Exhibit 10.08
PENTEGRA RETIREMENT SERVICES
Summary Plan Description
Pentegra
Defined Contribution Plan
for Financial Institutions
as adopted by:
Federal Home Loan Bank of New York
(IMAGE) [c98069c9806903.gif]

 

 

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SUMMARY PLAN DESCRIPTION
for
Federal Home Loan Bank of New
York New York, NY
September 1, 2008
Pentegra Defined Contribution Plan
for Financial Institutions
108 Corporate Park Drive
White Plains, NY 10604

 

 

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Dear Member:
We are pleased to present your Summary Plan Description. This Summary is
designed to help you understand and appreciate the savings plan provided by
Federal Home Loan Bank of New York through the Pentegra Defined Contribution
Plan for Financial Institutions (formerly known as the Financial Institutions
Thrift Plan) (the “Plan”).
The Plan is a tax-exempt, trusteed savings plan which was created in 1970. It is
administered by a professional staff under the direction of a Board of Directors
(the “Board”) comprised of officers of the Federal Home Loan Banks and
participating financial institutions as well as the Plan’s President.
The Plan provides an opportunity for you to save and invest on a regular,
long-term basis. All contributions to the Plan (a defined contribution type
plan) are paid to the Trustee to be invested for the benefit of all members. An
individual account is maintained for each member. Under certain conditions, a
member may make withdrawals or take loans from their account based on its market
value.
The Plan offers federal income tax advantages. You do not pay taxes on employer
contributions or investment income until they are withdrawn. An employer subject
to income tax may deduct its contributions.
This Summary highlights the main features of the Plan. The Plan and Declaration
of Trust contain the governing provisions and should be consulted as official
text in all cases. If there is any conflict between this Summary and the Plan
Document, the Plan Document will control.
Finally, please note that wherever the masculine pronoun is used in this
Summary, it is intended to include the feminine pronoun.

     
 
  Board of Directors,
 
  Pentegra Defined Contribution Plan for
Financial Institutions

 

 

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SUMMARY OF YOUR BENEFITS

     
ELIGIBILITY
  You will be eligible for membership in the Plan on the first day of the month
coinciding with or next following the date you complete three months of
employment. Your employer will notify you of your right to become a member when
you first become eligible and will furnish you with an enrollment application.
However, certain groups of employees are not eligible for membership in the
Plan. Please refer to the “Determining Your Eligibility” section of this
Summary.
 
   
PLAN SALARY
  Plan Salary is defined as your basic salary rate, reflecting changes that
occur during the year.

In addition, any pre-tax contributions that you make are included in Plan
Salary. Please refer to the “Plan Salary” section of this Summary.
 
   
PLAN
CONTRIBUTIONS
  Employee — You may elect to make a pre-tax and/or after-tax contribution of 1%
to 19% (in 1% increments) of Plan Salary. If you are at least age 50, you may
elect to make catch-up contributions ($5,000 for 2008, indexed).
 
   
 
  Employer — Your employer will contribute an amount equal to the greater of
(A) or (B)
 
   
 
 
(A)   (i) 100% of your contributions through your 3rd year of employment;
 
 
        
(ii) 150% of your contributions during your 4th and 5th years of Employment; and
 
 
     
(iii) 200%of your contributions starting with your 6th year of employment.
 
   
 
  OR
 
   
 
 
(B)   The lesser of $75 per month or 2% of your Plan Salary.
 
   
 
  This percentage rate applies to the first 3% of your Plan Salary (see the
“Plan Salary” section of this Summary).

In addition, your employer may, in its sole discretion, make a profit sharing
contribution to the Plan. You will be eligible to receive a profit sharing
contribution if you are employed on the last day of the plan year, retire, die
or become totally and permanently disabled prior to December 31 of the year for
which the profit sharing contributions are being made to the Plan by your
employer.
 
   
VESTING
  You will be 100% vested in any employer matching and/or profit sharing
contributions immediately upon enrollment in the Plan. You are always 100%
vested in any contributions you make to the Plan. In other words, you will not
give up any units based on your own contributions when you terminate employment.
 
   
LOANS
  You may take a loan from your account and pay your account back with interest.
Please refer to the “Borrowing From Your Account” section of this Summary to
determine how you may take a loan from your account.
 
   
WITHDRAWALS
  While you are working, you may withdraw all or part of your vested account
balance subject to certain limitations. You may also make withdrawals from your
account after termination of employment.
 
   
DISABILITY
  If you are disabled, you will be entitled to the same withdrawal rights as if
you had terminated employment.
 
   
DEATH
  If you die before the value of your account is paid to you, your beneficiary
may receive the full value of your account or may defer payment within certain
limits. If you are married, your spouse will be your beneficiary unless your
spouse consents in writing to the designation of a different beneficiary.

 

 

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TABLE OF CONTENTS

         
Determining Your Eligibility
    1  
• Employee Eligibility
    1  
• Reenrollment
    1  
Making Contributions to the Plan
    2  
• Plan Contributions
    2  
• Allocation of Contributions
    3  
• IRS Nondiscrimination Rules
    3  
• Rollovers
    4  
• Plan Salary
    4  
Investing Your Account
    5  
• Investment of Contributions
    5  
• Valuation of Accounts
    5  
• Reporting to Members
    5  
Vesting
    6  
Making Withdrawals from Your Account
    7  
• While Employed
    7  
• Upon Termination of Employment
    8  
• Upon Disability
    8  
• Upon Death
    9  
Borrowing from Your Account
    10  
• Loans
    10  
Plan Limitations
    11  
Other Information
    12  
• Top Heavy Information
    12  
• Disputed Claims Procedure
    12  
• Qualified Domestic Relations Orders (QDRO’s)
    12  
Members Rights
    13  
• Statement of ERISA Rights
    13  
Plan Information
    14  

 

 

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DETERMINING YOUR ELIGIBILITY

     
Employee Eligibility
  You will be eligible for membership in the Plan on the first day of the month
coinciding with or next following the date you complete three months of
employment. Your employer will notify you of your right to become a member when
you first become eligible and will furnish you with an enrollment application.
 
   
 
  In order for you to complete three months of employment, you must complete at
least 250 hours of employment in a three consecutive month period. The initial
three consecutive month period is measured from your date of employment. If you
do not complete at least 250 hours of employment in such period, subsequent
three month periods are measured.
 
   
 
  In counting hours you will be credited with an hour of employment for every
hour you have a right to be paid. This includes vacation, sick leave, jury duty,
etc. and any hours for which back pay may be due.

Notwithstanding the above, the following groups of employees are not eligible
for membership in the Plan:
 
   
 
 
•     Flex staff employees.
 
   
 
  Flex staff employees are those that are not regular full time or part time
employees. Flex staff employees are not eligible to participate, regardless of
the number of hours actually worked during the Plan Year. However, Flex staff
employees that were hired prior to August 1, 2001 will continue to be eligible
to participate in the Plan.
 
   
 
  After you meet the Plan’s eligibility requirements and your completed
enrollment form is received by the Plan Board, you will be enrolled in the Plan.
Your participation will continue until the earlier of (a) your termination of
employment and payment to you of your entire account or (b) your death.
 
   
Reenrollment
  If you terminate employment and are subsequently reemployed by the same
employer, you will be eligible for immediate reenrollment.

 

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MAKING CONTRIBUTIONS TO THE PLAN

     
Plan Contributions
  Employee — You may elect to make a pre-tax and/or after-tax contribution of 1%
to 19% (in 1% increments) of Plan Salary (see the “Plan Salary” section of this
Summary). You may elect not to make any contributions, in which case your
employer will make the 2% minimum contribution as described below.
 
   
 
  You may change the rate at which you are contributing one time in any
reporting period as of the first day of any contribution reporting period. You
may suspend your contributions at any time, but suspended contributions may not
subsequently be made up.
 
   
 
  Employer — Your employer will contribute an amount equal to the greater of
(A) or (B)
 
   
 
 
(A)    (i) 100% of your contributions through your 3rd year of employment;
 
 
     
   (ii) 150% of your contributions during your 4th and 5th years of employment;
and
 
 
     
   (iii) 200%of your contributions starting with your 6th year of employment.
 
   
 
  OR
 
   
 
 
(B)    The lesser of $75 per month or 2% of your Plan Salary.
 
   
 
  This percentage rate applies to the first 3% of your Plan Salary (see the
“Plan Salary” section of this Summary).

                          Illustration   Employer’s Matching Contribution   Your
  100% During     150% During     200% Starting   Contribution   2nd & 3rd Yrs.
    4th & 5th Yrs.     with 6th Yr. of   Rate   of Employment     of Employment
    Employment  
1%
    1.00%       1.50%       2.00%  
2%
    2.00%       3.00%       4.00%  
3-19%
    3.00%       4.50%       6.00%  

     
 
  In addition, your employer may, in its sole discretion, make a profit sharing
contribution to the Plan. You will be eligible to receive a profit sharing
contribution if you are employed on the last day of the plan year, retire, die
or become totally and permanently disabled prior to December 31 of the year for
which the profit sharing contributions are being made to the Plan by your
employer.
 
   
 
  Please refer to the “Making Withdrawals From Your Account” section of this
Summary to determine if there are any restrictions on employer contributions on
account of a withdrawal.
 
   
 
  Catch-up Contributions — All employees who are eligible to make contributions
to this Plan and who will reach age 50 before the end of a calendar year will be
eligible to make catch-up contributions in accordance with, and subject to the
limitations of, Section 414(v) of the Internal Revenue Code.
 
   
 
  The maximum catch-up contribution for 2008 is $5,000 (as indexed in the
future). The amount, if any, of your elective deferrals which will be
characterized as catch-up contributions will be determined at the end of the
Plan Year based upon the statutory limits and plan limits in effect for the Plan
Year.
 
   

 

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MAKING CONTRIBUTIONS TO THE PLAN
CONTINUED

     
 
  There are several ways in which a contribution could be characterized as a
catch-up contribution, as illustrated in the following examples. Assume that the
member is over age 50 in each example:
 
   
 
  Example 1: Suppose your annual salary is $125,000 and you contribute 15% of
your Plan Salary to the Plan (as permitted under the terms of the Plan) for each
contribution reporting period in 2008. At the end of the Plan Year, you will
have contributed $18,750 to the Plan. Because this amount exceeds the statutory
limit on elective deferrals ($15,500 in 2008), the excess ($3,250) will be
treated as a catch-up contribution.
 
   
 
  Example 2: Same facts as provided in Example 1, except that your annual Plan
Salary is $75,000. In this example, you will have contributed $11,250 to the
Plan in 2008 ($75,000 x 15%). Because your contributions do not exceed either
the Plan’s maximum contribution percentage or the elective deferral limitation
($15,500 in 2008) and no other limitations are impacted, no portion of your
contributions is treated as a catch-up contribution.
 
   
 
  Example 3: Suppose that your annual Plan Salary is $110,000 in 2008, you
earned total compensation of $100,000 in 2007 (making you a Highly-Compensated
Employee for 2008), and you contributed $15,500 to the Plan in 2008. Because
your $15,500 contribution does not exceed either the Plan’s maximum contribution
percentage or the elective deferral limit ($15,500 in 2008), there is no
catch-up contribution based upon the application of those two limits. However,
further assume that the Plan determines that you are required to receive a
$6,000 Actual Deferral Percentage (“ADP”) refund for 2008. In this scenario,
$5,000 of your ADP refund would automatically be recharacterized as a catch-up
contribution.
 
   
Allocation of Contributions
  Your employer has established a Regular Account, 401(k) Account and Profit
Sharing Account for each member. All of your contributions and all employer
contributions will be allocated to these accounts. The total value of these
accounts, including the value of your Rollover Account (see below), represents
your interest in the Plan.
 
   
 
  Employee — You may allocate all or part of your contributions to your 401(k)
Account. Contributions not allocated to your 401(k) Account will be allocated to
your Regular Account.
 
   
 
  Employer — If you allocate a contribution of at least 2% to your 401(k)
Account, all employer contributions will be allocated to your Regular Account.
If you do not allocate any of your contributions to your 401(k) Account,
employer contributions of the lesser of $75 per month or 2% of your Plan Salary
will be allocated to your 401(k) Account. The balance of employer contributions,
if any, will be allocated to your Regular Account.
 
   
IRS Nondiscrimination
Rules
  If you are a Highly Compensated Employee, a portion of your contributions
and/or employer contributions made on your behalf, if any, may have to be
returned to you in order to comply with special Internal Revenue Service
(IRS) nondiscrimination rules (see the “Plan Limitations” section of this
Summary for other limitations). In general, a Highly Compensated Employee is an
employee who:
 
   
 
 
(a)    was a 5% owner at any time during 2008 or 2007, or
 
   
 
 
(b)    received annual compensation in excess of $100,000 for 2007.

 

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MAKING CONTRIBUTIONS TO THE PLAN
CONTINUED

     
Rollovers
  You may make a rollover contribution of an eligible rollover distribution from
any other Internal Revenue Service qualified retirement plan or an individual
retirement arrangement (IRA). These funds will be maintained in a separate
Rollover Account in which you will have a nonforfeitable vested interest. Please
note that you may establish a Rollover Account within the Plan prior to
satisfying the Plan’s eligibility requirements. However, the establishment of a
Rollover Account prior to satisfying such eligibility requirements will not
constitute active membership in the Plan.
 
   
Plan Salary
  Plan Salary is defined as your basic salary rate, reflecting changes occurring
during the year.
 
   
 
  In addition, any pre-tax contributions that you make as well as pre-tax
contributions to a Section 125 cafeteria plan and, unless the employer elects
otherwise, Qualified Transportation Fringe benefits as defined under
Section 132(f) of the Internal Revenue Code, are included in Plan Salary.
 
   
 
  Your Plan Salary for any year may not exceed a specified dollar amount as
determined by the Internal Revenue Service each year. This limit is $230,000 for
2008, and is subject to adjustment in accordance with IRS regulations.

 

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INVESTING YOUR ACCOUNT

     
Investment of Contributions
  All contributions are invested at your direction in one or more of the
investment funds provided under your Plan in whole percentages. These funds are
described in greater detail in your enrollment kit.
 
   
 
  Please note that different investment instructions can be provided to the Plan
for amounts already accumulated in your account and for future contributions.
Certain restrictions may apply. Changes in investment instructions may be made
by submitting a properly completed form, by using Pentegra by Phone, the
Pentegra Voice Response System or by accessing Pentegra Online at
www.pentegra.com. You may access Pentegra by Phone by calling 1-800-433- 4422.
 
   
 
  Any changes which are received by Stock Market Closing (usually 4 p.m. Eastern
Time) will be processed at the business day’s closing price. Transaction changes
received after Stock Market Closing will be processed on the next business day.
Your Plan allows for a change of investment allocation on a daily basis.
 
   
 
  Investment changes made by submitting a form is effective on the valuation
date (see the “Valuation of Accounts” section of this Summary) on which your
written notice is processed.
 
   
 
  No amounts invested in the Stable Value Fund may be transferred directly to
the Money Market Fund. Stable Value Fund amounts transferred to and invested in
any of the other funds provided under the Plan for a period of three months may
subsequently be transferred to the Money Market Fund upon the submission of a
separate Change of Investment form.
 
   
 
  If no investment direction is given, all contributions credited to a
participant’s account will be invested in the target date retirement fund, the
year of which coincides with or next follows the year in which the member
reaches age 65.
 
   
Valuation of Accounts
  The Plan uses a unit system for valuing each Investment Fund. Under this
system each participant’s share in any Investment Fund is represented by units.
The unit value is determined as of the close of business each regular business
day (daily valuation). The total dollar value of a participant’s share in any
Investment Fund as of any valuation date is determined by multiplying the number
of units to the participant’s credit by the unit value of the Fund on that date.
The sum of the values of the Funds you select represents the total value of your
Plan account.
 
   
 
  NOTE: If for some reason (such as shut down of financial markets) the
underlying portfolio of any Investment Fund cannot be valued, the valuation date
for such Investment Fund will be the next day on which the underlying portfolios
can be valued.
 
   
Reporting to Members
  As soon as practicable after the end of each calendar quarter, the Plan will
send you a Quarterly Statement. This Statement provides information about your
account including its market value in each Investment Fund. Activity for the
quarter is reported by Investment Fund and contribution type.

 

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VESTING

     
Vesting
  Vesting is the process under which you earn a non-forfeitable right to the
units in your account. You are always 100% vested in any contributions you make
to the Plan. In other words, you will not give up any units based on your own
contributions when you terminate employment.
 
   
 
  Your employer has also provided that you are immediately 100% vested in any
employer matching and/or profit sharing contributions credited to your account.

 

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MAKING WITHDRAWALS FROM YOUR ACCOUNT

     
While Employed
  You may make a total or partial withdrawal of the vested portion of your
account by filing the appropriate form with the Plan. A withdrawal is based on
the unit values on the valuation date on which a properly completed withdrawal
form is received and processed by the Plan. (See the “Valuation of Accounts”
section of this Summary).
 
   
 
  Under current law, an excise tax of 10% is generally imposed on the taxable
portion of withdrawals occurring prior to your reaching age 591/2. There are
certain exceptions to the 10% excise tax. For example, the 10% excise tax will
not apply to withdrawals made on account of separation from service on or after
the date you have reached age 55, death or disability.
 
   

  A   From the Regular Account:         Not more than one voluntary withdrawal
may be made from your Regular Account in a calendar year unless it is limited to
your own contributions, if any, made prior to January 1, 1987 (“pre 1987
contributions”) without earnings.         No partial withdrawal of less than
$1,000 will be permitted unless it is for either the full amount of (a) your own
“pre-1987 contributions” without earnings, (b) your own contributions (pre-1987
plus post-1986) and earnings on them or (c) the total vested balance of your
Regular Account.     B   From the 401(k) Account:         Not more than one
withdrawal may be made from your 401(k) Account in a calendar year.         As
required by Internal Revenue Service Regulations, a withdrawal from your 401(k)
Account prior to age 591/2 or termination of employment can only be made on
account of hardship. The existence of an immediate and heavy financial need, and
the lack of any other available financial resources to meet this need, must be
demonstrated for a hardship withdrawal. The following situations will be
considered to constitute an immediate and heavy financial need:

  1)   Medical Expenses — Medical expenses (other than amounts paid by
insurance) incurred by the member as well as the member’s spouse or dependents
(other than amounts paid by insurance).     2)   Home Purchase — Purchase of a
principal residence of the member (mortgage payments are excluded).     3)  
Educational Expenses — Tuition, including room and board, for the next 12 months
of post-secondary education of the member as well as the member’s spouse,
children, or dependents.     4)   Prevention of Eviction — Prevention of
eviction from a member’s principal residence or foreclosure on the mortgage of a
member’s principal residence.     5)   Funeral Expenses — Burial or funeral
expenses for the member’s deceased parent, spouse, children, or dependents.    
6)   Home Damage — Expenses for the repair of damages to the member’s principal
residence that would qualify as a tax deductible casualty loss.

      No partial withdrawal of less than $1,000 will be permitted unless it is
for either (a) the amount necessary to satisfy your hardship or (b) the total
vested balance of your 401(k) Account. Only one in-service withdrawal may be
made in any Plan Year.

 

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MAKING WITHDRAWALS FROM YOUR ACCOUNT
CONTINUED

      You will be required to receive a distribution of the remaining available
vested balance, if any, of your Regular Account and your Rollover Account, if
any, prior to making a hardship withdrawal from your 401(k) Account. In no event
may the maximum amount of a hardship withdrawal from your 401(k) Account exceed
the value of your 401(k) Account as of December 31, 1988 plus the amount of any
401(k) contributions which you make to the Plan on or after January 1, 1989
reduced by the amount of any hardship withdrawals which you make from your
401(k) Account on or after January 1, 1989.     C.   From the Rollover Account:
        Not more than one withdrawal may be made from your Rollover Account in a
calendar year. No partial withdrawal of less than $1,000 will be permitted
unless it is for the total balance of your Rollover Account.     D.   From the
Profit Sharing Account:         Not more than one withdrawal may be made from
your Profit Sharing Account in a calendar year. No partial withdrawal of less
than $1,000 will be permitted unless it is for the total balance of your Profit
Sharing Account.         NOTE: In general, employer contributions credited on
your behalf will not be available for in-service withdrawal until such employer
contributions have been invested in the Plan for at least 24 months (2 years) or
you have been a participant in the Plan for at least 60 months (5 years) or have
reached age 591/2.

     
Upon Termination of Employment
  You may leave your account with the Plan and defer commencement of receipt of
your vested balance until April 1 of the calendar year following the later of
(i) the calendar year in which you reach age 701/2, or (ii) the calendar year in
which you retire (unless you are a 5% owner during the year in which you reach
age 701/2) except to the extent that your vested account balance as of the date
of your termination is less than $500, in which case your interest in the Plan
will be cashed out and payment sent to you.
 
   
 
  Please note that if you leave your account with the Plan and your vested
balance is less than $20,000, your account will be assessed an annual
administrative fee in the amount of $24.00. If your vested account balance is
equal to or exceeds $20,000, no annual administrative fee will be assessed to
your account. You may make withdrawals from your account(s) at any time after
you terminate employment. You may continue to change the investment instructions
with respect to your remaining account balance and make withdrawals as provided
above. (See the “Investment of Contributions” section of this Summary).
 
   
 
  If your total vested account equals or exceeds $500, you may elect, in lieu of
a lump sum payment, to be paid in annual installments with the right to take in
a lump sum the vested balance of your account at any time during such payment
period. If the actuarial determination of your life expectancy is less than the
period you elect, the maximum period over which you can receive annual
installments will be the next lower payment period.
 
   
Upon Disability
  If you are disabled in accordance with the definition of disability under the
Plan, you will be entitled to the same withdrawal rights as if you had
terminated your employment.
 
   
 
  You are disabled under the Plan if you are eligible to receive (i) disability
insurance benefits under Title II of the Federal Social Security Act or
(ii) disability benefits under any other Internal Revenue Service qualified
employee benefits plan or long-term disability plan of your employer.

 

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MAKING WITHDRAWALS FROM YOUR ACCOUNT
CONTINUED

     
Upon Death
  If you die while you are a member of the Plan, the value of your entire
account will be payable to your beneficiary. This payment will be made in the
form of a lump sum, unless the payment would exceed $500, in which event
payments must commence by December 31 of the calendar year immediately following
the calendar year in which you died or, if your spouse is your beneficiary, by
December 31 of the calendar year in which you would have reached age 701/2, if
later.
 
   
 
  The minimum amount that will be distributed for each calendar year after the
year of your death is the quotient obtained by dividing your account balance by
your remaining life expectancy calculated using your age in the year of death,
reduced by one for each subsequent year. If there is no designated beneficiary
your entire account balance must be distributed by December 31 of the calendar
year following the fifth anniversary of your death.
 
   
 
  If you are married, your spouse will be your beneficiary unless your spouse
consents in writing to the designation of a different beneficiary.

 

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BORROWING FROM YOUR ACCOUNT

     
Loans
  You may borrow from your 401(k) Account and Rollover Account as well as the
vested portion of your Regular Account and Profit Sharing Account. You may
borrow any amount between $1,000 and $50,000 (reduced by your highest
outstanding loan balance(s) from the Plan during the preceding 12 months). In no
event may you borrow more than 50% of the vested balance of your account.
 
   
 
  You may borrow only once in each calendar year from your Profit Sharing
Account, Regular Account or 401(k) Account and once each calendar year from your
Rollover Account. Each loan must be for at least $1,000. Your 401(k) Account
will first be used for the loan unless you specifically request otherwise. In
any event, whichever account you borrow from first, such account must be
exhausted before you may borrow any amount from the other account. A loan from
your Rollover Account, if you have one, will be considered a separate loan. The
amount of your loan will first be deducted from the taxable portion of your
account and then from the after-tax portion, if any.
 
   
 
  The amount of your loan will be deducted on the valuation date (see the
“Valuation of Accounts” section of this Summary) on which the Plan office
receives and processes your properly executed Loan Application, Promissory Note
and Disclosure Statement and Truth-in-Lending Statement. On request, the Plan
Administrator will provide you with the application form. The loan will not
affect your right to continue making contributions or to receive employer
contributions.
 
   
 
  Your loan will be deducted proportionately from the funds in which the account
(from which you are taking the loan) is invested. Your loan repayments will be
credited in accordance with your investment instructions in effect at the time
of each repayment.
 
   
 
  The rate of interest for the term of the loan will be established as of the
loan date, and shall be a reasonable rate of interest generally comparable to
the rates of interest then in effect at a major banking institution (e.g., the
Barron’s Prime Rate [base rate] plus 1%).
 
   
 
  Repayments are made through payroll deductions and will be transmitted along
with the employer’s contribution reports. The repayment period is between one
and 15 years for loans used exclusively for the purchase of a primary residence
or between one and five years for all other loans, at your option. After three
monthly payments have been made, you may repay the outstanding balance of the
loan (subject to the terms of your loan document).
 
   
 
  As you repay the loan, the principal portion, together with the interest, will
be credited to your account. In this way, you will be paying interest to
yourself. A $50.00 origination fee and a $40.00 annual administrative fee will
be subtracted from your account. The origination fee, plus the first year’s
administrative fee, will be deducted proportionately from your account at the
time of origination. Subsequent annual administrative fees will be deducted from
your account.
 
   
 
  In the event that you leave employment or die before repaying the loan, the
outstanding balance will be due and, if not paid by the end of the calendar
quarter following the calendar quarter in which you terminate employment or die,
will be deemed a distribution and subject to the applicable tax treatment.
However, you may elect upon termination of employment to continue to repay the
loan on a monthly basis directly to the Plan office.

 

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PLAN LIMITATIONS

     
Plan Limitations
  Internal Revenue Service (“IRS”) requirements impose certain limitations on
the amount of contributions that may be made to this and other qualified plans.
In general, the annual “contributions” made to a defined contribution plan such
as this Plan, in respect of any member, may not exceed the lesser of (a) 100% of
the member’s total compensation or (b) a specific dollar amount, as determined
by the Internal Revenue Service each year. The dollar limit is $46,000 for 2008
and is subject to adjustment in accordance with IRS regulations.
 
   
 
  For this purpose, “contributions” include employer contributions and member
contributions. The combined annual member contributions allocated to a member’s
401(k) Account may not exceed a specific dollar amount, as determined by the
Internal Revenue Service each year. This limit is $15,500 in 2008, and is
subject to adjustment in accordance with IRS regulations. If your employer has
another tax-qualified plan in effect, these limits are subject to additional
restrictions.
 
   
 
  Each member and beneficiary assumes the risk in connection with any decrease
in the market value of his account. The benefit to which you may be entitled
when you take a distribution of your account cannot be determined in advance.
 
   
 
  As a defined contribution plan, the Plan is not covered by the plan
termination insurance provisions of Title IV of the Employee Retirement Income
Security Act of 1974 (“ERISA”). Therefore, your benefits are not insured by the
Pension Benefit Guaranty Corporation in the event of a plan termination.
 
   
 
  The Trustee is empowered to charge against and pay out of the Trust Fund, to
the extent not paid by the employers, all proper costs of operation and
administration of the Plan, including the expenses and compensation of the
Trustee, expenses of the Board and compensation for its agents.
 
   
 
  Except as may otherwise be required by applicable law or pursuant to the terms
of a Qualified Domestic Relations Order, amounts payable by the Plan generally
may not be assigned, and if any person entitled to a payment attempts to assign
it, his interest in the amount payable may be terminated and held for the
benefit of that person or his dependents.
 
   
 
  Membership in the Plan does not give you the right to continued employment
with your employer or affect your employer’s right to terminate your employment.
 
   
 
  Your employer’s continued participation is subject to IRS approval and any
requirements the IRS may impose.
 
   
 
  An employer may terminate its participation in the Plan at any time. In
addition, the Board retains the right to terminate the Plan or an employer’s
participation in the Plan in certain circumstances. If the Plan is terminated or
if your employer’s participation in the Plan is terminated, there will be no
further contributions to the Plan for your account.

 

-11-

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OTHER INFORMATION

     
Top Heavy Information
  A “top heavy” plan is a plan under which more than 60% of the accrued benefits
(account values) are for key employees. Key employees generally include officers
and shareholders earning more than $150,000 per year (indexed for cost-of-living
adjustments), 5% owners of the Employer, and 1% owners of the Employer earning
more than $150,000 per year. If your employer’s plan is top heavy for a
particular Plan Year, you may be entitled to a minimum employer contribution
equal to the lesser of 3% of your Plan Salary or the greatest percentage
contributed by the employer for any key employee. This minimum contribution
would be offset by the regular contribution made by your employer (See the “Plan
Contributions” section of this Summary).
 
