's Individual Account shall be payable to any surviving Beneficiary designated by the Participant, or, if no Beneficiary survives the Participant, to the Participant's Spouse, or, where no Spouse exists, to the Participant's estate. If the Beneficiary is a minor, distribution will be deemed to have been made to such Beneficiary if the portion of the Participant's Individual Account to which the Beneficiary is entitled is paid to their legal guardian or, if applicable, to their custodian under the Uniform Gifts to Minors Act or the Uniform Transfers to Minors Act. If a Beneficiary is not a minor but is not legally competent to request or consent to a distribution, distributions will be deemed to have been made to such Beneficiary if the portion of the Participant's Individual Account to which the Beneficiary is entitled is paid to the Participant's court-appointed guardian, an attorney in fact acting under a valid power of attorney, or any other individual or entity authorized under state law to act on behalf of the Beneficiary.
|
|
C.
|
Distribution Request: When Distributed - A Beneficiary of a deceased Participant entitled to a distribution who wishes to receive a distribution must submit a request (either in writing or in any other form permitted under rules promulgated by the IRS and DOL) to the Plan Administrator. If required in writing, such request shall be made on a form provided or approved by the Plan Administrator. Upon a valid request, the Plan Administrator shall direct the Trustee (or Custodian, if applicable) to commence distribution as soon as administratively feasible after the request is received, except as otherwise provided in the Adoption Agreement.
|
|
5.04
|
FORM OF DISTRIBUTION TO BENEFICIARIES
|
|
A.
|
Value of Individual Account Does Not Exceed $5,000 - If the value of the Vested portion of a Participant's Individual Account does not exceed $5,000, the value of the Vested portion of a Participant's Individual Account may be made to the Beneficiary in a single lump sum in lieu of all other forms of distribution under the Plan, as soon as administratively feasible.
|
|
B.
|
Value of Individual Account Exceeds $5,000 - If the value of the Vested portion of a Participant's Individual Account exceeds $5,000, the preretirement survivor annuity requirements of Plan Section 5.10 shall apply unless waived in accordance with that Plan Section 5.10 or unless the Retirement Equity Act safe harbor rules of Plan Section 5.10(E) apply. However, a surviving Spouse Beneficiary may elect any form of payment allowable under the Plan in lieu of the preretirement survivor annuity. Any such payment to the surviving Spouse must meet the requirements of Plan Section 5.05.
|
|
C.
|
Other Forms of Distribution to Beneficiary - If the value of a Participant's Individual Account exceeds $5,000, and the Participant has properly waived the preretirement survivor annuity, as described in Plan Section 5.10 (if applicable), or if the Beneficiary is the Participant's surviving Spouse, the Beneficiary may, subject to the requirements of Plan Section 5.05. request (either in writing or in any other form permitted under rules promulgated by the IRS and DOL) that the Participant's Individual Account be paid in any form of distribution permitted to be taken by the Participant under this Plan other than applying the Individual Account toward the purchase of an annuity contract. Notwithstanding the foregoing, installment payments to a Beneficiary cannot be made over a period exceeding the Life Expectancy of such Beneficiary.
|
|
5.05
|
REQUIRED MINIMUM DISTRIBUTION REQUIREMENTS
|
|
A.
|
General Rules
|
1.
|
Subject to Plan Section 5.10, the requirements of this Section shall apply to any distribution of a Participant's interest and will take precedence over any inconsistent provisions of this Plan. Unless otherwise specified, the provisions of Plan Section 5.05 apply to calendar years beginning after December 31, 2002.
|
2.
|
All distributions required under this Plan Section 5.05 shall be determined and made in accordance with Treasury Regulation 1.401(a)(9), including the minimum distribution incidental benefit requirement of Code Section 401(a)(9)(G).
|
3.
|
Limits on Distribution Periods -As of the first Distribution Calendar Year, distributions to a Participant, if not made in a single sum, may only be made over one of the following periods (or a combination thereof):
|
|
a.
|
the life of the Participant,
|
|
b.
|
the joint lives of the Participant and a designated Beneficiary,
|
|
c.
|
a period certain not extending beyond the Life Expectancy of the Participant, or
|
|
d.
|
a period certain not extending beyond the joint life and last survivor expectancy of the Participant and a Designated Beneficiary.
|
|
B.
|
Time and Manner of Distribution
|
|
1.
|
Required Beginning Date - The Participant's entire interest will be distributed, or begin to be distributed, to the Participant no later than the Participant's Required Beginning Date.
|
|
2.
|
Forms of Distribution - Unless the Participant's 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 Plan Section 5.05(C) and Plan Section 5.05(D). If the Participant's 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 related Treasury Regulations.
|
|
C.
|
Required Minimum Distributions During Participant's Lifetime
|
|
1.
|
Amount of Required Minimum Distribution for Each Distribution Calendar Year - During the Participant's lifetime, the minimum amount that will be distributed for each Distribution Calendar Year is the lesser of
|
|
a.
|
the quotient obtained by dividing the Participant's Benefit by the distribution period in the Uniform Lifetime Table set forth in Treasury Regulation 1.401(a)(9)-9, Q&A-2, using the Participant's age as of the Participant's birthday in the Distribution Calendar Year; or
|
|
b.
|
if the Participant's sole Designated Beneficiary for the Distribution Calendar Year is the Participant's Spouse, the quotient obtained by dividing the Participant's Benefit by the number in the Joint and Last Survivor Table set forth in Treasury Regulation 1.401(a)(9)-9, Q&A-3, using the Participant's and Spouse's attained ages as of the Participant's and Spouse's birthdays in the Distribution Calendar Year.
|
|
2.
|
Lifetime Required Minimum Distributions Continue Through Year of Participant's Death - Required minimum distributions will be determined under this Plan Section 5.05(C) beginning with the first Distribution Calendar Year and up to and including the Distribution Calendar Year that includes the Participant's date of death.
|
|
D.
|
Required Minimum Distributions After Participant's Death
|
|
1.
|
Death On or After Date Distributions Begin
|
|
a.
|
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 Participant's death is the quotient obtained by dividing the Participant's benefit by the longer of the remaining Life Expectancy of the Participant or the remaining Life Expectancy of the Participant's Designated Beneficiary, determined as follows:
|
|
i.
|
The Participant's remaining Life Expectancy is calculated using the age of the Participant in the year of death, reduced by one for each subsequent year.
|
|
ii.
|
If the Participant's surviving Spouse is the Participant's sole Designated Beneficiary, the remaining Life Expectancy of the surviving Spouse is calculated for each Distribution Calendar Year after the year of the Participant's death using the surviving Spouse's age as of the Spouse's birthday in that year. For Distribution Calendar Years after the year of the surviving Spouse's death, the remaining Life Expectancy of the surviving Spouse is calculated using the age of the surviving Spouse as of the Spouse's birthday in the calendar year of the Spouse's death, reduced by one for each subsequent calendar year.
|
|
iii.
|
If the Participant's surviving Spouse is not the Participant's sole Designated Beneficiary, the Designated
|
|
b.
|
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 Participant's death, the minimum amount that will be distributed for each Distribution Calendar Year after the year of the Participant's death is the quotient obtained by dividing the Participant's benefit by the Participant's remaining Life Expectancy calculated using the age of the Participant in the year of death, reduced by one for each subsequent year.
|
|
2.
|
Death Before Date Distributions Begin
|
|
a.
|
Participant Survived by Designated Beneficiary - Except as provided in the Adoption Agreement (or in a separate IRS model amendment, if applicable), 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 Participant's death is the quotient obtained by dividing the Participant's benefit by the remaining Life Expectancy of the Participant's Designated Beneficiary, determined as provided in Section 5.05(D)(1).
|
|
i.
|
If the Participant's surviving Spouse is the Participant's sole Designated Beneficiary, then, except as provided in the Adoption Agreement (or in a separate IRS model amendment, if applicable), 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 70'/=, if later.
|
|
ii.
|
If the Participant's surviving Spouse is not the Participant's sole Designated Beneficiary, then, except as provided in the Adoption Agreement (or in a separate IRS model amendment, if applicable), distributions to the Designated Beneficiary will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died.
|
|
iii.
|
If the Participant's surviving Spouse is the Participant's sole Designated Beneficiary and the surviving Spouse dies after the Participant but before distributions to the surviving Spouse are required to begin, this Plan Section 5.05(D)(2), other than Plan Section 5.05(D)(2)(a), will apply as if the surviving Spouse were the Participant.
|
|
b.
|
No Designated Beneficiary — If the Participant dies before the date distributions begin and there is no Designated
|
|
3.
|
Election to Allow Designated Beneficiary Receiving Distributions Under 5-Year Rule to Elect Life Expectancy Distributions Unless specified otherwise in a separate IRS model amendment, a Designated Beneficiary who is receiving payments under the five-year rule may make a new election to receive payments under the life expectancy rule until December 31, 2003, provided that all amounts that would have been required to be distributed under the life expectancy rule for all distribution calendar years before 2004 are distributed by the earlier of December 31, 2003 or the end of the five-year period.
|
|
E.
|
TEFRA Section 242(b) Elections
|
|
1.
|
Notwithstanding the other requirements of this Plan Section 5.05 and subject to the requirements of Plan Section 5.10, Joint and Survivor Annuity Requirements, distribution on behalf of any Employee (or former Employee), including a five-percent owner, who has made a designation in Section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act (a "Section 242(b)(2) Election") may be made in accordance with all of the following requirements (regardless of when such distribution commences).
|
|
a.
|
The distribution by the Fund is one which would not have qualified such Fund under Code Section 401(a)(9) as in effect before amendment by the Deficit Reduction Act of!984.
|
|
b.
|
The distribution is in accordance with a method of distribution designated by the Employee whose interest in the Fund is being distributed or, if the Employee is deceased, by a Beneficiary of such Employee.
|
|
c.
|
Such designation was in writing, was signed by the Employee or the Beneficiary, and was made before January 1, 1984.
|
|
d.
|
The Employee had accrued a benefit under the Plan as of December 31, 1983.
|
|
e.
|
The method of distribution designated by the Employee or the Beneficiary specifies the time at which distribution will commence, the period over which distributions will be made, and in the case of any distribution upon the Employee's death, the Beneficiaries of the Employee listed in order of priority.
|
2.
|
A distribution upon death will not be covered by this transitional rule unless the information in the designation contains the required information described above with respect to the distributions to be made upon the death of the Employee.
