Document:

Exhibit 10.30

 

401(K) NON-STANDARDIZED
PROTOTYPE ADOPTION AGREEMENT #002

FOR

THE CHARLES SCHWAB
DEFINED CONTRIBUTION PLAN AND TRUST #01

 

	
  Section 1.

  	
  General Plan Information

  	
  2

  
	
   

  	
   

  	
   

  
	
  Section 2.

  	
  Service Definitions for
  Eligibility, Vesting and Allocations

  	
  3

  
	
   

  	
   

  	
   

  
	
  Section 3.

  	
  Eligibility Requirements

  	
  5

  
	
   

  	
   

  	
   

  
	
  Section 4.

  	
  Elective Deferrals

  	
  11

  
	
   

  	
   

  	
   

  
	
  Section 5.

  	
  Safe Harbor Contributions

  	
  11

  
	
   

  	
   

  	
   

  
	
  Section 6.

  	
  Non-Safe Harbor Matching
  Contributions

  	
  12

  
	
   

  	
   

  	
   

  
	
  Section 7.

  	
  Non-Safe Harbor
  Non-Elective Contributions

  	
  14

  
	
   

  	
   

  	
   

  
	
  Section 8.

  	
  Rollovers and Employee
  Contributions

  	
  15

  
	
   

  	
   

  	
   

  
	
  Section 9.

  	
  Prevailing Wage
  Contributions

  	
  16

  
	
   

  	
   

  	
   

  
	
  Section 10.

  	
  Vesting Requirements

  	
  17

  
	
   

  	
   

  	
   

  
	
  Section 11.

  	
  Compensation Definitions

  	
  19

  
	
   

  	
   

  	
   

  
	
  Section 12.

  	
  Allocation of Forfeitures

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 13.

  	
  Allocation of Earnings and
  Losses

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 14.

  	
  Normal and Early
  Retirement Age

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 15.

  	
  Distribution Provisions

  	
  26

  
	
   

  	
   

  	
   

  
	
  Section 16.

  	
  Loans, Insurance and
  Directed Investments

  	
  28

  
	
   

  	
   

  	
   

  
	
  Section 17.

  	
  Top Heavy Allocations

  	
  29

  
	
   

  	
   

  	
   

  
	
  Section 18.

  	
  Testing Elections

  	
  29

  
	
   

  	
   

  	
   

  
	
  Section 19.

  	
  401(k) SIMPLE
  Provisions

  	
  29

  
	
   

  	
   

  	
   

  
	
  Section 20.

  	
  Miscellaneous Provisions

  	
  30

  
	
   

  	
   

  	
   

  
	
  Section 21.

  	
  Signature Provisions

  	
  31

  

 

1

 

Section
1.  General Plan Information

 

	
  1.1

  	
  Plan
  Name

  	
  Michaels Stores, Inc. Employees 401(k) Plan

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Plan #   001

  
	
   

  	
   

  	
   

  	
   

  
	
  1.2

  	
  Sponsoring
  Employer

  	
  Michaels Stores, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
  Address

  	
  8000 Bent Branch Drive

  
	
   

  	
   

  	
   

  
	
   

  	
  City

  	
  Irving

  	
  State  TX

  	
  ZIP Code  75063

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Telephone # 

  	
  972-409-1300

  	
  Tax ID # 75-1943604

  	
  Trust ID #

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.3

  	
  Fiscal Year.

  	
  x  A
  12-consecutive month period  beginning Jan 31 and ending Jan 30

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
      o 
  Except for a short Fiscal Year beginning

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  o A 52-53 week year o beginning 
  o ending

  
	
   

  	
   

  	
   

  
	
  1.4

  	
  Type of
  Business Entity.  (check
  one)

  	
  x 

  	
  C-Corporation

  
	
   

  	
   

  	
  o

  	
  S-Corporation

  
	
   

  	
   

  	
  o

  	
  Partnership

  
	
   

  	
   

  	
  o

  	
  Sole Proprietorship

  
	
   

  	
   

  	
  o

  	
  Tax Exempt Organization

  
	
   

  	
   

  	
  o

  	
  Limited Liability
  Company (LLC)

  
	
   

  	
   

  	
  o

  	
  Limited Liability
  Partnership (LLP)

  
	
   

  	
   

  	
  o

  	
  Other
  (must be a legal entity recognized
  under Federal income tax laws)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1.5

  	
  Adopting
  Employers. Check here x
  if there are additional adopting employers and complete the “Adopting
  Employer Addendum.”

  
	
   

  	
   

  
	
  1.6

  	
  Plan
  Administrator    Michaels
  Stores, Inc.

  
	
   

  	
   

  
	
   

  	
  Address  8000 Bent Branch Drive

  
	
   

  	
   

  
	
   

  	
  City

  	
  Irving

  	
  State  TX

  	
  ZIP Code  75063

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Telephone #    972-409-1300

  	
  Fax #

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1.7

  	
  Trustees. The Trustees of the Plan are as selected
  below.  (The use of a trust agreement other than one which
  has been approved by the Internal Revenue Service for use with this Plan will
  remove the Plan from M&P status and render it individually designed.) 

  
	
   

  	
   

  
	
   

  	
  o 

  	
  Individual Trustees    0

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  City

  	
  State

  	
  ZIP Code

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  x

  	
  Corporate
  Trustee              The Charles
  Schwab Trust Company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address 215 Fremont Street, 6th Floor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  City   San Francisco                                           State   CA                                                              ZIP
  Code   94105

  
																

 

2

 

o            Discretionary Trustee. The corporate Trustee has full
discretion in investing the assets of the Plan except as otherwise instructed
by the Administrator, by the Employer, by an Investment Manager, by another
Named Fiduciary < o or by a Participant in accordance with
Section 16.3 of the Adoption Agreement with regard to Participant directed
investments >.

 

x          Directed Trustee. The
corporate Trustee is only permitted to invest the assets of the Plan as
directed by the Administrator, by the Employer, by an Investment
Manager, by another Named Fiduciary < o or
by a Participant in accordance with Section 16.3 of the Adoption Agreement with regard to Participant directed
investments >.

 

1.8      Effective
Dates

 

o    This is a new
plan effective
                                      .

 

x   This
is an amended plan effective Feb 1, 2009 with an original
effective date of Feb 1, 1987.

 

o            This is a frozen plan which was
frozen                                       .
The Plan remains frozen and is being amended and restated effective                                       . The original
effective date of the Plan is                                       .

 

1.9       Plan Year. A
12-consecutive month period beginning
Jan 1 and ending Dec 31.

 

o    Except
for a short Plan Year beginning                                                                                                                   .

 

1.10    Anniversary
Date. The Anniversary Date of the Plan is 
Dec 31.

 

1.11             Permitted Contributions. The contributions checked below
are currently permitted under the terms of the Plan. (check
all that apply)

 

x          Pre-Tax Elective
Deferrals (see Section 4 of the
Adoption Agreement on page 11)

o            Roth Elective
Deferrals (see Section 4 of the
Adoption Agreement on page 11)

o            ADP Safe Harbor
Contributions  (see Section 5 of the Adoption
Agreement on page 11)

o            ACP Safe Harbor
Contributions (see Section 5 of the Adoption Agreement on page 12)

x          Non-Safe Harbor
Matching Contributions (see
Section 6 of the Adoption
Agreement on page 12)

o            Non-Safe Harbor
Non-Elective Contributions (see
Section 7 of the Adoption Agreement on page 14)

x          Qualified Matching
Contributions (see Sections 3.7 of the
Basic Plan)

x          Qualified
Non-Elective Contributions (see
Sections 3.8 of the Basic Plan)

x          Rollover
Contributions (see Section 8 of the Adoption Agreement on page 15 )

x          Voluntary Employee
Contributions (see Section 8 of the
Adoption Agreement on page 16)

o            Deemed IRA Contributions
(see Section 8 of the Adoption
Agreement on page 16)

o            Prevailing Wage
Contributions (see Section 9 of the Adoption Agreement on page 16)

 

Section 2.  Service Definitions for Eligibility, Vesting and
Allocations

 

2.1                   Method of Determining
Service.
An Employee’s Years of Service/Periods of Service (“Service”) is determined
as follows:

 

(a)          o    Counting
of Hours Method Only.  A Participant’s Service for all purposes is
determined by the Counting of Hours Method, and a Year of Service for
eligibility and Vesting is determined as selected in (1) and (2) below.

 

(1)         Eligibility to Participate. A Year of Service for
eligibility purposes is                    (max.
1,000)  Hours of
Service and a Break in Service for eligibility purposes is                    (max.
500)  Hours of
Service.

 

(2)         Vesting. A Year of Service for Vesting purposes is                    (max.
1,000)  Hours of
Service and a Break in Service for Vesting purposes is                    (max.
500)  Hours of
Service.

 

(b)          o    Elapsed Time Method Only.
A Participant’s Service for all purposes is determined by the Elapsed Time
Method.

 

(c)          x   A
Mixture of Methods. A Participant’s Service for each purpose is
determined by the method selected below.

 

(1)   For Eligibility Purposes: (check
one)

o    Elapsed
Time Method

x   Counting of Hours Method. A Year of Service
for eligibility purposes is 1,000 (max. 1,000)
Hours of Service and a Break in Service for eligibility purposes is 500 (max. 500)  Hours
of Service.

 

3

 

(2)   For Vesting Purposes: (check
one)

x   Elapsed
Time Method

o    Counting of Hours Method. A Year of Service
for Vesting purposes is                    (max.
1,000)  Hours of
Service and a Break in Service
for Vesting purposes is                    (max.
500)  Hours of
Service.

