NAVIDEA
BIOPHARMACEUTICALS, INC.
401(k)
PLAN AND TRUST
Original
Effective Date: July 1, 1990
Amendment
and Restatement Effective Date: January 1, 2016, adopted in April,
2016
NAVIDEA
BIOPHARMACEUTICALS, INC.
401(k)
PLAN AND TRUST
Table of Contents
NAVIDEA
BIOPHARMACEUTICALS, INC.
401(k)
PLAN AND TRUST
The
Navidea Biopharmaceuticals, Inc. 401(k) Plan and Trust (Plan) is
hereby executed by and between Navidea Pharmaceuticals, Inc.
(Company) and Mid Atlantic Trust Company (Trustee).
ARTICLE
I
The
Company established the Plan originally effective July 1, 1990.
This restated Plan hereby amends and restates the Plan as adopted
by the Company and is effective January 1, 2016. (The effective
date may not be earlier than the first day of the Plan Year in
which the restatement is executed).
This
plan and trust document is intended to reflect provisions required
under the Code and ERISA, including the Economic Growth and Tax
Relief Reconciliation Act of 2001 (EGTRRA), Pub. L. 107-16 (with
technical corrections made by the Job Creation and Worker
Assistance Act of 2002 (JCWAA)), Pub. L. 104-147, the Pension
Funding Equity Act of 2004 (PFEA), Pub. L. 108-218, the American
Jobs Creation Act of 2004 (AJCA), Pub. L. 108-357, the Katrina
Emergency Tax Relief Act of 2005 (KETRA), Pub. L. 109- 73, the Gulf
Opportunity Zone Act of 2005 (GOZA), Pub. L. 109-135, the Pension
Protection Act of 2006 (PPA ’06), Pub. L. 109-280, and the
U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq
Accountability Appropriations Act, 2007, Pub. L. 110-28; the Heroes
Earnings Assistance and Relief Tax Act of 2008 (HEART); the
Emergency Economic Stabilization Act of 2008 (EESA), Pub. L.
110-343; the Worker, Retiree, and Employer Recovery Act of 2008
(WRERA), Pub. L. 110-458 and other guidance in effect as of January
1, 2012, and such other dates as provided in the relevant
guidance.
The
Plan is for the exclusive benefit of the Employees of the Company
and of any proprietorship, corporation or partnership adopting the
Plan and listed on Appendix A, as amended, attached hereto and made
a part hereof. No part of the trust corpus or income shall ever be
used for or diverted to any purpose other than for the exclusive
benefit of the Participants or their beneficiaries.
The
Plan is designated as a 401(k) profit sharing plan.
ARTICLE
II
As used
herein, the following words shall have the meaning stated herein,
unless otherwise specifically provided:
2.01 Account shall mean the
combined value of all accounts maintained for a Participant under
this Plan.
2.02 Actuarial Equivalent
shall
mean equality in value of the aggregate amounts expected to be
received under different forms of benefit payments. Actuarial
Equivalent shall be determined according to the mortality table and
assumptions being utilized by the insurance company providing the
annuity quotations for a distribution.
2.03 Actual Contribution Percentage or
ACP shall mean the
average of the Contribution Percentages of the eligible
Participants in a group.
2.04 Actual Deferral Percentage or
ADP shall mean, for a
specified group of Participants for a Plan Year, the average of the
ratios (calculated separately for each Participant in such group)
of (1) the amount of Employer Contributions, as defined in this
Section 2.04, actually paid over to the Trust Fund on behalf of
such Participant for such Plan Year to (2) the Participant’s
Compensation for such Plan Year (whether or not the Employee was an
eligible Participant for the entire Plan Year). Employer
Contributions on behalf of any Participant shall include: (1) any
Elective Deferrals made pursuant to the Participant’s
deferral election, including Excess Elective Deferrals of Highly
Compensated Employees, but excluding (a) Excess Elective Deferrals
of Nonhighly Compensated Employees that arise solely from the
Elective Deferrals made under the Plan or plans of the Employer and
(b) Elective Deferrals that are taken into account in the
Contribution Percentage test (provided the ADP test is satisfied
both with and without exclusion of these Elective Deferrals); and
(2) at the election of the Employer, Qualified Employer
Contributions as set forth in Section 6.06 of this Plan. For
purposes of computing the ADP, 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. Excess deferrals that are distributed in accordance with
Treasury Regulations at 1.402(g)-1(e)(2) or (e)(3) are not Annual
Additions.
2.05 Administrator
shall
mean the Company unless the Company designates a Committee to
administer the Plan, pursuant to Section 12.01.
2.07 Annual Addition
shall
mean the sum of the following amounts allocated on behalf of a
Participant for a Limitation Year: (a) all Employer contributions;
(b) all forfeitures; and (c) all Participant contributions. Except
to the extent provided in Treasury Regulations, Annual Additions
include excess contributions described in Section 401(k) of the
Code. Annual Additions also include Excess Amounts reapplied to
reduce Employer contributions under Section 4.06. Amounts allocated
after March 31, 1984, to an individual medical account (as defined
in Section 415(l)(2) of the Code) included as part of a pension or
annuity plan maintained by the Employer are Annual Additions.
Furthermore, Annual Additions include contributions paid or accrued
after December 31, 1985, for taxable years ending after
December 31, 1985, attributable to post-retirement medical
benefits allocated to the separate account of a key employee (as
defined in Section 419A(d)(3) of the Code) under a welfare benefit
fund (as defined in Section 419(e) of the Code) maintained by the
Employer, but only for purposes of the dollar limitation applicable
to the Maximum Permissible Amount. Annual Additions include
allocations under a simplified employee pension.
Restorative
payments allocated to a Participant’s Account, which include
payments made to restore losses to the Plan resulting from actions
(or a failure to act) by a fiduciary for which there is a
reasonable risk of liability under Title I of ERISA or under other
applicable federal or state law, where similarly situated
participants are similarly treated do not give rise to an
“Annual Addition” for any Limitation Year.
2.08 Annual Benefit
shall
mean the amount payable annually in the form of a life annuity if
the Participant is unmarried, or a Qualified Joint and Survivor
Annuity, if married, with no ancillary benefits. Benefits not
directly related to retirement shall not be taken into
account.
2.09 Annuity Starting Date
shall
mean the first day of the first period for which an amount is
payable as an annuity or in any other form.
2.10 Authorized Leave of
Absence shall mean any
absence authorized by the Employer under its standard personnel
practices, including, but not limited to, service in the United
States Armed Forces on account of war or other emergency, provided
the Participant returns to employment with the Employer prior to
the expiration of such authorized absence or as provided by
law.
2.11 Base Compensation
shall
mean the lesser of a Participant’s Compensation, per Section
2.15, or the Integration Level.
2.12 Break in Service
shall
mean any twelve (12) consecutive month period, as described in
Section 2.79 for purposes of determining vesting during which such
Employee has not completed more than 500 Hours of Service with the
Employer.
The
applicable twelve (12) consecutive month period for a Break in
Service for vesting purposes, shall be consistent with the period
used to determine a Year of Service for vesting, as set forth in
Section 2.79.
Break
in Service shall mean for eligibility purposes a Period of
Severance of at least twelve (12) consecutive months as set forth
in Section 3.01.
2.13 Code shall mean the
Internal Revenue Code of 1986, as amended.
2.14 Committee shall mean the
Committee established under Article XII.
2.15 Compensation, for purposes
other than Sections 2.42 and 4.06 and Articles VI and XIV shall
mean with respect to each Employee of the Employer, wages within
the meaning of Section 3401(a) of the Code and all other payments
of compensation to an Employee by the Employer (in the course of
the Employer’s trade or business) for which the Employer is
required to furnish the Employee a written statement under Code
Sections 6041(d), 6051(a)(3), and 6052. Compensation must be
determined without regard to any rules under Section 3401(a) that
limit the remuneration included in wages based on the nature or
location of the employment or the services performed (such as the
exception for agricultural labor in Section
3401(a)(2)).
Notwithstanding
the above, Compensation shall exclude all of the following items:
(1) reimbursements or other expense allowances; (2) fringe benefits
(cash and non-cash); (3) moving expenses; (4) deferred
compensation; and (5) welfare benefits; and amounts earned prior to
the date that an Employee becomes a Participant.
Notwithstanding
the above, Compensation shall include elective contributions that
are made by the Employer that are not includible in income under
Sections 125, 402(g)(3), 402(h)(1)(B) or 403(b) of the Code,
compensation deferred under Section 457(b) of the Code, or employee
contributions under Section 414(h)(2) that are picked up by the
employing unit and effective for Plan Years beginning on or after
January 1, 2001, elective amounts that are not includible in income
under Code Section 132(f)(4).
The
measuring period for determining Compensation shall be the calendar
year ending with or within the Plan Year.
Notwithstanding
the above, Compensation with respect to each Self-Employed
Individual shall mean Earned Income.
Any
contributions to this Plan on behalf of any Owner-Employee may be
made only with respect to the Earned Income of the Owner-Employee
that is derived from the trade or business with respect to which
the Plan is established.
Only
amounts earned and paid during such period shall be included in the
definition of Compensation.
For any
Plan Year beginning after December 31, 2001, the annual
Compensation of each Participant taken into account in determining
allocations shall not exceed $200,000, as adjusted for
cost-of-living increases in accordance with Code Section
401(a)(17)(B). Annual Compensation means Compensation during the
Plan Year or such other consecutive 12-month period over which
compensation is otherwise determined under the Plan (the
determination period). The cost-of-living adjustment in effect for
a calendar year applies to annual Compensation for the
determination period that begins with or within such calendar
year.
If a
determination period consists of fewer than 12 months, the annual
Compensation limit is an amount equal to the otherwise applicable
annual Compensation limit multiplied by a fraction, the numerator
of which is the number of months in the short determination period,
and the denominator of which is 12.
If
Compensation for any prior determination period is taken into
account in determining a Participant’s allocations for the
current Plan Year, the Compensation for such prior determination
period is subject to the applicable annual Compensation limit in
effect for that prior period.
Effective
for Plan Years beginning after December 31, 1996, if this Plan
provides for the continuation of contributions for a fixed or
determinable period on behalf of all Participants who are
permanently and totally disabled (as defined in Section 22(e)(3) of
the Code), the Employer may make Employer Contributions on behalf
of such Employee including a Highly Compensated Employee (as
defined in Section 414(q) of the Code), without first making the
election required by Section 415(c)(3)(C)(iii) of the
Code.
Provided,
further, effective for Limitation Years beginning on or after July
1, 2007, in determining the amount or allocation of any
contribution that is based on Compensation, only Compensation paid
to a Participant for services rendered to the Employer while
employed as an Eligible Employee shall be taken into account.
Further, notwithstanding anything to the contrary herein, severance
amounts paid after severance from employment shall be excluded from
Compensation. For purposes of this Section, “severance
amounts” are any amounts paid after severance from
employment, except a payment of regular compensation for services
during the Employee’s regular working hours, or compensation
for services outside the Employee’s regular working hours
(such as overtime or shift differential), commissions, bonuses, or
other similar payments provided such payment would have been made
prior to a severance from employment if the Employee had continued
in employment with the employer, provided such amounts are paid by
the later of 2-1/2 months after, or the end of the Limitation Year
that includes the date of the Employee’s severance from
employment with the employer (as defined in applicable
guidance).
For
purposes of this Section, an Employee has a “severance from
employment” when the Employee ceases to be an employee of the
employer maintaining the Plan, and an Employee does not have a
“severance from employment” if, in connection with a
change of employment, the individual’s new employer maintains
such Plan with respect to the individual. The determination of
whether an Employee ceases to be an employee of the employer
maintaining the Plan is based on all of the relevant facts and
circumstances.
For
years beginning after December 31, 2008: (i) an individual
receiving a differential wage payment, as defined by Code Section
3401(h)(2), shall be treated as an Employee of the Employer making
the payment (rather than an Employee who has incurred a severance
from employment); and (ii) the differential wage payment shall be
treated as compensation for Plan purposes, including Code Section
415 and any other Code section that references the definition of
compensation under Code Section 415.
If all
employees of the Employer performing service in the uniformed
services described in Code Section 3401(h)(2)(A) are entitled to
receive differential wage payments (as defined in Code Section
3401(h)(2)) on reasonably equivalent terms and, if eligible to
participate in a retirement plan maintained by the Employer, to
make contributions based on the payments on reasonably equivalent
terms (taking into account Code Sections 410(b)(3), (4), and (5)),
then the Plan shall not be treated as failing to meet the
requirements of any provision described in Code Section
414(u)(1)(C) by reason of any contribution or benefit which is
based on the differential wage payment.
2.16 Compensation, for purposes of
Sections 2.42 and 4.06 and Articles VI and XIV shall mean with
respect to each Participant, wages within the meaning of Section
3401(a) of the Code and all other payments of compensation to an
Employee by the Employer (in the course of the Employer’s
trade or business) for which the Employer is required to furnish
the Employee a written statement under Sections 6041(d),
6051(a)(3), and 6052 of the Code.
Compensation
must be determined without regard to any rules under Section
3401(a) that limit the remuneration included in wages based on the
nature or location of the employment or the services performed
(such as the exception for agricultural labor in Section
3401(a)(2)).
Notwithstanding
the above, Compensation with respect to each Self-Employed
Individual shall mean Earned Income.
For
purposes of this Section, the measuring period for determining
Compensation shall be the Limitation Year. For Limitation Years
beginning after December 31, 1996, compensation for a Limitation
Year is the Compensation actually paid or includible in gross
income during such Limitation Year.
Notwithstanding
the above, Compensation for a Participant in a defined contribution
plan who is permanently and totally disabled (as defined in Section
22(e)(3) of the Code) is the Compensation such Participant would
have received for the Limitation Year if the Participant had been
paid at the rate of Compensation paid immediately before becoming
permanently and totally disabled; for Limitation Years beginning
before January 1, 1997, but not for Limitation Years beginning
after December 31, 1996, 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 Section 2.42 of
the Plan) and contributions made on behalf of such Participant are
nonforfeitable when made.
For
purposes of applying the limitations of this Section, Compensation
paid or made available during such Limitation Year shall include
any Elective Deferral (as defined in Section 402(g)(3) of the
Code), and any amount which is contributed or deferred by the
Employer at the election of the Employee and which is not
includible in the gross income of the Employee by reason of Section
125 or 457 of the Code and effective for Limitation Years beginning
on or after January 1, 2001, elective amounts not includible in
income of the Employee by reason of Section 132(f)(4) of the
Code.
Notwithstanding
any other provision of this Plan, Code Section 132(f)(4) is
included in the definition of Compensation for the following
purposes: (i) for Code Section 415, (ii) for identification of
Highly Compensated Employees in Section 2.42 of this Plan, (iii)
for identification of a Key Employee under Section 14.02(a) of this
Plan, and (iv) for calculation of minimum benefits under Article
XIV of this Plan.
For any
Plan Year beginning after December 31, 2001, the annual
Compensation of each Participant taken into account in determining
allocations shall not exceed $200,000, as adjusted for
cost-of-living increases in accordance with Code Section
401(a)(17)(B). Annual Compensation means Compensation during the
Plan Year or such other consecutive 12-month period over which
compensation is otherwise determined under the Plan (the
determination period). The cost-of-living adjustment in effect for
a calendar year applies to annual Compensation for the
determination period that begins with or within such calendar
year.
Effective
for Limitation Years beginning on or after July 1, 2007, the
definition of Compensation for purposes of Sections 2.42 and 4.06
and Articles VI and XIV shall be Compensation as set forth in
Section this 2.16, with the following exceptions:
(i)
Compensation shall
be based on the amount actually paid or made available to the
Participant (or, if earlier, includible in the gross income of the
Participant) during the applicable determination period (Limitation
Year or Plan Year), regardless of date of
participation;
(ii)
Compensation shall
include amounts paid by the later of 2-1/2 months after severance
from employment (as defined in Section 2.15) or by the end of the
Limitation Year that includes the date of the Participant’s
severance from employment with the employer if (a) the payment is
regular compensation for services during the Participant’s
regular working hours, or compensation for services outside the
Participant’s regular working hours (such as overtime or
shift differential), commissions, bonuses, or other similar
payments; and (b) the payment would have been paid to the
Participant prior to a severance from employment if the Participant
had continued in employment with the Employer;
(iii)
Compensation shall
not include amounts paid as compensation to a nonresident alien, as
defined in Code Section 7701(b)(1)(B), who is not a Participant in
the Plan to the extent the compensation is excludable from gross
income and is not effectively connected with the conduct of a trade
or business within the United States.
For
years beginning after December 31, 2008: (i) an individual
receiving a differential wage payment, as defined by Code Section
3401(h)(2), shall be treated as an Employee of the Employer making
the payment (rather than an Employee who has incurred a severance
from employment); and (ii) the differential wage payment shall be
treated as compensation for Plan purposes, including Code Section
415 and any other Code section that references the definition of
compensation under Code Section 415.
If all
employees of the Employer performing service in the uniformed
services described in Code Section 3401(h)(2)(A) are entitled to
receive differential wage payments (as defined in Code Section
3401(h)(2)) on reasonably equivalent terms and, if eligible to
participate in a retirement plan maintained by the Employer, to
make contributions based on the payments on reasonably equivalent
terms (taking into account Code Sections 410(b)(3), (4), and (5)),
then the Plan shall not be treated as failing to meet the
requirements of any provision described in Code Section
414(u)(1)(C) by reason of any contribution or benefit which is
based on the differential wage payment.
2.17 Contract shall mean any life
insurance policy or annuity contract (group or individual) issued
on the life of a Participant.
2.18 Contribution Agreement
shall
mean a written agreement signed by a Participant by which the
Participant authorizes the Employer to deduct and withhold from
such Participant’s Compensation a specified amount and to
contribute such amount to the Plan pursuant to the provisions of
Section 5.02.
A
Contribution Agreement under Section 5.02 cannot relate to
Compensation that is currently available prior to the adoption or
effective date of Section 5.02. Elective Deferrals cannot precede
the earlier of (1) the performance of services relating to the
Elective Deferral Contribution or (2) when the Compensation that is
subject to the Contribution Agreement would be currently available
to the Employee in the absence of an election to defer.
Notwithstanding the foregoing provisions, the timing of Elective
Deferrals will not fail to satisfy the requirements of this
paragraph merely because contributions for a pay period are
occasionally made before the services with respect to that pay
period are performed, provided the contributions are made early in
order to accommodate bona fide administrative
considerations.
2.19 Contribution Percentage
shall
mean the ratio (expressed as a percentage) of the
Participant’s Contribution Percentage Amounts to the
Participant’s Compensation for the Plan Year.
2.20 Contribution Percentage
Amounts shall mean the sum
of the Employee After-Tax Contributions, Matching Contributions,
and Qualified Matching Employer 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. Such
Contribution Percentage Amounts shall not include Matching
Contributions that are forfeited either to correct Excess Aggregate
Contributions or because the contributions to which they relate are
Excess Elective Deferrals, Excess Contributions or Excess Aggregate
Contributions. The Employer may elect to use Elective Deferrals and
the portion of the Qualified Employer Contribution that is
attributable to Employer Contributions under Section 6.06 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.
2.21 Determination Year
shall
mean the applicable year of the Plan for which a determination is
being made.
2.22 Disability shall mean a
physical or mental condition of a Participant resulting from bodily
injury, disease, or mental disorder which renders him totally and
permanently incapable of continuing his usual and customary
employment with the Employer and provided that such Disability
occurs while the Participant is an Employee of the Company. The
Disability of a Participant shall be determined by a licensed
physician chosen by the Administrator.
2.23 Early Retirement Age
shall
mean the date on which a Participant attains age 55 and has
completed at least five (5) Years of Service as Years of Service
are defined for vesting purposes with the Employer.
2.24 Early Retirement Date
shall
mean the date on which a Participant or former Participant retires
after attaining Early Retirement Age.
2.25 Earned Income
shall
mean the net earnings from self-employment in the trade or business
with respect to which the Plan is established, for which personal
services of the individual are a material income-producing factor.
Net earnings will be determined without regard to items not
included in gross income and the deductions allocable to such
items. Net earnings are reduced by contributions by the Employer to
a qualified plan to the extent deductible under Section 404 of the
Code. Net earnings shall be determined with regard to the deduction
allowed to the taxpayer by Section 164(f) of the Code for taxable
years beginning after December 31, 1989.
2.26 Effective Date
shall
mean January 1, 2016, except as otherwise stated throughout the
Plan.
2.27 Elective Deferrals
or Elective Deferral
Contributions shall mean any Employer Contributions made to
the Plan at the election of the Participant, in lieu of cash
compensation. 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 Section 401(k) of the Code, and salary reduction,
simplified employee pension described in Code Section 408(k)(6),
any eligible deferred compensation plan under Section 457 of the
Code, any plan as described under Section 408(p) and any plan
described under Section 501(c)(18) of the Code, and any Employer
Contributions made on the behalf of a Participant for the purchase
of an annuity contract under Section 403(b) of the Code pursuant to
a salary reduction agreement.
A cash
or deferred election under this Plan does not include a one-time
irrevocable election made no later than the Employee’s first
becoming eligible under the Plan or any other plan or arrangement
of the Employer that is described in Code Section 219(g)(5)(A)
(whether or not such other plan or arrangement has terminated), to
have contributions equal to a specified amount or percentage of the
Employee’s Compensation (including no amount of Compensation)
made by the Employer on the Employee’s behalf to the Plan and
a specified amount or percentage of the Employee’s
Compensation (including no amount of Compensation) divided among
all other plans or arrangements of the Employer (including plans or
arrangements not yet established) for the duration of the
Employee’s employment with the Employer, or in the case of a
defined benefit plan to receive accruals or other benefits
(including no benefits) under such plans. Employer Contributions
made pursuant to a one-time irrevocable election described in this
paragraph are not treated as having been made pursuant to a cash or
deferred election and are not includible in an Employee’s
gross income by reason of Code Section 1.402(a)-1(d). In the case
of an irrevocable election made on or before December 23, 1994, the
election does not fail to be treated as a one-time irrevocable
election under this paragraph merely because an Employee was
previously eligible under another plan of the Employer (whether or
not such other plan has terminated). In the case of a plan in which
partners may participate, the election does not fail to be treated
as a one-time irrevocable election under this paragraph merely
because the election was made after commencement of employment or
after the Employee’s first becoming eligible under any plan
of the Employer, provided that the election was made before the
first day of the first Plan Year beginning after December 31, 1988,
or, if later, March 31, 1989.
2.28 Elective Deferral
Account shall mean an
account established for a Participant for the purpose of receiving
contributions made to the Plan by the Employer on behalf of the
Participant pursuant to Section 5.02.
2.29 Employee shall mean any
person employed by the Employer or any other employer required to
be aggregated with such Employer under Code Sections 414(b), (c),
(m) or (o).
The
term Employee shall include Owner-Employees and any Leased Employee
deemed to be an Employee as provided in Sections 414(n) or (o) of
the Code of any Employer described in the preceding paragraph.
Provided, however, Leased Employees shall not be covered under this
Plan as an Employee unless such participation is required to meet
the minimum coverage requirements under Section 410(b)(1) of the
Code.
The
term Employee shall exclude any independent contractor. The term
Employee shall exclude, for purposes of participation in this Plan,
the following categories of persons:
A
person who is a member of a union with which the Employer has a
collective bargaining agreement directly or through an
employer’s association in which retirement benefits have been
the subject of good faith bargaining between the Employer and its
employees who are covered by the collective bargaining contract,
unless the collective bargaining agreement requires the Employee to
be covered under the Plan.
Nonresident aliens
who do not receive any earned income (as defined in Section
911(d)(2) of the Code) from the Employer which constitutes United
States source income (as defined in Section 861(a)(3) of the
Code).
Any
individual who is deemed by the Employer to be an independent
contractor and/or is treated as a Leased Employee and who is
subsequently determined by a regulatory agency, judicial proceeding
or settlement to be an Employee, shall be deemed by the Employer
excluded from eligibility under this Plan from the effective date
that the status of Employee is so determined by the regulatory
agency, judicial proceeding or settlement.
Notwithstanding
any other provision of this Section 2.29, an employee of an
employer required to be aggregated with the Employer under Code
Section 414(b), (c), (m) or (o) shall be eligible to participate in
this Plan only if such employer is included as a participating
employer under Section 16.12 of this Plan.
2.30 Employee After-Tax
Contribution shall mean any
contribution made by or on behalf of a Participant on an after-tax
basis pursuant to Section 5.01.
2.31 Employee After-Tax Contribution
Account shall mean an
account established for a Participant for the purpose of receiving
contributions made to the Plan by the Participant pursuant to
Section 5.01.
2.32 Employer shall mean the
Company and any other entity adopting this Plan pursuant to Section
16.12.
2.33 Employer Contributions
shall
mean contributions made by the Employer pursuant to Section
4.01.
2.34 Employer Contribution
Account shall mean an
account established for a Participant for the purpose of receiving
contributions made to the Plan by the Employer pursuant to Section
4.01 and Article VI, if applicable.
2.35 Entry Date shall mean the
first day of any month.
2.36 ERISA shall mean the
Employee Retirement Income Security Act of 1974, as
amended.
2.37 Excess Aggregate
Contribution shall mean, with
respect to any Plan Year, the excess of:
(a)
The aggregate
Contribution Percentage Amounts taken into account in computing the
numerator of the Contribution Percentage actually made on behalf of
a Highly Compensated Employee for such Plan Year, over
(b)
The maximum
Contribution Percentage Amounts permitted by the ACP test
(determined hypothetically 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 Section 5.04 and then determining Excess
Contributions pursuant to Section 6.02.
2.38 Excess Compensation
shall
mean the Employee’s Compensation, per Section 2.15, in excess
of the Integration Level.
2.39 Excess Contributions
shall
mean, 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
hypothetically reducing contributions made on behalf of Highly
Compensated Employees in order of the ADPs, beginning with the
highest of such percentages).
2.40 Excess Elective
Deferrals shall mean those
Elective Deferrals of a Participant that either (1) are made during
the Participant’s taxable year and exceed the dollar
limitation under Code Section 402(g) (including, if applicable, the
dollar limitation on catch-up contributions defined in Code Section
414(v)) for such year; or (2) are made during a calendar year and
exceed the dollar limitation under Code Section 402(g) (including,
if applicable, the dollar limitation on catch-up contributions
defined in Code Section 414(v)) for the Participant’s taxable
year beginning in such calendar year, counting only Elective
Deferrals made under this Plan or any other plan, contract or
arrangement maintained by the Employer. Excess Elective Deferrals
shall be treated as Annual Additions under the Plan.
2.41 Fiscal Year shall mean the Plan
Year.
2.42 Highly Compensated
Employee shall include
Highly Compensated active Employees and Highly Compensated former
Employees.
A
Highly Compensated active Employee includes any Employee who
performs service for the Employer during the Determination Year and
who, during the Look-Back Year or the Determination
Year:
(a)
Was a 5-percent
owner (as defined in Section 416(i)(1) of the Code) of the Employer
at any time during the current or the preceding year,
or
(b)
for the preceding
year - had Compensation (as defined in Section 2.16, for the entire
Plan Year) from the Employer in excess of $80,000 (as adjusted by
the Secretary pursuant to Section 415(d) of the Code, except that
the base period is the calendar quarter ending September 30, 1996);
and, if the Employer so elects below, was in the top paid group of
Employees for such preceding year.
A
Highly Compensated former Employee is based on the rules applicable
to determining Highly Compensated Employee status as in effect for
that Determination Year, in accordance with Section 1.414(q)-1T,
A-4 of the temporary Income Tax Regulations and Internal Revenue
Service Notice 97-45.
The
determination of who is a Highly Compensated Employee, including
the determinations of the number and identity of Employees in the
top paid group, will be made in accordance with Section 414(q) of
the Code and the regulations thereunder.
