JETBLUE AIRWAYS CORPORATION
401(k) RETIREMENT PLAN
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
ADMINISTRATION
2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER 15
2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY 16
2.3 POWERS AND DUTIES OF THE ADMINISTRATION 16
2.4 RECORDS AND REPORTS 18
2.5 APPOINTMENT OF ADVISORS 18
2.6 PAYMENT OF EXPENSES 18
2.7 CLAIMS PROCEDURE 18
2.8 CLAIMS REVIEW PROCEDURE 19
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY 19
3.2 EFFECTIVE DATE OF PARTICIPATION 20
3.3 DETERMINATION OF ELIGIBILTY 20
3.4 TERMINATION OF ELIGIBILITY 20
3.5 OMISSION OF ELIGIBLE EMPLOYEE 21
3.6 INCLUSION OF INELIGIBLE EMPLOYEE 21
3.7 REHIRED EMPLOYEES AND BREAKS IN SERVICE 21
3.8 ELECTION NOT TO PARTICIPATE 22
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER CONTRIBUTION 23
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION 23
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4.3 TIME OF PAYMENT OF EMPLOYER CONTRIBUTION 27
4.4 ALLOCATION OF CONTRIBUTION AND EARNING3 27
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS 32
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS 35
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS 38
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS 41
4.9 MAXIMUM ANNUAL ADDITIONS 44
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS 46
4.11 ROLLOVERS AND PLAN-TO-PLAN TRANSFERS FROM QUALIFIED PLANS 48
4.12 DIRECTED INVESTMENT ACCOUNT 50
4.13 QUALIFIED MILITARY SERVICE 53
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND 53
5.2 METHOD OF VALUATION 53
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT 53
6.2 DETERMINATION OF BENEFITS UPON DEATH 54
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY 55
6.4 DETERMINATION OF BENEFITS UPON TERMINATION 56
6.5 DISTRIBUTION OF BENEFITS 57
6.6 DISTRIBUTION OF BENEFITS UPON DEATH 60
6.7 TIME OF SEGREGATION OR DISTRIBUTION 61
6.8 DISTRIBUTION FOR MINOR OF INCOMPETENT BENEFICIARY 61
6.9 LOCATION OF PARTICIPANT OF BENEFICIARY UNKNOWN 61
6.10 PRE-RETIREMENT DISTRIBUTION 62
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6.11 ADVANCE DISTRIBUTION FOR HARDSHIP 62
6.12 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION 64
ARTICLE VII
TRUSTEE
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE 64
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE 65
7.3 OTHER POWERS OF THE TRUSTEE 66
7.4 LOANS TO PARTICIPANT'S 68
7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS 70
7.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES 70
7.7 ANNUAL REPORT OF THE TRUSTEE 71
7.8 AUDIT 71
7.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE 72
7.10 TRANSFER OF INTEREST 73
7.11 TRUSTEE INDEMNIFICATION 73
7.12 DIRECT ROLLOVER 73
7.13 EMPLOYER SECURITIES AND REAL PROPERTY 75
ARTICLE VIII
AMENDMENT, TERMINATION AND MERGERS
8.1 AMENDMENT 75
8.2 TERMINATION 76
8.3 MERGER, CONSOLIDATION OR TRANSFER OF ASSETS 76
ARTICLE IX
TOP HEAVY PROVISIONS
9.1 TOP HEAVY PLAN REQUIREMENTS 77
9.2 DETERMINATION OF TOP HEAVY STATUS 77
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ARTICLE X
MISCELLANEOUS
10.1 PARTICIPANT'S RIGHTS 80
10.2 ALIENATION 8O
10.3 CONSTRUCTION OF PLAN 81
10.4 GENDER AND NUMBER 82
10.5 LEGAL ACTION 82
10.6 PROHIBITION AGAINST DIVERSION OF FUNDS 82
10.7 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE 83
10.8 INSURER'S PROTECTIVE CLAUSE 83
10.9 RECEIPT AND RELEASE FOR PAYMENTS 83
10.10 ACTION BY THE EMPLOYER 83
10.11 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY 83
10.12 HEADINGS 84
10.13 APPROVAL BY INTERNAL REVENUE SERVICE 84
10.14 UNIFORMITY 85
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JETBLUE AIRWAYS CORPORATION
401(k) RETIREMENT PLAN
THIS AGREEMENT hereby adopted this 31st day of December, 2001, by
jetBlue Airways Corporation (herein referred to as the "Employer") and John D.
Owen, Thomas E. Kelly and Vincent Stablie (herein collectively referred to as
the "Trustee").
W I T N E S S E T H:
WHEREAS, the Employer heretofore established a Profit Sharing Plan
and Trust effective October 1, 1999 (hereinafter called the "Effective Date"),
known as jetBlue Airways Corporation 401k Retirement Plan (herein referred to
as the "Plan") in recognition of the contribution made to its successful
operation by its employees and for the exclusive benefit of its eligible
employees; and
WHEREAS, under the terms of the Plan, the Employer has reserved the
right and power to amend the Plan, provided the Trustee joins in such amendment
if the provisions of the Plan affecting the Trustee are amended;
NOW, THEREFORE, effective October 1, 1999, except as otherwise
provided herein, the Employer and the Trustee, in accordance with the provisions
of the Plan pertaining to amendments thereof, hereby amend the Plan in its
entirety and restate the Plan to provide as follows:
ARTICLE I
DEFINITIONS
1.1 "Act" means the Employee Retirement Income Security Act of 1974, as it
may be amended from time to time.
1.2 "Administrator" means the Employees unless another person or entity
has been designated by the Employer pursuant to Section 2.2 to administer the
Plan on behalf of the Employer.
1.3 "Affiliated Employer" means any corporation which is a member of a
controlled group of corporation (as defined in Code Section 414(b)) which
includes the Employer; any trade or business (whether or not incorporated) which
is under common control (as defined in Code Section 414(c)) with the Employer;
any organazation (whether or not incorporated) which is a member of an
affiliated service group (as defined in Code Section 414(m)) which includes the
Employer; and any other entity required to be aggregated with the Employer
pursuant to Regulations under Code Section 414(o).
1.4 "Aggregate Account" means, with respect to each Participant, the value
of all accounts maintained on behalf of a Particiapnt, whether attributable to
Employer or Employee contributions, subject to tne provisions of Section 9.2.
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1.5 "Anniversary Date" means the last day of the Plan Year.
1.6 "Beneficiary" means the person (or entity) to whom the share of a
deceased Participant's total account is payable, subject to the restrictions of
Sections 6.2 and 6.6.
1.7 "Code" means the Internal Revenue Code of 1986, as amended or replaced
from time to time.
1.8 "Compensation" with respect to any Participant means such
Participant's wages as defined in Code Section 3401(a) and all other payments of
compensation by the Employer (in the course of the Employer's trade or business)
for a Plan Year for which the Employer is required to furnish the Participant a
written statement under Code Sections 6041(d), 6051(a)(3) and 6052.
Compensation must be determined without regard to any rules under Code Section
3401(a) that limit the remuneration included in wages based on the nature or
location of the employment or the services performed (such as the exception for
agricultural labor in Code Section 3401(a)(2)).
For purposes of this Section, the determination of Compensation
shall be made by:
(a) excluding, for purposes of the Employer's discretionary
profit sharing contributions pursuant to Section 4.1(c), the
following items: per diem allowances and other similar types of
expense reimbursements, the value of company-paid group term life
insurance; moving allowances, relocation adjustments and other
similar payments and allowances; automobile expense allowances and
reimbursements; annual bonuses to officers and directors, but not
excluding cash incentive awards and other types of cash bonuses to
team members other than officers and directors; the value of other
non-cash fringe benefits, such as incentive passes and "positive
space" travel benefits; PTO payouts; any taxable compensation that
may result from the grant or exercise of stock-based compensation;
any other type of deferred compensation; severance pay and payments
in the nature of severance benefits; non-taxable sick pay, workers
compensation payments and payments under short-term and long-term
disability plans; and payments under a pilots' loss of license
income replacement plan.
(b) excluding, for purposes of salary reduction elections
pursuant to Section 4.2 and Employer matching contributions pursuant
to Section 4.1(b), the following items: per diem allowances and
other similar types of expense reimbursements, the value of
company-paid group term life insurance; moving allowances,
re1ocaton adjustments and other similar payments and allowances;
automobile expense allowances and reimbursements; the value of other
non-cash fringe benefits, such as incentive passes and "positive
space" travel benefits; any taxable compensation that may result
from the grant or exercise of
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stock-based compensation; any other type of deferred
compensation; severance pay and payments in the nature of
severance benefits; non-taxable sick day; workers compensation
payments and payments under any long-term disability plan; and
payments under a pilots' loss of license income replacement plan.
(c) including amounts which are contributed by the Employer
pursuant to a salary reduction agreement and which are not
includible in the gross income of the Participant under Code
Sections 125, 132(f) (4) for Plan Years beginning after December 31,
2000, 402(e) (3), 402(h) (1) (B), 403(b) or 457(b), and Employee
contributions described in Code Section 414(h) (2) that are treated
as Employer contributions.
For a Participant's initial year of participation, Compensation
shall be recognized as of such Employee's effective date of participation in the
component of the Plan for which Compensation is being used pursuant to Section
3.2.
Compensation in excess of $150,000 (or such other amount provided in
the Code) shall be disregarded for all purposes other than for purposes of
salary deferral elections pursuant to Section 4.2. Such amount shall be adjusted
for increases in the cost of living on accordance with Code Section 401 (a) (17)
(B) , except that the dollar increase in effect on January 1 of any calendar
year shall be effective for the Plan Year beginning with or within such calendar
year. For any short Plan Year the Compensation limit shall be an amount equal to
the Compensation limit for the calendar year in which the Plan Year begins
multiplied by the ratio obtained by dividing the number of full months in the
short Plan Year by twelve (12).
If any class of Employees is excluded from the Plan, then
Compensation for any Employee who becomes eligible or ceases to be eligible to
participate during a Plan Year shall include only the portion of his
Compensation earned while the Employee is an Eligible Employee.
1.9 "Contract" or "Policy" means any life insurance policy, retirement
income policy or annuity contract (group or individual) issued pursuant to the
terms of the Plan. In the event of any conflict between the terms of this Plan
and the terms of any contract purchased hereunder, the Plan provisions shall
control.
1.10 "Deferred Compensation" with respect to any Participant means the
amount of the Participant's total Compensation which has been contributed to the
Plan in accordance with the Participant's deferral election pursuant to Section
4.2 excluding any such amounts distributed as excess "annual additions" pursuant
to Section 4.1O(a).