 

(3)   For benefit accrual and allocation purposes: (check
one)

o    Elapsed
Time Method

x   Counting of Hours Method

 

2.2                   Predecessor Service. o  Service with the following entity or entities
will be credited as selected in (a), (b), (c), (d) and (e) below:  (this
section need only be completed if the Employer does not maintain the plan of
the predecessor employer)

 

 

 

(a)          o            Elective Deferrals, QMACs and
QNECs. Service with an entity
listed above will be given for eligibility purposes under Section 3.2(a) of
the Adoption Agreement.

 

(b)          o            ADP Safe Harbor Contributions. Service with an entity listed above will be
given for eligibility purposes under Section 3.2(b) of the
Adoption Agreement.

 

(c)          o            ACP Safe Harbor Matching
Contributions. Service with an entity listed above will be credited
for: (check all that apply)

o    Eligibility purposes under Section 3.2(c) of
the Adoption Agreement

o    Vesting purposes under Section 10.3 of
the Adoption Agreement

 

(d)          o            Non-Safe Harbor Matching
Contributions. Service with an entity listed above will be credited
for: (check all that apply)

o    Eligibility purposes under Section 3.2(d) of
the Adoption Agreement

o    Vesting purposes under Section 10.4 of
the Adoption Agreement

 

(e)          o            Non-Safe Harbor Non-Elective
Contributions. Service with an entity listed above will be credited
for: (check all that apply)

o    Eligibility purposes under Section 3.2(e) of
the Adoption Agreement

o    Vesting purposes under Section 10.5 of
the Adoption Agreement

 

2.3                   Re-Hired Employees. The Service of an Eligible
Employee who Terminates Employment and is rehired after incurring a Break in
Service will be credited in accordance with the provisions selected below.

 

(a)          o    One
Year Holdout Rule. The One
Year Holdout Rule will be applied to rehired Eligible Employees.

 

(b)          x   Rule of
Parity. The Rule of Parity will be applied to non-Vested
rehired Eligible Employees.

 

2.4                   Computation Periods. If eligibility and/or Vesting are
determined by the Counting of Hours Method, the following will apply:

 

(a)   x          The eligibility computation
period will: (check
one)

x   Be
based on an Employee’s 12-month employment year

o    Switch
to the Plan Year after an Employee’s initial 12-month employment year

 

(b)   o            The Vesting computation period
will be: (check
one)

o    The
Plan Year

o    Based
on an Employee’s 12-month employment year

 

(c)   x          An Employee will be deemed to
have been credited with a Year of Service for eligibility purposes: (check one)

x   At
the end of the eligibility computation period in which he or she is credited
with the required Hours of Service

o    At
the time he or she is actually credited with the required Hours of Service

 

4

 

Section 3. 
Eligibility Requirements

 

3.1                   Eligible Employees. All Employees are Eligible
Employees < x except for the class or classes
of Employees (as defined in Section 2.1 of the Basic Plan) below who are
excluded from participating for the purpose selected >: (check
all that apply)

 

(a)   x   Ineligible Classes for Elective
Deferrals, QMACs and QNECs.

 

x   Union
Employees

x   Non-Resident
Alien Employees

o    “Merger
and Acquisition” Employees (but
only during the statutory exclusion period)

o    Highly
Compensated Employees (1)

x   Leased
Employees (not otherwise excluded by statute) (1)

x   Employees
of an Affiliated Employer that does not adopt this Plan (1)

o    Key
Employees <o but only those
who are also Highly Compensated Employees > (1)

o    Employees
who are paid primarily by salary (1)

o    Employees
who are paid primarily by the hour (1)

o    Employees
who are paid primarily by commissions (1)

x   Other
(cannot be age or
service related)  (1)   Any person receiving payments as a
consultant.

 

 

 

(1) Even if checked, these
employees are still included in determining if the Plan satisfies the
requirements of Code §410(b).

 

(b)          o    Ineligible Classes for ADP
Safe Harbor Contributions. Any
ineligible classes checked in (a) above are also ineligible for ADP Safe
Harbor Contributions. In addition, the classes checked below are ineligible for
ADP Safe Harbor Contributions.

o    Union
Employees (if not already checked in (a) above)

o    Key
Employees who are also Highly Compensated Employees (if not already checked in (a) above)  (1)

o    Highly
Compensated Employees (if
not already checked in (a) above)  (1)

o    Other
(cannot be age or
service related) (1)

 

 

 

(1) Even if checked, these
employees are still included in determining if the Plan satisfies the
requirements of Code §410(b).

 

(c)          o    Ineligible Classes for ACP
Safe Harbor Contributions. Any
ineligible classes checked in (a) above are also ineligible for ACP Safe
Harbor Contributions. In addition, the classes checked below are ineligible for
ACP Safe Harbor Contributions.

o    Union
Employees (if not already checked in (a) above)

o    Key
Employees who are also Highly Compensated Employees (if not already checked in (a) above) (1)

o    Highly
Compensated Employees (if
not already checked in (a) above) (1)

o    Other
(cannot be age or
service related) (1)

 

 

 

5

 

(1) Even if checked, these
employees are still included in determining if the Plan satisfies the
requirements of Code §410(b).

 

(d)   x   Ineligible Classes for Non-Safe
Harbor Matching Contributions.

x   Union
Employees

x   Non-Resident
Alien Employee

o    “Merger
and Acquisition” Employees (but
only during the statutory exclusion period)

o    Highly
Compensated Employees (1)

x   Leased
Employees (not otherwise excluded by statute) (1)

x   Employees
of an Affiliated Employer that does not adopt this Plan (1)

o    Key
Employees < o
but only those who are also Highly Compensated Employees > (1)

o    Employees
who are paid primarily by salary (1)

o    Employees
who are paid primarily by the hour (1)

o    Employees
who are paid primarily by commissions (1)

x   Other
(cannot be age or
service related)  (1)   Any person receiving payments as a
consultant.

 

 

 

(1) Even if checked, these
employees are still included in determining if the Plan satisfies the
requirements of Code §410(b).

 

(e)   o    Ineligible Classes for Non-Safe
Harbor Non-Elective Contributions.

o    Union
Employees

o    Non-Resident
Alien Employees

o    “Merger
and Acquisition” Employees (but
only during the statutory exclusion period)

o    Highly
Compensated Employees (1)

o    Leased
Employees (not otherwise excluded by statute) (1)

o    Employees
of an Affiliated Employer that does not adopt this Plan (1)

o    Key
Employees < o
but only those who are also Highly Compensated Employees > (1)

o    Employees
who are paid primarily by salary (1)

o    Employees
who are paid primarily by the hour (1)

o    Employees
who are paid primarily by commissions (1)

o    Other
(cannot be age or
service related)  (1)

 

 

 

(1) Even if checked, these
employees are still included in determining if the Plan satisfies the
requirements of Code §410(b).

 

3.2                   Minimum Age and Service
Requirements. An Eligible
Employee (see Section 3.1 above) will be
eligible to enter the Plan as a Participant for the selected purpose on the
applicable Entry Date upon satisfying the following age and/or service
requirements:

 

(a)   x   Requirements for Elective
Deferrals, QMACs and QNECs:

 

(1)   Age Requirement 21  (max. 21 – enter zero if
none)

 

(2)   Service Requirement (check
one)

o    A)    None

o    B)    1-Year Period of Service

o    C)       -month Period of Service (max. 12)

o    D)       -week Period of Service (max. 52)

 

6

 

o    E)       -day Period of Service (max. 365)

o    F)    1 Year of Service

x   G)    1 Year of Service, or if earlier, 6  (max. 11)
consecutive calendar months of employment

                    x in which the Employee is credited with at
least 83-1/3 Hours of Service per month

o    H)    1 Year of Service, or if earlier,               
(max. 51) consecutive weeks of
employment

                o in
which the Employee is credited with at least                 
Hours of Service per week

o    I)     1 Year of Service, or if earlier,               
(max. 364) consecutive days of employment

                o in
which the Employee is credited with at least                 
Hours of Service per day

 

(b)   o    Requirements
for ADP Safe Harbor Contributions:

 

(1)   Age Requirement                   (max. 21 – enter zero if none)

 

(2)   Service Requirement (check
one)

o    A)    None

o    B)    1-Year Period of Service

o    C)        -month Period of Service (max. 12)

o    D)        -week Period of Service (max. 52)

o    E)        -day Period of Service (max. 365)

    o    F)    1 Year of Service

o    G)    1 Year of Service, or if earlier,               
(max. 11) consecutive calendar months of
employment

                    o in which the Employee is credited with at
least                 
Hours of Service per month

o    H)    1 Year of Service, or if earlier,               
(max. 51) consecutive weeks of
employment

                o in
which the Employee is credited with at least                 
Hours of Service per week

o    I)     1 Year of Service, or if earlier,               
(max. 364) consecutive days of
employment

                o in
which the Employee is credited with at least                 
Hours of Service per day

 

(c)   o    Requirements for ACP Safe
Harbor Contributions:

 

(1)   Age Requirement                   (max. 21 – enter zero if none)

 

(2)   Service Requirement (check
one)

o    A)    None

o    B)    1-Year Period of Service

o    C)        -month Period of Service (max. 12)

o    D)        -week Period of Service (max. 52)

o    E)        -day Period of Service (max. 365)

o    F)    1 Year of Service

o    G)    1 Year of Service, or if earlier,               
(max. 11) consecutive calendar months of
employment

                    o in which the Employee is credited with at
least                 
Hours of Service per month

o    H)    1 Year of Service, or if earlier,               
(max. 51) consecutive weeks of
employment

                o in
which the Employee is credited with at least                 
Hours of Service per week

o    I)     1 Year of Service, or if earlier,               
(max. 364) consecutive days of
employment

                o in
which the Employee is credited with at least                 
Hours of Service per day

