Updated January 28, 1998
GAPSHARE
INTRODUCTION 1
ARTICLE I - DEFINITIONS 2
ARTICLE II - ELIGIBILITY AND PARTICIPATION 10
Section 2.1 Eligibility Requirements. 10
Section 2.2 Participation. 11
Section 2.3 Years of Service for Eligibility Computation. 11
ARTICLE III - CONTRIBUTIONS 13
Section 3.1 Employer Contributions. 13
Section 3.2 Employee Elective Deferrals. 13
Section 3.3 After-Tax Employee Contributions. 14
Section 3.4 Rollover Contributions. 14
Section 3.5 Trustee-to-Trustee Transfers. 15
Section 3.6 Deduction Limitation. 15
Section 3.7 Minimum Employer Contribution. 15
ARTICLE IV - 401(k) and 401(m) 16
Section 4.1 Distribution of Excess Employee Elective Deferrals. 16
Section 4.2 Actual Deferral Percentage Test. 17
Section 4.3 Distribution of Excess Contributions. 19
Section 4.4 Actual Contribution Percentage Test. 20
Section 4.5 Distribution of Excess Aggregate Contributions. 23
Section 4.6 Recharacterization. 24
ARTICLE V - ALLOCATIONS, VALUATION AND VESTING 25
Section 5.1 Allocation of Contributions. 25
Section 5.2 Participants Who Will Receive an Allocation. 25
Section 5.3 Allocation of Forfeitures. 25
Section 5.4 Allocation Limitations. 25
Section 5.5 Valuation. 33
Section 5.6 Vesting and Accrual. 33
Section 5.7 Allocation of Minimum Employer Contributions. 35
ARTICLE VI - DISTRIBUTIONS 37
Section 6.1 Distributions of Small Account Balances. 37
Section 6.2 Distributions While In-Service. 37
Section 6.3 Distributions Upon Separation From Service. 38
Section 6.4 Distributions Upon Retirement. 38
Section 6.5 Distributions Upon Death. 38
Section 6.6 Distributions Upon Disability. 39
Section 6.7 Special Beneficiary Provisions. 40
Section 6.8 Consent of the Participant Required for
Distributions if Account Balances Greater
Than $5,000. 40
Section 6.9 Commencement of Benefits. 41
Section 6.10 Required Distributions. 42
Section 6.11 Special Distribution Rules for 401(k) Contributions
and Qualified Non-Elective Contributions. 48
Section 6.12 Form of Distribution. 48
Section 6.13 Trustee-to-Trustee Transfers. 48
Section 6.14 Normal Form of Benefit. 49
Section 6.15 Rollovers to Other Plans or IRAs. 49
ARTICLE VII - LOANS 50
Section 7.1 Availability of Loans. 50
Section 7.2 Amount of Loans. 50
Section 7.3 Terms of Loans. 50
ARTICLE VIII - PLAN ADMINISTRATION 53
Section 8.1 Duties of the Employer. 53
Section 8.2 The Committee. 53
Section 8.3 Appointment of Advisor. 54
Section 8.4 Powers and Duties of the Committee. 54
Section 8.5 Organization and Operation. 55
Section 8.6 Claims Procedure. 55
Section 8.7 Records and Reports. 56
Section 8.8 Liability. 57
Section 8.9 Reliance on Statements. 57
Section 8.10 Remuneration and Bonding. 58
Section 8.11 Committee Decisions Final. 58
Section 8.12 Participant-Directed Investments. 58
ARTICLE IX - TRUST AGREEMENT 59
Section 9.1 Establishment of Trust. 59
Section 9.2 Exclusive Benefit. 59
ARTICLE X - AMENDMENT, TERMINATION AND MERGER 60
Section 10.1 Amendment. 60
Section 10.2 Termination. 60
Section 10.3 Merger, Consolidation or Transfer. 61
ARTICLE XI - TOP-HEAVY PROVISIONS 62
Section 11.1 Applicability. 62
Section 11.2 Definitions. 62
Section 11.3 Minimum Allocation. 65
Section 11.4 Nonforfeitability of Minimum Allocation. 65
Section 11.5 Allocation Limitations. 66
Section 11.6 Minimum Vesting Schedules. 66
ARTICLE XII - GENERAL PROVISIONS 67
Section 12.1 Governing Law. 67
Section 12.2 Power to Enforce. 67
Section 12.3 Alienation of Benefits. 67
Section 12.4 Not an Employment Contract. 67
Section 12.5 Discretionary Acts. 68
Section 12.6 Interpretation. 68
ARTICLE XIII - SPECIAL RULES FOR PUERTO RICAN PARTICIPANTS 69
ARTICLE XIV - SIGNATURE PAGE 72
INTRODUCTION
Purpose.
The primary purpose of the GapShare (the "Plan") is to provide
the Employees of Gap, Inc. and affiliates with retirement benefits
in recognition of the contribution of the Employees to the
successful operation of the Employer. The Plan is intended to be a
profit sharing plan, qualified under section 401(a) of the Internal
Revenue Code (the "Code"), which permits salary deferral
contributions as provided by section 401(k) of the Code; and its
affiliated Trust is intended to be exempt from tax under
section 501(a) of the Code. In addition, it is intended that the
Plan meet the applicable requirements of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA").
Effective Date.
Pursuant to the terms of the Plan which permit its amendment by the
Employer, this document is a restatement, in its entirety, of the
Plan, generally effective January 1, 1998.
The terms of this document now set forth the controlling provisions
of the Plan for all persons who are Employees on or after the
Effective Date; provided, however, that to the extent required
under section 411(d)(6) of the Code (and related Treasury
Regulations), the applicable provisions of the preceding Plan
documents are incorporated herein by reference.
ARTICLE I - DEFINITIONS
The following words and phrases, wherever capitalized, shall have
the meanings set forth below, unless the context in which they
appear within the Plan clearly indicates otherwise:
Account(s) means the aggregate (or as otherwise specified) interest
of a Participant in the assets of the Trust. Each Participant's
interest will be segregated into one or more of the following
Accounts, which will reflect, in addition to contributions
allocated thereto, appropriate allocations of earnings, gains,
losses and expenses of the Trust:
Employee Deferral Account. The separate Account maintained
for each Participant to which are credited his Employee
Elective Deferrals.
100% Vested Matching Contribution Account. The separate
Account maintained for each Participant to which are
credited any 100% Vested Matching Contributions allocated
to him.
Excess Matching Contribution Account. The separate Account
maintained for each Participant to which are credited any
Excess Matching Contributions allocated to him.
Employer Matching Contribution Account. The separate
Account maintained for each Participant to which are
credited any Employer Matching Contributions allocated to
him and made in accordance with Section 3.1.
Qualified Non-Elective Contribution Account. The separate
Account maintained for each Participant to which are
credited any Qualified Non-Elective Contributions allocated
to him and made on his behalf in accordance with
Section 3.1.
Rollover Account. The separate Account maintained for each
applicable Participant to which contributions are made
under Section 3.4.
After-Tax Employee Contribution Account. The separate
Account maintained for each Participant, in accordance with
Section 3.3, reflecting his After-Tax Employee
Contributions.
The Administrator may, in its discretion, establish subaccounts
within each separate Account.
Administrative Delegate means one or more persons or institutions
to whom the Committee has delegated certain administrative
functions pursuant to a written agreement.
Administrator means the Committee designated by the Employer to
administer the Plan.
Affiliate means a member of a controlled group of corporations,
within the meaning of section 414(b) of the Code, which includes
the Employer; a trade or business (whether or not incorporated)
which is in common control with the Employer as determined in
accordance with section 414(c) of the Code; or any organization
which is a member of an affiliated service group, within the
meaning of section 414(m) of the Code, which includes the Employer;
and any other organization required to be aggregated with the
Employer pursuant to section 414(o) of the Code.
After-Tax Employee Contributions means contributions to the Plan,
if any, made by an Employee on an after-tax, nondeductible basis.
Beneficiary means the person or persons or a trust affirmatively
designated by a Participant to receive all or a portion of such
Participant's benefits in the event the Participant dies leaving
benefits payable to such a Beneficiary in accordance with the
provisions of Article VI.
Board means the Board of Directors of the Employer.
Code means the Internal Revenue Code of 1986, as amended from time
to time.
Committee means the Global Benefits Committee of the Employer or
its designated representatives.
Compensation means all of each Participant's compensation as
defined in section 415(c)(3) of the Code and Treasury Regulations
Sections 1.415-2(d)(2) and (3).
Notwithstanding the above, for purposes other than allocations
pursuant to provision(s) providing for permitted disparity and/or
Top-Heavy allocations, Compensation shall be determined by
excluding moving expenses.
Compensation shall include only that Compensation which is actually
paid to the Participant during the determination period. Except as
provided elsewhere in this Plan, the determination period shall be
the Plan Year.
Effective for Plan Years beginning after December 31, 1988, the
annual Compensation of each Participant taken into account for
purposes of determining all benefits provided under the Plan for
any determination period shall not exceed $200,000 as adjusted by
the Secretary at the same time and in the same manner as under
section 415(d) of the Code ("Compensation Limit"), except that
the dollar increase in effect on January 1 of any calendar year
shall be effective for years beginning in such calendar year. The
Compensation Limit for a determination period shall be the
Compensation Limit in effect on the January 1 coinciding with or
preceding such determination period. If Compensation is determined
on the basis of a 12-consecutive-month period ending within the
Plan Year, then the applicable Compensation Limit is the
Compensation Limit in effect for the calendar year in which such
12-month period begins. If Compensation is determined on the basis
of a period of less than 12 calendar months, the Compensation Limit
shall be the annual Compensation Limit which would otherwise be
applicable multiplied by the
ratio obtained by dividing by 12 the number of full months in the
short period. In determining the Compensation of a Participant for
purposes of the $200,000 limitation, the rules of section 414(q)(6)
of the Code shall apply except that, in applying such rules, the
term "family" shall include only the Spouse of the Participant
and any lineal descendants of the Participant who have not attained
age 19 before the close of the Plan Year. If as a result of the
application of such rules the adjusted $200,000 limitation is
exceeded, then (except for purposes of determining the portion of
Compensation up to the integration level, as defined in
Section 5.1, if applicable) the limitation shall be prorated among
the affected individuals in proportion to each such individual's
Compensation as determined prior to the application of this
limitation.
Notwithstanding the above, effective for Plan Years beginning after
December 31, 1993, the annual Compensation Limit shall not exceed
$150,000, adjusted for calendar years beginning after 1994 at the
same time and in the same manner as under section 415(d) of the
Code, but only if and when the aggregate of such potential
adjustments totals at least $10,000, and then only in amounts of
$10,000, in the manner described in section 401(a)(17) of the Code.
If Compensation for any prior determination period is taken into
account in determining an Employee's allocations or benefits for
the current determination period, the Compensation for such prior
period is subject to the applicable annual Compensation Limit in
effect for that prior period. For this purpose, for years
beginning before January 1, 1990, the applicable annual
Compensation Limit is $200,000.
Defined Benefit Plan means a pension plan maintained by the
Employer which is qualified under section 401(a) of the Code and
which is not a Defined Contribution Plan, except to the extent that
it maintains separate accounts with respect to which it is treated
as a Defined Contribution Plan.
Defined Contribution Plan means a plan qualified under
section 401(a) of the Code and maintained by the Employer which
provides for an account for each individual who participates in the
plan, from which account all benefits attributable to amounts
allocated to each such Participant's account (and any income and
expenses or gains or losses attributable to such accounts, both
realized and unrealized) are paid.
Disability means any medically determinable physical or mental
impairment which results in an inability to engage in any
substantial gainful activity by reason thereof and which may be
expected to result in death or which has lasted or can be expected
to last for a continuous period of not less than 12 months. The
permanence and degree of such impairment must be supported by
medical evidence. Disability will be determined by a physician
appointed by the Administrator.