In
determining who is a Highly Compensated Employee the Employer makes
the top paid group election. The effect of this election is that an
Employee (who is not a 5-percent owner at any time during the
Determination Year or the Look-Back Year) with Compensation in
excess of $80,000 (as adjusted) for the Look-Back Year is a Highly
Compensated Employee only if the Employee was in the top-paid group
for the Look-Back Year. This election is effective January 1,
2001.
In
determining who is a Highly Compensated Employee (other than as a
5-percent owner) the Employer makes a calendar year data election.
The effect of this election is that the Look-Back Year is the
calendar year beginning with or within the Look-Back Year. The Plan
may not use this election to determine whether an Employee is a
Highly Compensated Employee on account of being a 5-percent owner.
This election is effective January 1, 2001.
An
Employer making a top paid group election is not required to also
make the calendar year data election. Likewise, an Employer making
a calendar year data election is not required to make a top paid
group election.
If the
Employer makes both the top paid group election and the calendar
year data election above, the Look-Back Year in determining the top
paid group must be the calendar year beginning with or within the
Look-Back Year. The top paid group election and the calendar year
data election must apply consistently to the Determination Years of
all plans of the Employer, except that the consistency requirement
will not apply to Determination Years beginning with or within the
1997 calendar year, and for Determination Years beginning on or
after January 1, 1998 and before January 1, 2000, satisfaction of
the consistency requirement is determined without regard to any
nonretirement plans of the Employer. Other transitional rules apply
with respect to the consistency requirement as set forth in
Internal Revenue Service Notice 97-45. For a Plan Year beginning on
or after January 1, 1997 and before January 1, 1998 an Employer may
make a calendar year calculation election under Section
1.414(q)-1T, A-14(b) of the temporary Income Tax Regulations as
provided for in Internal Revenue Service Notice 97-45 taking into
account the statutory amendments made by the Small Business Job
Protection Act of 1996 to Section 414(q) of the Code.
2.43 Hour of Service for an Elapsed Time
Plan shall have the
meaning set forth in Section 3.01.
2.44 Integration Level
shall
mean the Taxable Wage Base.
2.45 Investment Manager
shall
mean a fiduciary other than the Company appointed pursuant to
Section 11.04 to manage, acquire or dispose of any asset of the
Trust Fund who acknowledges in writing his fiduciary obligation to
the Plan and Trust and who is:
(a)
an investment
advisor registered under the Investment Advisor’s Act of
1940;
(b)
a bank as defined
in that Act; or
(c)
an insurance
company qualified to perform investment management services under
the laws of more than one state of the United States.
2.46 Leased Employee
shall
mean any person (other than an employee of the recipient) who
pursuant to an agreement between the recipient Employer and any
other person (leasing organization) has performed services for the
recipient Employer (or for the recipient Employer and related
persons determined in accordance with Section 414(n)(6) of the
Code) on a substantially full time basis for a period of at least
one year, and such services are performed under the primary
direction or control of the recipient Employer. Contributions or
benefits provided a Leased Employee by the leasing organization
which are attributable to services performed for the recipient
Employer shall be treated as provided by the recipient
Employer.
A
Leased Employee shall not be considered an Employee of the
recipient Employer if:
(a)
Such employee is
covered by a money purchase pension plan maintained by the leasing
organization and which provides:
(i)
A nonintegrated
employer contribution rate of at least 10 percent (10%) of
compensation, as defined in Section 415(c)(3) of the Code, but
including amounts contributed pursuant to a salary reduction
agreement which are excludable from the employee’s gross
income under Section 125, Section 402(e)(3), Section 402(h) or
Section 403(b) of the Code;
(ii)
Immediate
participation; and
(iii)
Full and immediate
vesting.
(b)
Leased Employees do
not constitute more than 20 percent (20%) of the recipient
Employer’s nonhighly compensated workforce.
2.47 Limitation Year
shall
mean the Plan Year.
2.48 Look-Back Year
shall
mean the twelve (12) consecutive month period immediately preceding
the Determination Year, unless the calendar year data election is
selected in Section 2.42.
2.49 Matching Contribution
shall
mean an Employer contribution made to this or any other defined
contribution plan on behalf of a Participant on account of a
Participant’s Elective Deferrals, under a plan maintained by
the Employer in Section 2.49.
Employer
contributions are not Matching Contributions made on account of
Elective Deferrals if they are contributed before the cash or
deferred election is made or before the Employees’
performance of services with respect to which the Elective
Deferrals are made (or when the cash that is subject to the cash or
deferred elections would be currently available, if earlier). In
addition, an employer contribution is not a Matching Contribution
made on account of an Employee After-Tax Contribution if it is
contributed before the Employee After-Tax Contribution. This
paragraph does not apply to a forfeiture that is allocated as a
Matching Contribution. In addition, an allocation of shares from an
employee stock ownership plan loan suspense account described in
Treasury Regulation Section 54.4975-11(c) and (d) will not fail to
be treated as a Matching Contribution solely because the Employer
contribution that resulted in the release and allocation of those
shares from the suspense account is made before the
Employees’ performance of services with respect to which the
Elective Deferrals are made (or when the cash that is subject to
the cash or deferred elections would be currently available, if
earlier) provided that:
(1)
The contribution is
for a required payment that is due under the loan terms;
and
(2)
The contribution is
not made early with a principal purpose of accelerating
deductions.
The
timing of contributions will not be treated as failing to satisfy
the requirements of the immediately preceding paragraph merely
because contributions are occasionally made before the
Employees’ performance of services with respect to which the
Elective Deferrals are made (or when the cash that is subject to
the cash or deferred elections would be currently available, if
earlier) in order to accommodate bona fide administrative
considerations and are not paid early with a principal purpose of
accelerating deductions.
2.50 Matching Contribution
Account shall mean an
account established for a Participant for the purpose of receiving
Matching Contributions made by the Employer to the Plan pursuant to
Section 4.02 and/or Section 4.03 and/or Article VI, if
applicable.
2.51 Maximum Permissible
Amount shall mean for the
Limitation Years beginning after December 31, 2001, except to the
extent permitted under Section 414(v) of the Code (if applicable),
the Annual Addition that may be contributed or allocated to a
Participant’s Account under the Plan for any Limitation Year
which shall not exceed the lesser of:
(a)
$40,000, as
adjusted for increases in the cost-of-living under Section 415(d)
of the Code, or
(b)
100 percent of the
Participant’s Compensation, within the meaning of Section
415(c)(3) of the Code, for the Limitation Year.
The
Compensation limit referred to in (b) above shall not apply to any
contribution for medical benefits after separation from service
(within the meaning of Code Section 401(h) or Section 419A(f)(2) of
the Code) which is otherwise treated as an Annual
Addition.
If
there is a short Limitation Year because of a change in the
Limitation Year, the Administrator will multiply the $40,000
limitation (or larger limitation) by the following fraction: number
of months in the short Limitation Year divided by twelve
(12).
2.52 Named Fiduciary
shall
mean the Company.
2.53 Nonhighly Compensated
Employee shall mean an
Employee of the Employer who is not a Highly Compensated
Employee.
2.54 Normal Retirement Age
shall
mean the date on which a Participant or a former Participant
attains age 65 (not to exceed 65).
2.55 Normal Retirement Date
shall
mean the date on which a Participant retires after attaining Normal
Retirement Age.
2.56 Owner-Employee
shall
mean an individual who is a sole proprietor, or who is a partner
owning more than 10 percent (10%) of either the capital or profits
interest of the partnership.
2.57 Participant shall mean an
Employee who has commenced participation in the Plan after having
met the eligibility requirements of Article III. An Employee who
becomes a Participant shall remain a Participant under the Plan
until the Trustee has fully distributed the Participant’s
vested account balance or deemed a nonvested account balance to be
cashed out or forfeited. A Participant who is has incurred a
severance from employment or who is otherwise in eligible to
participate under the terms of Section 2.29 and Article III is an
“inactive” Participant. Eligibility for contributions
and various other plan provisions are limited to active
Participants.
2.58 Participation Commencement
Date shall mean the
first day of the first Plan Year in which the Participant commenced
participation in the Plan.
2.59 Plan shall mean the
Navidea Biopharmaceuticals, Inc. 401(k) Plan and Trust, as set
forth herein or as hereafter amended, and previously named the
Neoprobe Corporation 401(k) Plan and Trust.
2.60 Plan Year shall mean the
twelve (12) consecutive month period beginning January 1and ending
December 31.
2.62 Qualified Domestic Relations
Order shall mean a
domestic relations order as defined in Section 414(p) of the Code
and Section 206(d)(3)(B) of ERISA and those other domestic
relations orders permitted to be so treated by the Administrator
under the provisions of the Retirement Equity Act of
1984.
Effective
April 6, 2007, a domestic relations order that otherwise satisfies
the requirements of a Qualified Domestic Relations Order will not
fail to be a Qualified Domestic Relations Order: (i) solely because
the order is issued after, or revises, another domestic relations
order or Qualified Domestic Relations Order; or (ii) solely because
of the time at which the order is issued, including issuance after
the annuity starting date or after the Participant’s death.
Such a domestic relations order is subject to the same requirements
and protections that apply to Qualified Domestic Relations
Orders.
2.63 Qualified Election
shall
mean a waiver of a Qualified Joint and Survivor Annuity or
Qualified Pre-Retirement Survivor Annuity made in writing and
consented to by the Participant’s Spouse. Any 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 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 a Plan
representative 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 (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 Section
9.02 or 9.03.
2.64 Qualified Employer
Contribution shall mean
contributions made by the Employer and elected under Section 6.06
to be treated as Qualified Employer Contributions.
2.65 Qualified Employer Contribution
Account shall mean an
account established for a Participant for the purpose of receiving
Qualified Employer Contributions made by the Employer to the Plan
pursuant to Section 6.06.
2.66 Qualified Joint and Survivor
Annuity shall mean an
immediate annuity for the life of the Participant with a survivor
annuity to the Participant’s Spouse which is not less than
fifty percent (50%) and not more than one hundred percent (100%),
of the amount of the annuity which is payable during the joint
lives of the Participant and the Participant’s Spouse and
which is the amount of benefit which can be purchased with the
Participant’s vested Account balance. The Participant may,
with Spousal consent, elect to receive a smaller annuity benefit
with continuation of the payments to the Spouse at a rate of 75% or
100% of the rate payable to a Participant during his lifetime. The
survivor annuity to the Spouse shall automatically be fifty percent
(50%) of the amount of the annuity which is payable during the
joint lives of the Participant and the Participant’s Spouse
unless the Participant and the Participant’s Spouse elect
otherwise.
2.67 Qualified Pre-Retirement Survivor
Annuity shall mean an
annuity for the life of the surviving Spouse which is the amount
that can be purchased with the Participant’s vested Account
balance (as of the date of death), the Actuarial Equivalent of
which is not less than fifty percent (50%) of the
Participant’s non-forfeitable Account balance as determined
on the Participant’s date of death.
2.68 Qualifying Employer Real
Property shall mean parcels
of employer real property under ERISA Section 407(d)(2) -- (A) if a
substantial number of the parcels are dispersed geographically; (B)
if each parcel of real property and the improvements thereon are
suitable (or adaptable without excessive cost) for more than one
use; (C) even if all of such real property is leased to one lessee
(which may be the Employer, or an affiliate of the Employer); and
(D) if the acquisition and retention of such property comply with
the provisions of ERISA Part 4 (other than Section 404(a)(1)(B) to
the extent it requires diversification, and Section 404(a)(1)(C),
406, and ERISA 407(a)).
2.69 Qualifying Employer
Securities shall mean an
employer security, under ERISA Section 407(d)(1), which
is:
(B)
a marketable
obligation (as defined in ERISA 407(e)), or
(C)
an interest in
publicly traded partnership (as defined in Section 7704(b) of the
Code, but only if such partnership is an existing partnership as
defined in Section 10211(c)(2)(A) of the Revenue Act of
1987).
After
December 17, 1987, in the case of a plan other than an eligible
individual account plan, an Employer Security described in
subparagraph (A) or (C) shall be considered a Qualifying Employer
Security only if such employer security satisfies the requirements
of ERISA Section 407(f)(1).
2.71 Rollover Account
shall
mean an account established for an Employee for the purposes of
receiving a rollover contribution made to the Plan in accordance
with the terms of Section 11.05 or receiving a trustee to trustee
transfer made in accordance with the terms of Section
11.06.
2.72 Self-Employed Individual
shall
mean an individual who has Earned Income for the taxable year from
the trade or business for which the Plan is established; also, an
individual who would have had Earned Income but for the fact that
the trade or business had no net profits for the taxable
year.
2.73 Spouse shall mean the
Spouse or surviving Spouse of the Participant, provided that a
former Spouse, to the extent provided under a Qualified Domestic
Relations Order as described in Section 414(p) of the Code, will be
treated as the Spouse or surviving Spouse.
2.75 Taxable Wage Base
shall
mean a uniform dollar amount not in excess of the contribution and
benefit base under Section 230 of the Social Security Act in effect
as of the first day of the Plan Year.
2.76 Trust or Trust Fund
shall
mean the assets of the Plan and Trust as shall exist from time to
time.
2.77 Trustee shall mean Mid
Atlantic Trust Company or the person(s) or entity(ies) serving as
Trustee pursuant to Article XI and any successor
thereto.
2.78 Valuation Date
shall
mean the last day of the Plan Year and such other date or dates
deemed necessary or appropriate by the Administrator.
2.79 Year of Service
shall
mean:
For
purposes of determining eligibility to participate in the Plan,
Year of Service shall mean the twelve (12) consecutive month period
during which an Employee completes 1,000 Hours of Service and it
shall begin on the day an Employee first performs an Hour of
Service and end on the day immediately preceding the anniversary
thereof. Succeeding Years of Service shall be based on the Plan
Year and shall begin with the Plan Year in which the first
anniversary of an Employee’s employment with the Employer
commences. An Employee who is credited with 1000 Hours of Service
in both the initial eligibility computation period and the first
Plan Year which commences prior to the first anniversary of the
Employees initial eligibility computation period will be credited
with two (2) Years of Service for purposes of eligibility to
participate.
For
purposes of determining eligibility for allocations of
contributions or forfeitures, see Sections 4.02, 4.03, and
4.07.
For
vesting purposes, if the Employer maintains a plan of a predecessor
employer, service for such predecessor shall be treated as service
for the Employer.
ARTICLE
III
ELIGIBILITY AND
PARTICIPATION
3.01 Service Crediting for Eligibility for
an Elapsed Time Plan.
An
Employee who is in a class of employees eligible to participate in
the Plan shall be eligible to participate in the Plan on the Entry
Date immediately following the completion of 3 months of service
(not to exceed 12 months) upon the first hour of employment with
the Employer and attainment of age 20 ½ (not to exceed
21).
For
purposes of determining an Employee’s initial or continued
eligibility to participate in the Plan 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. If the Employer
maintains the plan of a predecessor employer, service with the
predecessor is counted as service with the Employer.
For
purposes of this Section 3.01, 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.
Notwithstanding
the foregoing, each Employee who was a Participant in this Plan
prior to the Effective Date of this amendment and restatement shall
continue to be a Participant under this Plan.
Effective
December 12, 1994, notwithstanding any other provision of this Plan
to the contrary, contributions, benefits and service credit with
respect to qualified military service will be provided in
accordance with Section 414(u) of the Code. Additionally, each
Employee shall be credited with Hours of Service in accordance with
the Family and Medical Leave Act, but only for the purposes of and
to the extent required by the statute.
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.
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 (1) by reason of the pregnancy of the individual, (2) by
reason of the birth of a child of the individual, (3) by reason of
the placement of a child with the individual in connection with the
adoption of such child by such individual, or (4) for purposes of
caring for such child for a period beginning immediately following
such birth or placement.
Each
Employee who has fulfilled the eligibility requirements of this
Section 3.01 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. Section 4.07 of this Plan sets forth
the requirements for an allocation of the Employer Contribution to
the Account of any individual Participant. An Employee otherwise
eligible, who is in an ineligible class of employees, will
immediately participate in the Plan on becoming a member of an
eligible class.
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).
Notwithstanding any other provision of this Plan, an employee of an
affiliated service group, control group or corporation (or a group
of trade or businesses under common control) or any other entity
required to be aggregated with the Employer pursuant to Code
Sections 414(o), (n), (b), (c) or (m), will be eligible to
participate in this Plan in accordance with Section 16.12 of this
Plan and on completion of the eligibility requirements of Article
III.
3.02 Application for
Participation.
Participation
in the Plan is voluntary and shall be automatically commenced by an
Employee who has met the eligibility requirements of Section 3.01
as of any Entry Date, however, in order to begin making Elective
Deferral Contributions, an eligible Employee must deliver a signed
Contribution Agreement to the Employer prior to his initial Entry
Date on which he desires to begin making contributions to the Plan
or at such other time as determined by the Administrator. If a
Participant does not execute a Contribution Agreement effective on
his initial Entry Date, such Participant may execute a Contribution
Agreement at any time as provided in the first paragraph of Section
5.02(c).
3.03 Participation Upon
Re-Employment.
A
Participant whose employment terminates and who is subsequently
re-employed shall re-enter the Plan as an active Participant
immediately on the date of his re-employment. In the event that an
Employee completes the eligibility requirements of Section 3.01,
but his employment terminates prior to becoming a Participant and
he is subsequently re-employed, such Employee shall be deemed to
have met the eligibility requirements as of the date of his
re-employment and shall become a Participant on the date of his
re-employment; provided, however, that if he is re-employed prior
to the date he would have become a Participant if his employment
had not terminated, he shall become a Participant as of the date he
would have become a Participant if his employment had not
terminated. Any other Employee whose employment terminates and who
is subsequently reemployed shall become a Participant in accordance
with the provisions of Section 3.01.
3.04 Authorized Leave of
Absence.
A
Participant on an Authorized Leave of Absence shall not be deemed
to have incurred a Break in Service, provided such Participant
returns to the employ of the Employer within thirty (30) days after
such Authorized Leave of Absence ends.
Notwithstanding
the foregoing, if a Participant is on an Authorized Leave of
Absence due to qualified military service under Section 414(u) of
the Code, such Participant shall not be deemed to have incurred a
Break in Service, provided the Participant returns to the employ of
the Employer within the later of (a) thirty days after such
Authorized Leave of Absence ends; or (b) within the time prescribed
in Section 414(u) of the Code. Further, any additional elective
contributions made on behalf of a Participant in connection with
qualified military service shall not be taken into account for
nondiscrimination testing purposes.
3.05 Past Service with Former
Employer.
Service
with a predecessor Employer must be counted for purposes of the
Plan if the successor continues to maintain the Plan of the
predecessor Employer.
3.06 Omission of Eligible
Employee.
Correction
by the Employer for this failure must be done in accordance with
the requirements of the Employee Plans Compliance Resolution System
(“EPCRS”) (i.e., in accordance with Revenue Procedure
2013-12 or subsequent guidance).
3.07 Inclusion of Ineligible
Employee.
Correction
by the Employer for this failure must be done in accordance with
the requirements of the Employee Plans Compliance Resolution System
(“EPCRS”) (i.e., in accordance with Revenue Procedure
2013-12 or subsequent guidance).
ARTICLE
IV
EMPLOYER
CONTRIBUTIONS
4.01 Employer
Contributions.
The
Employer intends to make contributions to the Plan irrespective of
whether it has profits, in amounts determined by it in its
discretion each Plan Year. Provided that any such Employer
Contribution amount shall not exceed the maximum amount deductible
for Federal income tax purposes. Employer Contributions shall be
allocated to each Participant’s Employer Contribution Account
as described in Section 4.07 and shall be vested as provided in
Section 8.01.
The
Employer’s Contribution shall be paid to the Plan not later
than the time prescribed by law for filing the Employer’s
Federal income tax return (including extensions) for the
Employer’s taxable year with respect to which a deduction for
the contribution is claimed.
4.02 Matching Contributions for Elective
Deferrals.
The
Employer shall make Matching Contributions to the Plan equal to a
percentage of the Elective Deferrals made by a Participant, such
percentage to be determined at the discretion of the Employer.
Matching Contributions to the Plan may be made in the form of
shares of Qualifying Employer Securities and shall be based upon
each Participant’s Elective Deferral Contribution determined
on a quarterly basis. The value of the Matching Contribution shall
be based upon the value of the Qualifying Employer Securities as
determined by the Company on a uniform and nondiscriminatory
basis.
Such
Matching Contributions shall be vested as provided in Section 8.01
and shall be allocated to the Matching Contribution Account of all
eligible Participants who shall include any Participant regardless
of the Participant’s Hours of Service.
Matching
Contributions may be made by the Employer and allocated to the
Matching Contribution Account of a Participant quarterly, provided,
however, such Matching Contributions shall be made no later than
the time prescribed by law for filing the Employer’s Federal
income tax return (including extensions) for the taxable year with
respect to which the Matching Contributions are made.
4.04 Form of
Contribution.
Contributions
made by the Employer shall be in Qualifying Employer
Securities.
4.05 For Exclusive Benefit of
Participants.
Any and
all contributions made by the Employer to the Trust Fund, with the
exception contained in Section 4.08, shall be irrevocable and
neither such contributions nor any income therefrom shall be used
for, nor diverted to, purposes other than for the exclusive benefit
of Participants or their beneficiaries under the Plan.
4.06 Limitations on
Allocations.
(a)
General Limitation.
Notwithstanding any other provisions of this Plan, the aggregate
Annual Addition to a Participant’s Account under this Plan
and all other defined contribution plans (as defined in Section
414(i) of the Code) of the Employer covering such Participant shall
not exceed the Maximum Permissible Amount.
(b)
Disposition of Excess Amount.
The Employer shall not contribute an amount to the Plan which would
cause the Annual Addition to any Participant’s Account to
exceed the Maximum Permissible Amount. Excess Amount, for purposes
of this Section shall mean the excess of the Participant’s
Annual Additions for the Limitation Year over the Maximum
Permissible Amount.
However,
if the Annual Addition to any Participant’s Account exceeds
the Maximum Permissible Amount due to allocation of forfeitures, a
reasonable error in estimating Compensation, a reasonable error in
determining the amount of Elective Deferrals (within the meaning of
Section 402(g)(3)) that may be made with respect to any individual
under the limits of Section 415 of the Code, or under any other
limited facts and circumstances as set forth by the Commissioner of
the Internal Revenue Service (the “Commissioner”), then
any contributions made by the Participant for the Plan Year, to the
extent of the excess, shall be returned to the Participant. If,
after returning such contributions to the Participant, an excess
still exists, such excess shall be reallocated to all other
eligible Participants in the same manner that the initial
allocation of the employer contribution was made. If an excess
cannot be reallocated to any Participant’s Account without
exceeding the Maximum Permissible Amount, any amount that remains
unallocated shall be held in a holding account and administered as
described in this Section 4.06.
The
amount in such holding account shall be reallocated as an employer
contribution to the Accounts of Participants in the next Limitation
Year and, if necessary, in succeeding Limitation Years. No profits
or losses attributable to the assets of the Trust shall be
allocated to such holding account. The Employer shall not make any
contributions to the Plan and the Plan shall not accept any
Participant contributions that would constitute Annual Additions
until all amounts held in such holding account are allocated to
Participants’ Accounts in succeeding Limitation Years.
Notwithstanding the foregoing, the otherwise permissible Annual
Addition for any Participant under this Plan may be further reduced
to the extent necessary, as determined by the Administrator, to
prevent disqualification of the Plan under Section 415 of the Code,
which imposes additional limitations on the benefits payable to
Participants who also may be participating in another tax qualified
pension, profit sharing, savings or stock bonus plan of the
Employer. The Administrator shall advise affected Participants of
any such additional limitation on their Annual
Additions.
Provided,
however, that for Limitation Years beginning on or after July 1,
2007, in correcting an amount that exceeds the Maximum Permissible
Amount, the Employer may use a correction method as set forth under
the Employee Plans Compliance Resolution System or any successor
thereto (i.e., Revenue Procedure 2013-12 or subsequent guidance),
and may not use any other correction method.
(c)
More than One Defined Contribution
Plan.
This
Section applies if, in addition to this Plan, the Participant is
covered under another qualified defined contribution plan
maintained by the Employer, a welfare benefit fund, as defined in
Section 419(e) of the Code maintained by the Employer, or an
individual medical account, as defined in Section 415(1)(2) of the
Code, maintained by the Employer, which provides an Annual Addition
during any 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. If as a result of the allocation, 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
welfare benefit fund or individual medical account will be deemed
to have been allocated first 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 will be attributed as of
such date to this Plan.
4.07 Allocation of Employer Contributions
and Forfeitures.
(a)
Eligibility for Allocation of
Contributions for a Non-Safe Harbor Plan. The Employer
Contributions and forfeitures (if forfeitures are allocated to the
Participant’s Account pursuant to Section 4.07(b)) to the
Plan for each Plan Year, if any, shall be allocated to the Employer
Contribution Account of eligible Participants who shall include any
Participant who is employed as of the last day of the Plan
Year.
(b)
Forfeiture
Allocation.
Forfeitures
shall first be made available to reinstate previously forfeited
account balances of reemployed Participants, if any, pursuant to
Article VIII. The remaining forfeitures, if any, shall be used to
reduce the Employer Contribution for the current or subsequent Plan
Year in which such forfeiture occurs.
(c)
Employer Contribution
Allocation.
Floating Integration Allocation Method – Option 1
(design-based safe harbor). Employer Contributions, for the
Plan Year shall be allocated to each eligible Participant’s
Employer Contribution Account as follows:
Step One: Any Employer Contributions will be allocated
simultaneously in accordance with this paragraph. The simultaneous
allocation must result in an equal allocation percent not to exceed
the maximum disparity rate, of each Participant’s total
Compensation and of each Participant’s Excess Compensation;
where the maximum disparity rate is equal to the lesser of 5.7%, or
the applicable percentage determined in accordance with the table
below:
Integration
Level
Maximum Disparity
Rate
Not
exceeding the greater of $10,000 or
20% of
the Taxable Wage
Base 5.7%
More
than 20% but not more than
80% of
the Taxable Wage
Base 4.3%
More
than 80% but less than
100% of
the Taxable Wage
Base 5.4%
100% of
the Taxable Wage
Base 5.7%.
The
allocation based on a Participant’s total Compensation is the
same ratio that the Participant’s total Compensation bears to
the total Compensation of all such eligible Participants. The
allocation based on a Participant’s Excess Compensation is
the same ratio that each Participant’s Excess Compensation
bears to the Excess Compensation received by all such eligible
Participants.
Step Two: Any Employer Contributions remaining after the
allocation in Step One will be allocated in the ratio that each
Participant’s total Compensation bears to the total
Compensation received by all such eligible
Participants.
Provided,
however, if the Plan is Top-Heavy, Employer Contributions for the
Plan Year will be allocated to each Participant’s Employer
Contribution Account as follows:
Step One: Any Employer Contributions will be allocated in
the ratio that each Participant’s total Compensation bears to
the total Compensation by all such Participants, but not in excess
of 3% of each Participant’s total Compensation.
Step Two: Any Employer Contributions remaining after the
allocation in Step One will be allocated in the ratio that each
Participant’s Excess Compensation bears to the Excess
Compensation received by all such eligible Participants, but not in
excess of three percent (3%) of each Participant’s Excess
Compensation.
Step Three: Any Employer Contributions remaining after the
allocation in Step Two will be allocated simultaneously in
accordance with this paragraph. The simultaneous allocation must
result in an equal allocation percent not to exceed the maximum
disparity rate, of each Participant’s Compensation and of
each Participant’s Excess Compensation; where the maximum
disparity rate is equal to the lesser of 2.7%, or the applicable
percentage determined in accordance with the table
below:
Integration
Level
Maximum Disparity
Rate
Not
exceeding the greater of $10,000 or
20% of
the Taxable Wage
Base 2.7%
More
than 20% but not more than
80% of
the Taxable Wage
Base 1.3%
More
than 80% but less than
100% of
the Taxable Wage
Base 2.4%
100% of
the Taxable Wage
Base 2.7%.
