As filed with the Securities and Exchange Commission on September 23, 1997.
Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_____________________
EMCORE CORPORATION
(Exact name of issuer as specified in its charter)
New Jersey 22-2746503
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
394 Elizabeth Avenue
Somerset, New Jersey 08873
(908) 271-9090
(Address of principal executive offices)
_________________________________
EMCORE CORPORATION
401(K) PLAN
(Full title of plan)
__________________
Thomas G. Werthan
EMCORE Corporation
394 Elizabeth Avenue
Somerset, New Jersey 08873
(Name and address of agent for service)
(Telephone number, including area code, of agent for service):
(908) 271-9090
___________________
Copy to:
Kevin Keogh, Esq.
White & Case
1155 Avenue of the Americas
New York, NY 10036
___________________
CALCULATION OF REGISTRATION FEE
Proposed Maximum Proposed Maximum Amount of
Title of Securities Amount to Offering Price Aggregate Registration
to be Registered be Registered* Per Share Offering Price* Fee
Common Stock, $800,000 N/A $800,000 $242
without par value
* Estimated pursuant to Rule 457 of the General Rules and Regulations under
the Securities Act of 1933 solely for the purposes of computing the
registration fee, based on the average of the high and low sales prices of the
securities being registered hereby on the Nasdaq National Market on September
24, 1997.
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
EMCORE Corporation (the "Company") hereby incorporates by reference the
following documents:
(a) The Company's prospectus relating to an initial public offering of
Common Stock, filed pursuant to Rule 424(b) under the Securities Act on March
7, 1997 (Reg. No. 333-18565), and containing audited financial statements for
the Company's most recent fiscal year.
(b) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form S-1, as declared effective by the
Commission on March 5, 1997 (Reg. No. 333-18565).
(c) The Company's Quarterly Report on Form 10-Q for the period ended
March 31, 1997, filed with the Commission on May 15, 1997 (File No. 0-22175).
(d) The Company's Quarterly Report on Form 10-Q for the period ended
June 30, 1997, filed with the Commission on August 15, 1997 (File No. 0-
22175).
In addition, all documents filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") subsequent to the date of this Registration Statement and
prior to the filing of a post-effective amendment that indicates that all
securities offered herein have been sold or that deregisters all securities
then remaining unsold shall be deemed to be incorporated herein by reference
and to be a part hereof from the respective date of filing of each such
document. Any statement contained in a document incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Registration Statement to the extent that a statement contained herein or in
any other subsequently filed document that also is incorporated or deemed to
be incorporated herein by reference modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
The Company's Certificate of Incorporation provides that the Company
shall indemnify its directors and officers to the full extent permitted by New
Jersey law, including in circumstances in which indemnification is otherwise
discretionary under New Jersey law. Section 14A:2-7 of the New Jersey
Business Corporation Act provides that a New Jersey corporation's:
"certificate of incorporation may provide that a director or officer
shall not be personally liable, or shall be liable only to the extent therein
provided, to the corporation or its shareholders for damages for breach of any
duty owed to the corporation or its shareholders, except that such provision
shall not relieve a director or officer from liability for any breach of duty
based upon an act or omission (a) in breach of such person's duty of loyalty
to the corporation or its shareholders, (b) not in good faith or involving a
knowing violation of law or (c) resulting in receipt by such person of an
improper personal benefit. As used in this subsection, an act or omission in
breach of a person's duty of loyalty means an act or omission which that
person knows or believes to be contrary to the best interests of the
corporation or its shareholders in connection with a matter in which he has a
material conflict of interest."
In addition, Section 14A:3-5 (1995) of the New Jersey Business
Corporation Act (1995) provides as follows:
INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES
(1) As used in this section,
(a) "Corporate agent" means any person who is or was a director, officer,
employee or agent of the indemnifying corporation or of any constituent
corporation absorbed by the indemnifying corporation in a consolidation or
merger and any person who is or was a director, officer, trustee, employee or
agent of any other enterprise, serving as such at the request of the
indemnifying corporation, or of any such constituent corporation, or the legal
representative of any such director, officer, trustee, employee or agent;
(b) "Other enterprise" means any domestic or foreign corporation, other
than the indemnifying corporation, and any partnership, joint venture, sole
proprietorship, trust or other enterprise, whether or not for profit, served
by a corporate agent;
(c) "Expenses" means reasonable costs, disbursements and counsel fees;
(d) "Liabilities" means amounts paid or incurred in satisfaction of
settlements, judgments, fines and penalties;
(e) "Proceeding" means any pending, threatened or completed civil,
criminal, administrative or arbitrative action, suit or proceeding, and any
appeal therein and any inquiry or investigation which could lead to such
action, suit or proceeding; and
(f) References to "other enterprises" include employee benefit plans;
references to "fines" include any excise taxes assessed on a person with
respect to an employee benefit plan; and references to "serving at the request
of the indemnifying corporation" include any service as a corporate agent
which imposes duties on, or involves services by, the corporate agent with
respect to an employee benefit plan, its participants, or beneficiaries; and a
person who acted in good faith and in a manner the person reasonably believed
to be in the interest of the participants and beneficiaries of an employee
benefit plan shall be deemed to have acted in a manner "not opposed to the
best interests of the corporation" as referred to in this section.
(2) Any corporation organized for any purpose under any general or special
law of this State shall have the power to indemnify a corporate agent against
his expenses and liabilities in connection with any proceeding involving the
corporate agent by reason of his being or having been such a corporate agent,
other than a proceeding by or in the right of the corporation, if:
(a) such corporate agent acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the corporation; and
(b) with respect to any criminal proceeding, such corporate agent had no
reasonable cause to believe his conduct was unlawful. The termination of any
proceeding by judgment, order, settlement, conviction or upon a plea of nolo
contendere or its equivalent, shall not of itself create a presumption that
such corporate agent did not meet the applicable standards of conduct set
forth in paragraphs 14A:3-5(2)(a) and 14A:3-5(2)(b).
(3) Any corporation organized for any purpose under any general or special
law of this State shall have the power to indemnify a corporate agent against
his expenses in connection with any proceeding by or in the right of the cor-
poration to procure a judgment in its favor which involves the corporate agent
by reason of his being or having been such corporate agent, if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation. However, in such proceeding no indem-
nification shall be provided in respect of any claim, issue or matter as to
which such corporate agent shall have been adjudged to be liable to the
corporation, unless and only to the extent that the Superior Court or the
court in which such proceeding was brought shall determine upon application
that despite the adjudication of liability, but in view of all circumstances
of the
case, such corporate agent is fairly and reasonably entitled to indemnity for
such expenses as the Superior Court or such other court shall deem proper.
(4) Any corporation organized for any purpose under any general or special
law of this State shall indemnify a corporate agent against expenses to the
extent that such corporate agent has been successful on the merits or other-
wise in any proceeding referred to in subsections 14A:3-5(2) and 14A:3-5(3) or
in defense of any claim, issue or matter therein.
(5) Any indemnification under subsection 14A:3-5(2) and, unless ordered by
a court, under subsection 14A:3-5(3) may be made by the corporation only as
authorized in a specific case upon a determination that indemnification is
proper in the circumstances because the corporate agent met the applicable
standard of conduct set forth in subsection 14A:3-5(2) or subsection
14A:3-5(3). Unless otherwise provided in the certificate of incorporation or
bylaws, such determination shall be made
(a) by the board of directors or a committee thereof, acting by a majority
vote of a quorum consisting of directors who were not parties to or otherwise
involved in the proceeding; or
(b) if such a quorum is not obtainable, or, even if obtainable and such
quorum of the board of directors or committee by a majority vote of the
disinterested directors so directs, by independent legal counsel, in a written
opinion, such counsel to be designated by the board of directors; or
(c) by the shareholders if the certificate of incorporation or bylaws or a
resolution of the board of directors or of the shareholders so directs.
(6) Expenses incurred by a corporate agent in connection with a proceeding
may be paid by the corporation in advance of the final disposition of the
proceeding as authorized by the board of directors upon receipt of an under-
taking by or on behalf of the corporate agent to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified as provided
in this section.
(7) (a) If a corporation upon application of a corporate agent has failed
or refused to provide indemnification as required under subsection 14A:3-5(4)
or permitted under subsections 14A:3-5(2), 14A:3-5(3) and 14A:3-5(6), a cor-
porate agent may apply to a court for an award of indemnification by the
corporation, and such court
(i) may award indemnification to the extent authorized under subsections
14A:3-5(2) and 14A:3-5(3) and shall award indemnification to the extent
required under subsection 14A:3-5(4), notwithstanding any contrary determina-
tion which may have been made under subsection 14A:3-5(5); and
(ii) may allow reasonable expenses to the extent authorized by, and subject
to the provisions of, subsection 14A:3-5(6), if the court shall find that the
corporate agent has by his pleadings or during the course of the proceeding
raised genuine issues of fact or law.
(b) Application for such indemnification may be made:
(i) in the civil action in which the expenses were or are to be incurred or
other amounts were or are to be paid; or
(ii) to the Superior Court in a separate proceeding. If the application is
for indemnification arising out of a civil action, it shall set forth
reasonable cause for the failure to make application for such relief in the
action or proceeding in which the expenses were or are to be incurred or other
amounts were or are to be paid.
The application shall set forth the disposition of any previous application
for indemnification and shall be made in such manner and form as may be
required by the applicable rules of court or, in the absence thereof, by
direction of the court to which it is made. Such application shall be upon
notice to the corporation. The court may also direct that notice shall be
given at the expense of the corporation to the shareholders and such other
persons as it may designate in such manner as it may require.
(8) The indemnification and advancement of expenses provided by or granted
pursuant to the other subsections of this section shall not exclude any other
rights, including the right to be indemnified against liabilities and expenses
incurred in proceedings by or in the right of the corporation, to which a cor-
porate agent may be entitled under a certificate of incorporation, bylaw,
agreement, vote of shareholders, or otherwise; provided that no
indemnification shall be made to or on behalf of a corporate agent if a
judgment or other final adjudication adverse to the corporate agent
establishes that his acts or omissions (a) were in breach of his duty of
loyalty to the corporation or its shareholders, as defined in subsection (3)
of N.J.S.14A:2-7, (b) were not in good faith or involved a knowing violation
of law or (c) resulted in receipt by the corporate agent of an improper
personal benefit.
(9) Any corporation organized for any purpose under any general or special
law of this State shall have the power to purchase and maintain insurance on
behalf of any corporate agent against any expenses incurred in any proceeding
and any liabilities asserted against him by reason of his being or having been
a corporate agent, whether or not the corporation would have the power to
indemnify him against such expenses and liabilities under the provisions of
this section. The corporation may purchase such insurance from, or such insur-
ance may be reinsured in whole or in part by, an insurer owned by or otherwise
affiliated with the corporation, whether or not such insurer does business
with other insureds.
(10) The powers granted by this section may be exercised by the
corporation, notwithstanding the absence of any provision in its certificate
of incorporation or bylaws authorizing the exercise of such powers.
(11) Except as required by subsection 14A:3-5(4), no indemnification shall
be made or expenses advanced by a corporation under this section, and none
shall be ordered by a court, if such action would be inconsistent with a
provision of the certificate of incorporation, a bylaw, a resolution of the
board of directors or of the shareholders, an agreement or other proper
corporate action, in effect at the time of the accrual of the alleged cause of
action asserted in the proceeding, which prohibits, limits or otherwise
conditions the exercise of indemnification powers by the corporation or the
rights of indemnification to which a corporate agent may be entitled.
(12) This section does not limit a corporation's power to pay or reimburse
expenses incurred by a corporate agent in connection with the corporate
agent's appearance as a witness in a proceeding at a time when the corporate
agent has not been made a party to the proceeding.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
(a) The following is a complete list of exhibits filed as part of this
Registration Statement:
Exhibit
No. Description
4.1 Specimen certificate for shares of Common Stock (filed as an Exhibit to
the Company's Registration Statement on Form S-1, No. 333-18565, and
incorporated herein by reference).
4.2 The Company's 1995 Incentive and Non-Statutory Stock Option Plan, adopted
by the Company's Board of Directors and Shareholders on June 23, 1995
(filed as an Exhibit to the Company's Registration Statement on Form S-1,
No. 333-18565, and incorporated herein by reference).
4.3 The Company's 1996 Amendment to Incentive and Non-Statutory Stock Option
Plan (filed as an Exhibit to the Company's Registration Statement on Form
S-1, No. 333-18565, and incorporated herein by reference).
4.4 The Company's 401(k) Plan, adopted by the Board of Directors on July 23,
1997.
4.5 Restated Certificate of Incorporation, amended February 3, 1997 (filed as
an Exhibit to the Company's Registration Statement on Form S-1, File No.
333-18565 and incorporated herein by reference).
4.6 Amended By-Laws, as amended January 11, 1989 (filed as an Exhibit to the
Company's Registration Statement on Form S-1, File No. 333-18565 and
incorporated herein by reference).
5.1 Opinion of White & Case.
15.1 Letters of Coopers & Lybrand L.L.P., independent accountants, regarding
unaudited financial statements (filed as Exhibits to the Company's
Quarterly Reports on Form 10-Q for the periods ended March 31, 1997 and
June 30, 1997 and incorporated herein by reference).
23.1 Consent of White & Case (included in Exhibit 5.1 to this Registration
Statement).
23.2 Consent of Coopers & Lybrand L.L.P.
(b) The Company hereby undertakes to submit the EMCORE Corporation 401(k),
and any amendments thereto, to the Internal Revenue Service (the "IRS")
in a timely manner and make all changes required by the IRS in order to
qualify the EMCORE Corporation 401(k) under Section 401 of the Internal
Revenue Code.
ITEM 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933 (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's Annual Report pursuant to Section 13(a) or Section 15(d) of
the Exchange Act (and, where applicable, each filing of an employee
benefit plan's Annual Report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in the Registration Statement
shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that
a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered,
the Registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Somerset, State of New Jersey, on
this 23rd day of September, 1997.
EMCORE Corporation
By: /s/ Thomas G. Werthan
Thomas G. Werthan
Vice President, Finance and
Administration and Chief Financial Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints and
hereby authorizes Reuben F. Richards, Jr. and Thomas G. Werthan, severally,
such person's true and lawful attorneys-in-fact, with full power of
substitution or resubstitution, for such person and in his name, place and
stead, in any and all capacities, to sign on such person's behalf,
individually and in each capacity stated below, any and all amendments,
including post-effective amendments to this registration statement and to sign
any and all additional registration statements relating to the same offering
of securities as this registration statement and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Commission granting unto said attorneys-in-fact, full power and authority to
do and perform each and every act and thing requisite or necessary to be done
in and about the premises, as fully to all intents and purposes as such person
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact, or their substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement on Form S-8 has been signed by the following persons in the
capacities indicated, on September 23, 1997.
Signature Title
/s/ Reuben F. Richards, Jr. President, Chief Executive Officer
Reuben F. Richards, Jr. and Director (Principal Executive Officer)
/s/ Thomas G. Werthan Vice President, Chief Financial Officer,
Thomas G. Werthan Secretary and Director (Principal
Accounting and Financial Officer)
Chairman of the Board and Director
Thomas J. Russell
/s/ Richard A. Stall Director
Richard A. Stall
/s/ Howard R. Curd Director
Howard R. Curd
Director
Howard F. Curd
Director
Robert Louis-Dreyfus
/s/ Hugh H. Fenwick Director
Hugh H. Fenwick
/s/ Thomas E. Constance Director
Thomas E. Constance
__________________ Director
Shigeo Takayama
EXHIBIT INDEX
Exhibit
No. Description
4.1 Specimen certificate for shares of Common Stock (filed as an Exhibit to
the Company's Registration Statement on Form S-1, No. 333-18565, and
incorporated herein by reference).
4.2 The Company's 1995 Incentive and Non-Statutory Stock Option Plan, adopted
by the Company's Board of Directors and Shareholders on June 23, 1995
(filed as an Exhibit to the Company's Registration Statement on Form S-1,
No. 333-18565, and incorporated herein by reference).
4.3 The Company's 1996 Amendment to Incentive and Non-Statutory Stock Option
Plan (filed as an Exhibit to the Company's Registration Statement on Form
S-1, No. 333-18565, and incorporated herein by reference).
4.4 The Company's 401(k) Plan, adopted by the Board of Directors on July 23,
1997.
4.5 Restated Certificate of Incorporation, amended February 3, 1997 (filed as
an Exhibit to the Company's Registration Statement on Form S-1, File No.
333-18565 and incorporated herein by reference).
4.6 Amended By-Laws, as amended January 11, 1989 (filed as an Exhibit to the
Company's Registration Statement on Form S-1, File No. 333-18565 and
incorporated herein by reference).
5.1 Opinion of White & Case.
15.1 Letters of Coopers & Lybrand L.L.P., independent accountant, regarding
unaudited financial statements (filed as Exhibits to the Company's
Quarterly Reports on Form 10-Q for the periods ended March 31, 1997 and
June 30, 1997 and incorporated herein by reference).
23.1 Consent of White & Case (included in Exhibit 5.1 to this Registration
Statement).
23.2 Consent of Coopers & Lybrand L.L.P.
401(k) Plan Document
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PruArray 401(k) Plan
401(k) Plan Document
THIS DOCUMENT IS COPYRIGHTED UNDER THE LAWS OF THE UNITED STATES. USE,
DUPLICATION OR REPRODUCTION, INCLUDING THE USE OF ELECTRONIC MEANS, IS
PROHIBITED BY LAW WITHOUT THE EXPRESS CONSENT OF THE AUTHOR.
CONTENTS
Page
ARTICLE I. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Actual Deferral Percentage . . . . . . . . . . . . . 1
1.2 Adoption Agreement . . . . . . . . . . . . . . . . . 1
1.3 Aggregate Limit The sum of: . . . . . . . . . . . . . 1
1.4 Annual Additions . . . . . . . . . . . . . . . . . . 2
1.5 Annuity Starting Date . . . . . . . . . . . . . . . . 3
1.6 Applicable Calendar Year . . . . . . . . . . . . . . 3
1.7 Applicable Life Expectancy . . . . . . . . . . . . . 3
1.8 Average Contribution Percentage
(ACP) . . . . . . . . . . . . . . . . . . . . . . . . 3
1.9 Average Deferral Percentage (ADP) . . . . . . . . . . 3
1.10 Break In Service . . . . . . . . . . . . . . . . . . 4
1.11 Code . . . . . . . . . . . . . . . . . . . . . . . . 4
1.12 Compensation . . . . . . . . . . . . . . . . . . . . 4
1.13 Contribution Percentage . . . . . . . . . . . . . . . 7
1.14 Defined Benefit Plan . . . . . . . . . . . . . . . . 8
1.15 Defined Benefit (Plan) Fraction . . . . . . . . . . . 8
1.16 Defined Contribution Dollar
Limitation . . . . . . . . . . . . . . . . . . . . . 9
1.17 Defined Contribution Plan . . . . . . . . . . . . . . 9
1.18 Defined Contribution (Plan) Fraction . . . . . . . . 9
1.19 Designated Beneficiary . . . . . . . . . . . . . . . 10
1.20 Disability . . . . . . . . . . . . . . . . . . . . . 10
1.21 Distribution Calendar Year . . . . . . . . . . . . . 10
1.22 Early Retirement Age . . . . . . . . . . . . . . . . 11
1.23 Earned Income . . . . . . . . . . . . . . . . . . . . 11
1.24 Effective Date . . . . . . . . . . . . . . . . . . . 11
1.25 Election Period . . . . . . . . . . . . . . . . . . . 11
1.26 Elective Deferral . . . . . . . . . . . . . . . . . . 11
1.27 Eligible Participant . . . . . . . . . . . . . . . . 12
1.28 Employee . . . . . . . . . . . . . . . . . . . . . . 12
1.29 Employer . . . . . . . . . . . . . . . . . . . . . . 13
1.30 Entry Date . . . . . . . . . . . . . . . . . . . . . 13
1.31 Excess Aggregate Contributions . . . . . . . . . . . 13
1.32 Excess Amount . . . . . . . . . . . . . . . . . . . . 14
1.33 Excess Contribution . . . . . . . . . . . . . . . . . 14
1.34 Excess Elective Deferrals . . . . . . . . . . . . . . 14
1.35 Family Member . . . . . . . . . . . . . . . . . . . . 14
1.36 First Distribution Calendar Year . . . . . . . . . . 14
1.37 Fund . . . . . . . . . . . . . . . . . . . . . . . . 15
1.38 Hardship . . . . . . . . . . . . . . . . . . . . . . 15
1.39 Highest Average Compensation . . . . . . . . . . . . 15
1.40 Highly Compensated Employee . . . . . . . . . . . . . 15
1.41 Hour Of Service . . . . . . . . . . . . . . . . . . . 16
1.42 Key Employee . . . . . . . . . . . . . . . . . . . . 19
1.43 Leased Employee . . . . . . . . . . . . . . . . . . . 20
1.44 Limitation Year . . . . . . . . . . . . . . . . . . . 20
1.45 Master Or Prototype Plan . . . . . . . . . . . . . . 20
1.46 Matching Contribution . . . . . . . . . . . . . . . . 20
1.47 Maximum Permissible Amount . . . . . . . . . . . . . 20
1.48 Net Profit . . . . . . . . . . . . . . . . . . . . . 21
1.49 Normal Retirement Age . . . . . . . . . . . . . . . . 21
1.50 Owner-Employee . . . . . . . . . . . . . . . . . . . 21
1.51 Paired Plans . . . . . . . . . . . . . . . . . . . . 21
1.52 Participant . . . . . . . . . . . . . . . . . . . . . 21
1.53 Participant's Benefit . . . . . . . . . . . . . . . . 22
1.54 Permissive Aggregation Group . . . . . . . . . . . . 22
1.55 Plan . . . . . . . . . . . . . . . . . . . . . . . . 22
1.56 Plan Administrator . . . . . . . . . . . . . . . . . 22
1.57 Year . . . . . . . . . . . . . . . . . . . . . . . . 22
1.58 Present Value . . . . . . . . . . . . . . . . . . . . 23
1.59 Projected Annual Benefit . . . . . . . . . . . . . . 23
1.60 Qualified Deferred Compensation Plan . . . . . . . . 23
1.61 Qualified Domestic Relations Order . . . . . . . . . 24
1.62 Qualified Early Retirement Age . . . . . . . . . . . 24
1.63 Qualified Joint And Survivor Annuity . . . . . . . . 24
1.64 Qualified Matching Contribution . . . . . . . . . . . 24
1.65 Qualified Non-Elective Contributions . . . . . . . . 25
1.66 Qualified Voluntary Contribution . . . . . . . . . . 25
1.67 Required Aggregation Group . . . . . . . . . . . . . 25
1.68 Required Beginning Date . . . . . . . . . . . . . . . 25
1.69 Rollover Contribution . . . . . . . . . . . . . . . . 25
1.70 Salary Savings Agreement . . . . . . . . . . . . . . 26
1.71 Self-Employed Individual . . . . . . . . . . . . . . 26
1.72 Service . . . . . . . . . . . . . . . . . . . . . . . 26
1.73 Service Company . . . . . . . . . . . . . . . . . . . 26
1.74 Shareholder Employee . . . . . . . . . . . . . . . . 27
1.75 Simplified Employee Pension Plan . . . . . . . . . . 27
1.76 Sponsor . . . . . . . . . . . . . . . . . . . . . . . 27
1.77 Spouse (Surviving Spouse) . . . . . . . . . . . . . . 27
1.78 Super Top-Heavy Plan . . . . . . . . . . . . . . . . 27
1.79 Taxable Wage Base . . . . . . . . . . . . . . . . . . 27
1.80 Top-Heavy Determination Date . . . . . . . . . . . . 28
1.81 Top-Heavy Plan . . . . . . . . . . . . . . . . . . . 28
1.82 Top-Heavy Ratio . . . . . . . . . . . . . . . . . . . 28
1.83 Top-Paid Group . . . . . . . . . . . . . . . . . . . 30
1.84 Transfer Contribution . . . . . . . . . . . . . . . . 31
1.85 Trustee . . . . . . . . . . . . . . . . . . . . . . . 31
1.86 Valuation Date . . . . . . . . . . . . . . . . . . . 31
1.87 Vested Account Balance . . . . . . . . . . . . . . . 31
1.88 Voluntary Contribution . . . . . . . . . . . . . . . 32
1.89 Welfare Benefit Fund . . . . . . . . . . . . . . . . 32
1.90 Year Of Service . . . . . . . . . . . . . . . . . . . 32
ARTICLE II. ELIGIBILITY REQUIREMENTS . . . . . . . . . . . . . . . . . 33
2.1 Participation . . . . . . . . . . . . . . . . . . . . 33
2.2 Change In Classification Of
Employment . . . . . . . . . . . . . . . . . . . . . 33
2.3 Computation Period . . . . . . . . . . . . . . . . . 34
2.4 Employment Rights . . . . . . . . . . . . . . . . . . 34
2.5 Service With Controlled Groups . . . . . . . . . . . 34
2.6 Owner-Employees . . . . . . . . . . . . . . . . . . . 34
2.7 Leased Employees . . . . . . . . . . . . . . . . . . 35
2.8 Omission Of Eligible Employee . . . . . . . . . . . . 36
2.9 Inclusion Of Ineligible Employee . . . . . . . . . . 36
ARTICLE III. EMPLOYER CONTRIBUTIONS . . . . . . . . . . . . . . . . . . 37
3.1 Amount . . . . . . . . . . . . . . . . . . . . . . . 37
3.2 Expenses And Fees . . . . . . . . . . . . . . . . . . 37
3.3 Responsibility For Contributions . . . . . . . . . . 37
3.4 Return Of Contributions . . . . . . . . . . . . . . . 37
3.5 Form Of Contribution . . . . . . . . . . . . . . . . 38
ARITCLE IV. EMPLOYEE CONTRIBUTIONS . . . . . . . . . . . . . . . . . . 38
4.1 Voluntary Contributions . . . . . . . . . . . . . . . 38
4.2 Qualified Voluntary Contributions . . . . . . . . . . 38
4.3 Rollover Contribution . . . . . . . . . . . . . . . . 39
4.4 Transfer Contribution . . . . . . . . . . . . . . . . 40
4.5 Employer Approval Of Transfer
Contributions . . . . . . . . . . . . . . . . . . . . 41
4.6 Elective Deferrals . . . . . . . . . . . . . . . . . 41
4.7 Direct Rollover Of Benefits . . . . . . . . . . . . . 42
ARTICLE V. PARTICIPANT ACCOUNTS . . . . . . . . . . . . . . . . . . . 43
5.1 Separate Accounts . . . . . . . . . . . . . . . . . . 43
5.2 Adjustments To Participant Accounts . . . . . . . . . 43
5.3 Allocating Employer Contributions . . . . . . . . . . 44
5.4 Allocating Investment Earnings
And Losses . . . . . . . . . . . . . . . . . . . . . 46
5.5 Participant Statements . . . . . . . . . . . . . . . 47
ARTICLE VI. RETIREMENT BENEFITS AND DISTRIBUTIONS . . . . . . . . . . 47
6.1 Normal Retirement Benefits . . . . . . . . . . . . . 47
6.2 Early Retirement Benefits . . . . . . . . . . . . . . 47
6.3 Benefits On Termination Of
Employment . . . . . . . . . . . . . . . . . . . . . 48
6.4 Restrictions On Immediate
Distributions . . . . . . . . . . . . . . . . . . . . 50
6.5 Normal Form Of Payment . . . . . . . . . . . . . . . 52
6.6 Commencement Of Benefits . . . . . . . . . . . . . . 52
6.7 Claims Procedures . . . . . . . . . . . . . . . . . . 53
6.8 In-Service Withdrawals . . . . . . . . . . . . . . . 54
6.9 Hardship Withdrawal . . . . . . . . . . . . . . . . . 55
6.10 Order Of Withdrawals . . . . . . . . . . . . . . . . 57
ARTICLE VII. DISTRIBUTION REQUIREMENTS . . . . . . . . . . . . . . . . 58
7.1 Joint And Survivor Annuity
Requirements . . . . . . . . . . . . . . . . . . . . 58
7.2 Minimum Distribution Requirements . . . . . . . . . . 58
7.3 Limits On Distribution Periods . . . . . . . . . . . 58
7.4 Required Distributions On Or After
The Required Beginning Date . . . . . . . . . . . . . 59
7.5 Required Beginning Date . . . . . . . . . . . . . . . 60
7.6 Transitional Rule . . . . . . . . . . . . . . . . . . 61
7.7 Designation Of Beneficiary For Death Benefit . . . . 63
7.8 Nonexistence Of Beneficiary . . . . . . . . . . . . . 63
7.9 Distribution Beginning Before Death . . . . . . . . 64
7.10 Distribution Beginning After Death . . . . . . . . . 64
7.11 Distribution Of Excess Elective
Deferrals . . . . . . . . . . . . . . . . . . . . . . 65
7.12 Distributions of Excess
Contributions . . . . . . . . . . . . . . . . . . . . 66
7.13 Distribution Of Excess Aggregate Contributions . . . 67
ARTICLE VIII. JOINT AND SURVIVOR ANNUITY REQUIREMENTS . . . . . . . . . 69
8.1 Applicability Of Provisions . . . . . . . . . . . . . 69
8.2 Payment Of Qualified Joint And
Survivor Annuity . . . . . . . . . . . . . . . . . . 69
8.3 Payment Of Qualified Pre-Retirement
Survivor Annuity . . . . . . . . . . . . . . . . . . 69
8.4 Qualified Election . . . . . . . . . . . . . . . . . 70
8.5 Notice Requirements For Qualified
Joint And Survivor Annuity . . . . . . . . . . . . . 71
8.6 Notice Requirements For Qualified
Pre-Retirement Survivor Annuity . . . . . . . . . . . 71
8.7 Special Safe-Harbor Exception For
Certain Profit-Sharing Plans . . . . . . . . . . . . 72
8.8 Transitional Joint And Survivor
Annuity Rules . . . . . . . . . . . . . . . . . . . . 73
8.9 Automatic Joint And Survivor
Annuity And Early Survivor Annuity . . . . . . . . . 74
8.10 Annuity Contracts . . . . . . . . . . . . . . . . . . 75
ARTICLE IX. VESTING . . . . . . . . . . . . . . . . . . . . . . . . . 76
9.1 Employee Contributions . . . . . . . . . . . . . . . 76
9.2 Employer Contributions . . . . . . . . . . . . . . . 76
9.4 Requalification Prior To Five
Consecutive One-Year Breaks In
Service . . . . . . . . . . . . . . . . . . . . . . . 76
9.5 Requalification After Five
Consecutive One-Year Breaks In
Service . . . . . . . . . . . . . . . . . . . . . . . 77
9.6 Calculating Vested Interest . . . . . . . . . . . . . 77
9.7 Forfeitures . . . . . . . . . . . . . . . . . . . . . 78
9.8 Amendment Of Vesting Schedule . . . . . . . . . . . . 78
9.9 Service With Controlled Groups . . . . . . . . . . . 79
ARTICLE X. LIMITATIONS ON ALLOCATIONS AND
ANTIDISCRIMINATION TESTING . . . . . . . . . . . . . . . . 79
10.1 Participation In This Plan Only . . . . . . . . . . . 79
10.2 Disposition Of Excess Annual
Additions . . . . . . . . . . . . . . . . . . . . . . 80
10.3 Participation In This Plan And
Another Qualified Master and
Prototype Defined Contribution
Plan, Welfare Benefit Fund,
Individual Medical Account Or
Simplified Employee Pension Plan
Maintained By The Employer . . . . . . . . . . . . . 81
10.4 Disposition Of Excess Annual
Additions Under Two Plans . . . . . . . . . . . . . . 82
10.5 Participation In This Plan And
Another Defined Contribution Plan
Which Is Not A Qualified Master Or
Prototype Plan . . . . . . . . . . . . . . . . . . . 83
10.6 Participation In This Plan And A
Defined Benefit Plan . . . . . . . . . . . . . . . . 83
10.7 Average Deferral Percentage (ADP)
Test . . . . . . . . . . . . . . . . . . . . . . . . 84
10.8 Special Rules Relating To Applica-
tion Of ADP Test . . . . . . . . . . . . . . . . . . 84
10.9 Average Contribution Percentage
(ACP) Test . . . . . . . . . . . . . . . . . . . . . 86
10.10 Special Rules Relating To Applica-
tion Of ACP Test . . . . . . . . . . . . . . . . . . 87
ARTICLE XI. ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . 89
11.1 Plan Administrator . . . . . . . . . . . . . . . . . 89
11.2 Trustee . . . . . . . . . . . . . . . . . . . . . . . 89
11.3 Administrative Fees And Expenses . . . . . . . . . . 91
11.4 Duties And Indemnification . . . . . . . . . . . . . 91
11.5 Special Provisions Concerning
The Service Company . . . . . . . . . . . . . . . . . 93
ARTICLE XII. TRUST FUND . . . . . . . . . . . . . . . . . . . . . . . . 94
12.1 The Fund . . . . . . . . . . . . . . . . . . . . . . 94
12.2 Control Of Plan Assets . . . . . . . . . . . . . . . 94
12.3 Exclusive Benefit Rules . . . . . . . . . . . . . . . 95
12.4 Assignment And Alienation Of
Benefits . . . . . . . . . . . . . . . . . . . . . . 95
12.5 Determination Of Qualified Domestic Relations Order (QDRO)
95
ARTICLE XIII. INVESTMENTS . . . . . . . . . . . . . . . . . . . . . . . 97
13.1 Fiduciary Standards . . . . . . . . . . . . . . . . . 97
13.2 No Investment Discretion . . . . . . . . . . . . . . 97
13.3 Investment Directions . . . . . . . . . . . . . . . . 98
13.4 Permitted Investments . . . . . . . . . . . . . . . . 99
13.5 Shareholder Rights . . . . . . . . . . . . . . . . . 100
13.6 Liquidation Of Assets . . . . . . . . . . . . . . . . 100
13.7 Arbitration . . . . . . . . . . . . . . . . . . . . . 101
13.8 Participant Loans . . . . . . . . . . . . . . . . . . 102
13.9 Insurance Policies . . . . . . . . . . . . . . . . . 105
ARTICLE XIV. TOP-HEAVY PROVISIONS . . . . . . . . . . . . . . . . . . . 107
14.1 Applicability Of Rules . . . . . . . . . . . . . . . 107
14.2 Minimum Contribution . . . . . . . . . . . . . . . . 108
14.3 Minimum Vesting . . . . . . . . . . . . . . . . . . . 109
14.4 Limitations On Allocations . . . . . . . . . . . . . 109
ARTICLE XV. AMENDMENT AND TERMINATION . . . . . . . . . . . . . . . . 109
15.1 Amendment By Sponsor . . . . . . . . . . . . . . . . 110
15.2 Amendment By Employer . . . . . . . . . . . . . . . . 110
15.3 Termination . . . . . . . . . . . . . . . . . . . . . 110
15.4 Qualification Of Employer's Plan . . . . . . . . . . 111
15.5 Mergers And Consolidations . . . . . . . . . . . . . 111
15.6 Resignation And Removal . . . . . . . . . . . . . . . 112
15.7 Qualification Of Prototype . . . . . . . . . . . . . 112
ARTICLE XVI. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . 112
ARTICLE I -- DEFINITIONS
1.1 Actual Deferral Percentage
The ratio (expressed as a percentage and calculated separately for each
Participant) of:
(a) the amount of Employer contributions [as defined at (c) and (d)]
actually paid over to the Fund on behalf of such Participant for the Plan
Year to
(b) the Participant's Compensation for such Plan Year. (Unless
otherwise specified by the Employer in the Adoption Agreement,
Compensation will include all amounts earned from the Employer and
actually paid during the Plan Year).