 

(d)   x   Requirements for Non-Safe
Harbor Matching Contributions:

 

(1)   Age Requirement 21 (max.
21 – enter zero if none)

 

(2)   Service Requirement (check
one)

o    A)    None

o    B)        -Year Period of Service (max. 2, but
Vesting must be 100% if more than 1 year is used)

o    C)        -month Period of Service (max. 24, but
Vesting must be 100% if more than 12 months are
used)

o    D)        -week Period of Service (max. 104, but
Vesting must be 100% if more than 52 weeks are
used)

 

7

 

o    E)        -day Period of Service (max. 730, but Vesting must be 100% if more than 365 days are used)

o    F)        Year(s) of Service (max. 2, but Vesting must
be 100% if more than 1year is used)

x   G)    1 Year of Service, or if earlier, 6 (max. 11)
consecutive calendar months of employment

                x in
which the Employee is credited with at least 83-1/3
Hours of Service per month

o    H)    1 Year of Service, or if earlier,               
(max. 51) consecutive weeks of
employment

                o in
which the Employee is credited with at least                 
Hours of Service per week

o    I)     1 Year of Service, or if earlier,               
(max. 364) consecutive days of
employment

                o in
which the Employee is credited with at least                 
Hours of Service per day

 

(e)   o    Requirements for Non-Safe
Harbor Non-Elective Contributions:

 

(1)   Age Requirement                   (max. 21 – enter zero if none)

 

(2)   Service Requirement (check
one)

o    A)    None

o    B)        -Year Period of Service (max. 2, but Vesting must
be 100% if more than 1 year is used)

o    C)        -month Period of Service (max. 24, but
Vesting must be 100% if more than 12 months are
used)

o    D)        -week Period of Service (max. 104, but
Vesting must be 100% if more than 52 weeks are
used)

o    E)        -day Period of Service (max. 730, but Vesting must be 100% if more than 365 days are used)

o    F)        Year(s) of Service (max. 2, but Vesting must
be 100% if more than 1year is used)

o    G)    1 Year of Service, or if earlier,               
(max. 11) consecutive calendar months of
employment

                o in
which the Employee is credited with at least                 
Hours of Service per month

o    H)    1 Year of Service, or if earlier,               
(max. 51) consecutive weeks of
employment

                o in
which the Employee is credited with at least                 
Hours of Service per week

o    I)     1 Year of Service, or if earlier,               
(max. 364) consecutive days of
employment

                o in
which the Employee is credited with at least                 
Hours of Service per day

 

3.3                   Entry Dates. An Eligible Employee who has
satisfied the applicable age and service requirements selected in Section 3.2
will enter the Plan as a Participant for the applicable purpose on the Entry
Date (as defined in Section 2.2 of the Basic Plan) selected
below.

 

(a)   x   Entry
Date for Elective Deferrals, QMACs and QNECs:  (check one)

 

Note: If Section 3.2(a)(2)(G),
(H) or (I) is checked, an Eligible Employee who is entering the Plan
as a Participant after satisfying the 1 Year of Service component of such
service requirement will enter the Plan as a Participant on the earlier of (1) the
first day of the Plan Year that occurs after the date he or she satisfies the 1
Year of Service requirement (and any applicable age requirement) or (2) the
date that occurs six months after the date he or she satisfies the 1 Year of
Service requirement (and any applicable age requirement). The Entry Date or
Entry Dates selected below will only apply to an Eligible Employee who is
entering the Plan as a Participant after satisfying the months, days or weeks
component of such service requirement (and any applicable age requirement).

 

o    The
first day of the Plan Year coincident with or following the date the
requirements are satisfied.  (1)

o    The
last day of the Plan Year coincident with or following the date the
requirements are satisfied.  (1)

o    The first day of the month coincident
with or following the date the requirements are satisfied.

o    The first day of the payroll period
coincident with or following the date the requirements are satisfied.

x   The same day the requirements are
satisfied.

o    The first day of the 1st or
7th month coincident with or following the date
the requirements are satisfied.

o    The last day of the 6th or
12th month coincident with or following the date
the requirements are satisfied.

o    The first day of the 1st, 4th, 7th or 10th month coincident with or following the date
the requirements are satisfied.

o    The last day of the 3rd, 6th, 9th or 12th month coincident with or following the date
the requirements are satisfied.

 

(1)         This option cannot be checked if
the age requirement in 3.2(a)(1) is 21 and/or if one of the following
service requirements is checked: 3.2(a)(2)(B); 3.2(a)(2)(C) and the number of
months is more than 6; 3.2(a)(2)(D) and the number of weeks is  more than 26; 3.2(a)(2)(E) and
the number of days is more than 182; or 3.2(a)(2)(F).

 

8

 

(b)   o    Entry Date for ADP Safe Harbor
Contributions:  (check one)

 

Note: If Section 3.2(b)(2)(G),
(H) or (I) is checked, an Eligible Employee who is entering the Plan
as a Participant after satisfying the 1 Year of Service component of such
service requirement will enter the Plan as a Participant on the earlier of (1) the
first day of the Plan Year that occurs after the date he or she satisfies the 1
Year of Service requirement (and any applicable age requirement) or (2) the
date that occurs six months after the date he or she satisfies the 1 Year of
Service requirement (and any applicable age requirement). The Entry Date or
Entry Dates selected below will only apply to an Eligible Employee who is
entering the Plan as a Participant after satisfying the months, days or weeks
component of such service requirement (and any applicable age requirement).

 

o    Retroactive
to the first day of the Plan Year in which the requirements are satisfied.

o    The
first day of the Plan Year coincident with or following the date the
requirements are satisfied.   (1)

o    The first day of the Plan Year
nearest the date the requirements are satisfied.

o    The
last day of the Plan Year coincident with or following the date the
requirements are satisfied.  (1)

o    The last day of the Plan Year nearest
the date the requirements are satisfied.

o    The first day of the month coincident
with or following the date the requirements are satisfied.

o    The first day of the payroll period
coincident with or following the date the requirements are satisfied.

o    The same day the requirements are
satisfied.

o    The first day of the 1st or
7th month coincident with or following the date
the requirements are satisfied.

o    The last day of the 6th or
12th month coincident with or following the date
the requirements are satisfied.

o    The first day of the 1st, 4th, 7th or 10th month coincident with or following the date
the requirements are satisfied.

o    The last day of the 3rd, 6th, 9th or 12th month coincident with or following the date
the requirements are satisfied.

 

(1)         This option cannot be checked if
the age requirement in 3.2(b)(1) is 21 and/or if one of the following
service requirements is checked: 3.2(b)(2)(B); 3.2(b)(2)(C) and the number of
months is more than 6; 3.2(b)(2)(D) and the number of weeks is  more than 26; 3.2(b)(2)(E) and
the number of days is more than 182; or 3.2(b)(2)(F).

 

(c)   o    Entry Date for ACP Safe Harbor
Contributions:  (check one)

 

Note: If Section 3.2(c)(2)(G),
(H) or (I) is checked, an Eligible Employee who is entering the Plan
as a Participant after satisfying the 1 Year of Service component of such
service requirement will enter the Plan as a Participant on the earlier of (1) the
first day of the Plan Year that occurs after the date he or she satisfies the 1
Year of Service requirement (and any applicable age requirement) or (2) the
date that occurs six months after the date he or she satisfies the 1 Year of
Service requirement (and any applicable age requirement). The Entry Date or
Entry Dates selected below will only apply to an Eligible Employee who is
entering the Plan as a Participant after satisfying the months, days or weeks
component of such service requirement (and any applicable age requirement).

 

o    Retroactive
to the first day of the Plan Year in which the requirements are satisfied.

o    The
first day of the Plan Year coincident with or following the date the
requirements are satisfied.   (1)

o    The first day of the Plan Year
nearest the date the requirements are satisfied.

o    The
last day of the Plan Year coincident with or following the date the
requirements are satisfied.   (1)

o    The last day of the Plan Year nearest
the date the requirements are satisfied.

o    The first day of the month coincident
with or following the date the requirements are satisfied.

o    The first day of the payroll period
coincident with or following the date the requirements are satisfied.

o    The same day the requirements are
satisfied.

o    The first day of the 1st or
7th month coincident with or following the date
the requirements are satisfied.

o    The last day of the 6th or
12th month coincident with or following the date
the requirements are satisfied.

o    The first day of the 1st, 4th, 7th or 10th month coincident with or following the date
the requirements are satisfied.

o    The last day of the 3rd, 6th, 9th or 12th month coincident with or following the date
the requirements are satisfied.

 

(1)         This option cannot be checked if
the age requirement in 3.2(c)(1) is 21 and/or if one of the following
service requirements is checked: 3.2(c)(2)(B); 3.2(a)(2)(C) and the number of
months is more than 6; 3.2(c)(2)(D) and the number of weeks is  more than 26; 3.2(c)(2)(E) and
the number of days is more than 182; or 3.2(c)(2)(F).

 

9

 

(d)   x   Entry
Date for Non-Safe Harbor Matching Contributions:  (check one)

 

Note: If Section 3.2(d)(2)(G),
(H) or (I) is checked, an Eligible Employee who is entering the Plan
as a Participant after satisfying the 1 Year of Service component of such
service requirement will enter the Plan as a Participant on the earlier of (1) the
first day of the Plan Year that occurs after the date he or she satisfies the 1
Year of Service requirement (and any applicable age requirement) or (2) the
date that occurs six months after the date he or she satisfies the 1 Year of
Service requirement (and any applicable age requirement). The Entry Date or
Entry Dates selected below will only apply to an Eligible Employee who is
entering the Plan as a Participant after satisfying the months, days or weeks
component of such service requirement (and any applicable age requirement).