1.11 "Designated Investment Alternative" means a specific investment
identified by name by the Employer (or such other Fiduciary who has been given
the authority to select investment options) as an available investment under the
Plan to which Plan assets may be
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invested by the Trustee pursuant to the investment direction of a Participant.
1.12 "Directed Investment Option" means one or more of the following:
(a) a Designated Investment Alternative.
(b) any other investment permitted by the Plan and the
Participant Direction Procedures to which Plan assets may be
invested by the Trustee pursuant to the investment direction of a
Participant.
1.13 "Early Retirement Date." This Plan does not provide for a retirement
date prior to Normal Retirement Date.
1.14 "Elective Contribution" means the Employer contributions to the Plan
of Deferred Compensation excluding any such amounts distributed as excess
"annual additions" pursuant to Section 4.10(a). In addition, any Employer
Qualified Non-Elective Contribution made pursuant to Section 4.6(b) which is
used to satisfy the "Actual Deferral Percentage" tests shall be considered an
Elective Contribution for purposes of the Plan. Any contributions deemed to be
Elective Contributions (whether or not used to satisfy the "Actual Deferral
Percentage" tests or the "Actual Contribution Percentage" tests) shall be
subject to the requirements of Sections 4.2(b) and 4.2(c) and shall further be
required to satisfy the nondiscrimination requirements of Regulation
1.401(k)-1(b)(5) and Regulation 1.401(m)-1(b)(5), the provisions of which are
specifically incorporated herein by reference.
1.15 "Eligible Employee" means any Employee except as specified below.
Employees whose employment is governed by the terms of a collective
bargaining agreement between Employee representatives (within the meaning of
Code Section 7701 (a) (46)) and the Employer under which retirement benefits
were the subject of good faith bargaining between the parties will not be
eligible to participate in this Plan unless such agreement expressly provides
for coverage on this Plan.
Employees of Affiliated Employers shall rot be eligible to
participate on this Plan unless such Affiliated Employers have specifically
adopted this Plan in writing.
Employees classified by the Employer as independent contractors who
are subsequently determined. by the Internal Revenue Service to be Employees
shall not be Eligible Employees.
Employees classified by the Employer as flight attendants on a
short-term contract of one year or less shall not be Eligible Employees.
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1.16 "Employee" means any person who is employed by the Employer.
1.17 "Employer" means jetBlue Airways Corporation and any successor which
shall maintain this Plan; any predecessor which has maintained this Plan.
The Employer is a corporation, with principal offices in the State of New York.
1.18 "Excess Aggregate Contributions" means, with respect to any Plan
Year, the excess of the aggregate amount of the Employer matching contributions
made pursuant to Section 4.1(b) and any qualified nonelective contributions or
elective deferrals taken into account pursuant to Section 4.7(c) on behalf of
Highly Compensated Participants for such Plan Year, over the maximum amount of
such contributions permitted under the limitations of Section 4.7(a) (determined
by hypothetically reducing contributions made on behalf of Highly Compensated
Participants in order of the actual contribution ratios beginning with the
highest of such ratios). Such determination shall be made after first taking
into account corrections of any Excess Deferred Compensation pursuant to Section
4.2 and taking into account any adjustments of any Excess Contributions pursuant
to Section 4.6.
1.19 "Excess Contributions" means, with respect to a Plan Year, the
excess of Elective Contributions used to satisfy the "Actual Deferral
Percentage" tests made on behalf of Highly Compensated Participants for the Plan
Year over the maximum amount of such contributions permitted under Section
4.5(a) (determined by hypothetically reducing contributions made on behalf of
Highly Compensated Participants in order of the actual deferral ratios beginning
with the highest of such ratios). Excess Contributions shall be treated as an
"annual addition" pursuant to Section 4.9(b).
1.20 "Excess Deferred Compensation" means, with respect to any taxable
year of a Participant, the excess of the aggregate amount of such Participant's
Deferred Compensation and the elective deferrals pursuant to Section 4.2(f)
actually made on behalf of such Participant for such taxable year, over the
dollar limitation provided for in Code Section 402(g), which is incorporated
herein by reference. Excess Deferred Compensation shall be treated as an "annual
addition" pursuant to Section 4.9(b) when contributed to the Plan unless
distributed to the affected. Participant not later than the first April 15th
following the close of the Participant's taxable year. Additionally, for
purposes of Sections 9.2 end 4.4(g), Excess Deferred Compensation shall continue
to be treated as Employer contributions even of distributed pursuant to Section
4.2(f). However, Excess Deferred Compensation of Non-Highly Compensated
Participants is not taken into account for purposes of Section 4.5 (a) to the
extant such Excess Deferred Compensation occurs pursuant to Section 4.2(d).
1.21 "Fiduciary" means any person who (a) exercises any discretionary
authority or discretionary control respecting management of the Plan or
exercises any authority or control respecting management or disposition of its
assets, (b) renders investment advice for a fee or other compensation, direct or
indirect, with respect to
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any monies or other property of the Plan or has any authority or responsibility
to do so, or (C) has any discretionary authority or discretionary responsibility
in the administration of the Plan.
1.22 "Fiscal Year" means the Employer's accounting year of 12 months
commencing on January 1st of each year and ending the following December 31st.
1.23 "Forfeiture" means that portion of a Participant's Account that is
not Vested, and occurs on the earlier of:
(a) the distribution of the entire Vested portion of the
Participant's Account of a Former Participant who has severed
employment with the Employer, or
(b) the last day of the Plan Year in which a Former
Participant who has severed employment with the Employer incurs five
(5) consecutive 1-Year Breaks in Service.
Regardless of the preceding provisions, if a Former Participant is
eligible to share in the allocation of Employer contributions or Forfeitures in
the year in which the Forfeiture would otherwise occur, then the Forfeiture will
not occur until the end of the first Plan year for which the former Partcipant
is not eligible to share in the allocation of Employer contributions or
Forfeitures. Furthermore, the term "Forfeiture" shall also include amounts
deemed to be Forefeiture pursuant to any other provision of this Plan.
1.24 "Former Participant" means a person who has been a Participant, but
who has ceased to be a Participant for any reason.
1.25 "415 Compensation" with respect to any Participant means such
Participant's wages as defined in Code Section 3401(a) and all other payments of
compensation by the Employer (in the course of the Employer's trade or business)
for a Plan Year for which the Employer is required to furnish the Participant a
written statement under Code Sections 6041(d), 6051(a)(3) and 6052. "415
Compensation" must be determined without regard to any rules under Code Section
3401(a) that limit the remuneration included in wages based on the nature or
location of the employment or the services performed (such as the exception for
agricultural labor in Code Section 3401(a)(2)).
For Purposes of this Section, the determination of "415
Compensation" shall occlude any elective deferral (as defined on Code Section
402(g)(3)), and any amount which is contributed or deferred by the Employer at
the election of the Participant and which is not includible in the gross income
of the Participant by reason of Code Sections 125, 132(f)(4) for "limitation
years" beginning after December 31, 2000, or 457.
1.26 "414(s) Compensation" means any definition of compensation that
satisfies the nondiscrimination requirements of Code Section 414(s) and the
Regulations thereunder. The period for determining 414(s) Compensation must be
either the Plan Year or the calendar year
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ending with or within the Plan Year. An Employer may further limit the period
taken into account to that part of the Plan Year or calendar year in which an
Employee was a Participant in the component of the Plan being tested. The period
used to determine 414(s) Compensation must be applied uniformly to all
Participants for the Plan Year.
1.27 "Highly Compensated Employee" means, for Plan Years beginning after
December 31, 1996, an Employee described on Code Section 414(q) and the
Regulations thereunder, and generally means any Employee who:
(a) was a "five percent owner" as defined in Section 1.32(c)
at any time during the "determination year" or the "lookback year";
or
(b) for the "lookback year" had "415 Compensation" from the
Employer in excess of $80,000 and was in the Top-Paid Group for the
"lookback year." The $80,000 amount is adjusted at the same time and
in the same manner as under Code Section 415(d), except that the
base period is the calendar quarter ending September 30, 1996.
The "determination year" means the Plan Year for which testing is
being performed, and the "lookback year" means the immediately preceding twelve
(12) month period.
A highly compensated former Employee is based on the rules
applicable to determining Highly Compensated Employee status as in effect for
the "determination year," in accordance with Regulation 1.414(q)-1T, A4 and IRS
Notice 9745 (or any superseding guidance).
In determining whether an Employee is a Highly Compensated Employee
for a Plan Year beginning in 1997, the amendments to Code Section 414(q) stated
above are treated as having been in effect for years beginning in 1996.
In determining who is a Highly Compensated Employee, Employees who
are nonresident aliens and who received no earned income (within the meaning of
Code Section 911(d)(2)) from the Employer constituting United States source
income within the meaning of Code Section 861(a)(3) shall not be treated as
Employer. Additionally, all Affiliated Employers shall be taken into account as
a single employer any Leased Employees within the meaning of Code Sections
414(n)(2) and 414(o)(2) shall be considered Employees unless such Leased
Employees are covered by a plan described in Code Section 414(n)(5) and are not
covered in any qualified plan maintained by the Employer. The exclusion of
Leased Employees for this purpose shall be applied on a uniform and consistent
basis for all of the Employer's retirement plans. Highly Compensated Former
Employees shall be treated as Highly Compensated Employees without regard to
whether they performed services during the "determination "year."
1.28 "Highly Compensated Participant" means any Highly Compensated
Employee who is eligible to particiapate in the component
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of the Plan being tested.
1.29 "Hour of Service" means (1) each hour for which an Employee is
directly or indirectly compensated or entitled to compensation by the employer
for the performance of duties (these hours will be credited to the Employee for
the compensation period in which the duties are performed); (2) each hour for
which an Employee is directly or indirectly compensated or entitled to
compensation by the Employer (irrespective of whether the employment
relationship has terminated) for reasons other than performance of duties (such
as vacation, holidays, sickness, jury duty, disability, layoff, military duty or
leave of absence) during the applicable computation period (these hours will be
calculated and credited pursuant to Department of Labor regulation 2530.200b-2
which is incorporated herein by reference); (3) each hour for which back pay is
awarded or agreed to by the Employer without regard to mitigation of damages
(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). The same Hours of
Service shall not be credited both under (1) or (2), as the case may be, and
under (3).