Employer contributions on behalf of any Participant shall include:
(c) any Elective Deferrals made pursuant to the Participant's deferral
election, including Excess Elective Deferrals, but excluding Elective
Deferrals that are either taken into account in the Contribution
Percentage test (provided the ADP test is satisfied both with and without
exclusion of these Elective Deferrals) or are returned as excess Annual
Additions; and
(d) at the election of the Employer, Qualified Non-Elective
Contributions and Qualified Matching Contributions.
For purposes of computing Actual Deferral Percentages, an Employee who would
be a Participant but for the failure to make Elective Deferrals shall be
treated as a Participant on whose behalf no Elective Deferrals are made.
1.2 Adoption Agreement
The document attached to this Plan by which an Employer elects to establish a
qualified retirement plan and trust under the terms of this Prototype Plan and
Trust.
1.3 Aggregate Limit The sum of:
(a) 125 percent of the greater of the ADP of the Non-Highly Compensated
Employees for the Plan Year or the ACP of Non-Highly Compensated
Employees under the Plan subject to Code Section 401(m) for the Plan Year
beginning with or within the Plan Year of the cash or deferred
arrangement as described in Code Section 401(k) or Code Section
402(h)(1)(B), and
(b) the lesser of 200% or 2% plus the lesser of such ADP or ACP.
Alternatively, the aggregate limit can be determined by substituting "the
lesser of 200% or 2 percent plus" for "125% of" in (a) above, and substituting
"125% of" for "the lesser of 200% or 2% plus" in (b) above.
1.4 Annual Additions
The sum of the following amounts credited to a Participant's account for the
Limitation Year:
(a) Employer Contributions;
(b) Employee Contributions (under Article IV);
(c) Forfeitures;
(d) Amounts allocated after March 31, 1984, to an individual medical
account, as defined in Code Section 415(l)(2), which is part of a pension
or annuity plan maintained by the Employer (these amounts are treated as
Annual Additions to a Defined Contribution Plan, though they arise under
a Defined Benefit Plan); and
(e) Amounts derived from contributions paid or accrued after 1985, in
taxable years ending after 1985, which are either attributable to post-
retirement medical benefits allocated to the account of a Key Employee,
or to a Welfare Benefit Fund maintained by the Employer, are also treated
as Annual Additions to a Defined Contribution Plan. For purposes of this
paragraph, an Employee is a Key Employee if he or she meets the
requirements of paragraph 1.43 at any time during the Plan Year or any
preceding Plan Year. Welfare Benefit Fund is defined at paragraph 1.89.
(f) Allocations under a Simplified Employee Pension Plan.
Excess amounts applied in a Limitation Year to reduce Employer contributions
will be considered Annual Additions for such Limitation Year, pursuant to the
provisions of Article X.
1.5 Annuity Starting Date
The first day of the first period for which an amount is paid as an annuity or
in any other form.
1.6 Applicable Calendar Year
The First Distribution Calendar Year, and in the event of the recalculation of
life expectancy, such succeeding calendar year. If payments commence in
accordance with paragraph 7.4(e) before the Required Beginning Date, the
Applicable Calendar Year is the year such payments commence. If distribution
is in the form of an immediate annuity purchased after the Participant's death
with the Participant's remaining interest, the Applicable Calendar Year is the
year of purchase.
1.7 Applicable Life Expectancy
Used in determining the required minimum distribution. The life expectancy
(or joint and last survivor expectancy) calculated using the attained age of
the Participant (or Designated Beneficiary) as of the Participant's (or
Designated Beneficiary's) birthday in the Applicable Calendar Year reduced by
one for each calendar year which has elapsed since the date life expectancy
was first calculated. If life expectancy is being recalculated, the
Applicable Life Expectancy shall be the life expectancy as so recalculated.
The life expectancy of a non-Spouse Beneficiary may not be recalculated.
1.8 Average Contribution Percentage (ACP)
The average of the Contribution Percentages for each Highly Compensated
Employee and for each Non-Highly Compensated Employee.
1.9 Average Deferral Percentage (ADP)
The average of the Actual Deferral Percentages for each Highly Compensated
Employee and for each Non-Highly Compensated Employee.
1.10 Break In Service
If the Hour counting method has been chosen by the Employer in the Adoption
Agreement, a Break in Service is a 12-consecutive month period during which an
Employee fails to complete more than 500 Hours of Service. If the Elapsed
Time method has been chosen by the Employer in the Adoption Agreement, a Break
in Service is a period of severance of at least 12 consecutive months.
1.11 Code
The Internal Revenue Code of 1986, including any amendments.
1.12 Compensation
Unless otherwise specified by the Employer in the Adoption Agreement,
Compensation shall include all amounts earned from the Employer and actually
paid during the Plan Year.
(a) Code Section 3401(a) Wages. Compensation is defined as wages within
the meaning of Code Section 3401(a) for the purposes of Federal income
tax withholding at the source but determined without regard to any rules
that limit the remuneration included in wages based on the nature or
location of the employment or the services performed [such as the
exception for agricultural labor in Code Section 3401(a)(2)].
(b) Code Section 415 Compensation. For purposes of applying the
limitations of Article X and Top-Heavy minimums, the definition of
Compensation shall be Code Section 415 Compensation defined as follows: a
Participant's Earned Income, wages, salaries, and fees for professional
services and other amounts received (without regard to whether or not an
amount is paid in cash) for personal services actually rendered in the
course of employment with the Employer maintaining the Plan to the extent
that the amounts are includible in gross income [including, but not
limited to, commissions paid salesmen, compensation for services on the
basis of a percentage of profits, commissions on insurance premiums,
tips, bonuses, fringe benefits and reimbursements or other expense
allowances under a nonaccountable plan (as described in Regulation 1.62-
2(c))], and excluding the following:
(1) Employer contributions to a plan of deferred compensation which
are not includible in the Employee's gross income for the taxable
year in which contributed, or Employer contributions under a
Simplified Employee Pension Plan or any distributions from a plan of
deferred compensation,
(2) Amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by the Employee
either becomes freely transferable or is no longer subject to a
substantial risk of forfeiture,
(3) Amounts realized from the sale, exchange or other disposition
of stock acquired under a qualified stock option; and
(4) Other amounts which received special tax benefits, or
contributions made by the Employer (whether or not under a Salary
Reduction Agreement) towards the purchase of an annuity described in
Code Section 403(b) (whether or not the amounts are actually
excludable from the gross income of the Employee).
For purposes of applying the limitations of Article X, Compensation for a
Limitation Year is the Compensation actually paid or made available during
such Limitation Year. Notwithstanding the preceding sentence, Compensation
for a Participant in a Defined Contribution Plan who is permanently and
totally disabled [as defined in Code Section 22(e)(3)] is the Compensation
such Participant would have received for the Limitation Year if the
Participant had been paid at the rate of Compensation paid immediately before
becoming permanently and totally disabled. Such imputed Compensation for the
disabled Participant may be taken into account only if the participant is not
a Highly Compensated Employee [as defined in Code Section 414(q)] and
contributions made on behalf of such Participant are nonforfeitable when made.
If the Employer fails to pick the determination period in the Adoption
Agreement, the Plan Year shall be used. Unless otherwise specified by the
Employer in the Adoption Agreement, Compensation shall be determined as
provided in Code Section 3401(a) (as defined in this paragraph 1.12(a)). In
nonstandardized Adoption Agreement 002, the Employer may choose to eliminate
or exclude categories of Compensation which do not violate the provisions of
Code Sections 401(a)(4), 414(s), the regulations thereunder and Revenue
Procedure 89-65.
Beginning with 1989 Plan Years, the annual Compensation of each Participant
which may be taken into account for determining all benefits provided under
the Plan (including benefits under Article XIV) for any Plan Year shall not
exceed $200,000, as adjusted under Code Section 415(d). For Plan Years
beginning on or after January 1, 1994, the annual Compensation of each
Participant taken into account for determining all benefits provided under the
Plan for any Plan Year shall not exceed $150,000, as adjusted for increases in
the cost-of-living in accordance with Code Section 401(a)(17). The cost-of-
living adjustment in effect for a calendar year applies to any determination
period beginning in such calendar year.
In determining the Compensation of a Participant for purposes of this
limitation, the rules of Code Section 414(q)(6) shall apply, except in
applying such rules, the term "family" shall include only the spouse of the
Participant and any lineal descendants of the Participant who have not
attained age 19 before the end of the Plan Year. If, as a result of the
application of such rules the adjusted annual Compensation limitation is
exceeded, then (except for purposes of determining the portion of Compensation
up to the integration level if this Plan provides for permitted disparity),
the limitation shall be prorated among the affected individuals in proportion
to each such individual's Compensation as determined under this section prior
to the application of this limitation.
If a Plan has a Plan Year that contains fewer than 12 Calendar Months, then
the annual compensation limit for that period is an amount equal to the annual
Compensation as adjusted for the calendar year in which the compensation
period begins, multiplied by a fraction the numerator of which is the number
of full months in the short determination period and the denominator of which
is 12. If compensation for any prior plan year is taken into account in
determining an employee's contributions or benefits for the current year, the
compensation for such prior year is subject to the applicable annual
compensation limit in effect for that prior year. For this purpose, for years
beginning before January 1, 1990, the applicable annual compensation limit is
$200,000.
Compensation shall not include deferred compensation other than contributions
through a salary reduction agreement to a cash or deferred plan under Code
Section 401(k), a Simplified Employee Pension Plan under Code Section
402(h)(1)(B), a cafeteria plan under Code Section 125 or a tax-deferred
annuity under Code Section 403(b). Unless elected otherwise by the Employer
in the Adoption Agreement, these deferred amounts will be considered as
Compensation for Plan purposes. These deferred amounts are not counted as
Compensation for purposes of Articles X and XIV except for Code Sections
401(k) and 401(m) testing. When applicable to a Self-Employed Individual,
Compensation shall mean Earned Income.
1.13 Contribution Percentage
The ratio (expressed as a percentage and calculated separately for each
Participant) of:
(a) the Participant's Contribution Percentage Amounts [as defined at
(c)-(f)] for the Plan Year, to
(b) the Participant's Compensation for such Plan Year. Unless otherwise
specified by the Employer in the Adoption Agreement, Compensation will
include all amounts earned from the Employer and actually paid during the
Plan Year.
Contribution Percentage Amounts on behalf of any Participant shall include:
(c) the amount of Employee Voluntary Contributions, Matching
Contributions, and Qualified Matching Contributions (to the extent not
taken into account for purposes of the ADP test) made under the Plan on
behalf of the Participant for the Plan Year,
(d) forfeitures of Excess Aggregate Contributions or Matching
Contributions allocated to the Participant's account which shall be taken
into account in the year in which such forfeiture is allocated,
(e) at the election of the Employer, Qualified Non-Elective
Contributions, and
(f) the Employer also may elect to use Elective Deferrals in the
Contribution Percentage Amounts so long as the ADP test is met before the
Elective Deferrals are used in the ACP test and continues to be met
following the exclusion of those Elective Deferrals that are used to meet
the ACP test.
Contribution Percentage Amounts shall not include Matching Contributions,
whether or not Qualified, that are forfeited either to correct Excess
Aggregate Contributions, or because the contributions to which they relate are
Excess Deferrals, Excess Contributions, or Excess Aggregate Contributions.
1.14 Defined Benefit Plan
A Plan under which a Participant's benefit is determined by a formula
contained in the Plan and no individual accounts are maintained for
Participants.
1.15 Defined Benefit (Plan) Fraction
A fraction, the numerator of which is the sum of the Participant's Projected
Annual Benefits under all the Defined Benefit Plans (whether or not
terminated) maintained by the Employer, and the denominator of which is the
lesser of 125 percent of the dollar limitation determined for the Limitation
Year under Code Sections 415(b) and (d) or 140 percent of the Highest Average
Compensation, including any adjustments under Code Section 415(b).
Notwithstanding the above, if the Participant was a Participant as of the
first day of the first Limitation Year beginning after 1986, in one or more
Defined Benefit Plans maintained by the Employer which were in existence on
May 6, 1986, the denominator of this fraction will not be less than 125
percent of the sum of the annual benefits under such plans which the
Participant had accrued as of the close of the last Limitation Year beginning
before 1987, disregarding any changes in the terms and conditions of the plan
after May 5, 1986. The preceding sentence applies only if the Defined Benefit
Plans individually and in the aggregate satisfied the requirements of Section
415 for all Limitation Years beginning before 1987.
1.16 Defined Contribution Dollar Limitation
Thirty thousand dollars ($30,000) or, if greater, one-fourth of the defined
benefit dollar limitation set forth in Code Section 415(b)(1) as in effect for
the Limitation Year.
1.17 Defined Contribution Plan
A Plan under which individual accounts are maintained for each Participant to
which all contributions, forfeitures, investment income and gains or losses,
and expenses are credited or deducted. A Participant's benefit under such
Plan is based solely on the fair market value of his or her account balance.
1.18 Defined Contribution (Plan) Fraction
A Fraction, the numerator of which is the sum of the Annual Additions to the
Participant's account under all the Defined Contribution Plans (whether or not
terminated) maintained by the Employer for the current and all prior
Limitation Years (including the Annual Additions attributable to the
Participant's nondeductible Employee contributions to all Defined Benefit
Plans, whether or not terminated, maintained by the Employer, and the Annual
Additions attributable to all Welfare Benefit Funds, as defined in paragraph
1.89 and individual medical accounts, as defined in Code Section 415(l)(2),
maintained by the Employer), and the denominator of which is the sum of the
maximum aggregate amounts for the current and all prior Limitation Years of
service with the Employer (regardless of whether a Defined Contribution Plan
was maintained by the Employer). The maximum aggregate amount in the
Limitation Year is the lesser of 125 percent of the dollar limitation
determined under Code Sections 415(b) and (d) in effect under Code Section
415(c)(1)(A) or 35 percent of the Participant's Compensation for such year.
If the Employee was a Participant as of the end of the first day of the first
Limitation Year beginning after 1986, in one or more Defined Contribution
Plans maintained by the Employer which were in existence on May 6, 1986, the
numerator of this fraction will be adjusted if the sum of this fraction and
the Defined Benefit Fraction would otherwise exceed 1.0 under the terms of
this Plan. Under the adjustment, an amount equal to the product of (1) the
excess of the sum of the fractions over 1.0 times (2) the denominator of this
fraction will be permanently subtracted from the numerator of this fraction.
The adjustment is calculated using the fractions as they would be computed as
of the end of the last Limitation Year beginning before 1987, and disregarding
any changes in the terms and conditions of the Plan made after May 6, 1986,
but using the Section 415 limitation applicable to the first Limitation Year
beginning on or after January 1, 1987. The Annual Addition for any Limitation
Year beginning before 1987 shall not be re-computed to treat all Employee
Contributions as Annual Additions.
1.19 Designated Beneficiary
The individual who is designated as the beneficiary under the Plan in
accordance with Code Section 401(a)(9) and the regulations thereunder.
1.20 Disability
An illness or injury of a potentially permanent nature, expected to last for a
continuous period of not less than 12 months, certified by a physician
selected by or satisfactory to the Employer, which prevents the Employee from
engaging in any occupation for wage or profit for which the Employee is
reasonably fitted by training, education or experience.
1.21 Distribution Calendar Year
A calendar year for which a minimum distribution is required.
1.22 Early Retirement Age
The age set by the Employer in the Adoption Agreement (but not less than 55),
which is the earliest age at which a Participant may retire and receive his or
her benefits under the Plan.
1.23 Earned Income
Net earnings from self-employment in the trade or business with respect to
which the Plan is established, determined without regard to items not included
in gross income and the deductions allocable to such items, provided that
personal services of the individual are a material income-producing factor.
Earned income shall be reduced by contributions made by an Employer to a
qualified plan to the extent deductible under Code Section 404. For tax years
beginning after 1989, net earnings shall be determined, taking into account
the deduction for one-half of self-employment taxes allowed to the Employer
under Code Section 164(f) to the extent deductible.
1.24 Effective Date
The date on which the Employer's retirement plan or amendment to such plan
becomes effective. Unless otherwise specified in the Adoption Agreement, the
effective date shall be the first day of the Plan Year during which the
Adoption Agreement is executed by the Employer. For amendments reflecting
statutory and regulatory changes post Tax Reform Act of 1986, the Effective
Date will be the date upon which such amendment is first administratively
applied.
1.25 Election Period
The period which begins on the first day of the Plan Year in which the
Participant attains age 35 and ends on the date of the Participant's death.
If a Participant separates from service prior to the first day of the Plan
Year in which age 35 is attained, the Election Period shall begin on the date
of separation, with respect to the account balance as of the date of
separation.
1.26 Elective Deferral
Employer contributions made to the Plan at the election of the Participant, in
lieu of cash Compensation. Elective Deferrals shall also include
contributions made pursuant to a Salary Savings Agreement or other deferral
mechanism, such as a cash option contribution. With respect to any taxable
year, a Participant's Elective Deferral is the sum of all Employer
contributions made on behalf of such Participant pursuant to an election to
defer under any qualified cash or deferred arrangement as described in Code
Section 401(k), any simplified employee pension cash or deferred arrangement
as described in Code Section 402(h)(1)(B), any eligible deferred compensation
plan under Code Section 457, any plan as described under Code Section
501(c)(18), and any Employer contributions made on the behalf of a Participant
for the purchase of an annuity contract under Code Section 403(b) pursuant to
a Salary Savings Agreement. Elective Deferrals shall not include any
deferrals properly distributed as Excess Annual Additions.
1.27 Eligible Participant
Any Employee who is eligible to make a Voluntary Contribution, or an Elective
Deferral (if the Employer takes such contributions into account in the
calculation of the Contribution Percentage), or to receive a Matching
Contribution (including forfeitures) or a Qualified Matching Contribution. If
a Voluntary Contribution or Elective Deferral is required as a condition of
participation in the Plan, any Employee who would be a Participant in the Plan
if such Employee made such a contribution shall be treated as an Eligible
Participant even though no Voluntary Contributions or Elective Deferrals are
made.
1.28 Employee
Any person employed by the Employer (including Self-Employed Individuals and
partners), all Employees of a member of an affiliated service group [as
defined in Code Section 414(m)], Employees of a controlled group of
corporations [as defined in Code Section 414(b)], all Employees of any
incorporated or unincorporated trade or business which is under common control
[as defined in Code Section 414(c)], leased Employees [as defined in Code
Section 414(n)] and any Employee required to be aggregated by Code Section
414(o). All such Employees shall be treated as employed by a single Employer.
1.29 Employer
The Self-Employed Individual, partnership, corporation or other organization
which adopts this Plan, including any firm that succeeds the Employer and
adopts this Plan. For purposes of Article X, Limitations on Allocations,
Employer shall mean the Employer that adopts this Plan, and all members of a
controlled group of corporations [as defined in Code Section 414(b) as
modified by Code Section 415(h)], all commonly controlled trades or businesses
[as defined in Code Section 414(c) as modified by Code Section 415(h)] or
affiliated service groups [as defined in Code Section 414(m)] of which the
adopting Employer is a part, and any other entity required to be aggregated
with the Employer pursuant to regulations under Code Section 414(o).
1.30 Entry Date
The date on which an Employee commences participation in the Plan as
determined by the Employer in the Adoption Agreement. Unless the Employer
specifies otherwise in the Adoption Agreement, entry into the Plan shall be on
the first day of the Plan Year or the first day of the seventh month of the
Plan Year coinciding with or following the date on which an Employee meets the
eligibility requirements.
1.31 Excess Aggregate Contributions
The excess, with respect to any Plan Year, of:
(a) the aggregate Contribution Percentage Amounts taken into account in
computing the numerator of the Contribution Percentage actually made on
behalf of Highly Compensated Employees for such Plan Year, over
(b) the maximum Contribution Percentage Amounts permitted by the ACP
test (determined by reducing contributions made on behalf of Highly
Compensated Employees in order of their Contribution Percentages
beginning with the highest of such percentages).
Such determination shall be made after first determining Excess Elective
Deferrals pursuant to paragraph 1.34 and then determining Excess Contributions
pursuant to paragraph 1.33.
1.32 Excess Amount
The excess of the Participant's Annual Additions for the Limitation Year over
the Maximum Permissible Amount.
1.33 Excess Contribution
With respect to any Plan Year, the excess of:
(a) the aggregate amount of Employer contributions actually taken into
account in computing the ADP of Highly Compensated Employees for such
Plan Year, over
(b) the maximum amount of such contributions permitted by the ADP test
(determined by reducing contributions made on behalf of Highly
Compensated Employees in order of the ADPs, beginning with the highest of
such percentages).
1.34 Excess Elective Deferrals
Those Elective Deferrals that are includible in a Participant's gross income
under Code Section 402(g) to the extent such Participant's Elective Deferrals
for a taxable year exceed the dollar limitation under such Code Section.
Excess Elective Deferrals shall be treated as Annual Additions under the Plan,
unless such amounts are distributed no later than the first April 15 following
the close of the Participant's taxable year.
1.35 Family Member
The Employee's Spouse, any lineal descendants and ascendants and the Spouse of
such lineal descendants and ascendants.
1.36 First Distribution Calendar Year
For distributions beginning before the Participant's death, the First
Distribution Calendar Year is the calendar year immediately preceding the
calendar year which contains the Participant's Required Beginning Date. For
distributions beginning after the Participant's death, the First Distribution
Calendar Year is the calendar year in which distributions are required to
begin pursuant to paragraph 7.10.
1.37 Fund
All contributions received by the Trustee under this Plan and Trust,
investments thereof and earnings and appreciation thereon.
1.38 Hardship
An immediate and heavy financial need of the Employee where such Employee
lacks other available resources.
1.39 Highest Average Compensation
The average Compensation for the three consecutive Years of Service with the
Employer that produces the highest average. A Year of Service with the
Employer is the 12-consecutive month period defined in the Adoption Agreement.
1.40 Highly Compensated Employee
Any Employee who performs service for the Employer during the determination
year and who, during the immediate prior year:
(a) received Compensation from the Employer in excess of $75,000 [as
adjusted pursuant to Code Section 415(d)]; or
(b) received Compensation from the Employer in excess of $50,000 [as
adjusted pursuant to Code Section 415(d)] and was a member of the Top-
Paid Group for such year; or
(c) was an officer of the Employer and received Compensation during such
year that is greater than 50 percent of the dollar limitation in effect
under Code Section 415(b)(1)(A).
Notwithstanding (a), (b) and (c), an Employee who was not Highly Compensated
during the preceding Plan Year shall not be treated as a Highly Compensated
Employee with respect to the current Plan Year, unless such Employee is a
member of the 100 Employees paid the greatest Compensation during the year for
which such determination is being made.
(d) Employees who are five percent (5%) Owners at any time during the
immediate prior year or determination year.
Highly Compensated Employee includes Highly Compensated active Employees and
Highly Compensated former Employees.
1.41 Hour Of Service
(a) Hour Counting Method:
(1) Each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for the Employer. These
hours shall be credited to the Employee for the computation period
in which the duties are performed; and
(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 shall be
credited under this paragraph for any single continuous period
(whether or not such period occurs in a single computation period).
Hours under this paragraph shall be calculated and credited pursuant
to Section 2530.200b-2 of the Departmentof Labor Regulations which
are incorporated herein by this reference; and
(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 shall not be credited both under paragraph (a) or
paragraph (b), as the case may be, and under this paragraph (c).
These hours shall be credited to the Employee for the computation
period or periods to which the award or agreement pertains rather
than the computation period in which the award, agreement or payment
is made.
(4) Hours of Service shall be credited for employment with the
Employer and with other members of an affiliated service group [as
defined in Code Section 414(m)], a controlled group of corporations
[as defined in Code Section 414(b)], or a group of trades or
businesses under common control [as defined in Code Section 414(c)]
of which the adopting Employer is a member, and any other entity
required to be aggregated with the Employer pursuant to Code Section
414(o) and the regulations thereunder. Hours of Service shall also
be credited for any individual considered an Employee for purposes
of this Plan under Code Section 414(n) or Code Section 414(o) and
the regulations thereunder.
(5) Solely for purposes of determining whether a Break in Service,
as defined in paragraph 1.10, for participation and vesting purposes
has occurred in a computation period, an individual who is absent
from work for maternity or paternity reasons shall receive credit
for the Hours of Service which would otherwise have been credited to
such individual but for such absence, or in any case in which such
hours cannot be determined, 8 Hours of Service per day of such
absence. For purposes of this paragraph, an absence from work for
maternity or paternity reasons means an absence by reason of the
pregnancy of the individual, by reason of a birth of a child of the
individual, by reason of the placement of a child with the
individual in connection with the adoption of such child by such
individual, or for purposes of caring for such child for a period
beginning immediately following such birth or placement. The Hours
of Service credited under this paragraph shall be credited in the
computation period in which the absence begins if the crediting is
necessary to prevent a Break in Service in that period, or in all
other cases, in the following computation period. No more than 501
hours will be credited under this paragraph.
(6) Unless specified otherwise in the Adoption Agreement, the Hours
of Service Method shall be used. Also, unless specified otherwise
in the Adoption Agreement, Hours of Service shall be determined on
the basis of actual hours for which an Employee is paid or entitled
to payment.
(b) Elapsed Time Method:
(1) For purposes of this section, Hour of Service shall mean each
hour for which an Employee is paid or entitled to payment for the
performance of duties for the Employer.
(2) Break In Service is a period of severance of at least 12
consecutive months.
(3) Period of severance is a continuous period of time during which
the Employee is not employed by the Employer. Such period begins on
the date the Employee retires, quits or is discharged, or if
earlier, the 12 month anniversary of the date on which the Employee
was otherwise first absent from service.
(4) In the case of an individual who is absent from work for
maternity or paternity reasons, the 12-consecutive-month period
beginning on the first anniversary of the first date of such absence
shall not constitute a Break In Service. For purposes of this
paragraph, an absence from work for maternity or paternity reasons
means an absence (i) by reason of the pregnancy of the individual,
(ii) by reason of the birth of a child of the individual, (iii) by
reason of the placement of a child with the individual in connection
with the adoption of such child by such individual, or (iv) for
purposes of caring for such child for a period beginning immediately
following such birth or placement.
(5) Each Employee will share in Employer contributions for the
period beginning on the date the Employee commences participation
under the plan and ending on the date on which such Employee severs
employment with the Employer or is no longer a member of an eligible
class of Employees.