Effective Date The provisions of this amendment and restatement are
generally effective January 1, 1998, except for the retroactive
effective dates required by the Tax Reform Act of 1986, the Omnibus
Budget Reconciliation Act of 1986, the Omnibus Budget
Reconciliation Act of 1987, the Technical and Miscellaneous Revenue
Act of 1988, the Omnibus Budget Reconciliation Act of 1989, or any
final Regulations published and effective since the most recent
effective date of this Plan. Further, to the extent the Plan was
operated in accordance with the provisions of this amendment and
restatement as of an effective date earlier than that required by
law, such date shall be the Effective Date.
Employee means any common law Employee of the Employer or any
Affiliate. The term Employee shall also include any Leased
Employee deemed to be an Employee of the Employer or any Affiliate
as provided in section 414(n) or (o) of the Code.
Employee Elective Deferrals means contributions to the Plan from an
Employee's salary, which the Employee could have received currently
in Compensation.
Employer means Gap, Inc., any successor through merger,
consolidation or purchase of substantially all of the assets or
business of the entity which is the Employer immediately prior to
such succession, which successor, within 90 days after such
succession, agrees to continue this Plan; and any Affiliate which
adopts the Plan.
Employer Matching Contributions means those contributions made by
the Employer as described under Section 3.1 which are allocated to
Participants' Employer Matching Contribution Accounts, and does not
include Qualified Non-Elective Contributions (if any).
ERISA means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
Forfeitures means the nonvested portion, if any, of a Participant's
Account created as a result of termination of employment by the
Participant prior to the time he becomes 100 percent Vested in his
Account. A Forfeiture occurs immediately after the distribution of
the entire Vested portion of a Participant's Account or the last
day of the Plan Year in which his 5th consecutive One-Year Break in
Service occurs, whichever occurs earlier, or upon approval of Plan
Administrator.
Highly Compensated Employee means and includes active highly
compensated Employees and former highly compensated Employees.
An active highly compensated Employee includes any Employee who
performed service for the Employer during the Plan Year and who:
(1) during the preceding Plan Year received Compensation from the
Employer in excess of $80,000 (as adjusted pursuant to section
415(d) of the Code), and, if elected by the Employer, was a member
of the top-paid group for such year; or (2) during the current or
preceding Plan Year was an owner of more than 5 percent of the
Employer.
A former highly compensated Employee includes any Employee who
separated (or was deemed to have separated) from service prior to
the determination year, who has performed no service for the
Employer during the determination year, and who was a highly
compensated active Employee for either the year of his separation
from service or any determination year ending on or after the
Employee's 55th birthday.
The determination of who is a Highly Compensated Employee
(including the determination of the number and identity of
Employees in the top-paid group and the Compensation that is
considered) will be made in accordance with section 414(q) of the
Code and the Regulations promulgated thereunder. For purposes of
this definition, the Employer shall include any Affiliate.
Hour of Service means:
(a) Each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for the Employer.
These hours will be credited to the Employee for the
computation period in which the duties are performed;
(b) Each hour for which an Employee is paid, or entitled to
payment, by the Employer on account of a period of time
during which no duties are performed (irrespective of whether
the employment relationship has terminated) due to vacation,
holiday, illness, incapacity (including Disability), layoff,
jury duty, military duty or leave of absence. No more than
501 hours of service will be credited under this paragraph
for any single continuous period (whether or not such period
occurs in a single computation period). Hours under this
paragraph will be calculated and credited pursuant to
section 2530.200b-2 of the Department of Labor regulations,
which section is incorporated herein by this reference; and
(c) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. The
same hours of service will not be credited both under
paragraph (a) or paragraph (b), as the case may be, and under
this paragraph (c). These hours will be credited to the
Employee for the computation period or periods to which the
award or agreement pertains rather than the computation
period in which the award, agreement or payment is made.
For purposes of this definition, Employer includes any Affiliate.
Hours of Service will be credited for employment with other members
of any affiliated service group (under section 414(m) of the Code),
controlled group of corporations (under section 414(b) of the
Code), or group of trades or businesses under common control (under
section 414(c) of the Code) of which the adopting Employer is a
member, and any other entity required to be aggregated with the
Employer pursuant to section 414(o) of the Code and the Regulations
promulgated thereunder.
Hours of Service will also be credited with respect to any
individual considered an Employee for purposes of this Plan under
section 414(n) of the Code and the Regulations promulgated
thereunder.
Hours of Service will be credited for all employment with the
Employer regardless of whether the Employee was at the time an
eligible Employee.
Service will be determined on the basis of the actual hours for
which an Employee is paid or entitled to payment.
Late Retirement Date means the date, occurring after Normal
Retirement Age, on which an Employee actually retires from
employment with the Employer.
Leased Employee means any person (other than an Employee of the
Employer) who, pursuant to an agreement between the Employer and
any other person (the "leasing organization"), has performed
services for the Employer (or for the 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 of a type historically performed by Employees
in the business field of the Employer. Contributions or benefits
provided to a Leased Employee by the leasing organization which are
attributable to services performed for the Employer shall be
treated as provided by the Employer.
A Leased Employee shall not be considered an Employee of the
Employer if (i) such Employee is covered by a money purchase
pension plan maintained by the leasing organization providing:
(a) a non-integrated employer contribution rate of at least
10 percent of Compensation, as defined in section 415(c)(3) of the
Code, but including amounts contributed pursuant to a salary
reduction agreement which are excludable from the Employee's gross
income under section 125, section 402(e)(3), section 402(h) or
section 403(b) of the Code, (b) immediate participation, and
(c) full and immediate vesting; and (ii) Leased Employees do not
constitute more than 20 percent of the Employer's non-highly
compensated workforce.
Minimum Employer Contributions means contributions made by the
Employer in accordance with the provisions of Section 3.7.
Non-Highly Compensated Employee means an Employee who is not a
Highly Compensated Employee.
Normal Retirement Age means age 60.
One-Year Break in Service means a 12-consecutive-month period
during which the Participant does not complete more than 500 Hours
of Service.
Solely for purposes of determining whether a One-Year Break in
Service has occurred for participation and vesting purposes, an
individual who is absent from work for maternity or paternity
reasons shall receive credit for the Hours of Service which would
otherwise have been credited to such individual but for such
absence, or in any case in which such hours cannot be determined,
eight Hours of Service per day of such absence, to a maximum of
501 Hours of
Service for any one child-related absence. For purposes of this
paragraph, an absence from work for maternity or paternity reasons
means an absence: (1) by reason of the pregnancy of the individual;
(2) by reason of a birth of a child of the individual; (3) by
reason of the placement of a child with the individual in
connection with the adoption of such child by such individual; or
(4) for purposes of caring for such child for a period beginning
immediately following such birth or placement. The Hours of
Service credited under this paragraph shall be credited in the
computation period in which the absence begins if necessary to
prevent a One-Year Break in Service in that period or, in all other
cases, in the next following computation period.
Participant means an Employee of the Employer who participates in
the Plan pursuant to Article II; a former Employee who participated
in the Plan under Article II and who continues to be entitled to a
Vested benefit under the Plan; or a former Employee who
participated in the Plan under Article II, and who has not yet
incurred a One-Year Break in Service. For purposes of
Section 6.15, "Participant" shall include a former Participant,
as well as a former Participant's Surviving Spouse and
Participant's or former Participant's Spouse or former Spouse who
is the alternate payee under a qualified domestic relations order
as defined in section 414(p) of the Code (who shall be deemed
Participants with respect to such Spouse's interest under the
Plan).
Plan means the GapShare, as set forth herein.
Plan Year means the 12-consecutive-month period which begins on
January 1 and on each anniversary thereof.
Regulations means the Treasury regulations pertaining to the
Internal Revenue Code of 1986, as amended from time to time.
Required Distributions shall be as described in Section 6.10 of the
Plan.
Spouse means the spouse or surviving spouse of the Participant,
provided that a former Spouse shall be treated as the spouse or
surviving spouse to the extent provided under a "qualified
domestic relations order" as defined in section 414(p) of the
Code.
Top-Heavy shall have the meaning and effect described in Article XI
of the Plan.
Trust means the Trust as established under Article IX and
maintained for purposes of the Plan which is administered by the
Trustee in accordance with the provisions of the agreement of Trust
between the Employer and the Trustee. If the Trust is governed by
a separate agreement entered into between the Employer and the
Trustee (which shall be incorporated by reference herein and become
part of the Plan) to the extent the terms of such Trust agreement
conflict with the Plan, the terms of such Trust agreement will
control except to the extent that it is necessary to follow the
terms of the Plan in order to maintain the qualified status of the
Plan under section 401(a) of the Code.
Trustee means the party or parties named under the Trust who shall
have exclusive authority and discretion to manage and control the
assets of the Plan. Notwithstanding the above, to the extent the
Plan expressly provides, the Trustee shall be subject to the
direction of the Committee and/or Investment Manager.
Trust Fund means all money and other property received or held by
the Trustee under the Trust, plus all income and gains and minus
all losses, expenses, and distributions chargeable to the Trust
assets.
Valuation Date means any day on which the New York Stock Exchange
is open for business.
Vested means nonforfeitable.
Year of Service means a 12-consecutive-month period during which an
Employee is credited with at least 1,000 Hours of Service. If a
fractional Year of Service is used in the Plan, there will be no
Hours of Service requirement.
ARTICLE II - ELIGIBILITY AND PARTICIPATION
Section 2.1 Eligibility Requirements.
(a) Only Employees of the Employer will be eligible to
participate in the Plan.
(b) Employees become eligible to participate in the Plan upon
attainment of age 21 and completion of one Year of Service.
Employees become eligible to make Employee Elective Deferrals
under the Plan upon attainment of age 21 and completion of
one Year of Service.
(c) Notwithstanding any other provision of this Article II, all
Employees and former Employees who are Participants in the
Plan as of the date immediately preceding the Effective Date
of this amendment and restatement and who then have an
Account balance (whether or not nonforfeitable) shall
continue their participation in the Plan as restated. A
former Employee who was a Participant in the Plan and who
either did or did not receive a distribution of his entire
nonforfeitable Account balance on account of termination of
employment may become eligible to participate in the Plan
upon reemployment.
(d) Notwithstanding any other provision of this Plan, Employees
included within the following described classification(s) are
excluded from participation in this Plan:
(1) Employees in a unit of employees covered by a
collective bargaining agreement between the Employer
and employee representatives, if retirement benefits
were the subject of good faith bargaining and if two
percent or less of the Employees of the Employer who
are covered pursuant to that agreement are
professionals as defined in section 1.410(b)-9(g) of
the Regulations. For this purpose, the term "employee
representatives" does not include any organization
more than half of whose members are Employees who are
owners, officers, or executives of the Employer.
(2) Employees who are nonresident aliens (within the
meaning of section 7701(b)(1)(B) of the Code) and who
receive no earned income
(within the meaning of section 911(d)(2) of the Code)
from the Employer which constitutes income from sources
within the United States within the meaning of
section 861(a)(3) of the Code.
(3) Employees who are employed in a foreign country;
provided that this exclusion shall not apply to an
employee who is temporarily transferred to employment
with an employer in a foreign country and who is a
citizen or a resident alien of the United States at the
time of such transfer.
(4) Any individual who is paid through the accounts payable
system for services rendered, rather than an employer's
regular payroll system and any individual who has a
written agreement with an employer that he or she will
not be covered by the employer's benefit plans.
Section 2.2 Participation.
An Employee will begin participation in the Plan on the first day
of the first pay period following satisfaction of the eligibility
requirements set forth in Section 2.1 above.
For purposes of Employee Elective Deferrals, an eligible non-
excluded Employee will begin participation in the Plan on the first
day of the first pay period following satisfaction of the
eligibility requirements set forth in Section 2.1 above.