 

o    Retroactive
to the first day of the Plan Year in which the requirements are satisfied.

o    The
first day of the Plan Year coincident with or following the date the requirements
are satisfied. (1)

o    The first day of the Plan Year
nearest the date the requirements are satisfied.

o    The
last day of the Plan Year coincident with or following the date the
requirements are satisfied. (1)

o    The last day of the Plan Year nearest
the date the requirements are satisfied.

o    The first day of the month coincident
with or following the date the requirements are satisfied.

o    The first day of the payroll period
coincident with or following the date the requirements are satisfied.

x   The same day the requirements are
satisfied.

o    The first day of the 1st or
7th month coincident with or following the date
the requirements are satisfied.

o    The last day of the 6th or
12th month coincident with or following the date
the requirements are satisfied.

o    The first day of the 1st, 4th, 7th or 10th month coincident with or following the date
the requirements are satisfied.

o    The last day of the 3rd, 6th, 9th or 12th month coincident with or following the date
the requirements are satisfied.

 

(1)         This option cannot be checked if
the age requirement in 3.2(d)(1) is 21 and/or if one of the following
service requirements is checked: 3.2(d)(2)(B); 3.2(a)(2)(C) and the number of
months is more than 6; 3.2(d)(2)(D) and the number of weeks is  more than 26; 3.2(d)(2)(E) and
the number of days is more than 182; or 3.2(d)(2)(F).

 

(e)   o    Entry Date for Non-Safe Harbor
Non-Elective Contributions:  (check one)

 

Note: If Section 3.2(e)(2)(G),
(H) or (I) is checked, an Eligible Employee who is entering the Plan
as a Participant after satisfying the 1 Year of Service component of such
service requirement will enter the Plan as a Participant on the earlier of (1) the
first day of the Plan Year that occurs after the date he or she satisfies the 1
Year of Service requirement (and any applicable age requirement) or (2) the
date that occurs six months after the date he or she satisfies the 1 Year of
Service requirement (and any applicable age requirement). The Entry Date or
Entry Dates selected below will only apply to an Eligible Employee who is
entering the Plan as a Participant after satisfying the months, days or weeks
component of such service requirement (and any applicable age requirement).

 

o    Retroactive
to the first day of the Plan Year in which the requirements are satisfied.

o    The
first day of the Plan Year coincident with or following the date the
requirements are satisfied.  (1)

o    The first day of the Plan Year
nearest the date the requirements are satisfied.

o    The
last day of the Plan Year coincident with or following the date the
requirements are satisfied.  (1)

o    The last day of the Plan Year nearest
the date the requirements are satisfied.

o    The first day of the month coincident
with or following the date the requirements are satisfied.

o    The first day of the payroll period
coincident with or following the date the requirements are satisfied.

o    The same day the requirements are
satisfied.

o    The first day of the 1st or
7th month coincident with or following the date
the requirements are satisfied.

o    The last day of the 6th or
12th month coincident with or following the date
the requirements are satisfied.

o    The first day of the 1st, 4th, 7th or 10th month coincident with or following the date
the requirements are satisfied.

o    The last day of the 3rd, 6th, 9th or 12th month coincident with or following the date
the requirements are satisfied.

 

(1)         This option cannot be checked if
the age requirement in 3.2(e)(1) is 21 and/or if one of the following
service requirements is checked: 3.2(e)(2)(B); 3.2(a)(2)(C) and the number of
months is more than 6; 3.2(e)(2)(D) and the number of weeks is  more than 26; 3.2(e)(2)(E) and
the number of days is more than 182; or 3.2(e)(2)(F).

 

10

 

Section 4.  Elective Deferrals

 

4.1                               Elective Deferral Percentage. A Participant can make Elective
Deferrals < o  beginning                                         
(must be on or after the date this Adoption Agreement is signed by the
Sponsoring Employer) > in accordance with the
provisions selected below.

 

(a)   Minimum and Maximum
Percentage. The minimum permitted Elective Deferral percentage is 0% (enter zero if there is no
minimum %)  of Compensation and the maximum permitted Elective Deferral
percentage is 80% (max. 100%) of Compensation. Any other
Elective Deferral provisions will be set forth in an administrative policy
regarding Elective Deferrals as promulgated by the Administrator from time to
time. Such administrative policy may include, but is not limited to, setting
the maximum Elective Deferral percentage for Participants who are Highly
Compensated Employees (if such percentage is less than the maximum percentage
set forth above) and describing a program of automatic increases to a
Participants’ Elective Deferral percentage as elected by the Administrator
and/or the Participant.

 

(b)   Salary Reduction Agreements. A Participant can
change his or her Salary Reduction Agreement:
(check one)

 

x   At any time

o    Annually on the date established by the
Administrator

o    Semi-annually on the date established by the
Administrator

o    Quarterly on the date established by the
Administrator

o    Monthly on the day established by the
Administrator

o    On the date or dates as established by the
Administrator

 

(c)          o    Automatic Enrollment. Automatic
enrollment is permitted. The terms of the automatic enrollment, including but
not limited to the percentage, automatic increases to that percentage, the
proportion that is considered a Pre-Tax Elective Deferral and/or a Roth
Elective Deferral, and the Participants to whom it applies, will be set forth
in an administrative policy regarding Elective Deferrals as promulgated from
time to time by the Administrator.

 

4.2       x   Catch-Up
Contributions. Catch-Up Contributions are permitted in accordance
with Section 3.2(e) of the Basic Plan.

 

4.3       o    Roth Elective Deferrals. A Participant may designate all
or a portion or his or her Elective Deferrals as Roth Elective Deferrals in
accordance with Section 3.2(c) of the Basic Plan.

 

Section
5.  o Safe Harbor Contributions

 

5.1                               o    “Mandatory” ADP Safe Harbor Non-Elective Contributions. Subject to Section 3.20
of the Basic Plan, the Employer will make an ADP Safe Harbor Non-Elective
Contribution for each Safe Harbor Participant in an amount equal to 3% (or such
higher percentage as may be elected by the Employer by resolution) of
Compensation, except as may be indicated below.

 

o    The ADP Safe Harbor Non-Elective Contribution
will be used to offset the allocation that would otherwise be made to the
Participant under Section 7 of the Adoption Agreement. If Section 7.2(d) of
the Adoption Agreement is checked, this offset applies only to the second step
of the Two-Step Formula or the fourth step of the Four-Step Formula, as
applicable.

 

o    This
contribution will be made to the following defined contribution plan in lieu of
this Plan:

 

 

5.2                               o    “Contingent”
ADP Safe Harbor Non-Elective Contributions. Subject to Section 3.20 of
the Basic Plan, the Employer may make an ADP Safe Harbor Non-Elective
Contribution for each Safe Harbor Participant in an amount equal to 3% (or such
higher percentage as may be elected by the Employer by resolution) of
Compensation, except as may be indicated below.

 

o    The ADP Safe Harbor Non-Elective Contribution
will be used to offset the allocation that would otherwise be made to the
Participant under Section 7 of the Adoption Agreement. If Section 7.2(d) of
the Adoption Agreement is checked, this offset applies only to the second step
of the Two-Step Formula or the fourth step of the Four-Step Formula, as
applicable.

 

o    This
contribution will be made to the following defined contribution plan in lieu of
this Plan:

 

 

5.3                               o    ADP
Safe Harbor Basic Matching Contributions. The Employer will make a Matching
Contribution for each Safe Harbor Participant equal to the sum of (1) 100%
of the Participant’s Elective Deferrals that do not exceed 3% of Compensation
for the Allocation Period, plus (2) 50% of the Participant’s Elective
Deferrals that exceed 3% of Compensation for the Allocation Period but do not
exceed 5% percent of Compensation for the Allocation Period.

 

11

 

5.4                               o    ADP
Safe Harbor Enhanced Matching Contributions. The Employer will make a Matching
Contribution for each Safe Harbor Participant equal to the sum of (1) 100%
of the Participant’s Elective Deferrals that do not exceed           % of
Compensation for the Allocation Period, plus (2)           % of the
Participant’s Elective Deferrals that exceed           % of
Compensation but do not exceed           % of
Compensation for the Allocation Period. (Note: In the blank in (1) and the second
blank in (2), insert a number that is 3 but not greater than 6. The first and
last blanks in (2) must be completed so that, at any rate of elective
deferrals, the Matching Contribution is at least equal to the Matching
Contribution receivable if the Employer were making ADP Safe Harbor Basic
Matching Contributions, but the rate of match cannot increase as deferrals
increase.)

 

Note: You can only select Sections 5.5, 5.6 and/or 5.7 below if you
also selected Section 5.1, 5.2, 5.3 or 5.4 above.

 

5.5                               o    ACP
Safe Harbor Discretionary Non-Tiered Matching Contributions. The Employer’s
ACP Safe Harbor Discretionary Non-Tiered Matching Contribution is totally
discretionary, but when made will be a percentage determined by the Employer of
a Safe Harbor Participant’s Elective Deferrals that do not exceed 4% of his or
her Compensation for the Allocation Period. (Note: Any ACP Safe Harbor Discretionary Non-Tiered Matching
Contribution that exceeds 4% of a Participant’s Compensation is considered a
Non-Safe Harbor Matching Contribution and is subject to the ACP Test.)

 

5.6                               o    ACP Safe Harbor
Mandatory Non-Tiered Matching Contributions. The Employer must make an ACP Safe
Harbor Mandatory Non-Tiered Matching Contribution equal to             % of a Safe
Harbor Participant’s Elective Deferrals which do not exceed             % (max. 6) of a Safe Harbor Participant’s
Compensation for the Allocation Period.