|
3.
|
If a designation is revoked, any subsequent distribution must satisfy the requirements of Code Section 401(a)(9) and the regulations thereunder. If a designation is revoked subsequent to the date distributions are required to begin, the Plan must distribute, by the end of the calendar year following the calendar year in which the revocation occurs the total amount not yet distributed which would have been required to have been distributed to satisfy Code Section 401(a)(9) and the regulations thereunder, but for an election made in Section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act of 1982. For calendar years beginning after December 31, 1988, such distributions must meet the minimum distribution incidental benefit requirements. Any changes in the designation will be considered to be a revocation of the designation. However, the mere substitution or addition of another Beneficiary (one not named in the designation) under the designation will not be considered to be a revocation of the designation, so long as such substitution or addition does not alter the period over which distributions are to be made under the designation, directly or indirectly (for example, by altering the relevant measuring life).
|
4.
|
In the case in which an amount is transferred or rolled over from one plan to another plan, the rules in Treasury Regulation 1.401(a)(9)-8, Q&A-14 and Q&A-15, shall apply.
|
|
F.
|
Transition Rules
|
|
1
|
2000 and Before - Required minimum distributions for calendar years after 1984 and before 2001 were made in accordance with Code Section 401(a)(9) and the Proposed Treasury Regulations thereunder published in the Federal Register on July 27, 1987 (the "1987 Proposed Regulations").
|
2.
|
2001 -Required minimum distributions for calendar year 2001 were made in accordance with Code Section 401(a)(9) and the Proposed Treasury Regulations in Section 401(a)(9) as published in the Federal Register on January 17, 2001 (the "2001 Proposed Regulations") unless a prior IRS model amendment provisions was adopted that stated that the required minimum distributions for 2001 were made pursuant to the 1987 Proposed Regulations. If distributions were made in 2001 under the 1987 Proposed Regulations before the date in 2001 that the Plan began operating under the 2001 Proposed Regulations, the special transition rule in Announcement 2001-82, 2001-2 C.B. 123, applied.
|
3.
|
2002 - Required minimum distributions for calendar year 2002 were made in accordance with Code Section 40 l(a)(9) and the 2001 Proposed Regulations unless the prior IRS model amendment, if applicable, provided either a. or b. below applies.
|
|
a.
|
Required minimum distributions for 2002 were made pursuant to the 1987 Proposed Regulations.
|
|
b.
|
Required minimum distributions for 2002 were made pursuant to the Final and Temporary Treasury Regulations under Code Section 401(a)(9) published in the Federal Register on April 17, 2002 (the "2002 Final and Temporary Regulations") which are described in Plan Sections 5.05(B) through 5.05(E). If distributions were made in 2002 under either the 1987 Proposed Regulations or the 2001 Proposed Regulations before the date in 2002 that the Plan began operating under the 2002 Final and Temporary Regulations, the special transition rule in Section 1.2 of the model amendment in Revenue Procedure 2002-29, 2002-1 C.B. 1176, applied.
|
5.06
|
ANNUITY CONTRACTS
|
5.07
|
DISTRIBUTIONS IN-KIND
|
5.08
|
PROCEDURE FOR MISSING PARTICIPANTS OR BENEFICIARIES
|
5.09
|
CLAIMS PROCEDURES
|
|
A.
|
Filing a Claim for Plan Distributions - A Participant or Beneficiary who has been denied a request for a distribution or loan and desires to make a claim for the Vested portion of the Participant's Individual Account shall file a request (either in writing or in any other form permitted under rules promulgated by the IRS and DOL and acceptable to the Plan Administrator) with the Plan Administrator. If such request is required in writing, such request must be made on a form furnished to them by the Plan Administrator for such purpose. The request shall set forth the basis of the claim. The Plan Administrator is authorized to conduct such examinations as may be necessary to facilitate the payment of any benefits to which the Participant or Beneficiary may be entitled under the terms of the Plan.
|
|
B.
|
Denial of a Claim - Whenever a claim for a Plan distribution or loan submitted in accordance with this Section 5.09 by any Participant or Beneficiary has been wholly or partially denied, the Plan Administrator must furnish such Participant or Beneficiary notice (either in writing or in any other form permitted under rules promulgated by the IRS and DOL) of the denial within 90 days of the date the original claim was filed. This notice shall set forth the specific reasons for the denial, specific reference to pertinent Plan provisions on which the denial is based, a description of any additional information or material needed to perfect the claim, an explanation of why such additional information or material is necessary', and an explanation of the procedures for appeal.
|
|
C.
|
Remedies Available - The Participant or Beneficiary shall have 60 days from receipt of the denial notice in which to make written application for review by the Plan Administrator. The Participant or Beneficiary may request that the review be in the nature of a hearing. The Participant or Beneficiary shall have the right to representation, to review pertinent documents, and to submit comments in writing (or in any other form permitted by the IRS or DOL). The Plan Administrator shall issue a decision on such review within 60 days after receipt of an application for review as provided for in this Plan Section 5.09. Upon a decision unfavorable to the Participant or Beneficiary, such Participant or Beneficiary shall be entitled to bring such actions in law or equity as may be necessary or appropriate to protect or clarify their right to benefits under this Plan.
|
5.10
|
JOINT AND SURVIVOR ANNUITY REQUIREMENTS
|
|
A.
|
Application - The provisions of this Section shall apply to any Participant who is credited with at least one Hour of Service with the Employer on or after August 23, 1984, and such other Participants as provided in Treasury Regulations.
|
|
B.
|
Qualified Joint and Survivor Annuity - Unless an optional form of benefit is selected pursuant to a Qualified Election within the 90-day period ending on the Annuity Starting Date, a married Participant's Vested Account Balance will be paid in the form of a Qualified Joint and Survivor Annuity and an unmarried Participant's Vested Account Balance will be paid in the form of a life annuity. The Participant may elect to have such annuity distributed upon attainment of the Earliest Retirement Age under the Plan. In the case of a married Participant, the Qualified Joint and Survivor Annuity must be at least as valuable as any other optional form of benefit payable under the Plan at the same time.
|
|
C.
|
Qualified Preretirement Survivor Annuity - Unless an optional form of benefit has been selected within the Election Period pursuant to a Qualified Election, if a Participant dies before the Annuity Starting Date then the Participant's Vested Account Balance shall be applied toward the purchase of an annuity for the life of the surviving Spouse. The surviving Spouse may elect to have such annuity distributed within a reasonable period after the Participant's death.
|
|
D.
|
Notice Requirements
|
|
1.
|
In the case of a Qualified Joint and Survivor Annuity, the Plan Administrator shall no less than 30 days and not more than 90 days before the Annuity Starting Date provide each Participant an explanation (either in writing or in any other form permitted under rules promulgated by the IRS and DOL) of 1) the terms and conditions of a Qualified Joint and Survivor Annuity, 2) the Participant's right to make and the effect of an election to waive the Qualified Joint and Survivor Annuity form of benefit, 3) the rights of a Participant's Spouse, and 4) the right to make, and the effect of, a revocation of a previous election to waive the Qualified Joint and Survivor Annuity.
|
|
2.
|
In the case of a Qualified Preretirement Survivor Annuity as described in Plan Section 5.10(C), the Plan Administrator shall provide each Participant within the applicable period for such Participant an explanation (either in writing or in any other form permitted under rules promulgated by the IRS and DOL) of the Qualified Preretirement Survivor Annuity in such terms and in such manner as would be comparable to the explanation provided for meeting the requirements of Plan Section 5.10(D)(1) applicable to a Qualified Joint and Survivor Annuity.
|
|
3.
|
Notwithstanding the other requirements of this Plan Section 5.10(D), the respective notices prescribed by this Plan Section 5.10(D), need not be given to a Participant if 1) the Plan "fully subsidizes" the costs of a Qualified Joint and Survivor Annuity or Qualified Preretirement Survivor Annuity, and 2) the Plan does not allow the Participant to waive the Qualified Joint and Survivor Annuity or Qualified Preretirement Survivor Annuity and does not allow a married Participant to designate a non-Spouse Beneficiary. For purposes of this Plan Section 5.10(D)(3), a plan fully subsidizes the costs of a benefit if no increase in cost, or decrease in benefits to the Participant may result from the Participant's failure to elect another benefit.
|
|
E.
|
Retirement Equity Act Safe Harbor Rules
|
|
1.
|
Except as provided otherwise in the Adoption Agreement, the safe harbor provisions of this Plan Section 5.10(E) shall apply to a Participant in a profit sharing plan, and shall always apply to any distribution made on or after the first day of the first Plan Year beginning after December 31, 1988, from or under a separate account attributable solely to accumulated deductible employee contributions, as defined in Code Section 72(o)(5)(B). and maintained on behalf of a Participant in a money purchase pension plan, (including a target benefit pension plan) if the following conditions are satisfied:
|
|
a.
|
the Participant does not or cannot elect payments in the form of a life annuity; and
|
|
b.
|
on the death of a Participant, the Participant's Vested Account Balance will be paid to the Participant's surviving Spouse, but if there is no surviving Spouse, or if the surviving Spouse has consented in a manner conforming to a Qualified Election, then to the Participant's designated Beneficiary. The surviving Spouse may elect to have distribution of the Vested Account Balance commence within the 90-day period following the date of the Participant's death. The Vested Account Balance shall be adjusted for gains or losses occurring after the Participant's death in accordance with the provisions of the Plan governing the adjustment of account balances for other types of distributions. This Plan Section 5.10(E) shall not apply to a Participant in a profit sharing plan if the plan is a direct or indirect transferee of a defined benefit plan, money purchase pension plan, a target benefit pension plan, stock bonus, or profit sharing plan which is subject to the survivor annuity requirements of Code Section 401(a)(l 1) and Section 417. If this Plan Section 5.10(E) applies, then no other provisions of this Plan Section 5.10 shall apply except as provided in Treasury Regulations.
|
2.
|
The Participant may waive the spousal death benefit described in this Plan Section 5.10(E) at any time provided that no such waiver shall be effective unless it is a Qualified Election (other than the notification requirement referred to therein) that would apply to the Participant's waiver of the Qualified Preretirement Survivor Annuity.
|
3.