   
 
  In order to receive the minimum contribution for any Plan Year, you must be
employed on the last day of the Plan Year (December 31). If your employer also
provides a defined benefit or another defined contribution plan, your minimum
benefit may be provided under such plan.
 
   
Disputed Claims
Procedure
  If you disagree with respect to any benefit to which you feel you are
entitled, you should make a written claim to the President of the Plan. If your
claim is denied, you will receive written notice explaining the reason for the
denial within 90 days after the claim is filed.
 
   
 
  The President’s decision will be final unless you appeal such decision in
writing to the Board of Directors of the Plan, within 60 days after receiving
the notice of denial. The written appeal should contain all information you wish
to be considered. The Board will review the claim within 60 days after the
appeal is made. Its decision will be in writing and will include the reason for
such decision. The Board’s decision will be final.
 
   
Qualified Domestic
Relations Orders
(QDRO’s)
  A QDRO is a judgment, decree or order which has been determined by the Plan,
in accordance with the procedures established under the provisions of the Plan,
to constitute a QDRO under the Internal Revenue Code.
 
   
 
  To obtain copies of the Plan’s Model QDRO and QDRO Procedures, free of charge,
please contact the Plan Administrator. (Please refer to the “Plan Information”
section of this Summary to obtain the Plan Administrator’s address and telephone
number).

 

-12-

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MEMBERS RIGHTS

     
Statement of ERISA Rights
  As a participant of the Plan, you are entitled to certain rights and
protection under the Employee Retirement Income Security Act of 1974
(ERISA) which provides that all members shall be entitled to:
 
 
     
•    Examine, without charge, at the Plan Administrator’s office or at other
specified locations, all plan documents, and copies of all documents filed by
the Plan Administrator with the U. S. Department of Labor such as detailed
annual reports and plan descriptions.
 
 
     
•    Obtain copies of all plan documents and other plan information upon written
request to the Plan Administrator. The Administrator may make a reasonable
charge for the copies.
 
 
     
•    Receive a summary of the Plan’s annual financial report. The Plan
Administrator is required by law to furnish each member with a copy of such
summary.
 
   
 
  In addition to creating rights for Plan members, ERISA imposes duties upon the
people who are responsible for the operation of the Plan. The people who operate
your Plan, called “fiduciaries”, have a duty to do so prudently and in the
interest of you and other plan participants and beneficiaries. No one may fire
you or otherwise discriminate against you in any way to prevent you from
obtaining a benefit or exercising your rights under ERISA. If your claim for a
benefit is denied in whole or in part, you will receive a written explanation of
the reason for the denial. As already explained, you also have the right to have
your claim reconsidered.
 
   
 
  Under ERISA, there are steps you can take to enforce the above rights. For
instance, if you request materials from the Plan Administrator and do not
receive them within 30 days, you may file suit in a federal court. In such a
case, the court may require the Plan Administrator to provide the materials and
pay you up to $110 a day until you receive them, unless such materials were not
sent for reasons beyond the Administrator’s control. If you have a claim for
benefits which is denied or ignored, in whole or in part, you may file suit in a
state or federal court.
 
   
 
  In addition, if you disagree with the Plan Administrator’s decision (or lack
thereof) concerning the qualified status of a domestic relations order
subsequent to the 18 month period described in Section 414(p) of the Code, after
you complied with the remedies prescribed by the Plan’s QDRO procedures and the
Disputed Claims Procedures outlined in the Summary Plan Description, you may
file suit in federal court.
 
   
 
  If it should happen that Plan fiduciaries misuse the Plan’s money, or if you
are discriminated against for asserting your rights, you may seek assistance
from the U.S. Department of Labor or, after you have complied with the Disputed
Claims Procedure outlined in this Summary Plan Description, you may file suit in
a federal court. The court will decide who should pay court costs and legal
fees. If you are successful, the court may order the person you have sued to pay
these costs and fees. If you lose, the court may order you to pay such costs and
fees (for example, if it finds your claim is frivolous).
 
   
 
  If you have any questions about your Plan, you should contact the Plan
Administrator. If you have any questions about this statement or your rights
under ERISA, you should contact the nearest office of the Employee Benefits
Security Administration, U.S. Department of Labor, listed in your telephone
directory or the Division of Technical Assistance and Inquiries; Employee
Benefits Security Administration, U.S. Department of Labor, 200 Constitution
Avenue, N.W., Washington D.C. 20210.
 
   
 
  This Statement of ERISA Rights is required by federal law and regulation.

 

-13-

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PLAN INFORMATION

     
Employer
  Federal Home Loan Bank of New York
 
  101 Park Avenue
 
  New York, NY 10178-0599
 
   
 
  Telephone Number: (212) 681-6000
 
   
Plan Sponsor:
  The Plan is sponsored by the —
 
   
 
  Pentegra Defined Contribution Plan for Financial Institutions
 
  108 Corporate Park Drive
 
  White Plains, NY 10604
 
   
 
  Telephone Number — (914) 694-1300
 
  Pentegra by Phone — (800) 433-4422
 
  Pentegra Online — www.pentegra.com
 
   
 
  Employer Identification Number — 13-6321489
 
  Plan Number — 002
 
   
 
  Plan Year End — December 31
 
   
Plan Administrator:
  The Plan Administrator is the President of the Plan whose place of business is
the office of the Pentegra Defined Contribution Plan for Financial Institutions.
The President is also the person designated as agent for service of legal
process. Service of legal process may also be made upon the Plan Trustee.
 
   
Board of Directors:
  The composition up of the Board changes from year to year, but you may refer
to the most recent Annual Report (which is sent to your employer) for a current
listing of the Board members and their places of business.
 
   
Trustee:
  The Bank of New York
 
  One Wall Street
 
  New York, NY 10286
 
   
Participating
Employers:
  Upon receipt of a written request for information regarding whether a
particular employer is a member of this multiple employer arrangement, we will
provide you with a statement as to whether such employer is a member and, if so,
the employer’s address.

 

-14-

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(IMAGE) [c98069c9806904.gif]
 

Our difference is your advantage   Pentegra Retirement Services
108 Corporate Park Drive
White Plains, NY 10604
(800) 872-3473
www.pentegra.com

 

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PENTEGRA DEFINED CONTRIBUTION PLAN
FOR FINANCIAL INSTITUTIONS
16th Revision, Amended and Restated, Effective January 1, 2008
108 Corporate Park Drive
White Plains, N.Y. 10604

 

 

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A tax-exempt, trusteed savings plan
established July 1, 1970
in order that eligible employees
of financial institutions and other organizations serving them
may save and invest on a regular, long term basis.

 

 

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TABLE OF CONTENTS

              Page  
 
       
PURPOSE
    i  
 
       
ARTICLE I DEFINITIONS
    1  
 
       
ARTICLE II PARTICIPATION AND MEMBERSHIP
    8  
 
       
Section 1. Employer Participation
    8  
 
       
Section 2. Employee Membership
    8  
 
       
ARTICLE III CONTRIBUTIONS
    12  
 
       
Section 1. Contributions by Members
    12  
 
       
Section 2. Regular Contributions by Employer
    12  
 
       
Section 3. Supplemental Contributions by Employer
    14  
 
       
Section 4. 401(k) Features
    15  
 
       
Section 5. Remittance of Contributions
    22  
 
       
Section 6. Transfer of Funds and Rollover Contributions
    22  
 
       
Section 7. Limitations on Member Contributions and Matching Employer
Contributions
    27  
 
       
Section 8. Profit Sharing Feature
    30  
 
       
Section 9. Catch-up Contributions
    33  
 
       
Section 10. Automatic Enrollment
    33  
 
       
ARTICLE IV INVESTMENT OF CONTRIBUTIONS
    37  
 
       
Section 1. General
    37  
 
       
Section 2. Qualified Default Investment Alternative
    38  
 
       
ARTICLE V MEMBERS’ ACCOUNTS, UNITS AND VALUATION
    40  
 
       
ARTICLE VI VESTING OF UNITS
    41  
 
       
Section 1. Vesting
    41  
 
       
Section 2. Forfeitures
    44  
 
       
ARTICLE VII WITHDRAWAL PAYMENTS
    46  
 
       
Section 1. General
    46  
 
       
Section 2. Account Withdrawal While Employed
    47  
 
       
Section 3. Account Withdrawal Upon Termination of Employment or Employer
Participation
    47  
 
       
Section 4. Account Withdrawal Upon Member’s Disability
    52  
 
       
Section 5. Member’s Death
    53  
 
       
Section 6. Minimum Distribution Requirements
    54  
 
       

 

- i -

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              Page  
 
     
ARTICLE VIII LOAN PROGRAM
    60  
 
       
Section 1. General
    60  
 
       
Section 2. Loan Application
    60  
 
       
Section 3. Permitted Loan Amount
    61  
 
       
Section 4. Source of Funds for Loan
    61  
 
       
Section 5. Conditions of Loan
    61  
 
       
Section 6. Crediting of Repayment
    62  
 
       
Section 7. Cessation of Payments on Loan
    63  
 
       
Section 8. Loans to Former Members and Beneficiaries
    63  
 
       
ARTICLE IX ADMINISTRATION OF PLAN
    64  
 
       
Section 1. Board of Directors
    64  
 
       
Section 2. Trust Agreement
    66  
 
       
ARTICLE X MISCELLANEOUS PROVISIONS
    67  
 
       
Section 1. General Limitations
    67  
 
       
Section 2. Top Heavy Provisions
    68  
 
       
Section 3. Information and Communications
    72  
 
       
Section 4. Small Account Balances
    72  
 
       
Section 5. Amounts Payable to Incompetents, Minors or Estates
    72  
 
       
Section 6. Non-alienation of Amounts Payable
    72  
 
       
Section 7. Unclaimed Amounts Payable
    73  
 
       
Section 8. Leaves of Absence
    73  
 
       
Section 9. Return of Contributions to Employer
    74  
 
       
Section 10. Controlling Law
    74  
 
       
ARTICLE XI TERMINATION OF EMPLOYER PARTICIPATION
    75  
 
       
Section 1. Termination by Employer
    75  
 
       
Section 2. Termination by Board
    75  
 
       
Section 3. Termination Distribution
    75  
 
       
ARTICLE XII AMENDMENT OR TERMINATION OF THE PLAN AND TRUST
    76  
 
       
TRUSTS ESTABLISHED UNDER THE PLAN
    77  

 

- ii -

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PURPOSE
The purpose of the Pentegra Defined Contribution Plan for Financial Institutions
(the “Plan” or “Pentegra DC Plan”) is to provide Members of participating
Employers with a convenient way to save on a regular and long term basis and, in
addition to, or in lieu of such benefit, a benefit under a Profit Sharing
Feature, all as elected by the Employer, and as set forth herein and in the
Trust Agreement adopted as a part of this Plan. This Plan, as hereby amended and
restated, and the Trust established hereunder, are intended to qualify as a plan
and trust which meet the requirements of Sections 401(a), 401(k), and 501(a),
respectively, of the Internal Revenue Code of 1986, as now in effect or
hereafter amended, or any other applicable provisions of law including, without
limitation, the Employee Retirement Income Security Act of 1974, as amended. The
Plan is applicable to Members who earn one Hour of Employment on or after the
Plan’s Effective Date unless specifically provided otherwise herein or otherwise
required by applicable law. If a Member has not earned onr Hour of Employment on
or after the Plan’s Effective Date, the Member’s benefits shall be based on the
Plan’s predecessor plan document. The Effective Date of this Plan, as herein
amended and restated, is generally as of January 1, 2008, unless otherwise
provided herein or under applicable law.

 

- i -

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ARTICLE I DEFINITIONS

    The following words and phrases as used in this Plan shall have the
following meanings:   1.   “Account” means the Plan account established and
maintained in respect of each Member pursuant to Article V, including the
Member’s 401(k) Account, Roth 401(k) Account, Regular Account, Rollover Account
(including Profit Sharing Rollover Amounts), Safe Harbor CODA Account, and
Profit Sharing Account.   2.   “Actual Deferral Percentage Test Safe Harbor”
means the method described in Section 4(J) of Article III for satisfying the
actual deferral percentage test of Section 401(k) (3) of the Code.   3.  
“Actual Deferral Percentage Test Safe Harbor Contributions” means Employer
matching contributions and non-elective contributions described in Section 4(J)
of Article III.   4.   “Basic Amounts” means, with respect to a Member, the
contributions made on behalf of the Member by the Employer pursuant to
Article III, Section 2(B) and earnings thereon.   5.   “Beneficiary” means the
person or persons designated to receive any amount payable under the Plan upon
the death of a Member. Such designation may be made or changed only by the
Member on a form provided by, and filed with, the Board prior to his death. If
the Member is not survived by a Spouse and if no Beneficiary is designated, or
if the designated Beneficiary predeceases the Member, then any such amount
payable shall be paid to such Member’s estate upon his death.   6.   “Board”
means the Board of Directors provided for in Article IX, Section 1.   7.  
“Break in Service” means a Plan Year during which an individual has not
completed more than 500 Hours of Employment, as determined by the Board in
accordance with the IRS Regulations. Solely for purposes of determining whether
a Break in Service has occurred, an individual shall be credited with the Hours
of Employment which such individual would have completed but for a maternity or
paternity absence, as determined by the Board in accordance with this Article I,
Paragraph (7), the Code and the applicable regulations issued by the DOL and the
IRS; provided, however, that the total Hours of Employment so credited shall not
exceed 501 and the individual timely provides the Board with such information as
it may require. Hours of Employment credited for a maternity or paternity
absence shall be credited entirely (i) in the Plan Year in which the absence
began if such hours of Employment are necessary to prevent a Break in Service in
such year, or (ii) in the following Plan Year. For purposes of this Article I,
Paragraph (7), maternity or paternity absence shall mean an absence from work by
reason of the individual’s pregnancy, the birth of the individual’s child or the
placement of a child with the individual in connection with the adoption of the
child by such individual, or for purposes of caring for a child for the period
immediately following such birth or placement.   8.   “Code” means the Internal
Revenue Code of 1986, as now in effect or as hereafter amended. All citations to
sections of the Code are to such sections as they may from time to time be
amended or renumbered.

 

1

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9.   “Commencement Date” means the date on which an Employer begins to
participate in the Plan.   10.   “Contribution Determination Period” means the
Plan Year, fiscal year, or calendar or fiscal quarter, as elected by an
Employer, upon which eligibility for and the maximum permissible amount of any
contribution to the Profit Sharing Feature, as defined in Article III, Section
8, is determined. Notwithstanding the foregoing, for purposes of Article VI,
Section 2(B), Contribution Determination Period means the Plan Year.   11.  
“Disability” means a Member’s disability as defined in Article VII, Section 4.  
12.   “DOL” means the United States Department of Labor.   13.   “Employee”
means any person in the Employment of, and who receives a salary from, an
Employer, and any leased employee within the meaning of Section 414(n)(2) of the
Code, unless the Employer elects to exclude leased employees from participation
of the Plan under Article II, Section 2(H). Notwithstanding the foregoing, if
such leased employees constitute less than twenty percent (20%) of the
Employer’s Non-highly compensated workforce within the meaning of
Section 414(n)(5)(C)(ii) of the Code, such leased employees are not Employees if
they are covered by a plan meeting the requirements of Section 414(n)(5)(B) of
the Code. A director of the Employer is not eligible to participate in the Plan
unless he is also an Employee.   14.   “Employer” means any entity which has
adopted the Plan in accordance with Article II, Section 1.   15.   “Employment”
means all periods of service with an Employer commencing with the Employee’s
first day of employment or reemployment and ending on the date a break in
service begins. The first day of employment or reemployment is the first day the
Employee performs an hour of service. An Employee will also receive credit for
any period of severance of less than 12 consecutive months. Fractional periods
of a year will be expressed in terms of days.       Hour of service shall mean
each hour for which an Employee is paid or entitled to payment for the
performance of duties for an Employer.       For purposes of this Section 15,
break in service is a period of severance of at least 12 consecutive months.    
  Period of severance is a continuous period of time during which the Employee
is not employed by an Employer. Such period begins on the date the Employee
retires, quits or is discharged or, if earlier, the 12 month anniversary of the
date on which the Employee was otherwise first absent from service.       If an
Employer is a member of an affiliated service group (under Section 414(m) of the
Code), a controlled group of corporations (under Section 414(b) of the Code), a
group of trades or businesses (under Section 414(c) of the Code), or any other
entity required to be aggregated with the Employer pursuant to section 414(o) of
the Code, service will be credited for any employment for any period of time for
any other member of such group. Service will also be credited for any individual
required under section 414(n) or section 414(o) to be considered an employee of
any Employer aggregated under section 414(b), (c), or (m).

 

2

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    In the case of an Employee who is absent from work for maternity or
paternity reasons, the 12-consecutive month period beginning on the first
anniversary of the first date of such absence shall not constitute a break in
service. For purposes of this paragraph, an absence from work for maternity or
paternity reasons means an absence (1) by reason of the pregnancy of the
Employee, (2) by reason of the birth of a child of the Employee, (3) by reason
of the placement of a child with the Employee in connection with the adoption of
such child by such Employee, or (4) for purposes of caring for such child for a
period beginning immediately following such birth or placement.       Solely for
purposes of determining vesting, “Employment” shall include service performed by
an individual for an Employer or members of an affiliated service group (under
Code Section 414(m)), a controlled group of corporations (under Code
Section 414(b)), or a group of trades or businesses under common control (under
Code Section 414(c)), of which the Employer is a member, during the period such
individual is not a member of a class of Employees otherwise eligible to
participate in the Plan.   16.   “Enrollment Date” means the date on which an
Employee becomes a Member as provided under Article II, Section 2.   17.  
“ERISA” means the Employee Retirement Income Security Act of 1974, as now in
effect or as hereafter amended.   18.   “401(k) Account” means the Plan account
established and maintained in respect of a Member pursuant to Article III,
Section 4 and Article V, and shall include all amounts (and earnings thereon)
credited thereto on behalf of the Member pursuant to the provisions of
Article III. Unless specified otherwise, the term “401(k) Account” shall also
include a Member’s Roth 401(k) Account.   19.   “401(k) Elective Deferral” means
a Member’s pre-tax elective Salary deferrals pursuant to Article III, Section 4
and a Member’s Roth Elective Deferrals pursuant to Article III, Section 4(D).  
20.   “Highly Compensated Employee” or “Highly Compensated Member” means an
Employee or a Member (i) who is a 5 percent owner at any time during the
look-back year or determination year, or (ii) (a) who is employed during the
determination year and who during the look-back year received compensation from
the Employer in excess of $105,000 (in 2008) (as adjusted pursuant to the Code
and Regulations for changes in the cost of living), and (b) if elected by the
Employer was in the top-paid group of Employees for such look-back year.      
For this purpose, the determination year shall be the Plan Year. The look-back
year shall be the 12-month period immediately preceding the determination year.
      The top-paid group shall consist of the top 20 percent of the Employees
when ranked on the basis of compensation paid by the Employer.       The
determination of who is a Highly Compensated Employee will be made in accordance
with Section 414(q) of the Code and the IRS Regulations thereunder.

 

3

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21.   “Hour of Employment” means

(A) Each hour for which an Employee is paid, or entitled to payment, for the
performance of duties for an Employer. These hours will be credited to the
Employee for the computation period in which the duties are performed; and
(B) Each hour for which an Employee is paid, or entitled to payment, by an
Employer on account of a period of time during which no duties are performed
(irrespective of whether the employment relationship has terminated) due to
vacation, holiday, illness, incapacity (including disability), layoff, jury
duty, military duty or leave of absence. No more than 501 Hours of Employment
will be credited under this Subsection (B) for any single continuous period
(whether or not such period occurs in a single computation period). Hours under
this Subsection (B) will be calculated and credited pursuant to
Section 2530.200b-2 of the DOL Regulations which is incorporated herein by this
reference; and
(C) Each hour for which back pay, irrespective of mitigation of damages, is
either awarded or agreed to by an Employer. The same Hours of Employment will
not be credited both under Subsection (A) or (B), as the case may be, and under
this Subsection (C). These hours will be credited to the Employee for the
computation period or periods to which the award or agreement pertains rather
than the computation period in which the award, agreement or payment is made.
Hours of Employment will be credited for employment with other members of an
affiliated service group (under Code Section 414(m)), a controlled group of
corporations (under Code Section 414(b)), or a group of trades or businesses
under common control (under Code Section 414(c)), of which the Employer is a
member, and any other entity required to be aggregated with such Employer
pursuant to Code Section 414(o).
Hours of Employment will also be credited for any individual considered an
Employee for purposes of the Plan under Code Section 414(n) or Section 414(o).
Solely for purposes of determining eligibility to participate, “Hour of
Employment” shall include service performed by an individual for an Employer or
members of an affiliated service group (under Code Section 414(m)), a controlled
group of corporations (under Code Section 414(b)), or a group of trades or
businesses under common control (under Code Section 414(c)), of which the
Employer is a member, during the period such individual is not a member of a
class of Employees otherwise eligible to participate in the Plan.

22.   “IRS” means the United States Internal Revenue Service.   23.   “Leave of
Absence” means an absence authorized by an Employee’s Employer on a uniform
basis, in accordance with Article X, Section 8.

 

4

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24.   “Matching Amounts” means, with respect to a Member, the contributions made
on behalf of the Member by the Employer pursuant to Article III, Section 2(A)
and earnings thereon.   25.   “Member” means an Employee enrolled in the
membership of the Plan under Article II, Section 2. Notwithstanding the
foregoing, Member shall include a former Member, except for purposes of
Article III (other than Section 6 thereof) of the Plan.   26.   “Month” means
any calendar month.   27.   “Non-highly Compensated Employee” means an Employee
who is not a Highly Compensated Employee.   28.   “Normal Retirement Age” means
the Member’s sixty-fifth (65th) birthday.   29.   “Plan” or “Pentegra DC Plan”
means the Pentegra Defined Contribution Plan for Financial Institutions
established herein and as from time to time amended.   30.   “Plan Year” means a
12 month period ending December 31.   31.   “Profit Sharing Account” means the
Plan account established in respect of each Member pursuant to Article III,
Section 8(B)(2) and Article V which shall be maintained separate from any other
Account established in respect of such Member under the Plan. Except as
otherwise indicated under the Plan, a Member’s Profit Sharing Account shall not
include his Profit Sharing Rollover Amounts.   32.   “Profit Sharing Rollover
Amounts” means, with respect to an Employee or Member whose Employer
participates in the Plan solely under Article III, Section 8 (Profit Sharing
Feature), any amounts (and earnings thereon) transferred or contributed on
behalf of such Employee or Member pursuant to Article III, Section 6(C).   33.  
“Qualified Default Investment Alternative” or “QDIA” means an investment
alternative under Article IV, Section 2 that satisfies the requirements of
Section 404(c)(5) of ERISA and U.S. Department of Labor Regulations Section
2550.404c-5(e), and any guidance issued thereunder, and which has been approved
by the Board.   34.   “Regular Account” means the Plan account established and
maintained in respect of a Member pursuant to Article III, Section 2(C) and
Article V, and shall include all amounts (and earnings thereon) credited thereto
on behalf of the Member pursuant to the provisions of Article III.   35.  
“Regulations” means the applicable regulations issued under the Code, ERISA or
other applicable law, by the IRS, the DOL or any other governmental authority
and any proposed or temporary regulations or rules promulgated by such
authorities pending the issuance of such regulations.   36.   “Rollover Account”
means the Plan account established in respect of each Member pursuant to
Article III, Section 6(C) and Article V which shall be maintained separate from
any other Account established in respect of such Member under the Plan. For
purposes of Article III, Section 4(H), Article VII, Sections 1 and 2, and
Article VIII, a Member’s Rollover Account shall not include his Profit Sharing
Rollover Amounts unless otherwise indicated therein.

 

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37.   “Roth Elective Deferral” means an elective deferral that is:
(a) designated irrevocably by the Member at the time of the cash or deferred
election as a Roth contribution that is being made in lieu of all or a portion
of the pre-tax elective deferrals the Member is otherwise eligible to make under
the Plan; and (b) treated by the Employer as includible in the Member’s income
at the time the Member would have received that amount in cash if the Member had
not made a cash or deferred election.   38.   “Roth 401(k) Account” means the
Plan account established and maintained in respect of a Member pursuant to
Article III, Section 4(D) and Article V, and shall include all amounts (and
earnings thereon) credited thereto on behalf of the Member pursuant to the
provisions of Article III, Section 4(D) and including Roth Elective Deferrals
made pursuant to an Employer’s automatic enrollment program under Article III,
Section 10, where such automatic 401(k) Elective Deferrals are Roth Elective
Deferrals.   39.   “Safe Harbor CODA Account” means the Plan account established
in respect of each Member pursuant to Article III, Section 4(J) and Article V
which shall be maintained separate from any other Account established in respect
of such Member under the Plan.   40.   “Salary” means regular basic monthly (or
other periodic) salary or wages, exclusive of special payments such as overtime,
bonuses, fees, deferred compensation (other than amounts deferred pursuant to a
Member’s election under Article III, Section 4), severance payments, and
contributions by the Employer under this or any other plan (other than before
tax contributions made on behalf of a Member under a Code Section 125 cafeteria
plan or contributions made under Code Section 132(f), unless the Employer
specifically elects to exclude such contributions). Commissions shall be
included at the Employer’s option within such limits, if any, as may be set by
the Employer and applied uniformly to all its commission Employees. In addition,
Salary may also include, at the Employer’s option, special payments such as
(i) overtime or (ii) overtime plus bonuses. If an Employer elects to generally
include bonuses in the definition of Salary, the Employer may nevertheless elect
to exclude a particular type of bonus (e.g, long term incentive compensation
payments), provided such exclusion is applied uniformly to all its Employees.  
    If an Employer elects to include the special payments enumerated in (i) or
(ii) above in the definition of Salary or, if the Employer elects to include
commissions in the definition of Salary, such Salary shall be determined based
on the amounts received by the Member during the relevant determination period.
Otherwise, unless an Employer specifically requests to include Salary changes
received by a Member during the relevant determination period and is granted
permission by the Board, a Member’s monthly Salary rate is one twelfth of his
annual Salary rate as of each January 1. If commissions are included in Salary,
unless an Employer specifically requests to include commissions received by a
Member during the relevant determination period and is granted permission by the
Board, they shall be calculated on a uniform basis based on the commissions
received by the Member during the 12 month period prior to the determination
period. As an alternative to the foregoing definition, at the Employer’s option,
Salary may be defined to include total taxable compensation reported on the
Member’s IRS Form W-2, plus deferrals, if any, pursuant to Section 401(k) of the
Code, Section 125 of the Code, and Section 132(f) of the Code (unless the
Employer specifically elects to exclude such Section 125 and Section 132(f)
deferrals), but excluding the payment of compensation deferred from previous
years. In no event, may a Member’s Salary for any Plan Year exceed for purposes
of the Plan $200,000 or, effective January 1, 1994, $150,000 (adjusted for cost
of living to the extent permitted by the Code and the IRS Regulations).

 

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    For Plan Years beginning after December 31, 1996, the family member
aggregation rules of Code Section 414(q)(6) (as in effect prior to the Small
Business Job Protection Act of 1996) are eliminated.       The annual Salary of
each Member taken into account in determining allocations, shall not exceed
$230,000 (in 2008) as adjusted for cost-of-living increases in accordance with
section 401(a)(17)(B) of the Code.   41.   “Spouse” or “Surviving Spouse” means
the individual to whom a Member or former Member was married on the date such
Member withdraws his Account, or if such Member has not withdrawn his Account,
the individual to whom the Member or former Member was married on the date of
his death.   42.   “Supplemental Amounts” means, with respect to a Member, the
contributions made on behalf of the Member by the Employer pursuant to
Article III, Section 3 and earnings thereon.   43.   “Trustee” means the Trustee
or Trustees provided for in Article IX, Section 2.   44.   “Trust Fund” means
the Trust Fund or Funds established by the Trust Agreement or Agreements
provided for in Article IX, Section 2.   45.   “Unit” means the unit of measure
described in Article V of a Member’s proportionate interest in the Plan’s
Investment Funds.   46.   “Valuation Date” means any business day of any month
for the Trustee, except that in the event the underlying portfolios of any
Investment Fund cannot be valued on such date, the Valuation Date for such
Investment Fund shall be the next subsequent date on which the underlying
portfolio(s) can be valued. Valuations shall be made as of the close of business
on such valuation date(s).   47.   “Year of Employment” means a 12-month period
of Employment.   48.   “Year of Service” means any Plan Year during which an
individual completed at least 1,000 Hours of Employment, or satisfied any
alternative requirement, as determined by the Board in accordance with any
applicable regulations issued by the DOL and the IRS.   49.   The masculine
pronoun wherever used shall include the feminine pronoun.