(6) If the Employer is a member of an affiliated service group
(under section 414(m)), a controlled group of corporations (under
section 414(b)), a group of trades or businesses under common
control (under section 414(c)) or any other entity required to be
aggregated with the Employer pursuant to section 414(o), service
will be credited for any employment for any period of time for any
other member of such group. Service will also be credited for any
individual required under section 414(n) or section (414)(o) to be
considered an Employee of any Employer aggregated under section
414(b), (c), or (m).
1.42 Key Employee
Any Employee or former Employee (and the beneficiaries of such employee) who
at any time during the determination period was an officer of the Employer if
such individual's annual compensation exceeds 50% of the dollar limitation
under Code Section 415(b)(1)(A) (the defined benefit maximum annual benefit),
an owner (or considered an owner under Code Section 318) of one of the ten
largest interests in the employer if such individual's compensation exceeds
100% of the dollar limitation under Code Section 415(c)(1)(A), a 5% owner of
the Employer, or a 1% owner of the Employer who has an annual compensation of
more than $150,000. For purposes of determining who is a Key Employee, annual
compensation shall mean Compensation as defined for Article X, but including
amounts deferred through a salary reduction agreement to a cash or deferred
plan under Code Section 401(k), a Simplified Employee Pension Plan under Code
Section 408(k), a cafeteria plan under Code Section 125 or a tax-deferred
annuity under Code Section 403(b). The determination period is the Plan Year
containing the Determination Date and the four preceding Plan Years. The
determination of who is a Key Employee will be made in accordance with Code
Section 416(i)(1) and the regulations thereunder.
1.43 Leased Employee
Any person (other than an Employee of the recipient) who, pursuant to an
agreement between the recipient and any other person ("leasing organization"),
has performed services for the recipient [or for the recipient and related
persons determined in accordance with Code Section 414(n)(6)] on a
substantially full-time basis for a period of at least one year, and such
services are of a type historically performed by Employees in the business
field of the recipient Employer.
1.44 Limitation Year
The Plan Year as designated by the Employer in the Adoption Agreement for
purposes of determining the maximum Annual Addition to a Participant's
account. All qualified plans maintained by the Employer must use the same
Limitation Year. If the Limitation Year is amended to a different 12-
consecutive-month period, the new Limitation Year must begin on a date within
the Limitation Year in which the amendment is made.
1.45 Master Or Prototype Plan
A plan, the form of which is the subject of a favorable opinion letter from
the Internal Revenue Service.
1.46 Matching Contribution
An Employer contribution made to this or any other defined contribution plan
on behalf of a Participant on account of an Employee Voluntary Contribution
made by such Participant, or on account of a Participant's Elective Deferral,
under a Plan maintained by the Employer.
1.47 Maximum Permissible Amount
The maximum Annual Addition that may be contributed or allocated to a
Participant's account under the plan for any Limitation Year shall not exceed
the lesser of:
(a) the Defined Contribution Dollar Limitation, or
(b) 25% of the Participant's Compensation for the Limitation Year.
The compensation limitation referred to in (b) shall not apply to any
contribution for medical benefits [within the meaning of Code Section 401(h)
or Code Section 419A(f)(2)] which is otherwise treated as an Annual Addition
under Code Section 415(l)(1) or 419(d)(2). If a short Limitation Year is
created because of an amendment changing the Limitation Year to a different
12-consecutive month period, the Maximum Permissible Amount will not exceed
the Defined Contribution Dollar Limitation multiplied by the following
fraction: Number of months in the short Limitation Year divided by 12.
1.48 Net Profit
The current and accumulated operating earnings of the Employer before Federal
and State income taxes, excluding nonrecurring or unusual items of income, and
before contributions to this and any other qualified plan of the Employer.
Unless otherwise specified in the Adoption Agreement, profits will not be
required for Profit-Sharing contributions to the Plan.
1.49 Normal Retirement Age
The age, set by the Employer in the Adoption Agreement, at which a Participant
may retire and receive his or her benefits under the Plan. Unless otherwise
specified in the Adoption Agreement, the Normal Retirement Age shall be 65.
1.50 Owner-Employee
A sole proprietor, or a partner owning more than 10% of either the capital or
profits interest of the partnership.
1.51 Paired Plans
Two or more Plans maintained by the Sponsor designed so that a single or any
combination of Plans adopted by an Employer will meet the antidiscrimination
rules, the contribution and benefit limitations, and the Top-Heavy provisions
of the Code.
1.52 Participant
Any Employee who has met the eligibility requirements and is participating in
the Plan.
1.53 Participant's Benefit
The account balance as of the last Valuation Date in the calendar year
immediately preceding the Distribution Calendar Year (valuation calendar year)
increased by the amount of any contributions or forfeitures allocated to the
account balance as of the dates in the valuation calendar year after the
Valuation Date and decreased by distributions made in the valuation calendar
year after the Valuation Date. A special exception exists for the second
distribution Calendar Year. For purposes of this paragraph, if any portion of
the minimum distribution for the First Distribution Calendar Year is made in
the second Distribution Calendar Year on or before the
Required Beginning Date, the amount of the minimum distribution made in the
second distribution calendar year shall be treated as if it had been made in
the immediately preceding Distribution Calendar Year.
1.54 Permissive Aggregation Group
Used for Top-Heavy testing purposes, it is the Required Aggregation Group of
plans plus any other plan or plans of the Employer which, when considered as a
group with the Required Aggregation Group, would continue to satisfy the
requirements of Code Sections 401(a)(4) and 410.
1.55 Plan
The Employer's retirement plan as embodied herein and in the Adoption
Agreement.
1.56 Plan Administrator
The Employer.
1.57 Year
The 12-consecutive month period designated by the Employer in the Adoption
Agreement. If no such period is designated, the Plan Year shall be the
Employer's taxable year.
1.58 Present Value
Used for Top-Heavy test and determination purposes, when determining the
Present Value of accrued benefits, with respect to any Defined Benefit Plan
maintained by the Employer, interest and mortality rates shall be determined
in accordance with the provisions of the respective plan. If applicable,
interest and mortality assumptions will be specified in Section 11 of the
Adoption Agreement.
1.59 Projected Annual Benefit
Used to test the maximum benefit which may be obtained from a combination of
retirement plans, it is the annual retirement benefit (adjusted to an
actuarial equivalent straight life annuity if such benefit is expressed in a
form other than a straight life annuity or Qualified Joint and Survivor
Annuity) to which the Participant would be entitled under the terms of a
Defined Benefit Plan or plans, assuming:
(a) the Participant will continue employment until Normal Retirement Age
under the plan (or current age, if later), and
(b) the Participant's Compensation for the current Limitation Year and
all other relevant factors used to determine benefits under the plan will
remain constant for all future Limitation Years.
1.60 Qualified Deferred Compensation Plan
Any pension, profit-sharing, stock bonus, or other plan which meets the
requirements of Code Section 401 and includes a trust exempt from tax under
Code Section 501(a) or any annuity plan described in Code Section 403(a).
An Eligible Retirement Plan is an individual retirement account (IRA) as
described in section 408(a) of the Code, an individual retirement annuity
(IRA) as described in section 408(b) of the Code, an annuity plan as described
in section 403(a) of the Code, or a qualified trust as described in section
401(a) of the Code, which accepts Eligible Rollover Distributions. However,
in the case of an Eligible Rollover Distribution to a surviving Spouse, an
Eligible Retirement Plan is an individual retirement account or individual
retirement annuity.
1.61 Qualified Domestic Relations Order
A QDRO is a signed Domestic Relations Order issued by a State Court which
creates, recognizes or assigns to an alternate payee(s) the right to receive
all or part of a Participant's Plan benefit and which meets the requirements
of Code Section 414(p). An alternate payee is a Spouse, former Spouse, child,
or other dependent who is treated as a beneficiary under the Plan as a result
of the QDRO.
1.62 Qualified Early Retirement Age
For purposes of paragraph 8.9, Qualified Early Retirement Age is the latest
of:
(a) the earliest date, under the Plan, on which the Participant may
elect to receive retirement benefits, or
(b) the first day of the 120th month beginning before the Participant
reaches Normal Retirement Age, or
(c) the date the Participant begins participation.
1.63 Qualified Joint And Survivor Annuity
An immediate annuity for the life of the Participant with a survivor annuity
for the life of the Participant's Spouse which is at least one-half of but not
more than the amount of the annuity payable during the joint lives of the
Participant and the Participant's Spouse. The exact amount of the Survivor
Annuity is to be specified by the Employer in the Adoption Agreement. If not
designated by the Employer, the Survivor Annuity will be 1/2 of the amount
paid to the Participant during his or her lifetime. The Qualified Joint and
Survivor Annuity will be the amount of benefit which can be provided by the
Participant's Vested Account Balance.
1.64 Qualified Matching Contribution
Matching Contributions which when made are subject to the distribution and
nonforfeitability requirements under Code Section 401(k).
1.65 Qualified Non-Elective Contributions
Contributions (other than Matching Contributions or Qualified Matching
Contributions) made by the Employer and allocated to Participants' accounts
that the Participants may not elect to receive in cash until distributed from
the Plan; that are nonforfeitable when made; and that are distributable only
in accordance with the distribution provisions that are applicable to Elective
Deferrals and Qualified Matching Contributions.
1.66 Qualified Voluntary Contribution
A tax-deductible voluntary Employee contribution. These contributions may no
longer be made to the Plan.
1.67 Required Aggregation Group
Used for Top-Heavy testing purposes, it consists of:
(a) each qualified plan of the Employer in which at least one Key
Employee participates or participated at any time during the
determination period (regardless of whether the plan has terminated), and
(b) any other qualified plan of the Employer which enables a plan
described in (a) to meet the requirements of Code Sections 401(a)(4) or
410.
1.68 Required Beginning Date
The date on which a Participant is required to take his or her first minimum
distribution under the Plan. The rules are set forth at paragraph 7.5.
1.69 Rollover Contribution
A contribution made by a Participant of an amount distributed to such
Participant from another Qualified Deferred Compensation Plan in accordance
with Code Sections 402(a)(5), (6), and (7). An Eligible Rollover Distribution
is any distribution of all or any portion of the balance to the credit of the
Participant except that an Eligible Rollover Distribution does not include:
(a) any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life
(or life expectancy) of the Participant or the joint lives (or joint life
expectancies) of the Participant and the Participant's Designated
Beneficiary, or for a specified period of ten years or more;
(b) any distribution to the extent such distribution is required under
section 401(a)(9) of the Code; and
(c) the portion of any distribution that is not includible in gross
income (determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
A Direct Rollover is a payment by the plan to the Eligible Retirement Plan
specified by the Participant.
1.70 Salary Savings Agreement
An agreement between the Employer and a participating Employee where the
Employee authorizes the Employer to withhold a specified percentage of his or
her Compensation for deposit to the Plan on behalf of such Employee.
1.71 Self-Employed Individual
An individual who has Earned Income for the taxable year from the trade or
business for which the Plan is established including an individual who would
have had Earned Income but for the fact that the trade or business had no Net
Profit for the taxable year.
1.72 Service
The period of current or prior employment with the Employer. If the Employer
maintains a plan of a predecessor employer, Service for such predecessor shall
be treated as Service for the Employer.
1.73 Service Company
Prudential Mutual Fund Services, Inc., or its successor serving from time to
time.
1.74 Shareholder Employee
An Employee or Officer who owns [or is considered as owning within the meaning
of Code Section 318(a)(1)], on any day during the taxable year of an electing
small business corporation (S Corporation), more than 5% of such corporation's
outstanding stock.
1.75 Simplified Employee Pension Plan
An individual retirement account which meets the requirements of Code Section
408(k), and to which the Employer makes contributions pursuant to a written
formula. These plans are considered for contribution limitation and Top-Heavy
testing purposes.
1.76 Sponsor
Shall be Prudential Mutual Fund Management, Inc.
1.77 Spouse (Surviving Spouse)
The Spouse or Surviving Spouse of the Participant, provided that a former
Spouse will be treated as the Spouse or Surviving Spouse and a current Spouse
will not be treated as the Spouse or Surviving Spouse to the extent provided
under a Qualified Domestic Relations Order as described in Code Section
414(p).
1.78 Super Top-Heavy Plan
A Plan described at paragraph 1.81 under which the Top-Heavy Ratio [as defined
at paragraph 1.82] exceeds 90%.
1.79 Taxable Wage Base
For plans with an allocation formula which takes into account the Employer's
contribution under the Federal Insurance Contributions Act (FICA), the
contribution and benefit base in effect under Section 230, of the Social
Security Act, at the beginning of the Plan Year, or the amount elected by the
Employer in the Adoption Agreement.
1.80 Top-Heavy Determination Date
For any Plan Year subsequent to the first Plan Year, the last day of the
preceding Plan Year. For the first Plan Year of the Plan, the last day of
that year.
1.81 Top-Heavy Plan
For any Plan Year beginning after 1983, the Employer's Plan is top-heavy if
any of the following conditions exist:
(a) If the Top-Heavy Ratio for the Employer's Plan exceeds 60% and this
Plan is not part of any required Aggregation Group or Permissive
Aggregation Group of Plans.
(b) If the Employer's plan is a part of a Required Aggregation Group of
plans but not part of a Permissive Aggregation Group and the Top-Heavy
Ratio for the group of plans exceeds 60%.
(c) If the Employer's plan is a part of a Required Aggregation Group and
part of a Permissive Aggregation Group of plans and the Top-Heavy Ratio
for the Permissive Aggregation Group exceeds 60%.
1.82 Top-Heavy Ratio
(a) If the Employer maintains one or more Defined Contribution plans
(including any Simplified Employee Pension Plan) and the Employer has not
maintained any Defined Benefit Plan which during the 5-year period ending
on the Determination Date(s) has or has had accrued benefits, the Top-
Heavy Ratio for this Plan alone, or for the Required or Permissive
Aggregation Group as appropriate, is a fraction,
(1) the numerator of which is the sum of the account balances of
all Key Employees as of the Determination Date(s) [including any
part of any account balance distributed in the 5-year period ending
on the Determination Date(s)], and
(2) the denominator of which is the sum of all account balances
[including any part of any account balance distributed in the 5-year
period ending on the Determination Date(s)], both computed in
accordance with Code Section 416 and the regulations thereunder.
Both the numerator and denominator of the Top-Heavy Ratio are increased to
reflect any contribution not actually made as of the Determination Date, but
which is required to be taken into account on that date under Code Section 416
and the regulations thereunder.
(b) If the Employer maintains one or more Defined Contribution Plans
(including any Simplified Employee Pension Plan) and the Employer
maintains or has maintained one or more Defined Benefit Plans which
during the 5-year period ending on the Determination Date(s) has or has
had any accrued benefits, the Top-Heavy Ratio for any Required or
Permissive Aggregation Group as appropriate is a fraction, the numerator
of which is the sum of account balances under the aggregated Defined
Contribution Plan or Plans for all Key Employees, determined in
accordance with (a) above, and the Present Value of accrued benefits
under the aggregated Defined Benefit Plan or Plans for all Key Employees
as of the Determination Date(s), and the denominator of which is the sum
of the account balances under the aggregated Defined Contribution Plan or
Plans for all Participants, determined in accordance with (a) above, and
the Present Value of accrued benefits under the Defined Benefit Plan or
Plans for all Participants as of the Determination Date(s), all
determined in accordance with Code Section 416 and the regulations
thereunder. The accrued benefits under a Defined Benefit Plan in both
the numerator and denominator of the Top-Heavy Ratio are increased for
any distribution of an accrued benefit made in the 5-year period ending
on the Determination Date.
(c) For purposes of (a) and (b) above, the value of account balances and
the Present Value of accrued benefits will be determined as of the most
recent Valuation Date that falls within or ends with the 12-month period
ending on the Determination Date, except as provided in Code Section 416
and the regulations thereunder for the first and second plan years of a
Defined Benefit Plan. The account balances and accrued benefits of a
participant (1) who is not a Key Employee but who was a Key Employee in a
prior year, or (2) who has not been credited with at least one hour of
service with any Employer maintaining the Plan at any time during the 5-
year period ending on the Determination Date, will be disregarded. The
calculation of the Top-Heavy Ratio, and the extent to which
distributions, rollovers, and transfers are taken into account will be
made in accordance with Code Section 416 and the regulations thereunder.
Qualified Voluntary Employee Contributions will not be taken into
account for purposes of computing the Top-Heavy Ratio. When aggregating
plans the value of account balances and accrued benefits will be
calculated with reference to the Determination Dates that fall within the
same calendar year. The accrued benefit of a Participant other than a
Key Employee shall be determined under (1) the method, if any, that
uniformly applies for accrual purposes under all Defined Benefit Plans
maintained by the Employer, or (2) if there is no such method, as if such
benefit accrued not more rapidly than the slowest accrual rate permitted
under the fractional rule of Code Section 411(b)(1)(C).
1.83 Top-Paid Group
The group consisting of the top 20% of Employees when ranked on the basis of
Compensation paid during such year. For purposes of determining the number of
Employees in the group (but not who is in it), the following Employees shall
be excluded:
(a) Employees who have not completed 6 months of Service.
(b) Employees who normally work less than 17-1/2 hours per week.
(c) Employees who normally do not work more than 6 months during any
year.
(d) Employees who have not attained age 21.
(e) Employees included in a collective bargaining unit, covered by an
agreement between employee representatives and the Employer, where
retirement benefits were the subject of good faith bargaining and
provided that 90% or more of the Employer's Employees are covered by the
agreement.
(f) Employees who are nonresident aliens and who receive no earned
income which constitutes income from sources within the United States.
1.84 Transfer Contribution
A non-taxable transfer of a Participant's benefit directly from a Qualified
Deferred Compensation Plan to this Plan.
1.85 Trustee
The individual(s) or institution appointed by the Employer in the Adoption
Agreement.
1.86 Valuation Date
The last business day of each Plan Year or such other date consistent with the
operational cycle of the Service Company, as agreed to by the Employer and the
Service Company on which Participant accounts are revalued in accordance with
Article V hereof. For Top-Heavy purposes, the date selected by the Employer
as of which the Top-Heavy Ratio is calculated.
The value of mutual funds and other marketable investments shall be determined
using the most recent price quoted on a national securities exchange or over
the counter market. The value of investments for which there is no market
shall be determined in the sole judgement of the Employer or issuer and
neither the Trustee nor Service Company shall have responsibility with respect
to the valuation of such assets.
1.87 Vested Account Balance
The aggregate value of the Participant's Vested Account Balances derived from
Employer and Employee contributions (including Rollovers), whether vested
before or upon death, including the proceeds of insurance contracts, if any,
on the Participant's life. The provisions of Article VIII shall apply to a
Participant who is vested in amounts attributable to Employer contributions,
Employee contributions (or both) at the time of death or distribution.
1.88 Voluntary Contribution
An Employee contribution made to the Plan by or on behalf of a Participant
that is included in the Participant's gross income in the year in which made
and that is maintained under a separate account to which earnings and losses
are allocated.
1.89 Welfare Benefit Fund
Any fund that is part of a plan of the Employer, or has the effect of a plan,
through which the Employer provides welfare benefits to Employees or their
beneficiaries. For these purposes, Welfare Benefits means any benefit other
than those with respect to which Code Section 83(h) (relating to transfers of
property in connection with the performance of services), Code Section 404
(relating to deductions for contributions to an Employee's trust or annuity
and Compensation under a deferred payment plan), Code Section 404A (relating
to certain foreign deferred compensation plans) apply. A "Fund" is any social
club, voluntary employee benefit association, supplemental unemployment
benefit trust or qualified group legal service organization described in Code
Section 501(c)(7), (9), (17) or (20); any trust, corporation, or other
organization not exempt from income tax, or to the extent provided in
regulations, any account held for an Employer by any person.
1.90 Year Of Service
If the Hour counting method has been chosen by the Employer in the Adoption
Agreement, a Year Of Service is a 12-consecutive month period during which an
Employee is credited with not less than 1,000 (or such lesser number as
specified by the Employer in the Adoption Agreement) Hours of Service. If the
Elapsed Time Method has been chosen by the Employer in the Adoption Agreement,
an Employee will receive credit for the aggregate of all time period(s)
commencing with the Employee's first day of employment or reemployment and
ending on the date a Break In Service begins. The first day of employment or
reemployment is the first day the Employee performs an Hour of Service. An
Employee will also receive credit for any period of severance of less than 12
consecutive months. Fractional periods of a year will be expressed in terms
of days.
ARTICLE II -- ELIGIBILITY REQUIREMENTS
2.1 Participation
Unless otherwise specified in the Adoption Agreement, the Plan shall cover all
Employees having completed at least one Year of Service and who have attained
age 21. Employees who meet the eligibility requirements in the Adoption
Agreement on the Effective Date of the Plan shall become Participants as of
the Effective Date of the Plan. Unless stated to the contrary in the Adoption
Agreement, all Employees employed on the Effective Date of the Plan may
participate, even if they have not satisfied the Plan's specified eligibility
requirements. Other Employees shall become Participants on the Entry Date
coinciding with or immediately following the date on which they meet the
eligibility requirements. The Employee must satisfy the eligibility
requirements specified in the Adoption Agreement and be employed on the Entry
Date to become a Participant in the Plan. In the event an Employee who is not
a member of the eligible class of Employees becomes a member of the eligible
class, such Employee shall participate immediately if such Employee has
satisfied the minimum age and service requirements and would have previously
become a Participant had he or she been in the eligible class. A former
Participant shall again become a Participant upon returning to the employ of
the Employer. For this purpose, Participant's Compensation and Service shall
be considered from date of rehire.
2.2 Change In Classification Of Employment
If a Participant is transferred to an ineligible class of Employees, or is
otherwise reclassified as an ineligible Employee, any contribution or
allocation of forfeitures which would otherwise be made for him hereunder for
the Plan Year of such transfer or reclassification shall be made. No
contribution or allocation of forfeitures for or by him shall be made,
however, for any subsequent Plan Year prior to the Plan Year in which he again
becomes a Participant.
2.3 Computation Period
To determine Years of Service and Breaks in Service for purposes of
eligibility, the 12-consecutive month period shall commence on the date on
which an Employee first performs an Hour of Service for the Employer and each
anniversary thereof, such that the succeeding 12-consecutive month period
commences with the employee's first anniversary of employment and so on. If,
however, the period so specified is one year or less, the succeeding 12-
consecutive month period shall commence on the first day of the Plan Year
prior to the anniversary of the date they first performed an Hour of Service
regardless of whether the Employee is entitled to be credited with 1,000 (or
such lesser number as specified by the Employer in the Adoption Agreement)
Hours of Service during their first employment year.
2.4 Employment Rights
Participation in the Plan shall not confer upon a Participant any employment
rights, nor shall it interfere with the Employer's right to terminate the
employment of any Employee at any time.
2.5 Service With Controlled Groups
All Years of Service with other members of a controlled group of corporations
[as defined in Code Section 414(b)], trades or businesses under common control
[as defined in Code Section 414(c)], or members of an affiliated service group
[as defined in Code Section 414(m)] shall be credited for purposes of
determining an Employee's eligibility to participate.
2.6 Owner-Employees
If this Plan provides contributions or benefits for one or more Owner-
Employees who control both the business for which this Plan is established and
one or more other trades or businesses, this Plan and the Plan established for
other trades or businesses must, when looked at as a single Plan, satisfy Code
Sections 401(a) and (d) for the Employees of this and all other trades or
businesses.
If the Plan provides contributions or benefits for one or more Owner-Employees
who control one or more other trades or businesses, the Employees of the other
trades or businesses must be included in a Plan which satisfies Code Sections
401(a) and (d) and which provides contributions and benefits not less
favorable than provided for Owner-Employees under this Plan.
If an individual is covered as an Owner-Employee under the plans of two or
more trades or businesses which are not controlled, and the individual
controls a trade or business, then the contributions or benefits of the
Employees under the plan of the trades or businesses which are controlled must
be as favorable as those provided for him or her under the most favorable plan
of the trade or business which is not controlled.
For purposes of the preceding sentences, an Owner-Employee, or two or more
Owner-Employees, will be considered to control a trade or business if the
Owner-Employee, or two or more Owner-Employees together:
(a) own the entire interest in an unincorporated trade or business, or
(b) in the case of a partnership, own more than 50% of either the
capital interest or the profits interest in the partnership.
For purposes of the preceding sentence, an Owner-Employee, or two or more
Owner-Employees shall be treated as owning any interest in a partnership which
is owned, directly or indirectly, by a partnership which such Owner-Employee,
or such two or more Owner-Employees, are considered to control within the
meaning of the preceding sentence.
2.7 Leased Employees
Any leased Employee shall be treated as an Employee of the recipient Employer;
however, contributions or benefits provided by the leasing organization which
are attributable to services performed for the recipient Employer shall be
treated as provided by the recipient Employer. A leased Employee shall not be
considered an Employee of the recipient if such Employee is covered by a money
purchase pension plan providing:
(a) a non-integrated Employer contribution rate of at least 10% of
Compensation, [as defined in Code Section 415(c)(3) but including amounts
contributed by the Employer pursuant to a salary reduction agreement,
which are excludable from the Employee's gross income under a cafeteria
plan covered by Code Section 125, a cash or deferred profit-sharing plan
under Section 401(k) of the Code, a Simplified Employee Pension Plan
under Code Section 402(h)(1)(B ) and a tax-sheltered annuity under Code
Section 403(b)],
(b) immediate participation, and
(c) full and immediate vesting.
This exclusion is only available if Leased Employees do not constitute more
than twenty percent (20%) of the recipients non-highly compensated work force.
2.8 Omission Of Eligible Employee
If, in any Plan Year, any Employee who should be included as a Participant in
the Plan is erroneously omitted and discovery of such omission is not made
until after a contribution for the year has been made, the omitted Employee
shall be included in the next valuation. The Employer shall make any
additional contribution with respect to the omitted Employee that may be
deemed necessary.
Such contribution shall be made regardless of whether it is deductible in
whole or in part in any taxable year under applicable provisions of the Code.
The Employee shall receive credit under the terms of the Plan for any period
during which he should have been included as a Participant.
2.9 Inclusion Of Ineligible Employee
If in any Plan Year, any person who should not have been included as a
Participant in the Plan is erroneously included and discovery of such
incorrect inclusion is not made until after a contribution for the year has
been made, the Employer shall not be entitled to recover the contribution made
with respect to the ineligible person regardless of whether or not a deduction
is allowable with respect to such contribution. In such event, the amount
contributed with respect to the ineligible person shall be removed from the
ineligible Employee's Account and treated as a forfeiture.
ARTICLE III -- EMPLOYER CONTRIBUTIONS
3.1 Amount
The Employer intends to make periodic contributions to the Plan in accordance
with the formula or formulas selected in the Adoption Agreement. However, the
Employer's contribution for any Plan Year shall be subject to the limitations
on allocations contained in Article X.
3.2 Expenses And Fees
The Employer shall also be authorized to reimburse the Fund for all expenses
and fees incurred in the administration of the Plan or Trust and paid out of
the assets of the Fund. Such expenses shall include, but shall not be limited
to, fees for professional services, printing and postage. Commissions may not
be reimbursed.
3.3 Responsibility For Contributions
The Trustee shall not be required to determine if the Employer has made a
contribution or if the amount contributed is in accordance with the Adoption
Agreement or the Code. The Employer shall have sole responsibility in this
regard. The Trustee shall be accountable solely for contributions actually
received by it, within the limits of Article XI.
3.4 Return Of Contributions
Contributions made to the Fund by the Employer shall be irrevocable except as
provided below:
(a) Any contribution forwarded to the Trustee because of a mistake of
fact, provided that the contribution is returned to the Employer within
one year of the contribution.
(b) In the event that the Commissioner of Internal Revenue determines
that the Plan is not initially qualified under the Internal Revenue Code,
any contribution made incident to that initial qualification by the
Employer must be returned to the Employer within one year after the date
the initial qualification is denied, but only if the application for the
qualification is made by the time prescribed by law for filing the
Employer's return for the taxable year in which the Plan is adopted, or
such later date as the Secretary of the Treasury may prescribe.
(c) Contributions forwarded to the Trustee are presumed to be deductible
and are conditioned on their deductibility. Contributions which are
determined to not be deductible will be returned to the Employer.
3.5 Form Of Contribution
Except as contemplated in paragraphs 4.3 and 4.4, no contribution shall be
made in property other than United States currency or such other property as
is acceptable to the Service Company.
ARITCLE IV -- EMPLOYEE CONTRIBUTIONS
4.1 Voluntary Contributions
Unless otherwise specified in the Adoption Agreement, an Employee may not make
Voluntary Contributions to the Plan established hereunder. If permitted, they
will be made in a uniform and nondiscriminatory manner. Such contributions
are subject to the limitations on Annual Additions and are subject to
antidiscrimination testing.
4.2 Qualified Voluntary Contributions
A Participant may no longer make Qualified Voluntary Contributions to the
Plan. Amounts already contributed may not remain in the Trust Fund. The
Participant must withdraw the Qualified Voluntary Contribution amounts already
contributed by making a written application to the Plan Administrator.
4.3 Rollover Contribution
Unless provided otherwise in the Adoption Agreement, a Participant and an
Employee in an eligible class of Employees who has not met the eligibility
requirements for participation in the Plan may make a Rollover Contribution to
any Defined Contribution Plan established hereunder of all or any part of an
amount distributed or distributable to him or her from a Qualified Deferred
Compensation Plan provided:
(a) the amount distributed to the Participant is deposited in the Plan
no later than the sixtieth day after such distribution was received by
the Participant,
(b) the amount distributed is not one of a series of substantially equal
periodic payments made for the life (or life expectancy) of the
Participant or the joint lives (or joint life expectancies) of the
Participant and the Participant's Designated Beneficiary, or for a
specified period of ten years or more;
(c) the amount distributed is not required under section 401(a)(9) of
the Code;
(d) if the amount distributed included property such property is rolled
over, or if sold the proceeds of such property may be rolled over,
(e) the amount distributed is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation with
respect to employer securities).
In addition, if the Adoption Agreement allows Rollover Contributions, the Plan
will also accept any Eligible Rollover Distribution (as defined at paragraph
1.69) directly to the Plan.
Rollover Contributions, which relate to distributions prior to January 1,
1993, must be made in accordance with paragraphs (a) through (e) and
additionally meet the requirements of paragraph (f):
(f) the distribution from the Qualified Deferred Compensation Plan
constituted the Participant's entire interest in such Plan and was
distributed within one taxable year to the Participant:
(1) on account of separation from Service, a Plan termination, or
in the case of a profit-sharing or stock bonus plan, a complete
discontinuance of contributions under such plan within the meaning
of Section 402(a)(6)(A) of the Code, or
(2) in one or more distributions which constitute a qualified lump
sum distribution within the meaning of Code Section 402(e)(4)(A),
determined without reference to subparagraphs (B) and (H),
Such Rollover Contribution may also be made through an Individual Retirement
Account qualified under Code Section 408 where the IRA was used as a conduit
from the Qualified Deferred Compensation Plan, the Rollover Contribution is
made in accordance with the rules provided under paragraph (a) through (e) and
the Rollover Contribution does not include any regular IRA contributions, or
earnings thereon, which the Participant may have made to the IRA. Rollover
Contributions which relate to distributions prior to January 1, 1993, may be
made through an IRA in accordance with paragraphs (a) through (f) and
additional requirements as provided in the previous sentence. The Trustee
shall not be held responsible for determining the tax-free status of any
Rollover Contribution made under this Plan.