|
For purposes of this Plan Section 5.10(E), Vested Account Balance shall mean, in the case of a money purchase pension plan or a target benefit pension plan, the Participant's separate account balance attributable solely to accumulated deductible employee contributions within the meaning of Code Section 72(o)(5)(B). In the case of a profit sharing plan, Vested Account Balance shall have the same meaning as provided in the Definitions Section of this Plan.
|
4.
|
In the event this Plan is a direct or indirect transferee of or a restatement of a plan previously subject to the survivor annuity requirements of Code Sections 401(a)(l 1) and 417 and the Employer has selected to have this Plan Section 5.10(E) apply, the provisions of this Plan Section 5.10(E) shall not apply to any benefits accrued (including subsequent adjustments for earnings and losses) before the adoption of these provisions. Such amounts shall be separately accounted for in a manner consistent with Plan Section 7.02 and administered in accordance with the general survivor annuity requirements of Plan Section 5.10.
|
|
5.11
|
LIABILITY FOR WITHHOLDING ON DISTRIBUTIONS
|
|
5.12
|
DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS
|
|
A.
|
General Rule -A Participant may assign to this Plan any Excess Elective Deferrals made during a taxable year of the Participant by notifying the Plan Administrator of the amount of the Excess Elective Deferrals to be assigned to the Plan. Unless specified otherwise in the Adoption Agreement, Participants who claim Excess Elective Deferrals for the preceding calendar year must submit their claims (either in writing or in any other form permitted under rules promulgated by the IRS and DOL) to the Plan Administrator by March 1. A Participant is deemed to notify the Plan Administrator of any Excess Elective Deferrals that arise by taking into account only those Elective Deferrals made to this Plan and any other plan, contract, or arrangement of the Employer.
|
|
B.
|
Determination of Income or Loss - Excess Elective Deferrals shall be adjusted for any income or loss up to the date of the distribution. The income or loss allocable to Excess Elective Deferrals is the sum of: 1) the income or loss allocable to the Participant's Elective Deferral account for the taxable year multiplied by a fraction, the numerator of which is such Participant's Excess Elective Deferrals for the year and the denominator of which is the Participant's Individual Account balance attributable to Elective Deferrals without regard to any income or loss occurring during such taxable year, and 2) 10 percent of the amount determined under 1) multiplied by the number of whole calendar months between the end of the Participant's taxable year and the date of distribution, counting the month of distribution if distribution occurs after the 15lh day of such month. Notwithstanding the preceding sentence, the Plan Administrator may compute the income or loss allocable to Excess Elective Deferrals in the manner described in Plan Section 7.02(B) (i.e., the usual manner used by the Plan for allocating income or loss to Participants' Individual Accounts or any reasonable method), provided such method is used consistently for all Participants and for all corrective distributions under the Plan for the Plan Year. The Plan will not fail to use a reasonable method for computing the income or loss on Excess Elective Deferrals merely because the income allocable is based on a date that is no more than seven days before the distribution.
|
|
5.13
|
DISTRIBUTION OF EXCESS CONTRIBUTIONS
|
|
A.
|
General Rule - Notwithstanding any other provision of this Plan, Excess Contributions, plus any income and minus any loss allocable thereto, shall be distributed no later than 12 months after a Plan Year to Participants to whose Individual Accounts such Excess Contributions were allocated for such Plan Year, except to the extent such Excess Contributions were classified as Catch up Contributions. Excess Contributions are allocated to the Highly Compensated Employees with the largest amounts of Employer Contributions taken into account in calculating the ADP test for the year in which the excess arose, beginning with the Highly Compensated Employee with the largest amount of such Employer Contributions and continuing in descending order until all the Excess Contributions have been allocated. Both the total amount of the Excess Contribution and, for purposes of the preceding sentence, the "largest amount" are determined after distribution of any Excess Deferrals. To the extent a Highly Compensated Employee has not reached their Catch-up Contribution limit under the Plan, Excess Contributions allocated to such Highly Compensated Employees as Catch-up Contributions will not be treated as Excess Contributions. If such Excess Contributions are distributed more than 2'/z months after the last day of the Plan Year in which such Contributions arose, a 10 percent excise tax will be imposed on the Employer maintaining the Plan with respect to such amounts. Excess Contributions shall be treated as annual additions under the Plan even if distributed.
|
|
B.
|
Determination of Income or Loss - Excess Contributions shall be adjusted for any income or loss up to the date of distribution. The income or loss allocable to Excess Contributions allocated to each Participant is the sum of: 1) the income or loss allocable to the Participant's Elective Deferral account(s) (and, if applicable, the Qualified Nonelective Contribution account or the Qualified Matching Contributions account or both) for the Plan Year multiplied by a fraction, the numerator of which is such Participant's Excess Contributions for the year and the denominator of which is the Participant's Individual Account balance attributable to Elective Deferrals (and Qualified Nonelective Contributions or Qualified Matching Contributions, or both, if any of such contributions are included in the ADP test) without regard to any income or loss occurring during such Plan Year, and 2) 10 percent of the amount determined under 1) multiplied by the number of whole calendar months between the end of the Plan Year and the date of distribution, counting the month of distribution if distribution occurs after the 15lh day of such month. Notwithstanding the preceding sentence, the Plan Administrator may compute the income or loss allocable to Excess Contributions in the manner described in Plan Section 7.02(B) (i.e., the usual manner used by the Plan for allocating income or loss to Participants' Individual Accounts or any reasonable method), provided such method is used consistently for all Participants and for all corrective distributions under the Plan for the Plan Year. The Plan will not fail to use a reasonable method for computing the income or loss on Excess Contributions merely because the income allocable is based on a date that is no more than seven days before the distribution.
|
|
C.
|
Accounting for Excess Contributions - Excess Contributions allocated to a Participant shall be distributed from the Participant's Elective Deferral account(s) and Qualified Matching Contribution account (if applicable) in proportion to the Participant's Elective Deferrals and Qualified Matching Contributions (to the extent used in the ADP test) for the Plan Year. For years beginning after 2005, the Plan Administrator, in a uniform and nondiscriminatory manner, will either determine whether the distribution of Excess Contributions for a year will be made first from the Participant's Pre-Tax Elective Deferral account or the Roth Elective Deferral account, or a combination of both, to the extent both Pre-Tax Elective Deferrals and Roth Elective Deferrals were made for the year, or may allow Participants to specify otherwise. Excess Contributions shall be distributed from the Participant's Qualified Nonelective Contribution account only to the extent that such Excess Contributions exceed the balance in the Participant's Elective Deferral account(s) and Qualified Matching Contribution account.
|
5.14
|
DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS
|
|
A.
|
General Rule - Notwithstanding any other provision of this Plan, Excess Aggregate Contributions, plus any income and minus any loss allocable thereto, shall be forfeited, if forfeitable, or if not forfeitable, distributed no later than 12 months after a Plan Year to Participants to whose accounts such Excess Aggregate Contributions were allocated for such Plan Year. Excess Aggregate Contributions are allocated to the Highly Compensated Employees with the largest Contribution Percentage Amounts taken into account in calculating the ACP test for the year in which the excess arose, beginning with the Highly Compensated Employee with the largest amount of such Contribution Percentage Amounts and continuing in descending order until all the Excess Aggregate Contributions have been allocated. If such Excess Aggregate Contributions are distributed more than 2'/z months after the last day of the Plan Year in which such Excess Aggregate Contributions arose, a 10 percent excise tax will be imposed on the Employer maintaining the Plan with respect to those amounts. Excess Aggregate Contributions shall be treated as annual additions under the Plan even if distributed.
|
|
B.
|
Determination of Income or Loss - Excess Aggregate Contributions shall be adjusted for any income or loss up to the date of distributions. The income or loss allocable to Excess Aggregate Contributions allocated to each Participant is the sum of: 1) the income or loss allocable to the Participant's Nondeductible Employee Contribution account. Matching Contribution account, Qualified Matching Contributions account (if any, and if all amounts therein are not used in the ADP test) and, if applicable, Qualified Nonelective Contribution account and Elective Deferral account(s) for the Plan Year multiplied by a fraction, the numerator of which is such Participant's Excess Aggregate Contributions for the year and the denominator of which is the Participant's Individual Account balance(s) attributable to Contribution Percentage Amounts without regard to any income or loss occurring during such Plan Year; and 2) 10 percent of the amount determined under 1) multiplied by the number of whole calendar months between the end of the Plan Year and the date of distribution, counting the month of distribution if distribution occurs after the 15lh day of such month. Notwithstanding the preceding sentence, the Plan Administrator may compute the income or loss allocable to Excess Aggregate Contributions in the manner described in Plan Section 7.02(B) (i.e., the usual manner used by the Plan for allocating income or loss to Participants' Individual Accounts or any reasonable method), provided such method is used consistently for all Participants and for all corrective distributions under the Plan for the Plan Year. The Plan will not fail to use a reasonable method for computing the income or loss on Excess Aggregate Contributions merely because the income allocable is based on a date that is no more than seven days before the distribution.
|
|
C.
|
Accounting for Excess Aggregate Contributions - Excess Aggregate Contributions allocated to a Participant shall be forfeited, if forfeitable, or distributed on a pro rata basis from the Participant's Nondeductible Employee Contribution account. Matching Contribution account, and Qualified Matching Contribution account (and, if applicable, the Participant's Qualified Nonelective Contribution account or Elective Deferral account, or both). For years beginning after 2005. the Plan Administrator, in a uniform and nondiscriminatory manner, will determine whether the distribution of Elective Deferrals that are Excess Aggregate Contributions for a year will be made first from the Participant's Pre-Tax Elective Deferral account or the Roth Elective Deferral account, or a combination of both, to the extent both Pre-Tax Elective Deferrals and Roth Elective Deferrals were made for the year, or may allow Participants to specify otherwise.
|
|
5.15
|
RECHARACTERIZATION
|
5.16
|
LOANS TO PARTICIPANTS
|
|
A.
|
Loans shall be made available to all Participants on a reasonably equivalent basis. Notwithstanding the foregoing, new loans shall not be available to Participants who cease to be employed by the Employer, unless such Participants are parties-in-interest as defined in ERISA Section 3(14). In addition, existing loans shall be considered due and payable at such time as a Participant ceases to be an Employee and the loan will be considered in default and the Participant's Individual Account will be reduced by the outstanding amount of the loan unless otherwise specified in the loan policy statement or other loan documentation.
|
|
B.
|
Loans shall not be made available to Highly Compensated Employees in an amount greater than the amount made available to other Employees.