The
allocation based on a Participant’s total Compensation is the
same ratio that the Participant’s total Compensation bears to
the total Compensation of all such eligible Participants. The
allocation based on a Participant’s Excess Compensation is
the same ratio that each Participant’s Excess Compensation
bears to the Excess Compensation received by all such eligible
Participants.
Step Four: Any Employer Contributions remaining after the
allocation in Step Three will be allocated in the ratio that each
Participant’s total Compensation bears to the total
Compensation received by all such eligible
Participants.
Notwithstanding
any other provisions in this Section 4.07(c) and if this Plan
provides for permitted disparity, then for any Plan Year that this
Plan benefits any Participant who benefits under another qualified
plan or simplified employee pension, as defined in Code Section
408(k), maintained by the Employer and that other plan provides for
permitted disparity (or imputes disparity), Employer Contributions
and forfeitures (if forfeitures are allocated to the
Participant’s Account pursuant to Section 4.07(b)) will be
allocated to the Account of each Participant who either completes
more than 500 Hours of Service during the Plan Year or who is
employed on the last day of the Plan Year in the ratio that such
Participant’s total Compensation bears to the total
Compensation of all Participants. Additionally, effective for Plan
Years beginning on or after January 1, 1995, the cumulative
permitted disparity limit for a Participant is 35 total cumulative
permitted disparity years. Total cumulative permitted years means
the number of years credited to the Participant for allocation or
accrual purposes under this Plan or any other qualified plan or
simplified employee pension plan (whether or not terminated) ever
maintained by the Employer. For purposes of determining the
Participant’s cumulative permitted disparity limit, all years
ending in the same calendar year are treated as the same year. If
the Participant has not benefited under a defined benefit or target
benefit plan for any year beginning on or after January 1, 1994,
the Participant has no cumulative disparity limit.
(d)
Correction of
Allocations.
Notwithstanding
the above, if the Plan would otherwise fail to meet the
requirements of Section 410(b)(1)(A) and (B) of the Code and
the Regulations thereunder because Employer Contributions as made
under Section 4.01 have not been allocated to a sufficient
number or percentage of Employees for a Plan Year, then the
following rules shall apply:
(i)
The group of
Participants eligible to share in the Employer Contribution and
forfeitures (if forfeitures are allocated to Participants under
Section 4.07(b) of this Plan) for the Plan Year shall be expanded
to include the minimum number of Participants who would not
otherwise be eligible as are necessary to satisfy the applicable
test specified above. The specific Employees who shall become
eligible to participate under the terms of this Section 4.07(d)
shall be those who are actively employed on the last day of the
Plan Year and who have completed the greatest number of Hours of
Service in the Plan Year.
(ii)
If after
application of paragraph (i) above, the applicable test is still
not satisfied, then the group of Participants eligible to share in
the Employer Contribution and forfeitures (if forfeitures are
allocated to Participants under Section 4.07(b)) for the Plan Year
shall be further expanded to include the minimum number of
Employees who are not actively employed on the last day of the Plan
Year as are necessary to satisfy the applicable test. The specific
Employees who shall become eligible to share shall be those
Employees not employed on the last day of the Plan Year who have
completed the greatest number of Hours of Service in the Plan Year
before terminating employment.
Nothing
in this Section 4.07(d) shall permit the reduction of a
Participant’s accrued benefit. Therefore any amounts that
have previously been allocated to Participants may not be
reallocated to satisfy these requirements. In such event, the
Employer shall make an additional contribution equal to the amount
such affected Participants would have received had they been
included in the allocations, even if it exceeds the amount which
would be deductible under Section 404 of the Code.
4.08 Return of
Contributions.
All
contributions made by the Employer are made for the exclusive
benefit of the Participants and their beneficiaries.
Notwithstanding the foregoing, effective as of December 22, 1987,
amounts contributed to the Trust by the Employer pursuant to this
Article IV shall be returned to the Employer under the
circumstances and subject to the limitations set forth
herein:
(a)
Disallowance of Deduction. To
the extent that a Federal income tax deduction is disallowed for
any contribution made by the Employer, the Trustee shall refund to
the Employer the amount of such contribution disallowed within one
(1) year of the date of such disallowance upon presentation of
evidence of disallowance.
(b)
Denial of Initial
Qualification. In the event that the Commissioner determines
that the Plan is not initially qualified under the Code, any
contribution made incident to that initial qualification by the
Employer must be returned to the Employer within one (1) 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)
Mistake of Fact. Any
contribution made by the Employer because of a mistake shall be
returned to the Employer within one (1) year of the
contribution.
4.09 Definition of
Benefiting.
A
Participant is treated as benefiting under this Plan for purposes
of Article IV and Article V for any Plan Year during which the
Participant received or is deemed to receive an allocation in
accordance with Treasury Regulation 1.410(b)-3(a).
ARTICLE
V
PARTICIPANT
CONTRIBUTIONS
5.01 Employee After-Tax
Contributions.
Employee
After-Tax Contributions to the Plan are not permitted.
5.02 Elective Deferral
Contributions.
(a)
Amount. The Employer shall
automatically deduct and withhold from such Participant’s
Compensation each payroll period five percent (5%) of such
Employee’s Compensation and contribute such amount to the
Trust Fund on a before-tax basis, subject to the limitation of
Section 5.04. Notwithstanding the foregoing, the Participant may
execute a Contribution Agreement authorizing the Employer to deduct
and withhold from such Employee’s Compensation a different
percentage of such Compensation (including a zero Elective Deferral
amount) and contribute such amount to the Trust Fund on a
before-tax basis, subject to the limitation of Section 5.04. The
Participant may also make a special salary deferral election of
100% of any bonus. Elective Deferral Contributions shall be held in
a Participant’s Elective Deferral Account and shall be fully
vested and non-forfeitable at all times. Prior to the time an
automatic Elective Deferral election first goes into effect, a
Participant must receive written notice concerning the effect of
the automatic Elective Deferral election and his/her right to elect
a different level of Elective Deferral under the Plan, including
the right to elect not to defer. After receiving the notice, a
Participant must have a reasonable time to enter into a new
Contribution Agreement before any automatic Elective Deferral
election goes into effect.
Provided,
however, that with respect to Excess Elective Deferrals (including
any Roth contributions) occurring in the Employee’s 2007 tax
year, any refunds of Elective Deferrals that exceed the dollar
limitation contained in Code Section 402(g) for the 2007 tax year
shall be adjusted for income or loss up to the date of distribution
and income or loss attributable to such excess for the period from
the end of the tax year to the date of the return in the same
manner as provided for Excess Contributions under Plan Section
6.02(c).
In no
event may the Participant authorize such deduction of less than or
in excess of the maximum and minimum percent as determined by the
Employer each Plan Year under rules uniformly applicable to all
Participants.
In no
event, however, will a Participant be permitted to make a
contribution for any year to the extent that the portion of his
contribution which counts (for ceiling purposes) as an Annual
Addition to all of his accounts in all individual account plans
with the Employer, when added to the Employer Contributions,
Matching Contributions, and forfeitures credited to his Account,
causes the Annual Additions to his Account to exceed the Maximum
Permissible Amount. Additionally, an Elective Deferral Contribution
may not impair a Participant’s obligation for payroll taxes
(FICA, Medicare), qualified transportation reimbursements and
cafeteria plan deferrals.
(b)
Deposits. Amounts withheld
shall be contributed to the Trustee on the earliest day that the
funds can be segregated but in no event later than the fifteenth
(15th) day
of the month following the month in which the contributions were
withheld. All contributions shall be made no later than thirty (30)
days following the close of the Plan Year with respect to which the
contribution was made. Contributions shall be credited to a
Participant’s Elective Deferral Account upon receipt by the
Trustee.
(c)
Contribution Agreement. An
initial Contribution Agreement shall be effective as soon as
administratively reasonable after the date the Employee is first
eligible to participate provided it is filed with the Employer and
shall remain in effect until a new Contribution Agreement is filed
with the Employer. If a Participant does not execute a Contribution
Agreement effective on his initial Entry Date, such Participant may
execute a Contribution Agreement at any time after such initial
Entry Date and such Contribution Agreement shall be effective as
soon as administratively reasonable after the executed Contribution
Agreement is filed with the Employer.
Effective
for Elective Deferrals distributed after December 31, 2001, a
Contribution Agreement is automatically suspended by the Employer
for six (6) months following receipt by the Participant of a
hardship distribution made under this Plan and any other plan of
the Employer qualified under Section 401(a) of the
Code.
A
Contribution Agreement may be revoked at any time, provided that
any revocation shall be effective on the first day of any calendar
quarter next following the date the revocation is filed with the
Employer.
A
Contribution Agreement may be modified at any time, provided that
any modification shall be effective on the first day of any
calendar quarter next following the date the modification is filed
with the Employer.
The
Employer may amend or terminate any Contribution Agreement on
written notice to the Participant if the Employer determines such
amendment or termination of the Contribution Agreement is necessary
to meet the nondiscrimination provisions of Code Section 401(k)
and/or 401(m) or in order to meet other limitations or requirements
of the Code.
(d)
Tax Treatment. In accordance
with Section 401(k) of the Code, all amounts withheld from a
Participant’s Compensation and contributed to such
Participant’s Elective Deferral Account shall not be included
in the gross income of the Participant for Federal income tax
purposes and shall be deemed for tax purposes to be an Employer
Contribution to the Plan.
(e)
Military Leave. If a
Participant is on military leave, the Participant may continue to
make salary deferrals to the Plan provided the Participant is
receiving pay that is eligible for such contributions. The
Participant will continue to remain eligible to receive Employer
Matching Contributions as provided in Section 4.02 of the Plan.
Upon return from military leave, the Participant may elect to make
catch-up contributions to the Plan for a period equal to 3 times
their military service or 5 years, whichever is less. The amount of
such contributions shall be based on what the Participant’s
Compensation would have been if their employment had not been
interrupted for military service or the average Compensation during
the year immediately preceding military service. To determine the
amount of Matching Contribution an Employee is eligible to receive
under this Section 5.02(e), the Employer will use an estimate of
the Compensation the Participant would have received had the
Participant remained employed. The make-up contributions will not
be adjusted for past earnings.
5.04 Annual Elective Deferral
Limitation.
In no
event may the sum of the Employee Elective Deferrals withheld under
the Contribution Agreement plus any supplemental withholding on
behalf of any Participant to the Plan (or to any other plan
maintained by the Employer) exceed the dollar limitation contained
in Section 402(g) of the Code, (Section 402(g) Limit) as adjusted
annually, for any taxable year of the Participant. If the Employer
determines that the Elective Deferrals of any Employee for a
calendar year would exceed the Section 402(g) Limit for the
calendar year, the Employer shall not make any additional Elective
Deferrals with respect to that Employee for the remainder of such
calendar year, shall pay in cash to the Employee any amounts which
would cause the Elective Deferrals to exceed the Section 402(g)
Limit, and the Trustee shall distribute the amount in excess of the
Section 402(g) Limit (the Excess Elective Deferrals), as adjusted
for allocable income or loss, no later than April 15 of the
following year. The Employer or the Trustee shall determine the
amount of income or loss allocable to the Employee’s Excess
Elective Deferrals in a manner similar to the allocable income or
loss determination described in Section 6.02(c) for Excess
Contributions, except the Employer or Trustee shall make the
determination with reference to the income or loss allocable to
such Elective Deferrals and with reference to the Employee’s
taxable year rather than the Plan Year; provided, however, that no
income or loss attributable to such excess for the period from the
end of the Plan Year to the date of return need be calculated for a
distribution adjustment. If the Trustee distributes the Excess
Elective Deferrals by the appropriate April 15, it may make the
distribution irrespective of any other provision under this Plan or
the Code.
Provided,
however, that the Plan Administrator shall only calculate allocable
income for the gap period (i.e., the period after the close of the
taxable year in which the excess deferral occurred and prior to the
distribution) for Excess Elective Deferrals made in taxable year
2007; and provided that the Plan Administrator will calculate and
distribute the gap period allocable income only if the Plan
Administrator in accordance with the Plan terms otherwise would
allocate the gap period allocable income to the Participant’s
account.
If an
Employee participates in another plan under which he makes Elective
Deferrals pursuant to Section 401(k) of the Code, Elective
Deferrals under a simplified employee pension, or salary reduction
contributions to a tax sheltered annuity, irrespective of whether
the Employer maintains the other plan, the Employee may assign to
this Plan any Excess Elective Deferrals made during a taxable year
of the Participant by providing the Employer a written claim for
excess deferrals made for a calendar year. The eligible Employee
must submit the claim no later than the April 15 following the
close of the individual’s taxable year and the claim shall
specify the amount of the Employee’s Elective Deferrals under
this Plan which are excess deferrals. If the Employer receives a
timely claim, it shall direct the Trustee to distribute to the
Employee the excess deferral, as adjusted for allocable income or
loss, which the Employee has assigned to this Plan in accordance
with the distribution procedure described in the immediately
preceding paragraph.
Notwithstanding
the above, a Participant is deemed to have notified the Plan of the
Excess Elective Deferrals to the extent the Participant has Excess
Elective Deferrals for the taxable year by taking into account only
Elective Deferrals under this Plan and other plans of the
Employer.
Matching
Contributions which relate to Excess Elective Deferrals which are
distributed pursuant to this Section 5.04 shall be
forfeited.
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
limitations contained in Section 402(g) of the Code in effect for
such taxable year, except to the extent permitted by this Section
5.04 and Section 414(v) of the Code, if applicable.
ARTICLE
VI
NON-DISCRIMINATION
TESTING
6.01 Actual Deferral Percentage
Test.
(a)
Current Year Testing - ADP
Test. The ADP tests as set forth in (i) and (ii) below, will
be applied by comparing the current Plan Year’s ADP for
Participants who are Highly Compensated Employees with the current
Plan Year’s ADP for Participants who are Nonhighly
Compensated Employees. Once made, the Employer can elect prior year
testing for a Plan Year only if the Plan has used current year
testing for each of the preceding 5 Plan Years (or if lesser, the
number of Plan Years the Plan has been in existence) or if, as a
result of a merger or acquisition described in Code Section
410(b)(6)(C)(i), the Employer maintains both a plan using prior
year testing and a plan using current year testing and the change
is made within the transition period described in Code Section
410(b)(6)(C)(ii).
(i)
The ADP for a Plan
Year for Participants who are Highly Compensated Employees for the
Plan Year shall not exceed the ADP for Participants who are
Nonhighly Compensated Employees for the Plan Year multiplied by
1.25; or
(ii)
The ADP for
Participants who are Highly Compensated Employees for the Plan Year
shall not exceed the ADP for Participants who are Nonhighly
Compensated Employees for the Plan Year multiplied by 2.0, provided
that the ADP for Participants who are Highly Compensated Employees
does not exceed the ADP for Participants who are Nonhighly
Compensated Employees in the Plan Year by more than two (2)
percentage points.
(b)
Special Rules. The following
rules shall apply for purposes of the ADP test:
(i)
The ADP for any
Participant who is a Highly Compensated Employee for the Plan Year
and who is eligible to have Elective Deferrals (and Qualified
Employer Contributions if treated as Elective Deferrals for
purposes of the ADP test) allocated to his or her Accounts under
two or more arrangements described in Section 401(k) of the Code,
that are maintained by the Employer, shall be determined as if such
Elective Deferrals (and, if applicable, such Qualified Employer
Contributions) were made under a single arrangement. If a Highly
Compensated Employee participates in two or more cash or deferred
arrangements of the Employer that have different Plan Years, all
cash or deferred arrangements of the Employer made during the Plan
Year shall be aggregated. For Plan Years beginning before 2006, all
such cash or deferred arrangements shall be treated as a single
arrangement. Notwithstanding the foregoing, certain plans shall be
treated as separate if mandatorily disaggregated under Section
401(k) of the Code.
(ii)
In the event that
this Plan satisfies the requirements of Sections 401(k), 401(a)(4),
or 410(b) of the Code only if aggregated with one or more other
plans including an Employee Stock Ownership Plan
(“ESOP”), or if one or more other plans satisfy the
requirements of such sections of the Code only if aggregated with
this Plan, then this Section 6.01 shall be applied by determining
the ADP of Employees as if all such plans were a single plan. If
more than 10 percent of the Employer’s Nonhighly Compensated
Employees are involved in a plan coverage change as defined in
Regulations Section 1.401(k)-2(c)(4), then any adjustments to the
Nonhighly Compensated Employees’ ADP for the prior year will
be made in accordance with such Regulations, unless the Employer
has elected to use the current year testing method. For Plan Years
beginning after December 31, 1989, plans may be aggregated in order
to satisfy Section 401(k) of the Code only if they have the same
Plan Year and use the same ADP testing method.
(iii)
For purposes of
determining the ADP test, Elective Deferrals and Qualified Employer
Contributions must be made before the last day of the twelve (12)
month period immediately following the Plan Year to which
contributions relate.
(iv)
The Employer shall
maintain records sufficient to demonstrate satisfaction of the ADP
test and the amount of Qualified Employer Contributions used in
such test.
(v)
The determination
and treatment of the ADP amounts of any Participant shall satisfy
such other requirements as may be prescribed by the Secretary of
the Treasury.
(vi)
A Participant is a
Highly Compensated Employee for a particular Plan Year if he or she
meets the definition of a Highly Compensated Employee in effect for
that Plan Year. Similarly, a Participant is a Nonhighly Compensated
Employee for a particular Plan Year if he or she does not meet the
definition of a Highly Compensated Employee in effect for that Plan
Year.
(vii)
A Matching
Contribution that is forfeited to correct Excess Aggregate
Contributions, or because the contribution to which it relates is
treated as an Excess Contribution, Excess Elective Deferral, or
Excess Aggregate Contribution, is not taken into account in
satisfaction of the ADP test.
(viii)
Catch-up
contributions as described in Section 5.04, if applicable, and
additional deferrals made under Section 414(u) of the Code on
account of a Participant’s qualified military leave shall not
be taken into account for purposes of the ADP test.
(ix)
Excess Elective
Deferrals that exceed the limitations imposed by Code Section
402(g) shall be included in the ADP for Highly Compensated
Employees.
(x)
Except as otherwise
provided in this paragraph, the Plan may use the current year
testing method or prior year testing method for the ADP test for a
Plan Year without regard to whether the current year testing method
or prior year testing method is used for the ACP test for that Plan
Year. However, if the Plan uses different testing methods, then the
Plan cannot use:
(a)
The
recharacterization method of Regulation Section 1.401(k)-2(b)(3) to
correct excess contributions for a Plan Year;
(b)
The rules of
Regulation Section 1.401(m)-2(a)(6)(ii) to take Elective Deferral
Contributions into account under the ACP test (rather than the ADP
test); or
(c)
The rules of
Regulation Section 1.401(k)-2(a)(6)(v) to take Qualified Matching
Contributions into account under the ADP test (rather than the ACP
test).
6.02 Excess
Contributions.
(a)
Distribution. 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 were allocated for the preceding Plan
Year. Excess Contributions are allocated to the Highly Compensated
Employees with the largest amounts of contributions taken into
account in calculating the ADP test for the year in which the
excess arose, beginning with the Highly Compensated Employee with
the largest amount of such contributions and continuing in
descending order until all the Excess Contributions have been
allocated. For purposes of the preceding sentence, the largest
amount is determined after distribution of any Excess Deferrals. If
such excess amounts are distributed more than two and one-half
(2½) months after the last day of the Plan Year in which such
excess amounts arose, a ten percent (10%) 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.
(b)
Accounting. Excess
Contributions shall be distributed from the Participant’s
Elective Deferral Account and Qualified Employer Contribution
Account (if applicable) in proportion to the Participant’s
Elective Deferrals and Qualified Employer Contributions (to the
extent used in the ADP test) for the Plan Year. Excess
Contributions (including the amounts recharacterized as provided in
Section 6.03) shall be treated as Annual Additions under the
Plan.
(c)
Determination of Income or
Loss. Excess Contributions shall be adjusted for any gain or
loss (hereinafter “income”) up to the date of
distribution. Effective for Plan Years beginning after December 31,
2005 and prior to January 1, 2008, this shall include an adjustment
for income for the period between the end of the Plan Year and the
date of the distribution (the “gap period”). The
Administrator has the discretion to determine and allocate income
using any of the methods set forth below:
(i)
Reasonable method of allocating
income. The Administrator may use any reasonable method for
computing the income allocable to Excess Contributions, provided
that the method does not violate Code Section 401(a)(4), is used
consistently for all Participants and for all corrective
distributions under the Plan for the Plan Year, and is used by the
Plan for allocating income to Participant’s
Accounts.
(ii)
Alternative method of allocating
income. The Administrator may allocate income to Excess
Deferral Contributions for the Plan Year by multiplying the income
for the Plan Year allocable to the Elective Deferral Contributions
and other amounts taken into account under the ADP test (including
contributions made for the Plan Year), by a fraction, the numerator
of which is the Excess Contributions for the Employee for the Plan
Year, and the denominator of which is the sum of the:
(1)
Account balance
attributable to Elective Deferral Contributions and other amounts
taken into account under the ADP test as of the beginning of the
Plan Year, and
(2)
Any additional
amount of such contributions made for the Plan Year.
(iii)
Safe harbor method of allocating gap
period income. The Administrator may use the safe harbor
method in this paragraph to determine income on Excess
Contributions for the gap period. Under this safe harbor method,
income on Excess Contributions for the gap period is equal to ten
percent (10%) of the income allocable to Excess Contributions for
the Plan Year that would be determined under paragraph (b) above,
multiplied by the number of calendar months that have elapsed since
the end of the Plan Year. For purposes of calculating the number of
calendar months that have elapsed under the safe harbor method, a
corrective distribution that is made on or before the fifteenth
(15th) day
of a month is treated as made on the last day of the preceding
month and a distribution made after the fifteenth day of the month
is treated as made on the last day of the month.
(iv)
Alternative method for allocating Plan
Year and gap period income. The Administrator may determine
the allocable gain or loss for the aggregate of the Plan Year and
the gap period, by applying the alternative method provided by
paragraph (b) above to this aggregate period. This is accomplished
by substituting the income for the Plan Year and the gap period,
for the income for the Plan Year, and by substituting the
contributions taken into account under the ADP test for the Plan
Year and the gap period, for the contributions taken into account
under the ADP test for the Plan Year in determining the fraction
that is multiplied by that income.
Additionally,
the Plan will not fail to use a reasonable method for computing the
income or loss allocable to Excess Contributions merely because the
income or loss allocable to Excess Contributions is determined on a
date that is no more than 7 days before the
distribution.
6.04 Actual Contribution Percentage
Test.
(a)
ACP Test - Current Year
Testing. The ACP tests set forth in (i) and (ii) below, will
be applied by comparing the current Plan Year’s ACP for
Participants who are Highly Compensated Employees for each Plan
Year with the current Plan Year’s ACP for Participants who
are Nonhighly Compensated Employees. Once made, the Employer can
elect prior year testing for a Plan Year only if the Plan has used
current year testing for each of the preceding 5 Plan Years (or if
lesser, the number of Plan Years the Plan has been in existence) or
if, as a result of a merger or acquisition described in Code
Section 410(b)(6)(c)(i), the Employer maintains both a plan using
prior year testing and a plan using current year testing and the
change is made within the transition period described in Code
Section 410(b)(6)(c)(ii).
(i)
The ACP for a Plan
Year for Participants who are Highly Compensated Employees for the
Plan Year shall not exceed the ACP for Participants who are
Nonhighly Compensated Employees for the Plan Year multiplied by
1.25; or
(ii)
The ACP for a Plan
Year for Participants who are Highly Compensated Employees for the
Plan Year shall not exceed the lesser of (a) the ACP for
Participants who are Nonhighly Compensated Employees for the Plan
Year multiplied by two (2), or (b) the ACP for Participants who are
Nonhighly Compensated Employees in the Plan Year plus two (2)
percentage points.
(b)
Special Rules. The following
rules shall apply for purposes of the ACP test:
(i)
For purposes of
this Section, 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 Section 401(a) of the Code, or
arrangements described in Section 401(k) of the Code 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 (and Employee After-Tax Contributions, if
applicable) of the Employer that have different Plan Years, all
cash or deferred arrangements made during the Plan Year shall be
aggregated. For Plan Years beginning before 2006, all such cash or
deferred arrangements shall be treated as a single arrangement.
Notwithstanding the foregoing, certain plans shall be treated as
separate if mandatorily disaggregated under Section 401(k) of the
Code.
(ii)
In the event that
this Plan satisfies the requirements of Sections 401(m), 401(a)(4)
or 410(b) of the Code only if aggregated with one or more other
plans, or if one or more other plans satisfy the requirements of
such Sections of the Code only if aggregated with this Plan, then
this Section shall be applied by determining the Contribution
Percentage Amount of Employees as if all such plans were a single
plan. Any adjustments to the Nonhighly Compensated Employee ACP for
the prior year will be made in accordance with Notice 98-1 and any
superseding guidance, unless the Employer has elected to use the
current year testing method. For Plans Years beginning after
December 31, 1989, plans may be aggregated in order to satisfy
Section 401(m) of the Code only if they have the same Plan Year and
use the same ACP testing method.
(iii)
For purposes of
determining the Contribution Percentage test, Employee After-Tax
Contributions are considered to have been made in the Plan Year in
which contributed to the Trust Fund. Matching Contributions and
Qualified Employer Contributions will be considered made for a Plan
Year if made no later than the end of the twelve (12) month period
beginning on the day after the close of the Plan Year.
(iv)
The Employer shall
maintain records sufficient to demonstrate satisfaction of the ACP
test and the amount of Qualified Employer Contributions used in
such test.
(v)
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.
(vi)
A Participant is a
Highly Compensated Employee for a particular Plan Year if he or she
meets the definition of a Highly Compensated Employee in effect for
that Plan Year. Similarly, a Participant is a Nonhighly Compensated
Employee for a particular Plan Year if he or she does not meet the
definition of a Highly Compensated Employee in effect for that Plan
Year.
(vii)
Contributions made
as a result of a Participant’s qualified military service as
described in Code Section 414(u) are not taken into account for
purposes of the ACP test.
(viii)
Except as otherwise
provided in this paragraph, the Plan may use the current year
testing method or prior year testing method for the ACP test for a
Plan Year without regard to whether the current year testing method
or prior year testing method is used for the ADP test for that Plan
Year. However, if the Plan uses different testing methods, then the
Plan cannot use:
(a)
The
recharacterization method of Regulation Section 1.401(k)-2(b)(3) to
correct excess contributions for a Plan Year;
(b)
The rules of
Regulation Section 1.401(m)-2(a)(6)(ii) to take Elective Deferral
Contributions into account under the ACP test (rather than the ADP
test); or
(c)
The rules of
Regulation Section 1.401(k)-2(a)(6)(v) to take Qualified Matching
Contributions into account under the ADP test (rather than the ACP
test).
6.05 Excess Aggregate
Contributions.
(a)
Distribution. 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 are allocated
to the Highly Compensated Employees with the largest Contribution
Percentage Amounts taken into account in calculating the ACP test
for the year in which the excess arose, beginning with the Highly
Compensated Employee with the largest amount of such Contribution
Percentage Amounts and continuing in descending order until all the
Excess Aggregate Contributions have been allocated. If such Excess
Aggregate Contributions are distributed more than two and one-half
(2-1/2) months after the last day of the Plan Year in which such
excess amounts arose, a ten percent (10%) excise tax will be
imposed on the Employer maintaining the plan with respect to those
amounts. Excess Aggregate Contributions shall be treated as Annual
Additions under the Plan even if distributed.
(b)
Accounting. Excess Aggregate
Contributions shall be forfeited, if forfeitable or distributed on
a prorata basis from the Participant’s Employee After-Tax
Contribution Account, Matching Contribution Account, and Qualified
Employer Contribution Account (and, if applicable, Elective
Deferral Account). Forfeitures of Excess Aggregate Contributions
shall be applied to reduce Employer Contributions.