Notwithstanding (2) above, (i) no more than 501 Hours of Service are
required to be credited to an Employee on account of any single continuous
period during which the Employee performs no duties (whether or not such period
occurs in a single computation period); (ii) an hour for which an Employee is
directly or indirectly paid, or entit1ed to payment, on account of a period
during which no duties are performed is not required to be credited to the
Employee if such payment is made or due under a plan maintained solely for the
purpose of complying with applicable worker's compensation, or unemployment
compensation or disability insurance laws; and (iii) Hours of Service are not
required to be credited for a payment which solely reimburses an Employee for
medical or medically related expenses incurred by the Employee.
For purposes of (2) above, a payment shall be deemed to be made by
or due from the Employer regardless whether such payment is made by or due
from the Employer directly, or indirectly through, among others, a trust fund,
or insurer, to which the Employer contributes or pays premiums and regardless
of whether contributions made or due to the trust fund, insurer, or other entity
are for the benefit of particular Employees or are on behalf of a group of
Employees in the aggregate.
Notwithstanding the foregoing, for purposes of vesting hereunder, a
Participant shall be credited with Hours of Service on the basis of his payroll
period in accordance with the equivalencies set forth in Department of Labor
regulation 2530.200b-3(e)(1), which is incorporated herein by reference.
For purposes of this Section, Hours of Service will be credited for
employment with other Affiliated Employers. The provisions of Department of
Labor regulations 2530.200b-2(b) and (c)
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are incorporated herein by reference.
1.30 "Income" means the income or losses allocable to Excess Deferred
Compensation, Excess Contributions or Excess Aggregate Contributions which
amount shall be allocated in the same manner as income or losses are allocated
pursuant to Section 4.4(f).
1.31 "Investment Manager" means an entity that (a) has the power to
manage, acquire, or dispose of Plan assets and (b) acknowledges fiduciary
responsibility to the Plan in writing. Such entity must be a person, firm, or
corporation registered as an investment adviser under the Investment Advisers
Act of 1940, a bank, or an insurance company.
1.32 "Key Employee" means an Employee as defined in Code Section 416(i)
and the Regulations thereunder. Generally, any Employee or former Employee (as
well as each of the Employee's or former Employee's Beneficiaries) is considered
a Key Employee if the Employee, at any time during the Plan Year that contains
the "Determination Date" or any of the preceding four (4) Plan Years, has been
included in one of the following categories:
(a) an officer of the Employer (as that term is defined within
the meaning of the Regulations under Code Section 416) having annual
"415 Compensation" greater than 50 percent of the amount in effect
under Code Section 415 (b)(1)(A) for any such Plan Year.
(b) one of the ten employees having annual "415 Compensation"
from the Employer for a Plan Year greater than the dollar limitation
in effect under Code Section 415(c)(1)(A) for the calendar year in
which such Plan Year ends and owning (or considered as owning within
the meaning of Code Section 318) both more than one-half percent
interest and the largest interests in the Employer.
(c) a "five Percent owner" of the Employer. "Five percent
owner" means any person who owns (or is considered as owning within
the meaning of Code Section 318) more than five percent (5%) of the
outstanding stock of the Employer or stock possessing more than five
percent (5%) of the total combined voting power of all stock of the
Employer or, in the case of an unicorporated business, any person
who owns more than five percent (5%) of the capital or profits
interest in the Employer. In determining percentage ownership
hereunder, employers that would otherwise be aggregated under Code
Sections 414(b), (c), (m) and (o) shall be treated as separate
employers.
(d) a "one percent owner" of the Employer having an annual
"415 Compensation" from the Employer of more than $150,000. "One
percent owner" means any person who owns (or is considered as owning
within the meaning of Code Section 318) more than one percent (1%)
of the outstanding stock of the Employer or stock possessing more
than one
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percent (1%) of the total combined voting power of all stock of the
Employer or, in the case of an unincorporated business, any person
who owns more than one percent (1%) of the capital or profits
interest in the Employer. In determining percentage ownership
hereunder, employers that would otherwise be aggregated under Code
Sections 4l4(b), (c), (m) and (o) shall be treated as separate
employers. However, in determining whether an individual has "415
Compensation" of more than $150,000, "415 Compensation" from each
employer required to be aggregated under Code Sections 414(b), (c),
(m) and (o) shall be taken into account.
For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which are not includibie
in the gross income of the Participant under Code Sections 125, 132(f) (4) for
Plan Years beginning after December 31, 2000, 402(e)(3), 402(h)(1)(B), 403(b)
or 457(b), and Employee contributions described in Code Section 414(h)(2) that
are treated as Employer contributions.
1.33 "Late Retirement Date" means the first day of the month coinciding
with or next following a Participant's actual Retirement Date after having
reached Normal Retirement Date.
1.34 "Leased Employee" means, for Plan Years beginning after December 31,
1996, any person (other than an Employee of the recipient Employer) who pursuant
to an agreement between the recipient Employer and any other person or entity
("leasing organization") has performed services for the recipient (or for the
recipient and related persons determined in accordance with Code Section
414(n)(6)) on a substantially full time basis for a period of at least one year,
and such services are performed under primary direction or control by the
recipient Employer. Contributions or benefits provided a Leased Employee by the
leasing organization which are attributable to services performed for the
recipient Employer shall be treated as provided by the recipient Employer.
Furthermore, Compensation for a Leased Employee shall only include Compensation
from the leasing organization that is attributable to services performed for the
recipient Employer. A Leased Employee shall not be considered an Employee of the
recipient Employer:
(a) if such employee is covered by a money purchase pension
plan providing:
(1) a nonintegrated employer contribution rate of at least 10%
of compensation, as defined in Code Section 415(c)(3), but
for Plan Years beginning prior to January 1, 2001, excluding
amounts that are not includible in gross income under Code
Section 132(f)(4);
(2) immediate participation;
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(3) full and immediate vesting; and
(b) if Leased Employees do not constitute more tnan 20% of the
recipient Employer's non-highly compensated work force.
1.35 "Non-Elective Contribution" means the Employer contributions to the
Plan excluding, however, contributions made pursuant to the Participant's
deferral election provided for in Section 4.2 and any Qualified Non-Elective
Contribution used in the "Actual Deferral Percentage" tests.
1.36 "Non-Highly Compensated Participant" means, for Plan Years beginning
after December 31, 1996, any Participant who is not a Highly Compensated
Employee. However, for purposes of Section 4.5(a) and Section 4.6, if the prior
year testing method is used, a Non-Highly Compensated Participant shall be
determined using the definition of Highly Compensated Employee in effect for the
preceding Plan Year.
1.37 "Non-Key Employee" means any Employee or former Employee (and such
Employee's or former Employee's Beneficiaries) who is not, and has never been a
Key Employee.
1.38 "Normal Retirement Age" means the Participant's 60th birthday. A
Participant shall become fully Vested in the Participant's Account upon
attaining Normal Retirement Age.
1.39 "Formal Retirement Date" means the first day of the month coinciding
with or next following the Participant's Normal Retirement Age.
1.40 "1-Year Break in Service" means the applicable computation period
during which an Employee has not completed more than 500 Hours of Service with
the Employer. Further, solely for the purpose of determining whether a
Participant has incurred a 1-Year Break in Service, Hours of Service shall be
recognized for "authorized leaves of absence" and "maternity and paternity
leaves of absence." Years of Service and 1-Year Breaks in Service shall be
measured on the same computation period.
"Authorized leave of absence" means an unpaid, temporary cessation
from active emp1oyment with the Employer pursuant to an established
nondiscriminatory policy, whether occasioned by illness, military service, or
any other reason.
A "maternity or paternity leave of absence" means an absence from
work for any period by reason of the Employee's pregnancy, birth of the
Employee's child, placement of a child with the Employee on connection with the
adoption of such child, or any absence for the purpose of caring for such child
for a period immediately following such birth or placement. For this purpose,
Hours of Service shall be created for the computation period in which the
absence from work begins, only of credit therefore is necessary to prevent the
Employee
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from incurring a 1-Year Break in Service, or, on any other case, on the
immediately following computation period. The Hours of Service credited for
"maternity or paternity leave of absence" shall be those which would normally
have been credited but for such absence, or, in any case in which the
Administrator is unable to determine such hours normally credited, eight (8)
Hours of Service per day. The total Hours of Service required to be credited for
a "maternity or paternity leave of absence" shall not exceed the number of Hours
of Service needed to prevent the Employee from incurring a 1-Year Break in
Service.
1.41 "Participant" means any Eligible Employee who participates in the
Plan and has not for any reason become ineligible to participate further in the
Plan.
1.42 "Participant Direction Procedures" means such instructions,
guidelines or policies, the terms of which are incorporated herein, as shall be
established pursuant to Section 4.12 and observed by the Administrator and
applied and provided to Participants who have Participant Directed Accounts.
1.43 "Participant's Account" means the account established and maintained
by the Administrator for each Participant with respect to such Participant's
total interest in the Plan and Trust resulting from the Employer Non-Elective
Contributions.
A separate accounting shall be maintained with respect to that
portion of the Participant's Account attributable to Employer matching
contributions made pursuant to Section 4.1(b), Employer discretionary
contributions made pursuant to Section 4.1(c) and any Employer Qualified
Non-Elective Contributions.
1.44 "Participant's Combined Account" means the total aggregate amount of
each Participant's Elective Account and Participant's Account.
1.45 "Participant's Directed Account" means that portion of a
Participant's interest in the Plan with respect to which the Participant has
directed the investment in accordance with the Participant Direction Procedure.
1.46 "Participant's Elective Account" means the account established and
maintained by the Administrator for each Participant with respect to the
Participant's total interest in the Plan and Trust resulting room the Employer
Elective Contributions used to satisfy the "Actual Deferral Percentage" tests. A
separate accounting shall be maintained with respect to that portion of the
Participant's Elective Account attributable to such Elective Contributions
pursuant to Section 4.2 and any Employer Qualified Non-Elective Contributions.
1.47 "Participant's Transfer/Rollover Account" means the account
established and maintained by the Administrator for each Participant with
respect to the Participant's total interest in the Plan resulting from amounts
transferred to those Plan from a direct plan-to-plan
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transfer and/or with respect to such Participant's interest in the Plan
resulting from amounts transferred from another qualified plan or "conduit"
Individual Retirement Account on accordance with Section 4.11.
A separate accounting shall be maintained with respect to that
portion of the Participant's Transfer/Rollover Account attributable to
transfers (within the meaning of Code SectIon 414(l)) and "rollovers."
1.48 "Plan" means this instrument, including all amendments thereto.