|
|
C.
|
Loans must be adequately secured and bear a reasonable interest rate.
|
|
D.
|
No Participant loan shall exceed the Present Value of the Vested portion of a Participant's Individual Account.
|
|
E.
|
A Participant must obtain the consent of their Spouse, if any, to the use of the Individual Account as security for the loan. Spousal consent shall be obtained no earlier than the beginning of the 90 day period that ends on the date on which the loan is to be so secured. The consent must be in writing (or any other form permitted by the IRS and DOL), must acknowledge the effect of the loan, and must be witnessed by a notary public or plan representative. Such consent shall thereafter be binding with respect to the consenting Spouse or any subsequent Spouse with respect to that loan. A new consent shall be required if the Individual Account is used for renegotiation, extension, renewal, or other revision of the loan. Notwithstanding the foregoing, no spousal consent is necessary if, at the time the loan is secured, no consent would be required for a distribution under Code Section 417(a)(2)(B). In addition, spousal consent is not required if the Plan or the Participant is not subject to Code Section 401(a)(l 1) at the time the Individual Account is used as security, or if the total Individual Account subject to the security is less than or equal to $5,000.
|
|
F.
|
In the event of default, foreclosure on the note and attachment of security will not occur until a distribution eligibility requirement is met under the Plan.
|
|
G.
|
For plan loans made before January 1, 2002, no loans will be made to any shareholder-employee or Owner-Employee. For purposes of this requirement, a shareholder-employee means an employee or officer of an electing small business (Subchapter S) corporation who owns (or is considered as owning within the meaning of Code Section 318(a)(l)), on any day during the taxable year of such corporation, more than five percent of the outstanding stock of the corporation.
|
|
H.
|
Loan repayments will be suspended under the Plan as permitted under Code Section 414(u)(4) (USERRA).
|
|
I.
|
For years beginning after 2005, if the Participant's Individual Account contains both Pre-Tax Elective Deferrals and Roth Elective Deferrals, the specific rules governing the loan program may also designate the extent to which Pre-Tax Elective Deferrals, Roth Elective Deferrals, or a combination of both will 1) be used to calculate the maximum amount available for a loan, or 2) be available as a source from which loan proceeds may be taken or which may be used as security for a loan. To the extent permitted by law and related regulations, the rules established by the Plan Sponsor may specify the ordering rules to be applied in the event of a defaulted loan.
|
7.01
|
THE FUND
|
|
A.
|
Establishment and Maintenance - By adopting this Plan, the Employer establishes the Fund, which shall consist of the assets of the Plan held by the Trustee (or Custodian, if applicable) pursuant to Section Eight. Assets within the Fund may be pooled on behalf of all Participants, earmarked on behalf of each Participant or be a combination of pooled and earmarked assets. To the extent that assets are earmarked for a particular Participant, they will be held in a Separate Fund for that Participant.
|
|
B.
|
Division Of Fund Into Investment Funds - The Employer may direct the Trustee (or Custodian, if applicable) to divide and redivide the Fund into one or more Investment Funds. Such Investment Funds may include, but not be limited to, Investment Funds representing the assets under the control of an investment manager pursuant to Plan Section 7.22(C) and Investment Funds representing investment options available for individual direction by Participants pursuant to Plan Section 7.22(B). Upon each division or redivision, the Employer may specify the part of the Fund to be allocated to each such Investment Fund and the terms and conditions, if any, under which the assets in such Investment Fund shall be invested.
|
7.02
|
INDIVIDUAL ACCOUNTS
|
|
A.
|
Establishment and Maintenance - The Plan Administrator shall establish and maintain an Individual Account in the name of each Participant to reflect the total value of their interest in the Fund (including but not limited to Employer Contributions and earnings thereon). Each Individual Account established hereunder shall consist of such subaccounts as may be needed for each Participant, including:
|
1.
|
a subaccount to reflect Employer Contributions and Forfeitures allocated on behalf of a Participant;
|
2.
|
a subaccount to reflect a Participant's rollover contributions;
|
3.
|
a subaccount to reflect a Participant's transfer contributions;
|
4.
|
a subaccount to reflect a Participant's Nondeductible Employee Contributions;
|
5.
|
a subaccount to reflect a Participant's Pre-Tax Elective Deferrals; and
|
6.
|
a subaccount to reflect a Participant's Roth Elective Deferrals.
|
|
B.
|
Valuation Of Individual Accounts
|
1.
|
Where all or a portion of the assets of a Participant's Individual Account are invested in a Separate Fund for the Participant, then the value of that portion of such Participant's Individual Account at any relevant time equals the sum of the fair market values of the assets in such Separate Fund, less any applicable charges or penalties.
|
2.
|
The fair market value of the remainder of each Individual Account is determined in the following manner:
|
|
a.
|
Separate Fund- First, the portion of the Individual Account invested in each Investment Fund as of the previous Valuation Date is determined. Each such portion is reduced by any withdrawal made from the applicable Investment Fund to or for the benefit of a Participant or the Participant's Beneficiary, further reduced by any amounts forfeited by the Participant pursuant to Plan Section 4.01(C) or (D), and further reduced by any transfer to another Investment Fund since the previous Valuation Date, and is increased by any amount transferred from another Investment Fund since the previous Valuation Date. The resulting amounts are the net Individual Account portions invested in the Investment Funds.
|
|
b.
|
No Separate Fund— Second, the net Individual Account portions invested in each Investment Fund are adjusted upwards or downwards, pro rata (i.e., using the ratio of each net Individual Account portion to the sum of all net Individual Account portions) so that the sum of all the net Individual Account portions invested in an Investment Fund will equal the then fair market value of the Investment Fund. Notwithstanding the previous sentence, for the first Plan Year only, the net Individual Account portions shall be the sum of all contributions made to each Participant's Individual Account during the first Plan Year.
|
|
c.
|
Allocations - Third, any contributions to the Plan and Forfeitures are allocated in accordance with the appropriate allocation provisions of Section Three of the Plan. For purposes of this Section Seven of the Plan, contributions made by the Employer for any Plan Year but after that Plan Year will be considered to have been made on the last day of that Plan Year regardless of when paid to the Trustee (or Custodian, if applicable).
|
|
d.
|
Aggregation of Portions - Finally, the portions of the Individual Account invested in each Investment Fund (determined in accordance with (a), (b) and (c) above) are added together.
|
|
C.
|
Modification Of Method For Valuing Individual Accounts-If necessary or appropriate, the Plan Administrator may establish different or additional procedures (which shall be uniform and nondiscriminatory) for determining the fair market value of the Individual Accounts including, but not limited to, valuation on a daily basis pursuant to the number of shares of each permissible investment held on behalf of a Participant.
|
7.03
|
POWERS AND DUTIES OF THE PLAN ADMINISTRATOR
|
|
A.
|
The Plan Administrator shall have the authority to control and manage the operation and administration of the Plan. The Plan Administrator shall administer the Plan for the exclusive benefit of the Participants and their Beneficiaries in accordance with the specific terms of the Plan.
|
|
B.
|
The Plan Administrator may, by appointment, allocate the duties of the Plan Administrator among several individuals or entities. Such appointments shall not be effective until the party designated accepts such appointment in writing.
|
|
C.
|
The Plan Administrator shall be charged with the duties of the general administration of the Plan, including, but not limited to, the following:
|
1.
|
To determine all questions of interpretation or policy in a manner consistent with the Plan's documents. The Plan Administrator's construction or determination in good faith shall be conclusive and binding on all persons except as otherwise provided herein or by law. Any interpretation or construction shall be done in a nondiscriminatory manner and shall be consistent with the intent that the Plan shall continue to be deemed a qualified plan under the terms of Code Section 401(a), as amended from time to time, and shall comply with the terms of ERISA, as amended from time to time;
|
2.
|
To determine all questions relating to the eligibility of Employees to become or remain Participants hereunder;
|
3.
|
To compute the amounts necessary or desirable to be contributed to the Plan;
|
4.
|
To compute the amount and kind of benefits to which a Participant or Beneficiary shall be entitled under the Plan and to direct the Trustee (or Custodian, if applicable) with respect to all disbursements under the Plan, and, when requested by the Trustee (or Custodian, if applicable), to furnish the Trustee (or Custodian, if applicable) with instructions, in writing, on matters pertaining to the Plan and the Trustee (or Custodian, if applicable) may rely and act thereon;
|
5.
|
To maintain all records necessary for the administration of the Plan;
|
6.
|
To prepare and file such disclosures and tax forms as may be required from time to time by the Secretary of Labor or the Secretary of the Treasury;
|
7.
|
To furnish each Employee, Participant or Beneficiary such notices, information, and reports under such circumstances as may be required by law;
|
8.
|
To periodically review the performance of each Fiduciary and all other relevant parties to ensure such individuals' obligations under the Plan are performed in a manner that is acceptable under the Plan and applicable law; and
|
9.
|
To furnish a statement to each Participant or Beneficiary no later than 270 days after the close of each Plan Year, indicating the Individual Account balances of such Participant as of the last Valuation Date in such Plan Year.
|
|
D.
|
The Plan Administrator shall have all of the powers necessary or appropriate to accomplish their duties under the Plan, including, but not limited to, the following:
|
1.
|
To appoint and retain such persons as may be necessary to carry out the functions of the Plan Administrator;
|
2.
|
To appoint and retain counsel, specialists, or other persons as the Plan Administrator deems necessary or advisable in the administration of the Plan;
|
3.
|
To resolve all questions of administration of the Plan;
|
4.
|
To establish such uniform and nondiscriminatory rules which it deems necessary to carry out the terms of the Plan;
|
5.
|
To make any adjustments in a uniform and nondiscriminatory manner which it deems necessary to correct any arithmetical or accounting errors which may have been made for any Plan Year;
|
6.
|
To correct any defect, supply any omission, 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; and
|
7.
|
If the Plan permits a form of distribution other than a lump sum, and a Participant elects such form of distribution, the Plan Administrator may place that Participant's Individual Account into a segregated Investment Fund for the purpose of maintaining the necessary liquidity to provide benefit installments on a periodic basis.
|
7.04
|
EXPENSES AND COMPENSATION
|
7.05
|
INFORMATION FROM EMPLOYER
|
7.06
|
PLAN AMENDMENTS
|
|
A.