4.4 Transfer Contribution
Unless provided otherwise in the Adoption Agreement, a Participant and an
Employee in an eligible class of Employees who has not met the eligibility
requirements for participation in the Plan, may, subject to the provisions of
paragraph 4.5, also arrange for the direct transfer of his or her benefit from
a Qualified Deferred Compensation Plan to this Plan. For accounting and
record keeping purposes, Transfer Contributions shall be identical to Rollover
Contributions.
In the event the Employer accepts a Transfer Contribution from a Plan in which
the Employee was directing the investments of his or her account, the Employer
may continue to permit the Employee to direct his or her investments in
accordance with paragraph 13.7 with respect only to such Transfer
Contribution. Notwithstanding the above, the Employer may refuse to accept
such Transfer Contributions.
Notwithstanding anything to the contrary, if a Participant changes
classification of employment between eligible and ineligible classes, then the
Employer may transfer said Participant's account balance between the
appropriate plans maintained by the Employer, so long as such transfer will
not result in an illegal cut back in benefits in violation of Code Section
411(d)(6).
4.5 Employer Approval Of Transfer Contributions
The Employer maintaining a Safe-Harbor Profit-Sharing Plan in accordance with
the provisions of paragraph 8.7, acting in a nondiscriminatory manner, may in
its sole discretion refuse to allow Transfer Contributions to its profit-
sharing plan, if such contributions are directly or indirectly being
transferred from a defined benefit plan, a money purchase pension plan
(including a target benefit plan), a stock bonus plan, or another profit-
sharing plan which would otherwise provide for a life annuity form of payment
to the Participant.
4.6 Elective Deferrals
A Participant may enter into a Salary Savings Agreement with the Employer
authorizing the Employer to withhold a portion of such Participant's
Compensation not to exceed $7,000 per calendar year as adjusted under Code
Section 415(d) or, if lesser, the percentage of Compensation specified in the
Adoption Agreement and to deposit such amount to the Plan. No Participant
shall be permitted to have Elective Deferrals made under this Plan or any
other qualified plan maintained by the Employer, during any taxable year, in
excess of the dollar limitation contained in Code Section 402(g) in effect at
the beginning of such taxable year. Thus, the $7,000 limit may be reduced if
a Participant contributes pre-tax contributions to qualified plans of this or
other Employers. Any such contribution shall be credited to the Employee's
Salary Savings Account. Unless otherwise specified in the Adoption Agreement,
a Participant may amend his or her Salary Savings Agreement to increase,
decrease or terminate the percentage upon 30 days written notice to the
Employer. If a Participant terminates his or her agreement, such Participant
shall not be permitted to put a new Salary Savings Agreement into effect until
the first pay period in the next Plan Year, unless otherwise stated in the
Adoption Agreement. The Employer may also amend or terminate said agreement
on written notice to the Participant. If a Participant has not authorized the
Employer to withhold at the maximum rate and desires to increase the total
withheld for a Plan Year, such Participant may authorize the Employer upon 30
days notice to withhold a supplemental amount up to 100% of his or her
Compensation for one or more pay periods. In no event may the sum of the
amounts withheld under the Salary Savings Agreement plus the supplemental
withholding exceed 25% of a Participant's Compensation for a Plan Year.
Elective Deferrals shall be deposited in the Trust no later than the date
described in Section 2510.3-102 of the Department of Labor Regulations.
4.7 Direct Rollover Of Benefits
Notwithstanding any provision of the plan to the contrary that would otherwise
limit a Participant's election under this Paragraph, for distributions made on
or after January 1, 1993, a Participant may elect, at the time and in the
manner prescribed by the Plan Administrator, to have any portion of an
Eligible Rollover Distribution paid directly to an Eligible Retirement Plan
specified by the Participant in a Direct Rollover. Any portion of a
distribution which is not paid directly to an Eligible Retirement Plan shall
be distributed to the Participant. For purposes of this Paragraph, a
Surviving Spouse or a spouse or former spouse who is an alternate payee under
a Qualified Domestic Relations Order as defined in section 414(p) of the Code,
will be permitted to elect to have any Eligible Rollover Distribution paid
directly to an individual retirement account (IRA), an individual retirement
annuity (IRA), or another qualified retirement Plan.
The plan provisions otherwise applicable to distributions continue to apply to
Rollover and Transfer Contributions.
ARTICLE V -- PARTICIPANT ACCOUNTS
5.1 Separate Accounts
The Employer shall establish a separate bookkeeping account for each
Participant showing the total value of his or her interest in the Fund. Each
Participant's account shall be separated for bookkeeping purposes into the
following sub-accounts:
(a) Employer contributions.
(1) Matching Contributions.
(2) Qualified Matching Contributions.
(3) Qualified Non-Elective Contributions.
(4) Discretionary Contributions.
(5) Elective Deferrals.
(b) Voluntary Contributions (and additional amounts including required
contributions and, if applicable, either repayments of loans previously
defaulted on and treated as "deemed distributions" on which a tax report
has been issued, and amounts paid out upon a separation from service
which have been included in income and which are repaid after being re-
hired by the Employer).
(c) Transfer Contributions.
(d) Rollover Contributions.
5.2 Adjustments To Participant Accounts
As of each Valuation Date of the Plan, the Employer shall add to each account:
(a) the Participant's share of the Employer's contribution and
forfeitures as determined in the Adoption Agreement,
(b) any Elective Deferrals, Voluntary, Rollover or Transfer
Contributions made by the Participant,
(c) any repayment of amounts previously paid out to a Participant upon a
separation from Service and repaid by the Participant since the last
Valuation Date, and
(d) the Participant's proportionate share of any investment earnings and
increase in the fair market value of the Fund since the last Valuation
Date, as determined at paragraph 5.4.
The Employer shall deduct from each account:
(e) any withdrawals or payments made from the Participant's account
since the last Valuation Date, and
(f) the Participant's proportionate share of any decrease in the fair
market value of the Fund since the last Valuation Date, as determined at
paragraph 5.4.
5.3 Allocating Employer Contributions
The Employer's contribution shall be allocated to Participants in accordance
with the allocation formula selected by the Employer in the Adoption
Agreement, and the minimum contribution and allocation requirements for Top-
Heavy Plans. Unless otherwise specified in the Adoption Agreement, the Plan
will not be integrated with Social Security. Beginning with the 1990 Plan
Year and thereafter, for plans on Standardized Adoption Agreement 001,
Participants who are credited with more than 500 Hours of Service or are
employed on the last day of the Plan Year must receive a full allocation of
Employer contributions. In Nonstandardized Adoption Agreement 002, Employer
contributions shall be allocated to the accounts of Participants employed by
the Employer on the last day of the Plan Year unless indicated otherwise in
the Adoption Agreement. In the case of a non-Top-Heavy, Nonstandardized Plan,
Participants must also have completed a Year of Service unless otherwise
specified in the Adoption Agreement. For Nonstandardized Adoption Agreement
002, the Employer may only apply the last day of the Plan Year and Year of
Service requirements if the Plan satisfies the requirements of Code Sections
401(a)(26) and 410(b) and the regulations thereunder including the exception
for 401(k) plans. If, when applying the last day and Year of Service
requirements, the Plan fails to satisfy the aforementioned requirements,
additional Participants will be eligible to receive an allocation of Employer
Contributions until the requirements are satisfied. Participants who are
credited with a Year of Service, but not employed at Plan Year end, are the
first category of additional Participants eligible to receive an allocation.
If the requirements are still not satisfied, Participants credited with more
than 500 Hours of Service and employed at Plan Year end are the next category
of Participants eligible to receive an allocation. Finally, if necessary to
satisfy the said requirements, any Participant credited with more than 500
Hours of Service will be eligible for an allocation of Employer Contributions.
The Service requirement is not applicable with respect to any Plan Year during
which the Employer's Plan is Top-Heavy.
In the event the Employer selects an integrated allocation formula, the
Employer's contribution will be allocated in accordance with the following
method unless otherwise specified in the Adoption Agreement:
(a) First, to the extent contributions and forfeitures are sufficient,
all Participants will receive an allocation equal to 3% of their
Compensation.
(b) Next, any remaining Employer Contributions and forfeitures will be
allocated to Participants who have Compensation in excess of the Taxable
Wage Base (excess Compensation). Each such Participant will receive an
allocation in the ratio that his or her excess compensation bears to the
excess Compensation of all Participants. Participants may only receive
an allocation of 3% of excess Compensation.
(c) Next, any remaining Employer contributions and forfeitures will be
allocated to all Participants in the ratio that their Compensation plus
excess Compensation bears to the total Compensation plus excess
Compensation of all Participants. Participants may only receive an
allocation of up to 2.7% of their Compensation plus excess Compensation,
under this allocation method. If the Taxable Wage Base as defined in
Section 3 of the Adoption Agreement is less than the maximum, but more
than the greater of $10,000 or 20% of the maximum, then the 2.7% must be
reduced. If the amount specified is greater than 80% but less than 100%
of the maximum Taxable Wage Base, the 2.7% must be reduced to 2.4%. If
the amount specified is greater than the greater of $10,000 or 20% of the
maximum Taxable Wage Base, but not more than 80%, 2.7% must be reduced to
1.3%.
(d) Next, any remaining Employer contributions and forfeitures will be
allocated to all Participants (whether or not they received an allocation
under the preceding paragraphs) in the ratio that each Participant's
Compensation bears to all Participants' Compensation.
If the Plan is not Top-Heavy, subparagraphs (a) and (b) above may be
disregarded and 5.7%, 5.4% or 4.3% may be substituted for 2.7%, 2.4% or 1.3%
where it appears in (c) above.
5.4 Allocating Investment Earnings And Losses
A Participant's share of investment earnings and any increase or decrease in
the fair market value of the Fund shall be based on the proportionate value of
all active accounts (other than accounts with segregated investments) as of
the last Valuation Date less withdrawals since the last Valuation Date. If
applicable, segregated accounts may be allocated earnings, up through the date
of segregation, under the above method, at the Plan Administrator's
discretion. If Employer and/or Employee contributions are made monthly,
quarterly, or on some other systematic basis, the adjusted value of such
accounts for allocation of investment income and gains or losses shall include
one-half the contributions for such period. If Employer and/or Employee
contributions are not made on a systematic basis, it is assumed that they are
made at the end of the valuation period and therefore will not receive an
allocation of investment earnings and gains or losses for such period.
Notwithstanding the above, if contributions are made on a nonsystematic basis,
at the Plan Administrator's discretion, such contributions will be credited
with an allocation of the actual investment earnings and gains and losses from
the actual date of deposit of each such contribution until the end of the
period. In no event shall this election of allocating gains and losses be
used to discriminate. Finally, the Plan Administrator may elect to disregard
nonsystematic contributions made during the year, altogether, and allocate
earnings exclusively on the basis of all active accounts (other than accounts
with segregated investments) as of the last Valuation Date less withdrawals
since the last Valuation Date, or, if applicable, take into consideration any
systematic contributions, as provided above. Accounts with segregated
investments shall receive only the income or loss on such segregated
investments.
5.5 Participant Statements
The Employer shall periodically (not less often than annually), prepare a
statement for each Participant showing the additions to and subtractions from
his or her account since the last such statement and the fair market value of
his or her account as of the date for which the statement is prepared.
ARTICLE VI -- RETIREMENT BENEFITS AND DISTRIBUTIONS
6.1 Normal Retirement Benefits
A Participant shall be entitled to receive the balance held in his or her
account from Employer contributions upon attaining Normal Retirement Age or at
such earlier dates as the provisions of this Article VI may allow. If the
Participant elects to continue working past his or her Normal Retirement Age,
he or she will continue as an active Plan Participant and no distribution
shall be made to such Participant until his or her actual retirement date
unless the employer elects otherwise in the Adoption Agreement, or a minimum
distribution is required by law. Settlement shall be made in the normal form,
or if elected, in one of the optional forms of payment provided below.
6.2 Early Retirement Benefits
If the Employer so provides in the Adoption Agreement, an Early Retirement
Benefit will be available to individuals who meet the age and Service
requirements. An individual who meets the Early Retirement Age requirements
and separates from Service, will become fully vested, regardless of any
vesting schedule which otherwise might apply. If a Participant separates from
Service before satisfying the age requirements, but after having satisfied the
Service requirement, the Participant will be entitled to elect an Early
Retirement benefit upon satisfaction of the age requirement.
6.3 Benefits On Termination Of Employment
(a) If a Participant terminates employment prior to Normal Retirement
Age, such Participant shall be entitled to receive the vested balance
held in his or her account payable at Normal Retirement Age in the normal
form, or if elected, in one of the optional forms of payment provided
hereunder. If applicable, the Early Retirement Benefit provisions may be
elected. Notwithstanding the preceding sentence, a former Participant
may, if allowed in the Adoption Agreement, make application to the
Employer requesting early payment of any deferred vested and
nonforfeitable benefit due.
(b) If a Participant terminates employment, and the value of that
Participant's vested account balance derived from Employer and Employee
contributions is not greater than $3,500, the Participant may receive a
lump sum distribution of the value of the entire vested portion of such
account balance and the non-vested portion will be treated as a
forfeiture. The Employer shall continue to follow their consistent
policy, as may be established, regarding immediate cash-outs of Vested
Account Balances of $3,500 or less. For purposes of this Article, if the
value of a Participant's Vested Account Balance is zero, the Participant
shall be deemed to have received a distribution of such Vested Account
Balance immediately following termination. Likewise, if the Participant
is reemployed prior to incurring 5 consecutive 1-year Breaks In Service
they will be deemed to have immediately repaid such distribution. For
Plan Years beginning prior to 1989, a Participant's Vested Account
Balance shall not include Qualified Voluntary Contributions.
Notwithstanding the above, if the Employer maintains or has maintained a
policy of not distributing any amounts until the Participant's Normal
Retirement Age, the Employer can continue to uniformly apply such policy.
(c) If a Participant terminates employment with a Vested Account Balance
derived from Employer and Employee contributions in excess of $3,500, and
elects (with his or her Spouse's consent, if required) to receive 100% of
the value of his or her Vested Account Balance in a lump sum, the non-
vested portion will be treated as a forfeiture. The Participant (and his
or her Spouse, if required) must consent to any distribution, when the
Vested Account Balance described above exceeds $3,500 or if at the time
of any prior distribution it exceeded $3,500. For purposes of this
paragraph, for Plan Years beginning prior to 1989, a Participant's Vested
Account Balance shall not include Qualified Voluntary Contributions.
(d) Distribution of less than 100% of the Participant's Vested Account
Balance shall be permitted upon termination of employment.
(e) If a Participant who is not 100% vested receives or is deemed to
receive a distribution pursuant to this paragraph and resumes employment
covered under this Plan, the Participant shall have the right to repay to
the Plan the full amount of the distribution attributable to Employer
contributions on or before the earlier of the date that the Participant
incurs 5 consecutive 1-year Breaks in Service following the date of
distribution or five years after the first date on which the Participant
is subsequently reemployed. In such event, the Participant's account
shall be restored to the value thereof at the time the distribution was
made and may further be increased by the Plan's income and investment
gains and/or losses on the undistributed amount from the date of
distribution to the date of repayment.
(f) A Participant shall also have the option, to postpone payment of his
or her Plan benefits until the first day of April following the calendar
year in which he or she attains age 70-1/2. Any balance of a
Participant's account resulting from his or her Employee contributions
not previously withdrawn, if any, may be withdrawn by the Participant
immediately following separation from Service.
(g) If a Participant ceases to be an active Employee as a result of a
Disability as defined at paragraph 1.21, such Participant shall be able
to make an application for a disability retirement benefit payment. The
Participant's account balance will be deemed "immediately distributable"
as set forth in paragraph 6.4, and will be fully vested pursuant to
paragraph 9.2.
6.4 Restrictions On Immediate Distributions
(a) An account balance is immediately distributable if any part of the
account balance could be distributed to the Participant (or Surviving
Spouse) before the Participant attains (or would have attained if not
deceased) the later of the Normal Retirement Age or age 62.
(b) If the value of a Participant's vested account balance derived from
Employer and Employee Contributions exceeds (or at the time of any prior
distribution exceeded) $3,500, and the account balance is immediately
distributable, the Participant and his or her Spouse (or where either the
Participant or the Spouse has died, the survivor) must consent to any
distribution of such account balance. The consent of the Participant and
the Spouse shall be obtained in writing within the 90-day period ending
on the annuity starting date, which is the first day of the first period
for which an amount is paid as an annuity or any other form. The Plan
Administrator shall notify the Participant and the Participant's Spouse
of the right to defer any distribution until the Participant's account
balance is no longer immediately distributable. Such notification shall
include a general description of the material features, and an
explanation of the relative values of, the optional forms of benefit
available under the plan in a manner that would satisfy the notice
requirements of Code Section 417(a)(3), and shall be provided no less
than 30 days and no more than 90 days prior to the annuity starting date.
(c) Notwithstanding the foregoing, only the Participant need consent to
the commencement of a distribution in the form of a qualified Joint and
Survivor Annuity while the account balance is immediately distributable.
Furthermore, if payment in the form of a Qualified Joint and Survivor
Annuity is not required with respect to the Participant pursuant to
paragraph 8.7 of the Plan, only the Participant need consent to the
distribution of an account balance that is immediately distributable.
Neither the consent of the Participant nor the Participant's Spouse shall
be required to the extent that a distribution is required to satisfy Code
Section 401(a)(9) or Code Section 415. In addition, upon termination of
this Plan if the Plan does not offer an annuity option (purchased from a
commercial provider), the Participant's account balance may, without the
Participant's consent, be distributed to the Participant or transferred
to another Defined Contribution Plan [other than an employee stock
ownership plan as defined in Code Section 4975(e)(7)] within the same
controlled group.
(d) For purposes of determining the applicability of the foregoing
consent requirements to distributions made before the first day of the
first Plan Year beginning after 1988, the Participant's vested account
balance shall not include amounts attributable to Qualified Voluntary
Contributions.
(e) If a distribution is one to which Code Section 401(a)(11) and 417 do
not apply, such distribution may commence less than 30 days after the
notice required under Section 1.411(a)-11(c) of the Income Tax
Regulations is given, provided that:
(1) the Plan Administrator clearly informs the Participant that the
Participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not to
elect a distribution (and, if applicable, a particular distribution
option), and
(2) the Participant, after receiving the notice, affirmatively
elects a distribution.
6.5 Normal Form Of Payment
The normal form of payment for a profit-sharing plan satisfying the
requirements of paragraph 8.7 hereof shall be a lump sum with no option for
annuity payments. For all other plans, the normal form of payment hereunder
shall be a Qualified Joint and Survivor Annuity as provided under Article
VIII. A Participant whose vested account balance derived from Employer and
Employee contributions exceeds $3,500, or if at the time of any prior
distribution it exceeded $3,500, shall (with the consent of his or her Spouse)
have the right to receive his or her benefit in a lump sum or in monthly,
quarterly, semi-annual or annual payments from the Fund over any period not
extending beyond the life expectancy of the Participant and his or her
Beneficiary. For purposes of this paragraph, for Plan Years prior to 1989, a
Participant's Vested Account Balance shall not include Qualified Voluntary
Contributions. The normal form of payment shall be automatic, unless the
Participant files a written request with the Employer prior to the date on
which the benefit is automatically payable, electing a lump sum or installment
payment option. No amendment to the Plan may eliminate one of the optional
distribution forms listed above.
6.6 Commencement Of Benefits
(a) Unless the Participant elects otherwise, distribution of benefits
will begin no later than the 60th day after the close of the Plan Year in
which the latest of the following events occurs:
(1) the Participant attains age 65 (or normal retirement age if
earlier),
(2) the 10th anniversary of the year in which the Participant
commenced participation in the Plan, or
(3) the Participant terminates Service with the Employer.
(b) Notwithstanding the foregoing, the failure of a Participant and
Spouse (if necessary) to consent to a distribution while a benefit is
immediately distributable, within the meaning of paragraph 6.4 hereof,
shall be deemed an election to defer commencement of payment of any
benefit sufficient to satisfy this paragraph.
6.7 Claims Procedures
Upon retirement, death, or other severance of employment, the Participant or
his or her representative may make application to the Employer requesting
payment of benefits due and the manner of payment. If no application for
benefits is made, the Employer shall automatically pay any vested benefit due
hereunder in the normal form at the time prescribed at paragraph 6.4. If an
application for benefits is made, the Employer shall accept, reject, or modify
such request and shall notify the Participant in writing setting forth the
response of the Employer and in the case of a denial or modification the
Employer shall:
(a) state the specific reason or reasons for the denial,
(b) provide specific reference to pertinent Plan provisions on which the
denial is based,
(c) provide a description of any additional material or information
necessary for the Participant or his representative to perfect the claim
and an explanation of why such material or information is necessary, and
(d) explain the Plan's claim review procedure as contained in this Plan.
In the event the request is rejected or modified, the Participant or his or
her representative may within 60 days following receipt by the Participant or
representative of such rejection or modification, submit a written request for
review by the Employer of its initial decision. Within 60 days following such
request for review, the Employer shall render its final decision in writing to
the Participant or representative stating specific reasons for such decision.
If the Participant or representative is not satisfied with the Employer's
final decision, the Participant or representative can institute an action in a
federal court of competent jurisdiction; for this purpose, process would be
served on the Employer.
6.8 In-Service Withdrawals
An Employee may withdraw all or any part of the fair market value of his or
her Voluntary Contributions, Qualified Voluntary Contributions, Rollover
Contributions, upon written request to the Employer. Transfer Contributions,
which originate from a Plan meeting the safe-harbor provisions of paragraph
8.7, may also be withdrawn, by an Employee, upon written request to the
Employer. Transfer Contributions not meeting the safe-harbor provisions may
only be withdrawn upon retirement, death, disability, termination or
termination of the Plan, and will be subject to Spousal consent requirements
contained in Code Sections 411(a)(11) and 417. No such withdrawals are
permitted from a money purchase plan until the participant reaches Normal
Retirement Age. Such request shall include the Employee's address, social
security number, birthdate, and amount of the withdrawal. If at the time a
distribution of Qualified Voluntary Contributions is received the Participant
has not attained age 59-1/2 and is not disabled, as defined at Code Section
22(e)(3), the Participant will be subject to a federal income tax penalty,
unless the distribution is rolled over to a qualified plan or individual
retirement plan within 60 days of the date of distribution. A Participant may
withdraw all or any part of the fair market value of his or her pre-1987
Voluntary Contributions with or without withdrawing the earnings attributable
thereto. Post-1986 Voluntary Contributions may only be withdrawn along with a
portion of the earnings thereon. The amount of the earnings to be withdrawn
is determined by using the formula: DA[1-(V/V+E)], where DA is the
distribution amount, V is the amount of Voluntary Contributions and V+E is the
amount of Voluntary Contributions plus the earnings attributable thereto. A
Participant withdrawing his or her other contributions prior to attaining age
59-1/2, will be subject to a federal tax penalty to the extent that the
withdrawn amounts are includible in income. Any Participant in a profit-
sharing plan may, if permitted by the Employer in the Adoption Agreement,
withdraw all or any part of the fair market value of any of such vested
contributions, plus the investment earnings thereon, after attaining age 59-
1/2 without separating from Service. Such Employer contributions may not have
been used to satisfy the antidiscrimination test of Code Section 401(k). Such
distributions shall not be eligible for redeposit to the Fund. A withdrawal
under this paragraph shall not prohibit such Participant from sharing in any
future Employer Contribution he or she would otherwise be eligible to share
in. A request to withdraw amounts pursuant to this paragraph must if
applicable, be consented to by the Participant's Spouse. The consent shall
comply with the requirements of paragraph 6.4 relating to immediate
distributions.
6.9 Hardship Withdrawal
Unless otherwise specified by the Employer in the Adoption Agreement, a
Participant may not request a Hardship withdrawal prior to attaining age 59-
1/2. If permitted and the Participant has not attained age 59-1/2, the
Participant may be subject to a federal income tax penalty. Such request
shall be in writing to the Employer who shall have sole authority to authorize
a hardship withdrawal, pursuant to the rules below. Hardship withdrawals may
include Elective Deferrals regardless of when contributed and any earnings
accrued and credited thereon as of the last day of the Plan Year ending before
July 1, 1989 and Employer related contributions including but not limited to
Employer Matching Contributions, plus the investment earnings thereon to the
extent vested. Qualified Matching Contributions, Qualified Non-Elective
Contributions and Elective Deferrals reclassified as Voluntary Contributions
plus the investment earnings thereon are only available for hardship
withdrawal prior to age 59-1/2 to the extent that they were credited to the
Participant's Account as of the last day of the Plan Year ending prior to July
1, 1989. The Plan Administrator may limit withdrawals to Elective Deferrals
and the earnings thereon as stipulated above. Hardship withdrawals are
subject to the Spousal consent requirements contained in Code Sections
401(a)(11) and 417. Only the following reasons are valid to obtain hardship
withdrawal:
(a) medical expenses [within the meaning of Code Section 213(d)],
incurred or necessary for the medical care of the Participant, his or her
Spouse, children and other dependents,
(b) purchase (excluding mortgage payments) of the principal residence
for the Participant,
(c) payment of tuition and related educational expenses for the next
twelve (12) months of post-secondary education for the Participant, his
or her Spouse, children or other dependents, or
(d) the need to prevent eviction of the Employee from or a foreclosure
on the mortgage of, the Employee's principal residence.
Furthermore, the following conditions must be met in order for a withdrawal to
be authorized:
(e) the Participant has obtained all distributions, other than hardship
distributions, and all nontaxable loans under all plans maintained by the
Employer,
(f) all plans maintained by the Employer, other than flexible benefit
plans under Code Section 125 providing for current benefits, provide that
the Employee's Elective Deferrals and Voluntary Contributions will be
suspended for twelve months after the receipt of the Hardship
distribution,
(g) the distribution is not in excess of the amount of the immediate and
heavy financial need [(a) through (d) above], including amounts necessary
to pay any federal, state or local income tax or penalties reasonably
anticipated to result from the distribution, and
(h) all plans maintained by the Employer provide that an Employee may
not make Elective Deferrals for the Employee's taxable year immediately
following the taxable year of the hardship distribution in excess of the
applicable limit under Code Section 402(g) for such taxable year, less
the amount of such Employee's pre-tax contributions for the taxable year
of the hardship distribution.
If a distribution is made at a time when a Participant has a nonforfeitable
right to less than 100% of the account balance derived from Employer
contributions and the Participant may increase the nonforfeitable percentage
in the account:
(i) A separate account will be established for the Participant's
interest in the Plan as of the time of the distribution, and
(j) At any relevant time the Participant's nonforfeitable portion of the
separate account will be equal to an amount ("X") determined by the
formula:
X = P [AB + (R * D)] - (R * D)
For purposes of applying the formula: "P" is the nonforfeitable percentage at
the relevant time, "AB" is the account balance at the relevant time, "D" is
the amount of the distribution and "R" is the ratio of the account balance at
the relevant time to the account balance after distribution.
6.10 Order Of Withdrawals
Unless the Participant directs otherwise, withdrawals shall be made:
(a) First, from amounts attributable to Voluntary Contributions;
(b) Second, from amounts attributable to Rollover Contributions;
(c) Third, from amounts attributable to Transfer Contributions;
(d) Fourth, from amounts attributable to Elective Deferrals;
(e) Fifth, from amounts attributable to Qualified Non-Elective
Contributions;
(f) Sixth, from amounts attributable to Qualified Matching
Contributions;
(g) Seventh, from amounts attributable to vested matching
Contributions; and
(h) Eighth, from amounts attributable to vested Discretionary
Contributions.
ARTICLE VII -- DISTRIBUTION REQUIREMENTS
7.1 Joint And Survivor Annuity Requirements
All distributions made under the terms of this Plan must comply with the
provisions of Article VIII including, if applicable, the safe harbor
provisions thereunder.
7.2 Minimum Distribution Requirements
All distributions required under this Article shall be determined and made in
accordance with the minimum distribution requirements of Code Section
401(a)(9) and the regulations thereunder, including the minimum distribution
incidental benefit rules found at Regulations Section 1.401(a)(9)-2. The
entire interest of a Participant must be distributed or begin to be
distributed no later than the Participant's Required Beginning Date. Life
expectancy and joint and last survivor life expectancy are computed by using
the expected return multiples found in Tables V and VI of Regulations Section
1.72-9.
In determining required distributions under the Plan, Participants and/or
their Spouse (Surviving Spouse) shall have the right to have their life
expectancy recalculated annually. Whether the Participant only or both the
Participant and Spouse's lives shall be recalculated shall be determined by
the Participant.
7.3 Limits On Distribution Periods
As of the First Distribution Calendar Year, distributions if not made in a
single-sum, may only be made over one of the following periods (or a
combination thereof):
(a) the life of the Participant,
(b) the life of the Participant and a Designated Beneficiary,
(c) a period certain not extending beyond the life expectancy of the
participant, or
(d) a period certain not extending beyond the joint and last survivor
expectancy of the Participant and a designated beneficiary.
7.4 Required Distributions On Or After The Required Beginning Date
(a) If a participant's benefit is to be distributed over (1) a period
not extending beyond the life expectancy of the Participant or the joint
life and last survivor expectancy of the Participant and the
Participant's Designated Beneficiary or (2) a period not extending beyond
the life expectancy of the Designated Beneficiary, the amount required to
be distributed for each calendar year, beginning with distributions for
the First Distribution Calendar Year, must at least equal the quotient
obtained by dividing the Participant's benefit by the Applicable Life
Expectancy.
(b) For calendar years beginning before 1989, if the Participant's
Spouse is not the Designated Beneficiary, the method of distribution
selected must have assured that at least 50% of the Present Value of the
amount available for distribution was to be paid within the life
expectancy of the Participant.
(c) For calendar years beginning after 1988, the amount to be
distributed each year, beginning with distributions for the First
Distribution Calendar Year shall not be less than the quotient obtained
by dividing the Participant's benefit by the lesser of (1) the Applicable
Life Expectancy or (2) if the Participant's Spouse is not the Designated
Beneficiary, the applicable divisor determined from the table set forth
in Q&A-4 of Regulations Section 1.401(a)(9)-2. Distributions after the
death of the Participant shall be distributed using the Applicable Life
Expectancy as the relevant divisor without regard to Regulations Section
1.401(a)(9)-2.
(d) The minimum distribution required for the Participant's First
Distribution Calendar Year must be made on or before the Participant's
Required Beginning Date. The minimum distribution for other calendar
years, including the minimum distribution for the Distribution Calendar
Year in which the Participant's Required Beginning Date occurs, must be
made on or before December 31 of that Distribution Calendar Year.
(e) If the Participant's benefit is distributed in the form of an
annuity purchased from an insurance company, distributions thereunder
shall be made in accordance with the requirements of Code Section
401(a)(9) and the Regulations thereunder.