1.49 "Plan Year" means the Plan's accounting year of twelve (12) months
commencing on January 1st of each year and ending the following December 31st,
except for the first Plan Year which commenced October 1st.
1.50 "Qualified Non-Elective Contribution" means any Employer
contributions made pursuant to Section 4.6(b) and Section 4.8(f). Such
contributions shall be considered an Elective Contribution for the purposes of
the Plan and used to satisfy the "Actual Deferral Percentage" tests or the
"Actual Contributions Percentage" tests.
1.51 "Regulation" means the Income Tax Regulations as promulgated by the
Secretary of the Treasury or a delegate of the Secretary of the Treasury, and as
amended from time to time.
1.52 "Retired Participant" means a person who has been a Participant, but
who has become entitled to retirement benefits under the Plan.
1.53 "Retirement Date" means the date as of which a Participant retires
for reasons other than Total and Permanent Disability, whether such retiremnet
occurs on a Participant's Normal Retirement Date or Late Retirement Date (see
Section 6.1).
1.54 "Terminated Participant" means a person who has been a Participant,
but whose employment has been terminated other than by death, Total and
Permanent Disability or retirement.
1.55 "Top Heavy Plan" means a plan described in Section 9.2(a).
1.56 "Top Heavy Plan Year" means a Plan Year during which the Plan is a
Top Heavy Plan.
1.57 "Top-Paid Group" means the top 20 percent of Employees who performed
services for the Employer during the applicable year, ranked according to the
amount of "415 Compensation" received from the Employer during such year. All
Affiliated Employers shall be taken into account as a single employer, and
Leased Employees within the meaning of Code Sections 414(n)(2) and 414(o)(2)
shall be considered Employees unless such Leased Employees are covered by a plan
described in Code Section 414(n)(5) and are not covered in any plan
plan
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maintained by the Employer. Employees who are nonresident aliens who received
no earned income (with the meaning of Code Section 911(d)(2)) from the
Employer constituting United States source income within the meaning of Code
Section 861(a)(3) shall not be treated as Employees. Furthermore, for the
purpose of determining the number of active Employees in any year, the following
additional Employees shall also be excluded, however, such Employees shall still
be considered for the purpose of identifying the particular Employees in the
Top-Paid Group:
(a) Employees with less than six (6) months of service;
(b) Employees who normally work less than 17 1/2 hours per
week;
(c) Employees who normally work less than six (6) months
during a year; and
(d) Employees who have not yet attained age twenty-one (21).
In addition, if 90 percent or more of the Employees of the Employer
are covered under agreements the Secretary of Labor finds to be collective
bargaining agreements between Employee representatives and the Employer, and the
Plan covers only Employees who are not covered under such agreements, then
Employees covered by such agreements shall be excluded from both the total
number of active Employees as well as from the identification of particular
Employees in the Top-Paid Group.
The foregoing exclusions set forth in this Section shall be applied
on a uniform and consistent basis for all purposes for which the Code Section
414(q) definition is applicable.
1.58 "Total and Permanent Disability" means a physical or mental condition
of a Participant resulting from bodily injury, disease, or mental disorder which
renders such Participant incapable of continuing usual and customary employment
with the Employer. The disability of a Participant shall determined by a
licensed physician chosen by the Administrator. The determination shall be
applied uniformly to all Participants.
1.59 "Trustee" means the person or entity named as trustee herein or in
any separate trust forming a part of this Plan, and any successors.
1.60 "Trust Fund" means the assets of the Plan and Trust as the same shall
exist from time to time.
1.61 "Valuation Date" means the Anniversary Date and may include any
other date or dates deemed necessary or appropriate by the Administrator for
the valuation of the Participant's accounts during the Plan Year, which may
include any day that the Trustee, any
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transfer agent appointed by the Trustee or the Employer or any stock exchange
used by such agent, are open for business.
1.62 "Vested" means the nonforfeitable portion of any account maintained
on behalf of a Participant.
1.63 "Year of Service" means the computation period of twelve (12)
consecutive months, herein set forth, during which an Employee has at least 1000
Hours of Service.
For vesting purposes, the computation periods shall be the Plan
Year, including periods prior to the Effective Date of the Plan.
The computation period shall be the Plan Year if not otherwise set
forth herein.
Notwithstanding the foregoing, for any short Plan Year, the
determination of whether an Employee has completed a Year of Service shall be
made in accordance with Department of Labor regulation 2530.203-2(c).
Years of Service with any Affiliated Employer shall be recognized.
ARTICLE II
ADMINISTRATION
2.1 POWERS AND RESPONSIBILITES OF THE EMPLOYER
(a) In addition to the general powers and responsibilities
otherwise provided for in this Plan, the Employer shall be empowered
to appoint and remove the Trustee and the Administrator from time to
time as it deems necessary for the proper administration of the Plan
to ensure that the Plan is being operated for the exclusive benefit
of the Participants and their Beneficiaries in accordance with the
terms of the Plan, the Code, and the Act. The Employer may appoint
counsel, specialists, advisers, agents (including any nonfiduciary
agent) and other persons as the Employer deems necessary or
desirable on connection with the exercise of its fiduciary duties
under this Plan. The Employer may compensate such agents or
advisers from one assets of the Plan as fiducary expenses (but
not including any business (settlor) expenses of the Emp1oyer, to
the extent not paid by the Employer.
(b) The Employer may, by written agreement or designation,
appoint at its option an Investment Manager (qualified under the
Investment Company Act of 1940 as amended), investment adviser, or
other agent to provide direction to the Trustee which respect to any
or all of the Plan assets. Such appointment shell be given by the
Employer in writing in a form acceptable to the Trustee and shall
specifically identify the Plan assets with respect to which
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the Investment Manager or other agent shall have authority to direct
the investment.
(c) The Employer shall establish a "funding policy and
method," i.e., it shall determine whether the Plan has a short run
need for liquidity (e.g., to pay benefits) or whether liquidity is
a long run goal and investment growth (and stability of same) is a
more current need, or shall appoint a qualified person to do so.
The Employer or its delegate shall communicate such needs and goals
to the Trustee, who shall coordinate such Plan needs with its
Investment policy. The communication of such a "funding policy and
method" shall not, however, constitute a directive to the Trustee as
to the investment of the Trust Funds. Such "funding policy and
method" shall be consistent with the objectives of this Plan and
with the requirements of Title I of the Act.
(d) The Employer shall periodically review the performance
of any Fiduciary or other person to whom duties have been delegated
or allocated by it under the provisions or those Plan or pursuant to
procedures established hereunder. This requirement may be satisfied
by formal periodic review by the Employer or by a qualified person
specifically designated by the Employer, through day-to-day conduct
and evaluation, or through other appropriate ways.
2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer shall be the Administrator. The Employer may appoint
any person, including, but not limited to, the Employees of the Employer, to
perform the duties of the Administrator. Any person so appointed shall signify
acceptance by filing written acceptance with the Employer. Upon the resignation
or removal of any individual performing the duties of the Administrator, the
Employer may designate a successor.
2.3 POWERS AND DUTIES OF THE ADMINITRATOR
The primary responsibility of the Administrator is to administrator
the Plan for the exclusive benefit of the Participants and the Beneficiaries,
subject to the specific terms of the Plan. The Administrator shall administer
the Plan in accordance with its terms and shall have the power and discretion to
construe the terms of the Plan and to determine all questions arising in
connection with the administration, interpretation, and application of the Plan.
Any such determination by the Administrator shall be conclusive and binding upon
all persons. The Administrator may establish procedures, correct any defect,
supply any information, or reconcile any inconsistency on such manner and to
such extent as shall be deemed necessary or advisable to carry out the purpose
of the Plan; provided, however, that any procedure, discretionary act,
interpretation or construction shall be done in a nondiscriminatory manner cased
upon uniform principles consistently applied and shall be consistent with the
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intent that the Plan shall continue to be deemed a qualified plan under the
terms of Code Section 401(a), and shall comply with the terms of the Act and
all regulations issued pursuant thereto. The Administrator shall have all
powers necessary or appropriate to accomplish the Administrator's duties under
the Plan.
The Administrator shall be charged with the duties of the general
Administration of the Plan as set forth under the terms of the Plan, inducing,
but not limited to, the following:
(a) the discretion to determine all questions relating to the
eligibility of Employees to participate or remain a Participant
hereunder and to receive benefits under the Plan;
(b) to compute, certify, and direct the Trustee with respect
to the amount and the kind of benefits to which any Participant
shall be entitled hereunder;
(c) to authorize and direct the Trustee with respect to all
discretionary or otherwise directed disbursements from the Trust;
(d) to maintain all necessary records for the administration
of the Plan;
(e) to interpret the provisions of the Plan and to make and
publish such rules for regulation of the Plan as are consistent with
the terms hereof;
(f) to determine the size and type of any Contract to be
purchased from any insurer, and to designate the insurer from which
such Contract shall be purchased;
(g) to compute and certify to the Employer and to the
Trustee from time to time the sums of money necessary or desirable
to be contributed to the Plan;
(h) to consult with the Employer and the Trustee regarding the
short and long-term liquidity needs of the Paln in order that the
Trustee can exercise any investment discretion in a manner designed
to accomplish specific objectives;
(i) to prepare and implement a procedure to notify Eligible
Employees that they may elect to have a portion of their
Compensation deferred or paid to them in cash;
(j) to act as the named Fiduciary responsibile for
communications with Participants as needed to maintain Plan
compliance with Act Section 404(c), including, but not limited to,
the receipt and transmitting of Participant's directions as to the
investment of their account(s) under the Plan and the formulation of
policies, rules, and
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procedures pursuant to which Participants may give investment
instructions with respect to the investment of their accounts;
(k) to determine the validity of, and take appropriate action
with respect to, any qualified domestic relations order received by
it; and
(l) to assist any Participant regarding the Participant's
rights, benefits, or elections available under the Plan.
2.4 RECORDS AND REPORTS
The Administrator shall keep a record of all actions taken and
shall keep all other books of account, records, policies, and other data that
may be necessary for proper administration of the Plan and shall be responsible
for supplying all information and reports to the Internal Revenue Service,
Department of Labor, Participants, Beneficiaries and others as required by law.
2.3 APPOINTMENT OF ADVISERS
The Administrator, or the Trustee with the consent of the
Administrator, may appoint counsel, specialists, advisers, agents (including
such fiduciary agents) and other persons as the Administrator or the Trustee
deems necessary or desirable in connection with the administration of this Plan,
including but not limited to agents and advisers to assist with the
administration and management of the Plan, and thereby to provide, among such
other duties as the Administrator may appoint, assistance with maintaining Plan
records and the providing of investment information to the Plan's investment
fiduciaries and to Plan Participants.