 

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ARTICLE II PARTICIPATION AND MEMBERSHIP
Section 1. Employer Participation
Any financial institution, or other organization serving it, may apply to the
Board for participation in the Plan if: (A) as of its Commencement Date and in
accordance with Section 410(b) of the Code and the IRS Regulations (i) the
percentage of Non-highly Compensated Employees who will benefit under the Plan
is at least 70% of the percentage of Highly Compensated Employees who will
benefit under the Plan (excluding such employees as are permitted to be excluded
under IRS Regulations), or (ii) the average benefit percentage test (as defined
in Section 410(b)(2) of the Code and the IRS Regulations) will be satisfied with
respect to the Employer. The applicant shall submit the formal application and
all required information, and the Board, in its discretion, shall decide upon
admittance and determine the Commencement Date. The Board may, in its discretion
and at such times as it may determine, require an affirmative showing by an
Employer of its continued compliance with the requirements of Section 410(b) of
the Code and IRS Regulations. Initial and continued participation shall be
subject to the determination of the IRS that the Plan and the Trust Fund are tax
qualified and tax exempt under Sections 401(a) and 501(a) of the Code,
respectively. In addition, any Employee who participated in the Plan but who has
been transferred to a governmental or quasi-governmental agency serving the
financial industry shall, notwithstanding anything to the contrary in this
Section, be permitted to continue to participate in the Plan; provided that, in
such case, such Employee’s employing agency has adopted the Plan.
An Employer may, at its option, subject to the provisions of the Plan, adopt
different Plan features and provisions (basis of participation) for different
definable groups of employees, including for employees acquired pursuant to a
merger or acquisition. The Employer will be required to demonstrate that this
Section 1 and all other applicable Code and IRS Regulations continue to be
satisfied following the adoption of different bases of participation for
separate and definable groups of employees.
Section 2. Employee Membership

(A)   Employer contributions on behalf of any Member shall be conditioned upon
the Member making contributions under Article III, Section 1, except in the case
of the basic contribution feature described in Article III, Section 2; the
supplemental contribution feature (Formula (2)) described in Article III,
Section 3; the 401(k) Feature described in Article III, Section 4(B); the Safe
Harbor CODA non-elective contribution feature described in Article III,
Section 4(J); or the Profit Sharing Feature described in Article III, Section 8.
  (B)   Every Employee (other than Employees who, at the election of the
Employer, are excluded from participation under this Section 2) shall be
eligible for membership in the Plan on the later of:

  (1)   His Employer’s Commencement Date, or     (2)   The first day of the
month, or, at the election of the Employer, the first day of the calendar
quarter, coincident with or next following his satisfaction of one or more of
the eligibility requirements described hereunder, as designated by his Employer:
(i) the Employee’s first day of Employment; (ii) the completion of any number of
months not to exceed 12 consecutive months or (iii) the completion of one Year
of Service or two Years of Service, and/or (iv) if the Employer so elects, it
may adopt a minimum age requirement from age 18 to age 21. An Employer, at its
election and in a uniform and nondiscriminatory manner, may waive the
eligibility requirement(s) for participation specified under this paragraph
(B) for (1) all Employees, or (2) all those Employees employed on or up to
12 months after the Employer’s Commencement Date under the Plan.

 

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      The eligibility requirement(s) designated by the Employer shall apply
uniformly to all Plan Features elected by the Employer. Notwithstanding the
foregoing, the Employer may elect to establish as an eligibility requirement (as
a minimum service requirement, minimum age requirement, or both) for Employer
matching contributions, Employer basic contributions, Employer supplemental
contributions, Employer Safe Harbor CODA contributions, and/or Employer Profit
Sharing contributions (i) the completion of any number of months not to exceed
12 consecutive months, or (ii) the completion of one 12-consecutive-month
period, and/or (iii) if the Employer so elects, it may adopt a minimum age
requirement from age 18 to age 21. If, pursuant to Section 410(b)(4)(B), the
Employer applies Code Section 410(b) separately to the portion of the Plan
(within the meaning of Code Section 414(l)) that benefits only Employees who
satisfy the eligibility requirements of this Section 2 that are lower than age
twenty-one (21) and completion of a Year of Service, the Plan is treated as two
separate plans for purposes of Code Section 401(k). Accordingly, if the Employer
elects to make a Safe Harbor CODA contribution, then such contribution shall not
be made on behalf of Employees who have not attained age twenty-one (21) and
completed a Year of Service. However, in such a case, Section 401(k) Elective
Deferrals and the matching contribution made pursuant to Article III,
Section 2(A) on behalf of those Employees must satisfy Article III,
Sections 4(E), (F) and (G) and Article III, Section 7.         Subject to the
requirements of the Code, where an Employee who participated as a Member under
the Plan terminates employment with an Employer and thereafter is reemployed by
the same (or a different) Employer, such Employee, subject to any applicable
break in service rules, shall participate immediately upon returning to
employment with respect to the Profit Sharing Feature and the Basic and
Supplemental Employer Contribution and shall participate on the next applicable
payroll date with respect to Member Contributions, Matching Employer
Contributions, Safe Harbor Employer Contributions and the 401(k) Feature, as and
to the extent any such contribution feature is then maintained by such
Employee’s Employer and the Member has satisfied the eligibility requirements
for receiving such Employer contributions. In the case of an Employer that
adopts a 401(k) Feature under Article III, Section 4, the eligibility
requirement(s) under such Feature, and any other Plan Feature adopted by the
Employer in addition to the 401(k) Feature, shall not exceed the period
described in clause (i) above, and, at the election of the Employer, attainment
of an age as elected by the Employer from age 18 to age 21 as described in
clause (iii) above. In the event a Member is no longer part of an eligible class
of Employees and thus becomes ineligible to participate in the Plan, such
Employee, subject to any applicable break in service rules, shall participate
immediately upon returning to an eligible class of Employees with respect to the
Profit Sharing Feature and the Basic and Supplemental Employer Contribution and
shall participate on the next applicable payroll date with respect to Member
Contributions, Matching Employer Contributions, Safe Harbor CODA contributions,
and the 401(k) Feature, as and to the extent any such contribution feature is
then maintained by such Employee’s Employer and the Member has satisfied the
eligibility requirements for receiving such Employer contributions.

 

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(C)   Where an Employer designates a one Year of Service or two Years of Service
eligibility requirement, an Employee must complete at least 1,000 Hours of
Employment during each 12-consecutive-month eligibility computation period
(measured from his date of Employment and then from each January 1, thereafter).
Where an Employer designates an eligibility waiting period of less than
12 months, an Employee must, for purposes of eligibility, complete a required
number of hours (measured from his date of Employment and each anniversary
thereafter) which is arrived at by multiplying the number of months of the
eligibility waiting period requirement by 831/3; provided, however, if the
Employee completes at least 1,000 Hours of Employment during the
12-consecutive-month eligibility computation period (measured from his date of
Employment and then from each January 1 thereafter) the Employee shall be deemed
to satisfy the eligibility waiting period designated by the Employer.

(D) (1)    The Employer shall notify each Employee of his membership in the Plan
and shall furnish him with an enrollment application in order that he may elect
to make or receive contributions on his behalf under Article III at the earliest
possible date consonant with this Article.     (2)   All Employees whose
Employment commences after the expiration date of the Employer’s waiver of the
eligibility requirement(s) shall be enrolled in the Plan in accordance with the
eligibility requirement(s) designated in Paragraph (B) above.     (3)   If it is
determined that an Employee who is eligible to be enrolled has, for any reason,
not been so notified, such Employee shall be furnished an application by his
Employer and be retroactively enrolled, in accordance with the Plan and
applicable law, as of the date he first became eligible, upon receipt by the
Board of the application properly executed. In accordance with the Plan and
applicable law, the Employer may be required to make certain contributions, and
the Employee may, at his election, make any contributions he could have made,
had the Employee been enrolled on such earlier date. The Account of an Employee
who is retroactively enrolled shall, upon such enrollment, consist solely of the
number of Units which, as of the Valuation Date coincident with or next
following such enrollment, may be credited to him pursuant to Article V based
upon the amount of contributions received by the Board.

(E)   An Employee shall become a Member on his Enrollment Date which shall be
the date on which he becomes eligible. However, no person shall under any
circumstances become a Member unless and until his enrollment application is
filed with, and accepted by, the Plan. If an Employee fails to complete the
enrollment form furnished to him, the Employer shall do so on his behalf.

 

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(F)   At the option of the Employer, an Employee who is employed on or prior to
his Employer’s Commencement Date may make a one time election to waive
participation in the Plan on the Employer’s Commencement Date.   (G)  
Membership under all provisions of the Plan shall terminate upon the earlier of
(a) a Member’s termination of Employment and payment to him of his entire vested
interest, or (b) his death.   (H)   The following Employees, at the Employer’s
election, may be excluded from participation in the Plan:

  (i)   Employees who are included in a unit of Employees covered by a
collective bargaining agreement between the Employee representatives and one or
more Employers if there is evidence that retirement benefits were the subject of
good faith bargaining between such Employee representatives and such
Employer(s). For this purpose, the term “Employee representative” does not
include any organization where more than one-half of the membership is comprised
of owners, officers and executives of the Employer;     (ii)   Employees who are
non-resident aliens and who receive no earned income from the Employer which
constitutes income from sources within the United States;     (iii)   Employees
who are employed on an hourly basis. Notwithstanding, if the Employee is
employed on an hourly basis following the adoption date of the Plan by the
Employer, but prior to the adoption of an hourly exclusion by his Employer, such
employee shall will continue to receive benefits on the same basis as a regular
salaried Member, despite classification as an hourly employee unless the
employee is otherwise excluded from participation in the Plan at the election of
the Employer under this Section 2(H). In the event an individual who was not
part of an eligible class of Employees becomes part of an eligible class, such
individual will be eligible to participate in the Plan in accordance with the
provisions of this Article II;     (iv)   Employees who are not regular
full-time or part-time Employees (Flex Staff Employees);     (v)   Leased
Employees within the meaning of Section 414(n)(2) of the Code; and     (vi)  
Employees hired under a written agreement which precludes membership and
provides for a specific period of employment not in excess of one year.

 

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ARTICLE III CONTRIBUTIONS
Section 1. Contributions by Members
A Member of an Employer may elect to make contributions under the Plan (in 1%
increments) up to a maximum percentage specified by the Employer not to exceed
100% of his Salary. Each Employer shall elect whether: (A) its Members’
contributions must be based on a percentage of Salary (in 1% increments);
(B) its Members’ contributions must be based on a flat dollar amount of Salary;
or (C) to permit its Members to make contributions based on either a percentage
or flat dollar amount of Salary. A Member may change his contribution rate or
suspend his contributions at any time, but reduced or suspended contributions
may not subsequently be made up.
Section 2. Regular Contributions by Employer

(A)   Matching Employer Contributions       Under this Section, an Employer
shall contribute to the Plan on behalf of each of its Members (subject to any
possible suspension under Article VII) an amount equal to a percentage (as
specified by the Employer) of the Member’s contributions (determined, if elected
by the Employer, on the basis of the Plan Year) not in excess of a maximum of
50% (as specified by the Employer) of his Salary. Such contributions, unless
otherwise elected by the Employer, shall be made on a payroll period basis.
Notwithstanding, the Employer may elect to determine Employer matching
contributions based upon the entire Plan Year. A Member’s Salary and any
limitation on matching contributions shall be applied based upon the applicable
payroll period, unless the Employer elects to determine matching contributions
based upon the Plan Year. In such instance, a Member’s Salary and the applicable
limits for the entire Plan Year shall be used to determine Employer matching
contributions.       The percentage chosen by the Employer shall be in
accordance with the schedule of contribution formulas listed below. Such
contribution formula must be uniformly applicable to all its Members on a
payroll period basis (or on the basis of such other period as elected by the
Employer), except where the Employer has elected to provide a separate basis of
participation for different definable groups of employees under the Plan.

             
Formula 0
  —       0% of the Member’s contributions.
 
           
Formula 25
  —       25% of the Member’s contributions.
 
           
Formula 50
  —       50% of the Member’s contributions.
 
           
Formula 75
  —       75% of the Member’s contributions.
 
           
Formula 100
  —       100% of the Member’s contributions.
 
           
Formula Step (1)
  —   (i)   50% of the Member’s contributions through the third year of
Employment.
 
           
 
      (ii)   75% of the Member’s contributions during the fourth and fifth years
of Employment.
 
           
 
      (iii)   100% of the Member’s contributions upon completion of 5 or more
years of Employment.

 

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Formula Step (2)
  —   (i)   100% of the Member’s contributions through the third year of
Employment.
 
           
 
      (ii)   150% of the Member’s contributions during the fourth and fifth
years of Employment.
 
           
 
      (iii)   200% of the Member’s contributions upon completion of 5 or more
years of Employment.
 
            Formula Step (3)   —   A percentage of the Member’s contributions
chosen by the Employer through the Member’s third year of Employment with an
increased percentage of the Member’s contributions as elected by the Employer to
apply during the fourth and fifth years of Employment and a further increased
percentage of the Member’s contributions to apply upon completion of 5 or more
years of Employment.
 
            Formula 150   —   150% of the Member’s contributions.
 
            Formula 200   —   200% of the Member’s contributions.

Notwithstanding the matching formulas provided above, an Employer may at its
option, specify the percentage of the Member’s contributions which will be
matched by the Employer.

(B)   Basic Employer Contributions       An Employer may, at its option, make a
basic contribution equal to a uniform percentage (as specified by the Employer)
of each of its Members’ Salaries for each month or payroll period, as
applicable, provided that in no event shall such percentage exceed 15%. The
percentage so specified may be elected or changed by the Employer by filing a
properly completed form with the Pentegra DC Plan Office. No more than one such
change may be made by an Employer during any year. An employer may restrict the
allocation of such basic contribution to those Members who were employed with
the Employer on the last working day of the month or payroll period for which
the basic contribution is made.       At the election of the Employer, any basic
contribution shall be credited to its Members’ 401(k) Accounts or Regular
Accounts on a uniform basis.   (C)   Regular Accounts       A Regular Account
shall be established and maintained for each Member on whose behalf
contributions are made to the Plan pursuant to Section 1 or 2 of this Article.

 

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Section 3. Supplemental Contributions by Employer
An Employer may, at its option, make a supplemental contribution under Formula
(1) or (2) below:
Formula (1) — A uniform percentage (as specified by the Employer) of each
Member’s contributions not in excess of a maximum percentage (if the Employer
elects to impose such a maximum) of the Member’s Salary which were received by
the Plan during the preceding Plan Year. Such supplemental contribution may be
made on or before the last day of February in any year on behalf of all those
Members who were in its employ on the last working day of the preceding Plan
Year. For purposes of this Section, Members on a Type 1 non-military Leave of
Absence (as defined under Article I, Paragraph (23) and Article X,
Section 8(B)(1)), or a Type 4 military Leave of Absence (as defined under
Article I, Paragraph (23) and Article X, Section 8(B)(4)), shall be deemed
employed on the last working day of such preceding Plan Year.
Formula (2) — A uniform dollar amount per Member or a uniform percentage limited
to a specific dollar amount, if elected by the Employer, of each Member’s Salary
(i) for the preceding Plan Year or fiscal year, regardless of whether the Member
was eligible to participate in the Plan during the entire Plan Year (or fiscal
year), or (ii) if an Employer so elects with respect to all of its Members, for
the portion of the preceding Plan Year (or fiscal year) during which the Member
was eligible to participate in the Plan. Such supplemental contribution may be
made within the time prescribed by law, including extensions of time, for filing
of the Employer’s federal income tax return on behalf of all those Members who
were in its employ on the last working day of the preceding Plan Year (or, at
the Employer’s option, the Employer’s fiscal year). Notwithstanding anything
herein to the contrary, Employer contributions under Article III, Sections 2(A)
and 2(B) and Formula 2 of this Article III, Section 3 shall not exceed, in the
aggregate, 25% of the Member’s Salary for such Plan Year. The Employer may, at
its option, elect to make a contribution under this paragraph to only those
Members whose Salary is less than an amount to be specified by the Employer to
the extent that such Salary limit is less than the dollar amount under Section
414(q) of the Code for such year.
For purposes of this Section, Members on a Type 1 non-military Leave of Absence
(as defined under Article I, Paragraph (23) and Article X, Section 8(B)(1)), or
a Type 4 military Leave of Absence (as defined under Article I, Paragraph (23)
and Article X, Section 8(B)(4)), shall be deemed employed on the last working
day of such preceding Plan Year (or fiscal year). The percentage contributed
under this Formula (2) shall be limited in accordance with the Employer’s
matching formula and basic contribution rate under Section 2 of this Article
such that the sum of the Employer’s Formula (2) supplemental contribution plus
the Employer basic contribution and the maximum Employer matching contribution
under Section 2 of this Article shall not exceed 15% of Salary for such year.
At the election of the Employer, any supplemental contribution shall be credited
either to its Members’ 401(k) Accounts (but not to the Member’s Roth 401(k)
Account) or Regular Accounts on a uniform and nondiscriminatory basis.

 

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Section 4. 401(k) Features

(A)   An Employer may, at its option, adopt either the 401(k) Feature under
Paragraph (B) of this Section or one of the 401(k) Features described in
Paragraph (C) of this Section. In addition, an Employer may elect, in
conjunction with electing a Paragraph (B) or Paragraph (C) 401(k) Feature, a
Roth Elective Deferral feature under Paragraph (D). Under any 401(k) Feature,
there shall be established for each of its Members a “401(k) Account.” A
Member’s 401(k) Account shall be invested pursuant to his overall directions
under Article IV but maintained separately from his Regular Account (consisting
of the value of contributions made under Sections 1 and 2 of this Article).
Based on the Employer’s election in accordance with Article III, Section 1, a
Member contributing under this 401(k) feature shall be permitted to make
deferrals based upon a uniform percentage (in whole percentages), or flat dollar
amount of his Salary, as his Employer shall elect, so that the Member reaches
the Code Section 402(g) limit by the end of the Plan Year. Should such Member
not reach the 402(g) limit by the last contribution reporting period, the Member
will be permitted to make a final 401(k) Elective Deferral which will enable a
Member to precisely reach the limit under 402(g) of the Code. Such final
contribution may be made based on a percentage of the Member’s compensation
which is not a whole percentage. Notwithstanding anything in this Article III,
Section 4 to the contrary, and in accordance with IRS
Regulation Section 1.401(k)-1(a)(3)(iii), Member contributions may not be made
prior to the Member’s performance of services with respect to which the Member
contributions are made or, if earlier, when the compensation on which the Member
contribution is based would be currently available.   (B)   Option 1 — Under the
401(k) Feature provided in this Paragraph (B), each Member may elect to defer 1%
up to a maximum percentage specified by the Employer not to exceed 100% (in 1%
increments) of his Salary or, subject to Article III, Section 3, a flat dollar
amount of his Salary, or, if permitted by the Employer, either a percentage of
his Salary or flat dollar amount, as the Member shall elect, and direct his
Employer to contribute such amount to his 401(k) Account. Such deferral to the
401(k) Account shall reduce the Member’s contribution under Section 1 of this
Article.       The Employer shall contribute to each Member’s 401(k) Account an
amount equal to 2% of his Salary not in excess of $3,750, subject to Article X,
Section 1 of the Plan, unless the Member has deferred amounts of his Salary
pursuant to the preceding paragraph, in which case the Employer’s 2%
contribution will be allocated to the Member’s Regular Account. The amount which
the Employer would otherwise be required to contribute with respect to each
Member under Section 2 of this Article shall be reduced, but not below zero, by
the amount which it contributes with respect to the Member under this Paragraph
(B). Notwithstanding anything in this Paragraph to the contrary, should a
Member’s deferrals to the 401(k) Account reach the maximum specified under the
provisions of Paragraph (I) below in any Plan Year, the Employer’s 2%
contribution will be allocated to the Member’s Regular Account for the remainder
of such Plan Year.

The Employer, at its option, may adopt either of the two additional 401(k)
Features described below:

(C)   Option 2 — Under this Feature, each Member may elect to make deferrals to
his 401(k) Account and/or contributions to his Regular Account in an amount of
1% of, or subject to Article III, Section 1, a flat amount of, Salary, or, if
permitted by the Employer, either a percentage of his Salary or flat dollar
amount, up to a maximum percentage specified by the Employer not to exceed 100%
(in 1% increments) of his Salary, except that amounts deferred to the 401(k)
Account shall reduce the Member’s contribution under Section 1 of this Article.
Amounts contributed under this Option 2 may be allocated between the 401(k)
Account and/or the Regular Account based on multiples of 1%. Notwithstanding
anything herein to the contrary, a Member making a Roth 401(k) Elective Deferral
may only make such deferral to his 401(k) Account.

 

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    If so adopted, Employer contributions under the Plan, which shall be made on
behalf of each Member in an amount equal to a percentage of the Member’s 401(k)
Elective Deferrals to his 401(k) Account and contributions to his Regular
Account as specified by the Employer under Section 2 of Article III of his
Salary, shall first be allocated to a Member’s 401(k) Account until total Member
deferrals and Employer contributions allocated to the Member’s 401(k) Account
equal a percentage specified by the Employer. Thereafter, the Employer
contributions, with respect to both Member 401(k) Elective Deferrals and Regular
contributions, shall be contributed to the Member’s Regular Account in an amount
pursuant to the percentage elected in the preceding sentence.      
Notwithstanding the Employer election made under this Option 2, if the Member
has deferred amounts of his Salary equal to the maximum specified under the
provisions of Paragraph (I) below, the Employer shall contribute the remaining
Employer contributions to the Member’s Regular Account.       Option 3 — Under
this Feature each Member may make deferrals to his 401(k) Account, but not
contributions to his Regular Account. The Employer shall contribute under the
Plan on behalf of each Member an amount equal to a percentage, specified by the
Employer under Section 2 of Article III, of the Member’s 401(k) Elective
Deferrals to his 401(k) Account. The Employer’s contributions under this Feature
shall be made to the Member’s Regular Account.   (D)   Roth Elective Deferrals.

  (1)   General Application.

  (a)   This subsection will apply to contributions beginning June 1, 2006.    
(b)   As of June 1, 2006, if an Employer so elects, the Plan will accept Roth
Elective Deferrals made on behalf of Members. A Member’s Roth Elective Deferrals
will be allocated to a separate account maintained for such deferrals as
described in Paragraph (D)(2).     (c)   Unless specifically stated otherwise or
as provided under applicable law, Roth Elective Deferrals will be treated as
elective deferrals for all purposes under the Plan.

  (2)   Separate Accounting.

  (a)   Contributions and withdrawals of Roth Elective Deferrals will be
credited and debited, respectively, to the Roth 401(k) Account maintained for
each Member.

 

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  (b)   The Plan will maintain a record of the amount of Roth Elective Deferrals
in each Member’s Roth 401(k) Account.     (c)   Gains, losses and other credits
or charges must be separately allocated on a reasonable and consistent basis to
each Member’s Roth 401(k) Account and the Member’s other Accounts under the
Plan.     (d)   No contributions other than Roth Elective Deferrals and properly
attributable earnings will be credited to Member’s Roth 401(k) Account.

(E)   The actual deferral percentages for Highly Compensated Employees shall, in
accordance with the Code and IRS Regulations, satisfy either (1) or (2) as
follows:

  (1)   Prior Year Testing:         Notwithstanding any other provision of this
Section 4, the actual deferral percentage for a Plan Year for Highly Compensated
Employees for such Plan Year and the prior year’s actual deferral percentage for
Members who were Non-highly Compensated Employees for the prior Plan Year must
satisfy one of the following tests: (a) the actual deferral percentage for a
Plan Year of those Employees who are Highly Compensated Employees for the Plan
Year shall not exceed the prior year’s actual deferral percentage of those
Members who are Non-highly Compensated Employees for the prior Plan Year
multiplied by 1.25; or (b) the actual deferral percentage for a Plan Year for
Members who are Highly Compensated Employees for the Plan Year shall not exceed
the prior year’s actual deferral percentage for Members who were Non-highly
Compensated Employees for the prior Plan Year multiplied by 2.0, provided that
the actual deferral percentage for Members who are Highly Compensated Employees
does not exceed the actual deferral percentage for Members who were Non-highly
Compensated Employees in the prior Plan year by more than 2 percentage points.  
      For the first Plan Year that the Plan permits any Member to make elective
deferrals and this is not a successor plan, for purposes of the foregoing tests,
the prior year’s Non-highly Compensated Employees’ actual deferral percentage
shall be 3 percent unless the Employer has elected to use the current Plan
Year’s actual deferral percentage for these Members. The Employer may elect to
change from the Prior Year Testing method to the Current Year Testing method in
accordance with the Code and IRS Regulations.     (2)   Current Year Testing:  
      If elected by the Employer, the actual deferral percentage tests in
(a) and (b) above, will be applied by comparing the current Plan Year’s actual
deferral percentage for Members who are Highly Compensated Employees for such
Plan Year with the current Plan Year’s actual deferral percentage for Members
who are Non-highly Compensated Employees for such year. Once made, this election
can only be changed and the Prior Year Testing method applied if the Plan meets
the requirements for changing to Prior Year Testing set forth in applicable IRS
regulations.

 

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      For purposes of this Section 4, the “actual deferral percentage” for a
Plan Year means, for a specified group of Members for a Plan Year, the average
of the ratios (calculated separately for each Member in such group) of (a) the
amount of deferrals and/or contributions made to the Member’s 401(k) Account for
the Plan Year, to (b) the amount of the Member’s compensation (as defined in
Section 414(s) of the Code) which, at the Employer’s election, shall include the
compensation required to be reported under Section 6041 or 6051 of the Code
(i.e., “W-2 compensation”) for the Plan Year or, alternatively, where
specifically elected by the Employer, for only that part of the Plan Year during
which the Member was eligible to participate in the Plan. An Employee’s actual
deferral percentage shall be zero if no 401(k) Elective Deferral or contribution
is made by him or on his behalf for such applicable Plan Year. If the Plan and
one or more other plans which include cash or deferred arrangements are
considered as one plan for purposes of Sections 401(a)(4) and 410(b) of the
Code, the cash or deferred arrangements included in such plans shall be treated
as one arrangement for purposes of this Section 4.         In accordance with
IRS Regulations, the actual deferral percentage of a Member who is a Highly
Compensated Employee and who is eligible to participate in two or more cash or
deferred arrangements maintained by his Employer shall be determined by treating
all such cash or deferred arrangements as a single arrangement.     (3)  
Notwithstanding anything herein to the contrary, and in accordance with IRS
Regulation Section 1.401(k)-2(a)(6)(iv) and 1.401(m)-2(a)(6)(v), no qualified
nonelective contributions shall be taken into account in determining the actual
deferral percentage for a Plan Year for a Non-highly Compensated Employee under
the Plan to the extent such contributions exceed for such Non-highly Compensated
Employee the greater of (a) 5% of the Non-highly Compensated Employee’s
compensation (as defined in Code Section 414(s)) and (b) the product of (i) two
times the “Plan’s representative contribution rate” (within the meaning, as
applicable, of IRS Regulation Section 1.401(k)-2(a)(6)(iv) and
Section 1.401(m)-2(a)(6)(v) and (ii) the Non-highly Compensated Employee’s
compensation (as defined in Code Section 414(s)).

(F)   The Pentegra DC Plan Office shall determine as of the end of the Plan Year
whether one of the actual deferral percentage tests specified in Paragraph
(E) above is satisfied for such Plan Year. This determination shall be made
after first determining the treatment of excess deferrals within the meaning of
Section 402(g) of the Code under Paragraph (I) below.

  (1)   In the event that neither of such actual deferral percentage tests is
satisfied, the Pentegra DC Plan Office shall, to the extent permissible under
the Code and the IRS Regulations, refund the excess contributions for the Plan
Year in the following order of priority: by (i) refunding such amounts deferred
by the Member and allocated to his 401(k) Account, or Roth 401(k) Account in
accordance with Paragraph F(2) below which were not matched by his Employer (and
any earnings and losses allocable thereto), and (ii) refunding amounts deferred
for such Plan Year by the Member and allocated to his 401(k) Account, or Roth
401(k) Account in accordance with Paragraph (F)(2) below, (and any earnings and
losses allocable thereto) and, in accordance with the Code and applicable IRS
Regulations, forfeiting the amounts contributed for such Plan Year by the
Employer with respect to the Member’s 401(k) Elective Deferrals that are
returned pursuant to this Paragraph (and any earnings and losses allocable
thereto).

