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

Page

Article I Introduction  1

Article II Definitions  2

Article III Eligibility And Participation  3

Article IV Employer Contributions  4

Article V Participant Contributions  5

Article VI Non-Discrimination Testing  6

Article VII Accounts  7

Article VIII Vesting  8

Article IX Payment Of Benefits  9

Article X Named Fiduciary Powers And Responsibilities  10

Article XI Trustee Powers And Responsibilities  11

Article XII Committee Powers And Responsibilities  12

Article XIII Amendment, Termination, And Mergers  13

Article XIV Top-Heavy Provisions  14

Article XV Participant Loans  15

Article XVI Miscellaneous  16

Article XVII Minimum Distribution Requirements  17

APPENDIX A  A-1

 

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).

 

 

INTRODUCTION

 

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.

 

 

 

 

DEFINITIONS

 

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.

 

 

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.

 

 

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:

 

 

 

 

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:

 

 

 

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:

 

 

 

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 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:

 

 

 

 

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:

 

 

 

 

 

 

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:

 

 

 

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:

 

 

 

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:

 

 

 

 

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.

 

 

 

 

ELIGIBILITY AND PARTICIPATION

 

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.

 

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).

 

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.

 

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.

 

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.

 

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).

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

 

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.

 

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.

 

Contributions made by the Employer shall be in Qualifying Employer Securities.

 

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.

 

 

 

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.

 

 

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.

 

 

 

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.

 

 

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.

 

 

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:

 

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.

 

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 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).

 

 

 

PARTICIPANT CONTRIBUTIONS

 

Employee After-Tax Contributions to the Plan are not permitted.

 

 

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.

 

 

 

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.

 

 

 

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.

 

 

 

 

NON-DISCRIMINATION TESTING

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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.

 

 

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).

 

 

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:

 

 

 

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:

 

 

 

 

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:

 

 

 

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.

 

 

 

ACCOUNTS

 

 

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.

 

 

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.

 

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.

 

 

 

VESTING

 

 

 

 

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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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.

 

 

 

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.

 

 

PAYMENT OF BENEFITS

 

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.

 

 

 

 

 

 

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.

 

 

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.

The Plan does not offer any form of benefit other than a single lump sum payment in cash or in property.

 

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:

 

 

 

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.

 

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:

 

 

 

 

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.

 

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.

 

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:

 

 

 

 

 

 

 

 

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.

 

 

 

 

 

 

 

 

 

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.

 

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:

 

 

 

 

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.

 

 

 

 

NAMED FIDUCIARY POWERS AND RESPONSIBILITIES

 

The Named Fiduciary shall have only those specific powers, duties, responsibilities, and obligations as are specifically given them under 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.

 

 

 

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.

 

 

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.

 

 

 

TRUSTEE POWERS AND RESPONSIBILITIES

 

The Trustee shall have the following categories of responsibilities:

 

 

 

 

 

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.

 

 

 

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.

 

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.

 

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:

 

 

 

 

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.)

 

 

 

 

 

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).

 

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:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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.

 

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.

 

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:

 

 

 

 

 

 

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.

 

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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COMMITTEE POWERS AND RESPONSIBILITIES

 

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.

 

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.

 

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.

 

 

 

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.

 

 

 

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.

 

 

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.

 

 

 

 

 

 

AMENDMENT, TERMINATION, AND MERGERS

 

 

 

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.

 

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.

 

 

 

 

 

 

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.

 

 

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.

 

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).

 

 

 

TOP-HEAVY PROVISIONS

 

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:

 

 

 

 

 

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.

 

 

 

 

 

A Plan shall be considered a Top-Heavy Plan for the Plan Year if, as of the Determination Date:

 

 

 

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.

 

 

 

 

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).

 

 

 

 

PARTICIPANT 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.