Section 2.3 Years of Service for Eligibility Computation.
(a) For purposes of determining Years of Service and One-Year
Breaks in Service for purposes of establishing eligibility to
participate in the Plan, the initial eligibility computation
period shall be the 12-consecutive-month period beginning on
the date on which the Employee first performs an Hour of
Service for the Employer or an Affiliate ("employment
commencement date").
(b) The succeeding 12-consecutive-month eligibility computation
periods shall commence with the first Plan Year which
includes the first anniversary of the Employee's employment
commencement date, regardless of whether the Employee is
entitled to be credited with 1,000 Hours of Service during
the initial eligibility computation period. An Employee who
is credited with service in both the initial eligibility
computation period (described above) and the first Plan Year
which commences prior to the first anniversary of the
Employee's initial eligibility computation period will be
credited with two Years of Service for purposes of
eligibility to participate.
(c) Years of Service and One-Year Breaks in Service will be
measured by the same eligibility computation period.
(d) All Years of Service with the Employer or an Affiliate will
be credited for purposes of determining eligibility except
the following:
(1) If an Employee has a One-Year Break in Service before
satisfying the eligibility requirements of the Plan,
service before such Break will not be taken into
account.
(2) In the case of any Participant whose employment with
the Employer terminates and who subsequently is
reemployed by the Employer, regardless of whether the
Employee has incurred a One-Year Break in Service, such
Employee will participate immediately upon returning to
employment.
(e) In the event a Participant is no longer a member of an
eligible class of Employees and becomes ineligible to
participate but has not incurred a One-Year Break in Service,
such Employee will participate immediately upon again
becoming a member of an eligible class of Employees. If such
Participant incurs a One-Year Break in Service, eligibility
will be determined according to the break in service rules of
the Plan otherwise described in this Section 2.3.
An Employee who has not been, but who becomes a member of an
eligible class of Employees shall participate in the Plan
immediately upon becoming a member of such class if such
Employee has satisfied the minimum age and service
requirements necessary to become a Participant under the
Plan.
ARTICLE III - CONTRIBUTIONS
Section 3.1 Employer Contributions.
Employer Matching Contributions:
For each Plan Year the Employer may make an Employer Matching
Contribution to the trust based on After-Tax Employee Contributions
and Employee Elective Deferrals. The amount of the Employer
Matching Contributions shall be determined for each Plan Year by
the Employer, but shall not be based on more than four percent of
Participant's Compensation for the Plan Year.
Qualified Non-Elective Contributions:
At the discretion of the Employer, Qualified Non-Elective
Contributions may be made which may be used for purposes of
ensuring that the Plan complies with the nondiscrimination tests of
sections 401(k) or 401(m) of the Code and the Regulations
promulgated thereunder. Qualified Non-Elective Contributions may
be made with respect to only those Participants who are Non-Highly
Compensated Employees in the same dollar amount or the same
percentage of Compensation for each until the non-discrimination
tests of sections 401(k) and/or 401(m) of the Code are met.
Section 3.2 Employee Elective Deferrals.
Each Plan Year, each Participant may elect to defer between 2 and
16 percent of Compensation (Employee Elective Deferrals) which will
be contributed by the Employer to the Plan. New Participants may
commence deferrals as specified in Section 2.2. A Participant may
change his election or make a new election as of any business day.
Notification must be given to the Plan Administrator or its
designee by a Participant prior to the first pay period affected by
a modification.
In addition, a Participant may cease to have Employee Elective
Deferrals made as of any payroll period if notice is given to the
Plan Administrator or its designee prior to such date. The Plan
Administrator may reduce or completely prohibit Employee Elective
Deferrals at any time if the Administrator determines such action
is necessary to ensure compliance with section 401(k), 402(g), or
415 of the Code.
Employee Elective Deferrals under this and all other qualified
plans maintained by the Employer may not be made on behalf of any
Participant during any taxable year to the extent such would exceed
the dollar limitation of section 402(g) of the Code in effect at
the beginning of the taxable year ($7,000 as adjusted for cost of
living).
Section 3.3 After-Tax Employee Contributions.
Each Plan Year, each Participant may elect to defer between 2 and
21 percent of Compensation on an after-tax basis (After-Tax
Employee Contributions). After-Tax Employee Contributions are
permitted on a nondiscriminatory basis as determined by the
Administrator.
Section 3.4 Rollover Contributions.
(a) An Employee, who is eligible to participate in the Plan under
Section 2.1, regardless of whether he has satisfied the
Participation requirements of Section 2.2, may roll over into
the Plan an eligible rollover distribution (as defined in
section 402(c) of the Code) from another qualified plan, or
from an individual retirement account in the manner described
in section 408(d)(3)(A)(ii) of the Code. If such rollover is
not a direct transfer as described in section 401(a)(31) of
the Code, it must be received by the Plan within 60 days of
the date it was received by the Participant from the
distributing qualified plan or individual retirement account.
(b) The Plan Administrator shall develop such procedures, and may
require such information from an Employee desiring to make
such a rollover, as he deems necessary or desirable to
determine that the proposed rollover will meet the
requirements of this Section. Upon approval by the Plan
Administrator, the amount rolled over shall be deposited in
the Trust and shall be credited to the Employee's Rollover
Account. Such Account shall share in allocations of
earnings, losses and expenses of the Trust Fund, but shall
not share in allocations of Employer contributions. The
Employee's Rollover Account shall be distributed in
accordance with Article VI.
(c) In the event of a rollover contribution on behalf of an
Employee who is otherwise eligible to participate in the Plan
but who has not yet satisfied the participation requirements
of Section 2.2, such Employee's Rollover Account shall
represent his sole interest in the Plan until he becomes a
Participant.
Section 3.5 Trustee-to-Trustee Transfers.
(a) Subject to Plan Administrator approval, an Employee, not
excluded from participation in the Plan, regardless of
whether he has satisfied any age and service requirements for
participation, may cause assets from the qualified plan of a
prior employer to be transferred directly by the trustee of
such plan to the Trustee of this Plan.
(b) A direct rollover as described in Section 6.15 shall not
constitute a trustee-to-trustee transfer for purposes of the
Plan.
Section 3.6 Deduction Limitation.
Employer contributions made with respect to any Plan Year under
this Article III are conditioned upon such contributions being
deductible by the Employer for such Plan Year under section 404 of
the Code.
Section 3.7 Minimum Employer Contribution.
Minimum Employer Contribution
For each Plan Year, the Employer shall make contributions to the
Plan in the form of employer contributions, in cash or stock, at
least equal to a specified dollar amount, on behalf of those
individuals who are entitled to an allocation under Section 5.7.
Such amount shall be determined by the Employer, or its delegatee,
by appropriate action on or before the last day of the Employer's
taxable year that ends within such Plan Year.
The Minimum Employer Contribution for a Plan Year shall be paid by
the Employer in one or more installments without interest. The
Minimum Employer Contribution shall be deemed to be satisfied for
the Plan Year as soon as the total of "employer contributions"
for the Plan Year equals the amount of the Minimum Employer
Contribution. For purposes of this Section 3.7, "employer
contributions" means employer contributions, as defined under
section 404 of the Code, including, but not limited to, Employee
Elective Deferrals and Employer Matching Contributions. The
Employer shall pay the Minimum Employer Contribution at any time
during the Plan Year, and for purposes of deducting such
contribution, shall make the contribution not later than the time
prescribed by the Code for filing the Employer's Federal income tax
return including extensions, for its taxable year that ends within
such Plan Year. Notwithstanding any provision of the Plan to the
contrary, the Minimum Employer Contribution made to the Plan by the
Employer shall not revert to, or be returned to, the Employer.
ARTICLE IV - 401(k) and 401(m)
Section 4.1 Distribution of Excess Employee Elective
Deferrals.
(a) Excess Employee Elective Deferrals shall be distributed in
accordance with the provisions of this Section 4.1. Excess
Employee Elective Deferrals are those elective deferrals that
are includible in a Participant's gross income because they
exceed the dollar limitation ($7,000 as adjusted for cost of
living) imposed under Code section 402(g). Excess Employee
Elective Deferrals shall be treated as Annual Additions under
the Plan, except to the extent they are distributed on or
before the April 15 first following the close of a
Participant's tax year.
(b) A Participant may attribute to this Plan any excess Employee
Elective Deferrals made during a taxable year of the
Participant by notifying the Plan Administrator, through
actual or deemed notification, on or before March 1 following
the calendar year when the excess Employee Elective Deferrals
are made of the amount of the excess Employee Elective
Deferrals to be attributed to the Plan. A Participant will be
deemed to have notified the Plan Administrator of any excess
Employee Elective Deferrals which exist when only those
elective deferrals made to this Plan and any other plan(s)
maintained by the Employer are taken into account.
(c) Notwithstanding any other provision of the Plan, excess
Employee Elective Deferrals, plus any income and minus any
loss allocable thereto, shall be distributed no later than
April 15 to any Participant to whose Account excess Employee
Elective Deferrals were attributed for the preceding year and
who claims excess Employee Elective Deferrals for such
taxable year. With respect to any taxable year, a
Participant's Employee Elective Deferrals are 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, any simplified employee pension cash or deferred
arrangement as described in section 402(h)(1)(B) of the Code,
any eligible deferred compensation plan under section 457 of
the Code, 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, but shall not include amounts distributed pursuant
to the provisions of Section 5.4(a)(3) of this Plan.
(d) Excess Employee Elective Deferrals shall be adjusted for any
income or loss during the Plan Year. The income or loss
allocable to excess Employee Elective Deferrals is the income
or loss allocable to the Participant's Employee Deferral
Account for the taxable year multiplied by a fraction, the
numerator of which is such Participant's excess Employee
Elective Deferrals for the year and the denominator is the
Participant's Account balance attributable to Employee
Elective Deferrals without regard to any income or loss
occurring during such taxable year.
Section 4.2 Actual Deferral Percentage Test.
(a) For each Plan Year, the Actual Deferral Percentage (ADP) for
Participants who are Highly Compensated Employees must bear a
relationship to the ADP for Participants who are Non-Highly
Compensated Employees which satisfies either of the following
tests for nondiscrimination:
(1) The ADP for Participants who are Highly Compensated
Employees is not more than the ADP for Participants who
are Non-Highly Compensated Employees multiplied by
1.25; or
(2) The ADP for Participants who are Highly Compensated
Employees is not more than the ADP for Participants who
are Non-Highly Compensated Employees multiplied by two,
and the ADP for Participants who are Highly Compensated
Employees does not exceed the ADP for Participants who
are Non-Highly Compensated Employees by more than two
percentage points.
Actual Deferral Percentage means, for a specified group of
Participants for a Plan Year, the average of the ratios
(calculated separately for each Participant in such group) of
(i) the amount of Employer contributions actually paid over
to the Trust on behalf of such Participant for the Plan Year
to (ii) the Participant's Compensation for such Plan Year.
Employer contributions on behalf of any Participant shall
include: (i) any Employee Elective Deferrals made pursuant to
the Participant's deferral election, including excess
Employee Elective Deferrals of Highly Compensated Employees,
but excluding (A) Excess Employee Elective Deferrals by Non-
Highly Compensated Employees which are attributable solely to
Employee Elective Deferrals made under the Plan or any other
plan(s) of the Employer and (B) Employee 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 Employee Elective Deferrals); and
(ii) at the election of the Employer, Qualified Non-Elective
Contributions and Qualified Matching Contributions made
either to the Plan or another plan of the Employer qualified
under section 401(a). For purposes of computing Actual
Deferral Percentages, any Employee who would be a
Participant but for the failure to make Employee Elective
Deferrals shall be treated as a Participant on whose behalf
no Employee Elective Deferrals are made. Compensation may be
limited to that which is received for the period the Employee
is a Participant.