2.6 PAYMENT OF EXPENSES
All expenses of administration may be paid out of the Trust Fund
unless paid by the Employer. Such expenses shall include any expenses incident
to the functioning of the Administrator, or any person or persons retained or
appointed by any Named Fiduciary incident to the exercise of their duties under
the Plan, including, but not limited to, fees of accountants, counsel,
Investment Managers, agents (including nonfiduciary agents) appointed for the
purpose of assisting the Administrator or the Trustee on carrying out the
instructions of Participants as to the directed investment of their accounts and
other specialists and their agents, the costs of any bonds required pursuant to
Act Section 412, and other costs of administering the Plan. Until paid, the
expenses shall constitute a liability of the Trust Fund.
2.7 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed in writing with the
Administrator. Written notice of the disposition of a claim
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shall be furnished to the claimant within ninety (90) days after the
application is filed, or such period as is required by applicable law or
Department of Labor regulation. In the event the claim is denied, the reasons
for the denial shall be specifically set forth to the notice on language
calculated to be understood by the claimant, pertinent provisions of the Plan
shall be cited, and, where appropriate, an explanation as to how the claimant
can perfect the claim will be provided. In addition, the claimant shall be
furnished with an explanation of the Plan's claims review procedure.
2.8 CLAIMS REVIEW PROCEDURE
Any Employee, former Employee, or Beneficiary of either, who has
been denied a benefit by a decision of the Administrator pursuant to Section 2.7
shall be entitled to request the Administrator to give further consideration to
a claim by filing with the Administrator a written request for a hearing. Such
request, together with a written statement of the reasons why the claimant
believes the claim should be allowed, shall be filed with the Administrator no
later than sixty (60) days after receipt of the written notification provided
for in Section 2.7. The Administrator shall then conduct a hearing within the
next sixty (60) days, at which the claimant may be represented by an attorney or
any other representative of such claimant's choosing and expense and at which
the claimant shall have an opportunity to submit written and oral evidence and
arguments in support of the claim. At the hearing (or prior thereto upon five
(5) business days written notice the Administrator) the claimant or the
claimant's representative shall have an opportunity to review all documents in
the possession of the Administrator which are pertinent to the claim at issue
and its disallowance. Either the claimant or the Administrator may cause a court
reporter to attend the hearing and record the proceedings. In such event, a
complete written transcript of the proceedings shall be furnished to both
parties by the court reporter. The full expense of any such court reporter and
such transcripts shall be borne by the party causing the court reporter to
attend the hearing. A final decision as to the allowance of the claim shall be
made by the Administrator within sixty (60) days of receipt of the appeal
(unless there has been an extension of sixty (60) days due to special
circumstances, provided the delay and the special circumstances occasioning it
are communicated to the claimant within the sixty (60) day period). Such
communication shall be written in a manner calculated to be understood by the
claimant and shall include specific reasons for the decision and specific
references to the pertinent Plan provisions on which the decision is based.
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
An Eligible Employee shall be eligible to participate hereunder on
the date of such Employee's employment with the Employer.
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3.2 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee, with respect to salary reduction elections
pursuant to Section 4.2 and Employer matching contributions pursuant to Section
4.1(b), shall become a Participant efective as of the first day of the month
coinciding with or next following the date on which such Employee met the
eligibility requirements of Section 3.1, provided said Employee was still
employed as of such date (or if not employed on such date, as of the date of
rehire if a 1-Year Break in Service has not occurred or, if later, the date that
the Employee would have otherwise entered the Plan had the Employee not
terminated employment).
However, with respect to Employer discretionary contributions
pursuant to Section 4.1(c), an Eligible Employee shall become a Participant
effective as of the date on which such Employee satisfies the eligibility
requirements of Section. 3.1.
If an Employee, who has satisfied the Plan's eligibility
requirements and would otherwise have become a Participant, shall go from a
classification of a non-eligible Employee to an Eligible Employee, such
Employee shall become a Participant on the date such Employee becomes an
Eligible Employee or, if later, the date that the Employee would have otherwise
entered the Plan had the Empoyee always been an Eligible Employee.
If an Employee, who has satisfied the Plan's eligibility
requirements and would otherwise become a Participant, shall go from a
classification of an Eligible Employee to a non-eligible class of Employees,
such Employee shall become a Partiipant in the Plan on the date such Employee
again becomes an Eligible Employee, or, if later, the date that the Employee
would have otherwise entered the Plan had the Employee always been an Eligible
Employee. However, if such Employee incurs a 1-Year Break in Service,
eligibility will be determined under the Break in Service rules set forth in
Section 3.7.
3.3 DETERMINATION OF ELIGIBILITY
The Administrator shall determine the eligibility of each Employee
for participation in the Plan based upon information furnished by the Employer.
Such determination shall be conclusive and binding upon all persons, as long as
the same is made pursuant to Plan and the Act. Such determination shall be
subject to review pursuant to Section 2.8.
3.4 TERMINATION OF ELIGIBILITY
In the event a Participant shall go from a classification of an
Eligible Employee to an ineligible Employee, such Former Participant shall
continue to vest in the Plan for each Year of Service completed while a
non-eligible Employee, until such time as the Participant's Account is
forfeited or distributed pursuant to the terms of the Plan. Additionally, the
Former Participant's interest in the Plan shall continue to share in the
earnings of the Trust Fund.
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3.5 OMISSION OF ELIGIBLE EMPLOYEE
If, in any Plan Year, any Employee who should be included as a
Particlpant in the Plan is erroneously omitted and discovery of such ommission
is not made until after a contribution by the Employer for the year has been
made and allocated, then the Employer shall make a subsequent contribution, if
necessary after the application of Section 4.4(c), so that the omitted
Employee receives a total amount which the Employee would have received
(including both Employer contributions and earnings thereon) had the Employee
not been omitted. Such contribution shall be made regardless of whether it
is deductible in whole or in part in any taxable year under applicable
provisions of the Code.
3.6 INCLUSION OF INELIGIBLE EMPLOYEE
If, in any Plan Year, any person who should not have seen
included as a Participant in the Plan is erroneously included and discovery of
such inclusion is not made until after a contribution for the year has been
made and allocated, the Employer shall be entitled to recover the contribution
made with respect to the ineligible person provide the error is discovered
within twelve (12) months of the date on which it was made. Otherwise, the
amount contributed with respect to the ineligible person shall constitute a
Forfeiture for the Plan Year in which the discovery is made. Notwithstanding
the foregoing, any Deferred Compensation made by an ineligible person shall be
distributed to the person (along with any earnings attributable to such
Deferred Compensation)
3.7 REHIRED EMPLOYEES AND BREAKS IN SERVICES
(a) If any Participant becomes a Former Participant due to
severance from employment with the Employer and is re-employed by
the Employer before a 1-Year Break in Service occurs, the Former
Participant shall become a Participant as of the re-employment
date.
(b) If any Participant becomes a former Participant due to
severance from employment with the Employer and is re-employed
after a 1-Year Break in Service has occurred, Years of Service shall
include years of Service prior to the 1-Year Break in Service
subject to the following rules:
(I) In the case of a Former Participant who under the
Plan does not have a nonforfeitable right to an
interest in the Plan resulting from Employer
contributions, Years of Service before a period of
1-Year Break in Service will not be taken into account
if the number of consecutive 1-Year Breaks in Service
equal or exceed the greater of (A) five (5) or (B) the
aggregate number of pre-break Years of Service. Such
aggregate number of Years of Service will not include
any Years of Service disregarded under the preceding
sentence by reason of prior 1-Year Breaks in Services.
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(2) A Former Participant shall participate on the Plan
as of the date of re-employment.
(c) After a Former Participant who has severed
employment with the Employer incurs five 5) consecutive 1-Year
Breaks in Service, the Vested portion of said Former
Participant's Account attributable to pre-break service shall
not be increased as a result of post-break service. In such
case, separate accounts will be maintained as follows:
(1) one account for nonforfeitable benefits attributable
to pre-break service; and
(2) one account representing the Participant's Employer
derived account balance in the Plan attributable to
post-break service.
(d) If any Participant becomes a Former Participant due
to severance of employment with the Employer and is
re-employed by the Employer before five (5) consecutive 1-Year
Breaks in Service, and such Former Participant had received a
distribution of the entire Vested interest prior to
re-employment, then the forfeited account shall be reinstated
only if the Former Participant repays the full amount which
had been distributed. Such repayment must be made before the
earlier of five (5) years after the first date on which the
Participant is subsequently re-employed by the Employer or the
close of the first period of five (5) consecutive 1-Year
Breaks in Service commencing after the distribution. If a
distribution occurs for any reason other than a severance of
employment, the time for repayment may not end earlier than
five (5) years after the date of distribution. In the event
the Former Participant does repay the full amount distributed,
the undistributed forfeited portion of the Participant's
Account must be restored in full, unadjusted by any gains or
losses occurring subsequent to the Valuation Date preceding
the distribution. The source for such reinstatement may be
Forfeitures occurring during the Plan Year. If such source is
insufficient, then the Employer will contribute an amount
which is sufficient to restore any such forfeited Accounts
provided, however, that if a discretionary contribution is
made for such year pursuant to Section 4.1(c), such
contribution will first be applied to restore any such
Accounts and the remainder shall be allocated in accordance
with Section 4.4.
3.8 ELECTION NOT TO PARTICIPATE
An Employee, for Plan Years beginning on or after the later of the
adoption date or effective date of this amendment and restatement, may, subject
to the approval of the Employer, elect voluntarily not to participate in the
Plan. The election not to participate must be irrevocable and communicated to
the Employer, in
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writing, within a reasonable period of time before the beginning of the first
Plan Year.
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER CONTRIBUTION
For each Plan Year, the Employer shall contribute to the Plan:
(a) The amount of the total salary reduction elections of all
Participants made pursuant to Section 4.2(a), which amount shall
be deemed an Employer Elective Contribution.
(b) On behalf of each Participant who elects to defer
Compensation in accordance with Section 4.2(a) hereof, a matching
contribution equal to 100% of each such Participant's Deferred
Compensation not in excess of 3% of his Compensation, which amount
shall be deemed an Employer Non-Elective Contribution.
In applying the foregoing matching formula, the matching
contribution shall be accrued separately for each pay period during
the Plan Year, and only Deferred Compensation not in excess of 3% of
a Participant's Compensation in any such pay period shall be
considered. Except, however, in applying the matching formula
specified above for the Plan Years beginning January 1, 2000, and
January 1, 2001, respectively, salary reductions up to 3% of
Compensation for the entire Plan Year shall be considered.