 

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  (2)   In the case of a distribution of excess contributions, the Plan will
distribute pre-tax elective deferrals first.     (3)   The distribution of such
excess contributions shall be made to Highly Compensated Members to the extent
practicable before the 15th day of the third month immediately following the
Plan Year for which such excess contributions were made, but in no event later
than the end of the Plan Year following such Plan Year or, in the case of the
termination of the Plan in accordance with Article XII or termination of
Employer participation in the Plan in accordance with Article XI, no later than
the end of the twelve-month period immediately following the date of such
termination. For purposes of this Section 4, “excess contributions” means, with
respect to any Plan Year, the excess of the aggregate amount of 401(k) Elective
Deferrals and/or contributions (and any earnings and losses allocable thereto)
made to the 401(k) Accounts of Highly Compensated Members for such Plan Year,
over the maximum amount of such deferrals and/or contributions that could be
made to the 401(k) Accounts of such Members without violating the requirements
of Paragraph (E) above, determined by reducing 401(k) deferrals and/or
contributions made by or on behalf of Highly Compensated Members in order of the
actual deferral percentages beginning with the Highly Compensated Employee with
the largest 401(k) Elective Deferral amount for the Plan Year until such amount
is reduced to be equal to the Highly Compensated Employee with the next largest
401(k) Elective Deferral amount. The procedure described in the preceding
sentence shall be repeated until all excess contributions have been eliminated
and, as applicable, refunded. Notwithstanding anything herein to the contrary,
and in accordance with IRS Regulation Section 1.401(k)-2(b)(2)(iv), the income
allocable to the excess contributions to be refunded shall be equal to the
allocable gain or loss for the Plan Year in question and, as applicable, for the
“gap period” following the close of the Plan Year and ending on the date that is
seven days preceding the distribution date. The Plan shall determine the
allocable income in accordance with IRS
Regulation Section 1.401(k)-2(b)(2)(iv)(C) or (D) or, in accordance with IRS
Regulation Section 1.401(k)-2(b)(2)(iv)(B), any reasonable method for computing
the income allocable to the excess contribution.

(G)   Notwithstanding the provisions of Paragraphs (E) and (F) above, the amount
of excess contributions to be distributed pursuant to Paragraph (F) above, with
respect to a Member for a Plan Year, shall be reduced by any excess deferrals
distributed to such Member for such Plan Year pursuant to Paragraph (I) below.

 

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(H)   A withdrawal from the vested portion of a Member’s 401(k) Account may be
made only upon (a) attainment of age 591/2, (b) hardship (as determined by the
Board in accordance with this Paragraph (H)), (c) termination of Employment,
(d) death, (e) disability or (f) termination of an Employer’s participation in
the Plan provided the Employer certifies in writing in such form as is
satisfactory to counsel that no “alternative defined contribution plan” within
the meaning of Code Section 401(k)(10) and IRS Regulations
Section 1.401(k)-1(d)(4) will be established or maintained by the Employer at
the time of termination of participation in the Plan or will be maintained
through the period ending twelve months after distribution of all assets from
the Plan attributable to the Employer’s participation in the Plan and amounts
distributed upon such event shall be in the form of a “lump sum distribution”
within the meaning of Section 402(e)(4)(D) of the Code (without regard to Code
Sections 402(e)(4)(D)(i)(i)-(iv)). A withdrawal is on account of hardship only
if the distribution is both made on account of an immediate and heavy financial
need of the Member and is necessary to satisfy such financial need, and further
provided that no earnings in the Member’s 401(k) Account credited on or after
January 1, 1989 and/or Employer contributions made to the Member’s 401(k)
Account on or after January 1, 1989 may be distributed in satisfying such need.
For the purposes of this Paragraph (H), the term “immediate and heavy financial
need” shall be limited to the need of funds for (i) the payment of medical
expenses described in Section 213(d) of the Code previously incurred by the
Member, the Member’s Spouse, or any of the Member’s dependents (as defined in
Section 152 of the Code) or necessary for those persons to obtain such care,
(ii) the payment of tuition and room and board for the next twelve months of
post secondary education of the Member, the Member’s Spouse, the Member’s
children, or any of the Member’s dependents (as defined in Section 152 of the
Code and, for taxable years beginning on or after January 1, 2005, without
regard to Section 152(b)(1),(b)(2) and (d)(1)(B)), (iii) the purchase (excluding
mortgage payments) of a principal residence for the Member, (iv) the prevention
of eviction of the Member from his principal residence or the prevention of
foreclosure on the mortgage of the Member’s principal residence; (v) payments
for burial or funeral expenses for the Member’s deceased parent, Spouse,
children or dependents (as defined in Section 152 of the Code, without regard to
Code Section 152(d)(1)(B)); or (vi) expenses for the repair of damage to the
Member’s principal residence that would qualify for the casualty deduction under
Code Section 165 (determined without regard to whether the loss exceeds 10% of
adjusted gross income). For purposes of this Paragraph (H), a distribution
generally may be treated as “necessary to satisfy a financial need” if the
Employer reasonably relies upon the Member’s written representation that the
need cannot be relieved (i) through reimbursement or compensation by insurance
or otherwise, (ii) by reasonable liquidation of the Member’s assets, to the
extent such liquidation would not itself cause an immediate and heavy financial
need, (iii) by cessation of Member 401(k) Elective Deferrals pursuant to
Article III, Section 4 of the Plan or Member Regular contributions pursuant to
Article III, Section 1 of the Plan or (iv) by other distributions or nontaxable
(at the time of the loan) loans from plans maintained by the Employer or by any
other employer, or by borrowing from commercial sources on reasonable commercial
terms. The amount of any withdrawal pursuant to this Paragraph (H) shall not
exceed the amount required to meet the demonstrated financial hardship,
including any amounts necessary to pay any federal income taxes and penalties
reasonably anticipated to result from the distribution, as certified to the Plan
by the Member.       No amounts may be withdrawn on account of hardship pursuant
to this Paragraph prior to a Member’s withdrawal of the remaining vested balance
of his Regular Account and Rollover Account, notwithstanding the withdrawal
restrictions contained in Article VII, Section 2 or below.

 

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    Only one in-service withdrawal under this Paragraph may be made in any Plan
Year, and any amounts paid under this Article may not be returned to the Plan.
The amount of a withdrawal under this Paragraph (H) must be not less than the
lesser of (i) $1,000, (ii) the full value of the vested portion of the 401(k)
Account (reduced by the amount of post-December 31, 1988 earnings and Employer
401(k) contributions for those Members who have not attained age 591/2), if such
value is less than $1,000, or (iii) the amount approved as a hardship withdrawal
by the Board.   (I)   Notwithstanding any other provision of the Plan, no Member
may defer to his 401(k) Account during any Plan Year an amount in excess of
$15,500 (in 2008) or such other amount as may be provided in Section 402(g)(1)
of the Code, and as adjusted for cost-of-living increases in accordance with
Section 402(g)(4) of the Code. In the event that the 401(k) Elective Deferrals
for a Member exceeds the limitation in the previous sentence, the amount of such
excess, increased by any income and decreased by any losses attributable
thereto, shall be refunded to such Member no later than the April 15 of the Plan
Year following the Plan Year for which the elective deferrals were made.      
For purposes of Article III, Section 4 of the Plan, no Member shall be permitted
to have elective deferrals made under this Plan, or any other qualified plan
maintained by the Employer during the taxable year, in excess of the dollar
limitation contained in section 402(g) of the Code in effect for such taxable
year, except to the extent permitted under Section 9 of this Article and section
414(v) of the Code, if applicable.   (J)   Safe Harbor CODA       If the
Employer has elected the Safe Harbor CODA option, the provisions of this Section
shall apply for the Plan Year and any provisions relating to the actual deferral
percentage test described in Section 401(k)(3) of the Code or the actual
contribution percentage test described in Section 401(m)(2) of the Code do not
apply. Notwithstanding anything in the Plan to the contrary, if the Employer has
elected the Safe Harbor CODA option, then such option shall comply and be
administered in accordance with the applicable provisions of the safe harbor
requirements under the IRS Regulation Sections 1.401(k)-3 and 1.401(m)-3. To the
extent that any other provision of the Plan is inconsistent with the provisions
of this section, the provisions of the section govern.

  (i)   Actual Deferral Percentage Test Safe Harbor

  (1)   Unless the Employer elects to make enhanced matching contributions
(within the meaning of Section 401(k)(12)(B) of the Code and IRS Regulations
Section 1.401(k)-3(c)(3)), the Employer will elect to contribute monthly or on
another basis for the Plan Year: (a) a safe harbor matching contribution to the
Plan on behalf of each eligible Employee equal to (I) 100 percent of the amount
of the Employee’s 401(k) Elective Deferrals that do not exceed 3 percent of the
Employee’s Salary for the Plan Year, plus (II) 50 percent of the amount of the
Employee’s 401(k) Elective Deferrals that exceed 3 percent of the Employee’s
Salary but that do not exceed 5 percent of the Employee’s Salary (“Basic
Matching Contributions”); or (b) a safe harbor non-elective contribution to the
Plan on behalf of each eligible Employee equal to at least 3 percent of the
Employee’s Salary for the Plan Year.

 

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  (2)   The Member’s benefit derived from the Actual Deferral Percentage Test
Safe Harbor Contributions is nonforfeitable and may not be distributed earlier
than separation from service, death, disability, an event described in
Section 401(k)(10) of the Code, or the attainment of age 591/2. In addition,
such contributions must satisfy the Actual Deferral Percentage Test Safe Harbor
without regard to permitted disparity under Section 401(l) of the Code.     (3)
  At least 30 days, but not more that 90 days, before the beginning of the Plan
Year, the Employer will provide each Eligible Employee a comprehensive notice of
the Employee’s rights and obligations under the Plan, written in a manner
calculated to be understood by the average Eligible Employee. If an Employee
becomes eligible after the 90th day before the beginning of the Plan Year and
does not receive the notice for that reason, the notice must be provided no more
than 90 days before the Employee becomes eligible but not later than the date
the Employee becomes eligible.     (4)   In addition to any other election
periods provided under the Plan, each Eligible Employee may make or modify a
deferral election during the 30-day period immediately following receipt of the
notice described above.

Section 5. Remittance of Contributions
The contributions of both Members and their Employer (including an
administrative fee, as determined by the Board, to be paid by the Employer to
defray expenses attributable to its participation in the Plan) shall be recorded
by the Employer and remitted to the Board so that (i) in the case of Employer
Contributions the Board shall be in receipt thereof by the 15th day of the month
next following the month in respect of which such contributions are payable and
(ii) in the case of Member after-tax contributions and 401(k) Elective
Deferrals, the Trustee or custodian shall be in receipt thereof as soon as
reasonably practicable, but in no event later than the 15th business day of the
month following the month in which the Member contributions are received by the
Employer or the 15th business day of the month following the month in which such
amount would otherwise have been payable to the Member in cash. Such amounts
shall be credited to the Member’s Account pursuant to Article V.
Section 6. Transfer of Funds and Rollover Contributions

(A)   Upon such terms and conditions as the Board and the IRS shall approve, and
provided that all benefits (including all optional forms of benefit) under the
prior retirement plan are protected in accordance with Section 411(d)(6) of the
Code, or any successor thereto, and the IRS Regulations thereunder, a transfer
of funds may be made to the Plan from a prior retirement plan of an employer
which was qualified under Section 401(a) of the Code so long as such funds
(a) have been allocated to the individual members of such prior plan, (b) shall
be allocated to the Accounts of the Members of the Plan to whom they were
allocated under such prior plan, and (c) shall be applied so that each Member
affected thereby would receive a benefit immediately after the transfer, if the
Plan then terminated, at least equal to the benefit he would have received upon
a termination of such prior plan immediately before such transfer. In addition
to protecting those prior retirement plan benefits as required in the preceding
sentence, the Pentegra DC Plan Office may, in its discretion, preserve any other
prior retirement plan options which it determines to be economically and
administratively feasible and which are not required to be protected under
Section 411(d)(6) of the Code. Each Employee with respect to whom such a
transfer is made shall, upon such transfer, be eligible for membership in the
Plan.

 

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(B)   If the funds so transferred are transferred from a retirement plan subject
to Code Section 401(a)(11), then such funds shall be maintained in a separate
account (including, as applicable, a separate account for any such transfers
that represent after-tax contributions and related earnings) and any subsequent
distribution of those funds, and earnings thereon, shall be subject to the
following provisions:

  (1)   The benefit to which a married Member is entitled shall, except as
otherwise provided in this Paragraph (B), be payable by purchase from an
insurance company of a single premium contract providing for a Qualified Joint
and Survivor Annuity. The term, “Qualified Joint and Survivor Annuity,” means a
benefit providing an annuity commencing immediately for the life of the Member,
ending with the payment due on the last day of the month coincident with or
preceding the date of his death, and, if the Member dies leaving a Surviving
Spouse, a survivor annuity for the life of such Surviving Spouse equal to one
half of the annuity payable for the life of the Member under his Qualified Joint
and Survivor Annuity, commencing on the last day of the month following the date
of the Member’s death and ending with the payment due on the first day of the
month coincident with or preceding the date of such Surviving Spouse’s death.  
  (2)   In lieu of the form of benefit described immediately above, any benefit
payable pursuant to this Paragraph (B) may be paid in one cash payment thereof,
subject to the provisions of Subparagraph (5) below.     (3)   If a Member dies
prior to the date payment of his benefit commences (i) without leaving a
Surviving Spouse, or (ii) leaving a Surviving Spouse and having made a valid
election to waive the Preretirement Survivor Annuity in accordance with
Subparagraph (5) below, then the remaining value of the Member’s account subject
to this Paragraph (B) shall become payable to his Beneficiary in a lump sum
subject to Article III, Section 8(E)(2) and Article VII, Section 3(B).     (4)  
A Preretirement Survivor Annuity shall be paid to the Surviving Spouse of a
Member or former Member who dies before the commencement of payment of any
benefit from an account subject to this Paragraph (B). The term “Preretirement
Survivor Annuity” means a benefit providing for payment of 50% of the Member’s
account balance as of the Valuation Date coincident with or preceding the date
of his death, by the purchase of a single premium contract issued by an
insurance company providing a survivor annuity to his Surviving Spouse, for the
life of such Surviving Spouse. Payment of a Preretirement Survivor Annuity shall
commence in the month following the month in which the Member dies or as soon as
practicable thereafter; provided, however, that to the extent required by law,
if the value of the amount used to purchase a Preretirement Survivor Annuity
exceeds $500, then payment of the Preretirement Survivor Annuity shall not
commence prior to the date the Member reached (or would have reached, had he
lived) Normal Retirement Age without the written consent of the Member’s
Surviving Spouse. Absence of any required consent will result in a deferral of
payment of the Preretirement Survivor Annuity to the month following the month
in which occurs the earlier of (i) the date the required consent is received by
the Board or (ii) the date the Member would have reached Normal Retirement Age
had he lived.

 

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  (5)   (i) In the case of the Qualified Joint and Survivor Annuity, the Fund
shall no less than 30 days and no more than 90 days prior to the annuity
starting date provide each Member a written explanation of: (i) the terms and
conditions of the Qualified Joint and Survivor Annuity; (ii) the Member’s right
to make and the effect of an election to waive the Qualified Joint and Survivor
Annuity form of benefit; (iii) the rights of a Member’s Spouse; and (iv) the
right to make, and the effect of, a revocation of a previous election to waive
the Qualified Joint and Survivor Annuity. In the case of the Preretirement
Survivor Annuity, the Fund shall provide each Member within the applicable
period for such Member a written explanation of the Preretirement Survivor
Annuity in such terms and in such manner as would be comparable to the
explanation provided for meeting the requirements applicable to the Qualified
Joint and Survivor Annuity.         The applicable period for a Member is
whichever of the following periods ends last: (i) the period beginning with the
first day of the Plan Year in which the Member attains age 32 and ending with
the close of the Plan Year preceding the Plan Year in which the Member attains
age 35; (ii) a reasonable period ending after the individual becomes a Member;
or (iii) a reasonable period ending after this subparagraph (i) first applies to
the Member. Notwithstanding the foregoing, notice must be provided within a
reasonable period ending after separation from service in the case of a Member
who separated from service before attaining age 35.         For purposes of
applying the preceding paragraph, a reasonable period ending after the
enumerated events described in (ii) and (iii) is the end of the two-year period
beginning one year prior to the date the applicable event occurs, and ending one
year after that date. In the case of a Member who separates from service before
the Plan Year in which age 35 is attained, notice shall be provided within the
two-year period beginning one year prior to separation and ending one year after
separation. If such a Member thereafter returns to employment with an Employer,
the applicable period for such Member shall be redetermined.         (ii) A
Member may, with the written consent of his Spouse (unless the Board makes a
written determination in accordance with the Code and the Regulations that no
such consent is required), elect in writing (i) to receive his benefit in a
single lump sum payment within the 90-day period ending on his annuity starting
date (which is the first day of the first period for which an amount is paid as
an annuity or any other form); and (ii) to waive the Preretirement Survivor
Annuity within the period beginning on the first day of the Plan Year in which
the Member attains age 35 and ending on the date of his death. Any election made
pursuant to this Subparagraph (5) may be revoked by a Member, without spousal
consent at any time within which such election could have been made. Such an
election or revocation must be made in accordance with procedures developed by
the Board and shall be notarized.

 

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      Any consent by a Spouse obtained under this provision (or establishment
that the consent of a Spouse may not be obtained) shall be effective only with
respect to such Spouse. A consent that permits designations by the Member
without any requirement of further consent by such Spouse must acknowledge that
the Spouse has the right to limit consent to a specific Beneficiary, and a
specific form of benefit where applicable, and that the Spouse voluntarily
elects to relinquish either or both of such rights. No consent obtained under
this provision shall be valid unless the Member has received the notice
described in subparagraph (i) above.         Notwithstanding anything to the
contrary, effective for Plan Years beginning after December 31, 1996, the 90-day
period in which a Member may, with the written consent of his Spouse, elect in
writing to receive his benefit in a single lump sum shall not end before the
30th day after the date on which explanations of the Qualified Joint and
Survivor Annuity and Preretirement Survivor Annuity are provided. A Member may
elect (with any applicable spousal consent) to waive any requirement that the
written explanation be provided at least 30 days before the annuity starting
date (or to waive the 30-day requirement under the preceding sentence) if the
distribution commences more than seven days after such explanation is provided.
    (6)   Notwithstanding the preceding provisions of this Paragraph (B), any
benefit of $500, subject to the limits of Article X, Section 4, or less shall be
paid in a lump cash sum in full settlement of the Plan’s liability therefor;
provided, however, that in the case of a married Member, no such lump sum
payment shall be made after benefits have commenced without the consent of the
Member and his Spouse or, if the Member has died, the Member’s Surviving Spouse.
Furthermore, if the value of the benefit payable to a Member or his Surviving
Spouse is greater than $500 and the Member has or had not reached his Normal
Retirement Age, then to the extent required by law, unless the Member (and, if
the Member is married and his benefit is to be paid in a form other than a
Qualified Joint and Survivor Annuity, his Spouse, or, if the Member was married,
his Surviving Spouse) consents in writing to an immediate distribution of such
benefit, his benefit shall continue to be held in the Trust until a date
following the earlier of (i) the date of the Board’s receipt of all required
consents or (ii) the date the Member reaches his earliest possible Normal
Retirement Age under the Plan (or would have reached such date had he lived),
and thereafter shall be paid in accordance with this Paragraph (B).

(C)   Upon such terms and conditions as the Board shall approve, all Members
(regardless of whether their Accounts are active) shall be permitted to make
rollover contributions to the Plan of amounts held on their behalf in:

  (1)   a qualified plan described in section 401(a) or 403(a) of the Code,
(including after-tax contributions for direct rollovers);

 

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  (2)   an annuity contract described in section 403(b) of the Code, (excluding
after-tax contributions);     (3)   an eligible plan under section 457(b) of the
Code which is maintained by a state, political subdivision of a state, or an
agency or instrumentality of a state or political subdivision of a state; and  
  (4)   an individual retirement account or annuity described in section 408(a)
or 408(b) of the Code that is eligible to be rolled over and would otherwise be
includible in gross income.         An Employer may, at its option, permit its
Employees to make rollover contributions prior to the date as of which the
Employees become eligible for membership in the Plan. All such amounts which are
accepted by the Pentegra DC Plan Office shall be certified in form and substance
satisfactory to the Pentegra DC Plan Office by the Member as consisting of all
or a portion of an “eligible rollover distribution” or a “rollover contribution”
within the meaning of Section 402(c)(4) or Section 408(d)(3), respectively, of
the Code. A Member shall have a nonforfeitable vested interest in all such
amounts credited to his Rollover Account.     (5)   Notwithstanding anything in
this paragraph (C) to the contrary, the Plan will accept a rollover contribution
to a Roth 401(k) Account if it is a direct rollover from another Roth elective
deferral account under an applicable retirement plan described in Section
402A(e)(1) of the Code, and only to the extent the rollover is permitted under
the rules of Section 402(c) of the Code and the IRS Regulations issued
thereunder. The Plan will accept a rollover contribution to a Roth 401(k)
Account which is not a direct rollover only to the extent the rollover is
permitted under applicable law.     (6)   Upon such terms and conditions as the
Board and the IRS shall approve, a Member shall be permitted to transfer amounts
deferred and/or contributed on behalf of such Member to a nonqualified Plan
maintained by his Employer to the Plan. Such transfer to the Plan from the
Employer’s nonqualified deferred compensation Plan shall be made by the 15th day
of the third month immediately following the Plan Year for which compensation
was deferred by the Member. The transferred amounts shall be treated as
contributions under Article III for such Plan Year and shall be categorized as
401(k) Elective Deferrals under Article III, Section 4 or as Employer Matching
Contributions under Article III, Section 2, as applicable.

 

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Section 7. Limitations on Member Contributions and Matching Employer
Contributions

(A)   Notwithstanding any other provision of this Section 7, the actual
contribution percentage for a Plan Year for Highly Compensated Employees shall,
in accordance with the Code and IRS Regulations, satisfy either (i) or (ii) as
follows:

  (1)   Prior Year Testing:

  (a)   the actual contribution percentage for a Plan Year for Members who are
Highly Compensated Employees for the Plan Year shall not exceed the prior Plan
Year’s actual contribution percentage for Members who were Non-highly
Compensated Employees for the prior Plan Year multiplied by 1.25; or (b) the
actual contribution percentage for Members who are Highly Compensated Employees
for the Plan Year shall not exceed the prior year’s actual contribution
percentage for Members who were Non-highly Compensated Employees for the prior
Plan Year multiplied by 2, provided that the actual contribution percentage for
Members who are Highly Compensated Employees does not exceed the “actual
contribution percentage” for Members who were Non-highly Compensated Employees
in the prior Plan Year by more than 2 percentage points.

      For the first Plan Year this Plan permits any Member to make contributions
under Article III, Section 1 (after-tax), provides for Employer matching
contributions or both, and this is not a successor plan, for purposes of the
foregoing tests, the prior Plan Year’s Non-highly Compensated Employees’ actual
contribution percentage shall be 3 percent unless the Employer has elected to
use the current Plan Year’s actual contribution percentage for these Members.

  (ii)   Current Year Testing:         If elected by the Employer, the actual
contribution percentage tests in (a) and (b), above, will be applied by
comparing the current Plan Year’s actual contribution percentage for Members who
are Highly Compensated Employees for such Plan Year with the current Plan Year’s
actual contribution percentage for Members who are Non-highly Compensated
Employees for such year. Once made, this election can only be changed and the
Prior Year Testing method applied if the Plan meets the requirements for
changing to Prior Year Testing set forth in applicable IRS regulations.        
For purposes of this Section 7, the “actual contribution percentage” for a Plan
Year means, for a specified group of Employees, the average of the ratios
(calculated separately for each Employee in such group) of (a) the sum of
(i) Employer matching contributions credited to his Regular Account as described
in Section 2 and Section 3, Formula (1) of this Article for the Plan Year,
(ii) Member contributions credited to his Regular Account for the Plan Year, and
(iii) in accordance with and to the extent permitted by the IRS Regulations,
401(k) Elective Deferrals credited to his 401(k) Account, to (b) the amount of
the Member’s compensation (as defined in Section 414(s) of the Code) which, at
the Employer’s election, shall include the compensation required to be reported
under Section 6041 or 6051 of the Code (i.e., “W-2 compensation”) for the Plan
Year or, alternatively, where specifically elected by the Employer, for only
that part of the Plan Year during which the Member was eligible to participate
in the Plan. The 401(k) Elective Deferrals referred to in (iii) above in this
Paragraph (A) may be taken into account in determining the actual contribution
percentage for a Plan Year if the actual deferral percentage test is satisfied
prior to and following the exclusion of the 401(k) Elective Deferrals that are
used to satisfy the actual contribution percentage test. An Employee’s actual
contribution percentage shall be zero if no such contributions are made by him
or on his behalf for such Plan Year. The actual contribution percentage taken
into account under this Paragraph (A) for any Highly Compensated Employee who is
eligible to make Member contributions or receive Employer matching contributions
under two or more plans described in Section 401(a) of the Code or arrangements
described in Section 401(k) of the Code that are maintained by the Employer
shall be determined as if all such contributions were made under a single plan.

 

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  (iii)   Notwithstanding anything in this Section 7 to the contrary, and in
accordance with IRS Regulation 1.401(m)-2(a)(5), no Employer matching
contributions shall be taken into account in determining the actual contribution
percentage for a Plan Year for a Non-highly Compensated Employee under the Plan
to the extent such contributions exceed for such Non-highly Compensated Employee
the greatest of (A) 5% of the Non-highly Compensated Employee’s compensation (as
defined in Code Section 414(s)); (B) the Non-highly Compensated Employee’s
401(k) Elective Deferrals for the Plan Year; and (C) the product of (1) two
times the Plan’s “representative matching rate” (within the meaning of IRS
Regulation Section 1.401(m)-2(a)(5)(ii)) and (2) the Non-highly Compensated
Employee’s 401(k) Elective Deferrals. The foregoing limitation on Employer
matching contributions shall also apply to matching contributions with respect
to a Non-highly Compensated Employee’s after-tax contributions or the total of a
Non-highly Compensated Employee’s 401(k) Elective Deferrals and after-tax
contributions.

(B)   The Pentegra DC Plan Office shall determine as of the end of the Plan Year
whether one of the actual contribution percentage tests specified in Paragraph
(A) above is satisfied for such Plan Year. This determination shall be made
after first determining the treatment of excess deferrals within the meaning of
Section 402(g) of the Code under Article III, Section 4(I) and then determining
the treatment of excess contributions under Article III, Section 4(F). In the
event that neither of the actual contribution percentage tests is satisfied, the
Pentegra DC Plan Office shall (i) refund the excess aggregate contributions to
the extent attributable to Member after-tax contributions and vesting matching
contributions for which the underlying Member after-tax contributions or 401(k)
Elective Deferrals are not subject to correction under the actual deferral
percentage or actual contribution percentage tests for such year (and any income
related thereto) and (ii) forfeit the excess aggregate contributions to the
extent attributable to non-vested Employer matching contributions and vested
Employer matching contributions for which the underlying Member after-tax
contributions or 401(k) Elective Deferrals are subject to correction under the
actual deferral percentage or actual contribution percentage tests for such year
(and any income related thereto) in the manner described in Paragraph (C) below.
For purposes of this Section 7, “excess aggregate contributions” means, with
respect to any Plan Year and with respect to any Member, the excess of the
aggregate amount of contributions (and any earnings and losses allocable
thereto) made as (a) Employer matching contributions to their Regular Accounts,
(b) Member contributions to their Regular Accounts and (c) 401(k) Elective
Deferrals by Members to their 401(k) Accounts (to the extent permitted by the
IRS Regulations and if the Pentegra DC Plan Office elects to take into account
such elective deferrals when calculating the actual contribution percentage) of
Highly Compensated Members for such Plan Year, over the maximum amount of such
contributions that could be made as Employer matching contributions to Regular
Accounts, Member contributions to Regular Accounts and 401(k) Elective Deferrals
by Members to 401(k) Accounts of such Members without violating the requirements
of Paragraph (A) above.