(c)
Determination of Income or
Loss. Excess Aggregate Contributions shall be adjusted for
any gain or loss (hereinafter “income”) up to the date
of distribution. Effective for Plan Years beginning after December
31, 2005, and prior to January 1, 2008, this shall include an
adjustment for income for the period between the end of the Plan
Year and the date of the distribution (the “gap
period”). The Administrator has the discretion to determine
and allocate income using any of the methods set forth
below:
(i)
Reasonable method of allocating
income. The Administrator may use any reasonable method for
computing the income allocable to Excess Aggregate Contributions,
provided that the method does not violate Code Section 401(a)(4),
is used consistently for all Participants and for all corrective
distributions under the Plan for the Plan Year, and is used by the
Plan for allocating income to Participant’s
Accounts.
(ii)
Alternative method of allocating
income. The Administrator may allocate income to Excess
Aggregate Contributions for the Plan Year by multiplying the income
for the Plan Year allocable to the Matching Contributions and other
amounts taken into account under the ACP test (including
contributions made for the Plan Year), by a fraction, the numerator
of which is the Excess Aggregate Contributions for the Employee for
the Plan Year, and the denominator of which is the sum of
the:
(1)
Account balance
attributable to Matching Contributions and other amounts taken into
account under the ACP test as of the beginning of the Plan Year,
and
(2)
Any additional
amount of such contributions made for the Plan Year.
(iii)
Safe harbor method of allocating gap
period income. The Administrator may use the safe harbor
method in this paragraph to determine income on Excess
Contributions for the gap period. Under this safe harbor method,
income on Excess Aggregate Contributions for the gap period is
equal to ten percent (10%) of the income allocable to Excess
Aggregate Contributions for the Plan Year that would be determined
under sub-section (ii) above, multiplied by the number of calendar
months that have elapsed since the end of the Plan Year. For
purposes of calculating the number of calendar months that have
elapsed under the safe harbor method, a corrective distribution
that is made on or before the fifteenth (15th) day of a month is
treated as made on the last day of the preceding month and a
distribution made after the fifteenth day of the month is treated
as made on the last day of the month.
(iv)
Alternative method for allocating Plan
Year and gap period income. The Administrator may determine
the allocable gain or loss for the aggregate of the Plan Year and
the gap period, by applying the alternative method provided by
subsection (ii) above to this aggregate period. This is
accomplished by substituting the income for the Plan Year and the
gap period, for the income for the Plan Year, and by substituting
the contributions taken into account under the ACP test for the
Plan Year and the gap period, for the contributions taken into
account under the ACP test for the Plan Year in determining the
fraction that is multiplied by that income.
Additionally,
the Plan will not fail to use a reasonable method for computing the
income or loss allocable to Excess Aggregate Contributions merely
because the income or loss allocable to Excess Aggregate
Contributions is determined on a date that is no more than 7 days
before the distribution.
6.06 Qualified Employer
Contributions.
(a)
Effective for Plan
Years beginning after December 31, 1986, the Employer may elect to
treat all or a part of its Matching Contributions and its Employer
Contributions as Qualified Employer Contributions for purposes of
meeting the ADP test or ACP tests and as necessary to meet the
nondiscrimination tests described in this Article VI. Qualified
Employer Contributions shall be allocated to Nonhighly Compensated
and Highly Compensated Participants’ Qualified Employer
Contribution Account (and which such Contributions may be allocated
to some Plan Participants but not others) in an amount sufficient
to pass the test and such contributions shall be fully vested and
nonforfeitable at all times. The Employer, at the time such
contributions are made, will designate whether these contributions
are qualified non-elective contributions or qualified matching
contributions.
Additionally,
the Employer may make additional contributions to the Plan which
the employer designates as Qualified Employer Contributions for
purposes of meeting the ADP or ACP tests. Such contributions will
be allocated to Nonhighly Compensated Participants’ Qualified
Employer Contribution Account (and which such Contributions may be
allocated to some Plan Participants but not others) in an amount
sufficient to pass the test and such contributions shall be fully
vested and nonforfeitable at all times.
In
applying the requirements set forth in Code Sections
401(k)(3)(A)(ii), 401(m)(2), 410(b) and 401(a)(4), the Employer
may, at its option, utilize such testing procedures as may be
permitted under Code Sections 401(a)(4), 401(k), 401(m) or 410(b),
including without limitation, (i) aggregation of the Plan with one
or more other qualified plans, (ii) restructuring of the Plan into
one or more component plans, (iii) inclusion of qualified matching
contributions, qualified nonelective contributions or Elective
Deferrals described in, and meeting the requirements of, Code
Regulations under Code Sections 401(k) and 401(m) to any other
qualified plan of the Employer, or (iv) any permissible combination
thereof.
The
provisions of this Section 6.06 may not be used for purposes of
meeting the nondiscrimination tests described in this Article VI if
the Employer elects to use the Prior Year Testing method as
described in Section 6.01(a) and/or 6.04(a).
(b)
Effective for Plan
Years beginning after December 31, 2001, the Employer may elect to
treat all or a part of its Matching Contributions and its Employer
Contributions as Qualified Employer Contributions for purposes of
meeting the ADP test or ACP tests and as necessary to meet the
nondiscrimination tests described in this Article VI. Qualified
Employer Contributions shall be allocated to Nonhighly Compensated
and Highly Compensated Participants’ Qualified Employer
Contribution Account (and which such Contributions may be allocated
to some Plan Participants but not others as set forth below) in an
amount sufficient to pass the test and such contributions shall be
fully vested and nonforfeitable at all times. The Employer, at the
time such contributions are made, will designate whether these
contributions are Qualified Nonelective Contributions or Qualified
Matching Contributions as defined in Regulation Section 1.401(k)-6
and Regulation Section 1.401(m)-5, respectively.
Additionally,
the Employer may make additional contributions to the Plan which
the Employer designates as Qualified Employer Contributions for
purposes of meeting the ADP or ACP tests. Such contributions will
be allocated to Nonhighly Compensated Participants’ Qualified
Employer Contribution Account (and which such Contributions may be
allocated to some Plan Participants but not others as set forth
below) in an amount sufficient to pass the test and such
contributions shall be fully vested and nonforfeitable at all
times.
In
applying the requirements set forth in Code Sections
401(k)(3)(A)(ii), 401(m)(2), 410(b) and 401(a)(4), the Employer
may, at its option, utilize such testing procedures as may be
permitted under Code Sections 401(a)(4), 401(k), 401(m) or 410(b),
including without limitation, (i) aggregation of the Plan with one
or more other qualified plans, (ii) restructuring of the Plan into
one or more component plans, (iii) inclusion of Qualified Matching
Contributions, Qualified Nonelective Contributions or Elective
Deferrals described in, and meeting the requirements of,
Regulations under Code Sections 401(k) and 401(m) to any other
qualified plan of the Employer, or (iv) any permissible combination
thereof.
The
provisions of this Section 6.06 may not be used for purposes of
meeting the nondiscrimination tests described in this Article VI if
the Employer elects to use the prior year testing method as
described in Section 6.01(a) and/or 6.04(a).
Additionally,
Qualified Nonelective Contributions cannot be taken into account in
determining the actual deferral ratio for a Plan Year for a
Non-Highly Compensated Employee to the extent such contributions
exceed the product of that Non-Highly Compensated Employee’s
Code Section 414(s) compensation and the greater of five percent
(5%) or two (2) times the Plan’s “representative
contribution rate.” Any Qualified Nonelective Contribution
taken into account under an ACP test under Regulation Section
1.401(m)-2(a)(6) (including the determination of the representative
contribution rate for purposes of Regulation Section
1.401(m)-2(a)(6)(v)(B)), is not permitted to be taken into account
for purposes of this Section (including the determination of the
“representative contribution rate” under this Section).
For purposes of this Section:
(1)
The Plan’s
“representative contribution rate” is the lowest
“applicable contribution rate” of any eligible
Non-Highly Compensated Employee among a group of eligible
Non-Highly Compensated Employees that consists of half of all
eligible Non-Highly Compensated Employees for the Plan Year (or, if
greater, the lowest “applicable contribution rate” of
any eligible Non-Highly Compensated Employee who is in the group of
all eligible Non-Highly Compensated Employees for the Plan Year and
who is employed by the Employer on the last day of the Plan Year),
and
(2)
The
‘applicable contribution rate’ for an eligible
Non-Highly Compensated Employee is the sum of the Qualified
Matching Contributions taken into account in determining the actual
deferral ratio for the eligible Non-Highly Compensated Employee for
the Plan Year and the Qualified Nonelective Contributions made for
the eligible Non-Highly Compensated Employee for the Plan Year,
divided by the eligible Non-Highly Compensated Employee’s
Code Section 414(s) compensation for the same period.
Notwithstanding
the above, Qualified Nonelective Contributions that are made in
connection with an Employer’s obligation to pay prevailing
wages under the Davis-Bacon Act, Public Law 71-798, Service
Contract Act of 1965, Public Law 89-286, or similar legislation can
be taken into account for a Plan Year for a Non-Highly Compensated
Employee to the extent such contributions do not exceed 10 percent
(10%) of that Non-Highly Compensated Employee’s Code Section
414(s) compensation.
Qualified
Matching Contributions may only be used to calculate an actual
deferral ratio to the extent that such Qualified Matching
Contributions are Matching Contributions that are not precluded
from being taken into account under the ACP test for the Plan Year
under the rules of Regulation Section 1.401(m)-2(a)(5)(ii) and as
set forth in this Section in the below paragraphs.
A
Matching Contribution with respect to an Elective Deferral
Contribution for a Plan Year is not taken into account under the
ACP test for a Non-Highly Compensated Employee to the extent it
exceeds the greater of:
(1)
five percent (5%)
of the Non-Highly Compensated Employee’s Code Section 414(s)
compensation for the Plan Year;
(2)
the Non-Highly
Compensated Employee’s Elective Deferral Contributions for
the Plan Year; and
(3)
the product of two
(2) times the Plan’s ‘representative matching
rate’ and the Non-Highly Compensated Employee’s
Elective Deferral Contributions for the Plan Year.
For
purposes of this Section, the Plan’s “representative
matching rate” is the lowest “matching rate” for
any eligible Non-Highly Compensated Employee among a group of
Non-Highly Compensated Employees that consists of half of all
eligible Non-Highly Compensated Employees in the Plan for the Plan
Year who make Elective Deferral Contributions for the Plan Year
(or, if greater, the lowest “matching rate” for all
eligible Non-Highly Compensated Employees in the Plan who are
employed by the Employer on the last day of the Plan Year and who
make Elective Deferral Contributions for the Plan
Year).
For
purposes of this Section, the Plan’s “matching
rate” for an Employee generally is the Matching Contributions
made for such Employee divided by the Employee’s Elective
Deferral Contributions for the Plan Year. If the matching rate is
not the same for all levels of Elective Deferral Contributions for
an Employee, then the Employee’s “matching rate”
is determined assuming that an Employee’s Elective Deferral
Contributions are equal to six percent (6%) of Code Section 414(s)
compensation.
If the
Plan provides a Matching Contribution with respect to the sum of
the Employee’s After-Tax Contributions and Elective Deferral
Contributions, then for purposes of this Section, that sum is
substituted for the amount of the Employee’s Elective
Deferral Contributions in subsections (2) and (3) above and in
determining the ‘matching rate,’ and Employees who make
either Employee After-Tax Contributions or Elective Deferral
Contributions are taken into account in determining the
Plan’s ‘representative matching rate.’ Similarly,
if the Plan provides a match with respect to the Employee’s
After-Tax Contributions, but not Elective Deferral Contributions,
then for purposes of this subsection, the Employee’s
After-Tax Contributions are substituted for the amount of the
Employee’s Elective Deferral Contributions in subsections (2)
and (3) above and in determining the ‘matching rate,’
and Employees who make Employee After-Tax Contributions are taken
into account in determining the Plan’s ‘representative
matching rate.’
Qualified
Nonelective Contributions cannot be taken into account under the
ACP test for a Plan Year for a Non-Highly Compensated Employee to
the extent such contributions exceed the product of that Non-Highly
Compensated Employee’s Code Section 414(s) compensation and
the greater of five percent (5%) or two (2) times the Plan’s
‘representative contribution rate.’ Any Qualified
Nonelective Contribution taken into account under an ADP test under
Regulation Section 1.401(k)-2(a)(6) (including the determination of
the “representative contribution rate” for purposes of
Regulation Section 1.401(k)-2(a)(6)(iv)(B)) is not permitted to be
taken into account for purposes of this Section (including the
determination of the “representative contribution rate”
for purposes of subsection (a) below). For purposes of this
Section:
(1)
The Plan’s
‘representative contribution rate’ is the lowest
‘applicable contribution rate’ of any eligible
Non-Highly Compensated Employee among a group of eligible
Non-Highly Compensated Employees that consists of half of all
eligible Non-Highly Compensated Employees for the Plan Year (or, if
greater, the lowest “applicable contribution rate” of
any eligible Non-Highly Compensated Employee who is in the group of
all eligible Non-Highly Compensated Employees for the Plan Year and
who is employed by the Employer on the last day of the Plan Year),
and
(2)
The
‘applicable contribution rate’ for an eligible
Non-Highly Compensated Employee is the sum of the Matching
Contributions taken into account in determining the actual deferral
rate for the eligible Non-Highly Compensated Employee for the Plan
Year and the Qualified Nonelective Contributions made for that
Non-Highly Compensated Employee for the Plan Year, divided by that
Non-Highly Compensated Employee’s Code Section 414(s)
compensation for the Plan Year.
Notwithstanding
the above, Qualified Nonelective Contributions that are made in
connection with an Employer’s obligation to pay prevailing
wages under the Davis-Bacon Act, Public Law 71-798, Service
Contract Act of 1965, Public Law 89-286, or similar legislation can
be taken into account for a Plan Year for a Non-Highly Compensated
Employee to the extent such contributions do not exceed 10 percent
(10%) of that Non-Highly Compensated Employee’s Code Section
414(s) compensation.
Qualified
Nonelective Contributions and Qualified Matching Contributions
cannot be taken into account under this Section to determine an
actual deferral ratio to the extent such contributions are taken
into account for purposes of satisfying any other ADP test, any ACP
test, or the requirements of Regulation Section 1.401(k)-3,
1.401(m)-3, or 1.401(k)-4. Thus for example, Matching Contributions
that are made pursuant to Regulation Section 1.401(k)-3(c) cannot
be taken into account under the ADP test. Additionally, if the Plan
switches from the current year testing method to the prior year
testing method under Regulation Section 1.401(k)-2(c), Qualified
Nonelective Contributions that are taken into account under the
current year testing method for a Plan Year may not be taken into
account under the prior year testing method for the subsequent Plan
Year.
ARITCLE
VII
7.01 Valuation of Trust
Fund.
The
Trustee, as of the Valuation Date, shall determine the net worth of
the assets of the Trust Fund, and shall report such values to the
Administrator in writing. In determining such net worth, the
Trustee shall evaluate the assets of the Trust Fund at their fair
market values as of such Valuation Date, and shall deduct all
expenses for which the Trustee has not yet obtained reimbursement
from the Employer and/or the Trust Account as set forth in Section
11.09. Such valuation shall not include any Employer or Participant
Contributions or forfeitures as of such Valuation
Date.
7.02 Adjustment of
Accounts.
The
Administrator shall direct, as of the Valuation Date, before
allocation of forfeitures and Employer or Participant Contributions
on that date, an adjustment to the net credit balance in each
Participant Account upward or downward, so that the total of the
net credit balances of each such Account will equal the net worth
of the Trust Fund as of such date. The net credit balance of the
Trust Fund shall be allocated to each Participant’s Account
in the ratio that the Account of each Participant at the beginning
of the Plan Year bears to the total of such Participant Account
balances at the beginning of the Plan Year. Employer Contributions,
forfeitures, and Participant Contributions shall then be
allocated.
7.04 Direction by
Participants.
To the
extent that a Participant’s Account balance may permit, and
subject to such Regulations as may be issued, a Participant or
other beneficiary may direct the investment of his Account as
described in Section 11.03. All dividends, interest and expenses
thereon shall be credited to his Account in lieu of the procedure
described in Section 7.02.
The
Trustee shall furnish each Participant a written report regarding
the value of his Accounts within a reasonable period of time after
each Valuation Date.
ARTICLE
VIII
8.01 Vesting
Requirements.
(a)
Fully Vested Accounts. A
Participant’s interest in his Elective Deferral Account,
Rollover Account, Qualified Employer Contribution Account, and his
Matching Contribution Account shall be fully vested and
nonforfeitable at all times.
(b)
Accelerated Vesting. A
Participant’s interest in his Employer Contribution Account
shall be fully vested and nonforfeitable upon the first to occur
of: attainment of Normal Retirement Age, death while actively
employed by the Employer, Disability while actively employed by the
Employer, and attainment of Early Retirement Date.
(c)
Other Vesting. Except as
provided in (a) or (b) above, a Participant’s interest in his
Employer Contribution Account and shall vest in accordance with the
following schedule:
Years of
Service Vesting
Percentage
less
than
1
0%
1
25%
2
50%
3
75%
4 or
more
100%.
All of
a Participant’s Years of Service with the Employer are
counted to determine the vesting percentage in such
Participant’s Employer Contribution Account except as
described below.
(b)
Reemployment After Break in Service
(Vesting).
(i)
A former
Participant who had a nonforfeitable right to any portion of his
Account upon separation shall receive credit for all Years of
Service earned prior to separation, upon the former
Participant’s reemployment, but only after completing one (1)
Year of Service after reemployment. Effective for Plan Years
beginning after December 31, 2005, Elective Deferrals must be taken
into account for purposes of determining whether an Employee has a
nonforfeitable right to any portion of his Account at the time of
separation from service with the Employer.
(ii)
A former
Participant who did not have a nonforfeitable right to any portion
of his Account at the time of separation shall receive credit for
Years of Service prior to the separation, but only if (A) he
completes a Year of Service after reemployment, and (B) the number
of consecutive one (1) year Breaks in Service is less than the
greater of (1) five (5) (however, prior service will be disregarded
for Participants who incurred a one (1) year Break in Service prior
to the first day of the first Plan Year beginning in 1985), or (2)
the aggregate number of Years of Service before the separation.
Effective for Plan Years beginning after December 31, 2005,
Elective Deferrals must be taken into account for purposes of
determining whether an Employee has a nonforfeitable right to any
portion of his Account at the time of separation from service with
the Employer.
(iii)
Notwithstanding
paragraphs (i) and (ii) above, if the Participant is vested at
termination but less than 100% vested, the Plan will disregard
service prior to the Break in Service for purposes of calculating
the vested percentage of the Participant’s Account balance
before the Break in Service if:
(A)
A Participant
terminates employment and receives a distribution from the Plan of
his or her entire nonforfeitable benefits; and
(B)
The benefit
distributed was a small balance subject to the involuntary
distribution provisions of Section 9.09; and
(C)
The Participant is
later reemployed; then, Years of Service under Article VIII shall
exclude Years of Service credited prior to the Participant’s
termination of employment. If the distribution was less than the
Participant’s entire nonforfeitable benefit, then the
exclusion of Years of Service in the previous sentence does not
apply.
(iv)
Notwithstanding
paragraphs (i) and (ii) above, if a former Participant incurs five
(5) consecutive one (1) year Breaks in Service (only a one (1) year
Break in Service applies, if it was completed prior to the first
day of the Plan Year beginning in 1985) and is later reemployed,
then Years of Service credited after reemployment shall be
disregarded in computing the nonforfeitable percentage of benefits
earned prior to the separation.
(v)
If a Participant
incurs a separation and is reemployed prior to completing five (5)
consecutive one (1) year Breaks in Service (only a one (1) year
Break in Service applies if it was completed prior to the first day
of the Plan Year beginning in 1985), then the Participant shall
receive credit for Years of Service credited after reemployment
(with respect to prior benefits) under the following
procedure:
(A)
The Employer shall
contribute to an account for the benefit of the Participant the
amount the Participant forfeited at the close of the Plan Year in
which the separation occurred.
(B)
The
Participant’s nonforfeitable percentage in this account shall
be determined by counting Years of Service credited subsequent to
reemployment and prior to the separation (but only if Years of
Service prior to separation are not disregarded under paragraph
(vi) below).
(vi)
If a Participant
receives a distribution from the Plan when the Participant is less
than one hundred percent (100%) vested in his Account and the
Participant is later reemployed, then the following
applies:
(A)
If the Participant
repays the full amount of the distribution to the Plan within the
earlier of five (5) years from the date of reemployment or the
close of the first period of five (5) consecutive one (1) year
Breaks in Service commencing after the distribution
then:
(1)
The Plan will
accept this repayment into an account for the benefit of the
Participant.
(2)
If the Plan is
required to count service subsequent to reemployment under
paragraph (iv) above, then the Plan shall consolidate into a single
account the repaid distribution plus any forfeitures the Employer
was required to place in an account for the benefit of the
Participant.
(3)
The vested
percentage of this account shall be computed using Years of Service
credited prior to separation and after reemployment. In no event
will the vested amount in this account immediately after its
creation be less than the amount of the repaid
distribution.
(B)
If the Participant
does not repay the distribution within the five (5) year period
described in subparagraph (A) above, then Years of Service credited
prior to separation are disregarded.
(a)
General Rule. If a Participant
terminates his employment before his Account is fully vested, the
unvested portions thereof shall be deemed forfeited as of the
earlier of the date of the distribution of the vested portion of
such Account to such Participant or after five (5) consecutive one
(1) year Breaks in Service.
Provided,
however, such forfeitures shall be held in an unallocated account
and shall be allocated as provided in Section 4.07(b) as of the end
of the Plan Year coincident with or next following five (5)
consecutive one (1) year Breaks in Service. A forfeiture may only
occur if the Participant has received a cash-out distribution from
the Plan or if the Participant incurs five one-year Breaks in
Service. If a benefit is forfeited because the Participant or
beneficiary cannot be located, such benefit will be reinstated if a
claim is made by the Participant or beneficiary.
(b)
Deemed Cash-Out for Some
Participants. For purposes of this Section 8.03, if the
Participant is zero percent (0%) vested in his Employer
Contribution Account then the Participant shall be deemed to have
received a distribution of his vested Account balance as of the
date of his separation from service. However, if a Participant is
reemployed prior to incurring five (5) consecutive one (1) year
Breaks in Service, then such Participant’s forfeitures shall
be restored as if the Participant had repaid such forfeited amount.
Effective for Plan Years beginning after December 31, 2005,
Elective Deferrals must be taken into account for purposes of
determining whether an Employee has a nonforfeitable right to any
portion of his Account at the time of separation from service with
the Employer.
(c)
No Forfeiture for Withdrawal of
Employee After-Tax Contributions. No forfeitures will occur
solely as a result of an Employee’s withdrawal of Employee
After-Tax Contributions or Qualified Voluntary Employee
Contributions.
(d)
Reduction of Benefit. Effective
August 5, 1997, notwithstanding anything in this Plan to the
contrary, a Participant’s benefits under the Plan may be
reduced to satisfy the Participant’s liability to the Plan
due to the Participant’s conviction of a crime involving the
Plan, a judgment, consent order or decree in an action for
violation of fiduciary standards, or a settlement involving the
Department of Labor or the Pension Benefits Guaranty Corporation.
Nothing in this paragraph shall be construed to affect the survivor
annuity requirements with respect to distributions from the Plan to
the Participant. If a Participant’s benefits under the Plan
are reduced as stated in this paragraph, such reduction shall
comply with all requirements of Section 15.02 of the Taxpayer
Relief Act of 1997.
Upon a
Participant’s return to service after qualified military
leave, the Participant will not be treated as having a Break in
Service for vesting purposes.
ARTICLE
IX
Subject
to the provisions of this Article IX, a Participant’s entire
vested Account shall be payable to him, or in the event of his
death to his beneficiary, upon the first to occur of his
termination of employment by reason of his death, Disability,
retirement, or other separation from service in accordance with
this Article IX.
A
Participant’s Account shall be payable to an alternate payee
at such times as may be specified in a Qualified Domestic Relations
Order.
In no
event may any distribution of a Participant’s Elective
Deferral Account or Qualified Employer Contribution Account (and
income allocable to each) be distributed to such Participant before
his death, retirement, Disability or termination of employment
except as provided in Section 9.10 (in connection with hardship
distributions), Section 9.11 (in connection with in-service
distributions after the attainment of age 59-1/2), and Section 9.12
(in connection with termination of the Plan without the
establishment of defined contribution plans described at Section
9.12(a), the disposition by the Employer to an unrelated
corporation of substantially all of the assets as described in
Section 9.12(b), or disposition by the Employer to an unrelated
entity of the Employer’s interest in a subsidiary as further
described in Section 9.12(c)).
In the
case of a death or disability occurring on or after January 1,
2007, if a Participant dies while performing qualified military
service (as defined in Code Section 414(u)), the survivors of the
Participant are entitled to any additional benefits (other than
benefit accruals relating to the period of qualified military
service) provided under the Plan as if the Participant had resumed
and then terminated employment on account of death. The Plan will
credit the Participant’s qualified military service as
service for vesting purposes, as though the Participant had resumed
employment under the Uniformed Services Employment and Reemployment
Rights Act immediately prior to the Participant’s
death.
(a)
Normal Retirement Benefits.
When a Participant attains his Normal Retirement Age, all amounts
then credited to such Participant’s Account shall become 100%
vested and nonforfeitable and, if the Participant elects to
terminate employment, benefits shall be payable as of the
Participant’s Normal Retirement Date in the form described in
Section 9.02 unless the Participant or Spouse (if Spousal consent
is required under this Plan) has chosen an optional form of payment
under Section 9.04.
(b)
Deferred Retirement Benefits.
In the event a Participant remains in the service of the Employer
after his Normal Retirement Age, he shall nonetheless continue to
have contributions and forfeitures allocated to his Account and
participation in the Plan shall continue until his actual
termination of employment at which time benefits shall be payable
as of the date he elects to retire in the form described in Section
9.02 unless the Participant or Spouse (if Spousal consent is
required under this Plan) has chosen an optional form of payment
under Section 9.04 or, if provided herein at Section 9.11, and at
the Participant’s election, benefits will be payable at the
Participant’s attainment of Normal Retirement Age while the
Participant is still employed by the Employer.
(c)
Early Retirement Benefits. When
a Participant attains his Early Retirement Age and elects to
terminate employment, all amounts then credited to such
Participant’s Account shall become 100% vested and
nonforfeitable and benefits shall be payable as of the
Participant’s Early Retirement Date in the form described in
Section 9.02, unless the Participant or Spouse (if Spousal consent
is required under this Plan) has chosen an optional form of payment
under Section 9.04. If a Participant separates from service with
the Employer before satisfying the age requirement for early
retirement, the Participant shall be entitled to elect an early
retirement benefit upon satisfaction of such age
requirement.
(d)
Disability Retirement Benefits.
In the event of termination of employment with the Employer due to
a Participant’s Disability, all amounts then credited to such
Participant’s Account shall become 100% vested and
nonforfeitable and benefits shall be payable as of the Date of
Disability determination in the form described in Section 9.02,
unless the Participant or Spouse (if Spousal consent is required
under this Plan) has chosen an optional form of payment under
Section 9.04.
(e)
Pre-Retirement Death Benefits.
In the event of the Participant’s death before the Annuity
Starting Date, all amounts then credited to such
Participant’s Account shall become 100% vested and
nonforfeitable in the event such death occurred while the
Participant was employed by the Employer and shall become payable
in the form described in Section 9.03, unless the Participant or
Spouse (if Spousal consent is required under this Plan) has chosen
an optional form of payment under Section 9.04. Such benefits shall
be payable to the beneficiary designated by the Participant
pursuant to Section 9.08 and such beneficiary may elect to have
such benefits distributed within a reasonable period after the
Participant’s death.