(b) The ADP for any Participant who is a Highly Compensated
Employee for the Plan Year shall be determined by aggregating
his employee elective deferrals in all plans maintained by
the Employer. If a Highly Compensated Employee participates
in two or more cash or deferred arrangements having different
plan years, all cash or deferred arrangements ending with or
within the same calendar year shall be treated as a single
arrangement. Notwithstanding the above, any plans required to
be mandatorily segregated pursuant to Regulations promulgated
under section 401(k) of the Code shall not be aggregated for
purposes of this Section 4.2.
(c) In the event that this Plan satisfies the requirements of
sections 401(k), 401(a)(4), or 410(b) of the Code only if
aggregated with one or more other plans, or if one or more
other Plans satisfy the requirements of such sections of the
Code only if aggregated with this Plan, then this Section
shall be applied by determining the ADP of Employees as if
all such plans were a single plan. For Plan Years beginning
after December 31, 1989, plans may be aggregated in order to
satisfy section 401(k) of the Code only if they have the same
Plan Year.
(d) For purposes of determining the ADP of a Participant who is a
5-percent owner or one of the ten most highly paid Highly
Compensated Employees, the Employee Elective Deferrals (and
Qualified Non-Elective Contributions or Qualified Matching
Contributions, or both, if treated as Employee Elective
Deferrals for purposes of the ADP test) and Compensation of
such Participant shall include, respectively, the Employee
Elective Deferrals (and, if applicable, Qualified Non-
Elective Contributions and Qualified Matching Contributions,
or both) and Compensation for the Plan Year of family members
(as defined in section 414(q)(6) of the Code). Such family
members shall be disregarded as separate Employees in
determining the ADP both for Participants who are Non-Highly
Compensated Employees and for Participants who are Highly
Compensated Employees.
(e) In order to be considered for purposes of performing the ADP
test(s), Employee Elective Deferrals, Qualified Non-Elective
Contributions and Qualified Matching Contributions must be
made before the last day of the twelve-month period
immediately following the Plan Year to which such
contributions relate.
(f) The Employer shall maintain annual records sufficient to
demonstrate satisfaction of the ADP test and identify the
amount of Qualified Non-Elective Contributions or Qualified
Matching Contributions, or both, used in such test.
(g) The determination and treatment of the amounts considered in
determining the ADP with respect to each Participant shall
satisfy such other requirements as may be prescribed by the
Secretary of the Treasury.
Section 4.3 Distribution of Excess Contributions.
(a) Discriminatory Employee Elective Deferrals (Excess
Contributions) are, with respect to any Plan Year, the excess
of:
(1) The aggregate amount of Employer contributions actually
taken into account in computing the ADP of Highly
Compensated Employees for such Plan Year, over
(2) The maximum amount of such contributions permitted
pursuant to the ADP test described under Section 4.2(a)
(determined by reducing contributions made on behalf of
Highly Compensated Employees in order, beginning with
the contributions made on behalf of the Employee with
the highest ADP).
(b) Notwithstanding any other provision of this Plan, Excess
Contributions, plus any income and minus any loss allocable
thereto, shall be distributed no later than the last day of
each Plan Year to Participants to whose Accounts such Excess
Contributions were allocated for the preceding Plan Year.
Such distributions shall be made to Highly Compensated
Employees on the basis of the respective portions of the
Excess Contributions attributable to each of such Employees,
calculated as described above. Excess Contributions shall be
allocated to Participants who are subject to the family
member aggregation rules of section 414(q)(6) of the Code in
proportion to the Employee Elective Deferrals (and amounts
treated as Employee Elective Deferrals) of each family member
whose Employee Elective Deferrals are included in the
combined ADP. Excess Contributions (including any amounts
recharacterized as After-Tax Employee Contributions as
permitted under Section 4.6) shall be treated as Annual
Additions under the Plan.
(c) Excess Contributions shall be adjusted for any income or loss
during the Plan Year. The income or loss allocable to Excess
Contributions is the income or loss allocable to the
Participant's Employee Deferral Account (and, if applicable,
his Qualified Non-Elective Contribution Account or Qualified
Matching Contributions Account, or both) for the Plan Year
multiplied by a fraction, the numerator of which is such
Participant's Excess Contributions for the year and the
denominator of which is the Participant's Account balance
attributable to Employee Elective Deferrals (and Qualified
Non-Elective Contributions or Qualified Matching
Contributions, or both, if any of such contributions are
included in the ADP test) without regard to any income or
loss occurring during such Plan Year.
(d) Excess Contributions shall be distributed from the
Participant's Employee Deferral Account and Qualified
Matching Contributions Account (if applicable) in proportion
to the Participant's Employee Elective Deferrals and
Qualified Matching Contributions (to the extent used in the
ADP test) for the Plan Year. Excess Contributions shall be
distributed from the Participant's Qualified Non-Elective
Contribution Account only to the extent that such Excess
Contributions exceed the balance of the Participant's
Employee Deferral Account and Qualified Matching
Contributions Account.
Section 4.4 Actual Contribution Percentage Test.
(a) For each Plan Year, the Actual Contribution Percentage (ACP)
of Highly Compensated Employees must bear a relationship to
the ACP for Non-Highly Compensated Employees which satisfies
either of the following tests for nondiscrimination:
(1) The ACP for Participants who are Highly Compensated
Employees is not more than the ACP for Participants who
are Non-Highly Compensated Employees multiplied by
1.25; or
(2) The ACP for Participants who are Highly Compensated
Employees is not more than the ACP for Participants who
are Non-Highly Compensated Employees multiplied by two,
and the ACP for participants who are Highly Compensated
Employees does not exceed the ACP for Participants who
are Non-Highly Compensated Employees by more than two
percentage points.
(b) If any Highly Compensated Employees have both Employee
Elective Deferrals and Matching Contributions and/or After-
Tax Employee Contributions made on their behalf to plans
maintained by the Employer, and the sum of the ADP and ACP of
such Highly Compensated Employees subject to either or both
tests exceeds the Aggregate Limit, then the ACP of each such
Highly Compensated Employee will be reduced (beginning with
that of the Highly Compensated Employee whose ACP is the
highest) so that the limit is not exceeded. The amount by
which each Highly Compensated Employee's Contribution
Percentage Amount is reduced shall be treated as an Excess
Aggregate Contribution. The ADP and ACP of the Highly
Compensated Employees are determined after any corrections
required to meet the ADP and ACP tests. Multiple use does
not occur if either the ADP or ACP of the Highly Compensated
Employees does not exceed 1.25 multiplied by the ADP and ACP
of the Non-Highly Compensated Employees.
(c) For purposes of this Section, the Actual Contribution
Percentage for any Participant who is a Highly Compensated
Employee and who is eligible to have Contribution Percentage
Amounts allocated to his or her Account under two or more
plans described in section 401(a) of the Code, or
arrangements described in section 401(k) of the Code that are
maintained by the Employer, shall be determined as if the
total of such Contribution
Percentage Amounts was made under each plan. If a Highly
Compensated Employee participates in two or more cash or
deferred arrangements that have different plan years, all
cash or deferred arrangements ending with or within the same
calendar year shall be treated as a single arrangement.
Notwithstanding the above, to the extent mandatorily
disaggregated pursuant to Treasury Regulations promulgated
under section 401(m) of the Code, applicable plans shall
continue to be treated as separate.
(d) In the event that this Plan satisfies the requirements of
sections 401(m), 401(a)(4) or 410(b) of the Code only if
aggregated with one or more other plans, or if one or more
other plans satisfy the requirements of such sections of the
Code only if aggregated with this Plan, then this Section
shall be applied by determining the Contribution Percentage
of Employees as if all such plans were a single plan. For
plan years beginning after December 31, 1989, plans may be
aggregated in order to satisfy section 401(m) of the Code
only if they have the same plan year.
(e) For purposes of determining the Actual Contribution
Percentage of a Participant who is a five-percent owner or
one of the ten most highly paid Highly Compensated Employees,
the Contribution Percentage Amounts and Compensation of such
Participant shall include the Contribution Percentage Amounts
and Compensation for the Plan Year of family members as
defined in section 414(q)(6) of the Code. Family members,
with respect to Highly Compensated Employees, shall be
disregarded as separate Employees in determining the
Contribution Percentage both for Participants who are Non-
Highly Compensated Employees and for Participants who are
Highly Compensated Employees.
(f) For purposes of determining the ACP test, Employee
Contributions are considered to have been made in the Plan
Year in which contributions were made to the Trust. Matching
Contributions and Qualified Non-Elective Contributions will
be considered made for a Plan Year if made no later than the
end of the twelve-month period beginning on the day after the
close of the Plan Year.
(g) The Employer shall maintain records sufficient to demonstrate
satisfaction of the ACP test and identify the amount of
Qualified Non-Elective Contributions or Qualified Matching
Contributions, or both, used in such test.
(h) The determination and treatment of the Contribution
Percentage of any Participant shall satisfy such other
requirements as may be prescribed by the Secretary of the
Treasury.
(i) Definitions:
"Average Contribution Percentage" means, for a specified
group of Participants for a Plan Year, the average of the
ratios (calculated separately for each Participant in such
group) of the Participant's Contribution Percentage Amounts
to the Participant's Compensation for the Plan Year (whether
or not the Employee was a Participant for the entire Plan
Year).
"Aggregate Limit" -- In general, for purposes of this
Section, the Aggregate Limit is the greater of:
(1) The sum of:
(A) 1.25 times the greater of the Relevant Actual
Deferral Percentage or the Relevant Actual
Contribution Percentage, and
(B) Two percentage points plus the lesser of the
Relevant Actual Deferral Percentage or the
Relevant Actual Contribution Percentage. In no
event, however, shall this amount exceed twice
the lesser of the Relevant Actual Deferral
Percentage or the Relevant Actual Contribution
Percentage; or
(2) The sum of:
(A) 1.25 times the lesser of the Relevant Actual
Deferral Percentage or the Relevant Actual
Contribution Percentage, and
(B) Two percentage points plus the greater of the
Relevant Actual Deferral Percentage or the
Relevant Actual Contribution Percentage. In no
event, however, shall this amount exceed twice
the greater of the Relevant Actual Deferral
Percentage or the Relevant Actual Contribution
Percentage.
"Relevant Actual Deferral Percentage" means the Actual
Deferral Percentage of the group of Non-Highly Compensated
Employees eligible under the arrangement subject to
section 401(k) of the Code for the Plan Year, and the term
"Relevant Actual Contribution Percentage" means the Actual
Contribution Percentage of the group of Non-Highly
Compensated Employees eligible under the Plan subject to
section 401(m) of the Code for the Plan Year beginning with
or within the Plan Year of the arrangement subject to
section 401(k) of the Code.
"Contribution Percentage" means the ratio (expressed as a
percentage) of the Participant's Contribution Percentage
Amounts to the Participant's Compensation for the Plan Year
(whether or not the Employee was a Participant for the entire
Plan Year).
"Contribution Percentage Amounts" means the sum of the
Employee Contributions, Matching Contributions, and Qualified
Matching Contributions (to the extent not taken into account
for purposes of the ADP test) made under the Plan on behalf
of the Participant for the Plan Year. Such Contribution
Percentage Amounts shall not include Matching Contributions
which are forfeited either in order to correct Excess
Aggregate Contributions or because the contributions to which
they relate are Excess Employee Deferrals, Excess
Contributions, or Excess Aggregate Contributions. The
Employer may
include Qualified Non-Elective Contributions in the
Contribution Percentage Amounts. The Employer also may elect
to use Employee Elective Deferrals in the Contribution
Percentage Amounts so long as the ADP test is met before the
Employee Elective Deferrals are used in the ACP test and
continues to be met following the exclusion of those Employee
Elective Deferrals that are used to meet the ACP test.