|
Right Of Prototype Sponsor To Amend The Plan Or Terminate Sponsorship
|
1.
|
The Employer, by adopting the Plan, expressly delegates to the Prototype Sponsor the power, but not the duty, to amend the Plan without any further action or consent of the Employer as the Prototype Sponsor deems either necessary for the purpose of adjusting the Plan to comply with all laws and regulations governing pension or profit sharing plans or desirable to the extent consistent with such laws and regulations. Specifically, it is understood that the amendments may be made unilaterally by the Prototype Sponsor. However, it shall be understood that the Prototype Sponsor shall be under no obligation to amend the Plan documents, and the Employer expressly waives any rights or claims against the Prototype Sponsor for not exercising this power to amend. For purposes of Prototype Sponsor amendments, the mass submitter shall generally be recognized as the agent of the Prototype Sponsor. If the Prototype Sponsor does not adopt IRS model amendments adopted by the mass submitter, the Plan will no longer be identical to or a minor modifier of the mass submitter plan and will be considered an individually designed plan. Notwithstanding the foregoing, the adoption of good faith IRS amendments must be accomplished pursuant to the rules for each such amendment as prescribed by the IRS.
|
2.
|
An amendment by the Prototype Sponsor shall be accomplished by giving notice (either in writing or in any other form permitted under rules promulgated by the IRS and DOL) to the Adopting Employer of the amendment to be made. The notice shall set forth the text of such amendment and the date such amendment is to be effective. Such amendment shall take effect unless within the 30 day period after such notice is provided, or within such shorter period as the notice may specify, the Adopting Employer gives the Prototype Sponsor written notice of refusal to consent to the amendment. Such written notice of refusal shall have the effect of withdrawing the Plan as a prototype plan and shall cause the Plan to be considered an individually designed plan.
|
3.
|
In addition to the amendment rights described above, the Prototype Sponsor shall have the right to terminate its sponsorship of this Plan by providing notice (either in writing or in any other form permitted under rules promulgated by the IRS and DOL) to the Adopting Employer of such termination. Such termination of sponsorship shall have the effect of withdrawing the Plan as a prototype plan and shall cause the Plan to be considered an individually designed plan. The Prototype Sponsor shall have the right to terminate its sponsorship of this Plan regardless of whether the Prototype Sponsor has terminated sponsorship with respect to other employers adopting its prototype Plan.
|
|
B.
|
Right Of Adopting Employer To Amend The Plan - The Adopting Employer may amend the Plan to
|
1.
|
change options previously selected in the Adoption Agreement;
|
2.
|
add overriding language in the Adoption Agreement when such language is necessary to satisfy Code Section 415 or Code Section 416 because of the required aggregation of multiple plans;
|
3.
|
amend administrative provisions of the trust or custodial document in the case of a nonstandardized plan and make more limited amendments in the case of a standardized plan, such as the name of the Plan, Employer, Trustee or Custodian, Plan Administrator and other Fiduciaries, the trust year, and the name of pooled trust in which the Plan's trust will participate;
|
4.
|
add certain sample and model amendments published by the IRS or other required good faith amendments which specifically provide that their adoption will not cause the Plan to be treated as individually designed; and
|
5.
|
add or change provisions permitted under the Plan or specify or change the Effective Date of a provision as permitted under the Plan and correct obvious and unambiguous typographical errors or cross-references that merely correct a reference but that do not in any way change the original intended meaning of the provisions.
|
|
C.
|
Limitation On Power To Amend - No amendment to the Plan shall be effective to the extent that it has the effect of decreasing a Participant's accrued benefit. Notwithstanding the preceding sentence, a Participant's Individual Account may be reduced to the extent permitted under Code Section 412(c)(8). For purposes of this paragraph, a Plan amendment which has the effect of decreasing a Participant's Individual Account with respect to benefits attributable to service before the amendment shall be treated as reducing an accrued benefit. For purposes of this paragraph, a Participant shall not accrue a right to an allocation of an Employer Profit Sharing Contribution, Employer Money Purchase Pension Contribution or Target Benefit Contribution for the current Plan Year until the last day of such Plan Year and after the application of all amendments required or permitted by the IRS.
|
|
D.
|
Amendment Of Vesting Schedule - If the vesting schedule of the Plan is amended, in the case of an Employee who is a Participant as of the later of the date such amendment is adopted or the date it becomes effective, the Vested percentage (determined as of such date) of such Employee's Individual Account derived from Employer Contributions will not be less than the percentage computed under the Plan as of that date without regard to such amendment. Furthermore, if the Plan's vesting schedule is amended, or the Plan is amended in any way that directly or indirectly affects the computation of the Participant's Vested percentage, or if the Plan is deemed amended by an automatic change to or from a top-heavy vesting schedule, each Participant with at least three Years of Vesting Service with the Employer may elect, within the time set forth below, to have the Vested percentage computed under the Plan without regard to such amendment.
|
1.
|
60 days after the amendment is adopted;
|
2.
|
60 days after the amendment becomes effective; or
|
3.
|
60 days after the Participant is issued a notice (either in writing or in any other form permitted under rules promulgated by the IRS and DOL) of the amendment by the Employer or Plan Administrator.
|
7.07
|
PLAN MERGER OR CONSOLIDATION
|
7.08
|
PERMANENCY
|
7.09
|
METHOD AND PROCEDURE FOR TERMINATION
|
7.10
|
CONTINUANCE OF PLAN BY SUCCESSOR EMPLOYER
|
7.11
|
FAILURE OF PLAN QUALIFICATION
|
|
7.12
|
GOVERNING LAWS AND PROVISIONS
|
|
7.13
|
STATE COMMUNITY PROPERTY LAWS
|
|
7.14
|
HEADINGS
|
|
7.15
|
GENDER AND NUMBER
|
|
7.16
|
STANDARD OF FIDUCIARY CONDUCT
|
|
7.17
|
GENERAL UNDERTAKING OF ALL PARTIES
|
|
7.18
|
AGREEMENT BINDS HEIRS, ETC.
|
|
7.19
|
DETERMINATION OF TOP-HEAVY STATUS
|
|
A.
|
In General - Except as provided in Plan Section 7.19(B), this Plan is aTop-Heavy Plan if any of the following conditions exist:
|
1.
|
If the top-heavy ratio for this Plan exceeds 60 percent and this Plan is not part of any Required Aggregation Group or Permissive Aggregation Group of plans;
|
2.
|
If this Plan is part of a Required Aggregation Group of plans but not part of a Permissive Aggregation Group and the top- heavy ratio for the group of plans exceeds 60 percent; or
|
3.
|
If this Plan is a part of a Required Aggregation Group and part of a Permissive Aggregation Group of plans and the top-heavy ratio for the Permissive Aggregation Group exceeds 60 percent.
|
|
B.
|
Top-Heavy Ratio
|
|
1.
|
If the Employer maintains one or more defined contribution plans (including any simplified employee pension plan) and the Employer has not maintained any defined benefit plan which during the five-year period ending on the Determination Date(s) has or has had accrued benefits, the top-heavy ratio for this Plan alone or for the Required or Permissive Aggregation Group as appropriate is a fraction, the numerator of which is the sum of the account balances of all Key Employees as of the Determination Date(s) (including any part of any account balance distributed in the one-year period ending on the Determination Date(s) (five-year period ending on the Determination Date in the case of a distribution made for a reason other than Severance from Employment, death, or Disability and in determining whether the Plan is top-heavy for Plan Years beginning before January 1, 2002)) and the denominator of which is the sum of all account balances (including any part of any account balance distributed in the one-year period ending on the Determination Date(s), (five-year period ending on the Determination Date in the case of a distribution made for a reason other than Severance from Employment, death, or Disability and in determining whether the Plan is top-heavy for Plan Years beginning before January 1, 2002)) both computed in accordance with Code Section 416 and the regulations thereunder. Both the numerator and the 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 five-year period ending on the Determination Date(s) has or has had any accrued benefits, the top-heavy ratio for any Required or Permissive Aggregation Group, as appropriate, is a fraction, the numerator of which is the sum of account balances under the aggregated defined contribution plan or plans for all Key Employees, determined in accordance with 1) above, and the Present Value of accrued benefits under the aggregated defined benefit plan or plans for all Key Employees as of the Determination Date(s), and the denominator of which is the sum of the account balances under the aggregated defined contribution plan or plans for all Participants, determined in accordance with 1) above, and the Present Value of accrued benefits under the defined benefit plan or plans for all Participants as of the Determination Date(s), all determined in accordance with Code Section 416 and 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 one-year period ending on the Determination Date (five-year period ending on the Determination Date in the case of a distribution made for a reason other than Severance from Employment, death, or Disability and in determining whether the Plan is top-heavy for Plan Years beginning before January 1,2002).
|
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 1) who is not a Key Employee but who was a Key Employee in a prior year, or 2) who has not been credited with at least one Hour of Service with any employer maintaining the plan at any time during the one-year period (five-year period ending on the Determination Date in the case of a distribution made for a reason other than Severance from Employment, death, or Disability and in determining whether the Plan is top-heavy for Plan Years beginning before January 1, 2002) 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.
|
|
C.
|
SIMPLE 401(k) Plan Exception - Notwithstanding Plan Section 7.19(A) above, the Plan is not treated as aTop-Heavy Plan under Code Section 416 for any Year for which an Eligible Employer maintains this Plan as a SIMPLE 401(k) Plan.
|
|
D.
|
Safe Harbor 401(k) Plan Exception - Notwithstanding Plan Section 7.19(A) above, the Plan is not treated as aTop-Heavy Plan under Code Section 416 for any Year for which an Eligible Employer makes only those contributions described in Code Sections 401(k)(12) and 401(m)(l 1) for any Plan Year. If any other contributions are made for a Plan Year (e.g., Employer Profit Sharing Contributions, forfeitures, etc.), the Top-Heavy rules describe in Code Section 416(g)(4)(H) will apply for that Plan Year.
|
|
7.20
|
INALIENABILITY OF BENEFITS
|
1)
|
shall treat such order as a Qualified Domestic Relations Order if the Plan Administrator is paying benefits pursuant to such order on January 1, 1985, and
|
2)
|
may treat any other such order entered before January 1, 1985, as a Qualified Domestic Relations Order even if such order does not meet the requirements of Code Section 414(p).
|
|
7.21
|
BONDING
|
|
7.22
|
INVESTMENT AUTHORITY
|
|
A.