(f) For purposes of determining the amount of the required distribution
for each Distribution Calendar Year, the account balance to be used is
the account balance determined as of the last valuation preceding the
Distribution Calendar Year. This balance will be increased by the amount
of any contributions or forfeitures allocated to the account balance
after the valuation date in such preceding calendar year. Such balance
will also be decreased by distributions made after the Valuation Date in
such preceding Calendar Year.
(g) For purposes of subparagraph 7.4(f), if any portion of the minimum
distribution for the First Distribution Calendar Year is made in the
second Distribution Calendar Year on or before the Required Beginning
Date, the amount of the minimum distribution made in the second
Distribution Calendar Year shall be treated as if it had been made in the
immediately preceding Distribution Calendar Year.
7.5 Required Beginning Date
(a) General Rule. The Required Beginning Date of a Participant is the
first day of April of the calendar year following the calendar year in
which the Participant attains age 70-1/2.
(b) Transitional Rules. The Required Beginning Date of a Participant
who attains age 70-1/2 before 1988, shall be determined in accordance
with (1) or (2) below:
(1) Non-5-percent owners. The Required Beginning Date of a
Participant who is not a 5-percent owner is the first day of April
of the calendar year following the calendar year in which the later
of retirement or attainment of age 70-1/2 occurs. In the case of a
Participant who is not a 5-percent owner who attains age 70-1/2
during 1988 and who has not retired as of January 1, 1989, the
Required Beginning Date is April 1, 1990.
(2) 5-percent owners. The Required Beginning Date of a Participant
who is a 5-percent owner during any year beginning after 1979, is
the first day of April following the later of:
(i) the calendar year in which the Participant attains age 70-
1/2, or
(ii) the earlier of the calendar year with or within which ends
the plan year in which the Participant becomes a 5-percent
owner, or the calendar year in which the Participant retires.
(c) A Participant is treated as a 5-percent owner for purposes of this
Paragraph if such Participant is a 5-percent owner as defined in Code
Section 416(i) (determined in accordance with Code Section 416 but
without regard to whether the Plan is Top-Heavy) at any time during the
Plan Year ending with or within the calendar year in which such Owner
attains age 66-1/2 or any subsequent Plan Year.
(d) Once distributions have begun to a 5-percent owner under this
paragraph, they must continue to be distributed, even if the Participant
ceases to be a 5-percent owner in a subsequent year.
7.6 Transitional Rule
(a) Notwithstanding the other requirements of this Article and subject
to the requirements of Article VIII, Joint and Survivor Annuity
Requirements, distribution on behalf of any Employee, including a 5-
percent owner, may be made in accordance with all of the following
requirements (regardless of when such distribution commences):
(1) The distribution by the Trust is one which would not have
disqualified such Trust under Code Section 401(a)(9) as in effect
prior to amendment by the Deficit Reduction Act of 1984.
(2) The distribution is in accordance with a method of distribution
designated by the Employee whose interest in the Trust is being
distributed or, if the Employee is deceased, by a beneficiary of
such Employee.
(3) Such designation was in writing, was signed by the Employee or
the beneficiary, and was made before 1984.
(4) The Employee had accrued a benefit under the Plan as of
December 31, 1983.
(5) The method of distribution designated by the Employee or the
beneficiary specifies the time at which distribution will commence,
the period over which distributions will be made, and in the case of
any distribution upon the Employee's death, the beneficiaries of the
Employee listed in order of priority.
(b) A distribution upon death will not be covered by this transitional
rule unless the information in the designation contains the required
information described above with respect to the distributions to be made
upon the death of the Employee.
(c) For any distribution which commences before 1984, but continues
after 1983, the Employee or the beneficiary, to whom such distribution is
being made, will be presumed to have designated the method of
distribution under which the distribution is being made if the method of
distribution was specified in writing and the distribution satisfies the
requirements in subparagraphs (a)(1) and (5) above.
(d) If a designation is revoked, any subsequent distribution must
satisfy the requirements of Code Section 401(a)(9) and the regulations
thereunder. If a designation is revoked subsequent to the date
distributions are required to begin, the Trust must distribute by the end
of the calendar year following the calendar year in which the revocation
occurs the total amount not yet distributed which would have been
required to have been distributed to satisfy Code Section 401(a)(9) and
the regulations thereunder, but for the section 242(b)(2) election of the
Tax Equity and Fiscal Responsibility Act of 1982. For calendar years
beginning after 1988, such distributions must meet the minimum
distribution incidental benefit requirements in section 1.401(a)(9)-2 of
the Income Tax Regulations. Any changes in the designation will be
considered to be a revocation of the designation. However, the mere
substitution or addition of another beneficiary (one not named in the
designation) under the designation will not be considered to be a
revocation of the designation, so long as such substitution or addition
does not alter the period over which distributions are to be made under
the designation, directly or indirectly (for example, by altering the
relevant measuring life). In the case in which an amount is transferred
or rolled over from one plan to another plan, the rules in Q&A J-2 and
Q&A J-3 of the regulations shall apply.
7.7 Designation Of Beneficiary For Death Benefit
Each Participant shall file a written designation of beneficiary with the
Employer upon qualifying for participation in this Plan. Such designation
shall remain in force until revoked by the Participant by filing a new
beneficiary form with the Employer. The Participant may elect to have a
portion of his or her account balance invested in an insurance contract. If
an insurance contract is purchased under the Plan, the Trustee must be named
as Beneficiary under the terms of the contract. However, the Participant
shall designate a Beneficiary to receive the proceeds of the contract after
settlement is received by the Trustee. Under a profit-sharing plan satisfying
the requirements of paragraph 8.7, the Designated Beneficiary shall be the
Participant's Surviving Spouse, if any, unless such Spouse properly consents
otherwise.
7.8 Nonexistence Of Beneficiary
Any portion of the amount payable hereunder which is not disposed of because
of the Participant's or former Participant's failure to designate a
beneficiary, or because all of the Designated Beneficiaries predeceased the
Participant, shall be paid to his or her Spouse. If the Participant had no
Spouse at the time of death, payment shall be made to the personal
representative of his or her estate in a lump sum.
7.9 Distribution Beginning Before Death
If the Participant dies after distribution of his or her interest has begun,
the remaining portion of such interest will continue to be distributed at
least as rapidly as under the method of distribution being used prior to the
Participant's death.
7.10 Distribution Beginning After Death
If the Participant dies before distribution of his or her interest begins,
distribution of the Participant's entire interest shall be completed by
December 31 of the calendar year containing the fifth anniversary of the
Participant's death except to the extent that an election is made to receive
distributions in accordance with (a) or (b) below:
(a) If any portion of the Participant's interest is payable to a
Designated Beneficiary, distributions may be made over the life or over a
period certain not greater than the life expectancy of the Designated
Beneficiary commencing on or before December 31 of the calendar year
immediately following the calendar year in which the Participant died;
(b) If the Designated Beneficiary is the Participant's surviving Spouse,
the date distributions are required to begin in accordance with (a) above
shall not be earlier than the later of (1) December 31 of the calendar
year immediately following the calendar year in which the participant
died or (2) December 31 of the calendar year in which the Participant
would have attained age 70-1/2.
If the Participant has not made an election pursuant to this paragraph 7.10 by
the time of his or her death, the Participant's Designated Beneficiary must
elect the method of distribution no later than the earlier of (1) December 31
of the calendar year in which distributions would be required to begin under
this section, or (2) December 31 of the calendar year which contains the fifth
anniversary of the date of death of the participant. If the Participant has
no Designated Beneficiary, or if the Designated Beneficiary does not elect a
method of distribution, then distribution of the Participant's entire interest
must be completed by December 31 of the calendar year containing the fifth
anniversary of the Participant's death.
For purposes of this paragraph if the Surviving Spouse dies after the
Participant, but before payments to such Spouse begin, the provisions of this
paragraph with the exception of paragraph (b) therein, shall be applied as if
the Surviving Spouse were the Participant. For the purposes of this paragraph
and paragraph 7.9, distribution of a Participant's interest is considered to
begin on the Participant's Required Beginning Date (or, if the preceding
sentence is applicable, the date distribution is required to begin to the
Surviving Spouse). If distribution in the form of an annuity described in
paragraph 7.4(e) irrevocably commences to the Participant before the Required
Beginning Date, the date distribution is considered to begin is the date
distribution actually commences.
For purposes of paragraph 7.9 and this paragraph, if an amount is payable to
either a minor or an individual who has been declared incompetent, the
benefits shall be paid to the legally appointed guardian for the benefit of
said minor or incompetent individual, unless the court which appointed the
guardian has ordered otherwise.
7.11 Distribution Of Excess Elective Deferrals
(a) Notwithstanding any other provision of the Plan, Excess Elective
Deferrals plus any income and minus any loss allocable thereto, shall be
distributed no later than April 15, 1988, and each April 15 thereafter,
to Participants to whose accounts Excess Elective Deferrals were
allocated for the preceding taxable year, and who claim Excess Elective
Deferrals for such taxable year. Excess Elective Deferrals shall be
treated as Annual Additions under the plan, unless such amounts are
distributed no later than the first April 15th following the close of the
Participant's taxable year. A Participant is deemed to notify the Plan
Administrator of any Excess Elective Deferrals that arise by taking into
account only those Elective Deferrals made to this Plan and any other
plans of this Employer.
(b) Furthermore, a Participant who participates in another plan allowing
Elective Deferrals 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. The Participant's claim shall be in writing; shall be
submitted to the Plan Administrator not later than March 1 of each year;
shall specify the amount of the Participant's Excess Elective Deferrals
for the preceding taxable year; and shall be accompanied by the
Participant's written statement that if such amounts are not distributed,
such Excess Elective Deferrals, when added to amounts deferred under
other plans or arrangements described in Code Sections 401(k), 408(k)
[Simplified Employee Pensions], or 403(b) [annuity programs for public
schools and charitable organizations] will exceed the $7,000 limit as
adjusted under Code Section 415(d) imposed on the Participant by Code
Section 402(g) for the year in which the deferral occurred.
(c) Excess Elective Deferrals shall be adjusted for any income or loss
up to the end of the taxable year, during which such excess was deferred.
Income or loss will be calculated under the method used to calculate
investment earnings and losses elsewhere in the Plan or any other
reasonable method. Whichever method is selected shall be used for all
Participants and for all corrective distributions made from the Plan for
the Plan Year.
(d) If the Participant receives a return of his or her Elective
Deferrals, the amount of such contributions which are returned must be
brought into the Employee's taxable income.
7.12 Distributions of Excess Contributions
(a) Notwithstanding any other provision of this Plan, Excess
Contributions, plus any income and minus any loss allocable thereto,
shall be distributed no later than the last day of each Plan Year to
Participants to whose accounts such Excess Contributions were allocated
for the preceding Plan Year. If such excess amounts are distributed more
than 2-1/2 months after the last day of the Plan Year in which such
excess amounts arose, a ten (10) percent excise tax will be imposed on
the Employer maintaining the Plan with respect to such amounts. Such
distributions shall be made to Highly Compensated Employees on the basis
of the respective portions of the Excess Contributions attributable to
each of such Employees. Excess Contributions of Participants who are
subject to the Family Member aggregation rules of Code Section 414(q)(6)
shall be allocated among the Family Members in proportion to the Elective
Deferrals (and amounts treated as Elective Deferrals) of each Family
Member that is combined to determine the Average Deferral Percentage.
(b) Excess Contributions (including the amounts recharacterized) shall
be treated as Annual Additions under the Plan.
(c) Excess Contributions shall be adjusted for any income or loss up to
the end of the Plan Year. Income or loss will be calculated under the
method used to calculate investment earnings and losses elsewhere in the
Plan.
(d) Excess Contributions shall be distributed from the Participant's
Elective Deferral account and Qualified Matching Contribution account (if
applicable) in proportion to the Participant's Elective Deferrals and
Qualified Matching Contributions (to the extent used in the ADP test) for
the Plan Year. Excess Contributions shall be distributed from the
Participant's Qualified Non-Elective Contribution account only to the
extent that such Excess Contributions exceed the balance in the
Participant's Elective Deferral account and Qualified Matching
Contribution account.
7.13 Distribution Of Excess Aggregate Contributions
(a) 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 the last day of each Plan Year to Participants to whose
accounts such Excess Aggregate Contributions were allocated for the
preceding Plan Year. Excess Aggregate Contributions shall be allocated
to Participants who are subject to the Family Member aggregation rules of
Code Section 414(q)(6) in the manner prescribed by the regulations.
If such Excess Aggregate Contributions are distributed more than 2-
1/2 months after the last day of the Plan Year in which such excess
amounts arose, a ten (10) percent excise tax will be imposed on the
Employer maintaining the Plan with respect to those amounts. Excess
Aggregate Contributions shall be treated as Annual Additions under
the plan.
(b) Excess Aggregate Contributions shall be adjusted for any income or
loss up to the end of the Plan Year. The income or loss allocable to
Excess Aggregate Contributions is the sum of income or loss for the Plan
Year allocable to the Participant's Voluntary Contribution account,
Matching Contribution account (if any, and if all amounts therein are not
used in the ADP test) and, if applicable, Qualified Non-Elective
Contribution account and Elective Deferral account. Income or loss will
be calculated under the method used to calculate investment earnings and
losses elsewhere in the Plan.
(c) Forfeitures of Excess Aggregate Contributions may either be
reallocated to the accounts of non-Highly Compensated Employees or
applied to reduce Employer contributions, as elected by the employer in
the Adoption Agreement.
(d) Excess Aggregate Contributions shall be forfeited if such amount is
not vested. If vested, such excess shall be distributed in the following
order:
(i) First, from the Participant's Voluntary Contribution account;
(ii) Second, from the Participant's Matching Contribution account;
and
(iii) Third, from the Participant's Qualified Matching Contribution
account (if applicable).
ARTICLE VIII -- JOINT AND SURVIVOR ANNUITY REQUIREMENTS
8.1 Applicability Of Provisions
The provisions of this Article shall apply to any Participant who is credited
with at least one Hour of Service with the Employer on or after August 23,
1984 and such other Participants as provided in paragraph 8.8.
8.2 Payment Of Qualified Joint And Survivor Annuity
Unless an optional form of benefit is selected pursuant to a Qualified
Election within the 90-day period ending on the Annuity Starting Date, a
married Participant's Vested Account Balance will be paid in the form of a
Qualified Joint and Survivor Annuity and an unmarried Participant's Vested
Account Balance will be paid in the form of a life annuity. The Participant
may elect to have such annuity distributed upon attainment of the Early
Retirement Age under the Plan.
8.3 Payment Of Qualified Pre-Retirement Survivor Annuity
Unless an optional form of benefit has been selected within the Election
Period pursuant to a Qualified Election, if a Participant dies before benefits
have commenced then the Participant's vested account balance shall be paid in
the form of an annuity for the life of the Surviving Spouse. The Surviving
Spouse may elect to have such annuity distributed within a reasonable period
after the Participant's death.
A Participant who does not meet the age 35 requirement set forth in the
Election Period as of the end of any current Plan Year may make a special
qualified election to waive the qualified Pre-retirement Survivor Annuity for
the period beginning on the date of such election and ending on the first day
of the Plan Year in which the Participant will attain age 35. Such election
shall not be valid unless the Participant receives a written explanation of
the Qualified Pre-retirement Survivor Annuity in such terms as are comparable
to the explanation required under paragraph 8.5. Qualified Pre-retirement
Survivor Annuity coverage will be automatically reinstated as of the first day
of the Plan Year in which the Participant attains age 35. Any new waiver on
or after such date shall be subject to the full requirements of this Article.
8.4 Qualified Election
A Qualified Election is an election to either waive a Qualified Joint and
Survivor Annuity or a qualified pre-retirement survivor annuity. Any such
election shall not be effective unless:
(a) the Participant's Spouse consents in writing to the election;
(b) the election designates a specific beneficiary, including any class
of beneficiaries or any contingent beneficiaries, which may not be
changed without spousal consent (or the Spouse expressly permits
designations by the Participant without any further spousal consent);
(c) the Spouse's consent acknowledges the effect of the election; and
(d) the Spouse's consent is witnessed by a Plan representative or notary
public.
Additionally, a Participant's waiver of the Qualified Joint and Survivor
Annuity shall not be effective unless the election designates a form of
benefit payment which may not be changed without spousal consent (or the
Spouse expressly permits designations by the Participant without any further
spousal consent). If it is established to the satisfaction of the Plan
Administrator that there is no Spouse or that the Spouse cannot be located, a
waiver will be deemed a Qualified Election. Any consent by a Spouse obtained
under this provision (or establishment that the consent of a Spouse may not be
obtained) shall be effective only with respect to such Spouse. A consent that
permits designations by the Participant without any requirement of further
consent by such Spouse must acknowledge that the Spouse has the right to limit
consent to a specific beneficiary, and a specific form of benefit where
applicable, and that the Spouse voluntarily elects to relinquish either or
both of such rights. A revocation of a prior waiver may be made by a
Participant without the consent of the Spouse at any time before the
commencement of benefits. The number of revocations shall not be limited. No
consent obtained under this provision shall be valid unless the Participant
has received notice as provided in paragraphs 8.5 and 8.6 below.
8.5 Notice Requirements For Qualified Joint And Survivor Annuity
In the case of a Qualified Joint and Survivor Annuity, the Plan Administrator
shall, no less than 30 days and no more than 90 days prior to the Annuity
Starting date, provide each Participant a written explanation of:
(a) the terms and conditions of a Qualified Joint and Survivor Annuity;
(b) the Participant's right to make and the effect of an election to
waive the Qualified Joint and Survivor Annuity form of benefit;
(c) the rights of a Participant's Spouse; and
(d) the right to make, and the effect of, a revocation of a previous
election to waive the Qualified Joint and Survivor Annuity.
8.6 Notice Requirements For Qualified Pre-Retirement Survivor Annuity
In the case of a qualified pre-retirement survivor annuity as described in
paragraph 8.3, the Plan Administrator shall provide each Participant within
the applicable period for such Participant a written explanation of the
qualified pre-retirement survivor annuity in such terms and in such manner as
would be comparable to the explanation provided for meeting the requirements
of paragraph 8.5 applicable to a Qualified Joint and Survivor Annuity. The
applicable period for a Participant is whichever of the following periods ends
last:
(a) the period beginning with the first day of the Plan Year in which
the Participant attains age 32 and ending with the close of the Plan Year
preceding the Plan Year in which the Participant attains age 35;
(b) a reasonable period ending after the individual becomes a
Participant;
(c) a reasonable period ending after this Article first applies to the
Participant. Notwithstanding the foregoing, notice must be provided
within a reasonable period ending after separation from Service in the
case of a Participant who separates from Service before attaining age 35.
For purposes of applying the preceding paragraph, a reasonable period ending
after the events described in (b) and (c) is the end of the two-year period
beginning one-year prior to the date the applicable event occurs, and ending
one-year after that date. In the case of a Participant who separates from
Service before the Plan Year in which age 35 is attained, notice shall be
provided within the two-year period beginning one year prior to separation and
ending one year after separation. If such a Participant subsequently returns
to employment with the Employer, the applicable period for such Participant
shall be re-determined.
8.7 Special Safe-Harbor Exception For Certain Profit-Sharing Plans
(a) This paragraph shall apply to a Participant in a profit-sharing
plan, and to any distribution, made on or after the first day of the
first plan year beginning after 1988, from or under a separate account
attributable solely to Qualified Voluntary contributions, as maintained
on behalf of a Participant in a money purchase pension plan, (including a
target benefit plan) if the following conditions are satisfied:
(1) the Participant does not or cannot elect payments in the form
of a life annuity; and
(2) on the death of a Participant, the Participant's Vested Account
Balance will be paid to the Participant's Surviving Spouse, but if
there is no Surviving Spouse, or if the Surviving Spouse has
consented in a manner conforming to a Qualified Election, then to
the Participant's Designated Beneficiary.
The Surviving Spouse may elect to have distribution of the Vested Account
Balance commence within the 90-day period following the date of the
Participant's death. The account balance shall be adjusted for gains or
losses occurring after the Participant's death in accordance with the
provisions of the Plan governing the adjustment of account balances for other
types of distributions. These safe-harbor rules shall not be operative with
respect to a Participant in a profit-sharing plan if that plan is a direct or
indirect transferee of a Defined Benefit Plan, money purchase plan, a target
benefit plan, stock bonus plan, or profit-sharing plan which is subject to the
survivor annuity requirements of Code Section 401(a)(11) and Code Section 417,
and would therefore have a Qualified Joint and Survivor Annuity as its normal
form of benefit.
(b) The Participant may waive the spousal death benefit described in
this paragraph at any time provided that no such waiver shall be
effective unless it satisfies the conditions (described in paragraph 8.4)
that would apply to the Participant's waiver of the Qualified Pre-
Retirement Survivor Annuity.
(c) If this paragraph 8.7 is operative, then all other provisions of
this Article other than paragraph 8.8 are inoperative.
8.8 Transitional Joint And Survivor Annuity Rules
Special transition rules apply to Participants who were not receiving benefits
on August 23, 1984.
(a) Any living Participant not receiving benefits on August 23, 1984,
who would otherwise not receive the benefits prescribed by the previous
paragraphs of this Article, must be given the opportunity to elect to
have the prior paragraphs of this Article apply if such Participant is
credited with at least one Hour of Service under this Plan or a
predecessor Plan in a Plan Year beginning on or after January 1, 1976 and
such Participant had at least 10 Years of Service for vesting purposes
when he or she separated from Service.
(b) Any living Participant not receiving benefits on August 23, 1984,
who was credited with at least one Hour of Service under this Plan or a
predecessor Plan on or after September 2, 1974, and who is not otherwise
credited with any Service in a Plan Year beginning on or after January 1,
1976, must be given the opportunity to have his or her benefits paid in
accordance with paragraph 8.9.
(c) The respective opportunities to elect [as described in (a) and (b)
above] must be afforded to the appropriate Participants during the period
commencing on August 23, 1984 and ending on the date benefits would
otherwise commence to said Participants.
8.9 Automatic Joint And Survivor Annuity And Early Survivor Annuity
Any Participant who has elected pursuant to paragraph 8.8(b) and any
Participant who does not elect under paragraph 8.8(a) or who meets the
requirements of paragraph 8.8(a), except that such Participant does not have
at least 10 years of vesting Service when he or she separates from Service,
shall have his or her benefits distributed in accordance with all of the
following requirements if benefits would have been payable in the form of a
life annuity.
(a) Automatic Joint and Survivor Annuity. If benefits in the form of a
life annuity become payable to a married Participant who:
(1) begins to receive payments under the Plan on or after Normal
Retirement Age, or
(2) dies on or after Normal Retirement Age while still working for
the Employer, or
(3) begins to receive payments on or after the Qualified Early
Retirement Age, or
(4) separates from Service on or after attaining Normal Retirement
(or the Qualified Early Retirement Age) and after satisfying the
eligibility requirements for the payment of benefits under the Plan
and thereafter dies before beginning to receive such benefits, then
such benefits will be received under this Plan in the form of a
Qualified Joint and Survivor Annuity, unless the Participant has
elected otherwise during the Election Period. The Election Period
must begin at least 6 months before the Participant attains
Qualified Early Retirement Age and end not more than 90 days before
the commencement of benefits. Any election will be in writing and
may be changed by the Participant at any time.
(b) Election of Early Survivor Annuity. A Participant who is employed
after attaining the Qualified Early Retirement Age will be given the
opportunity to elect, during the Election Period, to have a survivor
annuity payable on death. If the Participant elects the survivor
annuity, payments under such annuity must not be less than the payments
which would have been made to the Spouse under the Qualified Joint and
Survivor Annuity if the Participant had retired on the day before his or
her death. Any election under this provision will be in writing and may
be changed by the Participant at any time. The Election Period begins on
the later of:
(1) the 90th day before the Participant attains the Qualified Early
Retirement Age, or
(2) the date on which participation begins, and ends on the date
the Participant terminates employment.
8.10 Annuity Contracts
Any annuity contract distributed under this Plan must be nontransferable. The
terms of any annuity contract purchased and distributed by the Plan to a
Participant or Spouse shall comply with the requirements of this Plan.
ARTICLE IX -- VESTING
9.1 Employee Contributions
A Participant shall always have a 100% vested and nonforfeitable interest in
his or her Elective Deferrals, Voluntary Contributions, Qualified Voluntary
Contributions, Rollover Contributions, and Transfer Contributions plus the
earnings thereon. No forfeiture of Employer related contributions (including
any minimum contributions made under paragraph 14.2) will occur solely as a
result of an Employee's withdrawal of any Employee contributions.
9.2 Employer Contributions
A Participant shall acquire a vested and nonforfeitable interest in his or her
account attributable to Employer contributions in accordance with the table
selected in the Adoption Agreement, provided that if a Participant is not
already fully vested, he or she shall become so upon attaining Normal
Retirement Age, Early Retirement Age, on death prior to normal retirement, on
retirement due to Disability, or on termination of the Plan. If no table is
selected in the Adoption Agreement, an Employee shall acquire a vested and
nonforfeitable interest in his or her account attributable to Employer
contributions in accordance with the following percentages: 20% after 2 Years
Of Service, 20% additional for each of the following Years Of Service,
reaching 100% after 6 Years Of Service with the Employer.
9.3 Computation Period
The computation period for purposes of determining Years of Service and Breaks
in Service for purposes of computing a Participant's nonforfeitable right to
his or her account balance derived from Employer contributions shall be the
Plan Year. In the event a former Participant with no vested interest in his
or her Employer contribution account requalifies for participation in the Plan
after incurring a Break in Service, such Participant shall be credited for
vesting with all pre-break and post-break Service.
9.4 Requalification Prior To Five Consecutive One-Year Breaks In Service
The account balance of such Participant shall consist of any undistributed
amount in his or her account as of the date of re-employment plus any future
contributions added to such account plus the investment earnings on the
account. The vested account balance of such Participant shall be determined
by multiplying the Participant's account balance (adjusted to include any
distribution or redeposit made under paragraph 6.3) by such Participant's
vested percentage. All Service of the Participant, both prior to and
following the break, shall be counted when computing the Participant's vested
percentage.
9.5 Requalification After Five Consecutive One-Year Breaks In Service
If such Participant is not fully vested upon re-employment, a new account
shall be established for such Participant to separate his or her deferred
vested and nonforfeitable account, if any, from the account to which new
allocations will be made. The Participant's deferred account to the extent
remaining shall be fully vested and shall continue to share in earnings and
losses of the Fund. When computing the Participant's vested portion of the
new account, all pre-break and post-break Service shall be counted. However,
notwithstanding this provision, no such former Participant who has had five
consecutive one-year Breaks in Service shall acquire a larger vested and
nonforfeitable interest in his or her prior account balance as a result of
requalification hereunder.
9.6 Calculating Vested Interest
A Participant's vested and nonforfeitable interest shall be calculated by
multiplying the fair market value of his or her account attributable to
Employer contributions on the Valuation Date preceding distribution by the
decimal equivalent of the vested percentage as of his or her termination date.
The amount attributable to Employer contributions for purposes of the
calculation includes amounts previously paid out pursuant to paragraph 6.3 and
not repaid if the non-vested portion has not been forfeited. The
Participant's vested and nonforfeitable interest, once calculated above, shall
be reduced to reflect those amounts previously paid out to the Participant and
not repaid by the Participant. The Participant's vested and nonforfeitable
interest so determined shall continue to share in the investment earnings and
any increase or decrease in the fair market value of the Fund up to the
Valuation Date preceding or coinciding with payment.
9.7 Forfeitures
Any balance in the account of a Participant who has separated from Service to
which he or she is not entitled under the foregoing provisions, shall be
forfeited and applied as provided in the Adoption Agreement. A forfeiture may
only occur if the Participant has received a distribution from the Plan or if
the Participant has incurred five consecutive 1-year Breaks in Service.
Furthermore, a Highly Compensated Employee's Matching Contributions may be
forfeited, even if vested, if the contributions to which they relate are
Excess Deferrals, Excess Contributions or Excess Aggregate Contributions.
9.8 Amendment Of Vesting Schedule
No amendment to the Plan shall have the effect of decreasing a Participant's
vested interest determined without regard to such amendment as of the later of
the date such amendment is adopted or the date it becomes effective. Further,
if the vesting schedule of the Plan is amended, or the Plan is amended in any
way that directly or indirectly affects the computation of any Participant's
nonforfeitable percentage or if the Plan is deemed amended by an automatic
change to or from a Top-Heavy vesting schedule, each Participant with at least
three Years of Service with the Employer may elect, within a reasonable period
after the adoption of the amendment, to have his or her nonforfeitable
percentage computed under the Plan without regard to such amendment. For
Participants who do not have at least one Hour of Service in any Plan Year
beginning after 1988, the preceding sentence shall be applied by substituting
"Five Years of Service" for "Three Years of Service" where such language
appears. The period during which the election may be made shall commence with
the date the amendment is adopted and shall end on the later of:
(a) 60 days after the amendment is adopted;
(b) 60 days after the amendment becomes effective; or
(c) 60 days after the Participant is issued written notice of the
amendment by the Employer or the Trustee. If the Trustee is asked to so
notify, the Fund will be charged for the costs thereof.
No amendment to the Plan shall be effective to the extent that it has the
effect of decreasing a Participant's accrued benefit. Notwithstanding the
preceding sentence, a Participant's account balance may be reduced to the
extent permitted under section 412(c)(8) of the Code (relating to financial
hardships). For purposes of this paragraph, a Plan amendment which has the
effect of decreasing a Participant's account balance or eliminating an
optional form of benefit, with respect to benefits attributable to service
before the amendment, shall be treated as reducing an accrued benefit.
9.9 Service With Controlled Groups
All Years of Service with other members of a controlled group of corporations
[as defined in Code Section 414(b)], trades or businesses under common control
[as defined in Code Section 414(c)], or members of an affiliated service group
[as defined in Code Section 414(m)] shall be considered for purposes of
determining a Participant's nonforfeitable percentage.
ARTICLE X -- LIMITATIONS ON ALLOCATIONS AND ANTIDISCRIMINATION
TESTING
10.1 Participation In This Plan Only
If the Participant does not participate in and has never participated in
another qualified plan, a Welfare Benefit Fund (as defined in paragraph 1.89)
or an individual medical account, as defined in Code Section 415(l)(2), or a
Simplified Employee Pension Plan, as defined in Code Section 408(k),
maintained by the adopting Employer, which provides an Annual Addition as
defined in paragraph 1.4, the amount of Annual Additions which may be credited
to the Participant's account for any Limitation Year will not exceed the
lesser of the Maximum Permissible Amount or any other limitation contained in
this Plan. If the Employer contribution that would otherwise be contributed
or allocated to the Participant's account would cause the Annual Additions for
the Limitation Year to exceed the Maximum Permissible Amount, the amount
contributed or allocated will be reduced so that the Annual Additions for the
Limitation Year will equal the Maximum Permissible Amount. Prior to
determining the Participant's actual Compensation for the Limitation Year, the
Employer may determine the Maximum Permissible Amount for a Participant on the
basis of a reasonable estimate of the Participant's Compensation for the
Limitation Year, uniformly determined for all Participants similarly situated.