(f)
Termination Benefits. Upon the
Participant’s termination of employment with the Employer for
reasons other than death, Disability or retirement the amounts then
credited and vested in such Participant’s Account shall
become payable as of the Participant’s termination of
employment date and shall be paid in the form described in Section
9.02, unless the Participant or Spouse (if Spousal consent is
required under this Plan) has chosen an optional form of payment
under Section 9.04.
9.02 Normal Form of
Benefit.
Notwithstanding
any other provision of this Plan, effective as of April 21, 2005,
this Plan does not offer a Qualified Joint and Survivor Annuity,
Pre-Retirement Survivor Annuity, or an annuity form of
distribution, and the normal form of benefit under this Plan is one
lump sum payment in cash or in property unless an optional form of
benefit, as specified in Section 9.04, is selected by the
Participant or Spouse (if Spousal consent is required under this
Plan). However, this provision shall not apply to any Participant
or beneficiary with respect to any distribution with an Annuity
Starting Date that is earlier than the effective date of this
paragraph.
9.03 Pre-Retirement Death
Benefit.
Notwithstanding
any other provision of this Plan, the availability of a Qualified
Pre-Retirement Survivor Annuity and/or annuity form of distribution
is limited as provided in Section 9.02.
9.04 Optional Forms of
Benefit.
The
Plan does not offer any form of benefit other than a single lump
sum payment in cash or in property.
9.05 Determination of
Amount.
For
purposes of this Article IX, except as provided in Section 7.03, if
applicable, the value of the Participant’s Account shall be
determined as of the Valuation Date coincident with or immediately
preceding the date the Participant’s vested Account is
distributed.
Unless
the Participant or Spouse elects otherwise or the distribution is
otherwise deferred, any benefits authorized by Section 9.01 shall
commence as soon as administratively reasonable after the Valuation
Date following the date the Participant’s vested Account
becomes payable as provided in Section 9.01.
Notwithstanding
the above, unless the Participant or Spouse elects otherwise,
distribution of benefits will begin no later than the sixtieth
(60th) day after the latest of the close of the Plan Year in
which:
(1) the
Participant attains age 65 (or Normal Retirement Age, if
earlier);
(2) occurs
the 10th anniversary of the year in which the Participant commenced
participation in the Plan; or
(3) the
Participant terminates service with the Employer.
If a
distribution is one to which Sections 401(a)(11) and 417 of the
Code do not apply, such distribution may commence less than 30 days
after the notice required under Code Section 417(a)(3) is given,
provided that:
(a)
the Plan
Administrator clearly informs the Participant that the Participant
has a right to a period of at least 30 days after receiving the
notice to consider the decision of whether or not to elect a
distribution (and, if applicable, a particular distribution option)
and,
(b)
the Participant,
after receiving the notice, affirmatively elects a
distribution.
If Code
Sections 401(a)(11) and 417 apply, a Participant may elect (with
any applicable Spousal consent) to waive any requirement that the
written explanation described in Code Section 417(a)(3)(A) be
provided at least 30 days before the Annuity Starting Date if the
distribution commences more than 7 days after such explanation is
provided.
For any
Qualified Joint and Survivor Annuity notice with respect to
distributions with annuity starting dates on or after October 1,
2004, or Qualified Pre-Retirement Survivor Annuity notices provided
on or after July 1, 2004, the notice will include a description of
the financial effect of electing the optional form of benefit
(i.e., the amounts and timing of payments to the participant under
the form of benefit during the participant's lifetime, and the
amounts and timing of payments after the death of the
participant).
For any
distribution notice under Code Section 411(a)(11)
(Participant’s consent to distribution) issued in plan years
beginning after December 31, 2006, the description of a
Participant’s right, if any, to defer receipt of a
distribution also will describe the consequences of failing to
defer receipt of the distribution. For notices issued before the
90th day
after the issuance of Treasury regulations (unless future Internal
Revenue Service guidance otherwise requires), the notice will
include: (i) a description indicating the investment options
available under the Plan (including fees) that will be available if
the participant defers distribution; and (ii) the portion of the
Summary Plan Description that contains any special rules that might
affect materially a Participant’s decision to
defer.
9.08 Beneficiary Designation and Consent of
Spouse.
The
beneficiary of any benefit payable upon the death of a married
Participant shall be the Participant’s Spouse. The
beneficiary of any benefit payable upon the death of an unmarried
Participant shall be the beneficiary(ies) designated by the
Participant under procedures established by the
Administrator.
The
Participant may designate a beneficiary other than his Spouse
if:
(a)
the Spouse consents
in writing to such beneficiary designation, or
(b)
the Participant has
no Spouse, or
(c)
the Spouse cannot
be located.
In such
event, the designation of a beneficiary shall be made on a form
satisfactory to the Administrator. A Participant may, with the
written consent of his Spouse, at any time revoke his designation
of a beneficiary or change his beneficiary by filing written notice
of such revocation or change with the Administrator. Any consent by
the Participant’s Spouse to any beneficiary designation must
be irrevocable, in writing, must acknowledge the effect of such
beneficiary designation and the specific non-Spouse beneficiary,
and be witnessed by a Plan representative or a notary
public.
Provided,
however, that in the event any Participant becomes divorced or any
Participant’s marriage is dissolved, any designation of
beneficiary pre-existing such event is hereby revoked except as
provided in a Qualified Domestic Relations Order as described in
Section 414(p) of the Code.
In the
event no valid designation of beneficiary exists at the time of the
Participant’s death (and there is no Spouse), the Participant
shall be deemed to have designated the following as his
beneficiaries, listed in the order of their priority: (1) his
Spouse, (2) his children and children of deceased children, per
stirpes, and (3) his estate.
In the
event a designated beneficiary under a valid beneficiary
designation cannot be located, then the amounts due to a
Participant shall be forfeited to the Trust until such time as the
designated beneficiary makes a valid claim for
benefits.
9.09 Consent to Distribution and
Involuntary Cash-Out of Small Amounts.
If the
value of a Participant’s vested Account Balance exceeds
$5,000 and the Account Balance is immediately distributable, the
Participant must consent in order for a distribution to be made in
any form.
Neither
the consent of the Participant nor the Participant’s Spouse
shall be required to the extent that a distribution is required to
satisfy Section 401(a)(9), Section 402(g), Section 415, Section
401(k), or Section 401(m) of the Code. Neither the consent of the
Participant nor the Participant’s Spouse shall be required to
the extent any involuntary cash-out provisions below apply. In
addition, upon termination of the Plan, if the Plan does not offer
an annuity option (purchased from a commercial provider) and if the
Employer or an Affiliate does not maintain another defined
contribution plan (other than an employee stock ownership plan as
defined in Code Section 4975(e)(7)), the Participant’s
Account Balance will, without the Participant’s consent, be
distributed to the Participant. However, if the Primary Employer or
an Affiliate maintains another Defined Contribution Plan (other
than an employee stock ownership plan as defined in Code Section
4975(e)(7)), then the Participant’s Account Balance will be
transferred, without the Participant’s consent, to the other
plan if the Participant does not consent to an immediate
distribution.
Notwithstanding
any provision of the Plan to the contrary, if a Participant has a
termination of Employment, and the value of his or her vested
Account Balance is not greater than $5,000, the Participant shall
receive a distribution of the value of the entire vested portion of
such Account Balance in a single sum and the nonvested portion of
such Account Balance shall be treated as a forfeiture.
If a
Participant would have received a distribution under the preceding
paragraph but for the fact that the Participant's vested Account
Balance exceeded the small balance threshold amount when the
Participant has a termination of Employment and if at a later time
such Account Balance is reduced such that it is not greater than
the small balance threshold amount, the Participant shall receive a
distribution of such Account Balance in a single sum and the
nonvested portion will be treated as a forfeiture.
For
purposes of this Section, if a Participant incurs a Nonvested
Severance, he or she shall be deemed to have received a
distribution of zero dollars reflecting the entire value of his or
her Employer Derived Account Balance.
Whether
a Participant’s vested Account Balance as described in this
Section exceeds the small balance threshold shall be determined at
the time of the current distribution without regard to the value of
such Account Balance at the time of any prior distribution. This
involuntary cash-out provision is not effective after the annuity
starting date without appropriate Participant and/or Spousal
consent.
In the
determination whether a Participant’s Account Balance may be
mandatorily distributed, the value of a Participant’s
nonforfeitable Account Balance shall not be determined with regard
to that portion of the Account Balance that is attributable to
rollover contributions (and earnings allocable thereto) within the
meaning of Code Sections 402(c), 403(a)(4), 403(b)(8),
408(d)(3)(A)(ii), and 457(e)(16). If the value of the
Participant’s nonforfeitable Account Balance as so determined
is $5,000 (or if selected in the Adoption Agreement, a lower
amount) or less, the Plan shall immediately distribute the
Participant’s entire nonforfeitable Account
Balance.
Provided,
however, effective March 28, 2005, if this vested Account Balance
is more than $1,000, the distribution shall be automatically rolled
over to an individual retirement account in the name of the
Participant (or beneficiary of a deceased Participant) in
accordance with Code Section 401(a)(31)(B)(i) and related
regulations, unless the Participant otherwise consents to the
distributions. In no event may such a default rollover to an
individual retirement account be made for any Participant who has
funds in an Employee After-Tax Contribution Account. For purposes
of applying these rollover provisions to an Account Balance
consisting at least in part of a Roth Contribution Account, the
amount of the Roth Contribution Account may be considered
separately from the non-Roth portions of the Participant's Account
Balance for the sole purpose of determining whether such Roth
Contribution Account shall be automatically rolled over to an
individual retirement account under this provision or paid to the
Participant in the form of a single lump-sum
distribution.
9.10 Hardship
Distributions.
Distribution
of Elective Deferrals (and any earnings credited to a
Participant’s Elective Deferral Account as of the later of
December 31, 1988, and the end of the last Plan Year ending before
July 1, 1989) and all other accounts under this Plan (excluding the
Qualified Employer Contribution Account, Qualified Nonelective
Contributions, and Qualified Matching Contributions) may be made to
a Participant in the event of hardship. For the purposes of this
Section, hardship is defined as an immediate and heavy financial
need of the Employee where such distribution is necessary because
the Employee lacks other available resources. Hardship
distributions are subject to the Spousal consent requirements
contained in Sections 401(a)(11) and 417 of the Code, if
applicable.
Hardship
shall be determined based on the following rules:
(a)
The following are
the only financial needs considered immediate and
heavy:
(i)
deductible medical
expenses (within the meaning of Section 213(d) of the Code and
effective for Plan Years beginning after December 31, 2005, without
regard to the 7.5% of income limitation) of the Employee, the
Employee’s Spouse, children, or dependents, or necessary for
these persons to obtain medical care described in Section 213(d) of
the Code;
(ii)
the purchase
(excluding mortgage payments) of a principal residence for the
Employee;
(iii)
payment of tuition
related educational fees and room and board expense for the next
twelve (12) months of post-secondary education for the Employee,
the Employee’s Spouse, children or dependents (without regard
to the change in definition of dependent under the Working Families
Tax Relief Act of 2004);
(iv)
the need to prevent
the eviction of the Employee from, or a foreclosure on the mortgage
of, the Employee’s principal residence;
(v)
payment of burial
or funeral expenses for an Employee’s parents, Spouse,
children, or certain dependents;
(vi)
home repairs
necessitated by a casualty that would qualify under Code Section
165, without regard to the $10,000 limitation effective for Plan
Years beginning after December 31, 2005.
Effective
August 17, 2006, a Participant’s hardship event, for purposes
of the Plan’s safe harbor hardship distribution provisions
pursuant to Treasury Regulation Section 1.401(k)-1(d)(3)(iii)(B),
includes an immediate and heavy financial need of the
Participant’s primary beneficiary under the Plan, that would
constitute a hardship event if it occurred with respect to the
Participant’s spouse or dependent as defined under Code
Section 152 (such hardship events being limited to educational
expenses, funeral expenses, and certain medical expenses). For
purposes of this Section, a Participant’s “primary
beneficiary under the Plan” is an individual who is named as
a beneficiary under the Plan and has an unconditional right to all
or a portion of the Participant’s account balance under the
Plan upon the Participant’s death.
(b)
A distribution will
be considered as necessary to satisfy an immediate and heavy
financial need of the Employee only if:
(i)
The Employee has
obtained all distributions, other than hardship distributions, and
all nontaxable loans under all plans maintained by the
Employer;
(ii)
All plans
maintained by the Employer provide that the Employee’s
Elective Deferrals (and Employee After-Tax Contributions) will be
suspended for six (6) months after the receipt of the hardship
distribution as provided for under this Plan at Sections 5.01(c)
and 5.02(c).
(iii)
The distribution is
not in excess of the amount of an immediate and heavy financial
need including the amount needed to pay taxes and penalties thereon
reasonably anticipated to result from the distribution, if
requested; and
(iv)
Notwithstanding any
other provision of this Plan, effective for Plan Years beginning
after December 31, 2001, in order to meet the safe harbor standards
of Regulations 1.401(k)-1(d)(3)(iii)(B) and
1.401(k)-1(d)(3)(iv)(E), there is no reduction in the maximum
amount of the Elective Deferral amounts that a Participant may make
under Code Section 402(g) because of a hardship distribution made
by this Plan or any other plan of the Employer.
(c)
Notwithstanding any
other provision of this Plan, a hardship distribution may not
include any contributions made under Section 6.06 of this Plan and
any contributions intended to satisfy the safe harbor contribution
requirements of Section 6.07 and Section 6.08, as
applicable.
9.11 In-Service
Distributions.
At the
election of the Participant, amounts then credited to the
Participant’s Account, to the extent then vested, minus the
amount represented by Employer Contributions, Qualified Nonelective
Contributions and Qualified Matching Contributions, made in the two
(2) years immediately preceding the year of distribution may be
distributed to the Participant at such time as the Participant
shall have attained the age of 59 ½. In no event may the
Elective Deferral Account or the Qualified Employer Contribution
Account be distributed as an in-service distribution except as may
be provided below in this Section 9.11 at age 59½, if
applicable and/or as provided under the hardship distribution
provisions of this Plan at Section 9.10, if
applicable.
In the
event that the Administrator makes such a distribution, the
Participant shall continue to be eligible to participate in the
Plan on the same basis as any other Employee. Any distribution made
pursuant to this Section shall be made in a manner consistent with
this Article IX, including, but not limited to, all notice and
consent requirements of Sections 411(a)(11) and 417 of the Code and
the Regulations thereunder, if applicable under this
Plan.
In the
event any assets are transferred to this Plan from a money purchase
pension plan, due to a merger, spin-off or trustee-to-trustee
transfer, such money purchase pension plan assets are not available
for in-service distribution under this Section. Notwithstanding the
foregoing, for Plan Years beginning after December 31, 2006, if the
Plan has received a transfer of assets from a money purchase
pension plan or a target benefit plan, a Participant who has
attained age 62 and who is not separated from employment may elect
to receive a distribution of the transferred assets.
Notwithstanding
any other provision of this Plan, an in-service distribution may
not include any contributions made under Section 6.06 of this
Plan.
9.12 Other Distributable
Amounts.
Effective
for Plan Years beginning after December 31, 1984 and in addition to
the provisions of Section 9.01, a Participant’s Elective
Deferral Account or Qualified Employer Contribution Account may be
distributed only upon the occurrence of any of the following
events:
(a)
Termination of the
Plan without the establishment of another defined contribution
plan, other than an employee stock ownership plan (as defined in
Code Section 4975(e)(7)), simplified employee pension plan (as
defined in Code Section 408(k) or a SIMPLE IRA Plan (as defined in
Code Section 408(p), a plan or contract described in Code Section
403(b) or Code Section 457(b) or (f).
(b)
The disposition by
the Employer to an unrelated corporation of substantially all of
the assets (within the meaning of Section 409(d)(2) of the Code)
used in a trade or business of the Employer if the Employer
continues to maintain this Plan after the disposition, but only
with respect to Employees who continue employment with the
corporation acquiring such assets, for Plan Years before
2002.
(c)
The disposition by
the Employer to an unrelated entity of the Employer’s
interest in a subsidiary (within the meaning of Section 409(d)(3)
of the Code) if the Employer continues to maintain this Plan, but
only with respect to Employees who continue employment with such
subsidiary, for Plan Years before 2002.
9.13 Location of Participant or Beneficiary
Unknown.
In the
event that all, or any portion, of the distribution payable to a
Participant or his beneficiary hereunder shall, if distributable as
an involuntary cash-out or otherwise, at the later of the
Participant’s attainment of age 62 or his Normal Retirement
Age, remain unpaid solely by reason of the inability of the
Administrator, after sending a registered letter, return receipt
requested, to the last known address, and after further diligent
effort, to ascertain the whereabouts of such Participant or his
beneficiary, the amount so distributable may be treated as a
forfeiture pursuant to the Plan. In the event a Participant or
beneficiary is located subsequent to his benefit being reallocated,
such benefit shall be restored unadjusted for earnings or
losses.
ARTICLE
X
NAMED FIDUCIARY POWERS AND
RESPONSIBILITIES
10.01 Allocation of
Responsibility.
The
Named Fiduciary shall have only those specific powers, duties,
responsibilities, and obligations as are specifically given them
under the Plan.
(a)
The Company shall
have the sole responsibility for making the contributions provided
for hereunder and shall have the sole authority to appoint and
remove the Trustee, the Administrator, and any Investment Manager
which may be provided for under the Plan; to formulate the
Plan’s funding policy and method; and to amend or terminate,
in whole or in part, the Plan.
The
Company is authorized under this Plan to voluntarily correct
operational failures as permitted by the provisions of the
Administrative Policy Regarding Self-Correction or such other
self-correction programs as provided by the Internal Revenue
Service and/or the Department of Labor.
(b)
The Administrator
shall have the responsibility for the administration of the Plan,
which responsibility is specifically described in the Plan
including the responsibility to construe any question of Plan
interpretation, subject to the provisions of Section
10.02.
(c)
The Trustee shall
have the sole responsibility of management of the assets held under
the Trust, except those assets, the management of which has been
assigned to an Investment Manager, who shall be solely responsible
for the management of the assets assigned to it, all as
specifically provided in the Plan.
Notwithstanding
anything in the Plan or Trust to the contrary, the Trustee(s) will
be directed trustees for all purposes, including with respect to
the Plan's legal claim for delinquent contributions, if any such
claims exist. The Trustee(s) shall be subject to proper
directions of the Company (including directions with respect to any
legal claims for delinquent contributions, if any such claims
exist) that are made in accordance with terms of the Plan and that
are not contrary to ERISA.
(d)
Each Named
Fiduciary warrants that any directions given, information
furnished, or action taken by it shall be in accordance with the
provisions of the Plan, authorizing or providing for such
direction, information or action. Furthermore, each Named Fiduciary
may rely upon any such direction, information or action of another
Named Fiduciary as being proper under the Plan, and is not required
under the Plan to inquire into the propriety of any such direction,
information or action. It is intended under the Plan that each
Named Fiduciary shall be responsible for the proper exercise of its
own powers, duties, responsibilities and obligations under the
Plan. No Named Fiduciary shall guarantee the Trust Fund in any
manner against investment loss or depreciation in asset value. Any
person or group may serve in more than one fiduciary
capacity.
10.02 Discretionary
Authority.
In
accordance with Section 503 of Title I of ERISA, the Named
Fiduciary under the Plan has complete authority to make all
determinations, whether factual or otherwise, regarding eligibility
and to review all denied claims for benefits under the Plan. In
exercising its fiduciary responsibilities, the Named Fiduciary
shall have absolute discretionary authority to determine whether
and to what extent Participants and beneficiaries are eligible to
participate or are entitled to benefits, and to construe disputed
or doubtful Plan terms. The Named Fiduciary shall be deemed to have
properly exercised such authority unless it has abused its
discretion hereunder by acting arbitrarily and capriciously. Each
Named Fiduciary shall discharge its duties with respect to the Plan
solely in the interest of the Participants and beneficiaries and
with the care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent man acting in a like
capacity and familiar with such matters would use in the conduct of
an enterprise of like character and like aims.
ARTICLE
XI
TRUSTEE POWERS AND
RESPONSIBILITIES
11.01 Basic
Responsibilities.
The
Trustee shall have the following categories of
responsibilities:
(a)
Consistent with the
funding policy and method determined by the Company, to invest
(subject to Participant direction of investment), manage, and
control the Plan assets subject, however, to the direction of any
Investment Manager appointed to manage all or a portion of the
assets of the Plan and provided that such investments are prudent
under ERISA, as amended, and the Regulations
thereunder.
(b)
At the direction of
the Administrator, to pay benefits required under the Plan to be
paid to Participants, or, in the event of their death, to their
beneficiaries; and
(c)
To maintain records
of receipts and disbursements and furnish to the Employer, and/or
Administrator, for each Fiscal Year a written annual report
pursuant to Section 11.10.
11.02 Investment Powers and
Duties.
(a)
The Trustee shall
invest and reinvest the Trust Fund to keep the Trust Fund invested
without distinction between principal and income and in such
securities or property, real or personal, wherever situated, as the
Trustee shall deem advisable, including, but not limited to,
stocks, common or preferred, bonds and mortgages, mutual funds,
common trust funds including common trust funds and collective
funds of the Trustee and/or any of its affiliates or other
fiduciary and/or any of its affiliates, collective investment
funds, and group annuity or deposit administration contracts and
other evidences of indebtedness or ownership, and real estate or
any interest therein. The Trustee shall at all times in making
investments of the Trust Fund consider, among other factors, the
short and long-term financial needs of the Plan on the basis of
information furnished by the Employer. In making such investments,
the Trustee shall not be restricted to securities or other property
of the character expressly authorized by the applicable law for
trust investments; however, the Trustee shall give due regard to
any limitations imposed by the Code or ERISA so that at all times
the Plan may qualify as a qualified 401(k) profit sharing plan and
trust.
By way
of illustration but not limitation, the Trustee may invest the
funds of the Trust in such securities and properties as it may
determine and shall not be restricted by any applicable laws
prescribing forms of property which may be held or acquired by a
Trustee.
The
Trustee may purchase Qualifying Employer Securities or Qualifying
Employer Real Property from the Employer or from any other source.
All such purchases must be made at fair market values.
(b)
The Trustee may
employ a bank or trust company pursuant to the terms of its usual
and customary bank agency agreement, under which the duties of such
bank or trust company shall be of a custodial, clerical and
recordkeeping nature. The Trustee's investment powers shall be
determined in the separate agreement with the Company that is
adopted in connection with the Trust provisions of this
Plan.
11.03 Participant
Direction.
Each
Participant (and any Employee who rolls an Eligible Rollover
Distribution into this Plan if pursuant to Section 11.05(a) an
Employee is eligible to make an Eligible Rollover Distribution into
this Plan) may elect to direct the investment of his Account in any
of the alternative investment funds established by the Trustee, as
part of the overall Trust Fund.
Provided,
however, a Participant may only elect to direct investment with
respect to his Elective Deferral Account.
A
Participant may elect to direct investments with respect to all
current or future contributions or with respect to his accumulated
balance. If the Participant does not direct the Trustee on how to
invest the Account (or a portion of the Account), the Trustee will
invest it as it deems appropriate in its sole and absolute
discretion as determined by the funding policy of the Plan, until
such time as the Participant elects to direct the investment of his
Account or portion thereof.
A
Participant must submit written instructions to the Trustee for
every change in selection of investments.
All
charges and fees related to an individual Participant’s
investment activities may be charged to the Participant’s
Account as set forth in Section 11.09.
The
Participant may change investment selection daily.
11.04 Investment
Manager.
The
Company may appoint an Investment Manager and shall designate the
portion of the Trust Fund to be managed by the Investment Manager.
The Investment Manager shall direct the Trustee in the exercise of
any of the powers described in Section 11.02(a). However, the
Investment Manager may not direct investment in securities issued
by the Employer, an Affiliate, the Trustee or any entity related
through common ownership to the Trustee.
11.05 Rollover
Contributions.
An
individual may transfer to the Plan all or a portion of an Eligible
Rollover Distribution, as defined below, provided the following
conditions are met:
(a)
such individual is
an Employee, including an Employee who has not met the eligibility
requirements of Section 3.01;
(b)
the amount
transferred to the Plan is transferred within sixty (60) days of
the date such individual received the Eligible Rollover
Distribution, provided, however, that for distributions made after
December 31, 2001, the Secretary of the Treasury may waive the
60-day rollover period if the failure to waive such requirement
would be against equity or good conscience, including cases of
casualty, disaster, or other events beyond the reasonable control
of the individual as provided under Code Sections 402(c)(3) and
408(d)(3); and
(c)
the amount
transferred to the Plan does not include any voluntary
contributions made by such individual to the prior
plan.
Additionally,
amounts transferred to this Plan as an Eligible Rollover
Distribution from an individual retirement account must be from a
conduit individual retirement account that has no assets other than
assets which (1) were previously distributed to the Employee by
another qualified plan as a lump-sum distribution, (2) were
eligible for tax-free rollover to a qualified plan and (3) were
deposited in such conduit individual retirement account within
sixty (60) days of receipt thereof and other than earnings on said
assets.
The
Administrator shall determine whether a proposed transfer to the
Plan meets with the above requirements. Amounts so transferred to
the Plan shall be credited to such individual’s Rollover
Account which shall be fully vested and nonforfeitable at all
times.
The
Administrator may direct that Employee transfers made after a
Valuation Date be segregated into a separate account for each
Participant in a federally insured savings account, certificate of
deposit in a bank or savings and loan association, money market
certificate, other short term debt security or other prudent
investment acceptable to the Trustee until such time as the
allocations pursuant to this Plan have been made, at which time
they may remain segregated or be invested as part of the general
Trust fund, as directed by the Trustee.
The
Plan will accept a direct rollover of an Eligible Rollover
Distribution from: (Check each that applies or none. Note that if
the Plan accepts a direct rollover from a qualified plan, choose
only one of the first two choices below.)
(X)
a qualified plan
described in Code Section 401(a) or 403(a), excluding After-Tax
Employee Contributions;
(
)
a qualified plan
described in Code Section 401(a) or 403(a), including After-Tax
Employee Contributions;
(X)
an annuity contract
described in Code Section 403(b), excluding After-Tax Employee
Contributions;
(X)
an eligible plan
under Code Section 457(b) which is maintained by a state, political
subdivision of a state, or any agency of instrumentality of a state
or political subdivision of a state.
Participant
Rollover Contributions from IRAs:
The
Plan: (Choose one.)
accept
a Participant rollover contribution of the portion of a
distribution from an individual retirement account or annuity
described in Code Section 408(a) or Code Section 408(b) that is
eligible to be rolled over and would otherwise be includible in
gross income.
This
Article applies to distributions made after December 31, 2001.
Notwithstanding any provision of the Plan to the contrary that
would otherwise limit a Distributee’s election under this
part, a Distributee may elect, at the time and in the manner
prescribed by the Administrator, to have any portion of an Eligible
Rollover Distribution that is equal to at least $500 paid directly
to an Eligible Retirement Plan specified by the Distributee in a
direct rollover.
Definitions.
Eligible Rollover Distribution: An Eligible Rollover
Distribution is any distribution of all or any portion of the
balance to the credit of the Distributee, except that an Eligible
Rollover Distribution does not include: any distribution that is
one of a series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life expectancy) of
the Distributee or the joint lives (or joint life expectancies) of
the Distributee and the Distributee’s designated beneficiary,
or for a specified period of ten years or more; any distribution to
the extent such distribution is required under Code Section
401(a)(9); any hardship distribution; the portion of any other
distribution(s) that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation
with respect to employer securities); and any other distribution(s)
that is reasonably expected to total less than $500 during a
year.