"Eligible Participant" means any Employee who is eligible
to make an After-Tax Employee Contribution, or an Employee
Elective Deferral (if the Employer takes such contributions
into account in the calculation of the Contribution
Percentage), or to receive a Matching Contribution or a
Qualified Matching Contribution.
"After-Tax Employee Contribution" means any contribution
made to the Plan by or on behalf of a Participant that is
included in the Participant's gross income in the year in
which made and that is maintained under a separate Account to
which earnings and losses are allocated.
"Matching Contribution" means an Employer contribution made
to this or any other Defined Contribution Plan on behalf of a
Participant on account of an Employee Contribution made by
such Participant, or on account of a Participant's Employee
Elective Deferral, under a plan maintained by the Employer.
Section 4.5 Distribution of Excess Aggregate Contributions.
(a) "Excess Aggregate Contributions" means, with respect to any
Plan Year, the excess of:
(1) The Actual Contribution Percentage (ACP) amounts taken
into account in computing the numerator of the
Contribution Percentage actually made on behalf of
Highly Compensated Employees for such Plan Year, over
(2) The maximum contribution percentage amounts permitted
by the ACP test (determined by reducing contributions
made on behalf of Highly Compensated Employees in order
of such Employees' Actual Contribution Percentages
beginning with the highest of such percentages).
(b) Notwithstanding any other provision of this Plan, Excess
Aggregate Contributions, plus any income and minus any loss
thereto, shall be forfeited if forfeitable or, if not
forfeitable, distributed no later than the last day of each
Plan Year to Participants to whose Accounts such Excess
Aggregate Contributions were allocated for the preceding Plan
Year. Excess Aggregate Contributions of Participants who are
subject to the family member aggregation rules of section
414(q)(6) of the Code shall be allocated among applicable
family members in proportion to the After-Tax Employee and
Employer
Matching Contributions (or amounts treated as Matching
Contributions) of each family member whose contributions are
included in the combined ACP. Excess Aggregate Contributions
shall be treated as Annual Additions under the Plan.
(c) Excess Aggregate Contributions shall be adjusted for any
income or loss during the Plan Year. The income or loss
allocable to Excess Aggregate Contributions shall be the
Matching Contribution Account (if any, and if all amounts
therein are not used in the ADP test) and, if applicable,
Qualified Non-Elective Contribution Account and Employee
Deferral Account for the Plan Year multiplied by a fraction,
the numerator of which is such Participant's Excess Aggregate
Contributions for the year and the denominator is the
Participant's Account balance(s) attributable to contribution
percentage amounts without regard to any income or loss
occurring during such Plan Year.
(d) Forfeitures of Excess Aggregate Contributions may either be
reallocated to the Accounts of Non-Highly Compensated
Employees or applied to reduce Employer contributions.
(e) Excess Aggregate Contributions shall be forfeited, if
forfeitable, or distributed on a pro rata basis from the
Participant's After-Tax Employee Contribution Account,
Matching Contribution Account, and Qualified Matching
Contribution Account (and, if applicable, the Participant's
Qualified Non-Elective Contribution Account or Employee
Deferral Account, or both).
Section 4.6 Recharacterization.
(a) The Administrator may treat Excess Contributions as an amount
which is distributed to the Participant and then contributed
by the Participant to the Plan as an After-Tax Employee
Contribution in order for the Plan to satisfy the ADP test.
Recharacterized amounts will remain nonforfeitable and
subject to the same distribution requirements as Employee
Elective Deferrals. Amounts may not be recharacterized to
the extent that such amount in combination with other
Employee Contributions made by that Employee would exceed any
stated limit under the Plan applicable to Employee
Contributions.
(b) Recharacterization must occur no later than two and one-half
months after the last day of the Plan Year in which such
Excess Contributions arose and is deemed to occur no earlier
than the date the last Highly Compensated Employee is
informed in writing of the amount recharacterized and the
consequences thereof. Recharacterized amounts will be
taxable to the Participant for the Participant's tax year in
which the Participant would have received them in cash.
ARTICLE V - ALLOCATIONS, VALUATION AND VESTING
Section 5.1 Allocation of Contributions.
As of the Valuation Date, Employee Elective Deferrals, After-Tax
Contributions, Employer Matching Contributions and Qualified Non-
Elective Contributions will be allocated to Participants' Accounts
in the amounts in which they were contributed to the Plan by the
Employer with respect to each Participant pursuant to Article III.
The Allocation of Minimum Employer Contribution is set forth in
Section 5.7.
Section 5.2 Participants Who Will Receive an Allocation.
(a) No Participant will receive an allocation of Employer Regular
Contributions as none are provided under this Plan.
(b) An allocation of Employer Matching Contributions made under
Section 3.1 shall only be made with respect to those
Participants who have performed at least one (1) Hour of
Service regardless of employment status on the last day of
the Plan Year.
(c) Allocation of the Minimum Employer Contribution is set forth
in Section 5.7.
Section 5.3 Allocation of Forfeitures.
Forfeitures, if any, will reduce Employer Matching Contributions
for the current Plan Year.
Section 5.4 Allocation Limitations.
(a) If the Participant does not participate in, and has never
participated in another qualified plan maintained by the
Employer, or a welfare benefit fund, as defined in
section 419(e) of the Code maintained by the Employer, or an
individual medical account, as defined in section 415(l)(2)
of the Code, maintained by the Employer, which provides an
Annual Addition as defined in subsection (d)(1), the
following provisions shall apply:
(1) The amount of Annual Additions which may be credited to
the Participant's Account for any Limitation Year shall
not exceed the lesser of the Maximum Permissible
Amount, as defined in subsection (d)(9), or any other
limitation contained in this Plan. If contributions
that would otherwise be contributed or allocated to the
Participant's Account would cause the Annual Additions
for the Limitation Year to exceed the Maximum
Permissible Amount, the amount
contributed or allocated will be reduced (Employee
Elective Deferrals first) so that the Annual Additions
for the Limitation Year will equal the Maximum
Permissible Amount.
(2) As soon as is administratively feasible after the end
of the Limitation Year, the Maximum Permissible Amount
for the Limitation Year will be determined on the basis
of the Participant's actual Section 415 Compensation
for the Limitation Year.
(3) If there is an excess Annual Addition due to a
reasonable error in estimating a Participant's
Compensation or in determining permissible Employee
Elective Deferrals, or any other facts and
circumstances as determined by the Committee and which
are found by the Commissioner of Internal Revenue to
justify the availability of the procedures for
correcting the excess as set forth in this subsection,
the excess will be corrected as follows:
(A) Any After-Tax Employee Contributions, to the
extent their return would reduce the excess, will
be returned to the Participant;
(B) Any portion of the excess directly attributable
to and arising from Employee Elective Deferrals,
to the extent its return would reduce the excess,
will be returned to the Participant;
(C) If after the application of paragraphs (A) and
(B) an excess still exists, and the Participant
is covered by the Plan at the end of the
Limitation Year, the excess in the Participant's
Account will be used to reduce Employer
contributions beginning with Employee Elective
Deferrals, if any, for the next Limitation Year,
and each succeeding Limitation Year if necessary;
(D) If after the application of paragraphs (A) and
(B) an excess still exists, and the Participant
is not covered by the Plan at the end of a
Limitation Year, the excess will be held
unallocated in a suspense account. The suspense
account will be applied to reduce future
contributions beginning with Employee Elective
Deferrals, if any, for all remaining Participants
for the next Limitation Year, and each succeeding
Limitation Year if necessary;
(E) If a suspense account is in existence at any time
during a Limitation Year pursuant to this
Section, it will not receive any allocation of
the investment gains and losses of the Trust. If
a suspense account is in existence at any time
during a particular Limitation Year, all amounts
in the suspense account must be allocated and
reallocated to Participants' Accounts before any
Employer or any After-Tax Employee Contributions
may be made to the Plan for that Limitation Year.
The excess amount may not be distributed to
Participants or former Participants.
(b) If, in addition to this Plan, a 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(l)(2)
of the Code) maintained by the Employer, which provides an
Annual Addition as defined in subsection (d)(1), during any
Limitation Year, the following provisions shall apply:
(1) The Annual Additions which may be credited to a
Participant's Account under this Plan for any such
Limitation Year may not exceed the Maximum Permissible
Amount reduced by the Annual Additions credited to such
Participant's account under such other plans and/or
welfare benefit funds for the same Limitation Year. If
the Annual Additions with respect to the Participant
under other Defined Contribution Plans and welfare
benefit funds maintained by the Employer are less than
the Maximum Permissible Amount and the Employer
contribution that would otherwise be contributed or
allocated to the Participant's Account under this Plan
would cause such Participant's 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.
(2) As soon as is administratively feasible after the end
of the Limitation Year, the Maximum Permissible Amount
for the Limitation Year will be determined on the basis
of the Participant's actual Section 415 Compensation
for the Limitation Year.
(3) If, as a result of a reasonable error in estimating
compensation, Employee contributions or other facts and
circumstances as determined by the Committee, a
Participant's Annual Additions under this Plan and such
other plans would include an amount in excess of the
Maximum Permissible Amount for a Limitation Year, the
excess 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.
(4) If an amount in excess of the Maximum Permissible
Amount was allocated to a Participant on an allocation
date of this Plan which coincides with an allocation
date of another plan, the excess attributed to this
Plan will be the product of
(A) the total excess allocated as of such date and
(B) the ratio of (i) the Annual Additions allocated
to the Participant for the Limitation Year as of
such date under this Plan to (ii) the total
Annual Additions allocated to the Participant for
the Limitation Year as of such date under this
and all other qualified Defined Contribution
Plans maintained by the Employer.
(5) Any excess Annual Addition attributed to this Plan will
be disposed of in the manner described in
subsection (a)(3).
(c) If the Employer maintains, or at any time maintained, a
qualified Defined Benefit Plan covering any Participant in
this Plan, the sum of a Participant's Defined Benefit
Fraction and Defined Contribution Fraction shall not exceed
1.0 in any Limitation Year. If the sum of the fractions
exceeds 1.0, the annual benefit provided under the Defined
Benefit Plan will be reduced until the sum of the fractions
equals 1.0.
(d) Definitions:
(1) Annual Additions: The sum of the following amounts
which are credited to a Participant's Account for the
Limitation Year:
(A) Employer contributions,
(B) After-Tax Employee Contributions (if any), and
(C) Amounts allocated, after March 31, 1984, to an
individual medical account, as defined in
section 415(1)(2) of the Code, which is part of a
pension or annuity plan maintained by the
Employer, as well as amounts derived from
contributions paid or accrued after December 31,
1985, in taxable years ending after such date,
attributable to post-retirement medical benefits
and allocated to the separate account of a Key
Employee, as defined in section 419(d)(3) of the
Code, under a welfare benefit fund, as defined in
section 419(e) of the Code, maintained by the
Employer.
For this purpose, any excess applied under
Sections (a)(3) or (b)(5) in the Limitation Year to
reduce Employer contributions will be considered Annual
Additions for such Limitation Year.
(2) Section 415 Compensation: For purposes of this
Section, a Participant's Earned Income (if any), wages,
salaries, and fees for professional services and other
amounts received for personal services actually
rendered in the course of employment with the Employer
maintaining the Plan (including, but not limited to,
commissions paid salesmen, compensation for services on
the basis of a percentage of profits, commissions on
insurance premiums, tips, bonuses, fringe benefits, and
reimbursements or expense allowances under a
nonaccountable plan as described in Treasury Regulation
Section 1.62-2(c)), and excluding the following:
(A) Employer contributions to a plan of deferred
compensation which are not includible in the
Employee's gross income for the taxable year in
which contributed, or Employer contributions
under a simplified employee pension plan to the
extent such contributions are deductible by the
Employee, or any distributions from a plan of
deferred compensation;
(B) Amounts realized from the exercise of a non-
qualified stock option, or when restricted stock
(or property) held by the Employee either becomes
freely transferable or is no longer subject to a
substantial risk of forfeiture;
(C) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified
stock option; and
(D) Other amounts which received special tax
benefits, or contributions made by the Employer
(whether or not under a salary reduction
agreement) toward the purchase of an annuity
contract described in section 403(b) of the Code
(whether or not the contributions are actually
excludable from the gross income of the
Employee).