 

5.7                               o    ACP
Safe Harbor Mandatory Tiered Matching Contributions. The Employer
must make an ACP Safe Harbor Mandatory Tiered Matching Contribution for each
Safe Harbor Participant equal to the amount determined below, provided the
ratio of Matching Contributions for a Safe Harbor Participant to his or her
Elective Deferrals and Employee Contributions does not increase as the amount
of his or her Elective Deferrals and Employee Contributions increases. In no
event can Elective Deferrals that exceed 6% of Compensation for the Allocation
Period be matched. (Note: The blanks must be completed so that, at any
rate of Elective Deferrals, the rate of Matching Contributions cannot increase
as Elective Deferrals increase.)

 

o  1st tier              %
of Elective Deferrals that do not exceed              %
of Compensation

o  2nd tier             % of Elective Deferrals that exceed
              %
but not
              %
of Compensation

o  3rd tier             % of Elective Deferrals that exceed
              %
but not
              %
of Compensation

o  4th tier             % of Elective Deferrals that exceed
              %
but not
              %
of Compensation

 

Section
6.  x Non-Safe Harbor Matching Contributions

 

6.1                   Determination of Amount. Non-Safe Harbor Matching
Contributions are permitted < o
beginning                                  
(must be after the later of the Plan’s original effective date or the
restatement date) >, subject to the provisions selected
below.

 

(a)          o    Totally Discretionary Formula
(Non-Tiered). Subject to the
requirements set forth in Section 3.4(f) of the Basic Plan, the
Employer’s Non-Safe Harbor Matching Contribution for any Allocation Period is
totally discretionary.

 

(b)          o    Discretionary Formula (Tiered or
Non-Tiered) With Fixed Maximum. Subject to the requirements set
forth in Section 3.4(f) of the Basic Plan, the Employer may make a
Non-Safe Harbor Matching Contribution for any Allocation Period equal to a
discretionary percentage of each Benefiting Participant’s Elective Deferrals,
not to exceed the following amount for any Allocation Period on behalf of any
Benefiting Participant:

 

o            %
(max. 100%) of a Benefiting
Participant’s Elective Deferrals

o            %
of a Benefiting Participant’s Compensation (this
% cannot exceed the minimum deferral % in 4.4(a))

o  $                      
for a Benefiting Participant

o  The lesser of               %
of a Benefiting Participant’s Compensation or $

o            %
(max. 100%) of a Participant Elective Deferrals that do not exceed             %
of his or her Compensation

 

(c)          x   Mandatory Non-Tiered Formula.
The Employer must make a Non-Safe Harbor Matching Contribution equal to 50% (max. 100%) of
each Benefiting Participant’s Elective Deferrals x not to exceed the following for an Allocation
Period:

 

x  Elective Deferrals in
excess of 6% of each Benefiting Participant’s
Compensation

o  $                  
for each Benefiting Participant

o  The
lesser of Elective Deferrals in excess of           %
of each Benefiting Participant’s Compensation or $

 

12

 

(d)          o    Mandatory Tiered Formula.
The Employer must make a Non-Safe Harbor Matching Contribution for each
Benefiting Participant equal to the amount determined by the tiered formula
below. (check each
tier that applies, but note that the rate of Non-Safe Harbor Matching
Contributions cannot increase as Elective Deferrals increase)

 

o  1st tier            %
of Elective Deferrals that do not exceed               %
of Compensation

o  2nd tier           %
of Elective Deferrals that exceed              %
but not               %
of Compensation

o  3rd tier           %
of Elective Deferrals that exceed               %
but not               %
of Compensation

o  4th tier           %
of Elective Deferrals that exceed               %
but not               %
of Compensation

o  5th tier           %
of Elective Deferrals that exceed               %
but not               %
of Compensation

o  6th tier           %
of Elective Deferrals that exceed               %
but not               %
of Compensation

o  7th tier           %
of Elective Deferrals that exceed               %
but not               %
of Compensation

o  8th tier           %
of Elective Deferrals that exceed               %
but not               %
of Compensation

o  9th tier           %
of Elective Deferrals that exceed               %
but not               %
of Compensation

o  10th tier         %
of Elective Deferrals that exceed               %
but not               %
of Compensation

 

(e)          o    Mandatory Years/Periods of
Service Formula. The Employer must make a Non-Safe Harbor Matching
Contribution for each Benefiting Participant equal to the Matching percentage
indicated below of each Benefiting Participant’s Elective Deferrals based on
the Benefiting Participant’s < o 1-Year Periods of Service > < o Years of
Service, and a Year of Service for purposes of this Section is a Plan Year
in which a Participant is credited with               
(max. 1,000) Hours of
Service >, subject to any limitations
indicated below. (check
each tier that applies)

 

	
  Years/Periods of Service

  	
   

  	
  Matching %

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  to

  	
   

  	
   

  	
  %

  	
  < o
  up to $         > < o up
  to        % of Compensation >

  	
   

  
	
  to

  	
   

  	
   

  	
  %

  	
  < o
  up to $         > < o up
  to        % of Compensation >

  	
   

  
	
  to

  	
   

  	
   

  	
  %

  	
  < o
  up to $         > < o up to        %
  of Compensation >

  	
   

  
	
  to

  	
   

  	
   

  	
  %

  	
  < o
  up to $         > < o up
  to        % of Compensation >

  	
   

  
	
  to

  	
   

  	
   

  	
  %

  	
  < o
  up to $         > < o up
  to        % of Compensation >

  	
   

  

 

6.2                   Benefiting Participants. Any Employee who has entered the
Plan as a Participant for Non-Safe Harbor Matching Contribution purposes and
makes an Elective Deferral in an Allocation Period < o and who is an
NHCE for that Allocation Period > will be a Benefiting Participant under
this Section for an Allocation Period based on the conditions below < o provided the
Participant is still an Eligible Employee under Section 3.1(d) on the
last day of the Allocation Period (or earlier Termination of Employment) >.

 

(a)   Participants who are
still Employees on the last day of the Allocation Period  (check one)

 

x  Will always be Benefiting
Participants regardless of Service

o  Must
be credited with                 
(max. 1,000) Hours of Service in the
Allocation Period

o  Must
be credited with a                 
(max. 6) month Period of Service  in the Allocation Period

o  Must
be credited with                 
(max. 6) consecutive calendar months of
employment in the Allocation Period

o  Must
be credited with                 
(max. 182) consecutive days of
employment in the Allocation Period

 

(b)   Participants who Terminate Employment before the last day of the
Allocation Period because of retirement on or after Normal Retirement
Age < o
or Early Retirement Age >, or because
of death or Disability  (check
one)

 

o  Will
not be Benefiting Participants for that Allocation Period

x  Will always be Benefiting
Participants regardless of Service

o  Must
be credited with                 
(max. 1,000) Hours of Service in the
Allocation Period

o  Must
be credited with a                 
(max. 6) month Period of Service  in the Allocation Period

o  Must
be credited with                 
(max. 6) consecutive calendar months of
employment in the Allocation Period

o  Must
be credited with                 
(max. 182) consecutive days of
employment in the Allocation Period

 

13

 

(c)   Participants who Terminate Employment before the last day
of the Allocation Period for any other reason (check
one)

 

o  Will not be
Benefiting Participants for that Allocation Period

x  Will always be Benefiting
Participants regardless of Service

o  Must
be credited with                 
(max. 1,000) Hours of Service in the
Allocation Period

o  Must be credited with a                 
(max. 6) month Period of Service  in the Allocation Period

o  Must
be credited with                 
(max. 6) consecutive calendar months of
employment in the Allocation Period

o  Must
be credited with                 
(max. 182) consecutive days of
employment in the Allocation Period

 

6.3                   o    Catch-Up Contributions. Catch-Up Contributions will be matched under the formula
selected in Section 6.1 < o  but any limitations selected in such
formula will be ignored >.

 

6.4                   o    Voluntary Employee Contributions. Voluntary Employee Contributions will be matched under the
formula selected in Section 6.1 < o
but any
limitations selected in such formula will be ignored >.

 

6.5                   o    Additional Non-Safe Harbor Matching Contributions. An Employer
may make additional Non-Safe Harbor Matching Contributions as selected in the “Additional
Non-Safe Harbor Matching Contribution Addendum” attached hereto.

 

Section
7.  o Non-Safe Harbor Non-Elective
Contributions

 

7.1                   Determination of Amount. Non-Safe Harbor Non-Elective
Contributions are permitted < o
beginning                            
(must be after the later of the Plan’s original effective date or the
restatement date) >, and the amount made by the Employer for
any Allocation Period will be determined by the formula below. (check
one)

 

o  Totally discretionary on the part of the Employer

o  Equal to at least                %
of the Compensation of all Benefiting Participants

o  Equal to at least $

o  As required by the following
collective bargaining agreement

o  Other
(describe how the amount is determined)

 

7.2                   Allocation Method. Non-Safe Harbor Non-Elective
Contributions made to the Plan will be allocated in the manner selected below.

 

(a)  o       Pro-rata
based on the Compensation for the Allocation Period of all
Benefiting Participants.

 

(b)  o       Per
capita (same dollar amount) for the Allocation Period to all
Benefiting Participants.

 

(c)  o       Pro-rata
based on the allocation points of all Benefiting Participants. Each
Participant’s allocation points for each Allocation Period will be the sum of
the points selected below. (check
all that apply, but 1) or 2) must be checked)

 

o  1)            
points for each year of a Participant’s age

o  2)            
points for each of a Participant’s credited Years/Periods of Service < o to a maximum of
          
years >

o  3)            
points per each $              
(max. $200) of a
Participant’s Compensation paid in the Allocation Period

 

(d)  o  Using permitted disparity
in < o a 2-step
allocation only > < o
a 4-step allocation only > < o
a 2-step allocation in non-Top Heavy Plan Years and a 4-step allocation in Top
Heavy Plan Years >, in accordance with Section 3.5(a)(4) of the
Basic Plan, based on the integration percentage and the integration level
selected below.