A
portion of a distribution shall not fail to be an Eligible Rollover
Distribution merely because the portion consists of After-Tax
Employee Contributions which are not includible in gross income.
However, such portion may be transferred only to an individual
retirement account or annuity described in Code Section 408(a) or
(b), or to a qualified defined contribution plan described in Code
Section 401(a) or 403(a) that agrees to separately account for
amounts so transferred, including separately accounting for the
portion of such distribution which is includible in gross income
and the portion of such distribution which is not so
includible.
Eligible Retirement Plan: An Eligible Retirement Plan is an
eligible plan under Code Section 457(b) which is maintained by a
state, political subdivision of a state, or any agency or
instrumentality of a state or political subdivision of a state and
which agrees to separately account for amounts transferred into
such plan from this Plan, an individual retirement account
described in Code Section 408(a) , and individual retirement
annuity described in Code Section 408(b) an annuity plan described
in Code Section 403(a), an annuity contract described in Code
Section 403(b), or a qualified plan described in Code Section
401(a) of the Code, that accepts the Distributee’s Eligible
Rollover Distribution. The definition of Eligible Retirement Plan
shall also apply in the case of a distribution to a surviving
Spouse, or to a Spouse or former Spouse who is the alternate payee
under a Qualified Domestic Relation Order, as defined in Code
Section 414(p).
If any
portion of an Eligible Rollover Distribution is attributable to
payments or distributions from a designated Roth account, an
Eligible Retirement Plan with respect to such portion shall include
only another designated Roth account of the individual from whose
account the payments or distributions were made, or a Roth IRA of
such individual.
For
distributions made after December 31, 2007, a Participant or
beneficiary may elect to roll over directly an Eligible Rollover
Distribution to a Roth IRA described in Code Section
408A(b).
Distributee: A Distributee includes an Employee or former
Employee. In addition, the Employee’s or former
Employee’s surviving Spouse and the Employee’s or
former Employee’s Spouse or former Spouse who is the
alternate payee under a Qualified Domestic Relations Order, as
defined in Code Section 414(p), are Distributees with regard to the
interest of the Spouse or former Spouse.
Direct Rollover: A Direct Rollover is a payment by the Plan
to the Eligible Retirement Plan specified by the
Distributee.
Non-spouse Beneficiary Rollover. For distributions after
December 31, 2009, a non-spouse beneficiary who is a
“designated beneficiary” under Code Section
401(a)(9)(E) and the regulations thereunder, may, by a direct
trustee-to-trustee transfer (“direct rollover”), roll
over all or any portion of his or her distribution to an individual
retirement account or annuity described in Code Section 408(a) or
408(b) (“IRA”) that is established on behalf of the
beneficiary and that will be treated as an inherited IRA pursuant
to Code Section 402(c)(11).
In
order to be able to roll over the distribution, the distribution
must otherwise satisfy the definition of an Eligible Rollover
Distribution. A non-spouse beneficiary may not roll over an amount
which is a required minimum distribution ineligible for rollover,
as determined under applicable Treasury Regulations and other
Internal Revenue Service guidance, including Q&A 17 and 18 of
Notice 2007-7, 2007-5 Internal Revenue Bulletin 395. If a
Participant dies before his or her Required Beginning Date, then
the non-spouse designated beneficiary may deposit into such IRA all
or any portion of the distribution that is deemed to be an Eligible
Rollover Distribution. In determining the portion of such
distribution that is considered to be a required minimum
distribution that must be made from the IRA, the beneficiary may
elect to use either the 5-year rule or the life expectancy rule,
pursuant to Treasury Regulation Section 1.401(a)(9)-3,
Q&A-4(c).
Although
a non-spouse beneficiary may roll over directly a distribution as
provided above, the distribution is not subject to the direct
rollover requirements of Code Section 401(a)(31), the notice
requirements of Code Section 402(f), or the mandatory withholding
requirements of Code Section 3405(c). If a non-spouse beneficiary
receives a distribution from the Plan, the distribution is not
eligible for a “60-day” rollover.
If the
Participant’s named beneficiary is a trust, the Plan may make
a direct rollover to an individual retirement account on behalf of
the trust, provided the trust satisfies the requirements to be a
designated beneficiary within the meaning of Code Section
401(a)(9)(E).
11.06 Trustee to Trustee
Transfers.
The
Administrator may accept and receive assets in the form of cash or
property (if property is a form of benefit accepted under this
Plan) transferred directly to the Plan by a trustee of another
employee benefit plan qualified under Sections 401(a), 403(b) and
401(d) of the Code. The Administrator shall determine whether a
proposed transfer to the trustee-to-trustee subaccount in the Plan
meets with the above requirements. Amounts so transferred to the
Plan shall be credited to a Rollover Account which shall be fully
vested and nonforfeitable at all times.
The
Trustee shall accept and receive assets only with respect to
Employees, including Employees who have not met the eligibility
requirements of Section 3.01.
Provided,
however, the Administrator shall not accept assets from the trustee
of another employee benefit plan which is required to provide
benefits in the form of a Qualified Joint and Survivor Annuity or a
Qualified Pre-Retirement Survivor Annuity pursuant to Section
401(a)(11) of the Code. This paragraph will apply in all
circumstances where a Trustee-to-Trustee transfer occurs from a
plan which provides that the normal form of benefit is a Qualified
Joint and Survivor Annuity or Qualified Pre-Retirement Survivor
Annuity.
The
Administrator may direct the Trustee to transfer the vested balance
of a Participant’s Account directly to a trustee of another
employee benefit plan qualified under Section 401(a) of the
Code.
The
Trustee will not accept a trustee-to-trustee transfer to this Plan
of an amount attributable to voluntary after-tax contributions made
by an individual to another employee benefit plan qualified under
the Code.
The
Trustee, in addition to all powers and authorities under common
law, statutory authority, including ERISA, and other provisions of
the Plan, including but not limited to, the funding policy and
method determined by the Company, and subject to the powers of the
Administrator and any Participant shall have the following powers
and authorities, to be exercised in the Trustee’s sole
discretion:
(a)
To purchase, or
subscribe for, any securities or other property and to retain the
same. In conjunction with the purchase of securities, margin
accounts may be opened and utilized;
(b)
To sell, exchange,
convey, transfer, grant options to purchase, or otherwise dispose
of any securities or other property held by the Trustee, by private
contract or at public auction. No person dealing with the Trustee
shall be bound to see to the application of the purchase money or
to inquire into the validity, expediency, or propriety of any such
sale or other disposition, with or without
advertisement;
(c)
To vote upon any
stocks, bonds, or other securities; to give general or special
proxies or powers of attorney with or without power of
substitution; to exercise any conversion privileges, subscription
rights or other options, and to make any payments incidental
thereto; to oppose, or to consent to, or otherwise participate in,
corporate reorganizations or other changes affecting corporate
securities, and to delegate discretionary powers, and to pay any
assessments or charges in connection therewith; and generally to
exercise any of the powers of an owner with respect to stocks,
bonds, securities, or other property;
(d)
To keep such
portion of the Trust Fund in cash or cash balances as the Trustee
may, from time to time, deem to be in the best interests of the
Plan, without liability for interest thereon;
(e)
To accept and
retain for such time as the Trustee may deem advisable any
securities or other property received or acquired as Trustee
hereunder, whether or not such securities or other property would
normally be purchased as investments hereunder;
(f)
To make, execute,
acknowledge, and deliver any and all documents of transfer and
conveyance and any and all other instruments that may be necessary
or appropriate to carry out the powers herein granted;
(g)
To settle,
compromise, or submit to arbitration any claims, debts, or damages
due or owing to or from the Plan, to commence or defend suits or
legal or administrative proceedings, and to represent the Plan in
all suits and legal and administrative proceedings;
(h)
To employ suitable
agents and counsel and to pay their reasonable expenses and
compensation, and such agent or counsel may or may not be agent or
counsel for the Employer;
(i)
The Trustee may
register any securities or other property held in the
trustee’s own name or in the name of a nominee or in street
name provided such securities are held on behalf of the Plan by (i)
a bank or trust company that is subject to supervision by the
United States or a State, or a nominee of such bank or trust
company; (ii) a broker or dealer registered under the Securities
Exchange Act of 1934, or a nominee of such broker or dealer; or
(iii) a clearing agency as defined in Section 3(a)(23) of the
Securities Exchange Act, or its nominee. All assets of the Plan
shall be held in the Trust by one or more Trustees pursuant to a
written trust agreement.
(j)
To apply for and
procure from responsible insurance companies, to be selected by the
Company, either for the general benefit of the Trust Fund or for
the particular benefit of a particular Participant, as an
investment of the Trust Fund such annuity, or other Contracts (on
the life of any Participant) as the Company shall deem proper; to
exercise, at any time or from time to time, any and all rights,
options and privileges of an absolute owner which may be granted
under such annuity, or other Contracts; to collect, receive, and
settle for the proceeds of all such annuity or other Contracts as
and when entitled to do so under the provisions
thereof;
(k)
To invest funds of
the Trust in time deposits or savings accounts bearing a reasonable
rate of interest in the Trustee’s bank;
(l)
To invest in
Treasury Bills and other forms of United States government
obligations;
(m)
To sell, purchase
and acquire put or call options if the options are traded on and
purchased through a national securities exchange registered under
the Securities Act of 1934, as amended, or, if the options are not
traded on a national securities exchange, are guaranteed by a
member firm of the New York Stock Exchange;
(n)
To deposit monies
in federally insured savings accounts or certificates of deposit in
banks or savings and loan associations;
(o)
To pool all or any
of the Trust Fund, from time to time, with assets belonging to any
other qualified employee pension benefit trust created by the
Employer or an affiliated company of the Employer, and to commingle
such assets and make joint or common investments and carry joint
accounts on behalf of this Plan and such other trust or trusts,
allocating undivided shares or interests in such investments or
accounts or any pooled assets of the two or more trusts in
accordance with their respective interests; and
(p)
To do all such acts
and exercise all such rights and privileges, although not
specifically mentioned herein, as the Trustee may deem necessary to
carry out the purposes of the Plan.
To the
extent that any collective investment trust or pool in which Plan
assets are invested constitutes a group trust that is tax-exempt
pursuant to Code Section 501(a) and Revenue Ruling 81-100, the
instrument establishing such trust shall govern any investment
therein, and is hereby made a part of this Plan and Trust to the
extent of such investment therein.
11.08 Duties Regarding Contributions and
Payments.
At the
direction of the Administrator, the Trustee shall, from time to
time, in accordance with the terms of the Plan: (a) accept
contributions to Plan, including but not limited to, contributions
by the Employer; the Trustee is not obligated to collect any
contributions from the Employer or to see that such funds are
deposited according to the provisions of the Plan or to see that
the contributions received comply with the provisions of the Plan;
and (b) make payments out of the Trust Fund; except as otherwise
provided herein, the Trustee shall not be responsible in any way
for the application of such payments. Any distributions made from
the Trust shall be in cash, securities, or other property as the
Company shall determine. If payment is in securities, the
securities to be used in making such payment shall be those which
the Administrator shall in his sole discretion determine, and such
securities shall be valued for the purpose of such payment at the
value thereof as of the date of such payment.
11.09 Trustee’s Compensation and
Expenses and Taxes.
The
Trustee shall be paid such reasonable compensation as shall from
time to time be agreed upon in writing by the Company and the
Trustee. An individual serving as Trustee who already receives
full-time pay from the Employer shall not receive compensation from
the Plan. In addition, the Trustee shall be reimbursed for any
reasonable expenses, including reasonable counsel fees incurred by
it as Trustee. Such compensation and expenses shall be paid from
the Trust Fund (if allowable under applicable law) unless paid or
advanced by the Employer.
All
expenses of administration may be paid out of the Trust Fund unless
such expenses are paid by the Employer. Such expenses shall include
any expenses incident to the functioning of the Administrator, or
any person or persons retained or appointed by any Named Fiduciary
incident to the exercise of their duties under the Plan, including,
but not limited to, fees of accountants, counsel, Investment
Managers, agents (including nonfiduciary agents) appointed for the
purpose of assisting the Administrator or the Trustee in carrying
out the instructions of Participants as to the directed investment
of their accounts, and other specialists and their agents, and
other costs of administering the Plan. Additionally expenses which
are directly attributable to a specific Participant shall be
charged directly against that Participant’s Account. Such
expenses include but are not limited to expenses related to a loan,
to a hardship distribution or to the bankruptcy of a Participant.
Until paid, any and all expenses shall constitute a liability of
the Trust Fund.
Within
a reasonable period of time after the end of each Plan Year or
receipt of the Employer’s Contribution for each Plan Year,
the Trustee shall furnish to the Company and Administrator a
written statement of account with respect to the Plan Year for
which such contribution was made setting forth:
(a)
the net income or
loss of the Trust Fund;
(b)
the gains or losses
realized by the Trust Fund upon sales or other disposition of the
assets;
(c)
the increase or
decrease in the value of the Trust Fund;
(d)
all payments and
distributions made from the Trust Fund; and
(e)
such further
information as the Trustee and/or Administrator deems
appropriate.
The
Company, upon its receipt of each such statement of account, shall
acknowledge receipt thereof in writing and advise the Trustee
and/or Administrator of its approval or disapproval thereof.
Failure by the Company to disapprove any such statement of account
within thirty (30) days after its receipt thereof shall be deemed
an approval thereof.
11.11 Records and
Actions.
The
Trustee shall keep accurate and detailed accounts of all
investments, receipts and disbursements and other transactions
hereunder, and all its accounts, books and records relating to the
Trust shall be open to inspection and audit by any person
designated by the Employer at all reasonable times.
11.12 Appointment, Resignation, Removal and
Succession of Trustee.
(a)
The Company hereby
appoints the Trustee named in Section 2.77 to serve as Trustee
hereunder. The Company may designate one or more successors prior
to the death, resignation, incapacity, or removal of a Trustee. In
the event a successor is so designated by the Company and accepts
such designation, the successor shall, without further act, become
vested with all the estate, rights, powers, discretions, and duties
of his predecessor with the like effect as if he were originally
named as Trustee herein immediately upon the death, resignation,
incapacity, or removal of his predecessor.
(b)
The Trustee may
resign at any time by delivering to the Company, at least thirty
(30) days before its effective date (unless the 30 day notice is
waived by the Company), a written notice of his
resignation.
(c)
The Company may
remove the Trustee by mailing by registered or certified mail,
addressed to such Trustee at his last known address, at least
thirty (30) days before its effective date (unless the 30 day
notice is waived by the Trustee), a written notice of his
removal.
(d)
Upon the death,
resignation, incapacity, or removal of any Trustee, a successor may
be appointed by the Company; and such successor, upon accepting
such appointment in writing and delivering same to the Company,
shall, without further act, become vested with all the estate,
rights, powers, discretions, and duties of his predecessor with
like respect as if he were originally named as a Trustee herein.
Until such a successor is appointed, or in the event the Employer
is no longer in existence, the remaining Trustee or Trustees shall
have full authority to act under the terms of the
Plan.
(e)
Whenever any
Trustee hereunder ceases to serve as such, he shall furnish to the
Company and Administrator a written statement of account with
respect to the portion of the Fiscal Year during which he served as
Trustee. This statement shall be either (i) included as part of the
annual statement of account for the Fiscal Year required under
Section 11.10 or (ii) set forth in a special statement. Any such
special statement of account should be rendered to the Employer no
later than the due date of the annual statement of account for the
Fiscal Year. The procedures set forth in Section 11.10 for the
approval by the Company of annual statements of account shall apply
to any special statement of account rendered hereunder and approval
by the Company of any such special statement in the manner provided
in Section 11.10 shall have the same effect upon the statement as
the Company’s approval of an annual statement of account. No
successor to the Trustee shall have any duty or responsibility to
investigate the acts or transactions of any predecessor who has
rendered all statements of account required by Section 11.10 and
this subparagraph.
11.13 Liability of
Trustee.
(a)
The Trustee shall
be entitled to rely upon a certification of the Administrator with
respect to any instruction or direction of the Administrator and
also to rely upon the certification of the Employer as to the name
of the Administrator then authorized and in continuing to rely upon
such certification until a subsequent certification is filed with
the Trustee. The Trustee shall be entitled to act in reliance upon
any instrument, certificate, or paper believed by Trustee to be
genuine and to be signed or presented by the proper person or
persons, and the Trustee shall be under no duty to make any
investigation or inquiry as to any statement contained in any such
writing, but may accept the same as conclusive evidence of the
truth and accuracy of the statements therein
contained.
(b)
The Employer agrees
to indemnify the Fund and the Trustee against any liability imposed
as a result of a claim asserted by any person or persons under
Federal or state law where the Trustee has acted in good faith in
reliance on a written direction or certification of the Employer or
the Administrator. The Employer may direct the Trustee to purchase
insurance at the Plan’s expense to cover the Trustee’s
liability or loss resulting from his acts or omissions, but such
policies must provide that the insurer shall have recourse against
the Trustee in the event of the Trustee’s breach of a
fiduciary duty. The Trustee shall be indemnified by the Employer
against costs, expenses and liabilities (other than amounts paid in
settlement to which the Employer does not consent) reasonably
incurred by it in connection with any action to which the Trustee
may be a party by reason of its service as the Trustee, except in
relation to matters as to which the Trustee shall be adjudged in
such action to be personally guilty of negligence or willful
misconduct in the performance of its duties. The foregoing right to
indemnification shall be in addition to such other rights as the
Trustee may enjoy as a matter of law or by reason of insurance
coverage of any kind, but shall not extend to costs, expenses
and/or liabilities otherwise covered by insurance or that would be
so covered by any insurance then in force if such insurance
contained a waiver of subrogation.
Divestment of
Employer Securities.
(a)
Rule applicable to Elective Deferrals
and employee contributions. For Plan Years beginning after
December 31, 2006, if any portion of the Account of a Participant
(including, for purposes of this Section 11.14, a beneficiary
entitled to exercise the rights of a Participant) attributable to
Elective Deferrals or employee contributions is invested in
publicly-traded Employer securities, the Participant may elect to
direct the Plan to divest any such securities, and to reinvest an
equivalent amount in other investment options which satisfy the
requirements of Section 11.14(c).
(b)
Rule applicable to Employer
contributions. If any portion of a Participant’s
Account attributable to nonelective or Matching Contributions is
invested in publicly-traded Employer securities, then a Participant
who has completed at least 3 years of vesting service, or a
beneficiary of any deceased Participant entitled to exercise the
right of a participant, may elect to direct the Plan to divest any
such securities, and to reinvest an equivalent amount in other
investment options which satisfy the requirements of Section
11.14(c).
i.
Three-year phase-in applicable to
Employer contributions. For Employer securities acquired
with nonelective or Matching Contributions during a Plan Year
beginning before January 1, 2007, the rule described in this
Section 11.14(b) only applies to the percentage of the Employer
securities (applied separately for each class of securities) as
follows:
ii
Exception to phase-in for certain age
55 Participants. The 3-year phase-in rule of Section
11.14(b).does not apply to a Participant who has attained age 55
and who has completed at least 3 Years of Service before the first
Plan Year beginning after December 31, 2005.
(c)
Investment options. For
purposes of this Section 11.14, other investment options must
include not less than 3 investment options, other than Employer
securities, to which the Participant may direct the proceeds of
divestment of Employer securities required by this Section 11.14,
each of which options is diversified and has materially different
risk and return characteristics. The Plan must provide reasonable
divestment and reinvestment opportunities at least quarterly.
Except as provided in regulations, the Plan may not impose
restrictions or conditions on the investment of Employer securities
which the Plan does not impose on the investment of other Plan
assets, other than restrictions or conditions imposed by reason of
the application of securities laws or a condition permitted under
Internal Revenue Service Notice 2006-107 or other applicable
guidance.
(d)
Exceptions for certain plans.
This Section 11.14 does not apply to a one-participant plan, as
defined in Code Section 401(a)(35)(E)(iv), or to an employee stock
ownership plan (“ESOP”) if: (i) there are no
contributions to the ESOP (or related earnings) attributable to
Elective Deferrals or Matching Contributions; and (ii) the ESOP is
a separate plan, for purposes of Code Section 414(l), from any
other defined benefit plan or defined contribution plan maintained
by the same employer or employers.
(e)
Treatment as publicly traded Employer
securities. For purposes of this Section 11.14,
“publicly traded Employer securities” means employer
securities which are readily tradable on an established securities
market. Except as provided in Treasury regulations or in Code
Section 401(a)(35)(F)(ii) (relating to certain controlled groups),
a plan holding Employer securities which are not publicly traded
Employer securities shall be treated as holding publicly traded
Employer securities if any Employer corporation, or any member of a
controlled group of corporations which includes such Employer
corporation (as defined in Code Section 401(a)(35)(F)(iii)) has
issued a class of stock which is a publicly traded Employer
security.
ARTICLE
XII
COMMITTEE POWERS AND
RESPONSIBILITIES
12.01 Appointment of
Committee.
The
Company may appoint a Committee consisting of at least three (3)
individual(s) to serve as Administrator of the Plan. In the absence
of the appointment of a Committee, the Plan shall be administered
by the Company and references in the Plan to the Committee or
Administrator shall be deemed to refer to the Company.
Members
of the Committee shall hold office at the pleasure of the Company
and may be dismissed at any time, with or without cause. Vacancies
on the Committee arising from death, resignation, removal or
otherwise, may be filled by the Company.
The
Committee shall administer the Plan in accordance with its terms.
The Committee shall have all powers necessary to enable it to carry
out its duties as provided herein. Not in limitation, but in
amplification of the foregoing, the Committee shall have the power
to interpret and construe the Plan and to determine all questions
that may arise hereunder as to the status and rights of
Participants and others hereunder, consistent with the provisions
hereof. The Committee shall have discretion in interpreting the
terms of the Plan and in making determinations regarding the status
and rights of Participants and others under the Plan, subject to
the provisions of Section 10.02.
The
Committee shall not take any action nor direct the Trustee to take
any action which would result in benefiting one Participant or
group of Participants at the expense of another Participant or in
discriminating between Participants who are similarly
situated.
12.04 Action by the
Committee.
The
Committee shall act by a majority of the members constituting the
Committee at any given time. Such action may be taken either by
vote at a meeting or in writing without a meeting, in which case
such writing shall be signed by all the members.
The
Committee shall keep a record of all its proceedings and all
information necessary for the proper administration of the
Plan.
12.06 Compensation and
Expenses.
The
members of the Committee shall serve without compensation for their
services as such, but shall be reimbursed by the Employer for all
necessary expenses incurred in the discharge of their
duties.
The
Employer shall indemnify any person who is or was a member of the
Committee and any person who is or was an Employee of the Employer
and who performs or performed services with respect to the Plan,
against all liabilities and all reasonable expenses (including,
without limitation, counsel fees and amounts paid in settlement
other than to the Employer) incurred or paid in connection with any
threatened or pending action, suit or proceeding to which he (or
his executor, administrator or other legal representative) may be
made a party, or in which he may otherwise be involved, by reason
of the fact that he serves or has served as a member of the
Committee or otherwise performs or has performed services with
respect to the Plan; provided, however that (a) if such action,
suit or proceeding shall be prosecuted against such person (or his
executor, administrator or other legal representative) to final
determination on the merits or otherwise, it shall not be finally
adjudged in such action, suit or proceeding that such person is
liable for gross negligence or willful misconduct in the
performance of his duty to the Employer or the Plan in relation to
the matter or matter in respect of which indemnification is
claimed, or (b) if such action, suit or proceeding shall be settled
or otherwise terminated as against such person (or his executor,
administer or other legal representative) without a final
determination, it shall be determined that such person was not
guilty of gross negligence or willful misconduct in the performance
of his duty to the Employer or the Plan in relation to the matter
or matters in respect of which indemnification is claimed, such
determination to be made by a majority of the members of the Board
of Directors of the Employer or by independent counsel to whom the
question may be referred by the Board of Directors.
12.08 Statutory Claims
Procedure.
(a)
General Procedure. The
Administrator shall have discretion regarding benefit
determinations. Unless waived by the Administrator, any person
entitled to benefits hereunder must file a claim with the
Administrator upon forms furnished by the Administrator.
Notwithstanding any other provision of this Plan, payment of
benefits need not be made until receipt of the claim and the
expiration of the time periods specified in this Section 12.08 for
rendering a decision on the claim. In the event a claim is denied,
benefits need not be made or commence until a final decision is
reached by the Administrator, subject to the provisions of Section
10.02.
(b)
Notice and Appeal Procedure for Claims
Filed Before January 1, 2002. This subsection (b) shall
apply to claims filed before January 1, 2002. The Administrator
shall notify the claimant of its decision within ninety (90) days
after receipt of the claim. However, if special circumstances
require, the Administrator may defer action on a claim for benefits
for an additional period not to exceed ninety (90) days, and in
that case it shall notify the claimant of the special circumstances
involved and the time by which it expects to render a
decision.
If the
Administrator determines that any benefits claimed should be
denied, it shall give notice to the claimant setting forth the
specific reason or reasons for the denial and provide a specific
reference to the Plan provisions on which the denial is based. The
Administrator shall also describe any additional information
necessary for the Participant to perfect the claim and explain why
the information is necessary.
The
claimant shall be entitled to full and fair review by the Named
Fiduciary of the denial. The claimant shall have sixty (60) days
after receipt of the denial in which to file a notice of appeal
with the Named Fiduciary. A final determination by the Named
Fiduciary shall be rendered within sixty (60) days after receipt of
the claimant’s notice of appeal. Under special circumstances
such determination may be delayed for an additional period not to
exceed sixty (60) days, in which case the claimant shall be
notified of the delay prior to the close of the initial sixty (60)
day period. The Named Fiduciary’s final decision shall set
forth the reasons and the references to the Plan provisions on
which it is based.
(c)
Notice and Appeal Procedure for Claims
Filed On or After January 1, 2002. This subsection (c) shall
apply to claims filed on or after January 1, 2002.
(i)
Claims not involving a determination
of disability. For claims not involving a determination of
disability, the Administrator shall notify the claimant of its
decision within a reasonable period of time, not exceeding ninety
(90) days, after receipt of the claim. However, if special
circumstances require, the Administrator may defer action on a
claim for benefits for an additional period not to exceed ninety
(90) days, and in that case it shall notify the claimant prior to
the close of the initial ninety (90) day period of the special
circumstances involved and the time by which it expects to render a
decision.
If the
Administrator determines that any benefits claimed should be
denied, it shall give notice to the claimant setting forth the
specific reason or reasons for the denial, providing a specific
reference to the Plan provisions on which the denial is based,
describing any additional material or information necessary for the
claimant to perfect the claim and an explanation of why such
material or information is necessary, and describing the
Plan’s review procedures and the time limits applicable to
such procedures. Such claimant shall be entitled to full and fair
review by the Named Fiduciary of the denial. The claimant shall
have sixty (60) days after receipt of the denial in which to file a
notice of appeal with the Named Fiduciary. A final determination by
the Named Fiduciary shall be rendered within a reasonable period of
time, not exceeding sixty (60) days, after receipt of the
claimant’s notice of appeal. Under special circumstances,
such determination may be delayed for an additional period not to
exceed sixty (60) days, in which case the claimant shall be
notified of the delay prior to the close of the initial sixty (60)
day period. The Named Fiduciary’s final decision shall set
forth the reasons and the references to the Plan provisions on
which it is based, shall advise that the claimant is entitled to
receive, upon request and free of charge, reasonable access to, and
copies of, all documents, records, and other information relevant
to the claim for benefits, and shall advise the claimant of the
right to bring an action under Section 502(a) of
ERISA.