For Limitation Years beginning after December 31, 1991,
for purposes of applying the limitations of this
Article, Section 415 Compensation for a Limitation Year
is the compensation actually paid or made available
during such Limitation Year. Section 415 Compensation
does not include accrued compensation unless it is
uniform and consistent and paid within two weeks.
Notwithstanding the preceding sentence, Section 415
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 at which he was
paid immediately before becoming permanently and
totally disabled; such imputed compensation for the
disabled Participant may be taken into account only if
the Participant is not a Highly Compensated Employee
(as defined in section 414(q) of the Code) and
contributions made on behalf of such Participant are
nonforfeitable when made.
(3) Defined Benefit Fraction: A fraction, the numerator of
which is the sum of the Participant's Projected Annual
Benefit under all Defined Benefit Plans (whether or not
terminated) maintained by the Employer, and the
denominator of which is the lesser of 125 percent of
the dollar limitation determined for the Limitation
Year under sections 415(b) and (d) of the Code or
140 percent of the highest average Section 415
Compensation, including any adjustments under
section 415(b) of the Code.
Notwithstanding the above, if the Participant was a
Participant, as of the first day of the first
Limitation Year beginning after December 31, 1986, in
one or more Defined Benefit Plans maintained by the
Employer which were in existence on May 6, 1986, the
denominator of this fraction will not be less than
125 percent of the sum of the annual benefits under
such plans which the Participant had accrued as of the
close of the last Limitation Year beginning before
January 1, 1987, disregarding any changes in the terms
and conditions of the plan(s) after May 5, 1986. The
preceding sentence applies only if the Defined Benefit
Plans individually and in the aggregate satisfied the
requirements of section 415 of the Code for all
Limitation Years beginning before January 1, 1987.
(4) Defined Contribution Dollar Limitation: $30,000 or, if
greater, one-fourth of the defined benefit dollar
limitation set forth in section 415(b)(1) of the Code,
as indexed, as in effect for the applicable Limitation
Year.
(5) Defined Contribution Fraction: A fraction, the
numerator of which is the sum of the Annual Additions
to the Participant's Account under this and all other
Defined Contribution Plans (whether or not terminated)
maintained by the Employer for the current and all
prior Limitation Years (including the annual additions
attributable to the Participant's nondeductible
Employee contributions to all Defined Benefit Plans,
whether or not terminated, maintained by the Employer,
and the annual additions attributable to all welfare
benefit funds, as defined in section 419(e) of the
Code, and individual medical accounts, as defined in
section 415(1)(2) of the Code, maintained by the
Employer), and the denominator of which is the sum of
the maximum aggregate amounts for the current and all
prior Limitation Years which also constituted Years of
Service with the Employer (regardless of whether a
Defined Contribution Plan was maintained by the
Employer). The maximum aggregate amount for any
Limitation Year is the lesser of (A) 125 percent of the
dollar limitation determined under sections 415(b)
and (d) of the Code in effect under
section 415(c)(1)(A) of the Code or (B) 35 percent of
the Participant's Section 415 Compensation for such
year.
If the Employee was a Participant as of the end of the
first day of the first Limitation Year beginning after
December 31, 1986 in one or more Defined Contribution
Plans maintained by the Employer which were in
existence on May 6, 1986, the numerator of this
fraction will be adjusted if the sum of this fraction
and the Defined Benefit Fraction would otherwise exceed
1.0 under the terms of this Plan. Under the
adjustment, an amount equal to the product of (1) the
excess of the sum of the fractions over 1.0, multiplied
by (2) the denominator of this fraction, will be
permanently subtracted from the numerator of this
fraction. The adjustment is calculated using the
fractions as they would be computed as of the end of
the last Limitation Year beginning before January 1,
1987, and disregarding any changes in the terms and
conditions of the Plan made after May 5, 1986, but
using the Code section 415 limitation applicable to the
first Limitation Year beginning on or after January 1,
1987.
The Annual Addition for any Limitation Year beginning
before January 1, 1987, shall not be recomputed to
treat all Employee contributions as Annual Additions.
In determining the Defined Contribution Fraction under
section 415(e)(3)(B) of the Code and pursuant to this
Section of the Plan, "100 percent" shall be
substituted for "125 percent" unless the minimum
allocation percentage under section 416(c)(2)(A) of the
Code and Section 11.3(a) of the Plan is increased from
"three percent" to "four percent" and the Plan would
not be a Top-Heavy Plan if the phrase "90 percent"
were substituted for each reference to the phrase
"60 percent" in Section 11.2(b) of the Plan.
(6) Employer: For purposes of this Article, any entity
that adopts this Plan, and all members of a controlled
group of corporations (as defined in section 414(b) of
the Code as modified by section 415(h) of the Code),
all commonly controlled trades or businesses (as
defined in section 414(c) of the Code as modified by
section 415(h) of the Code) or affiliated service
groups (as defined in section 414(m) of the Code) of
which the adopting Employer is part, and any other
entity required to be aggregated with the Employer
pursuant to Regulations under section 414(o) of the
Code.
(7) Highest Average Compensation: The average Section 415
Compensation for the three consecutive Years of Service
with the Employer which produces the highest average.
(8) Limitation Year: The Limitation Year is the Plan Year.
All qualified plans maintained by the Employer must use
the same Limitation Year. If the Limitation Year is
amended to a different 12-consecutive-month period, the
new Limitation Year must begin on a date within the
Limitation Year in which the amendment is made.
(9) Maximum Permissible Amount: The maximum Annual
Addition that may be contributed or allocated to a
Participant's Account under the Plan for any Limitation
Year shall not exceed the lesser of:
(A) the Defined Contribution Dollar Limitation, or
(B) 25 percent of the Participant's Section 415
Compensation for the Limitation Year.
The Section 415 Compensation limitation referred
to in (B) shall not apply to any contribution for
medical benefits (within the meaning of
section 401(h) or section 419A(f)(2) of the Code)
which is otherwise treated as an Annual Addition
under sections 415(1)(1) or 419A(d)(2) of the
Code.
If a short Limitation Year is created because an
amendment changes the Limitation Year to a
different 12-consecutive-month period, the
Maximum Permissible Amount shall not exceed the
Defined Contribution Dollar Limitation multiplied
by the following fraction:
Number of months in the short Limitation Year
12
(10) Projected Annual Benefit: The annual retirement
benefit (adjusted to an actuarially equivalent straight
life annuity if such benefit is expressed in a form
other than a straight life annuity or qualified joint
and survivor annuity) to which the Participant would be
entitled under the terms of the Plan assuming:
(A) The Participant will continue employment until
Normal Retirement Age under the Plan (or current
age, if later), and
(B) The Participant's Section 415 Compensation for
the current Limitation Year and all other
relevant factors used to determine benefits under
the Plan will remain constant for all future
Limitation Years.
Section 5.5 Valuation.
The assets of the Trust will be valued on each Valuation Date at
fair market value. On such date, the earnings and losses of the
Trust will be allocated to each Participant's Account according to
the ratio of such Account balance to all Account balances, or by
utilizing any other formula as is appropriate under the
circumstances.
Section 5.6 Vesting and Accrual.
(a) Employee Elective Deferrals, After-Tax Employee Contributions
and Qualified Non-Elective Contributions are always
100 percent Vested.
(b) The portion of a Participant's Account attributable to the
first $600 of Employer Matching Contributions for any Plan
Year, and earnings thereon, is 100 percent Vested. The
nonforfeitable percentage of a Participant's Account
attributable to any additional Employer Matching
Contributions, and earnings thereon, is determined as
follows:
Years of Service The nonforfeitable
percentage is:
Less than 1 0
Less than 2 0
Less than 3 0
Less than 4 20
Less than 5 40
Less than 6 60
Less than 7 80
7 or more 100
(c) Notwithstanding the vesting schedule(s) specified above, an
Employee's right to his Accounts will be nonforfeitable upon
attainment of Normal Retirement Age, death or Disability.
(d) For purposes of determining Years of Service and One-Year
Breaks in Service in computing an Employee's nonforfeitable
right to his Account balance derived from Employer
contributions, the 12-consecutive-month period will commence
on the date the Employee first performs an Hour of Service
and each subsequent 12-consecutive-month period will commence
on the anniversary of such date.
(e) All of an Employee's Years of Service with the Employer or
any Affiliate will be credited for vesting purposes.
(f) Years of Service before a One-Year Break in Service:
(1) In the case of a Participant who has incurred a One-
Year Break in Service, Years of Service before such
break will be immediately taken into account upon
rehire.
(2) In the case of a Participant who has 5 or more
consecutive One-Year Breaks in Service, all service
after such One-Year Breaks in Service will be
disregarded for the purposes of vesting the Employer-
derived Account balance that accrued before such One-
Year Breaks in Service. Such Participant's pre-break
service will count in counting vesting for the post-
break Employer-derived Account balance.
Separate Accounts will be maintained for the
Participant's pre-break and post-break Employer-derived
Account balance only if the pre-break Employer-derived
Account has a Vested balance. Both Accounts will share
in the earnings and losses of the Trust Fund.
If a Participant ceases to be employed but is then
reemployed by the Employer before a One-Year Break in
Service occurs, he shall continue to participate in the
Plan in the same manner as if such termination had not
occurred.
(g) If a Participant ceases to be employed but is then reemployed
by the Employer before he has incurred five One-Year Breaks
in Service, the forfeited portions of his Account shall be
restored by an additional Employer contribution.
(h) If the Plan's vesting schedule is changed or amended, or the
Plan is amended in any way that directly or indirectly
affects the computation of the Participant's nonforfeitable
percentage, each active Participant will be credited with the
most favorable schedule.
Furthermore, if the vesting schedule of a Plan is amended, in
the case of an Employee who is a Participant as of the later
of the date such amendment is adopted or the date it becomes
effective, the nonforfeitable percentage (determined as of
such date) of such Employee's right to his Employer-derived
accrued benefit will not be less than the percentage computed
under the Plan without regard to such amendment.
(i) If a distribution is made at a time when a Participant has a
nonforfeitable right to less than 100 percent of the Account
balance derived from Employer contributions and the
Participant may increase his nonforfeitable percentage in the
Account:
(1) A separate Account will be established for the
Participant's interest in the Plan as of the time of
the distribution, and
(2) At any relevant time the Participant's nonforfeitable
portion of the separate Account will be equal to an
amount ("X") determined by the formula:
X = P(AB + (R x D)) - (R x D)
For purposes of applying the above formula: P is the
nonforfeitable percentage at the relevant time, AB is
the Account balance at the relevant time, D is the
amount of the distribution, and R is the ratio of the
Account balance at the relevant time to the Account
balance after distribution. "Relevant time" means the
time at which, under the plan, the Vested percentage in
the Account can not increase.
Section 5.7 Allocation of Minimum Employer Contributions.
The Minimum Employer Contribution made for the Plan Year shall be
allocated as follows:
(a) First, the Minimum Employer Contribution for the Plan Year
shall be allocated during the Plan Year to each individual
who is an Eligible Participant on the first day of the Plan
Year as Employee Elective Deferrals pursuant to Section 3.2
and as Employer Matching Contributions pursuant to
Section 3.1. These allocations shall be made to each such
Eligible Participant's Employee Deferral Account and Employer
Matching Contribution Account, respectively.