|
Plan Investments - Except as provided in Plan Section 7.22(B) (relating to individual direction of investments by Participants), the Adopting Employer, not the Trustee (or Custodian, if applicable), shall have exclusive management and control over the investment of the Fund into any permitted investment. The Adopting Employer shall be responsible for establishing a funding policy statement on behalf of the Plan and shall provide a copy of such funding policy statement to the Discretionary Trustee, if any. Notwithstanding the foregoing, if the Trustee is designated as a Discretionary Trustee in the Adoption Agreement, such Discretionary Trustee may enter into an agreement with the Adopting Employer whereby the Discretionary Trustee will manage the investment of all or a portion of the Fund. Any such agreement shall be in writing and set forth such matters as the Discretionary Trustee deems necessary or desirable.
|
|
B.
|
Direction Of Investments By Participants - Unless otherwise indicated in the Adoption Agreement, each Participant shall have the responsibility for directing the Trustee (or Custodian, if provided for under a separate agreement between the Adopting Employer and the Custodian), regarding the investment of all or part of their Individual Account. If all of the requirements of erisa' Section 404(c)(l) are satisfied, then to the extent so directed, the Adopting Employer, Plan Administrator, Trustee, the Custodian (if applicable), and all other Fiduciaries are relieved of Fiduciary liability under ERISA Section 404.
|
|
C.
|
Investment Managers
|
1.
|
Definition of Investment Manager - The Adopting Employer may appoint one or more investment managers to make investment decisions with respect to all or a portion of the Fund. The investment manager shall be any firm or individual registered as an investment adviser under the Investment Advisers Act of 1940, a bank as defined in said Act, or an insurance company qualified under the laws of more than one state to perform services consisting of the management, acquisition, or disposition of any assets of the Plan.
|
2.
|
Investment Manager's Authority - A separate Investment Fund shall be established representing the assets of the Fund invested at the direction of the investment manager. The investment manager so appointed shall direct the Trustee (or Custodian, if applicable) with respect to the investment of such Investment Fund. The investments which may be acquired at the direction of the investment manager are those described in Plan Section 7.22(D).
|
3.
|
Written Agreement - The appointment of any investment manager shall be by written agreement between the Adopting Employer and the investment manager and a copy of such agreement (and any modification or termination thereof) must be given to the Trustee (or Custodian, if applicable). The agreement shall set forth, among other matters, the effective date of the investment manager's appointment and an acknowledgment by the investment manager that it is a Fiduciary of the Plan under ERISA.
|
4.
|
Concerning the Trustee (or Custodian, if applicable) - Written notice of each appointment of an investment manager shall be given to the Trustee (or Custodian, if applicable) at least 30 days in advance of the effective date of such appointment. Such notice shall specify which portion of the Fund will constitute the Investment Fund subject to the investment manager's direction. The Trustee (or Custodian, if applicable) shall comply with the investment direction given to it by the investment manager and will not be liable for any loss which may result by reason of any action (or inaction) it takes at the direction of the investment manager.
|
|
D.
|
Permissible Investments - The Trustee (or Custodian, if applicable) may invest the assets of the Plan in property of any character, real or personal, including, but not limited to, the following: stocks, including Qualifying Employer Securities, and including shares of open-end investment companies (mutual funds); bonds; notes; debentures; proprietary mutual funds; deposit accounts; options; limited partnership interests; mortgages; real estate or any interests therein (including Qualifying Employer Real Property); unit investment trusts; Treasury Bills, and other U.S. Government obligations; common trust funds, combined investment trusts, collective trust funds or commingled funds maintained by a bank or similar financial organization (whether or not the Trustee hereunder); savings accounts, certificates of deposit, demand or time deposits or money market accounts of a bank or similar financial organization (whether or not the Trustee hereunder); unless excluded in the Adoption Agreement, annuity contracts that are "guaranteed benefit policies," as defined in ERISA Section 401(b)(2)(B); life insurance policies; or in such other investments as is deemed proper without regard to investments authorized by statute or rule of law governing the investment of trust funds but with regard to ERISA and this Plan. Notwithstanding the preceding sentence, the Prototype Sponsor may, as a condition of making the Plan available to the Adopting Employer, limit the types of property in which the assets of the Plan may be invested. The list of permissible investment options shall be further limited in accordance with any applicable law, regulations, or other restrictions applicable to the Trustee or Custodian, including, but not limited to, internal operational procedures adopted by such Trustee (or Custodian, if applicable). The actions of a Discretionary Trustee named in the Adoption Agreement shall also be subject to the funding policy statement provided by the Adopting Employer. If any Trustee (or Custodian, if applicable) invests all or any portion of the Fund pursuant to written instructions provided by the Adopting Employer (including an investment manager appointed by the Adopting Employer pursuant to Plan Section 7.22(C)) or any Participant pursuant to Plan Section 7.22(B), the Trustee (or Custodian, if applicable) will be deemed to have invested pursuant to the Adopting Employer's funding policy statement.
|
|
E.
|
Matters Relating To Insurance
|
|
1.
|
If elected by the Plan Sponsor in the Adoption Agreement, a life insurance contract may be purchased on behalf of a Participant. No life insurance contract may be purchased unless the insured under the contract is the Participant or, where this Plan is a profit sharing or 401(k) plan, the Participant's Spouse or another individual in whom the Participant has an insurable interest. If a life insurance contract is to be purchased for a Participant, the aggregate premium for certain life insurance for each Participant must be less than a certain percentage of the aggregate Employer Contributions and Forfeitures allocated to a Participant's Individual Account at any particular time as follows.
|
|
a.
|
Ordinary Life Insurance - For purposes of these incidental insurance provisions, ordinary life insurance contracts are contracts with both nondecreasing death benefits and nonincreasing premiums. If such contracts are purchased, less than 50 percent of the aggregate Employer Contributions and Forfeitures allocated to any Participant's Individual Account will be used to pay the premiums attributable to them.
|
|
b.
|
Term and Universal Life Insurance - No more than 25 percent of the aggregate Employer Contributions and Forfeitures allocated to any Participant's Individual Account will be used to pay the premiums on term life insurance contracts, universal life insurance contracts, and all other life insurance contracts which are not ordinary life.
|
|
c.
|
Combination - The sum of 50 percent of the ordinary life insurance premiums and all other life insurance premiums will not exceed 25 percent of the aggregate Employer Contributions and Forfeitures allocated to any Participant's Individual Account.
|
2.
|
Any dividends or credits earned on insurance contracts for a Participant shall be allocated to such Participant's Individual Account derived from Employer Contributions for whose benefit the contract is held.
|
3.
|
Subject to Plan Section 5.10, the contracts on a Participant's life will be converted to cash or an annuity or distributed to the Participant upon separation from service with the Employer. In addition, contracts on the joint lives of a Participant and another person may not be maintained under this Plan if such Participant ceases to have an insurable interest in such other person.
|
4.
|
The Trustee (or Custodian, if applicable) shall apply for and will be the owner of any insurance contract(s) purchased under the terms of this Plan. The insurance contract(s) must provide that proceeds will be payable to the Trustee (or Custodian, if applicable). However, the Trustee (or Custodian, if applicable) shall be required to pay over all proceeds of the contract(s) to the Participant's Designated Beneficiary in accordance with the distribution provisions of this Plan. A Participant's Spouse will be the designated beneficiary of the proceeds in all circumstances unless a Qualified Election has been made in accordance with Plan Section 5.10. Under no circumstances shall the Fund retain any part of the proceeds. 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.
|
5.
|
The Plan Administrator may direct the Trustee (or Custodian, if applicable) to sell and distribute insurance or annuity contracts to a Participant (or other party as may be permitted) in accordance with applicable law or regulations.
|
6.
|
Notwithstanding any other provision herein, and except as may be otherwise provided by ERISA, the Employer shall indemnify and hold harmless the insurer, its officers, directors, employees, agents, heirs, executors, successors, and assigns, from and against any and all liabilities, damages, judgments, settlements, losses, costs, charges, or expenses (including legal expenses) at any time arising out of or incurred in connection with any action taken by such parties in the performance of their duties with respect to this Plan, unless there has been a final adjudication of gross negligence or willful misconduct in the performance of such duties.
|
7.23
|
PROCEDURES AND OTHER MATTERS REGARDING DOMESTIC RELATIONS ORDERS
|
|
A.
|
To the extent provided in any Qualified Domestic Relations Order, the former Spouse of a Participant shall be treated as a surviving Spouse of such Participant for purposes of any benefit payable in the form of either a Qualified Joint and Survivor Annuity or Qualified Preretirement Survivor Annuity.
|
|
B.
|
The Plan shall not be treated as failing to meet the requirements of the Code, which generally prohibits payment of benefits before the Participant's Termination of Employment or Severance from Employment, as applicable, with the Employer, solely by reason of payments to an Alternate Payee pursuant to a Qualified Domestic Relations Order.
|
|
C.
|
In the case of any Domestic Relations Order received by the Plan,
|
1.
|
the Plan Administrator shall promptly notify the Participant and any other Alternate Payee of the receipt of such order and the Plan's procedure for determining the qualified status of Domestic Relations Orders, and
|
2.
|
within a reasonable period after receipt of such order, the Plan Administrator shall determine whether such order is a Qualified Domestic Relations Order and notify the Participant and each Alternate Payee of such determination.
|
|
D.
|
During any period in which the issue of whether a Domestic Relations Order is a Qualified Domestic Relations Order is being determined by the Plan Administrator, by a court of competent jurisdiction, or otherwise, the Plan Administrator shall segregate in a separate account in the Plan or in an escrow account the amounts which would have been payable to the Alternate Payee during such period if the order had been determined to be a Qualified Domestic Relations Order. If within 18 months the order or modification thereof is determined to be a Qualified Domestic Relations Order, the Plan Administrator shall pay the segregated amounts (plus any interest thereon) to the person or persons entitled thereto. If within 18 months either 1) it is determined that the order is not a Qualified Domestic Relations Order, or 2) the issue as to whether such order is a Qualified Domestic Relations Order is not resolved, then the Plan Administrator shall pay the segregated amounts (plus any interest thereon) to the person or persons who would have been entitled to such amounts if there had been no order. Any determination that an order is a Qualified Domestic Relations Order which is made after the close of the 18-month period shall be applied prospectively only.