(ii)
Claims involving a determination of
disability. For claims involving a determination of
disability, the Administrator shall notify the claimant of its
decision within a reasonable period of time, not exceeding
forty-five (45) days, after receipt of the claim. However, if it
determines that there exist matters beyond the control of the Plan,
the Administrator may defer action on a claim for benefits for two
additional periods, each not to exceed thirty (30) days, and in
that case it shall notify the claimant prior to the close of the
initial forty-five (45) day period (or the initial thirty (30) day
extension) of the special circumstances involved and the time by
which it expects to render a decision. Such notice of extension
shall specifically explain the standards on which entitlement to a
benefit is based, the unresolved issues that prevent a decision on
the claim, and the additional information needed to resolve those
issues. The claimant shall be given at least forty-five (45) days
within which to provide the specified information. If a claimant
provides insufficient information or files an incomplete claim, the
time for making a decision is tolled (suspended) from the date the
Plan Administrator provides notice of an extension until the date
it receives the claimant’s response.
If the
Administrator determines that any benefits claimed should be
denied, it shall give notice to the claimant setting forth the
specific reason or reasons for the denial, providing a specific
reference to the Plan provisions on which the denial is based,
describing any additional material or information necessary for the
claimant to perfect the claim and an explanation of why such
material or information is necessary, and describing the
Plan’s review procedures and the time limits applicable to
such procedures. In addition, if an internal rule, guideline,
protocol, or other similar criterion was relied upon in making the
adverse determination, the Administrator shall provide either the
specific rule, guideline, protocol or other similar criterion, or a
statement that any such item was relied upon in making the adverse
determination and that a copy of such item will be provided free of
charge to the claimant upon request. Furthermore, if the adverse
determination is based upon a medical necessity or experimental
treatment or similar exclusion or limit, the Administrator shall
provide either an explanation of the scientific or clinical
judgment for the determination, or a statement that such
explanation will be provided free of charge upon
request.
The
claimant shall be entitled to full and fair review by the Named
Fiduciary of the denial. The claimant shall have one hundred eighty
(180) days after receipt of the denial in which to file a written
notice of appeal with the Named Fiduciary. A final determination by
the Named Fiduciary shall be rendered within a reasonable period of
time, not exceeding forty-five (45) days, after receipt of the
claimant’s notice of appeal. Under special circumstances,
such determination may be delayed for an additional period not to
exceed forty-five (45) days, in which case the claimant shall be
notified of the delay prior to the close of the initial forty-five
(45) day period. The Named Fiduciary’s final decision shall
set forth the reasons and the references to the Plan provisions on
which it is based, shall advise that the claimant is entitled to
receive, upon request and free of charge, reasonable access to, and
copies of, all documents, records, and other information relevant
to the claim for benefits, and shall advise the claimant of the
right to bring an action under Section 502(a) of
ERISA.
(d)
Administrator’s Discretion;
Final Determination by Named Fiduciary. The Administrator
shall have discretion in interpreting the terms of the Plan and in
making claim determinations. In accordance with Section 10.02,
final determinations shall be made by the Named Fiduciary and such
determinations shall be conclusive and binding on all
persons.
(e)
Commencement of Action. No
action at law or in equity shall be brought to recover under this
Plan until the appeal rights herein provided have been exercised
and the Plan benefits requested in such appeal have been denied in
whole or in part.
ARTICLE
XIII
AMENDMENT, TERMINATION, AND
MERGERS
13.01 Amendment by the
Employer.
(a)
The Employer shall
have the right at any time to amend the Plan. However, no such
amendment shall authorize or permit any part of the Trust Fund
(other than such part as is required to pay taxes and
administration expenses) to be used for or diverted to purposes
other than for the exclusive benefit of the Participants or their
beneficiaries or estates; no such amendment shall cause any
reduction in the amount credited to the Account of any Participant;
no such amendment shall eliminate or reduce an early retirement
benefit, eliminate an optional form of benefit (as provided in
Treasury Regulations) or restrict, directly or indirectly, the
benefit provided to any Participant prior to the amendment; no
amendment shall cause or permit any portion of the Trust Fund to
revert to or become the property of the Employer; and no such
amendment which affects the rights, duties or responsibilities of
the Trustee and/or the Administrator may be made without the
Trustee’s and/or the Administrator’s written consent.
Any amendment to the Plan shall become effective as provided
therein upon its execution. The Trustee shall not be required to
execute any such amendment unless the amendment affects the duties
of the Trustee hereunder. The authority to make any such amendment
(including adoption of this Plan as a restatement of an existing
plan) to the Plan rests with the Board of Directors (or sole
director, if applicable) of the Employer.
(b)
An amendment
(including the adoption of this Plan as a restatement of an
existing plan) may not decrease a Participant’s accrued
benefit, except to the extent permitted under Section 412(d)(2) of
the Code or to the extent permitted under Sections 1.411(d)-3 and
1.411(d)-4 of the Treasury Regulations, and may not reduce or
eliminate protected benefits under Section 411(d)(6) of the Code
determined immediately prior to the adoption date (or, if later,
the effective date) of the amendment. An amendment reduces or
eliminates protected benefits under Section 411(d)(6) of the Code
if the amendment has the effect of either (i) eliminating or
reducing an early retirement benefit or a retirement-type subsidy
(as defined in Treasury Regulations), or (ii) except as provided by
Treasury Regulations, eliminating an optional form of
benefit.
The
Administrator must disregard an amendment to the extent application
of the amendment would fail to satisfy this subparagraph (b). If
the Administrator must disregard an amendment because the amendment
would violate clause (i) or clause (ii), the Administrator must
maintain a schedule of the early retirement option or other
optional forms of benefit the Plan must continue for the affected
Participants.
13.02 Amendment by the Volume Submitter
Practitioner.
Effective
February 17, 2005, Employer notice and signature requirements have
been met for all adopting employers before the effective date of
February 17, 2005. Porter, Wright, Morris & Arthur LLP
(hereinafter referred to as the “Volume Submitter
Practitioner” or “Practitioner” in this Section
13.02) shall have the authority to amend the Plan on behalf of all
adopting Employers, including those Employers who have adopted the
Plan prior to this amendment, for changes in the Code, Regulations,
Revenue Rulings, other statements published by the Internal Revenue
Service, including model, sample or other required good faith
amendments, but only if their adoption shall not cause such Plan to
be individually designed, and for corrections of prior approved
plans. These amendments shall be applied to all Employers who have
adopted a volume submitter plan of the Practitioner.
The
Practitioner shall no longer have the authority to amend the Plan
on behalf of any adopting Employer as of either: (1) the date the
Internal Revenue Service requires the Employer to file Form 5300 as
an individually designed plan as a result of an Employer amendment
to the Plan to incorporate a type of plan not allowable in the
volume submitter program, as described in Revenue Procedure
2005-16, or (2) as of the date the Plan is otherwise considered an
individually designed plan due to the nature and extent of the
amendments. If the Employer is required to obtain a determination
letter for any reason in order to maintain reliance on the advisory
letter, the Practitioner’s authority to amend the Plan on
behalf of the adopting Employer is conditioned on the Plan
receiving a favorable determination letter.
The
Volume Submitter Practitioner shall maintain, or have maintained on
its behalf, a record of the Employers that have adopted the Plan,
and the Volume Submitter Practitioner shall make reasonable and
diligent efforts to ensure that adopting Employers have actually
received and are aware of all Plan amendments and that such
Employers adopt new documents when necessary. This amendment
supersedes other provisions of the Plan to the extent those other
provisions are inconsistent with this amendment.
13.03 Amendment of Vesting
Schedule.
(a)
If the Plan’s
vesting schedule is amended, or the Plan is amended in any way that
directly or indirectly affects the computation of the
Participant’s 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 (3) Years of
Service with the Employer may elect, within a reasonable period
after the adoption of the amendment or change, to have the
nonforfeitable percentage computed under the Plan without regard to
such amendment or change. For Participants who do not have at least
one (1) Hour of Service in any Plan Year beginning after December
31, 1988, the preceding sentence shall be applied by substituting
five (5) Years of Service for three (3) Years of Service where such
language appears. Notwithstanding the above, no election need be
provided for any Participant where nonforfeitable percentage under
the Plan, as amended, at any time cannot be less than such
percentage determined without regard to such
amendment.
(b)
The period during
which the election may be made shall commence with the date the
amendment is adopted or deemed to be made and shall end on the
latest of:
(i)
Sixty (60) days
after the amendment is adopted;
(ii)
Sixty (60) days
after the amendment becomes effective; or
(iii)
Sixty (60) days
after the Participant is issued written notice of the amendment by
the Employer or Administrator.
Notwithstanding
anything set forth in this Plan, if the Plan provides for vesting
schedules at Article VIII other than those given in Code Section
411(a)(2) or Code Section 416(b)(1) for top-heavy schedules, the
optional schedules must be at least as favorable as the statutory
schedules.
(c)
Effective with
respect to plan amendments adopted after August 9, 2006, the rules
of this subsection apply to a Plan amendment that decreases a
Participant's accrued benefits, or otherwise places greater
restrictions or conditions on a Participant's rights to Section
411(d)(6) protected benefits, even if the amendment merely adds a
restriction or condition that is permitted under the vesting rules
in section 411(a)(3) through (11). However, such an amendment does
not violate Section 411(d)(6) to the extent it applies with respect
to benefits that accrue after the applicable amendment date.
Provided, further, that a Plan amendment that satisfies the
applicable requirements under 29 CFR Section 2530.203-2(c) (rules
relating to vesting computation periods) does not fail to satisfy
the requirements of Code Section 411(d)(6) merely because the Plan
amendment changes the Plan's vesting computation
period.
13.04 Termination; Discontinuance of
Contributions.
The
Company shall have the right at any time to discontinue its
contributions hereunder and to terminate or partially terminate
this Plan and the Trust hereby created, by delivering to the
Trustee written notice of such discontinuance or termination. The
authority to discontinue contributions, terminate or partially
terminate the Plan and Trust rests with the Company through its
Board of Directors (or sole director, if applicable) of the
Employer. Any such discontinuance of contributions, termination or
partial termination shall be made by a resolution adopted by the
Board of Directors (or sole director, if applicable, or in a
writing by the sole proprietor, or partners of the partnership; if
applicable).
Upon
complete discontinuance of the Company’s contributions, or
full or partial termination of the Trust, all affected
Participants’ interests and rights to benefits shall become
fully vested, and shall not thereafter be subject to forfeiture
except to the extent that law or regulations may preclude such
vesting in order to prevent discrimination in favor of officers,
shareholders or Highly Compensated Employees and all unallocated
amounts shall be allocated to the Accounts of all Participants in
accordance with Treasury Regulation Section 1.411(d)-2(a)(2). Upon
final termination of the Trust and after payment of all Trust
expenses and liabilities, the Administrator shall direct the
Trustee to distribute all assets remaining in the Trust, such
distribution to commence as determined by the Administrator. Until
the Administrator so directs, the Trustee shall continue to
administer the Trust in accordance with the provisions hereof, and
shall make distributions in the event of death, Disability, the
attainment of Normal Retirement Age and retirement, the attainment
Early Retirement Date or other termination of employment as herein
provided. In the event the Administrator shall not within a
reasonable time after such termination have given the Trustee the
directions provided in this Section, the assets then remaining in
the Trust shall be distributed in such manner as may be directed by
a judgment or decree of a court of competent
jurisdiction.
In
distributing Participants’ Accounts, the Trustee may deduct
therefrom before distribution all expenses properly chargeable
against the Trust Fund, and shall then distribute such Accounts to
the Participants in accordance with the value of the interests of
such Participants as of the date of such distribution. Such
distribution of the Accounts of every Participant or his
beneficiary shall be in cash or in the assets in which the Trust
Fund may be invested unless annuities have been
purchased.
13.05 Merger or
Consolidation.
This
Plan and Trust may be merged or consolidated with, or its assets
and/or liabilities may be transferred to any other plan and trust
only if the benefits which would be received by a Participant of
this Plan, immediately after such transfer, merger or consolidation
(if the Plan then terminated), are at least equal to the benefits
the Participant was entitled to immediately before the transfer,
merger or consolidation (if the Plan had then terminated). The
authority to merge or consolidate this Plan or to transfer assets
and/or liabilities rests with the Board of Directors (or sole
director, if applicable, or sole proprietor or the partners of a
partnership, if applicable) of the Employer. Any such merger,
consolidation or transfer shall be made by a resolution adopted by
the Board of Directors (or sole director, if applicable, or in a
writing by the sole proprietor or partners of the partnership, if
applicable).
ARTICLE
XIV
14.01 Application of
Article.
The
provisions of this Article shall be effective for any Plan Year in
which the Plan is determined to be Top Heavy. The Top-Heavy
requirements of Section 416 of the Code and this Article XIV shall
not apply in any year beginning after December 31, 2001, if the
Plan consists solely of a cash or deferred arrangement which meets
the requirements of Section 401(k)(12) of the Code and Matching
Contributions with respect to which the requirements of Section
401(m)(11) of the Code are met.
For
purposes of this Article, the following words shall have the
meanings stated after them unless otherwise specifically
provided:
(a)
Key Employee shall mean any
Employee or former Employee (including any deceased Employee), who
at any time during the Plan Year containing the Determination Date
was:
(i)
An officer of the
Employer having annual compensation greater than $130,000 (as
adjusted under Code Section 416(i)(1) for Plan Years beginning
after December 31, 2002);
(ii)
A five percent (5%)
owner of the Employer; or
(iii)
A one percent (1%)
owner of the Employer who received annual compensation of more than
$150,000 per year.
The
determination of who is a Key Employee will be made in accordance
with the Code Section 416(i)(1) and the applicable regulations and
other guidance of general applicability issued
thereunder.
(b)
Non-Key Employee shall mean
those Employees who are not Key Employees.
(c)
Determination Date shall mean,
with respect to any Plan Year, the last day of the preceding Plan
Year. In the case of the first Plan Year, Determination Date shall
mean the last day of the first Plan Year.
(d)
Required Aggregation Group
shall mean a group of plans including: (1) each qualified plan of
the Employer in which at least one Key Employee participates or
participated at any time during the determination period or any of
the four preceding Plan Years (regardless of whether the plan has
terminated), and (2) any other qualified plan of the Employer which
enables a plan described in clause (1) to meet the requirements of
Sections 401(a)(4) or 410 of the Code.
(e)
Permissive Aggregation Group
shall mean the Required Aggregation Group 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 Sections 401(a)(4) and 410 of the
Code.
14.03 Top-Heavy
Determination.
A Plan
shall be considered a Top-Heavy Plan for the Plan Year if, as of
the Determination Date:
(a)
The Top-Heavy Ratio
for this Plan exceeds sixty percent (60%); or
(b)
The Plan is part of
a Required Aggregation Group and the Top-Heavy Ratio for such Group
exceeds sixty percent (60%).
However,
and notwithstanding (a) and (b) above, the Plan shall not be
considered a Top-Heavy Plan for any Plan Year in which the Plan is
a part of a Required or Permissive Aggregation Group and the
Top-Heavy Ratio for such Group is sixty percent (60%) or
less.
Plans
that only make contributions described in Code Sections 401(k)(12)
or 401(m)(11) for any Plan Year are excluded from the definition of
a Top-Heavy Plan. If any other contributions are made (e.g., profit
sharing or forfeitures) for a Plan Year, the requirements of Code
Section 415(g)(4)(H) are not met and the Plan is subject to the
top-heavy rules in Code Section 416 for that Plan
Year.
(a)
If this is the only
Plan maintained by the Employer or if only defined contribution
plans are aggregated with this Plan in making the Top-Heavy
determination, the Top-Heavy Ratio for this Plan or for the
Required or Permissive Aggregation Group shall be a fraction, the
numerator of which is the sum of the Accounts of all Key Employees
as of the Determination Date (including any part of any Account
distributed during the five-year period ending on the Determination
Date), and the denominator of which is the sum of the Accounts of
all Participants as of the Determination Date (including any part
of any Accounts distributed during the five-year period ending on
the Determination Date). Both the numerator and the denominator of
the Top-Heavy Ratio shall be adjusted to reflect any contribution
which is required to be taken into account under Section 416 of the
Code.
(b)
If the Employer
maintains a defined benefit plan or plans that are aggregated with
this Plan in making the Top-Heavy Determination, the Top-Heavy
Ratio for the Required or Permissive Aggregation Group shall be a
fraction, the numerator of which is the sum of Accounts under the
aggregated defined contribution plan or plans for all Key
Employees, determined in accordance with (a) above, plus the
present value of accrued benefits under the aggregated defined
benefit plan or plans for all Key Employees as of the Determination
Date, and the denominator of which is the sum of the Accounts under
the aggregated defined contribution plan or plans for all
Participants, determined in accordance with (a) above, plus the
present value of accrued benefits under the aggregated defined
benefit plan or plans for all Participants as of the Determination
Date. The accrued benefits under a defined benefit plan in both the
numerator and the denominator of the Top-Heavy Ratio shall be
adjusted for any distribution of an accrued benefit made during the
five-year period ending on the Determination Date. The present
value of any accrued benefit shall be determined based on the
actuarial assumptions contained in the aggregated defined benefit
plan.
(c)
For purposes of
subparagraphs (a) and (b) above, the value of the Accounts and the
present value of accrued benefits shall be calculated as of the
Determination Date and the Accounts and accrued benefits of any
Participant (i) who is not a Key Employee but who was a Key
Employee in a prior year, or (ii) who has not performed any service
for any Employer maintaining the Plan at any time during the
five-year period ending on the Determination Date shall be
disregarded. The calculation of the Top-Heavy Ratio, and the extent
to which distributions, rollovers and transfers are taken into
account shall be made in accordance with Section 416 of the Code
and the Regulations thereunder. When aggregating plans, the value
of the Account and accrued benefits shall be calculated with
reference to the Determination Dates that fall within the same
calendar year.
The
accrued benefit of a Participant other than a Key Employee shall be
determined under (a) the method, if any, that uniformly applies for
accrual purposes under all defined benefit plans maintained by the
Employer, or (b) if there is no such method, as if such benefit
accrued not more rapidly than the slowest accrual rate permitted
under the fractional rule of Section 411(b)(1)(c) of the
Code.
Effective
for Plan Years beginning after December 31, 2001, for distributions
during a year ending on the Determination Date, the present values
of accrued benefits and the amounts of Account balances of an
Employee as of the Determination Date shall be increased by the
distributions made with respect to the Employee under the Plan and
any plan aggregated with the Plan under Code Section 416(g)(2)
during the 1-year period ending on the Determination Date. The
preceding sentence shall also apply to distributions under a
terminated plan which, had it not been terminated, would have been
aggregated with the Plan under Code Section 416(g)(2)(A)(i). In the
case of a distribution made for a reason other than severance from
employment, death, or Disability, this provision shall be applied
by substituting “5-year period” for “1-year
period.”
For
Employees not performing services during a year ending on the
Determination Date, the accrued benefits and Accounts of any
individual who has not performed services for the Employer during
the 1-year period ending on the Determination Date shall not be
taken into account.
For any
Plan Year in which this Plan is top-heavy, the following vesting
schedule shall apply:
the
vesting schedule as shown in Section 8.01(c) as it is at least as
favorable as the vesting schedule required by the top-heavy
provisions.
The
minimum vesting schedule applies to all benefits within the meaning
of Section 411(a)(7) of the Code except those attributable to
Participant Contributions, including benefits accrued before the
effective date of Section 416 of the Code and benefits accrued
before the Plan became top-heavy. Further, no decrease in a
Participant’s nonforfeitable percentage may occur in the
event the Plan’s status as top-heavy changes for any Plan
Year. However, this Section does not apply to the Account balances
of any Employee who does not have an Hour of Service after the Plan
has initially become top-heavy and such Employee’s Account
balance will be determined without regard to this Section 14.05.
Notwithstanding the above vesting schedule, the Plan’s
vesting schedule at Section 8.01(c) (or the 100% vesting schedule
at 8.01(a), if applicable) will continue to apply provided it is at
least as favorable as the vesting schedule described
above.
If the
provisions of this Article apply for any Plan Year, the
contributions and forfeitures allocated to the Account of any
Non-Key Employee who is employed by the Employer on the last day of
the Plan Year shall equal at least three percent (3%) of the
Compensation of such Non-Key Employee. However, in the event that
the largest percentage of Compensation provided on behalf of any
Key Employee for the Plan Year is less than three percent (3%) of
such Key Employee’s Compensation, the minimum percentage of
Compensation that must be provided for any Non-Key Employee for the
Plan Year under this Section 14.06 is the largest percentage of
Compensation provided on behalf of any Key Employee for that Plan
Year. Elective Deferrals shall be taken into consideration for
purposes of determining the highest percentage allocated to a Key
Employee but not for the purposes of determining whether a Non-Key
Employee has received the minimum allocation under Code Section
416.
Notwithstanding
the above, if a minimum contribution for the Plan Year is made in
this Plan on behalf of each Participant who is not a Key Employee
and who is a Participant in a defined benefit plan maintained by
the Employer, then the contributions and forfeitures allocated to
the Account of any Non-Key Employee shall not be less than
five-percent (5%) of such Participant’s Compensation for the
Plan Year.
This
minimum allocation shall be made even though under other Plan
provisions, the Participant would not otherwise be entitled to
receive an allocation, or would have received a lesser allocation
for the Plan Year because of (i) the Participant’s failure to
complete 1000 Hours of Service (or any equivalent provided in the
Plan), or (ii) the Participant’s failure to make mandatory
Employee After-Tax Contributions to the Plan, or (iii) Compensation
less than a stated amount. This shall not apply to any Participant
who was not employed by the Employer on the last day of the Plan
Year. The minimum benefit provisions of this Section shall apply to
any Participant, under this Plan, even if the Participant is
covered under any other plan or plans of the Employer.
Matching
Contributions allocated to Key Employees are treated as Employer
Contributions for purposes of determining the minimum contribution
under this Section 14.06. However, if these contributions are
allocated to Employees other than Key Employees on the basis of
Employee Matching Contributions or Elective Deferrals to satisfy
the minimum contribution requirement, those amounts may not be
treated as Matching Contributions for purposes of satisfying the
ADP/ACP test. Such contributions must pass the general
nondiscrimination test of Code Section 401(a)(4) without regard to
Code Section 401(m). Elective Deferral Contributions on behalf of
Key Employees are taken into account in determining the minimum
contribution requirement. However Elective Deferral Contributions
on behalf of Employees other than Key Employees may not be treated
as Employer Contributions for purposes of the minimum contribution
requirements of this Section.
Notwithstanding
any other provision of this Plan, the minimum allocation required
(to the extent required to be nonforfeitable under Code Section
416(b)) may not be forfeited under Code Section 411(a)(3)(B) or
Code Section 411(a)(3)(D).
ARTICLE
XV
15.01 Availability of
Loans.
An
actively employed Participant and his beneficiary or a terminated
Participant with a vested Account who is a party-in-interest as
defined in ERISA Section 3(14) (collectively referred to as
Borrowers in this Article) may apply in writing requesting a loan
from the Trust Fund. Administration of this Article shall be by
authority of the Loan Administrator who shall be the
Administrator.
Loans
shall be made available from the Plan to all Borrowers on a
reasonably equivalent basis. Such loans shall be available to all
Borrowers without regard to any race, color, religion, sex, age, or
national origin. Loans shall not be made available to Highly
Compensated Employees (as defined in Plan Section 2.42) in an
amount greater than the amount made available to other Employees.
Further, consideration shall be given only to those factors which
would be considered in a normal commercial setting by an entity in
the business of making similar types of loans. Such factors may
include the Borrower’s credit worthiness and financial need.
The Loan Administrator shall have the sole right to approve or
disapprove a loan application, provided that the requirements of
this Section are satisfied.
A
Borrower must request a loan in writing addressed to the Loan
Administrator. The request should contain the amount of the loan
desired and should express a term for repayment of the
loan.
When
the request for the loan specifies a term for repayment of less
than five (5) years, the reason of the Borrower for requesting the
loan shall be taken into consideration by the Loan Administrator
only to the extent such would be considered in a normal commercial
setting by an entity in the business of making similar types of
loans.
Notwithstanding
the foregoing, if a Borrower desires to borrow the money for
purposes of acquiring a dwelling unit to be utilized as his
principal home, this should be specifically discussed with the Loan
Administrator in that it may affect the term of the loan and other
provisions as set forth below.
The
following are the only stated purposes for which a loan will be
made from the Plan:
(a)
deductible medical
expenses (within the meaning of Section 213(d) of the Code and
effective for Plan Years beginning after December 31, 2005, without
regard to the 7.5% of income limitation) of the Employee, the
Employee’s Spouse, children or dependents, including a
non-custodial child (effective for Plan Years beginning after
December 31, 2005, without regard to the change in the definition
of dependent under the Working Families Tax Relief Act of 2004), or
necessary for these persons to obtain medical care described in
Section 213(d) of the Code;
(b)
payment of burial
or funeral expenses for an Employee’s parents, Spouse,
children, or certain dependents;
(c)
the purchase,
(excluding mortgage payments) of a principal residence for the
Employee;
(d)
home repairs
necessitated by a casualty that would qualify under Code Section
165, without regard to the $10,000 limitation effective for Plan
Years beginning after December 31, 2005;
(e)
payment of tuition
and related educational fees and room and board expenses for the
next twelve (12) months of post-secondary education for the
Employee, the Employee’s Spouse, children or dependents
(without regard to the change in definition of dependent under the
Working Families Tax Relief Act of 2004); or
(f)
the need to prevent
the eviction of the Employee from, or a foreclosure on the mortgage
of, the Employee’s principal residence.
15.04 Amount of the
Loan.
No loan
to any Borrower can be made to the extent that such loan when added
to the outstanding balance of all other loans to the Borrower would
exceed the lesser of (a) $50,000 reduced by the excess (if any), of
the highest outstanding balance of loans during the one (1) 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 (b) one-half (1/2) the present value of the nonforfeitable
accrued benefit of the Borrower.
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
Sections 414(b), 414(c), (m) and (o) of the Code are aggregated. An
assignment or pledge of any portion of the Borrower’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.
A loan
that is deemed distributed under Code Section 72(p) (including
interest accruing thereafter) and that has not been repaid (such as
by a plan loan offset) is considered outstanding for purposes of
applying Code Section 72(p)(2)(A) to determine the maximum amount
of any subsequent loan to the Participant or beneficiaries under
this Section 15.04. This provision is effective for loans made on
or after January 1, 2002. This provision may also be applied to
loans made prior to January 1, 2002, to the extent permitted by the
Treasury regulations under Code Section 72(p).
The
minimum amount of any loan is $1,000.
Each
and every loan must be adequately secured. If a Borrower borrows an
amount which does not exceed fifty percent (50%) of his vested
Account, then such portion of his vested Account shall be adequate
security for the loan provided that the Borrower executes a pledge
agreement to effectuate this security.
If a
Borrower borrows more than fifty percent (50%) of his vested
Account, then additional security must be provided by the Borrower.
Such security shall be something which is so pledged to the Plan
that it may be sold, foreclosed upon or otherwise disposed of upon
default of repayment of the loan. The value and liquidity of such
security must be such that it may reasonably be anticipated that
loss of principal or interest will not result from the loan. The
adequacy of the security will be determined in light of the type
and amount of security which would be required in the case of an
otherwise identical transaction in a normal commercial setting
between unrelated parties on arm’s-length terms.
If a
loan is to be secured by a Borrower’s vested Account, and the
Borrower is married, Spousal consent must be obtained. Spousal
consent shall be obtained no earlier than the beginning of the
ninety (90) day period that ends on the date on which the loan is
to be so secured. The consent must be in writing, 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 with respect to that loan. A new consent shall be required
if the Account is used for renegotiation, extension, renewal, or
other revision of the loan. If a valid Spousal consent has been
obtained, then, notwithstanding any other provision of this Plan,
the portion of the Borrower’s vested Account balance used as
a security interest held by the Plan by reason of a loan
outstanding to the Borrower 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 one hundred percent
(100%) of the Borrower’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. However, no Spousal
consent shall be required under this paragraph if the total accrued
benefit subject to the security is not in excess of $5,000. The
Rollover Account, if any, will be counted in determining if the
value of the Account is $1,000.