(c) A discretionary amount, which amount, if any, shall be
deemed an Employer Non-Elective Contribution.
(d) Additionally, to the extent necessary, the Employer shall
contribute to the Plan the amount necessary to provide the top heavy
minimum contribution. All contributions by the Employer shall be
made in cash or in such property as is acceptable to the Trustee.
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION
(a) Each Participant may elect to defer Compensation which
would have been received in the Plan Year, but for the deferral
election, by up to 15%. A deferral election (or modiication of an
earlier election) may not be made with respect to Compensation which
is currently available on or before the date the Participant
executed such election. For purposes of this Section, Compensation
shall be determined prior to any reductions made pursuant to Code
Sections 125, 132(f)(4) for Plan Years beginning after December
3l, 2000, 402(e)(3), 402(h)(1)(B), 403(b) or 457(b), and Employee
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contributions described in. Code Section 414(h)(2) that are treated
as Employer contributions.
The amount by which Compensation is reduced shall be
that Participant's Deferred Compensation and be treated as an
Employer Elective Contribution and allocated to that Participant's
Elective Account.
(b) The balance in each Participant's Elective Account shall
be fully Vested at all times and, except as otherwise provided
herein, shall not be subject to Forfeiture for any reason.
(c) Notwithstanding anything in the Plan to the contrary,
amounts held in the Participant's Elective Account may not be
distributable (including any offset of loans) earlier than:
(1) a Participant's separation from service, Total and
Permanent Disability, or death;
(2) a Participant's attainment of age 59 1/2;
(3) the termination of the Plan without the existence at the
time of Plan termination of another defined contribution plan
or the establishment of a successor defined contribution plan
by the Employer or an Affiliated Employer within the period
ending twelve months after distribution of all assets from the
Plan maintained by the Employer. For this purpose, a defined
contribution plan does not include an employee stock ownership
plan (as defined in Code Section 4975(e)(7) or 409), a
simplified employee pension plan (as defined in Code Section.
408(k)), or a simple individual retirement account plan (as
defined in Code Section 408(p));
(4) the date of disposition by the Employer to an entity that
is not an Affiliated Employer of substantially all of the
assets (within the meaning of Code Section 409(d)(2)) used
in a trade or business of such corporation or such corporation
continues to maintain this Plan after the disposition with
respect to a Participant who continues employment with the
corporation acquiring such assets;
(5) the date of disposition by the Employer or an Affiliated
Employer who maintains the Plan of its interest in a
subsidiary (within the meaning of Code Section 409(d)(3)) to
an entity which is not an Affiliated Employer but only with
respect to a Participant who continues employment with such
subsidiary; or
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(6) the proven financial hardship of a Participant subject to
the limitations of Section 6.l1.
(d) For each Plan Year, a Participant's Deferred Compensation
made under this Plan and all other plans, contracts or arrangements
of the Employer maintaining this Plan shall not exceed, during any
taxable year of the Participant, the limitation imposed by Code
Section 402(g) as in effect at the beginning of such taxable year.
If such dollar limitation is exceeded, a Participant will be deemed
to have notified the Administrator of such excess amount which shall
be distributed in a manner consistent with Section. 4.2(f). The
dollar limitation shall be adjusted annually pursuant to the method
provided in Code Section 415(d) in accordance with Regulations.
(e) In the event a Participant has received a hardship
distribution from the Participant's Elective Account pursuant to
Section 6.11(b) or pursuant to Regulation 1.401(k)-1(d)(2)(iv)(B)
from any other plan maintained by the Employer, than such
Participant shall not be permitted to elect to have Deferred
Compensation contributed to the Plan for a period of twelve (12)
months following the receipt of the distribution. Furthermore, the
dollar limitation under Code Section 402(g) shall be reduced, with
respect to the Participant's taxable year following the taxable year
in which the hardship distribution was made, by the amount of such
Participant's Deferred Compensation, if any, pursuant to this Plan
(and any other plan maintained by the Employer) for the taxable year
of the hardship distribution.
(f) If a Participant's Deferred Compensation under this Plan
together with any elective deferrals (as defined in Regulation
l.402(g)-l(b)) under another qualified cash or deferred arrangement
(as described in Code Section 401(k)), a simplified employee pension
(as described in Code Section 408(k)(6)), a simple individual
retirement account plan (as described in Code Section 408(p)), a
salary reduction arrangement (within the meaning of Code Section
3121(a)(5)(D), a deferred compensation plan under Code Section
457(b), or a trust described in Code Section 501(c)(18) cumulatively
exceed the limitation imposed by Code Section 402(g) as adjusted
annually in accordance with the method provided in Code Section
415(d) pursuant to Regulations) for such Participant's taxable year,
the Participant may, not later than March 1 following the close of
the Participant's taxable year, notify the Administrator in wrIting
of such excess and request that the Participant's Deferred
Compensation under this Plan be reduced by an amount specified by
the Participant. In such event, the Administrator may direct the
Trustee to distribute such excess amount (and any Income allocable
to such excess amount) to the Participant not later than the
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first April 15th following the close of the Participant's taxable
year. Any distribution of less than the entire amount of Excess
Deferred Compensation and Income shall be treated as a pro rata
distribution of Excess Deferred Compensation and Income. The amount
distributed shall not exceed the Participant's Deferred Compensation
under the Plan for the taxable year (and any income allocable to
such excess amount). Any distribution on or before the last day of
the Participant's taxable year must satisfy each of the following
conditions:
(1) the distribution must be made after the date on which the
Plan received the Excess Deferred Compensation;
(2) the Participant shall designate the distribution as Excess
Deferred Compensation; and
(3) the Plan must designate the distribution as a distribution
of Excess Deferred Compensation.
Any distribution made pursuant to this Section 4.2(f)
shall be made first from unmatched Deferred Compensation and,
thereafter, from Deferred Compensation which is matched. Matching
contributions which relate to such Deferred Compensation shall be
forfeited.
(g) Notwithstanding Section 4.2(f) above, a Participant's
Excess Deferred Compensation shall be reduced, but not below zero,
by any distribution of Excess Contributions pursuant to Section
4.6(a) for the Plan Year beginning with or within the taxable year
of the Participant.
(h) At Normal Retirement Date, or such other date when the
Participant shall be entitled to receive benefits, the fair market
value of the Participant's Elective Account shall be used to provide
additional benefits to the Participant or the Participant's
Beneficiary.
(i) Employer Elective Contributions made pursuant to this
Section may be segregated into a separate account for each
Participant in a federally insured saving account, certificate of
deposit in a bank or savings and loan association, money market
certificate, or other short-term debt security acceptable to the
Trustee until such time as the allocations pursuant to Section 4.4
have been made.
(j) The Employer and the Administrator shall implement the
salary reduction elections provided for herein in accordance with
the following:
(1) A Participant must make an initial salary deferral
election within a reasonable time, not to
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exceed thirty (30) days, after entering the Plan pursuant to
Section 3.2. If the Participant fails to make an i3nitial
salary deferral election within such time, then such
Participant may thereafter make an election in accordance with
the rules govering modifications. The Participant shall make
such an election by entering into a written salary reduction
agreement with the Employer and filing such agreement with the
Administrator. Such election shall initially be effective
beginning with the pay period following the acceptance of the
salary reduction agreement by the Administrator, shall not
have retroactive effect and shall remain in force until
revoked.
(2) A Participant may modify a prior election at any time
during the Plan Year and concurrently make a new election by
filing a written notice with the Administrator within a
reasonable time before the pay period for which such
modification is to be effective. Any modification shall not
have retroactive effect and shall remain in force until
revoked.
(3) A Participant may elect to prospectively revoke the
Participant's salary reduction agreement in its entirety at
any time during the Plan Year by providing the Administrator
with thirty (30) days written notice of such revocation (or
upon such shorter notice period as may be acceptable to the
Administrator). Such revocation shall become effective as of
the beginning of the first pay period coincident with or next
following the expiration of the notice period. Furthermore,
the termination of the Participant's employment, or the
cessation of participation for any reason, shall be deemed to
revoke any salary reduction agreement then in effect,
effective immediately following the close of the pay period
within which such termination or cessation occurs.
4.3 TIME OF PAYMENT OF EMPLOYER CONTRIBUTION
The Employer may make its contribution to the Plan for a particular
Plan Year at such time as the Employer, in its sole discretion, determines. If
the Employer makes a contribution for a particular Plan Year after the close of
that Plan Year, the Employer will designate to the Trustee the Plan Year for
which the Employer is making its contribution.
4.4 ALLOCATION OF CONTRIBUTION AND EARNINGS
(a) The Administrator shall establish and maintain an account
in the name of each Participant to which the Administrator shall
credit as of each Anniversary Date, or other Valuation Date, all
amounts allocated to each such Participant as set forth herein.
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(b) The Employer shall provide the Administrator with all
information required by the Administrator to make a proper
allocation of the Employer contributions for each Plan Year. Within
a reasonable period of time after the date of receipt by the
Administrator of such information, the Administrator shall allocate
such contribution as follows:
(1) With respect to the Employer Elective Contribution made
pursuant to Section 4.1(a), to each Participant's Elective
Account in an amount equal to each such Participant's Deferred
Compensation for the year.
(2) With respect to the Employer Non-Elective Contribution
made pursuant to Section 4.1(b), to each Participant's Account
in accordance with Section 4.1(b).
Any Participant actively employed during the Plan Year shall
be eligible to share in the matching contribution for the Plan
Year.
(3) With respect to the Employer Non-Elective Contribution
made pursuant to Section 4.1(c), to each Participant's Account
in the same proportion that each such Participant's
Compensation for the year bears to the total Compensation of
all Participants for such year.
Only Participants who are actively employed on the last day of
the Plan Year shall be eligible to share in the discretionary
contribution for the year.
(c) On or before each Anniversary Date any amounts which
became Forfeitures since the last Anniversary Date may be made
available to reinstate previously forfeited account balances of
Former Participants, if any, in accordance with Section 3.7(d), be
used to satisfy any contribution that may be required pursuant to
Sections 3.5 and 6.9, or be used to pay any administrative expenses
of the Plan. The remaining Forfeitures, if any, shall be used to
reduce the Employer's contributions hereunder for the Plan Year in
which such Forfeitures occur.
(d) For any Top Heavy Plan Year, Employees not otherwise
eligible to share in the allocation of contributions as provided
above, shall receive the minimum allocation provided for in Section
4.4(g) if eligible pursuant to the provisions of Section 4.4(i).