 

	
  Integration%

  	
  Integration Level

  
	
  o  5.7%

  	
  o  The Taxable Wage Base

  
	
   

  	
  o              % of the Taxable Wage Base (must be 20% or less of the Taxable Wage Base)

  
	
   

  	
  o  $           (amount must be 20% or less of the Taxable Wage Base)

  
	
   

  	
   

  
	
  o  5.4%

  	
  o  80% of the Taxable Wage Base rounded up < o
  $1 > < o
  $100 > < o
  $1,000 >

  
	
   

  	
  o                % of the Taxable Wage Base (must be more than 80% but less than 100%)

  
	
   

  	
  o  $              (amount must be more than 80% but less than 100% of the Taxable Wage
  Base)

  
	
   

  	
   

  
	
  o  4.3%

  	
  o  20% of the Taxable Wage Base rounded up < o
  $1 > < o
  $100 > < o
  $1,000 >

  
	
   

  	
  o             % of the Taxable Wage Base (must be more than 20% but not more than 80%)

  
	
   

  	
  o  $            (amount must be more than 20% but not more than 80% of the Taxable
  Wage Base)

  

 

14

 

(e)  o       Using
the Participant Group Allocation method as set forth in the “Allocation
Group Addendum” attached hereto.

 

(f)  o         Using
the Age-Weighted Allocation method determined with the assumptions
indicated below.

 

Pre-Retirement Interest:             %   Pre-Retirement Mortality:

Post-Retirement Interest:            %   Post-Retirement Mortality:

 

7.3                   Benefiting Participants. An Employee who is a Participant
for Non-Safe Harbor Non-Elective Contribution purposes will be a Benefiting
Participant under this Section for an Allocation Period based on the
conditions below < o provided the Participant is
still an Eligible Employee under Section 3.1(e) on the last day of
the Allocation Period (or earlier Termination of Employment) >.

 

(a)   Participants who are
still Employees on the last day of the Allocation Period  (check one)

 

o    Will always be Benefiting Participants
regardless of Service

o    Must be credited with                 
(max. 1,000) Hours of Service in the
Allocation Period

o    Must be credited with a                 
(max. 6) month Period of Service  in the Allocation Period

o    Must be credited with                 
(max. 6) consecutive calendar months of
employment in the Allocation Period

o    Must be credited with                 
(max. 182) consecutive days of
employment in the Allocation Period

 

(b)          Participants who Terminate Employment before the last day of the
Allocation Period because of retirement on or after Normal Retirement
Age < o
or Early Retirement Age >, or because
of death or Disability  (check
one)

 

o    Will not be Benefiting Participants
for that Allocation Period

o    Will always be Benefiting Participants
regardless of Service

o    Must be credited with                 
(max. 1,000) Hours of Service in the
Allocation Period

o    Must be credited with a                 
(max. 6) month Period of Service  in the Allocation Period

o    Must be credited with                 
(max. 6) consecutive calendar months of
employment in the Allocation Period

o    Must be credited with                 
(max. 182) consecutive days of
employment in the Allocation Period

 

(c)          Participants who Terminate Employment before the last day of the
Allocation Period for any other reason (check one)

 

o    Will not be Benefiting Participants
for that Allocation Period

o    Will always be Benefiting Participants
regardless of Service

o    Must be credited with                 
(max. 1,000) Hours of Service in the
Allocation Period

o    Must be credited with a                 
(max. 6) month Period of Service  in the Allocation Period

o    Must be credited with                 
(max. 6) consecutive calendar months of
employment in the Allocation Period

o    Must be credited with                 
(max. 182) consecutive days of
employment in the Allocation Period

 

7.4                   o    Additional Non-Safe Harbor Non-Elective
Contributions. An Employer may make additional Non-Safe
Harbor Non-Elective Contributions as selected in the “Additional Non-Safe
Harbor Non-Elective Contribution Addendum” attached hereto.

 

Section
8.  x Rollovers and Employee Contributions

 

8.1                   x   Rollover
Contributions.  Rollover
Contributions are permitted < o
beginning                                         
(must be after the later of the Plan’s original effective date or the
restatement date) >, subject to the provisions selected
below.

 

(a)   Rollover Contributions can
be made to the Plan by:  (check
one)

 

o    Any Employee (including those who are not
Eligible Employees)

x   Any Eligible Employee (whether a Participant
or not)

o    Any Eligible Employee who has become a
Participant for Elective Deferral purposes

o    Any Eligible Employee who has become a
Participant for Non-Safe Harbor Matching Contribution purposes

o    Any Eligible Employee who has become a
Participant for Non-Safe Harbor Non-Elective Contribution purposes

 

(b)   Rollover Contributions will
be accepted from the following types of plans:  (check any that apply)

 

x   Code §401(a) plans  (qualified retirement
plans)

x   Code §403(a) plans  (qualified annuity plans)

x   Code §403(b) plans  (annuities purchased by a
Code §501(c)(3) organization and certain educational institutions)

 

15

 

x   Code §408(a) plans  (individual retirement
accounts)

x   Code §408(b) plans  (individual retirement
annuities)

x   Code §457(b) plans  (governmental only)

 

(c)   Rollover Contributions can
also include the following: (check all that apply)

 

o    Roth Elective Deferrals  (Note: Can be checked only
if this Plan also permits Roth Elective Deferrals)

o    Voluntary Employee Contributions

o    Mandatory Employee Contributions

o    Participant loans

o    In kind distributions (other than
Participant loans)

 

(d)   Rollover Contributions can be
withdrawn from the Plan: (check
one)

 

x   At any time

o    Annually on a date set by the Administrator

o    Semi-annually on dates set by the
Administrator

o    Quarterly on dates set by the Administrator

o    Monthly on dates set by the Administrator

o    Only upon Termination of Employment and only
at the time selected in Section 15.5 of the Adoption Agreement

 

(e)   Rollover Contributions which
are withdrawn from the Plan < x can > < o cannot
> be redeposited in the Plan.

 

8.2                   x   Voluntary Employee
Contributions.  Voluntary
Employee Contributions are permitted < o  beginning                     
(must be after the later of the Plan’s original effective date or the
restatement date) >, subject to the provisions selected
below.

 

(a)   Voluntary Employee
Contributions can be made to the Plan by:  (check one)

 

x   Any Eligible Employee who has become a
Participant for Elective Deferral purposes

o    Any Eligible Employee who has become a
Participant for Non-Safe Harbor Matching Contribution purposes

o    Any Eligible Employee who has become a
Participant for Non-Safe Harbor Non-Elective Contribution purposes

 

(b)          Minimum and Maximum Contribution. The minimum permitted Voluntary Employee
Contribution is 0% (enter zero if no minimum)  of Compensation and the maximum permitted contribution is 10% (max. 100) of
Compensation. Voluntary Employee Contributions can be made < o annually >
< o monthly >
< x each payroll
period >.

 

(c)   Voluntary Employee
Contributions can be withdrawn from the Plan: (check one)

 

x   At any time

o    Annually on a date set by the Administrator

o    Semi-annually on dates set by the
Administrator

o    Quarterly on dates set by the Administrator

o    Monthly on dates set by the Administrator

o    Only upon Termination of Employment and only
at the time selected in Section 15.5 of the Adoption Agreement

 

8.3                   o    Deemed IRAs.
Deemed Individual Retirement Accounts are permitted < o  beginning                                       
(must be after the later of the Plan’s original effective date or the
restatement date) >, subject to the provisions selected
below. (check one)

 

o    Any Eligible Employee who has become a
Participant for Elective Deferral purposes

o    Any Eligible Employee who has become a
Participant for Non-Safe Harbor Matching Contribution purposes

o    Any Eligible Employee who has become a
Participant for Non-Safe Harbor Non-Elective Contribution purposes

 

Section
9.  o Prevailing Wage Contributions

 

9.1       Prevailing Wage Contributions. Subject to Section 3.6 of
the Basic Plan, the Employer will make contributions to the Plan for the Prevailing
Wage Service of each Participant < o who is an NHCE
>. The Administrator may promulgate additional rules and procedures
regarding Prevailing Wage Contributions in an administrative policy regarding
Prevailing Wage Contributions.

 

9.2       Vesting.
Prevailing Wage contributions are 100% Vested at all times unless they
are “annualized” pursuant to Department of Labor Regulations, in which case
they will be Vested in accordance with the schedule selected in Section 10.6
of the Adoption Agreement. Notwithstanding the foregoing, to the extent a
Prevailing Wage contribution is used to offset an Employer contribution that is
required to be 100% Vested at all times, such Prevailing Wage contribution will
also be 100% Vested at all times.

 

16

 

Section
10.  Vesting Requirements

 

10.1            Full and Immediate Vesting Upon Retirement, Death or
Disability. A Participant’s Vested Interest in his or her
Participant’s Account will be 100% upon reaching Normal Retirement Age and upon
the occurrence of the following: (check all that
apply)

 

o    Reaching Early Retirement Age

x   Death prior to Termination of Employment

o    Disability prior to Termination of
Employment

 

10.2            Elective Deferrals, QMACs, QNECs and ADP Safe Harbor
Contributions. A Participant’s Vested Interest in all
Elective Deferrals, QMACS, QNECs and ADP Safe Harbor Contributions allocated to
him or her will be 100% at all times.

 

10.3            o    ACP
Safe Harbor Matching Contributions. A Participant’s Vested Interest
in his or her ACP Safe Harbor Matching Contribution Account will be determined
by the provisions selected below.