15.06 Source of Loan
Funds.
To the
extent that any loan is made, the Borrower shall be deemed to have
directed the Trustee to invest that portion of his or her Account
in such loan. If the Borrower’s Account does not have a total
cash balance sufficient to make the loan, the Borrower’s loan
request shall direct the Trustee as to which assets shall be
liquidated. All such loans shall be made to such Borrower from his
individual Plan Account and shall be charged against such Account.
All payments of interest and principal made by the Borrower shall
be credited to the Borrower’s individual Plan
Account.
The
interest rate shall be a rate as determined by the Company at the
time that the loan is consummated which the Company deems to be
reasonable under the then circumstances after considering all
relevant factors, including but not limited to the current state of
the economy, the term of the loan, the security provided and the
amount of the loan. The rate of interest determined by the Company
shall provide the Plan with a return commensurate with the interest
rates charged in the region in which the Borrower is employed by
persons in the business of lending money for loans which would be
made under similar circumstances. Every Borrower applying for a
loan shall receive a clear statement of the charges involved in
each loan transaction. This statement shall include the dollar
amount and the annual interest rate of the finance
charge.
The
Loan Administrator may charge the Borrower reasonable loan
fees.
15.08 Payment Terms of Loan and Payroll
Deduction.
Except
in the case where the purpose of the loan is to help purchase a
principal residence for the Borrower, the term of the loan shall be
for five (5) years, unless a shorter term of repayment is
requested. No loan shall be extended for a term greater than five
(5) years unless such loan shall be used to acquire a dwelling unit
which within a reasonable time is to be used (determined at the
time the loan is made) as the principal residence of the
Borrower.
The
repayment of the loan shall be made with payments that provide for
a substantially level amortization of principal and interest over
the term of the loan. Such payments shall be required to be made
not less frequently than quarterly. There shall be no penalty for
prepayment of any Plan loan. While the Borrower is employed by the
Employer, repayment of a loan may be made by payroll deduction not
less frequently than quarterly.
In the
event of a loan made for a Borrower’s acquisition of a
dwelling unit that is to be utilized as such applicant’s
principal residence as stated above, the loan term shall be for no
longer than thirty (30) years.
Each
loan shall be evidenced by a promissory note (Note) prepared by the
Loan Administrator, executed by the Participant, and delivered to
the Loan Administrator by the Participant upon receipt of the cash
amount of the loan.
Effective
December 12, 1994, loan repayments will be suspended under this
Plan as permitted under Section 414(u)(4) of the Code with respect
to a Participant for any part of a period during which the
Participant is performing service in the uniformed services (as
defined in Chapter 43 of Title 38 of the United States Code),
whether or not such service is qualified military service. Such
suspension shall not be taken into account for purposes of Code
Section 72(p), 401(a) or 4975(d)(1).
In the
event that a Borrower who obtains a loan from the Plan fails to pay
any installment of his or her obligation when due (subject to the
cure period set forth below), or to pay any other obligation or
liability to the Plan Trustee when due, or to comply with any other
provision contained in any promissory note or pledge agreement or
any other instrument delivered to the Plan Trustee, or if any
representations or warranty by the Borrower to the Plan Trustee,
whether oral or in any application, financial statement, security
instrument or other agreement is materially untrue, then in such
event, the Plan Trustee, at its option (at least, so long as no
loss for principal or interest will occur to the Plan due to the
delay of any enforcement), may declare any or all such obligations
of the Borrower to the Plan to be immediately due and payable
without notice or demand. The Plan Trustee shall then take such
steps to obtain payment of any or all such obligations of the
Borrower to the Plan including, but not limited to the sale,
foreclosure or other disposition of any amounts pledged as security
for the loan and/or the treatment of such obligations as a
distribution to the Borrower at such time to the extent that said
Borrower had pledged a portion of his or her vested Account in the
Plan as security for said loan. Notwithstanding the above, the
Administrator may allow a cure period and the requirement of
substantially level amortization set forth in Section 15.08 of this
document, will not be considered to have been violated if the
installment payment is made not later than the end of the cure
period, which period cannot continue beyond the last day of the
calendar quarter following the calendar quarter in which the
required installment payment was due.
Upon
default in payment of principal or interest within sixty (60) days
after the due date, the Employer shall thereupon withhold the
payments of principal and interest as the same are due or become
due from the Participant’s Compensation and pay the same on
the Note or, if the Participant has terminated or thereafter
terminates employment with the Employer, the Trustee, if otherwise
permitted to distribute assets, shall distribute the Note to the
former Participant as a distribution of an asset from the
Participant’s Account and shall reduce the balance of the
Participant’s Account by the amount of the unpaid
principal.
15.10 Shareholder-Employee
Loans.
No
loans will be made to any Shareholder-Employee or Owner-Employee.
For purposes of this requirement, a Shareholder-Employee means an
employee or officer of an electing small business (Subchapter S)
corporation who owns (or is considered as owning within the meaning
of Section 318(a)(1) of the Code), on any day during the taxable
year of such corporation, more than five percent (5%) of the
outstanding stock of the corporation and an Owner-Employee means an
individual who is a sole proprietor, or partner owning more than
ten percent (10%) of either the capital or profits interest of the
partnership.
15.11 Policy
Restrictions.
The
foregoing provisions shall be the standard loan provisions of the
Plan. However, different loan terms may be permitted provided that
the final determination shall be made by the Loan Administrator on
a uniform and nondiscriminatory basis. Accordingly, the provisions
of this Article XV may be supplemented and/or replaced by more
specific or different written provisions adopted by the Loan
Administrator as part of the Plan’s loan policy.
ARTICLE
XVI
16.01 Participant’s
Rights.
This
Plan shall not be deemed to constitute a contract between the
Employer and any Participant or to be a consideration or an
inducement for the employment of any Participant or Employee.
Nothing contained in this Plan shall be deemed to give any
Participant or Employee the right to be retained in the service of
the Employer or to interfere with the right of the Employer to
discharge any Participant or Employee at any time regardless of the
effect which such discharge shall have upon him as a Participant of
this Plan.
(a)
Subject to the
exceptions provided below and to the exception provided in Code
Section 401(a)(13)(C), no benefit which shall be payable out of the
Trust Fund to any person (including a Participant or his
beneficiary) shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, or
charge, and any attempt to anticipate, alienate, sell, transfer,
assign, pledge, encumber, or charge the same shall be void; and no
such benefit shall in any manner be liable for, or subject to, the
debts, contracts, liabilities, engagements, or torts of any such
person, nor shall it be subject to attachment or legal process for
or against such person, and the same shall not be recognized by the
Trustee, except to such extent as may be required by
law.
(b)
This provision
shall not apply to the extent a Participant or beneficiary is
indebted to the Plan, for any reason, under any provision of the
Plan. At the time a distribution is to be made to or for a
Participant’s or beneficiary’s benefit, such proportion
of the amount distributed as shall equal such indebtedness shall be
paid by the Trustee to the Trustee or the Administrator, at the
direction of the Administrator, to apply against or discharge such
indebtedness. Prior to making a payment, however, the Participant
or beneficiary must be given written notice by the Administrator
that such indebtedness is to be so paid in whole or part from his
Participant’s Account. If the Participant or beneficiary does
not agree that the indebtedness is a valid claim against his
Account, he shall be entitled to a review of the validity of the
claim in accordance with procedures provided in Article
XII.
(c)
Subparagraph (a)
shall not apply to a Qualified Domestic Relations Order. The
Administrator shall establish a written procedure to determine the
qualified status of domestic relations orders and to administer
distributions under such qualified orders.
16.03 Construction of
Plan.
This
Plan and Trust shall be construed and enforced according to ERISA
and the Code and the laws of the State of Ohio, and other than its
laws respecting choice of law, to the extent not preempted by
ERISA.
Wherever
any words are used herein in the masculine, feminine or neuter
gender, they shall be construed as though they were also used in
another gender in all cases where they would so apply, and whenever
any words are used herein in the singular or plural form, they
shall be construed as though they were also used in the other form
in all cases where they would so apply.
16.05 Prohibition Against Diversion of
Funds.
Except
as provided below and otherwise specifically permitted by law, it
shall be impossible by operation of the Plan or of the Trust, by
termination of either, by power of revocation or amendment, by the
happening of any contingency, by collateral arrangement or by any
other means, for any part of the corpus or income of any trust fund
maintained pursuant to the Plan or any funds contributed thereto to
be used for, or diverted to, purposes other than the exclusive
benefit of Participants or their beneficiaries.
Every
fiduciary, except a bank or an insurance company, unless exempted
by ERISA and regulations thereunder shall be bonded in an amount
not less than ten percent (10%) of the amount of the funds such
fiduciary handles; provided, however, that the minimum bond shall
be $1,000 and the maximum bond $500,000. In the case of a Plan that
holds employer securities (within the meaning of ERISA Section
407(d)(1)), the maximum bond amount is $1,000,000 or such other
amount as the Secretary of Labor prescribes. The amount of funds
handled shall be determined at the beginning of each Plan Year by
the amount of funds handled by such person, group, or class to be
covered and their predecessors, if any, during the preceding Plan
Year, or if there is no preceding Plan Year, then by the amount of
the funds to be handled during the then current year. The bond
shall provide protection to the Plan against any loss by reason of
acts of fraud or dishonesty by the fiduciary alone or in connivance
with others. The surety shall be a corporate surety company (as
such term is used in Section 412(a)(2) of ERISA), and the bond
shall be in a form approved by the Secretary of Labor.
Notwithstanding anything in the Plan to the contrary, the cost of
such bonds shall be an expense of and may, at the election of the
Administrator, be paid from the Trust Fund or by the
Employer.
Neither
the Company nor the Employer nor the Trustee, nor their successors,
shall be responsible for the validity of any insurance contract
issued hereunder or for the failure on the part of the insurer to
make payments provided by any such Contract, or for the action of
any person which may delay payment or render a Contract null and
void or unenforceable in whole or in part.
16.08 Receipt and Release for
Payments.
Any
payment to any Participant, his legal representative, beneficiary,
or to any guardian or committee appointed for such Participant or
beneficiary in accordance with the provisions of the Plan, shall,
to the extent thereof, be in full satisfaction of all claims
hereunder against the Trustee and the Employer and the Company,
either of whom may require such Participant, legal representative,
beneficiary, guardian or committee, as a condition precedent to
such payment, to execute a receipt and release thereof in such form
as shall be determined by the Trustee or the Company or the
Employer.
16.09 Actions and
Technologies.
Whenever
the Employer under the terms of the Plan is permitted or required
to do or perform any act or matter or thing, it shall be done and
performed by a person duly authorized by its legally constituted
authority. Unless waived by the party to whom directed, all
notices, reports, requests, elections, designations, claims or
other communications referred to in the Plan, and all actions taken
pursuant to the Plan, shall be in writing. Notwithstanding any
reference to a "writing," the Employer and Plan Administrator may
use telephonic or electronic media or other technologies to satisfy
any notice requirements, to the extent permissible under applicable
regulations or other generally applicable guidance. In
addition, a participant's consent to immediate distribution may be
provided through telephonic or electronic means, to the extent
permissible under regulations or other generally applicable
guidance. Further, the Employer and Plan Administrator may
also use telephonic or electronic media or other technologies to
conduct plan transactions such as enrolling Participants, making
and changing salary reduction elections, electing and changing
investment allocations, applying for loans, and other transactions,
to the extent permissible under applicable regulations or other
generally applicable guidance.
The
headings and subheadings of this Plan have been inserted for
convenience of reference and are to be ignored in any construction
of the provisions hereof.
All
provisions of this Plan shall be interpreted and applied in a
uniform, nondiscriminatory manner.
16.12 Participating
Employers.
Any
company deemed to be a member of a controlled group of corporations
or trades or business under common control or an affiliated service
group pursuant to Section 414(b), (c), (m) or (o) of the Code of
which the Company is also a member may, with the consent of the
Company and the consent of such company’s Board of Directors,
elect to participate in the Plan and may adopt the Plan and Trust
hereby created. From and after the effective date when such company
shall have become a party to this Plan, it shall for all purposes
of this Plan be included within the meaning of the word Employer.
Provided, however, such participating employers shall not be
required to authorize an amendment to the Plan in order to
effectuate an amendment or to terminate this Plan and
Trust.
It is
the intent of the Employer that contributions to the Plan shall be
for the exclusive benefit of the Participants and their
beneficiaries. In the event the Administrator cannot locate an
individual entitled to receive a distribution under the Plan, the
Administrator can act to prevent reversion of such benefits to the
state. If the whereabouts of any former Participant and/or
beneficiary who is entitled to any distribution under the Plan
cannot be determined by the Administrator or the Employer, then the
Administrator may instruct the Trustee to maintain such
Participant’s or beneficiary’s Account in suspense. The
Administrator shall, from time to time during the following three
(3) years, make reasonable efforts to locate such missing
Participant or beneficiary. If the Participant or beneficiary to
whom payment is due cannot be found within such three (3) year
period, the Administrator may declare such Account a forfeiture and
allocate it in accordance with Section 4.07. If a claim is later
made by a Participant or beneficiary for an Account which has been
forfeited pursuant to this Section, the forfeited benefit shall be
restored out of forfeitures occurring during the Plan Year or by
means of a special Employer Contribution and be paid to such
claimant.
Alternatively,
the Administrator may deposit the Participant’s Account in a
bank defined in Section 581 of the Code.
It
shall be the responsibility of the terminating Participant to keep
the Administrator informed as to his address, and the Trustee and
the Administrator shall not be required to do anything further than
sending all papers, notices, payments or the like to the last
address given them by such Participant unless they can be shown to
have acted in bad faith, having had knowledge of the
Participant’s actual whereabouts.
16.14 Mutual Exclusivity of
Benefits.
No
Participant or beneficiary shall be entitled to receive more than
one type of benefit under this Plan. Any election or type of
benefit made by the Participant shall be binding on the Participant
as well as his beneficiary.
If any
provision of this Plan shall be for any reason invalid or
unenforceable, the remaining provisions shall nevertheless be
carried into effect.
16.16 Spendthrift
Clause.
The
right of any Participant or beneficiary to any benefit or to any
payment hereunder or to any separate account shall not be subject
to alienation or assignment. If any Participant shall, except as
hereby permitted, attempt to assign, transfer or dispose of such
right, or should such right be subjected to attachment, execution,
garnishment, sequestration or other legal, equitable or other
process, it shall ipso facto pass to such one or more persons as
may be appointed by the Administrator from among the beneficiaries,
if any, therefore designated by such Participant and the Spouse and
blood relatives of the Participant. However, the Administrator, in
his sole discretion, may reappoint the Participant to receive any
payment thereafter becoming due either in whole or in part. Any
appointment made by the Administrator hereunder may be revoked by
the Administrator at any time, and further appointment made by
him.
All
provisions in this instrument for the vesting and payment of any
sum or interest are subject to the provisions that such sum and
interest shall not be anticipated, alienated or in any other manner
assigned by the Participant and shall not be subject to be reached
or applied either by any creditor, Spouse or divorced Spouse of any
Participant, nor by or under any agreement or decree of separation
or divorce, voluntary or involuntary, of any Participant, but shall
be for the benefit of the beneficiary chosen by the Participant or
Administrator pursuant to this Section, except as provided pursuant
to a Qualified Domestic Relations Order.
16.17 Payment to Minor or
Incompetent.
In the
event that any amount is payable to a minor or other legally
incompetent persons, such payment shall be paid, at the direction
of the conservator appointed either under a court order or
applicable state law which permits such an individual to be a
guardian for the benefit of said minor or incompetent.
Except
as may be specifically provided for by law, in any action or
proceeding involving the Trust or any property constituting a part
or all thereof, or the administration thereof, the Company, the
Employer, the Administrator, and the Trustee shall be the only
necessary parties and no Employees or former Employees of the
Employer or their beneficiaries or any other person having or
claiming to have an interest in the Trust or under the Plan shall
be entitled to any notice or process.
Except
as may be specifically provided for by law, any final judgment
which is not appealed or appealable that may be entered in any such
action or proceeding shall be binding and conclusive on the parties
hereto and all persons having or claiming to have an interest in
the Trust or under the Plan.
The
Administrator in conjunction with the Employer may undertake such
correction of Plan errors as the Administrator deems necessary,
including correction to preserve tax qualification of the Plan
under Code Section 401(a) or to correct a fiduciary breach under
ERISA.
The
Employer may also make qualified nonelective contributions to the
Plan, and allocate those contributions, in a manner so as to
correct other compliance matters, as generally discussed in the
Employee Plans Compliance Resolution System. The
Administrator may need to establish an unallocated account, such as
to make corrections as generally discussed in the Employee Plans
Compliance Resolution System or to receive a refund of
fees.
ARTICLE
XVII
MINIMUM DISTRIBUTION
REQUIREMENTS
The
provisions of this Article will apply for purposes of determining
required minimum distributions for calendar years beginning with
the 2004 calendar year.
The
requirements of this Article will take precedence over any
inconsistent provisions of the Plan.
17.1.3
Requirements of Treasury Regulations
Incorporated.
All
distributions required under this Article will be determined and
made in accordance with the Treasury regulations under Section
401(a)(9) of the Internal Revenue Code and the minimum distribution
incidental benefit requirement of Section 401(a)(9)(G) of the
Internal Revenue Code.
17.1.4
TEFRA Section 242(b)(2)
Elections.
Notwithstanding the
other provisions of this Article, distributions may be made under a
designation made before January 1, 1984, in accordance with Section
242(b)(2) of the Tax Equity and Fiscal Responsibility Act (TEFRA)
and the provisions of the Plan that relate to Section 242(b)(2) of
TEFRA.
17.02 Time and Manner of
Distribution.
The
Participant’s entire interest will be distributed, or begin
to be distributed, to the Participant no later than the
Participant’s Required Beginning Date.
17.2.2
Death of Participant Before
Distributions Begin.
If the
Participant dies before distributions begin, the
Participant’s entire interest will be distributed, or begin
to be distributed, no later than as follows:
(a)
If the
Participant’s surviving Spouse is the Participant’s
sole designated beneficiary, then, except as provided in the
Optional Provisions, distributions to the surviving Spouse will
begin by December 31 of the calendar year immediately following the
calendar year in which the Participant died, or by December 31 of
the calendar year in which the Participant would have attained age
70-1/2, if later.
(b)
If the
Participant’s surviving Spouse is not the Participant’s
sole designated beneficiary, then, except as provided in the
Optional Provisions, distributions to the designated beneficiary
will begin by December 31 of the calendar year immediately
following the calendar year in which the Participant
died.
(c)
If there is no
designated beneficiary as of September 30 of the year following the
year of the Participant’s death, the Participant’s
entire interest will be distributed by December 31 of the calendar
year containing the fifth anniversary of the Participant’s
death.
(d)
If the
Participant’s surviving Spouse is the Participant’s
sole designated beneficiary and the surviving Spouse dies after the
Participant but before distributions to the surviving Spouse begin,
this Section 17.02.2, other than Section 17.02.2(a), will apply as
if the surviving Spouse were the Participant.
For
purposes of this Section 17.02.2 and Section 17.04, unless Section
17.02.2(d) applies, distributions are considered to begin on the
Participant’s Required Beginning Date. If Section 17.02.2(d)
applies, distributions are considered to begin on the date
distributions are required to begin to the surviving Spouse under
Section 17.02.2(a). If distributions under an annuity purchased
from an insurance company irrevocably commence to the Participant
before the Participant’s Required Beginning Date (or to the
Participant’s surviving Spouse before the date distributions
are required to begin to the surviving Spouse under Section
17.02.2(a)), the date distributions are considered to begin is the
date distributions actually commence.
Unless
the Participant’s interest is distributed in the form of an
annuity purchased from an insurance company or in a single sum on
or before the Required Beginning Date, as of the first distribution
calendar year distributions will be made in accordance with
Sections 17.03 and 17.04 of this Article. If the
Participant’s interest is distributed in the form of an
annuity purchased from an insurance company, distributions
thereunder will be made in accordance with the requirements of
Section 401(a)(9) of the Code and the Treasury
regulations.
17.03 Required Minimum Distributions During
Participant’s Lifetime.
17.3.1
Amount of Required Minimum
Distribution for Each Distribution Calendar
Year.
During
the Participant’s lifetime, the minimum amount that will be
distributed for each distribution calendar year is the lesser
of:
(a)
the quotient
obtained by dividing the Participant’s Account balance by the
distribution period in the Uniform Lifetime Table set forth in
Section 1.401(a)(9)-9, Q&A-2, of the Treasury regulations,
using the Participant’s age as of the Participant’s
birthday in the distribution calendar year; or
(b)
if the
Participant’s sole designated beneficiary for the
distribution calendar year is the Participant’s Spouse, the
quotient obtained by dividing the Participant’s Account
balance by the number in the Joint and Last Survivor Table set
forth in Section 1.401(a)(9)-9, Q&A-3, of the Treasury
regulations, using the Participant’s and Spouse’s
attained ages as of the Participant’s and Spouse’s
birthdays in the distribution calendar year.
17.3.2
Lifetime Required Minimum
Distributions Continue Through Year of Participant’s
Death.
Required minimum
distributions will be determined under this Section 17.03 beginning
with the first distribution calendar year and up to and including
the distribution calendar year that includes the
Participant’s date of death.
17.04 Required Minimum Distributions After
Participant’s Death.
17.4.1
Death On or After Date Distributions
Begin.
(a)
Participant Survived by Designated
Beneficiary. If the Participant dies on or after the date
distributions begin and there is a designated beneficiary, the
remaining portion of his interest in the Plan must be distributed
to his Designated Beneficiary at least as rapidly as under the
method of distribution in effect at the time of the Participant's
death. The minimum amount that will be distributed for each
distribution calendar year after the year of the
Participant’s death is the quotient obtained by dividing the
Participant’s Account balance by the longer of the remaining
life expectancy of the Participant or the remaining life expectancy
of the Participant’s designated beneficiary, determined as
follows:
(1) The
Participant’s remaining life expectancy is calculated using
the age of the Participant in the year of death, reduced by one for
each subsequent year.
(2) If
the Participant’s surviving Spouse is the Participant’s
sole designated beneficiary, the remaining life expectancy of the
surviving Spouse is calculated for each distribution calendar year
after the year of the Participant’s death using the surviving
Spouse’s age as of the Spouse’s birthday in that year.
For distribution calendar years after the year of the surviving
Spouse’s death, the remaining life expectancy of the
surviving Spouse is calculated using the age of the surviving
Spouse as of the Spouse’s birthday in the calendar year of
the Spouse’s death, reduced by one for each subsequent
calendar year.
(3) If
the Participant’s surviving Spouse is not the
Participant’s sole designated beneficiary, the designated
beneficiary’s remaining life expectancy is calculated using
the age of the beneficiary in the year following the year of the
Participant’s death, reduced by one for each subsequent
year.
(b)
No Designated Beneficiary. If
the Participant dies on or after the date distributions begin and
there is no designated beneficiary as of September 30 of the year
after the year of the Participant’s death, the minimum amount
that will be distributed for each distribution calendar year after
the year of the Participant’s death is the quotient obtained
by dividing the Participant’s Account balance by the
Participant’s remaining life expectancy calculated using the
age of the Participant in the year of death, reduced by one for
each subsequent year.
17.4.2
Death Before Date Distributions
Begin.
(a)
Participant Survived by Designated
Beneficiary. Except as provided in 17.02.2 (regarding the
five-year rule, if applicable), if the Participant dies before the
date distributions begin and there is a designated beneficiary, the
minimum amount that will be distributed for each distribution
calendar year after the year of the Participant’s death is
the quotient obtained by dividing the Participant’s Account
balance by the remaining life expectancy of the Participant’s
designated beneficiary, determined as provided in Section
17.04.1.
(b)
No Designated Beneficiary. If
the Participant dies before the date distributions begin and there
is no designated beneficiary as of September 30 of the year
following the year of the Participant’s death, distributions
of the Participant’s entire interest will be completed by
December 31 of the calendar year containing the fifth anniversary
of the Participant’s death.
(c)
Death of Surviving Spouse Before
Distributions to Surviving Spouse Are Required to Begin. If
the Participant dies before the date distributions begin, the
Participant’s surviving Spouse is the Participant’s
sole designated beneficiary, and the surviving Spouse dies before
distributions are required to begin to the surviving Spouse under
Section 17.02.2(a), this Section 17.04.2 will apply as if the
surviving Spouse were the Participant.
The
individual who is designated as the beneficiary under Section 9.08
of the Plan and is the designated beneficiary under Code Section
401(a)(9) and Treasury Regulation Section
1.401(a)(9)-4.
17.5.2
Distribution calendar
year.
A
calendar year for which a minimum distribution is required. For
distributions beginning before the Participant’s death, the
first distribution calendar year is the calendar year immediately
preceding the calendar year 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
under Section 17.02.2. The required minimum distribution for the
Participant’s first distribution calendar year will be made
on or before the Participant’s Required Beginning
Date.
The
required minimum distribution for other distribution calendar
years, including the required minimum distribution for the
distribution calendar year in which the Participant’s
Required Beginning Date occurs, will be made on or before December
31 of that distribution calendar year.
Life
expectancy as computed by use of the Single Life Table in Section
1.401(a)(9)-9, Q&A-1, of the Treasury regulations.
17.5.4
Participant’s Account
balance.
The
Account balance as of the last Valuation Date in the calendar year
immediately preceding the distribution calendar year (valuation
calendar year) increased by the amount of any contributions made
and allocated or forfeitures allocated to the Account balance as of
dates in the valuation calendar year after the Valuation Date and
decreased by distributions made in the valuation calendar year
after the Valuation Date. The Account balance for the valuation
calendar year includes any amounts rolled over or transferred to
the Plan either in the valuation calendar year or in the
distribution calendar year if distributed or transferred in the
valuation calendar year.
The
Required Beginning Date is for the Participant who is not a
5-percent owner of the Employer, April 1 of the calendar year
following the later of: (i) the calendar year in which the
Participant retires, or (ii) the calendar year in which the
Participant attains age 70-1/2. Provided, however, that such
Participant may elect to commence minimum distributions at the
earlier of these dates. Provided, further, that the Required
Beginning Date for a Participant who is a 5-percent owner (as
described in Section 416(i) of the Code is the April 1 of the
calendar year following the calendar year in which the Participant
attains age 70-1/2.
17.06 2009 Required Minimum
Distributions.
Notwithstanding
any other provision of Article XVII, a Participant or beneficiary
who would have been required to receive required minimum
distributions for 2009 but for the enactment of Code Section
401(a)(9)(H) (“2009 RMDs”), and who would have
satisfied that requirement by receiving distributions that are (1)
equal to the 2009 RMDs or (2) one or more payments in a series of
substantially equal distributions (that include the 2009 RMDs) made
at least annually and expected to last for the life (or life
expectancy) of the Participant, the joint lives (or joint life
expectancy) of the Participant and the Participant’s
designated beneficiary, or for a period of at least 10 years
(“Extended 2009 RMDs”), will be given the opportunity
to elect to receive such distributions. If they do not elect to
receive such distributions, the distributions for 2009 will not be
made.
Notwithstanding
any other provision of Article XVII or Section 11.05, and solely
for purposes of applying the direct rollover provisions of the
Plan, a direct rollover will be offered only for distributions that
would be eligible rollover distributions without regard to Section
401(a)(9)(H).
This
Plan and Trust is adopted by the Company and the Trustee as of the
dates appearing opposite their respective signatures.
COMPANY:
NAVIDEA
BIOPHARMACEUTICALS, INC.
Date:
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4 APR 2016
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By:
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/s/ Brent L. Larson
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Its:
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EVP & CFO
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NAVIDEA
BIOPHARMACEUTICALS, INC.
401(k)
PLAN AND TRUST
LIST OF PARTICIPATING EMPLOYERS
Navidea
Biopharmaceuticals, Inc.
COLUMBUS/1504591v.8