|
7.24
|
INDEMNIFICATION OF PROTOTYPE SPONSOR
|
7.25
|
MILITARY SERVICE
|
8.01
|
FINANCIAL ORGANIZATION AS CUSTODIAN
|
A.
|
Responsibilities of the Custodian - The Custodian's responsibilities may be further limited by the Plan Trustee(s) and,
|
1.
|
To receive Plan contributions and to hold, invest and reinvest, and distribute the Fund as authorized by the Adopting Employer or its designee without distinction between principal and interest; provided, however, that nothing in this Plan shall require the Custodian to maintain physical custody of stock certificates (or other indicia of ownership of any type of asset) representing assets within the Fund.
|
2.
|
To maintain accurate records of contributions, investments, earnings, receipts, disbursements, withdrawals, and other transactions with respect to the Fund, and all accounts, books, and records relating thereto shall be open at all reasonable times to inspection and audit by any person designated by the Employer; provided, however, that the Custodian is given reasonable advance notice of such inspection by the Employer. On direction of the Adopting Employer or Plan Administrator, and if agreed to in writing by the Custodian, the Custodian may provide annual or interim accountings, valuations, or other reports concerning the assets of the custodial account subject to payment of all required additional fees for such reports. The Custodian's accounting will be at the Custodial Account level rather than the Participant level, and the Custodian will not be responsible for Participant-level record-keeping, reporting, or communication unless it agrees to do so in a separate written agreement with the Adopting Employer or Plan Administrator. The Custodian will also furnish the Adopting Employer with such other information as the Custodian possesses and which is necessary for the Adopting Employer to comply with the reporting requirements of ERISA, as applicable. An accounting will be deemed to have been approved by the Adopting Employer unless the Adopting Employer or Plan Administrator objects to the contents of an accounting within sixty (60) days of its mailing or electronic transmission by the Custodian. Any objections must set forth the specific grounds on which they are based. Upon approval, the Custodian shall be forever released from any and all liability with respect to the Account.
|
3.
|
To make disbursements from the Fund to Participants or Beneficiaries upon the proper authorization of the Plan Administrator.
|
4.
|
To furnish to the Plan Administrator an annual statement which reflects the value of the investments in the custody of the Custodian as of the end of the period and as of any other times as the Custodian and Plan Administrator may agree to in writing, including an agreement regarding the application of additional fees for such additional report.
|
5.
|
To invest the Fund only in investment options selected by the Investment Fiduciary. Such selection shall be made from among the types of property which the Prototype Sponsor makes available in Plan Section 7.22(D). Notwithstanding the first sentence of Section 7.22(D), the Prototype Sponsor and not the Custodian is responsible for choosing to make such investments available for investment and for determining the fair market value of each such investment, and the Custodian has determined only that it is functionally and operationally willing and able to provide its services hereunder with respect thereto. The Investment Fiduciary shall be responsible for ensuring compliance with all conditions, limitations, and restrictions concerning investment in any investment option. The Custodian shall place monies or other property received by it in such permitted investments as the Custodian shall be directed from time to time by instructions of the Investment Fiduciary (or Participant, if applicable) provided to it. If Participant direction in Section 7.22(B) of the Plan has been selected, the investment instructions of the Participants shall be aggregated and delivered to the Custodian by the Plan Administrator or its agent. In the absence of Participant direction, the investment instructions of the appropriate Investment Fiduciary shall be delivered to the Custodian by the Plan Administrator or its agent. The Custodian may hold the assets attributable to the Fund in omnibus accounts with assets of other retirement plans for which the Custodian serves as custodian or trustee. Nothing herein shall preclude the Investment Fiduciary from otherwise investing any Plan assets as permitted by the Plan, but the Custodian shall not be Custodian or Trustee thereof or have any duties or responsibilities with respect thereto.
|
6.
|
The Custodian is not obligated to place orders for the investment of the Fund if sufficient cash is not available in the Fund for use in placing such orders. The Custodian is authorized, but is not obligated, to advance funds or to arrange for another financial organization (which may be an affiliate of the Custodian) to advance funds from time to time for the purchase of investment assets, for distributions from the Fund and for other purposes before receipt of sufficient funds (whether contributions or proceeds of the liquidation of other investments). All such advances shall be made subject to the requirements of ERISA and the rules, regulations, rulings, and interpretations thereunder, including but not limited to the U.S. Department of Labor's Prohibited Transaction Class Exemption 80-26, as amended from time to time. If sufficient funds to repay any such advance are not received by the following business day, the Custodian may. in its discretion, then or at any time thereafter before such repayment, sell, redeem, or otherwise liquidate any assets of the Fund in order to repay such advance. Any gain realized upon such liquidation, after payment of any related costs and expenses, shall belong to the Plan. The Employer shall reimburse the Custodian on demand for any portion of any such advance and the related costs and expenses not repaid from the proceeds of the liquidation.
|
7.
|
The Custodian shall keep such portion of the Fund in cash or cash balances as may be directed from time to time by the applicable Investment Fiduciary. The Custodian shall not be liable for any interest on any cash balances so maintained nor for interest on any cash or cash balances maintained in the Fund pending investment in accordance with appropriate directions. Monies being transferred to and disbursed by the Custodian may be held in non-interest bearing transaction accounts in financial organizations selected by the Custodian (which may be affiliates of the Custodian) for purposes of collections and processing transfers and disbursements. The Custodian may transfer monies from the Fund to such accounts before issuance of wire transfer orders or checks, drafts, or other instruments payable from such accounts. The Custodian shall not exercise its powers in Plan Section 8.01(B)(1) except pursuant to the instructions of the Investment Fiduciary transmitted to the Custodian.
|
8.
|
Should the Investment Fiduciary instruct the Custodian to utilize the services of any broker, dealer, employee, or representative of either, or any other person ("Broker") to render services to the Fund, or should the Custodian require the services of such persons in order to fulfill its obligations pursuant to the Plan, the applicable Investment Fiduciary shall be solely responsible for the selection or designation of such Broker and shall be solely responsible for the acts of such Broker. The Custodian shall fully comply with the written instructions, if of a continuing nature, until revoked.
|
9.
|
In connection with payments and disbursements made from the Fund for any purpose, the Custodian shall be responsible for issuing checks or drafts to such parties and for such amounts as the Plan Administrator shall instruct. The Custodian shall be fully protected in making such payments pursuant to such instructions from time to time and shall be charged with no responsibility whatsoever respecting the purposes or propriety of such payments or the application of such monies.
|
10.
|
The Custodian shall provide any materials received by it relating to voting securities to the applicable Investment Fiduciary, which shall be responsible for voting securities or arranging for such securities to be voted in accordance with the Plan and applicable law. It is understood that the Custodian shall exercise the powers described in Plan Section 8.01(B) only pursuant to instructions of the Investment Fiduciary transmitted to the Custodian.
|
11.
|
The Custodian shall determine or have determined the value of the Fund as of each Valuation Date. The Custodian shall rely exclusively upon, and shall not be responsible for, share and unit values established by third parties, or unit values established by the Custodian in its capacity as a mutual fund recordkeeper, transfer agent, or Custodian to the extent that the Custodian establishes such unit values in reliance on third-party information, including, but not limited to:
|
(a)
|
in connection with mutual funds, the net asset value reported to the Custodian by such mutual funds or the transfer or other agents of such mutual funds or any generally recognized pricing service;
|
(b)
|
in connection with bank collective funds, the unit value as reported by the trustee of such funds or its agent:
|
(c)
|
in connection with policies and contracts with insurance companies or other financial institutions, the book value or other value ascribed to such policies or contracts by the insurance company or its agent or other financial organization or its agent; and
|
(d)
|
in connection with publicly traded securities, the market price of such securities as reported to the public in a generally available form.
|
|
12.
|
All records maintained by the Custodian with respect to the Fund shall be held for such period as may be required under applicable law. Upon the expiration of any such required retention period, the Custodian shall have the right to destroy such records. The Custodian shall have the right to preserve all records and accounts in original form, electronically, or on microfilm, magnetic tape, or any other similar process pursuant to applicable federal law and subsequent rules promulgated by the IRS or DOL.
|
|
13.
|
Except as provided below, the Custodian shall conclusively presume that the Employer, Trustee, Plan Administrator, or other responsible party has made all filings required by law as of the date required. Should the Custodian incur any liability by reason of any party's failure to timely file, the Employer shall indemnify and hold the Custodian, any parent, subsidiary, related corporation, or affiliate of the Custodian, including their respective directors, managers, officers, employees, and agents harmless for any and all liabilities, costs, expenses (including reasonable attorney's fees), and other obligations, including penalties and interest, incurred by the Custodian.
|
|
14.
|
Except for the disbursement of loan proceeds and reinvestment of loan payments pursuant to instructions received hereunder, under no circumstances shall the Custodian have or be allocated any responsibility for the administration of any Participant loan program in Plan Section 5.16.
|
|
B.
|
Powers of the Custodian - Except as otherwise provided in this Plan, and subject to receipt of instructions from the Adopting Employer. Plan Administrator, or Investment Fiduciary, as appropriate, the Custodian shall have the power, but, in the absence of proper direction as provided in Section 8.01 (A) above, not the duty to take any action with respect to the Fund which it deems necessary or advisable to discharge its responsibilities under this Plan including, but not limited to. the following powers:
|
1.
|
To invest all or a portion of the Fund (including idle cash balances) in time deposits, savings accounts, money market accounts, or similar investments bearing a reasonable rate of interest in the Custodian's own savings department or the savings department of another financial organization;
|
2.
|
To vote upon any stocks, bonds, or other securities; to give general or special proxies or powers of attorney with or without power of substitution; to exercise any conversion privileges or subscription rights and to make any payments incidental thereto; to oppose, or to consent to, or otherwise participate in, corporate reorganizations or other changes affecting corporate securities, and to pay any assessment or charges in connection therewith; and generally to exercise any of the powers of an owner with respect to stocks, bonds, securities, or other property;
|
3.
|
To hold securities or other property of the Fund in its own name, in the name of its nominee, or in bearer form; and
|
4.
|
To make, execute, acknowledge, and deliver any and all documents of transfer and conveyance and any and all other instruments that may be necessary or appropriate to carry out the powers herein granted.
|
8.02
|
TRUSTEE
|
|
A.
|
Responsibilities of the Trustee-The responsibilities of the Trustee shall be limited to the following duties:
|
1.