 

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(C)   To the extent excess aggregate contributions must be refunded or forfeited
for a Plan Year, such excess amounts will be refunded (or, as applicable,
forfeited) first to the Highly Compensated Employees with the largest
Contribution Percentage Amounts (as defined below) taken into account in
calculating the actual contribution percentage test for the year the excess
arose and continuing in descending order until all the excess aggregate
contributions are refunded (or, as applicable, forfeited). For purposes for the
preceding sentence, the “largest amount” is determined after distribution of any
excess aggregate contributions. For purposes of this paragraph, “Contribution
Percentage Amounts” means the sum of Member after-tax contributions, Employer
matching contributions, and Employer supplemental contributions under Formula
(1) made under the Plan on behalf of the Member for the Plan Year. However, such
Contribution Percentage Amounts shall not include Employer matching
contributions that are forfeited either to correct excess aggregate
contributions or because the contributions to which they relate are excess
deferrals, excess contributions or excess aggregate contributions. The refund or
forfeitures of such excess aggregate contributions shall be made with respect to
such Highly Compensated Members to the extent practicable before the 15th day of
the third month immediately following the Plan Year for which such excess
aggregate contributions were made, but in no event later than the end of the
Plan Year following such Plan Year or, in the case of the termination of the
Plan in accordance with Article XII or termination of Employer participation in
the Plan in accordance with Article XI, no later than the end of the
twelve-month period immediately following the date of such termination.

(D)   Notwithstanding anything in this Article III, Section 7 to the contrary,
and in accordance with IRS Regulation Section 1.401(m)-2(b)(2)(iv), the income
allocable to the excess aggregate contributions shall be equal to the allocable
gain or loss for the Plan Year in question and, as applicable, for the “gap
period” following the close of the Plan Year and ending on the date that is
seven days preceding the distribution date. The Plan shall determine the
allocable income in accordance with IRS
Regulation Section 1.401(m)-2(b)(2)(iv)(C) or (D) or, in accordance with IRS
Regulation Section 1.401(m)-2(b)(2)(iv)(B), any reasonable method for computing
the income allocable to the excess aggregate contributions.   (E)   Should an
Employer’s matching formula fail to satisfy the applicable nondiscrimination
requirements under the Code, the Employer shall be permitted to make additional
matching contributions to the Regular account of Non-highly Compensated
Employees (to be determined at the Employer’s discretion) and shall be
contributed by the Employer by March 15th following the Plan Year in which
matching contributions is discriminatory. Such matching contributions shall be
added to the matching contributions for the immediately preceding Plan Year and
shall be subject to this Section 7.

 

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Section 8. Profit Sharing Feature

(A)  
An Employer may, at its option, adopt a Profit Sharing Feature as described
herein, subject to any other provisions of the Plan, where applicable. This
Feature may be adopted either in lieu of, or in addition to, any other Plan
Feature contained in this Article III, including the contributions described in
Sections 1 through 4 of this Article. The Profit Sharing Feature is designed to
provide the Employer a means by which to provide discretionary contributions on
behalf of Employees eligible under the Plan.

Where investments provided for the contributions permitted under Article III,
Sections 1 through 4 were subject to the Members’ investment directions among
the Investment Funds, and the Profit Sharing Feature elected by the Employer
requires that all account balances be invested in the Stable Value Fund or the
Government Money Market Fund (subject to rules adopted by the Board), the
accounts provided under Article III, Sections 1 through 4 will continue to be
subject to the Members’ directions, pursuant to the provisions of Article IV.

(B)  (1)  
 Subject to the provisions of Article X, Section 1, an Employer may, but shall
not be required to, contribute on behalf of each of its Members, on an annual
(or at the election of the Employer, quarterly) basis for any Plan Year or
fiscal year of the Employer (as the Employer shall elect), a discretionary
amount not to exceed the maximum amount allowable as a deduction to the Employer
under the provisions of Section 404 of the Code. Such Profit Sharing
contribution must be received by the Pentegra DC Plan Office within the time
prescribed by law, including extensions of time, for filing of the Employer’s
federal income tax return following the close of the Contribution Determination
Period on behalf of all those Members who were in its employ on the last working
day of such Contribution Determination Period. For purposes of making the
allocations described in this Subparagraph (B)(1), a Member who is on a Type 1
non-military Leave of Absence (as defined in Article I, Paragraph (23) and
Article X, Section 8(B)(1)) or a Type 4 military Leave of Absence (as defined in
Article I, Paragraph (23) and Article X, Section 8(B)(4)), shall,
notwithstanding the provisions of this Paragraph, be treated as if he were a
Member who was an Employee in Employment on the last day of such Contribution
Determination Period.

  (2)  
A Profit Sharing Account shall be established and maintained on behalf of each
Member whose Employer has adopted the Profit Sharing Feature showing each
Member’s interests in the Investment Funds or other investment vehicles
attributable solely to such Profit Sharing contributions. The interest in each
Investment Fund shall be represented by Units. These Units will be valued in
accordance with Article V. Such account shall be known as the “Profit Sharing
Account,” as defined under Article I, Paragraph (31) and shall be an account
segregated from all other accounts maintained under the Plan with respect to
such Member.

 

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(C)  (1)  
Contributions shall be allocated to each Member’s Profit Sharing Account for the
Contribution Determination Period at the election of the Employer, in accordance
with one of the options selected below: (i) in the same ratio as each Member’s
Salary during such Contribution Determination Period bears to the total of such
Salary of all Members, (ii) in the same ratio as each Member’s Salary for the
portion of the Contribution Determination Period during which the Member
satisfied the Employer’s eligibility requirement(s) bears to the total of such
Salary of all Members or (iii) an Employer may integrate the Profit Sharing
Feature with Social Security in accordance with the following provision.

  (a)  
If the annual (or quarterly, if applicable) contribution for any Contribution
Determination Period (which period shall include, for the purposes of the
following maximum Social Security integration levels provided under
Subparagraphs (C)(1) and (2) for those Employers who have elected quarterly
allocations of contributions, the four quarters of a Plan Year or fiscal year)
is allocated based on a uniform percentage, such contribution shall be allocated
to each Member who is employed by the Employer on the last day of such
Contribution Determination Period in a uniform percentage (i) of each Member’s
Salary during the Contribution Determination Period (the “Base Contribution
Percentage”), plus a uniform percentage of each Member’s Salary for the
Contribution Determination Period in excess of the Social Security Taxable Wage
Base for such Contribution Determination Period (the “Excess Contribution
Percentage”), or (ii) of each Member’s Salary for the portion of the
Contribution Determination Period during which the Member satisfied the
Employer’s eligibility requirement(s), if any, up to the Base Contribution
Percentage for such Contribution Determination Period, plus a uniform percentage
of each Member’s Salary for the portion of the Contribution Determination Period
during which the Member satisfied the Employer’s eligibility requirement(s),
equal to the Excess Contribution Percentage.

  (b)  
If the annual (or quarterly, if applicable) contribution for any Contribution
Determination Period (which period shall include, for the purposes of the
following maximum Social Security integration levels provided under
Subparagraphs (C)(1) and (2) for those Employers who have elected quarterly
allocations of contributions, the four quarters of a Plan Year or fiscal year)
is allocated based on a specified dollar amount, such contribution shall be
allocated to each Member who is employed by the Employer on the last day of such
Contribution Determination Period as follows:

  (i)  
If the Plan is top heavy with respect to the Employer, (A) contributions will be
allocated to each Member’s Account in the ratio that each Member’s Salary bears
to the total of all Members’ Salary, but not in excess of 3% of such Member’s
Salary; (B) any remaining contributions after the application of (A) will be
allocated to each Member’s Account in the ratio of each Member’s Salary for the
Plan Year in excess of the Integration Level (as defined in the applicable
Employer resolution) bears to the sum of all Members’ Salary in excess of the
Integration Level, but not in excess of 3% of such Member’s excess Salary;
(C) any remaining contributions after the application of clauses (A) and
(B) will be allocated to each Member’s Account in the ratio that the sum of each
Member’s total Salary and Salary in excess of the Integration Level bears to the
sum of all Members’ total Salary and Salary in excess of the Integration Level,
but not in excess of the profit sharing Maximum Disparity Rate (as defined
below); and (D) any remaining contributions after the application of clauses
(A), (B) and (C) will be allocated to each Member’s Account in the ratio that
each Member’s Salary bears to the total of all Members’ Salary. If the Plan is
not top-heavy with respect to the Employer, or if the minimum top heavy
contribution or benefit is provided under another plan, clauses (A) and (B) may
be disregarded.

 

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  (ii)  
The profit sharing Maximum Disparity Rate is equal to the lesser of (A) or (B),
reduced by the percentage of Salary allocated under Paragraph (C)(1)(b)(i)(A)
above,: (A) 5.7%; or (B) the applicable percentage determined as follows: (1) if
the Integration Level is more than twenty percent (20%), but less than eighty
percent (80%), of the Social Security Taxable Wage Base, the applicable
percentage is 4.3%; (2) if the Integration Level is eighty percent (80%) or more
of the Social Security Taxable Wage Base, the applicable percentage is 5.4%.

  (2)  
The Excess Contribution Percentage described in Subparagraph (1) above may not
exceed the lesser of (i) the Base Contribution Percentage, or (ii) the greater
of (1) 5.7% or (2) the percentage equal to the portion of the Code Section
3111(a) tax imposed on employers under the Federal Insurance Contributions Act
(as in effect as of the beginning of the Plan Year) which is attributable to
old-age insurance. For purposes of this Subparagraph (2), “compensation” as
defined in Section 414(s) of the Code shall be substituted for “Salary” in
determining the Excess Contribution Percentage and the Base Contribution
Percentage.
    (3)  
The Employer may not adopt the Social Security integration options provided
above if any other integrated defined contribution or defined benefit plan is
maintained by the Employer during any Contribution Determination Period.
    (4)  
No contributions by Members shall be made under the Profit Sharing Feature
provided under this Section 8 of Article III.

(D)  (1)  
Contributions under the Profit Sharing Feature shall be invested in accordance
with the provisions and procedures of Article IV, except as otherwise provided
in this Paragraph (D). At the Employer’s election, contributions on behalf of
Members may be invested (i) entirely in the Stable Value Fund or the Government
Money Market Fund, subject to Board-adopted rules, (ii) pursuant to the Member’s
directions among the Investment Funds and other investment vehicles or
(iii) entirely in a QDIA. If the Employer does not so elect, or until an
effective direction is made by Members, all contributions made pursuant to this
Article III, Section 8, shall be invested in a QDIA.

  (2)  
A Member’s investment directions, if any, with respect to contributions made
under the Profit Sharing Feature, shall be submitted in writing and shall be
separate from the directions submitted with respect to all other contributions
under the Plan.

 

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  (3)  
Where an Employer previously elected to invest contributions pursuant to
Article IV and subsequently elects to have all future contributions invested
entirely in accordance with Subparagraph (D)(1) above, Units previously
accumulated in the Investment Funds or other investment vehicles prior to such
election will continue to be subject to the Members’ investment directions in
accordance with Article IV. All future Employer contribution allocations made
following the Employer’s election shall be allocated in accordance with
Subparagraph (D)(1).

(E)  (1)  
Except as otherwise provided under Article VII, Section 2, no amounts may be
withdrawn from a Member’s Profit Sharing Account while still employed by the
Employer, other than (i) amounts required to be distributed pursuant to the
terms of a Qualified Domestic Relations Order, as defined in Article X,
Section 6 of the Plan; or (ii) amounts withdrawn on account of mistake of fact,
within one year after the payment of the contribution, as reviewed and approved
by the Pentegra DC Plan Office.

  (2)  
Subject to the provisions of Article VII of the Plan, upon receipt by the Plan
of a notice of termination of Employment, a Member may request to withdraw any
or all vested amounts in his Profit Sharing Account, including any amounts held
in a Rollover Account for such Member, following the filing of a notice of
withdrawal with the Pentegra DC Plan Office.

Section 9. Catch-up Contributions
All employees who are eligible to make elective deferrals under this Plan and
who have attained age 50 before the close of the Plan Year shall be eligible to
make catch-up contributions in accordance with, and subject to the limitations
of, Section 414(v) of the Code. Such catch-up contributions shall not be taken
into account for purposes of the provisions of the Plan implementing the
required limitations of Sections 402(g) and 415 of the Code. The Plan shall not
be treated as failing to satisfy the provisions of the Plan implementing the
requirements of section 401(k)(3), 401(k)(11), 401(k)(12), 410(b), or 416 of the
Code, as applicable, by reason of the making of such catch-up contributions.
Catch-up contributions made pursuant to this Article III, Section 9 shall, at
the Employer’s election, be eligible for matching contributions in accordance
with Article III, Section 2.
Section 10. Automatic Enrollment

(A)  
An Employer may elect that 401(k) Elective Deferrals shall automatically be made
to the Plan on behalf of a Member in lieu of Salary, unless a Member
affirmatively elects: (1) that no such 401(k) Elective Deferrals shall be made
to the Plan, or (2) in accordance with Article III, Section 1, the percentage of
Salary, or specified dollar amount that shall be contributed to the Plan as a
401(k) Elective Deferrals.

  (1)  
An Employer so electing shall also elect: (a) whether such 401(k) Elective
Deferrals shall be pre-tax elective deferrals or Roth Elective Deferrals; and
(b) the percentage of the Member’s Salary, or, as applicable, flat dollar
amount, which shall be contributed to the Plan.

 

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  (2)  
Notwithstanding anything in Article III, Section 10(A) to the contrary, an
Employer may elect to limit the automatic enrollment feature to Employees who
commence Employment on or after the date the automatic enrollment feature
becomes effective with respect to the Employer, or to those Employees who have
not yet commenced participation in the Plan, provided that such Employer
election shall not apply if the Employer has elected to meet the requirements of
(C) or (D) of this Article III, Section 10.
    (3)  
The automatic contributions under this Section 10 shall cease to apply with
respect to a Member if the Member affirmatively elects: (a) to have 401(k)
Elective Deferrals made in a different amount or percentage of Salary, as
applicable; or (b) not to have 401(k) Elective Deferrals made on his behalf.
    (4)  
Automatic 401(k) Elective Deferrals will be invested in a QDIA, until a Member
affirmatively indicates how such amounts shall be invested.

(B)  
An Employer who elects that 401(k) Elective Deferrals be automatically made
under Article III, Section 10(A) may elect that such elective deferrals be made
pursuant to either Paragraph (C) or (D) of this Article III, Section 10.
  (C)  
Eligible Automatic Contribution Arrangement. In accordance with Section 414(w)
of the Code and the IRS Regulations issued thereunder, an “eligible automatic
contribution arrangement” shall provide as follows:

  (1)  
The default level of a Member’s automatic 401(k) Elective Deferral shall be a
uniform percentage of Salary elected by the Employer.
    (2)  
If an Employer elects, with respect to all of its Employees or a specified group
of its Employees, to allow Members to receive a distribution of automatic 401(k)
Elective Deferrals subject to the terms of the Plan and applicable law, a
Member, on whose behalf automatic 401(k) Elective Deferrals have been made, may
elect to receive a distribution equal to the amount of the automatic 401(k)
Elective Deferrals (as adjusted for attributable earnings or losses), provided
such election is made within 90 days of the first automatic 401(k) Elective
Deferral. Such distribution may be reduced by any generally applicable fees.

  (a)  
An Employer matching contribution contributed in connection with an automatic
401(k) Elective Deferral shall be forfeited in the event a Member elects to
withdraw his 401(k) Elective Deferrals under this Paragraph (C)(2). Such
forfeited matching contribution shall be subject to Article VI, Section 2.

  (3)  
The Employer shall provide each Member to whom this Paragraph (C) applies a
notice which includes the following information: the level of 401(k) Elective
Deferrals which will automatically be made if a Member does not make an
affirmative election, the Member’s right to elect not to have 401(k) Elective
Deferrals made on his behalf (or to elect to have contributions made in a
different amount or percentage of Salary) and how 401(k) Elective Deferrals
under this Paragraph (C) will be invested.

 

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(D)  
Qualified Automatic Contribution Arrangement. In accordance with
Section 401(k)(13) of the Code and the IRS Regulations issued thereunder, a
“qualified automatic contribution arrangement” shall provide as follows:

  (1)  
Amount of Automatic Deferral. The Employer shall elect a default 401(k) Elective
Deferral level which shall be a uniform percentage of Salary. The percentage
that first applies to a Member shall apply until the end of the last day of the
Plan Year following the Plan Year in which the initial default 401(k) Elective
Deferral was made. An Employer shall also elect default 401(k) Elective Deferral
levels for the following Plan Years, and such default levels shall increase by
at least 1% in each of the next 3 successive Plan Years, unless the default
401(k) Elective Deferral satisfies the minimum default levels in (D)(1)(a).

  (a)  
The minimum percentage an Employer may elect shall be 3% of Salary. Such minimum
percentage shall increase by 1% in the each of the 3 successive Plan Years
discussed above to a minimum percentage of no less than 6%.
    (b)  
Notwithstanding anything herein to the contrary, the default 401(k) Elective
deferral level shall not exceed 10% of Salary.

  (2)  
An Employer who has elected to have 401(k) Elective Deferrals automatically be
made under this Paragraph (D) shall be required to make contributions on behalf
of Non-highly Compensated Employees. An Employer shall elect whether such
contributions shall be made in accordance with (a) or (b) below.

  (a)  
An Employer may elect to make a nonelective contribution equal to at least 3% of
each eligible Non-highly Compensated Employee’s Salary.
    (b)  
An Employer may elect to make a matching contribution to eligible employees
equal to: (i) 100% of the 401(k) Elective Deferrals made under this Paragraph
(D) that do not exceed 1% of the applicable Member’s Salary; and (ii) at least
50% of the 401(k) Elective Deferrals made under this Paragraph (D) exceeding 1%,
but not exceeding 6%, of the Member’s Salary.
    (c)  
Notwithstanding anything in Article VI to the contrary, all Employer
contributions under this Paragraph (D) shall be fully vested after the Member
completes two Years of Employment.
    (d)  
Employer contributions under this Paragraph (D) may not be distributed earlier
than separation from service, death, disability, an event described in Section
401(k)(10) of the Code, or the attainment of age 591/2.

 

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  (3)  
The Employer shall provide each Member to whom this Paragraph (D) applies a
notice which includes the following information: the Member’s right to elect not
to have 401(k) Elective Deferrals made on his behalf (or to elect to have
contributions made in a different amount or percentage of Salary) and how 401(k)
Elective Deferrals under this Paragraph (C) will be invested. Such notice shall
also include such information as specified in Article III, Section 4(J)(3).

(E)  
Timing of Notices. The Employer shall provide the notices required by Paragraphs
(C) and (D) in accordance with the following timeframes. An initial notice shall
be provided to newly eligible Members no more than 90 days before the Member is
first eligible to make 401(k) Elective Deferrals under the Plan, but no later
than the date he first becomes eligible. An annual notice shall be provided to
Members within a reasonable time before the beginning of each Plan Year. Such
annual notice shall be provided at least 30 days, but no earlier than 90 days,
in advance of each subsequent Plan Year, or such other period as may be
permitted by law.

 

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ARTICLE IV INVESTMENT OF CONTRIBUTIONS
Section 1. General
All contributions to the Plan shall, upon receipt by the Board, be delivered to
the Trustee to be held in the Trust Fund and invested and distributed by the
Trustee in accordance with the provisions of the Plan and Trust Agreement. The
Trust Fund shall consist of certain investment funds (each an “Investment Fund”)
or other investment vehicles as described in the Trust Agreements and as
designated by the Board.
To the extent made available under the Plan, an Employer may elect to allow
Members to direct the investment of their Accounts, pursuant to, and in
accordance with, such rules and procedures as may be prescribed by the Employer
or the Board, to a self directed brokerage account. Should a self directed
brokerage account be made available under the Plan, the Board may elect to
provide, to all Members who have terminated employment with their Employer, the
option to direct the investment of their Account to a self directed brokerage
account. Where an Employer or the Board elects to provide a self directed
brokerage account under the Plan, the Trustee may invest amounts held by it in a
self directed brokerage account maintained by Charles Schwab & Co., Inc. (or any
other such entity which provides a self directed brokerage account) on behalf of
Plan Members who elect to utilize such investment vehicle.
A Trustee may in its discretion invest any amounts held by it in any Investment
Fund in any commingled or group trust fund described in Section 401(a) of the
Code and exempt under Section 501(a) of the Code or in any common trust fund
exempt under Section 584 of the Code, provided that such trust fund satisfies
the requirements of this Plan applicable to such investment fund and that the
Trustees serve as Trustee of such commingled, group or common trust fund. To the
extent that the Investment Funds are at any time invested in any commingled,
group or common trust fund, the declaration of trust or other instrument
pertaining to such fund and any amendments thereto are hereby adopted as part of
this Agreement and deemed to form a part of the Plan.
Except as provided in Article III, Section 8(D)(1), each Member shall direct in
writing that his contributions (including 401(k) Elective Deferrals and rollover
contributions, if any) and the contributions made by his Employer (including
Profit Sharing contributions) on his behalf shall be invested (a) entirely in
any single Investment Fund or other investment vehicle (subject to additional
restrictions imposed by the Board), or (b) in any combination of Investment
Funds or investment vehicles offered under the Plan, in multiples of 1% (subject
to additional restrictions imposed by the Board). Until an effective direction
is made by the Member, all such contributions shall be invested in a QDIA.
Any such investment direction shall be followed until changed. Subject to the
provisions of the following paragraphs of this Section, one time each business
day (or, as elected by the Employer, once per month, or once per quarter) a
Member may change his investment direction as to future contributions and also
as to the value of his accumulated amounts in the Investment Funds or other
investment vehicles. Such directed change will become effective upon the
Valuation Date coinciding with or next following the date which his notice was
received and processed by the Pentegra DC Plan Office subject to the same
conditions with respect to the amount to be transferred under this Section which
are specified in the Plan procedures for determining the amount of payments made
under Article VII, Section 1(A) of the Plan.

 

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Except as otherwise provided below, a Member may not direct a transfer of his
accumulated units in the Stable Value Fund to the Government Money Market Fund.
A Member may direct a transfer from any other Investment Fund to the Government
Money Market Fund provided that, except as otherwise provided below, amounts
previously transferred from the Stable Value Fund, to such Investment Fund
remain in such funds for a period of three months prior to being transferred to
the Government Money Market Fund.
Notwithstanding anything in this Article IV to the contrary, if a Member
participates in the automatic enrollment feature provided in Article III,
Section 10 (other than an automatic enrollment feature provided in Section 10(C)
of Article III which shall always be invested in a Qualified Default Investment
Alternative), and fails to make an effective investment direction with respect
to such deferral contributions, such amounts shall be invested in a Qualified
Default Investment Alternative.
Section 2. Qualified Default Investment Alternative

(A)  
The Accounts of a Member, who fails to provide affirmative instructions with
respect to the investment of such Accounts, shall be invested in accordance with
this Article IV, Section 2. For purposes of this Article IV, Section 2, the term
“Member” shall include a Beneficiary.
  (B)  
The Employer shall furnish the following materials to the Member:

  (1)  
An initial notice shall be provided to the Member: (1) at least 30 days in
advance of Membership eligibility, or least 30 days in advance of the date of
any first investment in the QDIA on behalf of the Member, or (2) on or before
the date of becoming a Member under Article II, Section 2, if the Member has an
opportunity to make a withdrawal in accordance with Article III, Section 10(C).
    (2)  
An annual notice shall be provided to the Member within a reasonable period of
time of at least 30 days, but no earlier than 90 days, in advance of each
subsequent Plan Year, or such other period as may be permitted by law.
    (3)  
The notice provided under Paragraphs (B)(1) and (2) of this Article IV,
Section 2 shall include : (a) a description of the circumstances under which
assets in the Member’s Account may be invested on behalf of the Member in a
QDIA; (b) an explanation of the Member’s right to direct the investments of his
Accounts; (c) a description of the QDIA, including a description of the
investment objectives, risk and return characteristics and fees and expenses
attendant to the investment alternative; (d) a description of the right of the
Members on whose behalf assets are invested in a QDIA to direct the investment
of those assets to any other investment alternative under the Plan without
financial penalty; and (e) an explanation of where Members can obtain investment
information concerning the other investment alternatives available under the
Plan. In addition, a notice required for a Member’s Account in connection with
Article III, Section 10 shall also contain an explanation of the circumstances
under which an elective deferral will be made for a Member, the percentage of
such contribution and the right to elect not to have such contribution made on
his or her behalf (or to elect to defer a different percentage).

 

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  (4)  
Such information as relating to a Member’s investment in a QDIA as is required
under U.S. Department of Labor Regulation Section 2550.404c-(5)(c)(4).

(C)  
A Member may transfer the investment of his Account to another investment
alternative available under the Plan with a frequency consistent with that
afforded to a Member who affirmatively elected to invest his Accounts in the
QDIA. Notwithstanding anything herein to the contrary, a Member whose Accounts
are invested in a QDIA pursuant to this Article IV, Section 2 shall be able to
transfer the investment of his Accounts to another investment alternative no
less frequently than once within any three-month period.
  (D)  
Any fees or restrictions imposed in connection with a Member’s withdrawal of his
investment from a QDIA shall satisfy the requirements of U.S. Department of
Labor Regulation Section 2550.404c-(5)(c)(5).

 

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ARTICLE V MEMBERS’ ACCOUNTS, UNITS AND VALUATION
An Account shall be established and maintained for each Member showing his
interests in the Investment Funds or other investment vehicles. The interest in
each Investment Fund shall be represented by Units.
As of each Valuation Date, the value of a Unit in each Investment Fund shall be
determined by dividing (a) the sum of the net assets at market value determined
by the Trustee by (b) the total number of outstanding Units.
The number of additional Units to be credited to a Member’s interest in each
Investment Fund, as of any Valuation Date, shall be determined by dividing
(a) that portion of the aggregate contributions by and on behalf of the Member
which was directed to be invested in such Investment Fund and received by the
Board by (b) the Unit value of such Investment Fund.
The value of a Member’s Account may be determined as of any Valuation Date by
multiplying the number of Units to his credit in each Investment Fund by the
value of the Investment Fund Unit on such date and aggregating the results. If,
and to the extent, a Member’s Account is invested pursuant to a self-directed
brokerage account, the investments held in that account shall be valued by the
brokerage firm maintaining such account in accordance with such procedures as
may be determined by such brokerage firm.

 

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ARTICLE VI VESTING OF UNITS
Section 1. Vesting

(A)  
All amounts credited to a Member’s Account shall immediately and fully vest in
him, except amounts with respect to which the Employer has elected to adopt a
vesting schedule as provided in this Article.
  (B)  
An Employer may adopt a different vesting schedule for its Members’ (i) Profit
Sharing Accounts, (ii) Matching Amounts (including amounts contributed by the
Employer under Article III, Section 3, Formula 1) and (iii) Basic Amounts and
Supplemental Amounts (under Article III, Section 3, Formula 2).
  (C)  
If an Employer elects to adopt an automatic enrollment program, as provided in
Article III, Section 10(D), Employer contributions shall vest as specified in
such Article III, Section 10(D).
  (D)  
In accordance with Subsection (A) above, one or more of the following schedules
may be elected by the Employer:

Schedule 1: Applicable Employer contributions (and related earnings) shall
immediately and fully vest. If the eligibility requirement(s) selected by the
Employer under Article II, Section 2(B), require(s) that an Employee complete a
period of Employment which is longer than 12 consecutive months, this vesting
Schedule 1 shall be automatically applicable.
Schedule 2: Applicable Employer contributions (and related earnings) shall
become nonforfeitable and fully vested in accordance with the schedule set forth
below:

          Completed   Vested   Years of Employment   Percentage  
 
       
Less than 2
    0 %
2 but less than 3
    20 %
3 but less than 4
    40 %
4 but less than 5
    60 %
5 but less than 6
    80 %
6 or more
    100 %

Schedule 3: Applicable Employer Contributions (and related earnings) shall
become nonforfeitable and fully vested in accordance with the schedule set forth
below:

          Completed   Vested   Years of Employment   Percentage  
 
       
Less than 5
    0 %
5 or more
    100 %

 

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Effective with respect to Employer contributions attributable to Employer basic,
supplemental or profit sharing contributions made on or after January 1, 2007,
this vesting schedule shall not be available for such contributions. Employer
contributions, attributable to basic, supplemental or profit-sharing
contributions, with respect to an Employer that had elected this Schedule 3
vesting schedule for such contributions, made on or after January 1, 2007, shall
vest in accordance with Schedule 4.
Schedule 4: Applicable Employer Contributions (and related earnings) shall
become nonforfeitable and fully vested in accordance with the schedule set forth
below:

          Completed   Vested   Years of Employment   Percentage  
 
       
Less than 3
    0 %
3 or more
    100 %

Schedule 5: Applicable Employer Contributions (and related earnings) shall
become nonforfeitable and fully vested in accordance with the schedule set forth
below:

          Completed   Vested   Years of Employment   Percentage  
 
       
Less than 1
    0 %
1 but less than 2
    25 %
2 but less than 3
    50 %
3 but less than 4
    75 %
4 or more
    100 %

Schedule 6: Applicable Employer Contributions (and related earnings) shall
become nonforfeitable and fully vested in accordance with the schedule set forth
by the Employer in accordance with applicable law.
Notwithstanding the vesting schedules above, a Member’s interest in his Account
shall become 100% vested in the event that (i) the Member dies while in service
with the Employer and the Plan has received notification of death, (ii) the
Member has been approved for Disability, pursuant to the provisions of
Article VII, Section 4, and the Plan has received notification of Disability, or
(iii) the Member has attained Normal Retirement Age while in service with the
Employer.