(b) Second, the balance of the Minimum Employer Contribution
remaining after the allocation in Section 5.7(a) shall be
allocated to the Employer Matching Contribution Account of
each Non-Highly Compensated Employee who is an Eligible
Participant on the first day of the Plan Year and is employed
on the last day of the Plan Year, in the ratio that such
Eligible Participant's Employee Elective Deferrals during the
Plan Year bears to the Employee Elective Deferrals of all
such Eligible Participants during the Plan Year.
(c) Third, notwithstanding Section 5.4 of the Plan, if the total
contributions allocated to a Participant's Accounts including
the Minimum Employer Contribution exceed the Participant's
maximum Annual Additions limit for any Limitation Year, then
such excess shall be held in a suspense account. Such
amounts shall be used to reduce employer contributions in the
next and succeeding Limitation Years.
(d) Fourth, the balance of the Minimum Employer Contribution
remaining after the allocation under Sections 5.7(a), (b) and
(c) shall be allocated as a nonelective contribution to each
Non-Highly Compensated Employee who is an Eligible
Participant on the first day of the Plan Year, in the ratio
that such Eligible Participant's Compensation for the Plan
Year bears to the Compensation for the Plan Year of all such
Eligible Participants. Contributions made pursuant to this
Subsection 5.7(d) shall be allocated to the Employer Matching
Contribution Account of such Eligible Participant
and are distributable only in accordance with the
distribution provisions applicable to Employer Matching
Contributions. Contributions made pursuant to this
Subsection shall be subject to the vesting schedule set forth
in Section 5.6. Such contributions shall be invested under
the Plan in the manner designated by such Eligible
Participant.
(e) Each installment of the Minimum Employer Contribution shall
be held in a contribution suspense account unless, or until,
allocated on or before the end of the Plan Year in accordance
with this Section 5.7. Such suspense account shall not
participate in the allocation of investment gains, losses,
income and deductions of the Trust Fund as a whole, but shall
be invested separately, as directed by the Employer, and all
gains, losses, income and deductions attributable to such
investment shall be applied to reduce Plan expenses, and
thereafter, to reduce employer contributions.
(f) The Minimum Employer Contribution allocated to the Employer
Matching Contribution Account of a Participant pursuant to
Section 5.7(b) shall be treated in the same manner as
Employer Matching Contributions for all purposes of the Plan.
(g) Notwithstanding any other provision of the Plan to the
contrary, any allocation of Employee Elective Deferrals to a
Participant's Employee Deferral Account shall be made under
either Section 5.1 or this Section 5.7, as appropriate, but
not both Sections. Similarly, any allocation of an Employer
Matching Contribution shall be made under either Section 5.1
or this Section 5.7, as appropriate, but not both Sections.
(h) An "Eligible Participant" for purposes of this Section 5.7
is any Employee who has satisfied the eligibility
requirements of Article II and is thereby eligible to make
Employee Elective Deferrals, whether or not such Employee has
elected to make contributions or has completed an enrollment
form. Notwithstanding the definition of "Participant" in
Article I, an Eligible Participant who receives an allocation
of a contribution under this Section 5.7 shall be treated as
a Participant under the Plan for all purposes.
ARTICLE VI - DISTRIBUTIONS
Section 6.1 Distributions of Small Account Balances.
If a Participant terminates service, and the value of the
Participant's Vested Account balance derived from Employer and
Employee contributions is not greater than $5,000, the Participant
will receive a distribution of the value of the entire Vested
portion of such Account balance. If the value of a Participant's
Vested Account balance is zero, the Participant shall be deemed to
have received a distribution of such Vested Account balance.
Section 6.2 Distributions While In-Service.
Subject to the provisions of Section 6.13, in-service distributions
shall be made, at the election of a Participant, in the following
circumstance(s):
(a) Anytime after the Participant's Normal Retirement Age.
(b) In-service distributions shall be permitted upon a
showing of hardship to the Committee. A hardship
withdrawal shall be authorized only upon a showing of
an immediate and heavy financial need.
(1) Hardship withdrawals are available from the
following accounts, and will be withdrawn from
the Participant's accounts in the following
hierarchy:
(A) After-Tax Employee Contribution Account
(B) Rollover Account
(C) Employee Deferral Account
(D) 100% Vested Matching Contribution Account
(not including pre-88 Employer
contributions or contributions less than
24 months old)
(E) Employer Matching Contribution Account
(vested portion of contributions that are
more than 24 months old)
(2) Withdrawals will be taken from the investment
funds on a pro rata basis.
(c) The Committee, at the election of the Participant,
shall direct the Trustee to distribute to any
Participant all or a portion of his or her After-Tax
Employee Contributions.
(d) The Committee, at the election of the Participant,
shall direct the Trustee to distribute to any
Participant all or a portion of his or her Rollover
Contributions.
(e) The Committee, at the election of the Participant,
shall direct to the Trustee to distribute to any
Participant all or a portion of his or her Pre-1998 100
percent Vested Employer Matching Contributions, for
those funds that have been in the Plan for at least 24
months.
(f) The Committee, at the election of the Participant,
shall direct the Trustee to distribute to any
Participant all or a portion of his of her Pre-1998
Regular Employer Matching Contributions for those funds
that have been in the Plan for at least 24 months.
Section 6.3 Distributions Upon Separation From Service.
Subject to the provisions of Sections 6.8 and 6.9, following the
request of the Participant and after approval of the Plan
Administrator, the Trustee shall distribute the value of the
Participant's Vested Account balance in one lump sum. Such
distribution shall begin as soon as administratively feasible,
following the Participant's separation from service.
Section 6.4 Distributions Upon Retirement.
In the event that an applicable retirement date has been reached,
and subject to the terms of Sections 6.8 and 6.9, all Vested
amounts credited to the Participant's Account balance shall become
distributable. Except as provided in Section 6.10, the
distribution will be made in one lump sum. The distribution will
be made, as soon as administratively feasible, following the
applicable retirement date which will include the attainment of
Normal Retirement Age or the Late Retirement Date and after the
Plan Administrator has approved the request of the Participant.
Section 6.5 Distributions Upon Death.
(a) Subject to the provisions of Sections 6.8 and 6.9, upon the
death of a Participant, the Committee shall instruct the
Trustee, in accordance with this Article, to distribute the
Account of a deceased Participant to that Participant's
Beneficiary. The Participant shall not name as his
Beneficiary someone other than his Spouse unless and until
the Participant and Spouse designate, in writing on a valid
waiver form provided by the
Committee for such purpose, an alternate Beneficiary, which
designation shall be witnessed by a notary public or by a
Plan representative. In addition, the Participant may
designate a Beneficiary other than his Spouse if: (1) the
Participant is legally separated or has been abandoned and
the Participant has a court order to such effect (and there
is no "qualified domestic relations order" as defined in
section 414(p) of the Code), or (2) the Participant has no
Spouse, or (3) the Spouse cannot be located. Where the
Participant makes no designation, the Beneficiary shall be
the Spouse, and if there is no Spouse, the Beneficiary shall
be the Participant's estate. The Committee may require such
proof of death and such evidence of the right of other
persons to be Beneficiaries as it shall deem proper under the
circumstances. The Committee's determination of death and of
the right of any Beneficiary to receive payments shall be
conclusive.
(b) The designation of a Beneficiary shall be made on a form
approved by the Committee. A Participant may revoke or
change his designation with the Committee by filing a new
designation form with the Committee. In the event that no
valid designation exists at the time of the Participant's
death, and the Participant has no Spouse, the death benefit
shall be payable to the Participant's estate.
(c) If the Participant was eligible, but had not yet received a
lump sum distribution prior to his death, the Trustee will
make the lump sum distribution to the Beneficiary as if the
Participant has not died.
If the Participant dies before distribution of his interest
has begun or before age 70 1/2, his Account must be
distributed as a lump sum within one year of the death of the
Participant.
Section 6.6 Distributions Upon Disability.
In the event of a Participant's total and permanent Disability, the
Trustee, as directed by the Plan Administrator, shall distribute,
subject to the provisions of Sections 6.8 and 6.9, the value of the
Participant's Vested Account balance. The distribution will be
made, after the request of the Participant and the approval of the
Plan Administrator, in one lump sum. The distribution will be made
as soon as administratively feasible following the determination of
Disability.
Section 6.7 Special Beneficiary Provisions.
(a) Lost Beneficiary. If, after five years have expired
following reasonable efforts of the Committee to locate a
Participant or his Beneficiary, including sending a
registered letter, return receipt requested to the last known
address, the Committee is unable to locate the Participant or
Beneficiary, then the amounts distributable to such
Participant or Beneficiary shall, pursuant to applicable
state and Federal laws, be treated as a Forfeiture under the
Plan. Where a Participant or Beneficiary is located
subsequent to a Forfeiture, such benefits shall be reinstated
by the Committee, and shall not count as an Annual Addition
under section 415 of the Code.
(b) Minor Beneficiary. The Committee may instruct the Trustee to
distribute a sum payable to a minor instead to his or her
legal guardian, or if there is no guardian, to a parent or
other responsible adult who maintains the residence of the
minor. In the alternative such distribution could be made to
the appropriate custodian under the Uniform Gifts to Minors
Act or Gift to Minors Act if applicable under the state laws
of the state in which the minor resides. Any payment in this
format shall discharge all fiduciaries involved in the
distribution including the Trustee, Employer, and Plan from
liability in regard to the transaction.
(c) Alternate Payee. A Participant's rights and benefits shall
be subject to the rights afforded to an alternate payee under
a qualified domestic relations order. In connection with a
proper qualified domestic relations order under section
414(p) of the Code, a distribution shall be permitted if such
distribution is authorized by the qualified domestic
relations order even if the Participant has not achieved a
distributable event under the Plan.
Section 6.8 Consent of the Participant Required for
Distributions if Account Balances Greater Than
$5,000.
If the value of a Participant's Vested Account balance derived from
Employer and Employee contributions exceeds (or at the time of any
prior distribution exceeded) $5,000, and the Account balance is
immediately distributable, the Participant (or where either the
Participant or the Spouse has died, the survivor) must consent to
any distribution of such Account balance. An Account balance is
immediately distributable if any part of the Account balance could
be distributed to the Participant (or Surviving Spouse) before the
Participant attains or would have attained if not deceased the
later of Normal Retirement Age or age 62.
The consent of the Participant shall not be required to the extent
that a distribution is required to satisfy section 401(a)(9) or
section 415 of the Code. In addition, upon termination of this
Plan, if the plan does not offer an annuity option (purchased from
a commercial provider) and if the Employer or any entity within the
same controlled group as the Employer does not maintain another
Defined Contribution Plan (other than an employee stock ownership
plan as defined in
section 4975(e)(7) or 409 of the Code or a simplified employee
pension plan as defined in section 408(k) of the Code, the
Participant's Account balance may, without the Participant's
consent, be distributed to the Participant. However, if any entity
within the same controlled group as the Employer maintains another
Defined Contribution Plan (other than an employee stock ownership
plan as defined in section 4975(e)(7) or 409 of the Code or a
simplified employee pension plan as defined in section 408(k) of
the Code) then the Participant's Account balance will be
transferred, without the Participant's consent, to the plan if the
Participant does not consent to an immediate distribution.
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
section 1.411(a)-11(c) of the Income Tax Regulations is given,
provided that:
(a) the Plan Administrator clearly informs the Participant that
the Participant has a right to a period of at least 30 days
after receiving the notice to consider the decision of
whether or not to elect a distribution (and, if applicable, a
particular distribution option), and
(b) the Participant, after receiving the notice, affirmatively
elects a distribution either in writing or by other permitted
electronic medium.
Section 6.9 Commencement of Benefits.
Unless the Participant elects otherwise, distribution of benefits
will begin no later than the 60th day after the latest of the close
of the Plan Year in which:
(a) the Participant attains age 65 (or Normal Retirement Age, if
earlier);
(b) occurs the 10th anniversary of the year in which the
Participant commenced participation in the Plan; or
(c) the Participant terminates service with the Employer.