(e) Notwithstanding the foregoing, Participants who are not
actively employed on the last day of the Plan Year due to Retirement
(Normal or Late), Total and Permanent
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Disability or death shall share in the allocation of contributions
for that Plan Year.
(f) As of each Valuation Date, before the current valuation
period allocation of Employer contributions, any earnings or losses
(net appreciation or net depreciation) of the Trust Fund shall be
allocated in the same proportion that each Participant's and Former
Participant's nonsegregated accounts bear to the total of all
Participants' and Former Participants' nonsegregated accounts as of
such date. Earnings or losses with respect to a Participant's
Directed Account shall be allocated in accordance with Section 4.12.
Participants' transfers from other qualified plans
deposited in the general Trust Fund shall share in any earnings and
losses (net appreciation or depreciation) of the Trust Fund in the
same manner provided above. Each segregated account maintained on
behalf of a Participant shall be credited or charged with its
separate earnings and losses.
(g) Minimum Allocations Required for Top Heavy Plan Years:
Notwithstanding the foregoing, for any Top Heavy Plan Year, the sum
of the Employer contributions allocated to the Participant's
Combined Account of each Employee shall be equal to at least three
percent (3%) of such Employee's "415 Compensation" (reduced by
contributions and forfeitures, if any, allocated to each Employee in
any defined contribution plan included with this Plan in a Required
Aggregation Group). However, if (1) the sum of the Employer
contributions allocated to the participant's Combined Account of
each Key Employee for such Top Heavy Plan Year is less than three
percent (3%) of each Key Employee's "415 Compensation" and (2) this
Plan is not required to be included in an Aggregation Group to
enable a defined benefit plan to meet the requirements of Code
Section 401(a) (4) or 410, the sum of the Employer contributions
allocated to the Participant's Combined Account of each Employee
shall be equal to the largest percentage allocated to the
Participant's Combined Account of any Key Employee. However, in
determining whether a Non-Key Employee has received the required
minimum allocation, such Non-Key Employee's Deferred Compensation
and matching contributions needed to satisfy the "Actual
Contribution Percentage" tests pursuant to Section 4.7(a) shall not
be taken into account.
However, no such minimum allocation shall be required in
this Plan for any Employee who participates in another defined
contribution plan subject to Code Section 412 included with this
Plan in a Required Aggregation Group.
(h) For purposes of the minimum allocations set forth
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above, the percentage allocated to the Participant's Combined
Account of any Key Employee shall be equal to the ratio of the sum
of the Employer contributions allocated on behalf of such Key
Employee divided by the "415 Compensation" for such Key Employee.
(i) For any Top Heavy Plan Year, the minimum allocations set
forth above shall be allocated to the Participant's Combined Account
of all Employees who are Participants and who are employed by the
Employer on the last day of the Plan Year, including Employees who
have (1) failed to complete a Year of Service; and (2) declined to
make mandatory contributions (if required) or, in the case of a cash
or deferred arrangement, elective contributions to the Plan.
(j) For the purposes of this Section, "415 Compensation" in
excess of $150,000 (or such other amount provided, in the Code)
shall be disregarded. Such amount shall be adjusted or increases in
the cost of living in accordance with Code Section 401(a)(17)(B),
except that the dollar increase in effect on January 1 of any
calendar year shall be effective for the Plan Year beginning with or
within such calendar year. If "415 Compensation" for any prior
determination period is taken into account in determining a
Participant's minimum benefit for the current Plan Year, the "415
Compensation" for such determination period is subject to the
applicable annual "415 Compensation" limit in effect for that prior
period. For this purpose, in determining the minimum benefit in Plan
Years beginning on or after January 1, 1989, the annual "415
Compensation" limit in effect for determination periods beginning
before that date is $200,000 (or such other amount as adjusted for
increases in the cost of living in accordance with Code Section
415(d) for determination periods beginning on or after January 1,
1989, and in accordance with Code Section 401(a)(17)(B) for
determination periods beginning on or after January 1, 1994). For
determination periods beginning prior to January 1, 1989, the
$200,000 limit shall apply only for Top Heavy Plan Years and shall
not be adjusted. For any short Plan Year the "415 Compensation"
limit shall be an amount equal to the "415 Compensation" limit for
the calendar year in which the Plan Year begins multiplied by the
ratio obtained by dividing the number of full months in the short
Plan Year by twelve (12).
(k) Notwithstanding anything herein to the contrary,
Participants who terminated employment for any reason during the
Plan Year shall share in the salary reduction contributions made by
the Employer for the year of termination without regard to the Hours
of Service credited.
(l) Notwithstanding anything in this Section to the contrary,
all information necessary to properly reflect a
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given transaction may not be available until after the date
specified herein for processing such transaction, in which case the
transaction will be reflected when such information is received and
processed. Subject to express limits that may be imposed under the
Code, the processing of any contribution, distribution or other
transaction may be delayed for any legitimate business reason
(including, but not limited to, failure of systems or computer
programs, failure of the means of the transmission of data, force
majeure, the failure of a service provider to timely receive values
or prices, and the correction for errors or omissions or the errors
or omissions of any service provider). The processing date of a
transaction will be binding for all purposes of the Plan.
(m) Notwithstanding anything to the contrary, if this is a
plan that would otherwise fail to meet the requirements of code
Section 410(b) (1) and the Regulations thereunder because Employer
contributions would not be allocated to a sufficient number or
percentage of Participants for a Plan Year, then the following rules
shall apply:
(1) The group of Participants eligible to share in the
Employer's contribution for the Plan Year shall be expanded to
include the minimum number of Participants who would not
otherwise be eligible as are necessary to satisfy the
applicable test specified above. The specific Participants who
shall become eligible under the terms of this paragraph shall
be those who have not separated from service prior to the last
day of the Plan Year and have completed the greatest number of
Hours of Service in the Plan Year.
(2) If after application of paragraph (1) above, the
applicable test is still not satisfied, then the group of
Participants eligible to share in the Employer's contribution
for the Plan Year shall be further expanded to include the
minimum number of Participants who have separated from service
prior to the last day of the Plan Year as are necessary to
satisfy the applicable test. The specific Participants who
shall become eligible to share shall be those Participants who
have completed the greatest number of Hours of Service in the
Plan Year before terminating employment.
(3) Nothing in this Section shall permit the reduction of a
Participant's accrued benefit. Therefore any amounts that have
previously been allocated to Participants may not be
reallocated to satisfy these requirements. In such event, the
Employer shall make an additional contribution equal to the
amount such affected Participants would have received had they
been included in the allocations,
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even if it exceeds the amount which would be deductible under
Code Section 404. Any adjustment to the allocations pursuant
to this paragraph shall be considered a retroactive amendment
adopted by the last day of the Plan Year.
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS
(a) Maximum Annual Allocation: For each Plan Year beginning
after December 31, 1996, the annual allocation derived from Employer
Elective Contributions to a Highly Compensated Participant's
Elective Account shall satisfy one of the following tests:
(1) The "Actual Deferral Percentage" for the Highly
Compensated Participant group shall not be more than the
"Actual Deferral Percentage" of the Non-Highly Compensated
Participant group (for the preceding Plan Year if the prior
year testing method is used to calculate the "Actual Deferral
Percentage" for the Non-Highly Compensated Participant group)
multiplied by 1.25, or
(2) The excess of the "Actual Deferral Percentage" for the
Highly Compensated Participant group over the "Actual Deferral
Percentage" for the Non-Highly Compensated Participant group
(for the preceding Plan Year if the prior year testing method
is used to calculate the "Actual Deferral Percentage" for the
Non-Highly Compensated Participant group) shall not be more
than two percentage points. Additionally, the "Actual Deferral
Percentage" for the Highly Compensated Participant group shall
not exceed the "Actual Deferral Percentage" for the Non-Highly
Compensated Participant group (for the preceding Plan Year if
the prior year testing method is used to calculate the "Actual
Deferral Percentage" for the Non-Highly Compensated
Participant group) multiplied by 2. The provisions of Code
Section 401(k)(3) and Regulation 1.401(k)-1(b) are
incorporated herein by reference.
However, in order to prevent the multiple use of the
alternative method described in (2) above and in Code Section
401(m)(9)(A), any Highly Compensated Participant eligible to
make elective deferrals pursuant to Section 4.2 and to make
Employee contributions or to receive matching contributions
under this Plan or under any other plan maintained by the
Employer or an Affiliated Employer shall have a combination of
such Participant's Elective Contributions and Employer
matching contributions reduced pursuant to Section 4.6(a) and
Regulation 1.401(m)-2, the provisions of which are
incorporated
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herein by reference.
(b) For the purposes of this Section "Actual Deferral
Percentage" means, with respect to the Highly Compensated
Participant group and Non-Highly Compensated Participant group for a
Plan Year, the average of the ratios, calculated separately for each
Participant in such group, of the amount of Employer Elective
Contributions allocated to each Participant's Elective Account for
such Plan Year, to such Participant's "414(s) Compensation" for such
Plan Year. The actual deferral ratio for each Participant and the
"Actual Deferral Percentage" for each group shall be calculated to
the nearest one hundredth of one percent. Employer Elective
Contributions allocated to each Non-Highly Compensated Participant's
Elective Account shall be reduced by Excess Deferred Compensation to
the extent such excess amounts are made under this Plan or any other
plan maintained by the Employer.
Notwithstanding the above, if the prior year test method
is used to calculate the "Actual Deferral Percentage" for the Non-
Highly Compensated Participant group for the first Plan Year of this
amendment and restatement, the "Actual Deferral Percentage" for the
Non-Highly Compensated Participant group for the preceding Plan Year
shall be calculated pursuant to the provisions of the Plan then in
effect.
(c) For the purposes of Sections 4.5(a) and 4.6, a Highly
Compensated Participant and a Non-Highly Compensated Participant
shall include any Employee eligible to make a deferral election
pursuant to Section 4.2, whether or not such deferral election was
made or suspended pursuant to Section 4.2.
Notwithstanding the above, if the prior year testing
method is used to calculate the "Actual Deferral Percentage" for the
Non-Highly Compensated Participant group for the first Plan Year of
this amendment and restatement, for purposes of Section 4.5(a) and
4.6, a Non-Highly Compensated Participant shall include any such
Employee eligible to make a deferral election, whether or not such
deferral election was made or suspended, pursuant to the provisions
of the Plan in effect for the preceding Plan Year.