 

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(E)  
Vesting Election

  (1)  
Except as otherwise provided in the next following paragraph, in the event that
the Employer adopts the Plan as a successor plan to another defined contribution
plan qualified under Section 401(a) and 501(a) of the Code, or in the event that
the Employer changes or amends a vesting schedule adopted under this Article,
any Member who was covered under such predecessor plan or the pre-amendment
vesting schedule under the Plan, and who has completed at least 3 Years of
Employment with such Employer, may elect to have the nonforfeitable percentage
of the portion of his Account which is subject to such vesting schedule computed
under such predecessor plan’s vesting provisions, or computed without regard to
such change or amendment (a “Vesting Election”). Any Vesting Election shall be
made by notifying the Pentegra DC Plan Office in writing within the election
period hereinafter described. The election period shall begin on the date such
amendment is adopted or the date such change is effective, or the date the Plan
which serves as a successor plan is adopted or effective, as the case may be,
and shall end no earlier than the latest of the following dates: (i) the date
which is 60 days after the day such amendment is adopted; (ii) the date which is
60 days after the day such amendment or change becomes effective; (iii) the date
which is 60 days after the day the Member is given written notice of such
amendment or change by the Pentegra DC Plan Office; (iv) the date which is
60 days after the day the Plan is adopted by the Employer or becomes effective;
or (v) the date which is 60 days after the day the Member is given written
notice that the Plan has been designated as a successor plan. Any such election
once made shall be irrevocable.

  (2)  
To the extent permitted under the Code and Regulations, an Employer described in
the foregoing paragraph may elect to treat all of its Members who are eligible
to make a Vesting Election as having made such Vesting Election if the Vesting
Schedule resulting from such an election is more favorable than the Vesting
Schedule that would apply pursuant to the Plan amendment. Furthermore, subject
to the requirements of the applicable Regulations, the Employer may elect to
treat all its Members, who were employed by the Employer on or before the
effective date of the change or amendment, as subject to the prior vesting
schedule, provided such prior schedule is more favorable.

(F)  
An Employer may, at its option, fully vest any Employer contributions (as
elected by the Employer) and related earnings allocated to Members’ Accounts
whose employment terminated pursuant to a sale of a line of business,
subsidiary, or a division, except that the Employer’s election shall be
ineffective if it is determined that such election is discriminatory.
  (G)  
Effective January 1, 2002, a Member’s accrued benefit derived from Employer
matching contributions shall vest as provided by the Employer, except that the
vesting schedule elected by the Employer for Employer matching contributions
(and related earnings) credited to the Member’s Account on or after January 1,
2002 must be nonforfeitable and fully vested in accordance with the minimum
vesting schedules under Section 411(a)(12) of the Code. If the Employer has
elected a vesting schedule for Employer matching contributions which does not
satisfy Section 411(a)(12) of the Code as of January 1, 2002, the Member’s
vested interest in his Account attributable to Employer matching contributions
made on or after January 1, 2002, shall not be less than the percentage
determined in accordance with the following schedule:

          Completed   Vested   Years of Employment   Percentage  
 
       
Less than 2
    0 %
2 but less than 3
    20 %
3 but less than 4
    40 %
4 but less than 5
    60 %
5 but less than 6
    80 %
6 or more
    100 %

 

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Notwithstanding the schedule provided above, if, as of December 31, 2001, an
Employer has elected a five (5) year cliff vesting schedule, under Schedule 3
above, for Employer matching contributions, the vested interest of each Member
for Employer matching contributions (and related earnings) credited to the
Member’s Account on or after January 1, 2002, shall not be less than the
percentage determined in accordance with the following schedule:

          Completed   Vested   Years of Employment   Percentage  
 
       
Less than 3
    0 %
3 or more
    100 %

Section 2. Forfeitures

(A)  
If a Member who was partially vested in his Account on the date of his
termination of Employment returns to Employment, his years of Employment prior
to the Break in Service shall be included in determining future vesting and, if
he returns before incurring 5 consecutive one-year Breaks in Service, any
amounts forfeited from his Account shall be restored to his Account; provided,
however, that if such a Member has received a distribution pursuant to
Article VII, Section 3 or Article III, Section 8, his non-vested account Units
shall not be restored unless he repays to the Plan the full amount distributed
to him before the earlier of (i) 5 years after the first date on which the
Member is subsequently reemployed by the Employer, or (ii) the close of the
first period of 5 consecutive one-year Breaks in Service commencing after the
withdrawal. The amounts restored to the Member’s Account will be valued on the
Valuation Date coincident with or next following the later of (i) the date the
Employee is rehired, or (ii) the date a new enrollment application is received
by the Pentegra DC Plan Office and (iii) the date the Employee repays the full
amount previously distributed to him that resulted in the forfeiture. If a
Member terminates Employment without any vested interest in his Account, he
shall (i) immediately be deemed to have received a total distribution of his
Account and (ii) thereupon forfeit his entire Account; provided that if such
Member returns to Employment before the number of consecutive one-year Breaks in
Service equals or exceeds the greater of (i) 5, or (ii) the aggregate number of
the Member’s Years of Service prior to such Break in Service, his Account shall
be restored in the same manner as if such Member had been partially vested at
the time of his termination of Employment and had his non-vested Account
restored upon a return to employment, and his Years of Employment prior to
incurring the first Break in Service shall be included in any subsequent
determination of his vesting service. Notwithstanding anything herein to the
contrary, in determining whether a Member has a vested interest in his Account
derived from Employer contributions for purposes of Code Sections 410(a)(5)(D)
and 411(a)(6)(D), the Member’s 401(k) Elective Deferrals shall be taken into
account and treated as derived from Employer contributions.

 

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(B)  
Forfeited amounts, as described in the preceding Paragraph A, shall be made
available to the Employer through a transfer from the Member’s Account to the
Employer Hold Account, upon: (1) if the Member had a vested interest in his
Account at his termination of Employment, the earlier of (i) the date as of
which the Member receives a distribution of his entire vested interest in his
Account or (ii) the date upon which the Member incurs 5 consecutive one-year
Breaks in Service or (2) the date of the Member’s termination of Employment, if
the Member then had no vested interest in his Account. Once so transferred, such
amounts shall be used at the option of the Employer to (i) reduce administrative
expenses (in accordance with Article IX, Section 2) for that Contribution
Determination Period, (ii) offset any contribution to be made by such Employer
for that Contribution Determination Period, or (iii) be allocated to all
eligible Members at the end of such Contribution Determination Period in
accordance with clause (ii) of the first sentence in Article III,
Section 8(C)(1). The Employer Hold Account, referenced in this Paragraph (B),
shall be maintained to receive, in addition to the forfeitures described above,
(i) contributions in excess of the limitations contained in Section 415 of the
Code, as described in Article X, Section 1(C),(ii) amounts, if any, forfeited
pursuant to Sections 4 and 7 of Article III, and (iii) Employer contributions
made in advance of the date allocable to Members.

 

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ARTICLE VII WITHDRAWAL PAYMENTS
Section 1. General

(A)  
All payments in respect of a Member’s Account shall be made in cash from the
Trust Fund and in accordance with the provisions of this Article or Articles XI
or XII or Article III, Section 4. The amount of payment will be determined in
accordance with the value of the Member’s Account on the Valuation Date
coinciding with or next following the date proper notice is filed with the
Board, unless following such Valuation Date a decrease in the value of the
Member’s investment in any of the Investment Funds or other Account investment
occurs prior to the date the Member’s Account is paid in which case that part of
the payment which is based on such investments shall equal the value of such
increments determined as of the date of payment which date shall occur as soon
as administratively practicable on or following the Valuation Date such proper
notice is filed with the Board. If Units are redeemed to make a payment of
benefits, the redemption date Unit value with respect to a Member’s investment
in any Investment Fund shall equal the value of a Unit in such Investment Fund,
as determined in accordance with the valuation method applicable to Unit
investments in such Fund on the date the Member’s investment is redeemed.
     
Payments provided under this Section will be made in a lump sum as soon as
practicable after such Valuation Date or date of redemption, as may be
applicable, subject to any applicable restriction on redemption imposed on
amounts invested in any of the available Investment Funds.

(B)  
At the election of the Employer, the Employer can suspend matching contributions
to the Plan on behalf of a Member, during his uninterrupted period of Service
with such Employer, who makes a withdrawal from his Regular Account for a period
of 6 months after such withdrawal, except that (i) if the withdrawal does not
exceed the amount of the Member’s contributions in his Regular Account plus
earnings thereon, Employer contributions on his behalf may resume 3 months after
such withdrawal, and (ii) if the withdrawal does not exceed the amount, if any,
of the Member’s contributions in his Regular Account made prior to January 1,
1987 without earnings, then Employer contributions on his behalf shall not be
affected by such withdrawal.
  (C)  
Any partial withdrawal from a Member’s Regular Account or Rollover Account shall
be in an amount of at least $1,000 or shall be for the full amount of either
(a) the Member’s contributions made prior to January 1, 1987 without earnings or
(b) the Member’s contributions plus earnings thereon. Any partial withdrawal
shall be deemed to come first from the Member’s contributions made prior to
January 1, 1987 without earnings referred to in (ii) above, second
proportionately from the Member contributions made after December 31, 1986 plus
earnings thereon, and finally from the balance of his Regular Account or
Rollover Account.
  (D)  
Any amounts paid under this Article may not be returned to the Plan.

 

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Section 2. Account Withdrawal While Employed
A Member may voluntarily withdraw his Account (other than his 401(k) Account,
Safe Harbor CODA Account, Profit Sharing Account, or Profit Sharing Rollover
Amounts, if any) while in Employment by filing a notice of withdrawal with the
Pentegra DC Plan Office; provided, however, that in the event his Employer has
elected to provide annuity options under Article VII, Section 3(B)(2) and a
Member has elected an annuity form of payment, no withdrawals may be made from a
married Member’s Account without the written consent of such Member’s Spouse
(which consent shall be subject to the procedures set forth in Article III,
Section 6(B)). Notwithstanding, the Employer may, at its option, provide that a
Member be allowed to withdraw all or a portion of his Profit Sharing Account or
Profit Sharing Rollover Amounts, if any. Only one in service withdrawal under
this Section may be made in any Plan Year from each of the Member’s Regular
Account and Rollover Account. This restriction shall not, however, apply to a
withdrawal of a Member’s contributions made prior to January 1, 1987 without
earnings, or a withdrawal under this Section in conjunction with a hardship
withdrawal as defined under Article III, Section 4(H).
Notwithstanding the foregoing paragraph, a Member shall not withdraw any
Matching, Basic, Profit Sharing, or Supplemental contributions made by his
Employer under Article III, Section 2 or Section 3 and credited to his Regular
Account unless (i) the Member has completed 60 months of participation in the
Plan, (ii) the withdrawal occurs at least 24 months after such Matching, Basic,
Profit Sharing, or Supplemental contributions were made by the Employer,
(iii) the Member’s Employer terminates its participation in the Plan or (iv) the
Member dies, is disabled, retires, terminates Employment or attains age 591/2.
For purposes of the preceding requirements, if the Member’s Account includes
amounts which have been transferred from a defined contribution plan established
prior to the adoption of the Plan by the Member’s Employer, the period of time
during which amounts were held on behalf of such Member and the periods of
participation of such Member under such defined contribution plan shall be taken
into account.

Section 3.  
Account Withdrawal Upon Termination of Employment or Employer Participation

(A)  
Except as provided in Article III, Sections 4 and 8, a Member who terminates
Employment with a participating Employer, or whose Employer terminates its
participation in the Plan under Article XI, may withdraw his Account at any time
thereafter up to attainment of age 701/2 or, if elected by his Employer in
accordance with the provisions of Article XI, Section 3, may transfer his
Account, including all outstanding loan balances, to a qualified successor plan
maintained by his Employer following the termination by the Employer of its
participation under the Plan; provided, however, that the Member may not
transfer outstanding loan balances unless such qualified successor plan provides
participant loans. For purposes of this Section 3, a qualified successor plan is
an employee benefit plan established or maintained by the Employer which (i) has
received a favorable determination letter from the IRS stating that such plan
satisfies the then current qualification and tax exemption requirements of the
Code or with respect to which an opinion of counsel to the same effect, and in
such form as may be satisfactory to the Pentegra DC Plan Office, (ii) has
provided the Pentegra DC Plan Office with written certification by its
appropriate fiduciaries that in the event of a transfer to such successor plan
of the withdrawn assets, the successor plan shall be fully liable for the
payment of all transferred benefits of the Members of such Employer (who consent
to the transfer), and that the Plan shall not be liable for the payment of any
part of such benefits, (iii) has provided each Member’s written consent to the
transfer and his release of all claims against the Plan arising out of his
membership therein, (iv) meets such other requirements of the IRS, other
appropriate governmental authority or of the Board, which may apply, and
(v) meets such other procedures as may be established by the Board from time to
time.

 

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Any withdrawal under this Section requires that a notice of withdrawal be filed
with the Pentegra DC Plan Office. If a Member does not file such notice, the
value of his Account will be paid to him as soon as practicable after his
attainment of age 701/2, but in no event shall payment commence later than April
1 of the calendar year following the calendar year in which the Member attains
age 70 1/2, unless otherwise provided by Article VII, Section 3(C) or applicable
law.

(B)  (1)  
In lieu of any lump sum payment of his total Account, a Member who has
terminated his Employment may elect in his notice of withdrawal to be paid in
installments (no less frequently than annually), provided that a Member shall
not be permitted to elect an installment period in excess of his remaining life
expectancy (or the joint life expectancy of the Member and his designated
beneficiary) and if a Member attempts such an election, he shall be deemed to
have elected the installment period with the next lowest multiple within the
Member’s remaining life expectancy, subject to the provisions of Article X,
Section 4. The amount of each installment will be equal to the value of the
Member’s Account, multiplied by a fraction, the numerator of which is one and
the denominator of which is the number of remaining installments including the
one then being paid, so that at the end of the installment period so elected,
the total Account will be liquidated. The value of the Units will be determined
in accordance with the Unit values on the Valuation Date on or next following
the Pentegra DC Plan Office’s receipt of his notice of withdrawal and on each
anniversary thereafter. Payment will be made as soon as practicable after each
such Valuation Date, but in no event shall payment commence later than April 1
of the calendar year following the calendar year in which the Member attains age
701/2 subject to Paragraph (C) below. The election of installments hereunder may
not be subsequently changed by the Member, except that upon written notice to
the Pentegra DC Plan Office, the Member may withdraw the balance of the Units in
his Account in a lump sum at any time.

  (2)  
Annuity Option. An Employer may, at its option, elect to provide an annuity
option in addition to the lump sum payment and installment payment options
described in Section 1(A) and Subsection (B)(1) above. In the event an Employer
elects to provide an annuity option, the following provisions shall apply:
       
Unmarried Members: Any unmarried Member who has terminated his Employment may
elect, in lieu of any lump sum or installment payment of his total Account(s)
under Section 1(A) or Subsection (B) above, to receive a benefit payable by
purchase from an insurance company of a single premium contract providing for
(i) a single life annuity for the life of the Member or (ii) an annuity for the
life of the Member and, if the Member dies leaving a designated Beneficiary, a
50% survivor annuity for the life of such designated Beneficiary.
       
Married Members: Except as otherwise provided below, (i) any married Member who
has terminated his Employment and who elected an annuity form of payment shall
receive a benefit payable by purchase from an insurance company of a single
premium contract providing for a Qualified Joint and Survivor Annuity, as
defined under Section 6(B)(1) of Article III, unless the Member’s spouse
executed a valid waiver of the Qualified Joint and Survivor Annuity and (ii) the
Surviving Spouse of any married Member who dies prior to the date payment of his
benefit commences and who elected to receive an annuity form of payment shall be
entitled to a Preretirement Survivor Annuity, as defined under Section 6(B)(4)
of Article III, unless the Member’s spouse executed a valid waiver of the
Preretirement Survivor Annuity.

 

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(C)  
Unless the Member elects otherwise, distribution of benefits will begin no later
than the 60th day after the latest of the close of the Plan Year in which
(i) the Member attains age 65; (ii) occurs the 10th anniversary of the year in
which the Member commenced participation in the Plan; or (iii) the Member
terminates Employment with an Employer. Notwithstanding the foregoing, the
failure of a Member and Spouse to consent to a distribution while a benefit is
immediately distributable shall be deemed to be an election to defer
commencement of payment of any benefit.
     
Effective as of January 1, 1997, and subject to Section 6 of this Article,
payment of a Member’s Account shall not commence later than April 1 of the
calendar year following the later of (i) the calendar year in which the Member
attains age 701/2 or (ii) the calendar year in which the Member retires;
provided however, if the Member is a 5 percent owner (as described in Section
416(i) of the Code), at any time during the Plan Year ending with or within the
calendar year in which the Employee attains age 701/2, any benefit payable to
such Member shall commence no later than April 1 of the calendar year following
the calendar year in which the Member attains age 701/2. Such benefit shall be
paid, in accordance with the Regulations, over a period not extending beyond the
life expectancy of such Member (or the joint life expectancy of the Member and
his designated Beneficiary). For purposes of this Section, life expectancy of a
Member and/or a Member’s spouse may at the election of the Member be
recalculated annually in accordance with the Regulations. The election, once
made, shall be irrevocable. If the Member does not make an election prior to the
time that distributions are required to commence, then life expectancies shall
not be recalculated. If a Member dies after distribution of his interest has
begun, the remaining portion of such interest will continue to be distributed at
least as rapidly as under the method of distribution being used prior to the
Member’s death. In addition, to the extent any payments from the Member’s
Account would be made after the Member’s death, such payments shall be made in
accordance with Section 401(a)(9) of the Code and the IRS Regulations thereunder
(including the minimum distribution incidental benefit requirements).
     
Except as provided in Article VII, Section 6, with respect to distributions
under the Plan made on or after November 1, 2001, for calendar years beginning
on or after January 1, 2001, the Plan will apply the minimum distribution
requirements of section 401(a)(9) of the Internal Revenue Code in accordance
with the regulations under section 401(a)(9) that were proposed on January 17,
2001 (the 2001 Proposed Regulations), notwithstanding any provision of the Plan
to the contrary. If the total amount of the 2001 required minimum distributions
made to a participant prior to November 1, 2001 are equal to or greater than the
amount of required minimum distributions determined under the 2001 Proposed
Regulations, then no additional distributions are required for such participant
for 2001 on or after such date. If the total amount of required minimum
distributions made to a participant prior to November 1, 2001 for 2001 are less
than the amount determined under the 2001 Proposed Regulations, then the amount
of required minimum distributions for 2001 on or after such date will be
determined so that the total amount of required minimum distributions for 2001
is the amount determined under the 2001 proposed Regulations. This amendment
shall continue in effect until the last calendar year beginning before the
effective date of the final regulations under section 401(a)(9) or such other
date as may be published by the Internal Revenue Service.

 

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(D)  
Solely to the extent required under applicable law and regulations, and
notwithstanding any provision of the Plan to the contrary that would otherwise
limit a Distributee’s election under this Subsection (D), a Distributee may
elect, at the time and in the manner prescribed by the Board, to have any
portion of an Eligible Rollover Distribution paid directly to an Eligible
Retirement Plan specified by the Distributee in a Direct Rollover.
Notwithstanding anything herein to the contrary, a Distributee who is a
non-spousal Beneficiary shall only make an Eligible Rollover Distribution to an
Eligible Retirement Pan if such Direct Rollover is accomplished through a direct
trustee to trustee rollover.

For purposes of this Subsection (D), the following terms shall have the
following meanings:

  (1)  
Eligible Rollover Distribution: Solely to the extent required under applicable
law and regulations, an Eligible Rollover Distribution is any distribution of
all or any portion of the balance to the credit of the Distributee, except that
an Eligible Rollover Distribution does not include: any distribution that is one
of a series of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the Distributee or the joint
lives (or joint life expectancies) of the Distributee and the Distributee’s
designated beneficiary, or for a specified period of ten years or more; any
distribution to the extent such distribution is required under Section 401(a)(9)
of the Code; and the portion of any distribution that is not includible in gross
income (determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
       
A portion of a distribution shall not fail to be an Eligible Rollover
Distribution merely because the portion consists of after-tax employee
contributions which are not includible in gross income. However, such portion
may be transferred only to an individual retirement account or annuity described
in section 408(a) or (b) of the Code, or to a qualified defined contribution
plan described in section 401(a) or 403(a) of the Code that agrees to separately
account for amounts so transferred, including separately accounting for the
portion of such distribution which is includible in gross income and the portion
of such distribution which is not so includible.
    (2)  
Eligible Retirement Plan: An Eligible Retirement Plan is an individual
retirement account described in Section 408(a) of the Code, an individual
retirement annuity described in Section 408(b) of the Code, an annuity plan
described in Section 403(a) of the Code, or a qualified trust described in
Section 401(a) of the Code, that accepts the Distributee’s Eligible Rollover
Distribution. However, in the case of an Eligible Rollover Distribution to a
Surviving Spouse, an Eligible Retirement Plan is an individual retirement
account or individual retirement annuity.

 

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An Eligible Rollover Distribution excludes hardship withdrawals as defined in
Section 401(k)(2)(B)(i)(IV) of the Code which are attributable to Member’s
401(k) deferrals under Treasury Regulation Section 1.401(k)-1(d)(2)(ii).
       
An Eligible Retirement Plan shall also mean an annuity contract described in
section 403(b) of the Code and an eligible plan under section 457(b) of the Code
which is maintained by a state, political subdivision of a state, or any agency
or instrumentality of a state or political subdivision of a state and which
agrees to separately account for amounts transferred into such plan from this
plan.
       
Notwithstanding anything herein to the contrary with respect to Distributees who
are non-spousal Beneficiaries, only an individual retirement plan under Sections
408(a) or (b) of the Code shall constitute an Eligible Retirement Plan.
    (3)  
Distributee: A Distributee includes an employee or former employee and effective
January 1, 2002, Distributee shall also include the Member’s Surviving Spouse.
In addition, the employee’s or former employee’s Surviving Spouse and the
employee’s or former employee’s spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as defined in Section 414(p)
of the Code, are Distributees with regard to the interest of the spouse or
former spouse.
       
A Distributee shall also include a non-spousal Beneficiary.
    (4)  
Direct Rollover: A Direct Rollover is a payment by the Plan to the Eligible
Retirement Plan specified by the Distributee.
    (5)  
Roth Elective Deferral Direct Rollover: Notwithstanding anything in this
Paragraph (D) to the contrary, a Direct Rollover of a distribution from a Roth
401(k) Account under the Plan will only be made to another Roth elective
deferral account under an applicable retirement plan described in
Section 402A(e)(1) or to a Roth IRA described in Section 408A of the Code, and
only to the extent the rollover is permitted under the rules of Section 402(c)
of the Code.

  (a)  
The Plan will not provide for a Direct Rollover (including an automatic
rollover) for distributions from a Member’s Roth 401(k) Account if the amount of
the distributions that are Eligible Rollover Distributions are reasonably
expected to total less than $200 during a year. In addition, any distribution
from a Member’s Roth 401(k) Account is not taken into account in determining
whether distributions from a Member’s other Accounts are reasonably expected to
total less than $200 during a year. However, Eligible Rollover Distributions
from a Member’s Roth 401(k) Account are taken into account in determining
whether the total amount of the Member’s account balances under the Plan exceeds
$500 for purposes of mandatory distributions from the Plan.

 

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  (b)  
The provisions of the Plan that allow a Member to elect a Direct Rollover of
only a portion of an Eligible Rollover Distribution, but only if the amount
rolled over is at least $500, is applied by treating any amount distributed from
the Member’s Roth 401(k) Account as a separate distribution from any amount
distributed from the Member’s other accounts in the Plan, even if the amounts
are distributed at the same time.

(E)  
Effective for distributions after December 31, 2001, a Member’s elective
deferrals and earnings attributable to these contributions may be distributed on
account of severance from employment. However, such a distribution shall be
subject to the other provisions of the Plan regarding distributions, other than
provisions that require a separation from service before such amounts may be
distributed.

Section 4. Account Withdrawal Upon Member’s Disability

(A)  
A Member who is separated from Employment by reason of a disability which is
expected to last in excess of 12 consecutive months and who is either
(i) eligible for, or is receiving, disability insurance benefits under the
Federal Social Security Act, (ii) approved for disability under the provisions
of the Pentegra Defined Benefit Plan for Financial Institutions, formerly known
as the Financial Institutions Retirement Fund (a defined benefit pension plan
through which federally insured financial institutions and organizations serving
them may cooperate in providing for the retirement of their employees), or
(iii) approved for disability under the provisions of any other benefit program
or policy maintained by his Employer, which policy or program is applied on a
uniform and nondiscriminatory basis to all Employees of such Employer, shall be
deemed to be disabled for all purposes under the Plan.
  (B)  
The Pentegra DC Plan Office shall determine whether a Member is disabled in
accordance with the terms of Paragraph (A) above; provided, however, approval of
Disability is conditioned upon notice to the Pentegra DC Plan Office of such
Member’s Disability by the Employer within 13 months of the Member’s separation
from Employment. The notice of Disability shall include a certification that the
Member meets one or more of the criteria listed in Paragraph (A) above.
  (C)  
Upon an Employer’s filing a written notice of Disability, a Member may withdraw
his total Account balance under the Plan (including his Rollover Account and/or
total Profit Sharing Account balance, if any) and have such amounts paid to him
in accordance with Article VII, Section 3. In lieu of such lump sum payment, the
Member may elect in his notice of withdrawal to (i) defer receipt of some or all
of his vested Account until April 1 of the calendar year following the calendar
year in which the Member attains 701/2, (ii) elect installment payments, as
described in Section 3(B) of this Article and Article III, Section 8(E)(2), or
(iii) make periodic withdrawals not more frequently than once per year pursuant
to the provisions of Article VII, Section 1; provided, however, if a disabled
Member becomes reemployed subsequent to withdrawal of some or all of his Account
balance, such Member may not repay to the Plan any such withdrawn amounts.

 

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Section 5. Member’s Death

(A)  
Subject to Section 3(B)(2) above, if a married Member dies, his Spouse, as
Beneficiary, will receive a death benefit equal to the value of the Member’s
Account determined on the Valuation Date on or next following the Board’s
receipt of notice that such Member died; provided, however, that if such
Member’s Spouse had consented in writing to the designation of a different
Beneficiary, the Member’s Account will be paid to such designated Beneficiary.
Such nonspousal designation may be revoked by the Member without spousal consent
at any time prior to the Member’s death. If a Member is not married at the time
of his death, his Account will be paid to his designated Beneficiary.
  (B)  
Subject to Section 3(B)(2) above, a Member may elect that upon his death, his
Beneficiary, pursuant to Paragraph (A) above, may receive, in lieu of any lump
sum payment, payment in 5 annual installments (10 if the Spouse is the
Beneficiary, provided that the Spouse’s remaining life expectancy is at least
10 years) whereby the value of 1/5th of such Member’s Units (or 1/10th in the
case of a spousal Beneficiary, provided that the Spouse’s remaining life
expectancy is at least 10 years) in each Investment Fund will be determined in
accordance with the Unit values on the Valuation Date on or next following the
Board’s receipt of notice of the Member’s death and on each anniversary of such
Valuation Date. Payment will be made as soon as practicable after each Valuation
Date until the Member’s Account is exhausted. Such election may be filed at any
time with the Board prior to the Member’s death and may not be changed or
revoked after such Member’s death. If such an election is not in effect at the
time of the Member’s death, his Beneficiary (including any spousal Beneficiary)
may elect to make withdrawals in accordance with this Article, provided that any
balance remaining in the deceased Member’s Account be withdrawn (i) on or before
the December 31 of the calendar year which contains the 5th anniversary, or
(ii) in periodic payments over such longer life-expectancy period as shall be
allowed by Section 401(a)(9) of the Code and the IRS regulations issued
thereunder. Notwithstanding the foregoing provisions of this Paragraph (B),
payment of a Member’s Account shall commence not later than the December 31 of
the calendar year immediately following the calendar year in which the Member
died or, in the event such Beneficiary is the Member’s Surviving Spouse, on or
before the December 31 of the calendar year in which such Member would have
attained age 701/2, if later (or, in either case, on any later date prescribed
by the IRS Regulations). If, upon the Spouse’s or Beneficiary’s death, there is
still a balance in the Account, the value of the remaining Units will be paid in
a lump sum to such Spouse’s or Beneficiary’s estate. Notwithstanding anything in
this Subsection (B) to the contrary, if a Member dies after distribution of his
or her interest has begun, the remaining portion of such interest will continue
to be distributed at least as rapidly as under the method of distribution being
used prior to the Member’s death. In addition, to the extent any payments from a
Member’s Account would be made after a Member’s death, such payments shall be
made in accordance with Section 401(a)(9) of the Code and the IRS Regulations
thereunder (including the minimum distribution incidental benefit requirements).