As soon as is administratively feasible after the end of the Limitation Year,
the Maximum Permissible Amount for the Limitation Year will be determined on
the basis of the Participant's actual Compensation for the Limitation Year.
10.2 Disposition Of Excess Annual Additions
If, pursuant to paragraph 10.1 or as a result of the allocation of
forfeitures, there is an Excess Amount, the excess will be disposed of under
one of the following methods as determined in the Adoption Agreement. If no
election is made in the Adoption Agreement then method "(a)" below shall
apply.
(a) Suspense Account Method
(1) Any Elective Deferrals and nondeductible Employee Voluntary
Contributions, to the extent they would reduce the Excess Amount,
will be returned to the Participant;
(2) If after the application of paragraph (1) an Excess Amount
still exists, and the Participant is covered by the Plan at the end
of the Limitation Year, the Excess Amount in the Participant's
account will be used to reduce Employer contributions (including any
allocation of forfeitures) for such Participant in the next
Limitation Year, and each succeeding Limitation Year if necessary;
(3) If after the application of paragraph (1) an Excess Amount
still exists, and the Participant is not covered by the Plan at the
end of the Limitation Year, the Excess Amount will be held
unallocated in a suspense account. The suspense account will be
applied to reduce future Employer contributions (including
allocation of any forfeitures) for all remaining Participants in the
next Limitation Year, and each succeeding Limitation Year if
necessary;
(4) If a suspense account is in existence at any time during the
Limitation Year pursuant to this paragraph, it will not participate
in the allocation of investment gains and losses. If a suspense
account is in existence at any time during a particular Limitation
Year, all amounts in the suspense account must be allocated and
reallocated to Participants' accounts before any Employer
contributions or any Employee Contributions may be made to the Plan
for that Limitation Year. Excess amounts may not be distributed to
Participants or former Participants.
(b) Spillover Method
(1) Any Elective Deferrals and nondeductible Employee Voluntary
Contributions, to the extent they would reduce the Excess Amount,
will be returned to the Participant.
(2) Any Excess Amount which would be allocated to the account of an
individual Participant under the Plan's allocation formula will be
reallocated to other Participants in the same manner as other
Employer contributions. No such reallocation shall be made to the
extent that it will result in an Excess Amount being created in such
Participant's own account.
(3) To the extent that amounts cannot be reallocated under (1)
above, the suspense account provisions of (a) above will apply.
10.3 Participation In This Plan And Another Qualified Master and Prototype
Defined Contribution Plan, Welfare Benefit Fund, Individual Medical
Account Or Simplified Employee Pension Plan Maintained By The Employer
The Annual Additions which may be credited to a Participant's account under
this Plan for any Limitation Year will not exceed the Maximum Permissible
Amount reduced by the Annual Additions credited to a Participant's account
under the other qualified Master or Prototype Defined Contribution Plans,
Welfare Benefit Funds, and individual medical accounts as defined in Code
Section 415(l)(2), or Simplified Employee Pension Plan, maintained by the
Employer, which provide an Annual Addition as defined in paragraph 1.4 for the
same Limitation Year. If the Annual Additions, with respect to the
Participant under other Defined Contribution Plans and Welfare Benefit Funds
maintained by the Employer, are less than the Maximum Permissible Amount and
the Employer contribution that would otherwise be contributed or allocated to
the Participant's account under this Plan would cause the Annual Additions for
the Limitation Year to exceed this limitation, the amount contributed or
allocated will be reduced so that the Annual Additions under all such plans
and funds for the Limitation Year will equal the Maximum Permissible Amount.
If the Annual Additions with respect to the Participant under such other
Defined Contribution Plans and Welfare Benefit Funds in the aggregate are
equal to or greater than the Maximum Permissible Amount, no amount will be
contributed or allocated to the Participant's account under this Plan for the
Limitation Year. Prior to determining the Participant's actual Compensation
for the Limitation Year, the Employer may determine the Maximum Permissible
Amount for a Participant in the manner described in paragraph 10.1. As soon
as administratively feasible after the end of the Limitation Year, the Maximum
Permissible Amount for the Limitation Year will be determined on the basis of
the Participant's actual Compensation for the Limitation Year.
10.4 Disposition Of Excess Annual Additions Under Two Plans
If, pursuant to paragraph 10.3 or as a result of forfeitures, a Participant's
Annual Additions under this Plan and such other plans would result in an
Excess Amount for a Limitation Year, the Excess Amount will be deemed to
consist of the Annual Additions last allocated except that Annual Additions
attributable to a Simplified Employee Pension Plan will be deemed to have been
allocated first, followed by Annual Additions attributable to a Welfare
Benefit Fund or Individual Medical Account as defined in Code Section
415(l)(2) regardless of the actual allocation date. If an Excess Amount was
allocated to a Participant on an allocation date of this Plan which coincides
with an allocation date of another plan, the Excess Amount attributed to this
Plan will be the product of:
(a) the total Excess Amount allocated as of such date, times
(b) the ratio of:
(1) the Annual Additions allocated to the Participant for the
Limitation Year as of such date under the Plan, to
(2) the total Annual Additions allocated to the Participant for the
Limitation Year as of such date under this and all the other
qualified Master or Prototype Defined Contribution Plans.
Any Excess Amount attributed to this Plan will be disposed of in the manner
described in paragraph 10.2.
10.5 Participation In This Plan And Another Defined Contribution Plan Which Is
Not A Qualified Master Or Prototype Plan
If the Participant is covered under another qualified Defined Contribution
Plan maintained by the Employer which is not a qualified Master or Prototype
Plan, Annual Additions which may be credited to the Participant's account
under this Plan for any Limitation Year will be limited in accordance with
paragraphs 10.3 and 10.4 as though the other plan were a Master or Prototype
Plan, unless the Employer provides other limitations in the Adoption
Agreement.
10.6 Participation In This Plan And A Defined Benefit Plan
If the Employer maintains, or at any time maintained, a qualified Defined
Benefit Plan covering any Participant in this Plan, the sum of the
Participant's Defined Benefit Plan Fraction and Defined Contribution Plan
Fraction will not exceed 1.0 in any Limitation Year. For any Plan Year during
which the Plan is Top-Heavy, the Defined Benefit and Defined Contribution Plan
Fractions shall be calculated in accordance with Code Section 416(h). The
Annual Additions which may be credited to the Participant's account under this
Plan for any Limitation Year will be limited in accordance with the provisions
set forth in the Adoption Agreement.
10.7 Average Deferral Percentage (ADP) Test
With respect to any Plan Year, the Average Deferral Percentage for
Participants who are Highly Compensated Employees and the Average Deferral
Percentage for Participants who are non-Highly Compensated Employees must
satisfy one of the following tests:
(a) Basic Test - The Average Deferral Percentage for Participants who
are Highly Compensated Employees for the Plan Year is not more than 1.25
times the Average Deferral Percentage for Participants who are non-Highly
Compensated Employees for the same Plan Year, or
(b) Alternative Test - The Average Deferral Percentage for Participants
who are Highly Compensated Employees for the Plan Year does not exceed
the Average Deferral Percentage for Participants who are non-Highly
Compensated Employees for the same Plan Year by more than 2 percentage
points provided that the Average Deferral Percentage for Participants who
are Highly Compensated Employees is not more than 2.0 times the Average
Deferral Percentage for Participants who are non-Highly Compensated
Employees.
10.8 Special Rules Relating To Application Of ADP Test
(a) The Actual Deferral Percentage for any Participant who is a Highly
Compensated Employee for the Plan Year and who is eligible to have
Elective Deferrals (and Qualified Non-Elective Contributions or Qualified
Matching Contributions, or both, if treated as Elective Deferrals for
purposes of the ADP test) allocated to his or her accounts under two or
more arrangements described in Code Section 401(k), that are maintained
by the Employer, shall be determined as if such Elective Deferrals (and,
if applicable, such Qualified Non-Elective Contributions or Qualified
Matching Contributions, or both) were made under a single arrangement.
If a Highly Compensated Employee participates in two or more cash or
deferred arrangements that have different Plan Years, all cash or
deferred arrangements ending with or within the same calendar year shall
be treated as a single arrangement.
(b) In the event that this Plan satisfies the requirements of Code
Sections 401(k), 401(a)(4), or 410(b), only if aggregated with one or
more other plans, or if one or more other plans satisfy the requirements
of such Code Sections only if aggregated with this Plan, then this
Section shall be applied by determining the Actual Deferral Percentage of
Employees as if all such plans were a single plan. For Plan Years
beginning after 1989, plans may be aggregated in order to satisfy Code
Section 401(k) only if they have the same Plan Year.
(c) For purposes of determining the Actual Deferral Percentage of a
Participant who is a 5-percent owner or one of the ten most highly-paid
Highly Compensated Employees, the Elective Deferrals (and Qualified Non-
Elective Contributions or Qualified Matching Contributions, or both, if
treated as Elective Deferrals for purposes of the ADP test) and
Compensation of such Participant shall include the Elective Deferrals
(and, if applicable, Qualified Non-Elective Contributions and Qualified
Matching Contributions, or both) for the Plan Year of Family Members as
defined in paragraph 1.36 of this Plan. Family Members, with respect to
such Highly Compensated Employees, shall be disregarded as separate
Employees in determining the ADP both for Participants who are non-Highly
Compensated Employees and for Participants who are Highly Compensated
Employees. In the event of repeal of the family aggregation rules under
Code Section 414(q)(6), all applications of such rules under this Plan
will cease as of the effective date of such repeal.
(d) For purposes of determining the ADP test, Elective Deferrals,
Qualified Non-Elective Contributions and Qualified Matching Contributions
must be made before the last day of the twelve-month period immediately
following the Plan Year to which contributions relate.
(e) The Employer shall maintain records sufficient to demonstrate
satisfaction of the ADP test and the amount of Qualified Non-Elective
Contributions or Qualified Matching Contributions, or both, used in such
test.
(f) The determination and treatment of the Actual Deferral Percentage
amounts of any Participant shall satisfy such other requirements as may
be prescribed by the Secretary of the Treasury.
10.9 Average Contribution Percentage (ACP) Test
If the Employer makes Matching Contributions or if the Plan allows Employees
to make Voluntary Contributions the Plan must meet additional
nondiscrimination requirements provided under Code Section 401(m). If
Employee Contributions (including any Elective Deferrals recharacterized as
Voluntary Contributions) are made pursuant to this Plan, then in addition to
the ADP test referenced in paragraph 10.7, the Average Contribution Percentage
test is also applicable. The Average Contribution Percentage for Participants
who are Highly Compensated Employees for each Plan Year and the Average
Contribution Percentage for Participants who are Non-Highly Compensated
Employees for the same Plan Year must satisfy one of the following tests:
(a) Basic Test - The Average Contribution Percentage for Participants
who are Highly Compensated Employees for the Plan Year shall not exceed
the Average Contribution Percentage for Participants who are non-Highly
Compensated Employees for the same Plan Year multiplied by 1.25; or
(b) Alternative Test - The ACP for Participants who are Highly
Compensated Employees for the Plan Year shall not exceed the Average
Contribution Percentage for Participants who are non-Highly Compensated
Employees for the same Plan Year multiplied by two (2), provided that the
Average Contribution Percentage for Participants who are Highly
Compensated Employees does not exceed the Average Contribution Percentage
for Participants who are non-Highly Compensated Employees by more than
two (2) percentage points.
10.10 Special Rules Relating To Application Of ACP Test
(a) If one or more Highly Compensated Employees participate in both a
cash or deferred arrangement and a plan subject to the ACP test
maintained by the Employer and the sum of the ADP and ACP of those Highly
Compensated Employees subject to either or both tests exceeds the
Aggregate Limit, then the ADP or ACP of those Highly Compensated
Employees who also participate in a cash or deferred arrangement will be
reduced (beginning with such Highly Compensated Employee whose ADP or ACP
is the highest) as set forth in the Adoption Agreement so that the limit
is not exceeded. The amount by which each Highly Compensated Employee's
Contribution Percentage Amounts is reduced shall be treated as an Excess
Aggregate Contribution. The ADP and ACP of the Highly Compensated
Employees are determined after any corrections required to meet the ADP
and ACP tests. Multiple use does not occur if both the ADP and ACP of
the Highly Compensated Employees does not exceed 1.25 multiplied by the
ADP and ACP of the non-Highly Compensated Employees.
(b) For purposes of this Article, the Contribution Percentage for any
Participant who is a Highly Compensated Employee and who is eligible to
have Contribution Percentage Amounts allocated to his or her account
under two or more plans described in Code Section 401(a), or arrangements
described in Code Section 401(k) that are maintained by the Employer,
shall be determined as if the total of such Contribution Percentage
Amounts was made under each Plan. If a Highly Compensated Employee
participates in two or more cash or deferred arrangements that have
different plan years, all cash or deferred arrangements ending with or
within the same calendar year shall be treated as a single arrangement.
(c) In the event that this Plan satisfies the requirements of Code
Sections 401(a)(4), 401(m), or 410(b) only if aggregated with one or more
other plans, or if one or more other plans satisfy the requirements of
such Code Sections only if aggregated with this Plan, then this Section
shall be applied by determining the Contribution Percentage of Employees
as if all such plans were a single plan. For plan years beginning after
1989, plans may be aggregated in order to satisfy Code Section 401(m)
only if the aggregated plans have the same Plan Year.
(d) For purposes of determining the Contribution percentage of a
Participant who is a five-percent owner or one of the ten most highly-
paid, Highly Compensated Employees, the Contribution Percentage Amounts
and Compensation of such Participant shall include the Contribution
Percentage Amounts and Compensation for the Plan Year of Family Members
as defined in Paragraph 1.36 of this Plan. Family Members, with respect
to Highly Compensated Employees, shall be disregarded as separate
Employees in determining the Contribution Percentage both for
Participants who are non-Highly Compensated Employees and for
Participants who are Highly Compensated Employees. In the event of
repeal of the family aggregation rules under Code Section 414(q)(6), all
applications of such rules under this Plan will cease as of the effective
date of such repeal.
(e) For purposes of determining the Contribution Percentage test,
Employee Contributions are considered to have been made in the Plan Year
in which contributed to the trust. Matching Contributions and Qualified
Non-Elective Contributions will be considered made for a Plan Year if
made no later than the end of the twelve-month period beginning on the
day after the close of the Plan Year.
(f) The Employer shall maintain records sufficient to demonstrate
satisfaction of the ACP test and the amount of Qualified Non-Elective
Contributions or Qualified Matching Contributions, or both, used in such
test.
(g) The determination and treatment of the Contribution Percentage of
any Participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
(h) Qualified Matching Contributions and Qualified Non-Elective
Contributions used to satisfy the ADP test may not be used to satisfy the
ACP test.
ARTICLE XI -- ADMINISTRATION
11.1 Plan Administrator
The Employer shall be the named fiduciary and Plan Administrator. These duties
shall include:
(a) appointing the Plan's attorney, accountant, actuary, or any other
party needed to administer the Plan,
(b) directing the Trustee with respect to payments from the Fund,
(c) communicating with Employees regarding their participation and
benefits under the Plan, including the administration of all claims
procedures,
(d) filing any returns and reports with the Internal Revenue Service,
Department of Labor, or any other governmental agency,
(e) reviewing and approving any financial reports, investment reviews,
or other reports prepared by any party appointed by the Employer under
paragraph (a),
(f) establishing a funding policy and investment objectives consistent
with the purposes of the Plan and the Employee Retirement Income Security
Act of 1974, and
(g) construing and resolving any question of Plan interpretation. The
Plan Administrator's interpretation of Plan provisions including
eligibility and benefits under the Plan is final, and unless it can be
shown to be arbitrary and capricious will not be subject to "de novo"
review.
11.2 Trustee
The Trustee shall only be responsible for maintaining the trust account(s) in
accordance with applicable laws on behalf of the Employer. The Trustee's
duties shall include:
(a) receiving contributions under the terms of the Plan, but not
determining the amount or enforcing the payment thereof,
(b) making distributions from the Fund in accordance with written
instructions received from an authorized representative of the Employer,
and
(c) keeping accurate and detailed records of all contributions,
receipts, investments, distributions, disbursements and all other
transactions with respect to each account (in the case of Employee
Investment Direction) or the Fund (in the case of Employer Investment
Direction). Periodically (not less than annually), the Trustee shall
provide a transcript of all activity in the account or in the Fund (which
may consist of regularly issued statements from the Service Company). In
the case of Employee Investment Direction, each such transcript will be
provided to the Participant. In the case of Employer Investment
Direction, each such transcript will be provided to the Employer. Each
such transcript shall be the sole accounting required of the Trustee.
Unless the Participant or Employer files a written objection to the
transcript within 60 days following the date it is furnished, he shall be
deemed to have consented to the accounting, and the Trustee and Service
Company shall be forever released and discharged from all liability and
accountability to anyone with respect to its acts, transactions, duties,
obligations or responsibilities as shown in, or reflected by the
transcript.
(d) employing such agents, attorneys or other professionals as the
Trustee may deem necessary or advisable in the performance of its duties.
The Trustee's duties shall be limited to those described above. The Employer
shall be responsible for any other administrative duties required under the
Plan or by applicable law.
11.3 Administrative Fees And Expenses
All reasonable costs, charges and expenses incurred by the Trustee and Service
Company in connection with the administration of the Fund and all reasonable
costs, charges and expenses incurred by the Plan Administrator in connection
with the administration of the Plan (including fees for legal services
rendered to the Trustee and Service Company or Plan Administrator) may be paid
by the Employer, but if not paid by the Employer when due, shall be paid from
the Fund. Such reasonable compensation to the Trustee and Service Company as
may be agreed upon from time to time between the Employer and the Trustee and
Service Company and such reasonable compensation to the Plan Administrator as
may be agreed upon from time to time between the Employer and Plan
Administrator and the compensation of the Service Company in accordance with
its fee schedule as in effect at the applicable time, may be paid by the
Employer, but if not paid by the Employer when due shall be paid by the Fund.
The Trustee and Service Company shall have the right to liquidate trust assets
to cover its fees. Notwithstanding the foregoing, no compensation other than
reimbursement for expenses shall be paid to a Plan Administrator who is the
Employer or a full-time Employee of the Employer. In the event any part of
the Trust becomes subject to tax, all taxes incurred will be paid from the
Fund unless the Plan Administrator advises the Trustee not to pay such tax.
11.4 Duties And Indemnification
(a) The Trustee shall have the authority and discretion to manage and
govern the Fund to the extent provided in this instrument, but does not
guarantee the Fund in any manner against investment loss or depreciation
in asset value, or guarantee the adequacy of the Fund to meet and
discharge all or any liabilities of the Plan.
(b) The Trustee shall not be liable for the making, retention or sale of
any investment or reinvestment made by it, as herein provided, or for any
loss to, or diminution of the Fund, or for any other loss or damage which
may result from the discharge of its duties hereunder except to the
extent it is judicially determined that the Trustee has failed to
exercise the care, skill, prudence and diligence under the circumstances
then prevailing that a prudent person acting in a like capacity and
familiar with such matters would use in the conduct of an enterprise of a
like character with like aims.
(c) The Employer warrants that all directions issued to the Trustee by
it or the Plan Administrator will be in accordance with the terms of the
Plan and not contrary to the provisions of the Employee Retirement Income
Security Act of 1974 and regulations issued thereunder.
(d) The Trustee shall not be answerable for any action taken pursuant to
any direction, consent, certificate, or other paper or document on the
belief that the same is genuine and signed by the proper person. All
directions by the Employer, Participant or the Plan Administrator shall
be given in a manner and form prescribed by the Trustee and approved by
the Service Company. The Employer shall deliver to the Trustee
certificates evidencing the individual or individuals authorized to act
as set forth in the Adoption Agreement or as the Employer may
subsequently inform the Trustee in writing and shall deliver to the
Trustee specimens of their signatures.
(e) The duties and obligations of the Trustee shall be limited to those
expressly imposed upon it by this instrument or subsequently agreed upon
by the parties. Responsibility for administrative duties required under
the Plan or applicable law not expressly imposed upon or agreed to by the
Trustee shall rest solely with the Employer.
(f) The Trustee shall be indemnified and saved harmless by the Employer
from and against any and all liability to which the Trustee may be
subjected, including all expenses reasonably incurred in its defense, for
any action or failure to act resulting from compliance with the
instructions of the Employer, the employees or agents of the Employer,
the Plan Administrator, or any other fiduciary to the Plan, and for any
liability arising from the actions or non-actions of any predecessor
Trustee or fiduciary or other fiduciaries of the Plan.
(g) The Trustee shall not be responsible in any way for the application
of any payments it is directed to make or for the adequacy of the Fund to
meet and discharge any and all liabilities under the Plan.
(h) With respect to non-mutual fund investments, the Trustee in
administering the Trust Fund is authorized and empowered to exercise
generally, any of the powers which a trustee might customarily exercise
in connection with investments held by the Trust Fund and to do all other
acts that the Trustee may deem necessary or proper to carry out any of
the powers and duties set forth in this Article XI.
11.5 Special Provisions Concerning The Service Company
(a) To the full extent permitted under ERISA, the Code, any other
applicable federal or state law, the regulations, rules and
interpretations thereunder, and subject to any written instrument
executed by the Trustee and the Service Company allocating
responsibilities between them, all ministerial functions assigned to the
Trustee under the Plan shall be delegated to the Service Company. All
instructions required to be given to the Trustee under the Plan will be
effective if given to the Service Company in the manner prescribed by the
Service Company. To the extent the Service Company is performing a
function assigned to the Trustee under the Plan, the Service Company
shall have the benefit of all of the limitations of the scope of the
Trustee's duties and liabilities, all rights of indemnification granted
to the Trustee and all other protections of any nature afforded the
Trustee under the Plan.
(b) It is understood and agreed that while the Service Company will
perform certain ministerial duties (such as custodial, reporting,
recording, and bookkeeping functions) with respect to Plan assets, such
duties do not involve the exercise of any discretionary authority or
other authority to manage or control Plan assets.
(c) With respect to any transaction which the Service Company is
directed to engage in, the Employer, the Trustee, the Named Investment
Fiduciary and the person directing the transaction shall be responsible
for making sure that the transaction does not violate any applicable
provision of law or disqualify the Plan under the Code, and the Service
Company shall have no responsibility therefor.
(d) The Employer and, where the Service Company is following the
directions or instructions of a Participant, the Trustee, Plan
Administrator or the Named Investment Fiduciary, such Participant, the
Trustee, Plan Administrator or the Named Investment Fiduciary (as the
case may be) shall at all times fully indemnify and save harmless the
Service Company from any liability which may arise in connection with
this Plan, except liability arising from the gross negligence or willful
misconduct of the Service Company. For purposes of this Section 11.5,
"liability" shall include, without limitation, taxes, expenses, claims,
damages, actions, suits, attorneys' fees, expenses of litigation or
preparation for threatened litigation, and any other charges. The
Service Company shall be liable for its own gross negligence or willful
misconduct in the performance of the duties expressly assumed by it under
the Plan.
ARTICLE XII -- TRUST FUND
12.1 The Fund
The Fund shall consist of all contributions made under Article III and Article
IV of the Plan and the investment thereof and earnings thereon. All
contributions and the earnings thereon less payments made under the terms of
the Plan, shall constitute the Fund. The Fund shall be administered as
provided in this document.
12.2 Control Of Plan Assets
The assets of the Fund or evidence of ownership shall be held by the Trustee
under the terms of the Plan and Trust. If the assets represent amounts
transferred from another trustee under a former plan, the Trustee named
hereunder shall not be responsible for the propriety of any investment under
the former plan.
12.3 Exclusive Benefit Rules
No part of the Fund shall be used for, or diverted to, purposes other than for
the exclusive benefit of Participants, former Participants with a vested
interest, and the beneficiary or beneficiaries of deceased Participants having
a vested interest in the Fund at death.
12.4 Assignment And Alienation Of Benefits
No right or claim to, or interest in, any part of the Fund, or any payment
from the Fund, shall be assignable, transferable, or subject to sale,
mortgage, pledge, hypothecation, commutation, anticipation, garnishment,
attachment, execution, or levy of any kind. The Trustee shall not recognize
any attempt to assign, transfer, sell, mortgage, pledge, hypothecate, commute,
or anticipate the same, except to the extent required by law. The preceding
sentences shall also apply to the creation, assignment, or recognition of a
right to any benefit payable with respect to a Participant pursuant to a
domestic relations order, unless such order is determined to be a qualified
domestic relations order, as defined in Code Section 414(p), or any domestic
relations order entered before January 1, 1985 which the Plan attorney and
Plan Administrator deem to be qualified.
12.5 Determination Of Qualified Domestic Relations Order (QDRO)
A Domestic Relations Order shall specifically state all of the following in
order to be deemed a Qualified Domestic Relations Order ("QDRO"):
(a) The name and last known mailing address (if any) of the Participant
and of each alternate payee covered by the QDRO. However, if the QDRO
does not specify the current mailing address of the alternate payee, but
the Plan Administrator has independent knowledge of that address, the
QDRO will still be valid.
(b) The dollar amount or percentage of the Participant's benefit to be
paid by the Plan to each alternate payee, or the manner in which the
amount or percentage will be determined.
(c) The number of payments or period for which the order applies.
(d) The specific plan (by name) to which the Domestic Relations Order
applies.
The Domestic Relations Order shall not be deemed a QDRO if it requires the
Plan to provide:
(e) any type or form of benefit, or any option not already provided for
in the Plan;
(f) increased benefits, or benefits in excess of the Participant's
vested rights;
(g) payment of a benefit earlier than allowed by the Plan's earliest
retirement provisions or in the case of a profit-sharing plan, prior to
the allowability of in-service withdrawals, or
(h) payment of benefits to an alternate payee which are required to be
paid to another alternate payee under another QDRO.
Promptly, upon receipt of a Domestic Relations Order ("Order") which may or
may not be "Qualified", the Plan Administrator shall notify the Participant
and any alternate payee(s) named in the Order of such receipt, and include a
copy of this paragraph 12.5. The Plan Administrator shall then forward the
Order to the Plan's legal counsel for an opinion as to whether or not the
Order is in fact "Qualified" as defined in Code Section 414(p). Within a
reasonable time after receipt of the Order, not to exceed 60 days, the Plan's
legal counsel shall make a determination as to its "Qualified" status and the
Participant and any alternate payee(s) shall be promptly notified in writing
of the determination.
If the "Qualified" status of the Order is in question, there will be a delay
in any payout to any payee including the Participant, until the status is
resolved. In such event, the Plan Administrator shall segregate the amount
that would have been payable to the alternate payee(s) if the Order had been
deemed a QDRO. If the Order is not Qualified, or the status is not resolved
(for example, it has been sent back to the Court for clarification or
modification) within 18 months beginning with the date the first payment would
have to be made under the Order, the Plan Administrator shall pay the
segregated amounts plus interest to the person(s) who would have been entitled
to the benefits had there been no Order. If a determination as to the
Qualified status of the Order is made after the 18-month period described
above, then the Order shall only be applied on a prospective basis. If the
Order is determined to be a QDRO, the Participant and alternate payee(s) shall
again be notified promptly after such determination. Once an Order is deemed
a QDRO, the Plan Administrator shall pay to the alternate payee(s) all the
amounts due under the QDRO, including segregated amounts plus interest which
may have accrued during a dispute as to the Order's qualification.
Unless specified otherwise in the Adoption Agreement, the earliest retirement
age with regard to the Participant against whom the order is entered shall be
the date the order is determined to be qualified. This will only allow
payouts to alternate payee(s) and not the Participant.
ARTICLE XIII -- INVESTMENTS
13.1 Fiduciary Standards
The Trustee shall invest and reinvest income in the same Fund in accordance
with the investment objectives established by the Employer, provided that:
(a) such investments are prudent under the Employee Retirement Income
Security Act of 1974 and the regulations promulgated thereunder,
(b) such investments are sufficiently diversified or otherwise insured
or guaranteed to minimize the risk of large losses, and
(c) such investments are similar to those which would be purchased by
another professional money manager for a like plan with similar
investment objectives.
13.2 No Investment Discretion
The Plan Sponsor and the Trustee shall have no discretion to direct any
investments of the Trust and are authorized solely to make and hold
investments only as directed pursuant to Section 13.3.
13.3 Investment Directions
(a) Responsibility for directing the Trustee with respect to the
investment of the Trust Fund shall be allocated to the Employer, or a
named fiduciary appointed by the Employer for that purpose (the "Named
Investment Fiduciary"), the Participants, or any investment manager (an
"Investment Manager"), who meets the requirements of Section 3(38) of the
Employee Retirement Income Security Act of 1974 (ERISA) appointed by the
Named Investment Fiduciary, all as provided in the Plan (including the
Adoption Agreement). To the extent investment responsibility is
allocated to the Participant, the Designated Beneficiary of a deceased
Participant shall discharge the responsibility subsequent to the
Participant's death and any reference to the Participant in any provision
of the Plan pertaining to investment directions shall in such event be
construed as a reference to the Designated Beneficiary.
(b) Investment directions shall be given in a manner and form prescribed
by the Trustee and shall be subject to such limitations, including
limitations as to the frequency with which any standing investment
instructions may be changed and funds may be moved among investment
choices, as the Employer or other Named Investment Fiduciary shall
prescribe. If Investment responsibility is allocated to Participants, to
the extent permitted by the Trustee, investment directions may be given
directly to the Service Company in a manner and form prescribed by the
Service Company.
(c) Cash for which no investments are directed shall be automatically
invested in such investment or investments as the Employer or other Named
Investment Fiduciary shall select from the investments the Service
Company makes available for that purpose unless and until the person
responsible for giving directions directs otherwise. Such automatic
investment shall be made at regular intervals and pursuant to procedures
provided by the Service Company (which procedures may, without
limitation, provide for more frequent intervals only if reinvested
balances exceed a stated amount). Absent a contrary direction in
accordance with the preceding provisions of Section 13.2 the Service
Company is hereby directed to make such automatic investments.
Notwithstanding other provisions of the Plan to the contrary, if another
qualified plan is amended and restated in the form of this Plan, the Employer
or the named investment fiduciary shall have the power to prescribe rules
regarding the investment of the assets held under the other qualified plan
until such time as any resulting reconciliation of Participant Accounts is
completed and the assets may be reinvested in investments permitted under
Section 13.4 of the Plan.
13.4 Permitted Investments
Except as Section 13.9 may apply, all amounts held in the Trust Fund under the
Plan shall be invested in mutual fund shares and annuities which are offered
through the Service Company, and such other investments as shall be accepted
in writing by the Service Company for availability under the Plan.
All dividends, including capital gain dividends, paid by any mutual fund shall
be reinvested in full and fractional shares of the mutual fund paying the
dividend in the manner specified in the prospectus of the mutual fund, and
such dividends shall be credited to the Trust Fund.
Each of the mutual funds in which the Plan may invest carries its own fees and
expenses, which may include management fees, Rule 12b-1 fees and/or other fees
and expenses, which are described in detail in each fund's prospectus.