(d) For the purposes of this Section and Code Sections 401(a)
(4), 410(b) and 401(k), if two or more plans which include cash or
deferred arrangements are considered one plan for the purposes of
Code Section 401(a) (4) or 410(b) (other than Code Section 410(b)
(2) (A) (ii)), the cash or deferred arrangements included in such
plans shall be treated as one arrangement. In addition, two or more
cash or deferred arrangements may be considered as a single
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arrangement for purposes of determining whether or not such
arrangements satisfy Code Sections 401(a)(4), 410(b) and
401(k). In such a case, the cash or deferred arrangements
included in such plans and the plans including such
arrangements shall be treated as one arrangement and as one
plan for purposes of this Section and Code Sections 401(a)(4),
410(b) and 401(k). Any adjustment to the Non-Highly
Compensated Participant actual deferral ratio for the prior
year shall be made in accordance with Internal Revenue Service
Notice 981 and any superseding guidance. Plans may be
aggregated under this paragraph (d) only if they have the same
plan year. Notwithstanding the above, for Plan Years beginning
after December 31, 1996, if two or more plans which include
cash or deferred arrangements are permissively aggregated
under Regulation 1.41O(b)-7(d), all plans permissively
aggregated must use either the current year testing method or
the prior year testing method for the testing year.
Notwithstanding the above, an employee stock ownership
plan described in Code Section 4975(e)(7) or 409 may not be
combined with this Plan for purposes of determining whether the
employee stock ownership plan or this Plan satisfies this Section
and Code Sections 401(a)(4), 410(b) and 401(k).
(e) For the purposes of this Section, if a Highly Compensated
Participant is a Participant under two or more cash or deferred
arrangements (other than a cash or deferred arrangement which is
part of an employee stock ownership plan as defined in Code Section
4975(e)(7) or 409) of the Employer or an Affiliated Employer, all
such cash or deferred arrangements shall be treated as one cash or
deferred arrangement for the purpose of determining the actual
deferral ratio with respect to such Highly Compensated Participant.
However, if the cash or deferred arrangements have different plan
years, this paragraph shall be applied by treating all cash or
deferred arrangements ending with or within the same calendar year
as a single arrangement.
(f) For the purpose of this Section, for Plan Years beginning
after December 31, 1996, when calculating the "Actual Deferral
Percentage" for the Non-Highly Compensated Participant group, the
current year testing method shall be used. Any change from the
current year testing method to the prior year testing method shall
be made pursuant to Internal Revenue Service Notice 981, Section VII
(or superseding guidance), the provisions of which are incorporated
herein by reference.
(g) Notwithstanding anything in this Section to the contrary,
the provisions of this Section and Section 4.6 may be applied
separately (or will be applied separately to the
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extent required by Regulations) to each plan within the meaning of
Regulation 1.401(k)-1(g)(11). Furthermore, for Plan Years
beginning after December 31, 1998, the provisions of Code Section
401(k)(3)(F) may be used to exclude from consideration all Non-
Highly Compensated Employees who have not satisfied the minimum age
and service requirements of Code Section 410(a)(1)(A).
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS
In the event (or if it is anticipated) that the initial allocations
of the Employer Elective Contributions made pursuant to Section 4.4 do (or
might) not satisfy one of the tests set forth in Section 4.5(a) for Plan Years
beginning after December 31, 1996, the Administrator shall adjust Excess
Contributions pursuant to the options set forth below:
(a) On or before the fifteenth day of the third month
following the end of each Plan Year, but in no event later than the
close of the following Plan Year, the Highly Compensated Participant
having the largest dollar amount of Elective Contributions shall
have a portion of such Participant's Elective Contributions
distributed until the total amount of Excess Contributions has been
distributed, or until the amount of such Participant's Elective
Contributions equals the Elective Contributions of the Highly
Compensated Participant having the second largest dollar amount of
Elective Contributions. This process shall continue until the total
amount of Excess Contributions has been distributed. In determining
the amount of Excess Contributions to be distributed with respect to
an affected Highly Compensated Participant as determined herein,
such amount shall be reduced pursuant to Section 4.2(f) by any
Excess Deferred Compensation previously distributed to such affected
Highly Compensated Participant for such Participant's taxable year
ending with or within such Plan Year.
(1) With respect to the distribution of Excess Contributions
pursuant to (a) above, such distribution:
(i) may be postponed but not later than the close of the
Plan Year following the Plan Year to which they are
allocable;
(ii) shall be adjusted for Income; and
(iii) shall be designated by the Employer as a
distribution of Excess Contributions (and Income).
(2) Any distribution of less than the entire amount of Excess
Contributions shall be treated as a pro rata
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distribution of Excess Contributions and Income.
(3) Matching contributions which relate to Excess
Contributions shall be forfeited unless the related matching
contribution is distributed as an Excess Aggregate
Contribution pursuant to Section 4.8.
(b) Notwithstanding the above, within twelve (12) months after
the end of the Plan Year, the Employer may make a special Qualified
Non-Elective Contribution in accordance with one of the following
provisions which contribution shall be allocated to the
Participant's Elective Account of each Non-Highly Compensated
Participant eligible to share in the allocation in accordance with
such provision. The Employer shall provide the Administrator with
written notification of the amount of the contribution being made
and for which provision it is being made pursuant to:
(1) A special Qualified Non-Elective Contribution may be made
on behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy (or to prevent an anticipated failure
of) one of the tests set forth in Section 4.5(a). Such
contribution shall be allocated in the same proportion that
each Non-Highly Compensated Participant's 414(s) Compensated
for the year (or prior year if the prior year testing method
is being used) bears to the total 414(s) Compensation of all
Non-Highly Compensated Participants for such year.
(2) A special Qualified Non-Elective Contribution may be made
on behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy (or to prevent an anticipated failure
of) one of the tests set forth in Section 4.5(a). Such
contribution shall be allocated in the same proportion that
each Non-Highly Compensated Participant electing salary
reductions pursuant to Section 4.2 in the same proportion that
each such Non-Highly Compensated Participant's Deferred
Compensation for the year (or at the end of the prior Plan
Year if the prior year testing method is being used) bears to
the total Deferred Compensation of all such Non-Highly
Compensated Participants for such year.
(3) A special Qualified Non-Elective Contribution may be made
on behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy (or to prevent an anticipated failure
of) one of the tests set forth in Section 4.5(a). Such
contribution shall be allocated in equal amounts (per capita).
(4) A special Qualified Non-Elective Contribution may be made
on behalf of Non-Highly Compensated
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Participants electing salary reductions pursuant to Section
4.2 in an amount sufficient to satisfy (or to prevent an
anticipated failure of) one of the tests set forth in Section
4.5(a). Such contribution shall be allocated for the year (or
at the end of the prior Plan Year if the prior year testing
method is used) to each Non-Highly Compensated Participant
electing salary reductions pursuant to Section 4.2 in equal
amounts (per capita).
(5) A special Qualified Non-Elective Contribution may be made
on behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy (or to prevent an anticipated failure
of) one of the tests set forth in Section 4.5(a). Such
contribution shall be allocated to the Non-Highly Compensated
Participant having the lowest 414(s). Compensation, until one
of the tests set forth in Section 4.5(a) is satisfied (or is
anticipated to be satisfied), or until such Non-Highly
Compensated Participant has received the maximum "annual
addition" pursuant to Section 4.9. This process shall continue
until, one of the tests set forth in Section 4.5(a) is
satisfied (or is anticipated to be satisfied).
Notwithstanding the above, at the Employer's discretion,
Non-Highly Compensated Participants who are not employed at the end
of the Plan Year (or at the end of the prior Plan Year if the prior
year testing method is being used) shall not be eligible to receive
a special Qualified Non-Elective Contribution and shall be
disregarded.
Notwithstanding the above, if the testing method changes
from the current year testing method to the prior year testing
method, then for purposes of preventing the double counting of
Qualified Non-Elective Contributions for the first testing year for
which the change is effective, any special Qualified Non-Elective
Contribution on behalf of Non-Highly Compensated Participants used
to satisfy the "Actual Deferral Percentage" or "Actual Contribution
Percentage" test under the current year testing method for the prior
year testing year shall be disregarded.
(c) If during a Plan Year, it is projected that the aggregate
amount of Elective Contributions to be allocated to all Highly
Compensated Participants under this Plan would cause the Plan to
fail the tests set forth in Section 4.5(a), then the Administrator
may automatically reduce the deferral amount of affected Highly
Compensated Participants, beginning with the Highly Compensated
Participant who has the highest deferral ratio until it is
anticipated the Plan will pass the tests or until the actual
deferral ratio equals the actual deferral ratio of the Highly
Compensated Participant having the next highest
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actual deferral ratio. This process may continue until it is
anticipated that the Plan will satisfy one of the tests set forth in
Section 4.5(a). Alternatively, the Employer may specify a maximum
percentage of Compensation that may be deferred.
(d) Any Excess Contributions (and Income) which are
distributed on or after 2 1/2 months after the end of the Plan Year
shall be subject to the ten percent (10%) Employer excise tax
imposed by Code Section 4979.
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) The "Actual Constitution Percentage" for Plan Years
beginning after December 31, 1996 for the Highly Compensated
Participant group shall not exceed the greater of:
(1) 125 percent of such percentage for the Non-Highly
Compensated Participant group (for the preceding Plan Year if
the prior year testing method is used to calculate the "Actual
Contribution Percentage" for the Non-Highly Compensated
Participant group); or
(2) the lesser of 200 percent of such percentage for the Non-
Highly Compensated Participant group (for the preceding Plan
Year if the prior year testing method is used to calculate the
"Actual Contribution Percentage" for the Non-Highly
Compensated Participant group), or such percentage for the
Non-Highly Compensated Participant group (for the preceding
Plan Year if the prior year testing method is used to
calculate the "Actual Contribution Percentage" for the
Non-Highly Compensated Participant group) plus 2 percentage
points. However, to prevent the multiple use of the
alternative method described in this paragraph and Code
Section 401(m)(9)(A), any Highly Compensated Participant
eligible to make elective deferrals pursuant to Section 4.2 or
any other cash or deferred arrangement maintained by the
Employer or an Affiliated Employer and to make Employee
contributions or to receive matching contributions under this
Plan or under any plan maintained by the Employer or an
Affiliated Employer shall have a combination of Elective
Contributions and Employer matching contributions reduced
pursuant to Regulation 1.401(m)-2 and Section 4.8(a). The
provisions of Code Section 401(m) and Regulations
1.401(m)-1(b) and 1.401(m)-2 are incorporated herein by
reference.
(b) For the purposes of this Section and Sectio