 

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Section 6. Minimum Distribution Requirements

(A)   General Rules.

  (1)   Effective Date. The provisions of this Section 6 will apply for purposes
of determining required minimum distributions commencing as of November 1, 2002
and thereafter.     (2)   Precedence. The requirements of this Section 6 will
take precedence over any inconsistent provisions of the Plan.     (3)  
Requirements of Treasury Regulations Incorporated. All distributions required
under this Plan will be determined in accordance with Treasury Regulations under
Section 401(a)(9) of the Code, and the minimum distribution incidental death
benefit requirement of Section 401(a)(9)(G) of the Code.     (4)   Limits on
Distributions Periods. As of the fist distribution calendar year, distributions
to a Member, if not made in a single sum, may only be made over the following
periods:

  (a)   the life of the Member,

  (b)   the joint lives of the Member and a designated Beneficiary,

  (c)   a period certain not extending beyond the life expectancy of the Member,
or

  (d)   a period certain not extending beyond the joint life and last survivor
expectancy of the Member and a designated Beneficiary.

(B)   Time and Manner of Distribution.

  (1)   Required Beginning Date. The Member’s entire interest will be
distributed, or begin to be distributed, to the member no later than the
Member’s Required Beginning Date (as defined below).

  (2)   Death of Participant Before Distributions Begin. If the Member dies
before distributions begin, the Member’s entire interest will be distributed, or
begin to be distributed, no later than as follows:

  (a)   If the Member’s Surviving Spouse is the Member’s sole designated
Beneficiary, then, except as provided in the adoption agreement, distributions
to the Surviving Spouse will begin by December 31 of the calendar year
immediately following the calendar year in which the Member died, or by
December 31 of the calendar year in which the member would have attained age 70
1/2, if later.

  (b)   If the Member’s Surviving Spouse is not the Member’s sole designated
Beneficiary, then, except as provided in the adoption agreement, distributions
to the designated Beneficiary will begin by December 31 of the calendar year
immediately following the calendar year in which the Member died.

 

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  (c)   If there is no designated Beneficiary as of September 30 of the year
following the year of the member’s death, the Member’s entire interest will be
distributed by December 31 of the calendar year containing the fifth anniversary
of the Member’s death.

  (d)   If the Member’s Surviving Spouse is the Member’s sole designated
Beneficiary and the surviving spouse dies after the Member but before
distributions to the Surviving Spouse begin, this Section 6(B)(2), other than
Section 6(B)(2)(a), will apply as if the Surviving Spouse were the Member.

For purposes of this Section 6(B)(2) and Section 6(D), unless Section 6(B)(2)(d)
applies, distributions are considered to begin on the Member’s Required
Beginning Date. If Section 6(B)(2)(d) applies, distributions are considered to
begin on the date distributions are required to begin to the surviving spouse
under Section 6(B)(2)(a). If distributions under an annuity purchased from an
insurance company irrevocably commence to the Member before the member’s
Required Beginning Date (or to the Member’s Surviving Spouse before the date
distributions are required to begin to the surviving spouse under
Section 6(B)(2)(a)), the date distributions are considered to begin is the date
distributions actually commence.

  (3)   Forms of Distribution. Unless the Member’s interest is distributed in
the form of an annuity purchased from an insurance company or in a single sum on
or before the Required Beginning Date, as of the first distribution calendar
year distributions will be made in accordance with Sections 6.3 and 6.4 of this
Article. If the Member’s interest is distributed in the form of an annuity
purchased from an insurance company, distributions thereunder will be made in
accordance with the requirements of Section 401(a)(9) of the Code and the
Treasury Regulations.

(C)   Required Minimum Distributions During Participant’s Lifetime.

  (1)   Amount of Required Minimum Distribution For Each Distribution Calendar
Year. During the Member’s lifetime, the minimum amount that will be distributed
for each distribution calendar year is the lesser of:

  (a)   the quotient obtained by dividing the Member’s account balance by the
distribution period in the Uniform Lifetime Table set forth in Section
1.401(a)(9)-9, Q&A-2, of the Treasury Regulations, using the Member’s age as of
the Member’s birthday in the distribution calendar year; or

  (b)   if the Member’s sole designated Beneficiary for the distribution
calendar year is the Member’s Spouse, the quotient obtained by dividing the
Member’s account balance by the number in the Joint and Last Survivor Table set
forth in Section 1.401(a)(9)-9, Q&A-3 of the Treasury Regulations, using the
Member’s and Spouse’s attained ages as of the Member’s and Spouse’s birthdays in
the distribution calendar year.

 

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  (2)   Lifetime Required Minimum Distributions Continue Through Year of
Participant’s Death. Required minimum distributions will be determined under
this section 6(C) of Article VII beginning with the first distribution calendar
year and up to and including the distribution calendar year that includes the
Member’s date of death.

(D)   Required Minimum Distributions After Member’s Death.

  (1)   Death On or After Date Distributions Begin.

  (a)   Member Survived by Designated Beneficiary. If the Member dies on or
after the date distributions begin and there is a designated Beneficiary, the
minimum amount that will be distributed for each distribution calendar year
after the year of the Member’s death is the quotient obtained by dividing the
Member’s account balance by the longer of the remaining life expectancy of the
Member or the remaining life expectancy of the Member’s designated Beneficiary,
determined as follows:

  (i)   The Member’s remaining life expectancy is calculated using the age of
the Member in the year of death, reduced by one for each subsequent year.

  (ii)   If the Member’s Surviving Spouse is the Member’s sole designated
Beneficiary, the remaining life expectancy of the Surviving Spouse is calculated
for each distribution calendar year after the year of the Member’s death using
the Surviving Spouse’s age as of the Spouse’s birthday in that year. For
distribution calendar years after the year of the Surviving Spouse’s death, the
remaining life expectancy of the Surviving Spouse is calculated using the age of
the Surviving Spouse as of the Spouse’s birthday in the calendar year of the
Spouse’s death, reduced by one for each subsequent calendar year.

  (iii)   If the Member’s Surviving Spouse is not the Member’s sole designated
Beneficiary, the designated Beneficiary’s remaining life expectancy is
calculated using the age of the Beneficiary in the year following the year of
the Member’s death, reduced by one for each subsequent year.

  (b)   No Designated Beneficiary. If the Member dies on or after the date
distributions begin and there is no designated Beneficiary as of September 30 of
the year after the year of the Member’s death, the minimum amount that will be
distributed for each distribution calendar year after the year of the Member’s
death is the quotient obtained by dividing the Member’s account balance by the
Member’s remaining life expectancy calculated using the age of the Member in the
year of death, reduced by one for each subsequent year.

 

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  (2)   Death Before Date Distributions Begin.

  (a)   Participant Survived by Designated Beneficiary. Except as provided in
the adoption agreement, if the Member dies before the date distributions begin
and there is a designated Beneficiary, the minimum amount that will be
distributed for each distribution calendar year after the year of the Member’s
death is the quotient obtained by dividing the Member’s account balance by the
remaining life expectancy of the Member’s designated Beneficiary, determined as
provided in section 6(D)(1) of Article VII.

  (b)   No Designated Beneficiary. If the Member dies before the date
distributions begin and there is no designated Beneficiary as of September 30 of
the year following the year of the Member’s death, distribution of the Member’s
entire interest will be completed by December 31 of the calendar year containing
the fifth anniversary of the Member’s death.

  (c)   Death of Surviving Spouse Before Distributions to Surviving Spouse Are
Required to Begin. If the Member dies before the date distributions begin, the
Member’s surviving spouse is the Member’s sole designated Beneficiary, and the
Surviving Spouse dies before distributions are required to begin to the
Surviving Spouse under section 6(B)(2)(a) of Article VII, this section 6(D)(2)
of Article VII will apply as if the Surviving Spouse were the Member.

(E)   Definitions.

  (1)   Designated Beneficiary. The individual who is designated by the Member
(or the Member’s Surviving Spouse) as the Beneficiary of the Member’s interest
under the Plan and who is the designated Beneficiary under Section 401(a)(9) of
Code and Section 1.401(a)(9)-4 of the Treasury Regulations.

  (2)   Distribution Calendar Year. A calendar year for which a minimum
distribution is required. For distributions beginning before the Member’s death,
the first distribution calendar year is the calendar year immediately preceding
the calendar year which contains the Member’s Required Beginning Date. For
distributions beginning after the Member’s death, the first distribution
calendar year is the calendar year in which distributions are required to begin
under section 6(B)(2) of Article VII. The required minimum distribution for the
Member’s first distribution calendar year will be made on or before the Member’s
Required Beginning Date. The required minimum distribution for other
distribution calendar years, including the required minimum distribution for the
distribution calendar year in which the Member’s Required Beginning Date occurs,
will be made on or before December 31 of that distribution calendar year.

  (3)   Life Expectancy. Life expectancy as computed by use of the Single Life
Table in Section 1.401(a)(9)-9, Q&A-1 of the Treasury Regulations.

  (4)   Member’s Account Balance. The account balance as of the last valuation
date in the calendar year immediately preceding the distribution calendar year
(valuation calendar year) increased by the amount of any contributions made and
allocated or forfeitures allocated to the account balance as of dates in the
valuation calendar year after the valuation date and decreased by distributions
made in the valuation calendar year after the valuation date. The account
balance for the valuation calendar year includes any amounts rolled over or
transferred to the Plan either in the valuation calendar year or in the
distribution calendar year if distributed or transferred in the valuation
calendar year.

 

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  (5)   Required Beginning Date. The required beginning date of a Member is
April 1 of the calendar year following the later of the calendar year in which
the Member attains age 701/2 or the calendar year in which the participant
retires, except that the benefit distributions to a 5% owner must commence by
April 1 of the calendar year following the calendar year in which the Member
attains age 701/2.

  (6)   5% owner. A Member is treated as a 5% owner for purposes of this
Section 5 if such Member is a 5% owner as defined in Section 416 of the Code at
any time during the Plan Year ending with or within the calendar year in which
such owner attains age 70 1/2. Once distributions have begun to a 5% owner under
this Section 5 they must continue to be distributed, even if the Member ceases
to be a 5% owner in a subsequent year.

(F)   TEFRA Section 242(b)(2) Elections.

  (1)   Notwithstanding the other requirements of this Section 6 of Article VII,
distribution on behalf of any Employee, including a 5% owner who has made a
designation under section 242(b)(2) of the Tax Equity and Fiscal Responsibility
Act (a “section 242(b)(2) election”) may be made in accordance with all of the
following requirements (regardless of when such distribution commences):

  (a)   The distribution by the Plan is one which would not have disqualified
such Plan under section 401(a)(9) of the Code as in effect prior to amendment by
the Deficit Reduction Act of 1984.

  (b)   The distribution is in accordance with a method of distribution
designated by the Member whose interest in the Plan is being distributed or, if
the Member is deceased, by a Beneficiary of such Member.

  (c)   Such designation was in writing, was signed by the Member or the
Beneficiary, and was made before January 1, 1984.

  (d)   The Member had accrued a benefit under the Plan as of December 31, 1983.

  (e)   The method of distribution designated by the Member or the Beneficiary
specifies the time at which distributions will commence, the period over which
distributions will be made, and in the case of any distribution upon the
Member’s death, the Beneficiaries of the Member listed in order of priority.

  (2)   A distribution upon death will not be covered by this transitional rule
unless the information in the designation contains the required information
described above with respect to the distributions to be made upon the death of
the Member.

 

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  (3)   For any distribution which commences before January 1, 1984, but
continues after December 31, 1983, the Member, or the Beneficiary, to whom such
distribution is being made, will be presumed to have designated the method of
distribution under which the distribution is being made if the method of
distribution was specified in writing and the distribution satisfies the
requirements in Sections 6(F)(1)(a) and 6(F)(1)(e) of Article VII.

  (4)   If a designation is revoked, any subsequent distribution must satisfy
the requirements of Section 401(a)(9) of the Code and the Treasury Regulations
thereunder. If a designation is revoked subsequent to the date distributions are
required to begin, the Plan must distribute by the end of the calendar year
following the calendar year in which the revocation occurs the total amount not
yet distributed which would have been required to have been distributed to
satisfy Section 401(a)(9) of the Code and the Treasury Regulations thereunder,
but for the section 242(b)(2) election. For calendar years beginning after
December 31, 1988, such distributions must meet the minimum distribution
incidental benefit requirements. Any changes in the designation will be
considered to be a revocation of the designation. However, the mere substitution
or addition of another Beneficiary (one not named in the designation) under the
designation will not be considered to be a revocation of the designation, so
long as such substitution or addition does not alter the period over which
distributions are to be made under the designation, directly or indirectly (for
example, by altering the relevant measuring life).

  (5)   In the case in which an amount is transferred or rolled over from one
plan to another plan, the rules in Treasury Regulations Section 1.401(a)(9)-8,
Q&A-14 and Q&A-15, shall apply.

(G)   Transition Rules.

  (1)   Required minimum distributions before November 1, 2002 were made
pursuant to Article VII, Sections 3(C) and 6(G)(2) through 6(G)(3) below, as
applicable.

  (2)   2000 and Before. Required minimum distributions for calendar years after
1984 and before 2001 were made in accordance with Section 401(a)(9) and the
proposed Treasury Regulations thereunder published in the Federal Register on
July 27, 1987 (the “1987 Proposed Regulations”).

  (3)   2001 and 2002. Required minimum distributions for calendar years 2001
and 2002 (made on or after November 1, 2001 and on or before October 31, 2002)
were made in accordance with Section 401(a)(9) and the Treasury Regulations
thereunder that were proposed on January 17, 2001.

 

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ARTICLE VIII LOAN PROGRAM
Section 1. General
An Employer may, at its option, make available this loan program for any Member
(and, if applicable under Section 8 of this Article, any Beneficiary), subject
to applicable law. In the event amounts are transferred to the Plan from a
retirement plan subject to Section 401(a)(11) of the Code, no loans may be made
from a married Member’s Account without the written consent of such Member’s
Spouse which shall be obtained no earlier than the beginning of the 90-day
period that ends on the date on which the loan is to be secured by any portion
of such Member’s Account. The consent must be in writing, must acknowledge the
effect of the loan, and must be notarized. Such consent shall thereafter be
binding with respect to the consenting Spouse or any subsequent Spouse with
respect to that loan. In the event an Employer elects the loan program under
this Article VIII, loans shall be available from the Rollover Accounts of any
Employees of the Employer who have not yet become Members.
Section 2. Loan Application

(A)   Subject to the restrictions described in Paragraph (B) of this Section, a
Member in Employment may borrow from his Account by filing an application with
the Pentegra DC Plan Office. Such application (hereinafter referred to as a
“completed application”) shall (i) specify the terms pursuant to which the loan
is requested to be made and (ii) provide such information and documentation as
the Board shall require, including a note, duly executed by the Member, granting
a security interest of an amount not greater than 50% of his vested Account, to
secure the loan. With respect to such Member, the completed application shall
authorize the repayment of the loan through payroll deductions. Such loan will
become effective upon the Valuation Date coinciding with or next following the
date on which his completed application and other required documents were
received by the Pentegra DC Plan Office, subject to the same conditions with
respect to the amount to be transferred under this Section which are specified
in the Plan procedures for determining the amount of payments made under
Article VII, Section 1(A) of the Plan.

(B)   The Board shall establish standards in accordance with the Code and ERISA
which shall be uniformly applicable to all Members eligible to borrow from their
interests in the Trust Fund similarly situated and shall govern the approval or
disapproval of completed applications. The terms for each loan shall be set
solely in accordance with such standards.

(C)   In accordance with the Board’s established standards, each completed
application shall be reviewed and approved or disapproved as soon as practicable
after the receipt thereof, and the applying Member shall be promptly notified of
such approval or disapproval. Notwithstanding the foregoing, the review of a
completed application, or payment of the proceeds of an approved loan, may be
deferred if the proceeds of the loan would otherwise be paid during the period
commencing on December 1 and ending on the following January 31.

(D)   Subject to Paragraph (C) of this Section and Paragraph (C) of Section 6 of
this Article VIII, upon approval of a completed application, payment of the loan
to the Member shall be made from the Investment Fund(s) in the same proportion
that the designated portion of the Member’s Account is invested at the time of
the loan, and the relevant portion of the Member’s interest in such Investment
Fund(s) shall be cancelled and shall be transferred in cash to the Member. The
Pentegra DC Plan Office shall maintain sufficient records regarding such amounts
to permit an accurate crediting of repayments of the loan.

 

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Section 3. Permitted Loan Amount
The amount of each loan may not be less than $1,000 nor more than the maximum
amount as described below. The maximum amount available for loan under the Plan
(when added to the outstanding balance of all other loans from the Plan to the
borrowing Member) shall not exceed the lesser of: (a) $50,000 reduced by the
excess (if any) of (i) the highest outstanding loan balance attributable to the
Account of the Member requesting the loan from the Plan during the one year
period ending on the day preceding the date of the loan, over (ii) the
outstanding balance of all other loans from the Plan to the Member on the date
of the loan, or (b) 50 percent of the value of the Member’s vested Account based
on the latest available information on the date on which the Pentegra DC Plan
Office receives the completed application for the loan and other required
documents. In determining the maximum amount that a Member may borrow, all
vested assets of his Account, will be taken into consideration, provided that,
where the Employer has not elected to make a Member’s entire Account available
for loans or where a Member’s Account contains investments in a brokerage
account which shall not be available for loans, in no event shall the amount of
the loan exceed the value of such vested portion of the Member’s Account from
which loans are permissible.
Section 4. Source of Funds for Loan
The amount of the loan will be deducted from the Member’s Account in the
Investment Funds in accordance with Section 2(D) of this Article and the Plan
procedures for determining the amount of payments made under Article VII,
Section 1(A). An Employer may elect to not make loans available to Members from
a Member’s Regular Account, 401(k) Account, Safe Harbor CODA Account, Profit
Sharing Account (including Profit Sharing Rollover amounts), and/or Rollover
Account from which the loan shall be allocable based upon the Member’s
designation. Any portion of a Member’s Account which is invested in a brokerage
account shall not be available for loans. The account from which the Member
first chooses to borrow must be exhausted before the Member can borrow any
amount from the other account. A loan will first be allocable (to the extent the
Employer permits Members to take loans from one or more of the Members’
Accounts) out of the amounts which are the least accessible to the Member unless
elected otherwise.
Section 5. Conditions of Loan

(A)   Each loan to a Member under the Plan shall be repaid in level amounts
through regular payroll deductions after the effective date of the loan, and
continuing thereafter with each payroll. Notwithstanding the foregoing sentence,
at the election of the Employer, a loan may be repaid in level monthly payments
or on a payroll period basis, provided that the Employer applies such election
uniformly to all Members. Except as otherwise required by the Code and the IRS
Regulations, each loan shall have a repayment period of not less than 12 months
and not in excess of 60 months except that, if the purpose of the loan is the
purchase of a primary residence, not more than 180 months. After the first
3 monthly payments of the loan have been satisfied, the Member may pay the
outstanding loan balance (including accrued interest from the due date).

 

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(B)   The rate of interest for the term of the loan will be established as of
the loan date, and will be the Barron’s Prime Rate (base rate) plus 1% as
published on the last Saturday of the preceding month, or such other rate as may
be required by applicable law and determined by reference to the prevailing
interest rate charged by commercial lenders under similar circumstances. The
applicable rate would then be in effect through the last business day of the
month.

(C)   Repayment of all loans under the Plan shall be secured by 50% of the
Member’s vested interest in his Account determined as of the origination of such
loan.

(D)   Only one loan may be made to a Member in the Plan Year from his Account
(excluding the Member’s Rollover Account), except that a second loan may be made
from the Member’s Rollover Account, if any, in such Plan Year, unless the
Employer does not permit loans to be made from the Member’s Rollover Account.

(E)   There shall be a reasonable origination fee and/or an annual
administration fee assessed to the Member’s Account for each loan made to a
Member or Beneficiary.

Section 6. Crediting of Repayment.

(A)   Upon lending any amount to a Member, the Board shall establish and
maintain a loan receivable account with respect to, and for the term of, the
loan. The allocations described in this Section shall be made from the loan
receivable account.

(B)   Upon receipt of each monthly or payroll period installment payment and the
crediting thereof to the Member’s loan receivable account, there shall be
allocated to the Member’s Account in the Investment Funds in accordance with his
most recent investment instruction the principal portion of the installment
payment plus that portion of the interest equal to the rate determined in
Section 5(B) of this Article.

(C)   The unpaid balance owed by a Member on a loan under the Plan shall not
reduce the amount credited to his Account. However, from the time of payment of
the proceeds of the loan to the Member, such Account shall be deemed invested,
to the extent of such unpaid balance, in such loan until the complete repayment
thereof or distribution from such Account. Any loan repayment shall first be
deemed allocable to a Member’s Regular Account contributions, then earnings on
such Member’s Regular Account contributions and finally Employer contributions
plus earnings. Notwithstanding the preceding sentence, any loan repayment of
amounts derived from a Member’s 401(k) Account, Regular Account and Rollover
Account shall be applied to such accounts on a proportionate basis that reflects
the allocable portion of those Member accounts deemed invested in the loan.

 

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Section 7. Cessation of Payments on Loan

(A)   If a Member, while employed, fails to make a monthly or payroll period
installment payment when due, as specified in the completed application, subject
to applicable law, he will be deemed to have received a distribution of the
outstanding balance of the loan. If such default occurs after the first
3 monthly payments of the loan have been satisfied, the Member may pay the
outstanding balance, including accrued interest from the due date, by the last
day of the calendar quarter following the calendar quarter which contains the
due date of the last monthly installment payment, in which case no such
distribution will be deemed to have occurred. Subject to applicable law,
notwithstanding the foregoing, a Member that borrows amounts from his 401(k)
Account may not cease to make monthly installment payments while employed and
receiving a Salary from the Employer.

(B)   Except as otherwise provided under Section 8 below, upon a Member’s
termination of Employment, death or Disability, or the termination of his
Employer’s participation in the Plan, no further monthly installment payments
may be made. Unless the outstanding balance, including accrued interest from the
due date, is paid by the last day of the calendar quarter following the calendar
quarter of the date of such occurrence, the Member will be deemed to have
received a distribution of the outstanding balance of the loan including accrued
interest from the due date. This Subsection (B) shall also apply to a Member
(i) whose Employer terminates its participation in the Plan without establishing
or maintaining a qualified successor plan (as defined in Article VII, Section 3)
to which the Member’s Account could be transferred, (ii) who elects not to
transfer the total accumulated balance of his Account to such qualified
successor plan, as provided under Article VII, Section 3(A), where the Employer
has satisfied all conditions and requirements to permit such transfer, or
(iii) who fails to transfer outstanding loan balances as provided under
Article VII, Section 3(A)(2).

Section 8. Loans to Former Members and Beneficiaries
Notwithstanding any other provisions of this Article VIII, a Member who
terminates Employment for any reason or whose Employer terminates participation
in the Plan (a “Terminated Member”) shall be permitted to continue making
scheduled repayments with respect to any loan balance outstanding at the time he
becomes a Terminated Member and any Terminated Member (or Beneficiary) shall be
permitted to borrow from his Account if his Employer (or the Employer of the
Member with respect to whom he is a Beneficiary) permitted loans under the Plan
at the time he became a Terminated Member (or became entitled to benefits as a
Beneficiary). If any individual who continues to make repayments or who borrows
from his Account pursuant to this Section 8 fails to make a monthly installment
payment by the end of the calendar quarter following the calendar quarter of the
scheduled payment date, he will be deemed to have received a distribution of the
outstanding balance of the loan.

 

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ARTICLE IX ADMINISTRATION OF PLAN
Section 1. Board of Directors

(A)   The general administration of the Plan and the general responsibility for
carrying out the provisions of the Plan shall be placed in a Board of Directors
who must be Members of the Plan. The President of the Plan shall be the chief
administrative officer of the Plan, a member ex officio of the Board and, for
purposes of ERISA, the “plan administrator.” The Board shall constitute the
“named fiduciary” for purposes of ERISA. The Board may adopt, and amend from
time to time, by-laws not inconsistent with the Trust and the Plan and shall
have such duties and exercise such powers as are provided in the Plan, Trust
Agreement and by-laws. The number of Directors, their method of election and
their terms of office shall be governed by such by-laws. The Board shall hold an
annual meeting each year and may hold additional meetings from time to time.

(B)   The Board members shall serve without compensation, but shall be
reimbursed for any reasonable expenses incurred in their capacities as Board
members. Neither the Plan Administrator, nor any Board member, officer or
employee of the Plan shall be personally liable by virtue of any contract or
other instrument executed by him or on his behalf in such capacity nor for any
mistake of judgment made in good faith. Each Employer, by its participation in
the Plan, agrees that each member of the Board and officer and employee of the
Plan shall be indemnified by the Employer for any liability, in excess of that
which is covered by insurance, arising out of any act or omission to act in
connection with the Plan, except for fraud or willful misconduct. The obligation
to pay any such expense shall be allocated among the Employers by the Board in
such manner as the Board deems equitable.

(C)   The Board shall elect from its membership a chairman and a vice chairman
of the Board, and shall elect such other officers of the Plan as the Board deems
desirable. The Board may appoint committees and shall arrange for such legal,
accounting, investment advisory or management, administrative and other services
as it deems appropriate to carry out the Plan, and may act in reliance upon the
advice and actions of the persons or firms providing such services. The Board
may delegate to any committee, officer, employee or agent the authority to
perform any act pertaining to the Plan or the administration thereof. No
Employer shall under any circumstances or for any purpose be deemed an agent of
the Board. The Board shall cause to be maintained proper accounts and accounting
procedures and shall submit an Annual Report on the operations of the Plan to
each Employer for the information of its members. The Board may adopt by-laws
governing the conduct of its affairs and may amend such by-laws from time to
time.

(D)   The Board shall have the exclusive right to interpret the Plan and to
determine any question arising under or in connection with the administration of
the Plan. Its decision or action in respect thereof shall be conclusive and
binding upon all persons having an interest in the Trust or under the Plan. The
Board shall have no duty to see that contributions received by the Trustee under
the Plan comply with the provisions of the Plan, nor any duty to enforce payment
of any contributions under the Plan.

 

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(E)  (1)   All claims for benefits under the Plan shall be submitted in writing
to, and within a reasonable period of time decided by, the President of the
Plan. If the claim is wholly or partially denied, written notice of the denial
shall be furnished within 90 days after receipt of the claim; provided that, if
special circumstances require an extension of time for processing the claim, an
additional 90 days from the end of the initial period shall be allowed for
processing the claim, in which event the claimant shall be furnished with a
written notice of the extension prior to the termination of the initial 90-day
period indicating the special circumstances requiring an extension. The written
notice denying the claim shall set forth the reasons for the denial, including
specific reference to pertinent provisions of the Plan on which the denial is
based, a description of any additional information necessary to perfect the
claim and information regarding review of the claim and its denial.

  (2)   A claimant may review all pertinent documents and may request a review
by the Board of a decision denying the claim. Such a request shall be made in
writing and filed with the Board within 60 days after delivery to the claimant
of written notice of the decision. Such written request for review shall contain
all additional information which the claimant wishes the Board to consider. The
Board may hold a hearing or conduct an independent investigation, and the
decision on review shall be made as soon as possible after the Board’s receipt
of the request for review. Written notice of the decision on review shall be
furnished to the claimant within 60 days after receipt by the Board of a request
for review, unless special circumstances require an extension of time for
processing, in which event an additional 60 days shall be allowed for review and
the claimant shall be so notified in writing. Written notice of the decision on
review shall include specific reasons for the decision. For all purposes under
the Plan, such decision on claims (where no review is requested) and decision on
review (where review is requested) shall be final, binding and conclusive on all
interested persons as to participation and benefits eligibility, the amount of
benefits and as to any other matter of fact or interpretation relating to the
Plan.