 

(a)   The Vesting schedule for ACP Safe
Harbor Matching Contributions in a non-Top Heavy Plan Year is: (check one)

 

o    100% full and immediate

o            The schedule set forth below

 

1 Year / Period of Service                     %

2 Years / Periods of Service                  %   (must be at least 20% unless
100% Vesting occurs after 3 years)

3 Years / Periods of Service                  %   (must be at least 40%)

4 Years / Periods of Service                  %   (must be at least 60%)

5 Years / Periods of Service                  %   (must be at least 80%)

6 Years / Periods of Service                  %   (must be 100%)

 

(b)   The Vesting schedule for ACP
Safe Harbor Matching Contributions in a Top Heavy Plan Year is: (check one)

 

o    100% full and immediate

o            The schedule set forth below

 

1 Year / Period of Service                     %

2 Years / Periods of Service                  %   (must be at least 20% unless
100% Vesting occurs after 3 years)

3 Years / Periods of
Service                  %   (must be at least 40%)

4 Years / Periods of
Service                  %   (must be at least 60%)

5 Years / Periods of Service                  %   (must be at least 80%)

6 Years / Periods of
Service                  %   (must be 100%)

 

(c)          o    Vesting Schedule for Pre-EGTRRA
Contributions. Notwithstanding
paragraphs (a) and (b) above, a Participant’s Vested Interest in ACP
Safe Harbor Contributions which were made to the Plan prior to January 1,
2001 will be determined in accordance with the Vesting schedule in effect when
such contributions were made to the Plan.

 

(d)          o    Service Excluded for Vesting.
All Service with the Employer is
counted in determining a Participant’s Vested Interest in the ACP Safe Harbor
Matching Contribution Account except the following: (check all
that apply)

 

o    Service
before age 18

o    Service
before the Employer maintained this Plan or a predecessor plan

o    Service
during a period for which the Employee made no mandatory contributions to the
Plan

 

10.4            x   Non-Safe Harbor
Matching Contributions. A Participant’s Vested Interest in his or her
Non-Safe Harbor Matching Contribution Account will be determined by the
provisions below selected below.

 

(a)   The Vesting schedule for Non-Safe
Harbor Matching Contributions in a non-Top Heavy Plan Year is: (check one)

 

o    100% full and immediate

x          The schedule set forth below

 

1 Year / Period of Service 33.00%

2 Years / Periods of Servic 67.00%  (must be at least 20% unless
100% Vesting occurs after 3 years)

3 Years / Periods of Service 100%   (must be at least 40%)

4 Years / Periods of Service 100%   (must be at least 60%)

5 Years / Periods of Service 100%   (must be at least 80%)

6 Years / Periods of Service 100%  
(must be 100%)

 

17

 

(b)   The Vesting schedule for
Non-Safe Harbor Matching Contributions in a Top Heavy Plan Year is: (check one)

 

o    100% full and immediate

x          The schedule set forth below

 

1 Year / Period of Service 33.00%

2 Years / Periods of Servic 67.00%  (must be at least 20% unless
100% Vesting occurs after 3 years)

3 Years / Periods of Service 100%   (must be at least 40%)

4 Years / Periods of Service 100%   (must be at least 60%)

5 Years / Periods of Service 100%   (must be at least 80%)

6 Years / Periods of Service 100%  
(must be 100%)

 

(b)          o    Vesting Schedule for Pre-EGTRRA
Contributions. Notwithstanding
paragraphs (a) and (b) above, a Participant’s Vested Interest in
Non-Safe Harbor Matching Contributions which were made to the Plan prior to January 1,
2001 will be determined in accordance with the Vesting schedule in effect when
such contributions were made to the Plan.

 

(c)          o    Service Excluded for Vesting.
All Service with the Employer is
counted in determining a Participant’s Vested Interest in the Non-Safe Harbor
Matching Contribution Account except the following: (check all
that apply)

 

o    Service
before age 18

o    Service
before the Employer maintained this Plan or a predecessor plan

o    Service
during a period for which the Employee made no mandatory contributions to the
Plan

 

10.5            o    Non-Safe Harbor Non-Elective Contributions. A Participant’s
Vested Interest in all Non-Safe Harbor Non-Elective Contributions allocated to
him or her will be determined by the provisions selected below.

 

(a)   The Vesting schedule for Non-Safe Harbor Non-Elective
Contributions in a non-Top Heavy Plan Year is: (check one)

 

o    100% full and immediate

o    7 Year Graded

o    5 Year Cliff

o            The schedule set forth below

 

1 Year / Period of Service              %

2 Years / Periods of Service           %   (must be at least 20% unless
100% Vesting occurs after 3 years)

3 Years / Periods of Service           %   (must be at least 40%)

4 Years / Periods of Service           %   (must be at least 60%)

5 Years / Periods of Service           %   (must be at least 80%)

6 Years / Periods of Service           %   (must be 100%)

 

(b)   The Vesting schedule for Non-Safe Harbor Non-Elective
Contributions in a Top Heavy Plan Year is: (check one)

 

o    100% full and immediate

o            The schedule set forth below

 

1 Year / Period of
Service              %

2 Years / Periods of Service           %   (must be at least 20% unless
100% Vesting occurs after 3 years)

3 Years / Periods of Service           %   (must be at least 40%)

4 Years / Periods of Service           %   (must be at least 60%)

5 Years / Periods of Service           %   (must be at least 80%)

6 Years / Periods of
Service           %   (must be 100%)

 

(c)          o    Service Excluded for Vesting.
All Service with the Employer is
counted in determining a Participant’s Vested Interest in the Non-Safe Harbor
Non-Elective Contribution Account except the following: (check all
that apply)

 

o    Years
of Service before age 18

o    Years
of Service before the Employer maintained this Plan or a predecessor plan

o    Years
of Service during a period for which the Employee made no mandatory
contributions to the Plan

 

18

 

10.6            o    Prevailing Wage
Contributions. Except as otherwise provided in Section 9.2
of the Adoption Agreement, a Participant’s Vested Interest in all Prevailing
Wage contributions allocated to him or her will be determined by the provisions
below.

 

(a)   The Vesting schedule for
Prevailing Wage Contributions in a non-Top Heavy Plan Year is: (check one)

 

o    100% full and immediate

o    7 Year Graded

o    5 Year Cliff

o            The schedule set forth below

 

1 Year / Period of Service             %

2 Years / Periods of
Service          %   (must be at least 20% unless
100% Vesting occurs after 3 years)

3 Years / Periods of Service          %   (must be at least 40%)

4 Years / Periods of Service          %   (must be at least 60%)

5 Years / Periods of Service          %   (must be at least 80%)

6 Years / Periods of Service          %   (must be 100%)

 

(b)   The Vesting schedule for
Prevailing Wage Contributions in a Top Heavy Plan Year is: (check one)

 

o    100% full and immediate

o            The schedule set forth below

 

1 Year / Period of Service             %

2 Years / Periods of Service          %   (must be at least 20% unless
100% Vesting occurs after 3 years)

3 Years / Periods of Service          %   (must be at least 40%)

4 Years / Periods of Service          %   (must be at least 60%)

5 Years / Periods of Service          %   (must be at least 80%)

6 Years / Periods of
Service          %   (must be 100%)

 

(c)          o    Service Excluded for Vesting.
All Service with the Employer is
counted in determining a Participant’s Vested Interest in the Prevailing Wage
Contribution Account except the following: (check all that apply)

 

o    Years
of Service before age 18

o    Years
of Service before the Employer maintained this Plan or a predecessor plan

o    Years
of Service during a period for which the Employee made no mandatory
contributions to the Plan

 

Section
11.  Compensation Definitions

 

11.1             x   Elective Deferrals. A Participant’s
Compensation for Elective Deferral purposes will be determined as selected
below.

 

(a)   Compensation is defined as:  (check one)

 

x   Form W-2 Compensation

o    Code §3401 Compensation

o    Safe Harbor Code §415 Compensation

 

(b)   Elective contributions under
Code §125, §132(f)(4), §402(h), §403(b), §457(b) and §414(h)(2) will:  (check one)

 

o    Be included
as Compensation

x   Not be included
as Compensation

 

(c)   The Compensation measuring
period is the:  (check one)

 

x   Plan Year

o    Fiscal Year ending on or within the Plan
Year

o    Calendar year ending on or within the Plan
Year

 

(d)          x   The following
categories of remuneration will not be counted as Compensation:  (check all that apply)

 

x   1) Compensation
received prior to becoming a Participant

o    2) Compensation
received while an ineligible Employee under Section 3.1(a) of the Adoption Agreement

o    3) All items in
Regulation §1.414(s)-1(c)(3) (i.e.,
expense allowances, fringe benefit, moving expenses, etc.)

o    4) Post-Severance
Compensation (1)

 

19

 

o    5) Deemed 125
Compensation (1)

o    6) Bonuses (1)

o    7) Overtime  (1)

o    8) Commissions  (1)

x   9)
Other (describe) (1)  See 1 in Addendum

 

 

(1)     If checked, the Plan’s
definition of compensation may fail to satisfy the safe harbor requirements
unless such compensation is excluded only with respect to Highly Compensated
Employees under paragraph (e) below.

 

(e)          o    The amounts
excluded under (d)(4) – (9) will only be excluded with respect to: (check
all that apply)

 

o    Highly
Compensated Employees

o    Other
(cannot be a class that only includes NHCEs)

 

 

11.2             o    ADP Safe Harbor Contributions. A Participant’s
Compensation for purposes of any ADP Safe Harbor Contributions contributed
under Section 5 of the
Adoption Agreement will be determined as selected below.