|
To receive Plan contributions and to hold, invest, and reinvest the portion of the Fund for which it serves as Trustee, as authorized by the Employer or its designee, without distinction between principal and interest; provided, however, that nothing in this Plan shall require the Trustee to maintain physical custody of stock certificates (or other indicia of ownership) representing assets within the Fund;
|
2.
|
To maintain accurate records of contributions, investments, earnings, receipts, disbursements, withdrawals, and other transactions under the trust;
|
3.
|
To make disbursements from the portion of the Fund for which it serves as Trustee to Participants or Beneficiaries upon the proper authorization of the Plan Administrator; and
|
4.
|
To furnish to the Plan Administrator a statement which reflects the value of the investments in the custody of the Trustee as of the end of each Plan Year and as of any other times as the Trustee and Plan Administrator may agree in writing.
|
|
B.
|
Powers of the Trustee - Except as otherwise provided in this Plan, the Trustee shall have the power, but, in the absence of proper direction, as provided in Section 8.02(A) above, not the duty to take any action with respect to the portion of the Fund for which it serves as Trustee that it deems necessary or advisable to discharge its responsibilities under this Plan including, but not limited to, the following powers:
|
|
1.
|
To purchase or subscribe for securities or other property and to retain them in trust; to sell any such property at any time held by it for cash or other consideration at such time or times and on such terms and conditions as may be deemed appropriate; to exchange such property and to grant options for the purchase or exchange thereof, and to convey, partition, or otherwise dispose of, with or without covenants, including covenants of warranty of title, any securities or other property free of all trusts; to charge the trust for the cost of all securities purchased or received against a payment and to credit the trust with the proceeds received from the securities sold or delivered against payment. For any trades not settled immediately upon placement, the Trustee shall have the right to sell securities from the trust in a reasonably prudent fashion sufficient to recover any funds advanced;
|
2.
|
To oppose, or consent to and participate in, any plan of reorganization, consolidation, merger, combination, or other similar plan; to oppose or to consent to any contract, lease, mortgage, purchase, sale, or other action by any corporation pursuant to such plan, and to accept and retain any securities or other property issued under any such plan; to deposit any such property with any protective, reorganization or other similar Plan Administrator; to delegate discretionary power thereto and to pay and agree to pay part of its expenses and compensation and any assessments levied with respect to any such securities or other property so deposited;
|
3.
|
To assign, renew, extend, or discharge, or to participate in the assignment, renewal, extension, or discharge of any debt, mortgage, or other lien, upon such terms, including a partial release, as may be deemed advisable by the Trustee, and to agree to a reduction in the rate of interest thereon or to any other modification or change in the terms thereof or of any guarantee pertaining thereto, in any manner and to any extent that may be deemed in the best interest of the Fund; to waive any default, whether in the performance of any covenant or condition of any note, bond, or mortgage or in the performance of any guarantee, or to enforce any such default in such manner and to such extent as may be deemed advisable; to exercise and enforce any and all rights of foreclosure and to exercise and enforce, in any action, suit, or proceeding at law or in equity, any rights or remedies in respect of any debt, mortgage, lien, or guarantee;
|
4.
|
To exercise all conversion and subscription rights pertaining to any securities or other property;
|
5.
|
To collect and receive any and all moneys, securities, or other property of whatsoever kind or nature due or owing or belonging to the Fund and to give full discharge and acquittance therefore;
|
6.
|
To exercise, personally or by general or limited power of attorney, any right, including the right to vote or grant proxies, discretionary or otherwise, appurtenant to any assets held by the trust, and the right to participate in voting trusts with other stockholders. The Plan Administrator shall have responsibility for instructing the Trustee as to voting such shares and the tendering of such shares, by proxy or in person, except to the extent such responsibility is delegated to another person, under the terms of the Plan or under an agreement between the Adopting Employer and an investment manager, in which case such persons shall have such responsibility. In no event shall the Trustee be responsible for the voting or tendering of shares of securities held in the trust or for ascertaining or monitoring whether or how proxies are voted or whether the proper number of proxies is received;
|
7.
|
To register any securities or other property held by it hereunder in the name of the Trustee or in the names of nominees with or without the addition of words indicating that such securities or other property are held in a fiduciary capacity, to take and hold the same unregistered or in form permitting transferability by delivery, to deposit or arrange for the deposit of securities in a qualified central depository even though, when so deposited, such securities or other property may be held in the name of the nominee of such depository with other securities deposited therein by other persons, or to deposit or to arrange for the deposit of any securities or other property issued by the United States government, or any agency or instrumentality thereof, with a Federal Reserve bank, provided that the books and records of the Trustee shall at all times disclose that all such securities or other property are part of the Fund;
|
8.
|
To settle, compromise, or submit to arbitration, any claims, debts, or damages due or owing to or from the Fund; to commence or defend suits or legal proceedings whenever, in its judgment, any interest of the Fund so requires, and to represent the Fund in all suits or legal proceedings in any court of law or equity or before any other body or tribunal and to charge against the Fund all reasonable expenses and attorney's fees in connection therewith;
|
9.
|
To borrow money from others, excluding the Trustee in its corporate capacity or any party-in-interest, for the purposes of the Fund, and upon such terms and conditions as the Trustee may deem proper, and for the sum so borrowed or advanced, the Trustee may issue its promissory note as Trustee and secure the repayment thereof by creating a lien upon any assets of the Fund;
|
10.
|
To invest all or part of the Fund in interest bearing deposits with a bank or similar financial institution related to the Trustee if such bank or other institution is a fiduciary with respect to the Plan, as defined in ERISA, including but not limited to investments in time deposits, savings deposits, certificates of deposit, or time accounts that bear a reasonable interest rate;
|
11.
|
To invest and reinvest all or a part of the Fund in any available investments and to dispose of all or any part of the securities or other property that may from time to time or at any time constitute the Fund;
|
12.
|
To invest and reinvest all or a portion of the Fund pursuant to an agreement between the Adopting Employer and the Trustee establishing a special designated "pooled investment fund" primarily for the purpose of valuing certain trust assets held by the Trustee in a fiduciary capacity;
|
13.
|
To register Fund property in the Trustee's own name, in the name of a nominee, or in bearer form, provided the Trustee's records and accounts show that such property is an asset of the Fund;
|
14.
|
To exercise or dispose of any right it may have as the holder of any security, to convert the same into another security, to acquire any additional security or securities, to make any payments, to exchange any security, or to do any other act with reference thereto;
|
15.
|
To exchange any property for other property upon such terms and conditions as the Trustee may deem proper, and to give or receive money to effect equality in price;
|
16.
|
To deposit any security with any protective or reorganization committee, to delegate to that committee such power and authority as the Trustee may deem proper, and to agree to pay out of the Fund that portion of the expenses and compensation of that committee as the Trustee may deem proper;
|
17.
|
To invest in Qualifying Employer Securities if the Adopting Employer designates Qualifying Employer Securities as a permissible investment option under the Adoption Agreement;
|
18.
|
To appoint agents as necessary or desirable, including legal counsel who may be counsel for the Employer;
|
19.
|
To hold that portion of the Fund as the Trustee may deem necessary for ordinary administration, the transfer of assets to another trust or fiduciary, pending investment instructions, and for the disbursement of funds in cash, without liability for interest, by depositing the same in any bank (including deposits that bear no interest or a reasonable rate of interest in a bank or similar financial institution supervised by the United States or a State, even where a bank or financial institution is the Trustee, or otherwise is a Fiduciary of the Plan, subject to the rules and regulations governing such deposits, and without regard to the amount of any such deposit);
|
20.
|
To retain insurance contracts that are guaranteed investment contracts;
|
21.
|
To invest cash balances held by the Trustee, from time to time, in short-term cash equivalents having ready marketability, including but not limited to interest bearing accounts, money market mutual funds, U.S. Treasury bills, commercial paper (including such forms thereof, other than the Trustee's own paper, as may be available through the Trustee's own trust department), certificates of deposit, and similar types of securities; and
|
22.
|
Generally to do all such acts, execute all such instruments, initiate such proceedings, and exercise all such rights and privileges with relation to property constituting the Fund as if the Trustee were the absolute owner thereof, and, to the extent not inconsistent with the express provisions hereof, the enumeration of any power herein shall not be by way of limitation, but shall be cumulative and construed as full and complete power in favor of the Trustee. In addition to the authority specifically herein granted, the Trustee shall have such power to do all acts as may be deemed necessary for full and complete management of the Fund and appropriate to carry out the purposes of the Fund, and shall further have all powers and authorities conferred on trustees by the laws of the Trustee's domiciliary state.
|
8.03
|
COMPENSATION AND EXPENSES
|
|
8.04
|
NO OBLIGATION TO QUESTION DATA
|
|
8.05
|
RESIGNATION
|
|
8.06
|
DEGREE OF CARE - LIMITATIONS OF LIABILITY
|
|
8.07
|
INDEMNIFICATION OF TRUSTEE AND CUSTODIAN
|
|
8.08
|
MISCELLANEOUS
|
|
A.
|
Governing Law-To the extent not preempted by ERISA, Plan Sections 8.01 and 8.02 shall be construed and enforced, to the extent possible, according to the laws of the State in which the Custodian or Trustee maintains its principle place of business and all provisions hereof shall be administered according to the laws of said State and any federal laws, regulations or rules which may from time to time be applicable.
|
|
B.
|
Necessary Parties - To the extent permitted by law, only the Employer and the Trustee (or Custodian, if applicable) shall be necessary parties in any application to the courts for an interpretation of Section 8.01 or 8.02 or for an accounting by the Trustee (or Custodian, if applicable), and no other Plan Fiduciary, Participant, Beneficiary, or other person having an interest in the Fund shall be entitled to any notice or service of process. Any final judgment entered in such an action or proceeding shall, to the extent permitted by law, be conclusive upon all persons claiming in Plan Sections 8.01 or 8.02.
|
|
C.
|
Force Majeure - The Trustee (or Custodian, if applicable) shall not be responsible or liable for the failure or delay in performance of its obligations arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, or that could not be avoided by the exercise of due care, such as an act of God or any mechanical, electronic, or communications failure.
|
|
D.
|
Agents - In performing its obligations under this Plan, the Trustee (or Custodian, if applicable) shall be entitled to employ suitable agents, counsel, sub-custodians, and other service providers.
|