Participants who invest in these mutual funds will, as shareholders of those
funds, bear their prorata portion of each fund's fees and expenses. Employer
acknowledges that Prudential Mutual Fund Distributors (PMFD) and Prudential
Securities Incorporated (PSI) may act as distributor of each fund's shares and
that PSI, PMFD and Pruco Securities Corporation (Prusec) are subsidiaries of
The Prudential Insurance Company of America (Prudential) (through which the
Guaranteed Interest Account is offered) and are each affiliated with the Funds
as described in each fund's prospectus. Employer acknowledges that
Prudential, PMFD, PSI and Prusec are not fiduciaries to the Plan, have no
obligation to the Plan or the Participants and are acting solely in their own
interest. Employer further acknowledges that Prudential, PMFD, PSI and Prusec
may be deemed to benefit from advisory and other fees paid to it or its
affiliates in connection with the management and operation of the mutual funds
in which the Participants may invest, from sales charges and contingent
deferred sales charges imposed as described in the prospectus and from fees
paid to The Prudential Insurance Company of America in connection with the
Guaranteed Interest Account.
13.5 Shareholder Rights
The Trustee shall exercise any rights of a shareholder (including voting
rights) with respect to any securities held, but only in accordance with the
instructions of the Participant or the Designated Beneficiary of a deceased
Participant subject to and except as permitted by any applicable rules of the
Securities and Exchange Commission and any national securities exchange.
13.6 Liquidation Of Assets
If the Trustee must liquidate assets in order to make distributions, transfer
assets, or pay fees, expenses or taxes assessed against all or a part of the
Fund, and the Trustee is not instructed as to the liquidation of such assets,
assets will be liquidated in accordance with the rules and procedures
customarily followed by the Service Company, which rules shall be formulated
in a manner to eliminate the potential for exercise of discretion by the
Service Company in the liquidation of assets and shall be applied consistently
with respect to all similarly situated plans in the form of the Prototype
Plan; provided that if a contribution is being made to an affected subaccount
as of the date the Trustee would otherwise be liquidating assets pursuant to
this section, the Trustee may withdraw the necessary amount of cash and invest
the remainder of the contribution in investments in the same proportion as
would have resulted had the withdrawal not been made. The Trustee is
expressly authorized to liquidate assets in order to satisfy the Trust Fund's
obligation to pay the Trustee's compensation if such compensation is not paid
on a timely basis.
13.7 Arbitration
This Plan requires that certain controversies be arbitrated as provided below.
In this regard it is to be noted that:
(a) Arbitration is final and binding on the parties.
(b) The parties are waiving their right to seek remedies in court
including the right to jury trial.
(c) Pre-arbitration discovery is generally more limited than and
different from court proceedings.
(d) The arbitrator's award is not required to include factual findings
or legal reasoning and any party's right to appeal or to seek
modification of rulings by the arbitrators is strictly limited.
(e) The panel of arbitrators will typically include a minority of
arbitrators who were or are affiliated with the securities industry.
Unless the following procedure for the resolution of controversies is not
enforceable under ERISA, any controversy arising out of or relating to the
Plan, or with respect to transactions of any kind executed by, through or with
the Service Company or otherwise pertaining to the Plan shall be settled by
arbitration. The arbitration may be before either the National Association of
Securities Dealers, Inc. (NASD) or the New York Stock Exchange, Inc., as
Employer/Employee, as the case may be, may elect and shall be governed by the
laws of the State of New York. If Employer/Employee does not make the above
election by registered mail addressed to PSI at its main office within 5
business days after demand by PSI that Employer/Employee make such election,
then PSI shall have the right to elect the arbitration tribunal of its choice.
Notice preliminary to, in conjunction with or incident to arbitration, may be
sent to Employer/Employee by mail and personal service is hereby waived.
Judgment upon any award rendered by the arbitrators may be entered in any
court having jurisdiction thereof, without notice to Employer/Employee.
No person shall bring a putative or certified class action to arbitration, nor
seek to enforce any pre-dispute arbitration agreement against any person who
has initiated in court a putative class action; or who is a member of a
putative class who has not opted out of the class with respect to any claims
encompassed by the putative class action until: (i) the class certification
is denied; or (ii) the class is decertified; or (iii) the customer is excluded
from the class by the court. Such forbearance to enforce an agreement to
arbitrate shall not constitute a waiver of any rights under this agreement
except to the extent stated herein.
13.8 Participant Loans
Unless otherwise specified in the Adoption Agreement, Participant Loans will
not be permitted. If permitted by the Adoption Agreement, a Participant may
make application to the Employer requesting a loan from the Fund. Loans shall
be made available to all Participants on a reasonably equivalent basis and
shall not be made available to highly compensated employees who are
Participants in amounts greater than made available to all other Participants.
The Employer will administer all Participant Loans unless the Trustee
otherwise agrees in writing to accept these duties. Loan administration
duties shall include, but are not limited to: approving or disapproving loan
applications from Participants, loan origination and closing, providing proper
disclosures to Participant borrowers under applicable federal and state
lending laws, notifying Participant borrowers of default, and collecting
current and past due payments on such loans. The Employer will notify the
Trustee of any loan to be made from the Fund. The Trustee will reflect the
amount of each such loan and its repayments on records of the Fund. Any loan
granted hereunder shall be made subject to the following rules:
(a) No loan when aggregated with any outstanding Participant loan(s),
shall exceed the lesser of (i) $50,000 reduced by the excess, if any, of
the highest outstanding balance of loans during the one year period
ending on the day before the loan is made, over the outstanding balance
of loans from the Plan on the date the loan is made or (ii) one-half of
the fair market value of a Participant's vested account balance built up
from Employer Contributions, Voluntary Contributions, and Rollover
Contributions. For the purpose of the above limitation, all loans from
all plans of the Employer and other members of a group of employers
described in Code Sections 414(b), 414(c), and 414(m) are aggregated. An
assignment or pledge of any portion of the Participant's interest in the
Plan and a loan, pledge, or assignment with respect to any insurance
contract purchased under the Plan, will be treated as a loan under this
paragraph.
(b) All applications must be made on forms provided by the Employer and
must be signed by the Participant.
(c) Any loan granted hereunder shall bear interest at a rate reasonable
at the time of application, considering the purpose of the loan and the
rate being charged by representative commercial banks in the local area
for a similar loan unless the Employer sets forth a different method for
determining loan interest rates in its loan procedures. The loan
agreement shall also provide that the payment of principal and interest
be amortized in level payments not less frequently than quarterly.
(d) The term of such loan shall not exceed five years except in the case
of a loan for the purpose of acquiring any house, apartment, condominium,
or mobile home (not used on a transient basis) which is used or is to be
used within a reasonable time as the principal residence of the
Participant. The term of such loan shall be determined by the Employer
considering the maturity dates quoted by representative commercial banks
in the local area for a similar loan.
(e) The principal and interest paid by a Participant on his or her loan
shall be credited to the Fund in the same manner as for any other Plan
investment. Loans will be treated as segregated investments of the
individual Participants.
(f) If a Participant's loan application is approved by the Employer,
such Participant shall be required to sign a note, loan agreement, and
assignment of one-half of his or her interest in the Fund as collateral
for the loan. The Participant, except in the case of a profit-sharing
plan satisfying the requirements of paragraph 8.7, must obtain the
consent of his or her Spouse, if any, within the 90 day period before the
time his or her account balance is used as security for the loan. A new
consent is required if the account balance is used for any renegotiation,
extension, renewal or other revision of the loan, including an increase
in the amount thereof. The consent must be written, must acknowledge the
effect of the loan, and must be witnessed by a plan representative or
notary public. Such consent shall thereafter be binding with respect to
the consenting Spouse or any subsequent Spouse.
(g) If a valid Spousal consent has been obtained, then, notwithstanding
any other provision of this Plan, the portion of the Participant's vested
account balance used as a security interest held by the Plan by reason of
a loan outstanding to the Participant shall be taken into account for
purposes of determining the amount of the account balance payable at the
time of death or distribution, but only if the reduction is used as
repayment of the loan. If less than 100% of the Participant's vested
account balance (determined without regard to the preceding sentence) is
payable to the surviving Spouse, then the account balance shall be
adjusted by first reducing the vested account balance by the amount of
the security used as repayment of the loan, and then determining the
benefit payable to the Surviving Spouse.
(h) The Employer may also require additional collateral in order to
adequately secure the loan.
(i) A Participant's loan shall immediately become due and payable if
such Participant terminates employment for any reason or fails to make a
principal and/or interest payment as provided in the loan agreement. If
such Participant terminates employment, the Employer shall immediately
request payment of principal and interest on the loan. If the
Participant refuses payment following termination, the Employer shall
reduce the Participant's vested account balance by the remaining
principal and interest on his or her loan. If the Participant's vested
account balance is less than the amount due, the Employer shall take
whatever steps are necessary to collect the balance due directly from the
Participant. However, no foreclosure on the Participant's note or
attachment of the Participant's account balance will occur until a
distributable event occurs in the Plan.
(j) No loans will be made to Owner-Employees (as defined in paragraph
1.50) or Shareholder-Employees (as defined in paragraph 1.74), unless an
exemption from the prohibited transactions rules is first obtained from
the Department of Labor.
(k) If a Participant requests a loan, the funds to be loaned will be
taken from the subaccount or subaccounts specified by the Participant or,
in the absence of such a specification, form the subaccounts in the order
specified in Section 6.10 pertaining to withdrawals. If specific assets
of the Trust Fund are allocable to individual Participants' Accounts,
such assets equal in value to the amount of the loan shall be sold at the
direction of the Participant to provide the funds to be loaned.
13.9 Insurance Policies
Unless otherwise specified in the Adoption Agreement, the insurance provisions
of this Section 13.9 shall not be applicable. If agreed upon by the Trustee
and approved by the Employer in the Adoption Agreement, Employees may elect
the purchase of life insurance policies under the Plan. If elected, the
maximum annual premium for a whole life policy shall not exceed 50% of the
aggregate cumulative Employer contributions allocated to the account of a
Participant. Whole life policies are policies with both nondecreasing death
benefits and nonincreasing premiums. The maximum annual premium for term
contracts or universal life policies and all other policies which are not
whole life shall not exceed 25% of aggregate Employer contributions allocated
to the account of a Participant. The maximum annual premiums for a
Participant with both a whole life and a term contract or universal life
policies shall be limited to one-half of the whole life premiums plus the term
premium but shall not exceed 25% of the aggregate Employer contributions
allocated to the account of a Participant. It may also be elected to have
policies purchased on behalf of a Participant's spouse, their dependents, or
any individual in whom the Participant has an insurable interest. If any
policy is maintained on the joint lives of a Participant and another
individual, it may not be maintained under the Plan should the other
individual predecease the Participant. Any policies purchased under this Plan
shall be held subject to the following rules:
(a) The Trustee shall be applicant and owner of any policies issued.
(b) All policies or contracts purchased shall be endorsed as
nontransferable, and must provide that proceeds will be payable to the
Trustee; however, the Trustee shall be required to pay over all proceeds
of the contracts to the Participant's Designated Beneficiary in
accordance with the distribution provisions of this Plan. Under no
circumstances shall the Trust retain any part of the proceeds.
(c) Each Participant shall be entitled to designate a beneficiary under
the terms of any contract issued; however, such designation will be given
to the Trustee which must be the named beneficiary on any policy. Such
designation shall remain in force, until revoked by the Participant, by
filing a new beneficiary form with the Trustee. A Participant's Spouse
will be the Designated Beneficiary of the proceeds in all circumstances
unless a Qualified Election has been made in accordance with paragraph
8.4. The beneficiary of a deceased Participant shall receive, in
addition to the proceeds of the Participant's policy or policies, the
amount credited to such Participant's investment account.
(d) A Participant who is uninsurable or insurable at substandard rates,
may elect to receive a reduced amount of insurance, if available, or may
waive the purchase of any insurance.
(e) At the discretion of the Participant, any dividends or credits
earned on a life insurance contract shall either be allocated to the
Participant's account in the Fund, applied in reduction of any premiums
thereon, or, if no premiums are due, applied to increase the proceeds of
the life insurance contract.
(f) If Employer contributions are inadequate to pay all premiums on all
insurance policies, the Trustee may, at the option of the Employer,
utilize other amounts remaining in each Participant's account to pay the
premiums on his or her respective policy or policies, allow the policies
to lapse, reduce the policies to a level at which they may be maintained,
or borrow against the policies on a prorated basis, provided that the
borrowing does not discriminate in favor of the policies on the lives of
Officers, Shareholders, and highly compensated Employees.
(g) On retirement or termination of employment of a Participant, the
Employer shall direct the Trustee to cash surrender the Participant's
policy and credit the proceeds to his or her account for distribution
under the terms of the Plan. However, before so doing, the Trustee shall
first offer to distribute the policy to the Participant as a part of the
benefit distribution. If a Participant on whose life an insurance policy
is held under the Plan does not make a timely direction regarding the
policy under this Section (g), the Participant shall be deemed to have
directed that the policy be converted into cash to be distributed in the
manner in which the balance of the Participant's Account is to be
distributed. All distributions resulting from the application of this
paragraph shall be subject to the Joint and Survivor Annuity Rules of
Article VIII, if applicable.
(h) The Employer shall be solely responsible to see that these insurance
provisions are administered properly and that if there is any conflict
between the provisions of this Plan and any insurance contracts issued
that the terms of this Plan will control.
ARTICLE XIV -- TOP-HEAVY PROVISIONS
14.1 Applicability Of Rules
If the Plan is or becomes Top-Heavy in any Plan Year beginning after 1983, the
provisions of this Article will supersede any conflicting provisions in the
Plan or Adoption Agreement.
14.2 Minimum Contribution
Notwithstanding any other provision in the Employer's Plan, for any Plan Year
in which the Plan is Top-Heavy or Super Top-Heavy, the aggregate Employer
contributions and forfeitures allocated on behalf of any Participant (without
regard to any Social Security contribution) under this Plan and any other
Defined Contribution Plan of the Employer shall be lesser of 3% of such
Participant's Compensation or the largest percentage of Employer contributions
and forfeitures, as a percentage of the Key Employee's annual Compensation
allocated on behalf of any Key Employee for that year.
Each Participant who is employed by the Employer on the last day of the Plan
Year shall be entitled to receive an allocation of the Employer's minimum
contribution for such Plan Year. The minimum allocation applies even though
under other Plan provisions the Participant would not otherwise be entitled to
receive an allocation, or would have received a lesser allocation for the year
because the Participant fails to make Mandatory Contributions to the Plan, the
Participant's Compensation is less than a stated amount, or the Participant
fails to complete 1,000 Hours of Service (or such lesser number designated by
the Employer in the Adoption Agreement) during the Plan Year. A Paired
profit-sharing plan designated to provide the minimum Top-Heavy contribution
must do so regardless of profits. An Employer may make the minimum Top-Heavy
contribution available to all Participants or just non-Key Employees.
For purposes of computing the minimum allocation, Compensation shall mean
Compensation as defined in the second paragraph of paragraph 1.12 of the Plan.
The Top-Heavy minimum contribution does not apply to any Participant to the
extent the Participant is covered under any other plan(s) of the Employer and
the Employer has provided in Section 11 of the Adoption Agreement that the
minimum allocation or benefit requirements applicable to Top-Heavy Plans will
be met in the other plan(s).
If a Key Employee makes an Elective Deferral or has an allocation of Matching
Contributions made to his or her account, a Top-Heavy minimum will be required
for non-Key Employees who are Participants, however, neither Elective
Deferrals by nor Matching Contributions to non-Key Employees may be taken into
account for purposes of satisfying the top-heavy Minimum Contribution
requirement.
14.3 Minimum Vesting
For any Plan Year in which this Plan is Top-Heavy, the minimum vesting
schedule elected by the Employer in the Adoption Agreement will automatically
apply to the Plan. If the vesting schedule selected by the Employer in the
Adoption Agreement is less liberal than the allowable schedule, the schedule
will automatically be modified. If the vesting schedule under the Employer's
Plan shifts in or out of the Top-Heavy schedule for any Plan Year, such shift
is an amendment to the vesting schedule and the election in paragraph 9.8 of
the Plan applies. The minimum vesting schedule applies to all accrued
benefits within the meaning of Code Section 411(a)(7) except those
attributable to Employee contributions, including benefits accrued before the
effective date of Code Section 416 and benefits accrued before the Plan became
Top-Heavy. Further, no reduction in vested benefits may occur in the event
the Plan's status as Top-Heavy changes for any Plan Year. However, this
paragraph does not apply to the account balances of any Employee who does not
have an Hour of Service after the Plan initially becomes Top-Heavy and such
Employee's account balance attributable to Employer contributions and
forfeitures will be determined without regard to this paragraph.
14.4 Limitations On Allocations
In any Plan Year in which the Top-Heavy Ratio exceeds 90% (i.e., the Plan
becomes Super Top-Heavy), the denominators of the Defined Benefit Fraction (as
defined in paragraph 1.15) and Defined Contribution Fraction (as defined in
paragraph 1.18) shall be computed using 100% of the dollar limitation instead
of 125%.
ARTICLE XV -- AMENDMENT AND TERMINATION
15.1 Amendment By Sponsor
The Sponsor may amend any or all provisions of this Plan and Trust at any time
without obtaining the approval or consent of any Employer which has adopted
this Plan and Trust provided that no amendment shall authorize or permit any
part of the corpus or income of the Fund to be used for or diverted to
purposes other than for the exclusive benefit of Participants and their
beneficiaries, or eliminate an optional form of distribution. In the case of
a mass-submitted plan, the mass-submitter shall amend the Plan on behalf of
the Sponsor.
15.2 Amendment By Employer
The Employer may amend any option in the Adoption Agreement, and may include
language as permitted in the Adoption Agreement,
(a) to satisfy Code Section 415, or
(b) to avoid duplication of minimums under Code Section 416, because of
the required aggregation of multiple plans.
The Employer may add certain model amendments published by the Internal
Revenue Service which specifically provide that their adoption will not cause
the Plan to be treated as an individually designed plan for which the Employer
must obtain a separate determination letter.
If the Employer amends the Plan and Trust other than as provided above, the
Employer's Plan shall no longer participate in this Prototype Plan and will be
considered an individually designed plan.
15.3 Termination
Employers shall have the right to terminate their Plans upon 60 days notice in
writing to the Trustee. If the Plan is terminated, partially terminated, or
if there is a complete discontinuance of contributions under a profit-sharing
plan maintained by the Employer, all amounts credited to the accounts of
Participants shall vest and become nonforfeitable. In the event of a partial
termination, only those who are affected by such partial termination shall be
fully vested. In the event of termination, the Employer shall direct the
Trustee with respect to the distribution of accounts to or for the exclusive
benefit of Participants or their beneficiaries. The Trustee shall dispose of
the Fund in accordance with the written directions of the Plan Administrator,
provided that no liquidation of assets and payment of benefits, (or provision
therefor), shall actually be made by the Trustee until after it is established
by the Employer in a manner satisfactory to the Trustee, that the applicable
requirements, if any, of ERISA and the Internal Revenue Code governing the
termination of employee benefit plans, have been or are being, complied with,
or that appropriate authorizations, waivers, exemptions, or variances have
been, or are being obtained.
15.4 Qualification Of Employer's Plan
If the adopting Employer fails to attain or retain Internal Revenue Service
qualification, such Employer's Plan shall no longer participate in this
Prototype Plan and will be considered an individually designed plan.
15.5 Mergers And Consolidations
(a) In the case of any merger or consolidation of the Employer's Plan
with, or transfer of assets or liabilities of the Employer's Plan to, any
other plan, Participants in the Employer's Plan shall be entitled to
receive benefits immediately after the merger, consolidation, or transfer
which are equal to or greater than the benefits they would have been
entitled to receive immediately before the merger, consolidation, or
transfer if the Plan had then terminated.
(b) Any corporation into which the Trustee or any successor trustee may
be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Trustee or any
successor trustee may be a party, or any corporation to which all or
substantially all the trust business of the Trustee or any successor
trustee may be transferred, shall be the successor of such Trustee
without the filing of any instrument or performance of any further act,
before any court.
15.6 Resignation And Removal
The Trustee may resign by written notice to the Employer which shall be
effective 60 days after delivery. The Employer may discontinue its
participation in this Prototype Plan and Trust effective upon 60 days written
notice to the Sponsor. In such event the Employer shall, prior to the
effective date thereof, amend the Plan to eliminate any reference to this
Prototype Plan and Trust and appoint a successor trustee or arrange for
another funding agent. The Trustee shall deliver the Fund to its successor on
the effective date of the resignation or removal, or as soon thereafter as
practicable, provided that this shall not waive any lien the Trustee may have
upon the Fund for its compensation or expenses. If the Employer fails to
amend the Plan and appoint a successor trustee, or other funding agent within
the said 60 days, or such longer period as the Trustee may specify in writing,
the Plan shall be deemed individually designed and the Employer shall be
deemed the successor trustee. The Employer must then obtain its own
determination letter.
15.7 Qualification Of Prototype
The Sponsor intends that this Prototype Plan will meet the requirements of the
Code as a qualified Prototype Retirement Plan and Trust. Should the
Commissioner of Internal Revenue or any delegate of the Commissioner at any
time determine that the Plan and Trust fails to meet the requirements of the
Code, the Sponsor will amend the Plan and Trust to maintain its qualified
status.
ARTICLE XVI -- GOVERNING LAW
Construction, validity and administration of the Prototype Plan and Trust, and
any Employer Plan and Trust as embodied in the Prototype document and
accompanying Adoption Agreement, shall be governed by Federal law to the
extent applicable and to the extent not applicable by the laws of the
State/Commonwealth in which the principal office of the Sponsor is located.
Internal Revenue Service Department of the Treasury
Plan Description: Prototype Non-standardized Profit Sharing Plan Washington, DC20224
with CODA
FFN: 50296321903-001 Case: 9400380
EIN: 13-3408212 BPD: 03 Plan: 001 Person to Contact: Mr. Dua
Letter Serial No: D256803b
PRUDENTIAL MUTUAL FUND MANAGEMENT INC. Telephone Number: (202) 622-8380
1 SEAPORT PLAZA Refer Reply to: CP:E:EP:Q:3
NEW YORK, NY 10292 Date: 03/11/94
Dear Applicant:
In our opinion, the amendment to the form of the plan identified above does
not in and of itself adversely affect the plan's acceptability under Section
401 of the Internal Revenue Code. This opinion relates only to the amendment
to the form of the plan. It is not an opinion as to the acceptability of any
other amendment or of the form of the plan as a whole, or as to the effect of
other Federal or local statutes.
You must furnish a copy of this letter to each employer who adopts this plan.
You are also required to send a copy of the approved form of the plan, any
approved amendments and related documents to each Key District Director of
Internal Revenue Service in whose jurisdiction there are adopting employers.
Our opinion on the acceptability of the form of the plan is not a ruling or
determination as to whether an employer's plan qualifies under code section
401(a). An employer who adopts this plan will be considered to have a plan
qualified under Code section 401(a) provided all the terms of the plan are
followed, and the eligibility requirements and contribution or benefit
provisions are not more favorable for highly compensated employees than for
other employees. Except as stated below, the Key District Director will not
issue a determination letter with regard to this plan.
Our opinion does not apply to the form of the plan for purposes of Code
section 401(a)(16) if: (1) an employer ever maintained another qualified plan
for one or more employees who are covered by this plan, other than a specified
paired within the meaning of Section 7 of Rev. Proc. 89-9, 1989-1 C.B. 780: or
(2) after December 31, 1985, the employer maintains a welfare benefit fund
defined in Code Section 419(e), which provides post retirement medical
benefits allocated to separate accounts for key employees as defined in Code
section 419A(d)(3).
An employer that has adopted a standardized plan may not rely on this opinion
letter with respect to: (1) whether any amendment or series of amendments to
the plan satisfies the nondiscrimination requirements of section 1.401(a)(4)-
5(a) of the regulations, except with respect to the plan amendments granting
past service that meet the safe harbor described in section 1.401(a)(4)-
5(a)(5) and are not part of a pattern of amendments that significantly
discriminates in favor of highly compensated employees; or (2) whether the
plan satisfies the effective availability requirement of section 1.401(a)(4)-
4(c) of the regulations with respect to any benefits, right or feature.
An employer that has adopted a standardized plan as an amendment to a plan
other than a standardized plan may not rely on this opinion letter with
respect to whether a benefit, right or other feature that is prospectively
eliminated satisfies the current availability requirements of section
1.401(a)-4 of the regulations.
The employer may request a determination (1) as to whether the plan,
considered with all related qualified plans and, if appropriate, welfare
benefit funds, satisfies the requirements of Code section 401(a)(16) as to
limitations on benefits and contributions in Code section 415; (2) regarding
the nondiscriminatory effect of grants of past service; and (3) with respect
to whether a prospectively eliminated benefit, right or feature satisfies the
current availability requirements.
Our opinion does not apply to the form of the plan for purposes of section
401(a) of the code unless the terms of the plan, as adopted or amended, that
pertain to the requirements of sections 401(a)(4), 401(a)(5), 401(a)(17),
401(l), 401(b) and 401(s) of the Code, as amended by the Tax Reform Act of
1986 or subsequent legislation, (a) are made effective retroactively to the
first day of the first plan year beginning after December 31, 1988 (or such
other date on which these requirements first became effective with respect to
this plan); or (b) are made effective no later than the first day on which the
employer is no longer entitled, under regulations, to rely on a reasonable,
good faith interpretation of these requirements, and the prior provisions of
the plan constitute such an interpretation.
This letter with respect to the amendment to the form of the plan does no
affect the applicability to the plan of the continued, interim and extended
reliance provisions of section 13 and 17.03 of Rev. Proc. 89-9, 1989-1 C.B.
780 The applicability of such provisions may be determined by reference to the
initial opinion letter issued with respect to the plan.
If you, the sponsoring organization, have any questions concerning the IRS
processing of this case, please call the above telephone number. This number
is only for use of the sponsoring organization. Individual participants
and/or adopting employers with questions concerning the plan should contact
the sponsoring organization. The plan's adoption agreement must include the
sponsoring organization's address and telephone number for inquiries by
adopting employers.
If you write to the IRS regarding this plan, please provide your telephone
number and the most convenient time for us to call in case we need more
information. Whether you call or write, please refer to the Letter Serial
Number and File Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record. Please notify us if you
modify or discontinue sponsorship of this plan.
Sincerely yours,
Chief Employee Plans Qualifications Branch
Internal Revenue Service Department of the Treasury
Plan Description: Prototype Non-standardized Profit Sharing Plan Washington, DC20224
with CODA
FFN: 50396321903-002 Case: 9400381
EIN: 13-3408212 BPD: 03 Plan: 002 Person to Contact: Mr. Dua
Letter Serial No: D356804b
PRUDENTIAL MUTUAL FUND MANAGEMENT INC. Telephone Number: (202) 622-8380
1 SEAPORT PLAZA Refer Reply to: CP:E:EP:Q:3
NEW YORK, NY 10292 Date: 03/11/94
Dear Applicant:
In our opinion, the amendment to the form of the plan identified above does
not in and of itself adversely affect the plan's acceptability under Section
401 of the Internal Revenue Code. This opinion relates only to the amendment
to the form of the plan. It is not an opinion as to the acceptability of any
other amendment or of the form of the plan as a whole, or as to the effect of
other Federal or local statutes.
You must furnish a copy of this letter to each employer who adopts this plan.
You are also required to send a copy of the approved form of the plan, any
approved amendments and related documents to each Key District Director of
Internal Revenue Service in whose jurisdiction there are adopting employers.
An employer who adopts the amended form of the plan after the date of the
amendment should apply for a determination letter by filing an application
with the Key District Director of the Internal Revenue on Form 5307, Short
Form Application for Determination for Employee Benefit Plan.
This letter with respect to the amendment to the form of the plan does not
affect the applicability to the plan of the continued, interim and extended
reliance provisions of sections 13 and 17.03 of Rev. Proc. 89-9, 1989-1 C.B.
780. The applicability of such provisions may be determined by reference to
the initial opinion letter issued with respect to the plan.
If you, the Sponsoring organization, have any questions concerning the IRS
processing of this case, please call the above telephone number. This number
is only for use of the sponsoring organization. Individual participants
and/or adopting employers with questions concerning the plan should contact
the sponsoring organization. The plan's adoption agreement must include the
sponsoring organization's address and telephone number for inquiries by
adopting employers.
If you write to the IRS regarding this plan, please provide your telephone
number and the most convenient time for us to call in case we need more
information. Whether you call or write, please refer to the Letter Serial
Number and File Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record. Please notify us if you
modify or discontinue sponsorship of this plan.
Sincerely yours
Chief Employees Plan Qualifications Branch
Plan #001
STANDARDIZED
ADOPTION AGREEMENT
PROTOTYPE CASH OR DEFERRED PROFIT-SHARING
PLAN AND TRUST
Sponsored by
PRUDENTIAL MUTUAL FUND MANAGEMENT, INC.
The Employer named below hereby establishes a Cash or Deferred Profit-Sharing
Plan for eligible Employees as provided in this Adoption Agreement and the
accompanying Basic Prototype Plan and Trust/Custodial Account, Basic Plan
Document #04.
1. EMPLOYER INFORMATION
NOTE: If multiple Employers are adopting the Plan, complete this
section based on the lead Employer. Additional Employers may
adopt this Plan by attaching executed signature pages to the
back of the Employer's Adoption Agreement.
(a) NAME AND ADDRESS:
EMCORE CORPORATION
394 ELIZABETH AVENUE
SOMERSET, NJ 08873
(b) TELEPHONE NUMBER: (908)271-9090
(c) TAX ID NUMBER: 22-2746503
(d) FORM OF BUSINESS:
[ ] (i) Sole Proprietor
[ ] (ii) Partnership
[X] (iii) Corporation
[ ] (iv) "S" Corporation (formerly known as Subchapter S)
[ ] (v) Other:
(e) NAME OF PLAN: EMCORE CORPORATION 401(k) PLAN
(f) THREE DIGIT PLAN NUMBER
FOR ANNUAL RETURN/REPORT: 001
2. EFFECTIVE DATE
(a) This is a new Plan having an effective date of .
(b) This is an amended Plan.
(i) The effective date of the original Plan was JANUARY 1, 1992.
The effective date of the amended Plan is JUNE 1, 1997.
NOTE: The effective date of the amended Plan for the Tax Reform Act
of 1986 required changes is the first day of the 1987 Plan
Year. Sections 7(f) and 12 herein shall be effective as of the
first day of the 1989 Plan Year. Any prior amendments to the
plan which were intended to have effect after December 31, 1986
will continue to be in effect only until the effective date of
this amended and restated plan.
3. DEFINITIONS
(a) "Compensation" Shall include all items as set forth in paragraph
1.12 of Basic Plan Document #04.
[X] (i) For purposes of Discretionary Contributions, Compensation
shall include all amounts for the Plan Year during which
the Employee was eligible to participate.
[ ] (ii) For purposes of Discretionary Contributions, Compensation
will only include amounts for the period during which the
Employee was eligible to participate.
(b) "Entry Date"
[X] (i) The first day of the month coinciding with or following
the date on which an Employee meets the eligibility
requirements.
[ ] (ii) The earlier of the first day of the Plan Year or the
first day of the seventh month of the Plan Year
coinciding with or following the date on which an
Employee meets the eligibility requirements.