 

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Section 2. Trust Agreement

(A)   The Board shall enter into one or more Trust Agreements with a Trustee or
Trustees selected by the Board. The Trust established under any such agreement
shall be a part of the Plan and shall provide that all funds received by the
Trustee as contributions under the Plan and the income therefrom (other than
such part as is necessary to pay the expenses and charges referred to in
Paragraph (B) of this Section) shall be held in the Trust Fund for the exclusive
benefit of the Members or their Beneficiaries, and managed, invested and
reinvested and distributed by the Trustee in accordance with the Plan. Sums
received for investment may be invested (i) wholly or partly through the medium
of any common, collective or commingled trust fund maintained by a bank or other
financial institution and which is qualified under Sections 401(a) and 501(a) of
the Code and constitutes a part of the Plan, or (ii) wholly or partly through
the medium of a group annuity or other type of contract issued by an insurance
company and constituting a part of the Plan, and utilizing, under any such
contract, general, commingled or individual investment accounts. Subject to the
provisions of Article XII, the Board may from time to time and without the
consent of any Employer, Member or Beneficiary (a) amend the Trust Agreement or
any such insurance contract in such manner as the Board may deem necessary or
desirable to carry out the Plan, (b) remove the Trustee and designate a
successor Trustee upon such removal or upon the resignation of the Trustee, and
(c) provide for an alternate funding agency under the Plan. The Trustee shall
make payments under the Plan only to the extent, in the amounts, in the manner,
at the time, and to the persons as shall from time to time be set forth and
designated in written authorizations from the Board.

(B)   The Trustee shall from time to time charge against and pay out of the
Trust Fund taxes of any and all kinds whatsoever which are levied or assessed
upon or become payable in respect of such Fund, the income or any property
forming a part thereof, or any security transaction pertaining thereto. To the
extent not paid by the Employers, the Trustee shall also charge against and pay
out of the Trust Fund other expenses incurred by the Trustee in the performance
of its duties under the Trust, the expenses incurred by the Board in the
performance of its duties under the Plan (including reasonable compensation for
agents and cost of services rendered in respect of the Plan), such compensation
of the Trustee as may be agreed upon from time to time between the Board and the
Trustee, and all other proper charges and disbursements of the Trustee or the
Board.

 

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ARTICLE X MISCELLANEOUS PROVISIONS
Section 1. General Limitations

(A)   In order that the Plan be maintained as a qualified plan and trust under
the Code, contributions in respect of a Member shall be subject to the
limitations set forth in this Section, notwithstanding any other provision of
the Plan. The contributions in respect of a Member to which this Section is
applicable are his own contributions and his Employer’s contributions.       For
purposes of this Section 1, a Member’s contributions shall be determined without
regard to any rollover contributions (as defined by Section 401(a)(5) of the
Code). For purposes of this Section 1, a Member’s compensation shall be a
Member’s Form W-2 compensation (within the meaning of IRS
Regulation Section 1.415(c)-2(d)(4)).

(B)   Annual additions to a Member’s Account (including his 401(k) Account,
Regular Accounts and his Profit Sharing Account) and to any other defined
contribution plan maintained by the Member’s Employer in respect of any Plan
Year may not exceed the limitations set forth in Section 415 of the Code, which
are incorporated by reference. For these purposes, “annual additions” shall have
the meaning set forth in Section 415(c)(2) of the Code, as modified elsewhere in
the Code and the Regulations, and the limitation year shall mean the Plan Year
unless any other twelve consecutive month period is designated pursuant to a
written resolution adopted by the Employer and approved by the Board.

    Effective for limitation years beginning after December 31, 2001, except to
the extent permitted under Article III, Section 9 of the Plan and Section 414(v)
of the Code, if applicable, the annual additions that may be contributed or
allocated to a Member’s Account under the Plan for any limitation year shall not
exceed the lesser of:

  (i)   $40,000, as adjusted for increases in the cost-of-living under section
415(d) of the Code, or

  (ii)   100 percent of the Member’s compensation, within the meaning of section
415(c)(3) of the Code, for the limitation year.

(C)   In the event that, due to forfeitures, reasonable error in estimating a
Member’s compensation, or other limited facts and circumstances, total
contributions to a Member’s Account are found to exceed the limitations of this
Section, the Board shall cause contributions made under Article III, Section 1
in excess of such limitations to be refunded to the affected Member, with
earnings thereon, and shall take appropriate steps to reduce, if necessary, the
Employer contributions made with respect to those returned contributions. Such
refunds shall not be deemed to be withdrawals, loans, or distributions from the
Plan. If a Member’s annual contributions exceed the limitations contained in
Paragraph (B) of this Section after the Member’s Article III, Section 1
contributions, with earnings thereon, if any, have been refunded to such Member,
the Profit Sharing contribution to be allocated to any Member in respect of any
Contribution Determination Period (including allocations as provided in this
Paragraph) shall instead be allocated to or for the benefit of all other Members
who are

 

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    Employees in Employment as of the last day of the Contribution Determination
Period as determined under Article III, Section 8(c) and allocated in the same
proportion that each such Member’s Salary for such Contribution Determination
Period bears to the total Salary for such Contribution Determination Period of
all such Members or, the Board may, at the election of the Employer, utilize
such excess to reduce the contributions which would otherwise be made for the
succeeding Contribution Determination Period by the Employer. If, with respect
to any Contribution Determination Period, there is an excess Profit Sharing
contribution, and such excess cannot be fully allocated in accordance with the
preceding sentence because of the limitations prescribed in Paragraph (B) of
this Section, the amount of such excess which cannot be so allocated shall be
allocated to the Employer Hold Account and made available to the Employer
pursuant to the terms of Article VI, Section 2(B)(2) except that any such excess
contribution may not be applied to reduce administrative expenses (in accordance
with Article IX, Section 2). The Board, in accordance with Paragraph (D) of this
Section, shall take whatever additional action may be necessary to assure that
contributions to Members’ Accounts meet the requirements of this Section.

(D)   In addition to the steps set forth in Paragraph (C) above, the Board may
from time to time adjust or modify the maximum limitations applicable to
contributions made in respect of a Member under this Section 1 as may be
required or permitted by the Code or ERISA prior to or following the date that
allocation of any such contributions commence and shall take appropriate action
to real locate the annual contributions which would otherwise have been made but
for the application of this Section.

(E)   Membership in the Plan shall not give any Employee the right to be
retained in the Employment of his Employer and shall not affect the right of the
Employer to discharge any Employee.

(F)   Each Member, Spouse and Beneficiary assumes all risk in connection with
any decrease in the market value of the assets of the Trust Fund. Neither the
Board nor the Trustee guarantees that upon withdrawal the value of a Member’s
Account, his Profit Sharing Account, and/or his Rollover Account will be equal
to or greater than the amount of the Member’s own deferrals or contributions, or
those credited on his behalf in which the Member has a vested interest, under
the Plan.

(G)   The establishment, maintenance or crediting of a Member’s Account pursuant
to the Plan shall not vest in such Member any right, title or interest in the
Trust Fund except at the times and upon the terms and conditions and to the
extent expressly set forth in the Plan and the Trust Agreement.

(H)   The Trust Fund shall be the sole source of payments under the Plan and the
Employer and the Board assume no liability or responsibility for such payments,
and each Member, Spouse or Beneficiary who shall claim the right to any payment
under the Plan shall be entitled to look only to the Trust Fund for such
payment. All contributions to the Trust Fund shall be deemed to have been made
in the State of New York.

Section 2. Top Heavy Provisions
In respect of any Employer, the Plan will be considered a Top Heavy Plan for any
Plan Year if it is determined to be a Top Heavy Plan as of the last day of the
preceding Plan Year.

 

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The provisions of this Section 2 shall apply and supersede all other provisions
in the Plan during each Plan Year with respect to which the Plan, with regard to
such Employer, is determined to be a Top Heavy Plan.

(A)   For purposes of this Section 2, the following terms shall have the
meanings set forth below:

  (1)   “Affiliate” shall mean any entity affiliated with any Employer within
the meaning of Section 414(b), 414(c) or 414(m) of the Code, or pursuant to the
IRS Regulations under Section 414(o) of the Code, except that for purposes of
applying the provisions hereof with respect to the limitation on contributions,
Section 415(h) of the Code shall apply.

  (2)   “Aggregation Group” shall mean the group composed of each qualified
retirement plan of the Employer or an Affiliate in which a Key Employee is a
member and each other qualified retirement plan of the Employer or an Affiliate
which enables a plan of the Employer or an Affiliate in which a Key Employee is
a member to satisfy Sections 401(a)(4) or 410 of the Code. In addition, the
Board may choose to treat any other qualified retirement plan as a member of the
Aggregation Group if such Aggregation Group will continue to satisfy Sections
401(a)(4) and 410 of the Code with such plan being taken into account.

  (3)   “Key Employee” shall mean a “Key Employee” as defined in
Sections 416(i)(1) and (5) of the Code and the IRS Regulations. For purposes of
Section 416 of the Code and for purposes of determining who is a Key Employee,
an Employer which is not a corporation may have “officers” only for Plan Years
beginning after December 31, 1985. For purposes of determining who is a Key
Employee pursuant to this Subparagraph (3), compensation shall have the meaning
prescribed in Section 414(s) of the Code or, to the extent required by the Code
or the IRS Regulations, Section 1.415-2(d) of the IRS Regulations.

  (4)   “Non Key Employee” shall mean a “Non Key Employee” as defined in
Section 416(i)(2) of the Code and the IRS Regulations thereunder.

  (5)   “Top Heavy Plan” shall mean a “Top Heavy Plan” as defined in Section
416(g) of the Code and the IRS Regulations thereunder.

  (6)   “Determination Date” shall mean the last day of the preceding Plan Year
or, in the case of the first Plan Year, the last day of such Plan Year.

  (7)   “Top Heavy Ratio” is a fraction, the numerator of which is the sum of
the account balances of all Key Employees as of the applicable Determination
Date (including any part of any account balance distributed in the five-year
period ending on the Determination Date), and the denominator of which is the
sum of all account balances (including any part of any account balance
distributed in the five-year period ending on the Determination Date), both
computed in accordance with Section 416 of the Code and the IRS Regulations
thereunder.

 

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(B)   Subject to the provisions of Paragraph (D) below, for each Plan Year that
the Plan is a Top Heavy Plan, the Employer’s contribution allocable to each
Employee (other than a Key Employee) who has satisfied the eligibility
requirement(s) of Article II, Section 2, and who is in service at the end of the
Plan Year shall not be less than the lesser of (i) 3% of such eligible
Employee’s compensation (as defined in Section 414(s) of the Code or, to the
extent required by the Code or the IRS Regulations, Section 1.415-2(d) of the
Regulations), provided that for any Plan Year beginning on or after January 1,
1994 no more than $150,000 (adjusted for cost of living to the extent permitted
by the Code and the IRS Regulations) shall be taken into account), or (ii) the
percentage at which Employer contributions for such Plan Year are made and
allocated on behalf of the Key Employee for whom such percentage is the highest.
For the purpose of determining the appropriate percentage under clause (ii), all
defined contribution plans required to be included in an Aggregation Group shall
be treated as one plan. Clause (ii) shall not apply if the Plan is required to
be included in an Aggregation Group which enables a defined benefit plan also
required to be included in said Aggregation Group to satisfy Sections 401(a)(4)
or 410 of the Code. Contributions attributable to salary reduction that are made
to a Key Employee’s 401(k) Account and Roth 401(k) Account shall be taken into
account in determining the minimum required contribution under this Subsection
(B).

(C)   If the Plan is a Top Heavy Plan for any Plan Year, and (i) the Employer
has elected a vesting schedule under Article VI for an employer contribution
type which does not satisfy the minimum Top Heavy vesting requirements or
(ii) if the Employer has not elected a vesting schedule for an employer
contribution type, the vested interest of each Member, who is credited with at
least one Hour of Employment on or after the Plan becomes a Top Heavy Plan, for
each employer contribution type in his Account described in clause (i) or
(ii) above, shall not be less than the percentage determined in accordance with
the following schedule:

          Completed   Vested   Years of Employment   Percentage  
 
       
Less than 2
    0 %
2 but less than 3
    20 %
3 but less than 4
    40 %
4 but less than 5
    60 %
5 but less than 6
    80 %
6 or more
    100 %

    Notwithstanding the schedule provided above, if the Plan is a Top Heavy Plan
for any Plan Year and if an Employer has elected a cliff vesting schedule for an
employer contribution type described in clause (i) or (ii) above, the vested
interest of each Member, who is credited with at least one Hour of Employment on
or after the Plan becomes a Top Heavy Plan, for such employer contribution type
in his Account, shall not be less than the percentage determined in accordance
with the following schedule:

          Completed   Vested   Years of Employment   Percentage  
 
       
Less than 3
    0 %
3 or more
    100 %

 

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(D)   The Board shall, to the maximum extent permitted by the Code and in
accordance with the IRS Regulations, apply the provisions of this Section 2 by
taking into account the benefits payable and the contributions made under the
Pentegra Defined Benefit Plan for Financial Institutions or any other qualified
plan maintained by an Employer, to prevent inappropriate omissions or required
duplication of minimum contributions.

(E)   Effective for Plan Years beginning after December 31, 2001, for purposes
of determining whether the Plan is a top-heavy plan under Section 416(g) of the
Code, and whether the Plan satisfies the minimum benefits requirements of
Section 416(c) of the Code for such years, the following provisions shall apply:

  (1)   “Key Employee” shall mean any Employee or former Employee (including any
deceased employee) who at any time during the Plan Year that includes the
determination date was an officer of the Employer having annual compensation
greater than $130,000 (as adjusted under section 416(i)(1) of the Code for plan
years beginning after December 31, 2002), a 5-percent owner of the employer, or
a 1-percent owner of the employer having annual compensation of more than
$150,000. For this purpose, annual compensation means compensation within the
meaning of section 415(c)(3) of the Code. The determination of who is a Key
Employee will be made in accordance with section 416(i)(1) of the Code and the
applicable regulations and other guidance of general applicability issued
thereunder.

  (2)   The present value of accrued benefits and the amounts of account
balances of an Employee as of the determination date shall be increased by the
distributions made with respect to the Employee under the Plan and any plan
aggregated with the Plan under section 416(g)(2) of the Code during the 1-year
period ending on the determination date. The preceding sentence shall also apply
to distributions under a terminated plan which, had it not been terminated,
would have been aggregated with the Plan under section 416(g)(2)(A)(i) of the
Code. In the case of a distribution made for a reason other than separation from
service, death, or disability, this provision shall be applied by substituting
“5-year period” for “1-year period.”         The accrued benefits accounts of
any individual who has not performed services for the employer during the 1-year
period ending on the determination date shall not be taken into account.

  (3)   Employer matching contributions shall be taken into account for purposes
of satisfying the minimum contribution requirements of section 416(c)(2) of the
Code and the Plan. The preceding sentence shall apply with respect to matching
contributions under the Plan, or any other plan maintained by the Employer, to
the maximum extent permitted by the Code and in accordance with the IRS
Regulations. Employer matching contributions that are used to satisfy the
minimum contribution requirements shall be treated as matching contributions for
purposes of the actual contribution percentage test and other requirements of
section 401(m) of the Code.

      The employer may elect to provide that the minimum benefit requirement
shall be met in another plan (including another plan that consists solely of a
cash or deferred arrangement which meets the requirements of section 401(k)(12)
of the Code and matching contributions with respect to which the requirements of
section 401(m)(11) of the Code are met).

 

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Section 3. Information and Communications
Each Employer, Member, Spouse and Beneficiary shall be required to furnish the
Board with such information and data as may be considered necessary by the
Board. All notices, instructions and other communications with respect to the
Plan shall be in such form as is prescribed from time to time by the Board,
shall be mailed by first class mail or delivered personally, and shall be deemed
to have been duly given and delivered only upon actual receipt thereof by the
Board. All information and data submitted by an Employer or a Member, including
a Member’s birth date, marital status, salary and circumstances of his
employment and termination thereof, may be accepted and relied upon by the
Board. All communications from the Board or the Trustee to an Employer, Member,
Spouse or Beneficiary shall be deemed to have been duly given if mailed by first
class mail to the address of such person as last shown on the records of the
Plan.
Section 4. Small Account Balances
Notwithstanding the foregoing provisions of the Plan, and except as provided in
Article III, Section 6(B)(6), if the value of all of a Member’s Account under
the Plan (including a Profit Sharing Account and a Rollover Account, if any),
when aggregated is equal to or exceeds $500, then no Account will be distributed
without the consent of the Member prior to age 65 (at the earliest).
Section 5. Amounts Payable to Incompetents, Minors or Estates
If the Board shall find that any person to whom any amount is payable under the
Plan is unable to care for his affairs because of illness or accident, or is a
minor, or has died, then any payment due him or his estate (unless a prior claim
therefor has been made by a duly appointed legal representative) may be paid to
his Spouse, relative or any other person deemed by the Board to be a proper
recipient on behalf of such person otherwise entitled to payment. Any such
payment shall be a complete discharge of the liability of the Trust Fund
therefor.
Section 6. Non-alienation of Amounts Payable
Except insofar as may otherwise be required by applicable law, or Article VIII,
or pursuant to the terms of a Qualified Domestic Relations Order, no amount
payable under the Plan shall be subject in any manner to alienation by
anticipation, sale, transfer, assignment, bankruptcy, pledge, attachment, charge
or encumbrance of any kind, and any attempt to so alienate shall be void; nor
shall the Trust Fund in any manner be liable for or subject to the debts or
liabilities of any person entitled to any such amount payable; and further, if
for any reason any amount payable under the Plan would not devolve upon such
person entitled thereto, then the Board, in its discretion, may terminate his
interest and hold or apply such amount for the benefit of such person or his
dependents as it may deem proper. For the purposes of the Plan, a “Qualified
Domestic Relations Order” means any judgment, decree or order (including
approval of a property settlement agreement) which has been determined by the
Board in accordance with procedures established under the Plan, to constitute a
Qualified Domestic Relations Order within the meaning of Section 414(p)(1) of
the Code. No amounts may be withdrawn under Article VII and Article III,
Section 8, and no loans granted under Article VIII, if the Pentegra DC Plan
Office has received a document which may be determined following its receipt to
be a Qualified Domestic Relations Order prior to completion of review of such
order by the Office within the time period prescribed for such review by the IRS
Regulations.

 

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Section 7. Unclaimed Amounts Payable
If the Board cannot ascertain the whereabouts of any person to whom an amount is
payable under the Plan, and if, after 5 years from the date such payment is due,
a notice of such payment due is mailed to the address of such person, as last
shown on the records of the Plan, and within 3 months after such mailing such
person has not filed with the Board written claim therefor, the Board may direct
in accordance with ERISA that the payment (including the amount allocable to the
Member’s contributions) be cancelled, and used in abatement of the Plan’s
administrative expenses, provided that appropriate provision is made for
recrediting the payment if such person subsequently makes a claim therefor.
Section 8. Leaves of Absence

(A)   Contribution allocations and vesting service continue to the extent
provided in Paragraphs (B)(1), (2), (3) or (4), below, during any approved Leave
of Absence, provided that the Employer notifies the Plan of its intention to
grant to a specific Employee or Member, pursuant to the Employer’s policy which
is uniformly applicable to all its Employees under similar circumstances, one of
the Leaves of Absence described in Paragraph (B) below, and agrees to notify the
Plan at the conclusion of such leave.

(B)   For purposes of the Plan there are only four types of approved Leaves of
Absence:

  (1)   Non-military leave granted to a Member for a period not in excess of one
year during which service is recognized for vesting purposes and the Member is
entitled to share in any supplemental contributions under Article III, Section 3
or forfeitures under Article VI, Section 2, if any, on a pro rata basis,
determined by the Salary earned during the Plan Year or Contribution
Determination Period; or

  (2)   Non-military leave or layoff granted to a Member for a period not in
excess of one year during which service is recognized for vesting purposes, but
the Member is not entitled to share in any contributions or forfeitures as
defined under (1) above, if any, during the period of the leave; or

  (3)   To the extent not otherwise required by applicable law, military or
other governmental service leave granted to a Member from which he returns
directly to the service of the Employer. Under this leave, a Member may not
share in any contributions or forfeitures as defined under (1) above, if any,
during the period of the leave, but vesting service will continue to accrue; or

 

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  (4)   To the extent not otherwise required by applicable law, a military leave
granted at the option of the Employer to a Member who is subject to military
service pursuant to an involuntary call-up in the Reserves of the U.S. Armed
Services from which he returns to the service of the Employer within 90 days of
his discharge from such military service. Under this leave, a Member is entitled
to share in any contributions or forfeitures as defined under (1) above, if any,
and vesting service will continue to accrue. Notwithstanding any provision of
the Plan to the contrary, if a Member has one or more loans outstanding at the
time of this leave, repayments on such loan(s) may be suspended, if the Member
so elects, until such time as the Member returns to the service of the Employer
or the end of the leave, if earlier.

      The determination of who is a Highly Compensated Employee will be made in
accordance with Section 414(q) of the Code and the IRS Regulations thereunder.

(C)   Notwithstanding any provision of this Plan to the contrary, effective
December 12, 1994, contribution allocations and vesting service with respect to
qualified military service will be provided in accordance with Section 414(u) of
the Code. Loan repayments will be suspended under this Plan as permitted under
Section 414(u)(4) of the Code during such period of qualified military service.

Section 9. Return of Contributions to Employer

(A)   In the case of a contribution that is made by an Employer by reason of a
mistake of fact, such Employer may request the return to it of such contribution
within one year after the payment of the contribution, provided such refund is
made within one year after the payment of the contribution.

(B)   In the case of a contribution made by an Employer or a contribution
otherwise deemed to be an Employer contribution under the Code, such
contribution shall be conditioned upon the deductibility of the contribution by
the Employer under Section 404 of the Code. To the extent the deduction for such
contribution is disallowed, in accordance with IRS Regulations, the Employer may
request the return to it of such contribution within one year after the
disallowance of the deduction.

Section 10. Controlling Law
The Plan and all rights thereunder shall be governed by and construed in
accordance with the laws of the State of New York (without regard to the
principles of the conflicts of laws thereof) and ERISA.

 

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ARTICLE XI TERMINATION OF EMPLOYER PARTICIPATION
Section 1. Termination by Employer
Any Employer may terminate its participation in the Plan by giving the Board
written notice specifying a termination date which shall be a Valuation Date at
least 60 days subsequent to the date such notice is received by the Board.
Section 2. Termination by Board
The Board may terminate any Employer’s participation, as of a termination date
specified by the Board, if the Board determines that the Employer has failed to
make proper contributions or to comply with any other provision of the Plan or
any applicable rulings or Regulations under the Code, within 15 days after
notice and demand by the Board. Except as provided under Article III, Section 3,
upon complete discontinuance of an Employer’s contributions, its participation
shall automatically terminate, and its termination date shall be a Valuation
Date specified by the Board which is within 3 months subsequent to the last day
through which the Employer’s contributions to the Trust Fund were paid.
Section 3. Termination Distribution
If an Employer’s participation is terminated, the Board shall promptly notify
the IRS and such other appropriate governmental authority as applicable law may
require. Neither the Employer not its Employees shall make any further
contributions under the Plan after the termination date, except that the
Employer shall remit to the Board an amount equal to the product of (i) $60
multiplied by (ii) the number of the Employer’s Members and Employees with a
balance in their Accounts as of the termination date, to defray the cost of
implementing its termination. If the Employer elects to permit transfers to a
qualified successor plan in accordance with Article VII, Section 3, for which
Pentegra Services, Inc., will provide services, the Board may waive the
withdrawal fees provided for in this Section 3. Except as Article III, Section 4
may provide, each Employee may thereafter withdraw the current value of his
Accounts in accordance with Article VII. Subject to the provisions of
Article XII, Paragraph (D), an Employer whose participation has been terminated
pursuant to this Article may transfer assets under its prior Plan to a qualified
successor plan, provided such plan satisfies the requirements contained in
Article VII, Section 3 and the transfer is otherwise in accordance with the
procedures of such Section.
Upon the termination of participation under the Plan of an Employee’s or
Member’s Employer, any rights of the Employee or Member to make contributions,
rollovers or transfers to the Plan shall cease.

 

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ARTICLE XII AMENDMENT OR TERMINATION OF THE PLAN AND TRUST

(A)   The Board shall have the right to amend or terminate the Plan or Trust
Agreement at any time in whole or in part, for any reason, and without the
consent of any Employer, Member or Beneficiary, and each Employer by its
adoption of the Plan and Trust shall be deemed to have delegated this authority
to the Board. No amendment, however, shall impair such rights of payment as the
Member or his Beneficiary would have had, if such amendment had not been made,
with respect to contributions made by him or on his behalf prior to such
amendment, except to the extent that such amendment is, in the opinion of the
Board, necessary or desirable to qualify or maintain the Plan and the Trust as a
plan and trust meeting the requirements of Sections 401(a) and 501(a) of the
Code as now in effect or hereafter amended, or any other applicable section of
the Code now or hereafter in force from time to time; and no amendment shall
make it possible for any part of the Trust Fund (other than such part as may be
necessary to pay the expenses and charges referred to in Article IX) to be used
for purposes other than for the exclusive benefit of Members or their
Beneficiaries.

(B)   In the event of termination of the Plan by the Board or upon a complete
discontinuance of contributions under the Plan, the Units credited to each
Member’s Account as of the date of such termination or complete discontinuance
of contributions shall be fully vested in the Member, and the Trustee shall upon
direction of the Board liquidate the assets of the Trust Fund with such
promptness as the Trustee deems prudent. When such liquidation has been
completed and after provision for all expenses and charges referred to in
Article IX, and proportionate adjustment of all Plan Accounts to reflect such
expenses, the Trustee shall pay to each person who was a Member on such
termination date (or in the event of his death on or after such date, to his
Spouse or Beneficiary) a lump sum equal to the amount, if any, then credited to
his Account after such liquidation and provision for expenses and charges.

(C)   Notwithstanding any termination of the Plan by the Board, the Board shall
remain in existence and all the provisions of the Plan shall remain in force
which are necessary for the execution of the Plan and the distribution of the
Trust Fund assets in accordance with this Article.

(D)   No assets of the Plan shall in any event be merged, consolidated with, or
transferred to any other plan unless each Member affected thereby would, if such
plan then terminated immediately after such event, receive thereunder a benefit
which is equal to or greater than the benefit to which he would have been
entitled if the Plan had terminated immediately before such event.

(E)   In the event that any governmental authority or the Board determines that
a partial termination (within the meaning of ERISA) of the Plan has occurred as
to any Employer, then the Units credited to the Account of each Member who is
affected thereby shall be fully vested in such Member and the provisions of
Article XI and this Article XII, which in the opinion of the Board are necessary
for the execution of the Plan and the allocation and distribution of assets of
the Plan, shall apply.

 

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TRUSTS ESTABLISHED UNDER THE PLAN
Assets of the Plan are held in trust under Trust Agreements with Bank of New
York, pursuant to Article IX, Section 2 of the Plan. Any Employer or Member may
obtain a copy of these Trust Agreements from the office of the Plan.

 

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SUMMARY OF MATERIAL MODIFICATIONS
PLAN NAME: FEDERAL HOME LOAN BANK OF NEW YORK
PENTEGRA DC PLAN
In accordance with the requirements of the Employee Retirement Income Security
Act of 1974 (“ERISA”) and regulations thereunder, this is a Summary of Material
Modifications (“SMM”) regarding certain changes to the Federal Home Loan Bank of
New York Pentegra DC Plan (“Plan”).
This SMM supplements the Summary Plan Description (“SPD”) previously provided to
you and is intended to inform you of these Plan changes. You should retain this
document with your copy of the SPD.
Employer Information. The legal name, address, and Federal employer
identification number of the Employer are as follows:
Employer/Plan Sponsor: Federal Home Loan Bank of New York/Pentegra DC Plan
Address: 101 Park Avenue, New York, NY 10178
EIN: 13-6321489
Description of Plan Change(s). The Employer has amended the Plan in the
following respects, effective as of the date or dates specified hereunder:
1. Effective as of July 1, 2009, in addition to making pre-tax elective
deferrals, you may also elect all or a portion of your employee contributions to
be designated as Roth elective deferrals. Unless stated otherwise, Roth elective
deferrals will be treated as elective deferrals for all purposes under the Plan.
For purposes of making distributions, if you designate all or a portion of your
elective deferrals to be Roth elective deferrals, then such deferrals may be
withdrawn from your Roth Elective Deferral Account. The same rules and
restrictions that apply to withdrawals from your 401(k) Account will apply to
withdrawals from your Roth Elective Deferral Account. Earnings associated with
designated Roth contributions will become taxable upon distribution, if such
distribution is made within the 5-tax-year period beginning with the first tax
year for which you made a designated Roth contribution to the Plan.