Notwithstanding the foregoing, the failure of a Participant, Spouse
or Beneficiary to consent to a distribution while a benefit is
immediately distributable, within the meaning of Section 6.8 of the
Plan, shall be deemed to be an election to defer commencement of
payment of any benefit sufficient to satisfy this Section.
Section 6.10 Required Distributions.
(a) The requirements of this Article shall apply to any
distribution of a Participant's interest and will take
precedence over any inconsistent provisions of this Plan.
Unless otherwise specified, the provisions of this Article
apply to calendar years beginning after December 31, 1984.
All distributions shall be determined and made in accordance
with the proposed Regulations promulgated under section
401(a)(9) of the Code, including the minimum distribution
incidental benefit requirement of section 1.401(a)(9)-2 of
the proposed Regulations.
(b) The entire interest of a Participant must be distributed or
must begin to be distributed no later than the Participant's
Required Beginning Date (defined below) which is generally
the April 1st following his attainment of age 70 1/2.
Distributions may not be made over a period which exceeds
each of the following (or a combination thereof):
(1) the life of the Participant,
(2) the life of the Participant and a Designated
Beneficiary,
(3) a period certain not extending beyond the Life
Expectancy of the Participant, or
(4) a period certain not extending beyond the joint life
and last survivor expectancy of the Participant and a
Designated Beneficiary.
(c) If the Participant's interest is to be distributed in other
than a single sum, the following minimum distribution rules
shall apply on or after the Required Beginning Date:
(1) Distributions During the Participant's Life: If a
Participant's benefit is to be distributed over (1) a
period not extending beyond the Life Expectancy of the
Participant or the joint life and last survivor
expectancy of the Participant and the Participant's
Designated Beneficiary or (2) a period not extending
beyond the Life Expectancy of the Designated
Beneficiary, then the amount required to be distributed
for each calendar year, beginning with distributions
for the first Distribution Calendar Year, must at least
equal the quotient obtained by dividing the
Participant's benefit by the Applicable Life
Expectancy.
For calendar years beginning before January 1, 1989, if
the Participant's Spouse is not the Designated
Beneficiary, the method of distribution selected must
assure that at least 50 percent of the present value of
the amount available for distribution is paid within
the Life Expectancy of the Participant.
For calendar years beginning after December 31, 1988,
the amount to be distributed each year, beginning with
distributions for the first Distribution Calendar Year
shall not be less than the quotient obtained by
dividing the Participant's benefit by the lesser of
(1) the Applicable Life Expectancy or (2) if the
Participant's Spouse is not the Designated Beneficiary,
the applicable divisor determined from the table set
forth in Q&A-4 of section 1.401(a)(9)-2 of the proposed
Regulations. Distributions after the death of the
Participant shall be made using the Applicable Life
Expectancy above as the relevant divisor without regard
to proposed Regulations section 1.401(a)(9)-2.
The minimum distribution required for the Participant's
first Distribution Calendar Year must be made on or
before the Participant's Required Beginning Date. The
minimum distribution for other calendar years,
including the minimum distribution for the Distribution
Calendar Year in which the Employee's Required
Beginning Date occurs, must be made on or before
December 31 of that Distribution Calendar Year.
(2) Distributions After the Participant's Death: If the
Participant dies after distribution of his interest has
begun and after attaining age 70 1/2, the remaining
portion of such interest, if any, will continue to be
distributed at least as rapidly as under the method of
distribution being used prior to the Participant's
death.
If the Participant dies before distribution of his
interest began or prior to attaining age 70 1/2,
distribution of the Participant's entire interest shall
be completed by the later of December 31 of the
calendar year containing the fifth anniversary of the
Participant's death or, if any portion of the
Participant's interest is payable to a Designated
Beneficiary, distributions may be made over the life or
over a period certain not greater than the Life
Expectancy of the Designated Beneficiary commencing on
or before December 31 of the calendar year immediately
following the calendar year in which the Participant
died notwithstanding the above, however, but if the
Designated Beneficiary is the Participant's Surviving
Spouse, distributions are required to begin not earlier
than the later of (a) December 31 of the calendar year
in which the Participant died, or (b) December 31 of
the calendar year in which the Participant would have
attained age 70 1/2.
If the Participant has not made an election pursuant to
this Section by the time of his or her death, the
Participant's Designated Beneficiary must elect the
method of distribution no later than the earlier of
(1) December 31 of the calendar year in which
distributions would be required to begin under this
Section, or (2) December 31 of the calendar year which
contains the fifth anniversary of the date of death of
the Participant. If the Participant has no Designated
Beneficiary, or if the Designated Beneficiary does not
elect a method of distribution, distribution of the
Participant's entire interest must be completed by
December 31 of the calendar year containing the fifth
anniversary of the Participant's death.
For purposes of the above paragraphs, if the Surviving
Spouse dies after the Participant, but before payments
to such Spouse begin, the provisions above, except for
the spousal exception rule, shall be applied as if the
Surviving Spouse were the Participant.
Any amount paid to a child of the Participant will be
treated as if it has been paid to the Surviving Spouse
if the amount becomes payable to the Surviving Spouse
when the child reaches the age of majority.
Distribution of a Participant's interest is considered
to begin on the Participant's Required Beginning Date
(or, if applicable, the date distribution is required
to begin to the Surviving Spouse pursuant to the
above). If distribution in the form of an annuity
irrevocably commences to the Participant before the
Required Beginning Date, the date distribution is
considered to begin is the date distribution actually
commences.
(3) Definitions:
(A) Applicable Life Expectancy: The Life Expectancy
(or joint life and last survivor expectancy)
calculated using the attained age of the
Participant (or Designated Beneficiary) as of the
Participant's (or Designated Beneficiary's)
birthday in the applicable calendar year reduced
by one (1) for each calendar year which has
elapsed since the date the Life Expectancy was
first calculated. If Life Expectancy is being
recalculated, the Applicable Life Expectancy
shall be the Life Expectancy as so recalculated.
The applicable calendar year shall be the first
Distribution Calendar Year and if Life Expectancy
is being recalculated, such succeeding calendar
year.
(B) Designated Beneficiary: An individual
affirmatively elected by the Participant or the
Participant's Surviving Spouse. If no
Beneficiary is elected, the Designated
Beneficiary shall be the Spouse of the
Beneficiary under the Plan in accordance with
section 401(a)(9) of the Code and the proposed
Regulations thereunder.
(C) Distribution Calendar Year: A calendar year for
which a minimum distribution is required. For
distributions beginning before the Participant's
death, the first Distribution Calendar Year is
the calendar year immediately preceding the
calendar year which contains the Participant's
Required Beginning Date. For distributions
beginning after the Participant's death, the
first Distribution Calendar Year is the calendar
year in which distributions are required to begin
pursuant to the above.
(D) Life Expectancy: Life Expectancy and joint life
and last survivor expectancy are computed by use
of the expected return multiples in Tables V and
VI of section 1.72-9 of the Regulations.
Unless the Participant or the Surviving Spouse
elects otherwise by the time distributions are
required to begin, life expectancies shall be
recalculated annually. An election shall be
irrevocable as to the Participant or Surviving
Spouse and shall apply to all subsequent years.
The Life Expectancy of a non-Spouse Beneficiary
may not be recalculated.
(E) Participant's Benefits:
(i) The Account balance as of the last
Valuation Date in the calendar year
immediately preceding the Distribution
Calendar Year (valuation calendar year)
increased by the amount of any
contributions allocated to the Account
balance as of dates in the valuation
calendar year after the Valuation Date and
decreased by distributions made in the
valuation calendar year after the Valuation
Date.
(ii) For purposes of paragraph (a) above, if any
portion of the minimum distribution for the
first Distribution Calendar Year is made in
the second Distribution Calendar Year on or
before the Required Beginning Date, the
amount of the minimum distribution made in
the second Distribution Calendar Year shall
be treated as if it had been made in the
immediately preceding Distribution Calendar
Year.
(F) Required Beginning Date:
(i) General Rule. The Required Beginning Date
of a Participant is the first day of April
of the calendar year following the calendar
year in which the Participant attains age
70 1/2 subject to the transitional rules
below.
(ii) Transitional rules. The Required Beginning
Date of a Participant who attains age
70 1/2 before January 1, 1988, shall be
determined in accordance with (a) or (b)
below:
(a) Non-5-percent owners. The Required
Beginning Date of a Participant who
is not a 5-percent owner is the first
day of April of the calendar year
following the calendar year in which
the later of retirement or attainment
of age 70 1/2 occurs.
(b) 5-percent owners. The Required
Beginning Date of a Participant who
is a 5-percent owner during any year
beginning after December 31, 1979, is
the first day of April following the
later of:
(I) the calendar year in which the
Participant attains age 70 1/2,
or
(II) the earlier of the calendar
year with or within which ends
the Plan Year in which the
Participant becomes a 5-percent
owner, or the calendar year in
which the Participant retires.
(III) The Required Beginning Date of
a Participant who is not a 5-
percent owner who attains age
70 1/2 during 1988 and who has
not retired as of January 1,
1989, is April 1, 1990.
(iii) 5-percent owner. A Participant is treated
as a 5-percent owner for purposes of this
Section if such Participant is a 5-percent
owner as defined in section 416(i) of the
Code (determined in accordance with
section 416 of the Code but without regard
to whether the Plan is Top-Heavy) at any
time during the Plan Year ending with or
within the calendar year in which such
owner attains age 66 1/2 or any subsequent
Plan Year.
(iv) Once distributions have begun to a 5-
percent owner under this Section, they must
continue to be distributed even if the
Participant ceases to be a 5-percent owner
in a subsequent year.
(d) Transitional Rules for TEFRA Elections:
Notwithstanding the other requirements of this Section and
subject to the joint and survivor annuity requirements,
distribution on behalf of any Employee, including a
5-percent owner, may be made if all of the following
requirements are satisfied (regardless of when such
distribution commences):
(1) The distribution by the Trust is one which would not
have disqualified the Trust under section 401(a)(9) of
the Code as in effect prior to amendment by the Deficit
Reduction Act of 1984.
(2) The distribution is in accordance with a method of
distribution designated by the Employee whose interest
in the Trust is being distributed or, if the Employee
is deceased, by a Beneficiary of such Employee.
(3) Such designation was in writing, was signed by the
Employee or the Beneficiary, and was made before
January 1, 1984.
(4) The Employee had accrued a benefit under the Plan as of
December 31, 1983.
(5) The method of distribution designated by the Employee
or the Beneficiary specifies the time at which
distribution will commence, the period over which
distributions will be made, and in the case of any
distribution upon the Employee's death, the
Beneficiaries of the Employee listed in order of
priority.
A distribution upon death will not be covered by this
transitional rule unless the information in the designation
contains the required information described above with
respect to the distributions to be made upon the death of the
Employee.
For any distribution which commences before January 1, 1984,
but continues after December 31, 1983, the Employee or the
Beneficiary to whom such distribution is being made, will be
presumed to have designated the method of distribution under
which the distribution is being made if the method of
distribution was specified in writing and the distribution
satisfied the requirements of (1) and (5) above.
If a designation is revoked, any subsequent distribution must
satisfy the requirements of section 401(a)(9) of the Code and
the proposed Regulations thereunder. If a designation is
revoked subsequent to the date distributions are required to
begin, the Trust must distribute by the end of the calendar
year following the calendar year in which the revocation
occurs the total amount not yet distributed which would have
been required to have been distributed to satisfy
section 401(a)(9) of the Code and the proposed Regulations
thereunder, but for the section 242(b)(2) election. For
calendar years beginning after December 31, 1988, such
distributions must meet the minimum distributions inciden