[ ] (iii) The first day of the Plan Year, or the first day of the
fourth month, or the first day of the seventh month or
the first day of the tenth month, of the Plan Year
coinciding with or following the date on which an
Employee meets the eligibility requirements.
(c) "Hours of Service" Shall be determined on the basis of the method
selected below. Only one method may be selected. The method selected
shall be applied to all Employees covered under the Plan as follows:
[X] (i) On the basis of actual hours for which an Employee is
paid or entitled to payment.
[ ] (ii) On the basis of days worked. An Employee shall be
credited with ten (10) Hours of Service if under
paragraph 1.41 of the Basic Plan Document #04 such
Employee would be credited with at least one (1) Hour of
Service during the day.
[ ] (iii) On the basis of weeks worked. An Employee shall be
credited with forty-five (45) Hours of Service if under
paragraph 1.41 of the Basic Plan Document #04 such
Employee would be credited with at least one (1) Hour of
Service during the week.
(d) "Limitation Year" The Limitation Year shall be the Plan Year unless
another year is specified here:
(e) "Net Profit"
[X] (i) Not applicable (profits will not be required for any
contributions to the Plan).
[ ] (ii) As defined in paragraph 1.48 of the Basic Plan Document
#04.
(f) "Plan Year" The 12-consecutive month period commencing on JANUARY 1
and ending on DECEMBER 31.
(g) "Qualified Early Retirement Age" For purposes of making
distributions under the provisions of a Qualified Domestic Relations
Order, the Plan's Qualified Early Retirement Age with regard to the
Participant against whom the order is entered [X] shall [ ] shall
not be the date the order is determined to be qualified. If "shall"
is elected, this will only allow payout to the alternate payee(s).
(h) "Qualified Joint and Survivor Annuity" The safe-harbor provisions
of paragraph 8.7 of the Basic Plan Document #04 are applicable. If
the Plan is not safe-harbored under paragraph 8.7 of the Basic Plan
Document, the survivor annuity shall be 50% of the annuity payable
during the lives of the Participant and Spouse.
(i) "Taxable Wage Base"
[X] (i) Not Applicable - Plan is not integrated with Social
Security.
[ ] (ii) The maximum earnings considered wages for such Plan Year
under Code Section 3121(a).
[ ] (iii) % (not more than 100%) of the amount considered
wages for such Plan Year under Code Section 3121(a).
[ ] (iv) $ , provided that such amount is not in excess of
the amount determined under paragraph 3(i)(ii) above.
NOTE: Using less than the maximum at (ii) may result in a
change in the allocation formula in Section 7.
(j) "Year of Service"
(i) For Eligibility Purposes: (Choose one)
[ ] (1) The 12-consecutive month period during which an
Employee is credited with (not more than 1,000)
Hours of Service.
[X] (2) Elasped Time
If no answer is specified, the Hours of Service method will be
used.
(ii) For Allocation Accrual Purposes: The 12-consecutive month
period during which an Employee is credited with 501 (not more
than 1,000) Hours of Service. (For Plan Years beginning in
1990 and thereafter, if a number greater than 501 is specified,
it will be deemed to be 501.)
(iii) For Vesting Purposes: (Choose one)
[ ] (1) The 12-consecutive month period during which an
Employee is credited with (not more than
1,000) Hours of Service.
[X] (2) Elasped Time
If no answer is specified, the Hours of Service method
will be used.
4. ELIGIBILITY REQUIREMENTS
(a) Service:
[ ] (i) The Plan shall have no service requirement.
[ ] (ii) The Plan shall cover only Employees having completed at
least one Year of Service.
[X] (iii) The plan shall cover only Employees having completed at
least 1 months (less than 12).
NOTE: If the eligibility period selected is less than one year,
an Employee will not be required to complete any
specified number of Hours of Service to receive credit
for such period.
(b) Age:
[ ] (i) The Plan shall have no minimum age requirement.
[X] (ii) The Plan shall cover only Employees having attained age
20 (not more than age 21).
(c) Classification:
The Plan shall cover all Employees who have met the age and service
requirements with the following exceptions:
[ ] (i) No exceptions.
[X] (ii) The Plan shall exclude 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 bar-
gaining and if two percent or less of the Employees who
are covered pursuant to that agreement are professionals
as defined in Regulations Section 1.410(b)-9. For this
purpose, the term "Employee Representative" does not
include any organization more than half of whose members
are Employees who are owners, officers, or executives of
the Employer.
[X] (iii) The Plan shall exclude Employees who are nonresident
aliens [within the meaning of Code Section 7701(b)(1)(B)]
and who receive no earned income [within the meaning of
Code Section 911(d)(2)] from the Em ployer which
constitutes income from sources within the United States
[within the meaning of Code Section 861(a)(3)].
(d) Employees on Effective Date:
[X] (i) Not Applicable. All Employees will be required to
satisfy both the age and Service requirements specified
above.
[ ] (ii) Employees employed on the Plan's Effective Date do not
have to satisfy the Service requirements specified above.
[ ] (iii) Employees employed on the Plan's Effective Date do not
have to satisfy the age requirements specified above.
5. RETIREMENT AGES
(a) Normal Retirement Age:
If the Employer imposes a requirement that Employees retire upon
reaching a specified age, the Normal Retirement Age selected below
may not exceed the Employer imposed mandatory retirement age.
[X] (i) Normal Retirement Age shall be 60 (not to exceed age 65).
[ ] (ii) Normal Retirement Age shall be the later of attaining age
(not to exceed age 65) or the (not to exceed
the 5th) anniversary of the first day of the first Plan
Year in which the Participant commenced participation in
the Plan.
(b) Early Retirement Age:
Early Retirement Age shall not be applicable unless the Employer
attached a form to this Adoption Agreement certifying that Early
Retirement Age is a benefit which has accrued under the predecessor
Plan which cannot be cut back under Code Section 411(d)(6).
6. EMPLOYEE CONTRIBUTIONS
[X] (a) Participants shall be permitted to make Elective Deferrals in
any amount from 1% (not more than 2%) up to 15% (not more than
20%) of their Compensation.
If (a) is applicable, Participants shall be permitted to amend
their Salary Savings Agreements to change the contribution
percentage in accordance with the procedures established by the
Plan Administrator.
[ ] (b) Participants shall be permitted to make after tax Voluntary
Contributions.
NOTE: The Average Deferral Percentage Test will apply to
contributions under (a) above. The Average Contribution
Percentage Test will apply to contributions under (b) and may
apply to (a).
7. EMPLOYER CONTRIBUTIONS AND ALLOCATION THEREOF
NOTE: The Employer shall make contributions to the Plan in accordance
with the formula or formulas selected below. The Employer's
contribution shall be subject to the limitations contained in
Articles III and X. For this purpose, a contribution for a
Plan Year shall be limited for the Limitation Year which ends
with or within such Plan Year. Also, the integrated allocation
formulas below are for Plan Years beginning in 1989 and later.
The Employer's allocation for earlier years shall be as
specified in its Plan prior to amendment for the Tax Reform Act
of 1986.
(a) Current or Accumulated Net Profits are required for:
[ ] (i) Matching Contributions.
[ ] (ii) Qualified Non-Elective Contributions.
[ ] (iii) Discretionary Contributions.
If no answer is specified, Current or Accumulated Net Profits
will not be required.
NOTE: Elective Deferrals can always be contributed regardless of
profits.
(b) Salary Savings Agreement:
The Employer shall contribute and allocate to each
Participant's account an amount equal to the amount withheld
from the Compensation of such Participant pursuant to his or
her Salary Savings Agreement.
An Employee who has terminated his or her election under the
Salary Savings Agreement other than for hardship reasons may
not make another Elective Deferral:
[ ] (i) until the first day of the next Plan Year.
[ ] (ii) until the first day of the next valuation
period.
[X] (iii) for a period of 6 month(s) (not to exceed
12 months).
If no option is specified, option (ii) will apply.
[X] (c) Matching Employer Contribution [See paragraphs (g), (h) and (i)]:
[ ] (i) PERCENTAGE MATCH: The Employer shall contribute and
allocate to each eligible Participant's account an
amount equal to % of the amount contributed and
allocated in accordance with paragraph 7(b) above.
The Employer shall not match Participant Elective
Deferrals as provided above in excess of $ or
in excess of % of the Participant's
Compensation.
[X] (ii) DISCRETIONARY MATCH: The Employer shall
contribute and allocate to each eligible
Participant's account a percentage of the
Participant's Elective Deferral contributed and
allocated in accordance with paragraph 7(b)
above. The Employer shall not match Participant
Elective Deferrals in excess of $ or in
excess of % of the Participant's
Compensation.
[ ] (iii) TIERED MATCH: The Employer shall contribute and
allocate to each Participant's account an amount
equal to % of the first % of the
Participant's Compensation, and % of the next
% of the Participant's Compensation.
NOTE: Percentages specified in (iii) above may not increase as the
percentage of Participant's contribution increases.
[ ] (iv) FLAT DOLLAR MATCH: The Employer shall contribute and
allocate to each Participant's account $ if the
Participant defers at least 1% of Compensation.
(v) ELIGIBILITY FOR MATCH: Matching contributions will be
made to [X] all Employees eligible to participate [ ]
only to non-Highly Compensated Employees eligible to
participate.
[ ] (vi) QUALIFIED MATCH: Employer Matching Contributions will be
treated as Qualified Matching Contributions to the extent
specified by the Employer at the time the Matching
Employer Contributions are made.
(vii) MATCHING CONTRIBUTION COMPUTATION PERIOD: The time
period upon which matching contributions will be based
shall be:
[ ] (A) weekly
[ ] (B) bi-weekly
[ ] (C) semi-monthly
[ ] (D) monthly
[ ] (E) quarterly
[ ] (F) semi-annually
[X] (G) annually
[X] (d) Qualified Non-Elective Employer Contribution - [See paragraphs (g),
(h) and (i)] These contributions are fully vested when contributed.
The Employer shall have the right to make an additional
discretionary contribution which shall be allocated to each eligible
Employee in proportion to his or her Compensation as a percentage of
the Compensation of all eligible Employees. This part of the
Employer's contribution and the allocation thereof shall be
unrelated to any Employee contributions made hereunder. The amount
of Qualified non-Elective Contributions taken into account for
purposes of meeting the ADP or ACP test requirements is the amount
necessary to meet both the ADP and ACP tests. Qualified non-
Elective Contributions will be made to only non-Highly Compensated
Employees eligible to participate.
[X] (e) Additional Employer Contribution Other Than Qualified Non-Elective
Contributions - Non-Integrated [See paragraphs (g), (h) and (i)]
The Employer shall have the right to make an additional
discretionary contribution which shall be allocated to each eligible
Employee in proportion to his or her Compensation as a percentage of
the Compensation of all eligible Employees. This part of the
Employer's contribution and the allocation thereof shall be
unrelated to any Employee contributions made hereunder.
[ ] (f) Additional Employer Contribution - Integrated Allocation Formula
[See paragraphs (g), (h) and (i)]
The Employer's contribution for the Plan Year plus any forfeitures
(only if they are reallocated to Participants under Section 9
herein), shall be allocated to the accounts of eligible Participants
as set forth in the Basic Plan Document #04 of paragraph 5.3.
NOTE: Only one plan maintained by the Employer may be integrated with
Social Security.
(g) Allocation of Excess Amounts (Annual Additions)
Excess deferrals which result in an Excess Amount shall be returned
to the Participant. In the event that the allocation formula of
other contributions results in an Excess Amount, such excess shall
be:
[ ] (i) placed in a suspense account accruing no gains or losses
for the benefit of the Participant.
NOTE: For every Limitation Year, or part thereof, that a
suspense account exists, the Employer will be subjected
to a ten-percent penalty on the monies held in the
suspense account.
[X] (ii) reallocated as additional Employer contributions to all
other Participants to the extent that they do not have
any Excess Amount.
If no answer is specified, the suspense account method
will be used.
(h) Minimum Employer Contribution Under Top-Heavy Plans:
For any Plan Year during which the Plan is Top-Heavy, the sum of the
contributions and forfeitures as allocated to eligible Employees
under paragraphs 7(d), 7(e), 7(f) and 9 of this Adoption Agreement
shall not be less than the amount required under paragraph 14.2 of
the Basic Plan Document #04. Top-Heavy minimums will be allocated
to:
[X] (i) all eligible Participants.
[ ] (ii) only eligible non-Key Employees who are Participants.
(i) Return of Excess Contributions and/or Excess Aggregate
Contributions:
In the event that one or more Highly Compensated Employees is
subject to both the ADP and ACP tests and the sum of such tests
exceeds the Aggregate Limit, the limit will be satisfied by reducing
the ACP of the affected Highly Compensated Employees.
8. ALLOCATIONS TO TERMINATED EMPLOYEES
(a) For Plan Years beginning in 1990 and thereafter, the Employer will
allocate Employer related contributions to any Participant who is
credited with more than 500 Hours of Service or is employed on the
last day of the Plan Year without regard to the number of Hours of
Service.
The Employer will also allocate Employer related contributions to
any Participant who terminates during the Plan Year without accruing
the necessary Hours of Service if they terminate as a result of:
[ ] (i) Retirement.
[ ] (ii) Disability.
[ ] (iii) Death.
[ ] (iv) Other termination.
(b) If applicable, for Plan Years beginning prior to 1990:
[ ] (i) For Plan Years beginning prior to 1990, the Employer will
not allocate Employer related contributions to any
Participant who terminates employment during the Plan
Year.
[ ] (ii) The Employer will allocate Employer related contributions
to Employees who terminate during the Plan Year as a
result of:
[ ] (1) retirement.
[ ] (2) Disability.
[ ] (3) death.
[ ] (4) other termination provided that the Participant
has completed a Year of Service.
[ ] (5) other termination.
9. ALLOCATION OF FORFEITURES
NOTE: Subsections (a), (b) and (c) below apply to forfeitures of
amounts other than Excess Aggregate Contributions.
(a) Allocation Alternatives:
[ ] (i) Not Applicable. All contributions are always fully
vested.
[ ] (ii) Forfeitures shall be allocated to Participants in the
same manner as the Employer's contribution.
[X] (iii) Forfeitures shall be applied to reduce the Employer's
contribution for such Plan Year.
[ ] (iv) Forfeitures shall be applied to offset administrative
expenses of the Plan. If forfeitures exceed these
expenses, (iii) above shall apply.
(b) Date for Reallocation:
NOTE: If no distribution has been made to a former Participant, sub-
section (i) below will apply to such Participant even if the
Employer elects (ii) or (iii) below as its normal
administrative policy.
[ ] (i) Forfeitures shall be reallocated at the end of the Plan
Year during which the former Participant incurs his or
her fifth consecutive one year Break In Service.
[ ] (ii) Forfeitures will be reallocated immediately (as of the
next Valuation Date).
[X] (iii) Forfeitures will be reallocated as of the end of the Plan
Year in which the Participant separates from service.
[ ] (iv) Forfeitures shall be reallocated as of the end of the
Plan Year during which the former Employee incurs his or
her (1st, 2nd, 3rd, or 4th) consecutive one year
Break In Service.
(c) Restoration of Forfeitures:
If amounts are forfeited prior to five consecutive 1-year Breaks in
Service, the Funds for restoration of account balances will be
obtained from the following resources in the order indicated (fill
in 1 and 2 in the following boxes to indicate order):
[1] (i) Current year's forfeitures.
[2] (ii) Additional Employer contribution.
If no answer is specified, the order will be (i) and (ii).
(d) Forfeitures of Excess Aggregate Contributions shall be:
[X] (i) Applied to reduce Employer contributions.
[ ] (ii) Allocated, after all other forfeitures under the Plan, to
the Matching Contribution account of each non-Highly
Compensated Participant who made Elective Deferrals in
the ratio which each such Participant's Compensation for
the Plan Year bears to the total Compensation of all
Participants for such Plan Year. Such forfeitures cannot
be allocated to the account of any Highly Compensated
Employee.
Forfeitures of Excess Aggregate Contributions will be so applied at
the end of the Plan Year in which they occur.
10. CASH OPTION
[ ] (a) The Employer may permit a Participant to elect to defer to the
Plan, an amount not to exceed % of any Employer paid cash
bonus made for such Participant for any year. A Participant
must file an election to defer such contribution at least
fifteen (15) days prior to the end of the Plan Year. If the
Employee fails to make such an election, the entire Employer
paid cash bonus to which the Participant would be entitled
shall be paid as cash and not to the Plan. Amounts deferred
under this section shall be treated for all purposes as
Elective Deferrals. Notwithstanding the above, the election to
defer must be made before the bonus is made available to the
Participants.
[X] (b) Not Applicable.
If no answer is specified, option (b) will apply.
11. LIMITATIONS ON ALLOCATIONS
[X] This is the only Plan the Employer maintains or ever maintained;
therefore, this section is not applicable.
[ ] The Employer does maintain or has maintained another Plan (including
a Welfare Benefit Fund or an individual medical account [as defined
in Code Section 415(l)(2)], under which amounts are treated as
Annual Additions) and has completed the proper sections below.
Complete (a), (b) and (c) only if the Employer maintains or ever
maintained another qualified plan, including a Welfare Benefit Fund or an
individual medical account [as defined in Code Section 415(l)(2)], in
which any Participant in this Plan is (or was) a participant or could
possibly become a participant.
(a) If the Participant is covered under another qualified Defined
Contribution Plan maintained by the Employer, other than a Master or
Prototype Plan:
[ ] (i) the provisions of Article X of the Basic Plan Document
#04 will apply, as if the other plan were a Master or
Prototype Plan.
[ ] (ii) Attach provisions stating the method under which the
plans will limit total Annual Additions to the Maximum
Permissible Amount, and will properly reduce any Excess
Amounts, in a manner that precludes Employer discretion.
If no answer is specified, option (i) will apply.
(b) If a Participant is or ever has been a participant in a Defined
Benefit Plan maintained by the Employer:
Attach provisions which will satisfy the 1.0 limitation of Code
Section 415(e). Such language must preclude Employer discretion.
The Employer must also specify the interest and mortality
assumptions used in determining Present Value in the Defined Benefit
Plan.
(c) The minimum contribution or benefit required under Code Section 416
relating to Top-Heavy Plans shall be satisfied by:
[ ] (i) this Plan.
[ ] (ii)
(Name of other qualified plan of the Employer).
[ ] (iii) Attach provisions stating the method under which the
minimum contribution and benefit provisions of Code
Section 416 will be satisfied. If a Defined Benefit Plan
is or was maintained, an attachment must be provided
showing interest and mortality assumptions used in the
Top-Heavy Ratio.
If no answer is specified, option (i) will apply.
12. VESTING
Contributions under paragraph 7(b), 7(c)(vi) and 7(d) are always fully
vested. Employer contributions shall be subject to the vesting table
selected by the Employer below. A Participant shall receive credit for a
Year of Service as specified at 3(j)(iii) of this Adoption Agreement.
(a) Vesting Schedules:
NOTE: The vesting schedules below only apply to a Participant who has
at least one Hour of Service during or after the 1989 Plan
Year. If applicable, Participants who separated from Service
prior to the 1989 Plan Year will remain under the vesting
schedule as in effect in the Plan prior to amendment for the
Tax Reform Act of 1986.
(i) Full and immediate vesting.
Years of Service
1 2 3 4 5 6 7
(ii) % 100%
(iii) % % 100%
(iv) 0% 20% 40% 60% 80% 100%
(v) % % 20% 40% 60% 80% 100%
(vi) 10% 20% 30% 40% 60% 80% 100%
(vii) % % % % 100%
(viii) 20% 40% 60% 80% 100% 100% 100%
NOTE: The percentages selected for schedule (viii) may not be less
for any year than the percentages shown at schedule (v).
Contributions will vest as provided below:
Vesting
Option
Selected Type Of Employer Contribution
viii 7(c) Employer Match on Salary Savings
viii 7(e) or (f) Employer Discretionary
(b) Top-Heavy Vesting
For any Plan Year in which this Plan is Top-Heavy, the following
minimum vesting rules will apply:
(i) Schedules (v), (vi), and (viii) above will automatically shift
to schedule (iv).
(ii) Schedule (vii) above will automatically shift to schedule
(iii).
(c) Service disregarded for Vesting:
[X] (i) No service will be disregarded.
[ ] (ii) Service prior to the Effective Date of this Plan or a
predecessor plan shall be disregarded when computing a
Participant's vested and nonforfeitable interest.
[ ] (iii) Service prior to a Participant having attained age 18
shall be disregarded when computing a Participant's
vested and nonforfeitable interest.
13. SERVICE WITH PREDECESSOR ORGANIZATION
For purposes of satisfying the Service requirements for eligibility,
Hours of Service shall include Service with the following predecessor
organization(s):
(These hours will also be used for vesting purposes.)
14. ROLLOVER/TRANSFER CONTRIBUTIONS
(a) Rollover Contributions, including Direct Rollovers, as described at
paragraph 1.69 of the Basic Plan Document #04, [X] shall [ ] shall
not be permitted to be made to the Plan. If permitted, Employees
[X] may [ ] may not make Rollover Contributions prior to meeting the
eligibility requirements for participation in the Plan.
(b) Transfer Contributions, as described at paragraph 4.4 of the Basic
Plan Document #04 [X] shall [ ] shall not be permitted to be made to
the Plan. If permitted, Employees [X] may [ ] may not Transfer
Contributions prior to meeting the eligibility requirements for
participation in the Plan.
NOTE: Even if available, the Employer may refuse to accept such
contributions if its Plan meets the safe-harbor rules of
paragraph 8.7 of the Basic Plan Document #04.
15. HARDSHIP WITHDRAWALS
Hardship withdrawals, as provided for in paragraph 6.9 of the Basic Plan
Document #04, [X] are [ ] are not permitted. If permitted, Hardship
withdrawals [ ] shall [X] shall not be limited to Elective Deferrals.
16. PARTICIPANT LOANS
Participant loans, as provided for in paragraph 13.8 of the Basic Plan
Document #04, [X] are [ ] are not permitted. If permitted, repayments of
principal and interest shall be repaid to the Participant's segregated
account.
17. INSURANCE POLICIES
The insurance provisions of paragraph 13.9 of the Basic Plan Document #04
[ ] shall [X] shall not be applicable.
18. INVESTMENT DIRECTION
[ ] (a) Employer Investment Direction
The Employer investment direction provisions, as set forth in
Article XIII of the Basic Plan Document #04, shall be
applicable to the following:
[ ] (i) All monies
[ ] (ii) Employer Discretionary and Matching Monies
[ ] (iii) Employer Discretionary Monies excluding Matching Monies
[ ] (iv) Employer Matching Monies only.
[X] (b) Employee Investment Direction
Employee investment direction provisions, as set forth in
Article XIII of the Basic Plan Document #04, shall be
applicable to all monies not directed by Employer.
If no answer is specified, Employee Investment Direction will apply.
NOTE: Each of the mutual funds in which the Plan may invest carries
its own fees and expenses, which may include management fees,
Rule 12b-1 fees and/or other fees and expenses, which are
described in detail in each Fund's prospectus. Employees who
invest in one or more of these mutual funds will, as
shareholders of those mutual funds, bear their pro-rata portion
of each fund's fees and expenses and may also pay a sales
charge or contingent deferred sales charge in connection with
their purchase of fund shares. Employer acknowledges that
Prudential Securities Incorporated (PSI) and Pruco Securities
Corporation (Prusec) may be deemed to benefit from advisory and
other fees paid to its affiliates in connection with the
management and operation of the mutual funds in which the
Employee may invest, from sales charges and contingent deferred
sales charges imposed as described in the prospectus and from
fees paid to The Prudential Insurance Company of America in
connection with the Guaranteed Interest Account.
19. EARLY PAYMENT OPTION
(a) A Participant who has attained age 59-1/2 and who has not separated
from Service [X] may [ ] may not obtain a distribution of his or her
vested Employer contributions.
(b) A Participant who has attained the Plan's Normal Retirement Age and
who has not separated from Service [X] may [ ] may not receive a
distribution of his or her vested account balance.
NOTE: If the Participant has had the right to withdraw his or her
account balance in the past, this right may not be taken away.
Notwithstanding the above, to the contrary, required minimum
distributions will be paid. For timing of distributions, see
item 20 below.
20. DISTRIBUTION OPTIONS
(a) Timing of Distributions:
In cases of termination benefits shall be paid:
[ ] (i) As soon as administratively feasible following the close
of the Plan Year during which a distribution is requested
or is otherwise payable.
[X] (ii) As soon as administratively feasible, following the date
on which a distribution is requested or is otherwise
payable.
[ ] (iii) Only after the Participant has achieved the Plan's Normal
Retirement Age, or Early Retirement Age, if applicable.
If no answer is specified, option (ii) will apply.
(b) Optional Forms of Payment:
[X] (i) Lump Sum.
[X] (ii) Installment Payments.
[X] (iii) Other form(s)* as specified:
ANY COMBINATION OF THE
FOREGOING
If no answer is specified, option (i) will apply.
*Annuities are only available in either a nonsafe-harbored Plan
which does not meet the provisions of paragraph 8.7 of Basic Plan
Document #04 or in a Plan which previously offered annuities as an
optional form of payment.
21. SPONSOR CONTACT
The Sponsor of this Prototype Plan is Prudential Mutual Fund Management,
Inc., One Seaport Plaza, New York, New York 10292. Any questions
regarding this Prototype Plan document may be directed to your Prudential
Representative. You may also call Prudential Mutual Fund Services at
(800)848-4015.
22. SIGNATURES
DUE TO THE SIGNIFICANT TAX RAMIFICATIONS, THE SPONSOR RECOMMENDS THAT
BEFORE YOU EXECUTE THIS ADOPTION AGREEMENT, YOU CONTACT YOUR ATTORNEY OR
TAX ADVISOR.
The adopting Employer understands that there are fees for each account
under the Plan. THE BASIC PLAN DOCUMENT CONTAINS A PRE-DISPUTE
ARBITRATION CLAUSE FOUND IN ARTICLE XIII, SECTION 13.7 ARBITRATION.
(a) EMPLOYER:
Name and address of Employer if different than specified in Section
1 above.
IF EMPLOYER INVESTMENT DIRECTION APPLICABLE, NAME(S) OF
INDIVIDUAL(S) AUTHORIZED TO ISSUE INVESTMENT AND ADMINISTRATIVE
INSTRUCTIONS TO THE PLAN SPONSOR OR AFFILIATE:
This Adoption Agreement and the corresponding provisions of the Plan
and Trust Basic Plan Document #04 were adopted by the Employer the
day of , 19 .
Signed for the Employer by:
Title:
Signature:
THE EMPLOYER UNDERSTANDS THAT ITS FAILURE TO PROPERLY COMPLETE THE
ADOPTION AGREEMENT MAY RESULT IN DISQUALIFICATION OF ITS PLAN.
Employer's Reliance: An Employer who maintains or has ever
maintained or who later adopts any Plan [including, after December
31, 1985, a Welfare Benefit Fund, as defined in Section 419(e) of
the Code, which provides post-retirement medical benefits allocated
to separate accounts for Key Employees, as defined in Section
419A(d)(3)] or an individual medical account, as defined in Code
Section 415(l)(2) in addition to this Plan may not rely on the
opinion letter issued by the National Office of the Internal Revenue
Service as evidence that this Plan is qualified under Section 401 of
the Code. If the Employer who adopts or maintains multiple Plans
wishes to obtain reliance that such Plan(s) are qualified,
application for a determination letter should be made to the
appropriate Key District Director of Internal Revenue. The Employer
understands that its failure to properly complete the Adoption
Agreement may result in disqualification of its plan.
The Employer may not rely on the opinion letter issued by the
National Office of the Internal Revenue Service as evidence that
this Plan is qualified under section 401 of the Code unless the
terms of the Plan, as herein adopted or amended, that pertain to the
requirements of Code Sections 401(a)(4), 401(a)(17), 401(l),
401(a)(5), 410(b) and 414(s), as amended by the Tax Reform Act of
1986, or later laws, (a) are made effective retroactively to the
first day of the first Plan Year beginning after December 31, 1988
(or such later date on which these requirements first become
effective with respect to this Plan); or (b) are made effective no
later than the first day on which the Employer is no longer
entitled, under regulations, to rely on a reasonable, good faith
interpretation of these requirements, and the prior provisions of
the Plan constitute such an interpretation.
This Adoption Agreement may only be used in conjunction with Basic
Plan Document #04.
[X] (b) TRUSTEE:
[ ] Prudential Bank & Trust Company
Two Concourse Parkway, Suite 500
Atlanta, GA 30328
NOTE: There is an annual trustee fee charged under the Plan if
Prudential Bank & Trust Company is appointed as Trustee.
[X] The Trustee(s) will be the following individuals:
TOM WERTHAN
CAROL GULOTTA
The assets of the Fund shall be invested in accordance with para-
graph 13.3 of the Basic Plan Document #04 as a Trust. As such, the
Employer's Plan as contained herein was accepted by the Trustee the
day of , 19 .
Signed for the Trustee by:
Signature Signature
Signature Signature
(c) Prudential Mutual Fund Management, Inc.
The Employer's Agreement and the corresponding provisions of the
Plan and Trust Basic Plan Document #04 were accepted by Prudential
Mutual Fund Management, Inc. the day of , 19 .
Signed for by:
Title:
Signature:
Exhibit 5.1
White & Case
1155 Avenue of the Americas
New York, New York 10036
(212) 819-8200
September 23, 1997
EMCORE Corporation
394 Elizabeth Avenue
Somerset, New Jersey 08873
Ladies and Gentlemen:
You have requested our opinion in connection with the Registration
Statement on Form S-8 (the "Registration Statement") filed by EMCORE
Corporation (the "Company") with the Securities and Exchange Commission (the
"Commission") for registration under the Securities Act of 1933, as amended,
of the Company's Common Stock in an aggregate amount of $800,000 (the
"Shares") which may be acquired by certain employees of the Company pursuant
to the terms and provisions of the Company's 401(k) Plan (the "Plan").
We are familiar with the corporate proceedings relating to the
authorization of the Shares and have reviewed the corporate proceedings taken
with respect to the approval of the Plan by the Company's Board of Directors
on July 23, 1997. We have examined and relied on originals, or copies
certified to our satisfaction, of all such corporate records of the Company
and such other instruments and other certificates of public officials,
officers and representatives of the Company and such other persons, and we
have made such investigations of law, as we have deemed appropriate as a basis
for the opinion herein expressed.
Based upon the foregoing, it is our opinion that the Shares will, if
issued and delivered in accordance with the terms and provisions of the Plan,
be validly issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement. By giving such consent we do not thereby admit that
we are an "expert" with respect to any part of such Registration Statement as
that term is used in the Securities Act of 1933, as amended, or the rules or
regulations of the Commission issued thereunder.
Very truly yours,
White & Case
KK:SGH
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement on
Form S-8 of our report dated November 1, 1996, except for Notes 13 and 15 as
to which the date is December 6, 1996, and Note 16 as to which the date is
February 3, 1997, on our audits of the financial statements and financial
statement schedule of EMCORE Corporation.
Parsippany, New Jersey
September 24, 1997