 

(a)   Compensation is defined as: (check one)

 

o    Form W-2 Compensation

o    Code §3401 Compensation

o    Safe Harbor Code §415 Compensation

 

(b)          Elective contributions under Code §125, §132(f)(4), §401(k), §402(h),
§403(b), §457(b) and §414(h)(2) will: (check one)

 

o    Be included
as Compensation

o    Not be included as Compensation

 

(c)   The Compensation measuring
period is the: (check
one)

 

o    Plan Year

o    Fiscal Year ending on or within the Plan
Year

o    Calendar year ending on or within the Plan
Year

 

(d)          o    The following categories of remuneration
will not be counted as Compensation: (check all that
apply)

 

o    1) Compensation
received prior to becoming a Participant

o            2)
Compensation received while an ineligible Employee under Sections 3.1(a) and (b) of the
Adoption Agreement

o            3)
All items in Regulation §1.414(s)-1(c)(3) (i.e., expense allowances, fringe benefit, moving expenses, etc.)

o    4) Post-Severance
Compensation  (1)

o    5) Deemed 125
Compensation  (1)

o    6) Bonuses (1)

o    7) Overtime (1)

o    8) Commissions (1)

o    9) Other (describe) (1)

 

 

(1)         If checked, the Plan’s
definition of compensation may fail to satisfy the safe harbor requirements
unless such compensation is excluded only with respect to Highly Compensated
Employees under paragraph (e) below.

 

(e)          o    The amounts
excluded under (d)(4) – (9) will only be excluded with respect to: (check
all that apply)

 

o    Highly
Compensated Employees

o    Other
(cannot be a class that only includes NHCEs)

 

 

20

 

11.3             o    ACP Safe Harbor Contributions. A Participant’s Compensation for purposes of any ACP Safe Harbor
Contributions contributed under Section 5 of the
Adoption Agreement will be determined as selected below.

 

(a)   Compensation
is defined as: (check one)

o    Form W-2 Compensation

o    Code §3401 Compensation

o    Safe Harbor Code §415 Compensation

 

(b)          Elective contributions under Code
§125, §132(f)(4), §401(k), §402(h), §403(b), §457(b) and §414(h)(2) will:
(check one)

o    Be included as Compensation

o    Not be included as Compensation

 

(c)   The
Compensation measuring period is the: (check one)

o    Plan Year

o    Fiscal Year ending on or within the Plan Year

o    Calendar year ending on or within the Plan Year

 

(d)          o    The following categories of remuneration will not be counted
as Compensation: (check
all that apply)

	
   

  	
  o

  	
  1)
  Compensation received prior to becoming a Participant

  
	
   

  	
  o

  	
  2)
  Compensation received while an ineligible Employee under Sections 3.1(a) and (c) of the
  Adoption Agreement

  
	
   

  	
  o

  	
  3) All
  items in Regulation §1.414(s)-1(c)(3) (i.e., expense allowances,
  fringe benefit, moving expenses, etc.)

  
	
   

  	
  o

  	
  4)
  Post-Severance Compensation  (1)

  
	
   

  	
  o

  	
  5)
  Deemed 125 Compensation  (1)

  
	
   

  	
  o

  	
  6)
  Bonuses (1)

  
	
   

  	
  o

  	
  7)
  Overtime  (1)

  
	
   

  	
  o

  	
  8)
  Commissions  (1)

  
	
   

  	
  o

  	
  9)
  Other (describe) (1)

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

(1)         If
checked, the Plan’s definition of compensation may fail to satisfy the safe
harbor requirements unless such compensation is excluded only with respect to
Highly Compensated Employees under paragraph (e) below.

 

(e)          o    The amounts excluded under (d)(4) – (9) will only
be excluded with respect to: (check all that apply)

	
   

  	
  o

  	
  Highly Compensated
  Employees

  
	
   

  	
  o

  	
  Other (cannot be a class that only includes NHCEs)

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

11.4             x   Non-Safe Harbor Matching Contributions. A Participant’s Compensation for purposes of Non-Safe Harbor Matching
Contributions contributed under Section 6 of the
Adoption Agreement will be determined as selected below.

 

(a)   Compensation
is defined as: (check one)

x   Form W-2 Compensation

o    Code §3401 Compensation

o    Safe Harbor Code §415 Compensation

 

(b)          Elective contributions under Code
§125, §132(f)(4), §401(k), §402(h), §403(b), §457(b) and §414(h)(2) will:
(check one)

o    Be included as Compensation

x   Not be included as Compensation

 

(c)   The
Compensation measuring period is the: (check one)

	
   

  	
  x

  	
  Plan Year

  
	
   

  	
  o

  	
  Fiscal Year ending on
  or within the Plan Year

  
	
   

  	
  o

  	
  Calendar year ending on
  or within the Plan Year

  

 

21

 

(d)          x   The following categories of remuneration will not be counted
as Compensation: (check
all that apply)

	
   

  	
  x

  	
  1)
  Compensation received prior to becoming a Participant for Non-Safe Harbor
  Matching Contributions

  
	
   

  	
  o

  	
  2)
  Compensation received while an ineligible Employee under
  Section 3.1(d) of the Adoption Agreement

  
	
   

  	
  o

  	
  3) All items in Regulation
  §1.414(s)-1(c)(3) (i.e., expense
  allowances, fringe benefit, moving expenses, etc.)

  
	
   

  	
  o

  	
  4) Post-Severance
  Compensation (1)

  
	
   

  	
  o

  	
  5) Deemed 125 Compensation (1)

  
	
   

  	
  o

  	
  6) Bonuses (1)

  
	
   

  	
  o

  	
  7) Overtime (1)

  
	
   

  	
  o

  	
  8) Commissions (1)

  
	
   

  	
  x

  	
  9) Other (describe)  (1) See 2
  in Addendum

  

 

(1)         If
checked, the Plan’s definition of compensation may fail to satisfy the safe
harbor requirements unless such compensation is excluded only with respect to
Highly Compensated Employees under paragraph (e) below.

 

(e)          o    The amounts excluded under (d)(4) – (9) will only
be excluded with respect to: (check all that apply)

	
   

  	
  o

  	
  Highly Compensated
  Employees

  
	
   

  	
  o

  	
  Other (cannot be a class that only includes NHCEs)

  	
   

  
	
   

  	
   

  	
   

  

 

11.5             o    Non-Safe Harbor Non-Elective Contributions. A Participant’s Compensation for purposes of Non-Safe Harbor Non-Elective
Contributions contributed under Section 7 of the
Adoption Agreement will be determined as selected below.

 

(a)   Compensation
is defined as: (check one)

o    Form W-2 Compensation

o    Code §3401 Compensation

o    Safe Harbor Code §415 Compensation

 

(b)          Elective contributions under Code
§125, §132(f)(4), §401(k), §402(h), §403(b), §457(b) and §414(h)(2) will:
(check one)

o    Be included as Compensation

o    Not be included as Compensation

 

(c)   The
Compensation measuring period is the: (check one)

o    Plan Year

o    Fiscal Year ending on or within the Plan Year

o    Calendar year ending on or within the Plan Year

 

(d)          o    The following categories of remuneration will not be counted
as Compensation: (check
all that apply)

o    1) Compensation received prior to becoming
a Participant for Non-Safe Harbor Non-Elective Contributions

o            2) Compensation received while an ineligible Employee
under Section 3.1(e) of
the Adoption Agreement

o            3) All items in Regulation
§1.414(s)-1(c)(3) (i.e., expense allowances,
fringe benefit, moving expenses, etc.)

o            4) Post-Severance Compensation
(1)

o            5) Deemed 125 Compensation (1)

o            6) Bonuses (1)

o            7) Overtime (1)

o            8) Commissions (1)

	
   

  	
  o

  	
  9) Other (describe)  (1)

  	
   

  
	
   

  	
   

  	
   

  

 

(1)         If
checked, the Plan’s definition of compensation may fail to satisfy the safe
harbor requirements unless such compensation is excluded only with respect to
Highly Compensated Employees under paragraph (e) below.

 

(e)          o    The amounts excluded under (d)(4) – (9) will only
be excluded with respect: (check all that apply)

	
   

  	
  o

  	
  Highly Compensated
  Employees

  
	
   

  	
  o

  	
  Other (cannot be a class that only includes NHCEs)

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

22

 

(f)            o    Imputed Compensation During Periods of Disability.  Subject to Section 1.39(c) and
Section 1.41(g) of the Basic Plan, a Participant’s Compensation will
be imputed during periods of total disability (as defined in Code §22(e)(3)) in
determining or allocating Non-Safe Harbor Non-Elective Contributions. Any such
imputation will be limited to the number of Plan Years (and Limitation Years)
specified in an administrative policy, and the number of such Plan Years and
Limitations Years can be different for affected Participants who are HCEs and
those who are NHCEs.

 

11.6             x   Voluntary Employee Contributions.
A Participant’s Compensation for purposes of any
Voluntary Employee Contributions contributed under Section 8.2 of the
Adoption Agreement will be determined as selected below.

 

(a)   Compensation
is defined as: (check one)

x   Form W-2 Compensation

o    Code §3401 Compensation

o    Safe Harbor Code §415 Compensation

 

(b)          Elective contributions under Code
§125, §132(f)(4), §401(k), §402(h), §403(b), §457(b) and §414(h)(2) will:
(check
one)

o    Be included as Compensation

x   Not be included as Compensation

 

(c)   The
Compensation measuring period is the: (check one)

x   Plan Year

o    Fiscal Year ending on or within the Plan Year

o    Calendar year ending on or within the Plan Year

 

(d)          x   The following categories of remuneration will not be counted
as Compensation: (check all that
apply)

x   1) Compensation received prior to becoming
a Participant

o            2) Compensation received while an ineligible Employee
under Section 3.1(a) of the Adoption Agreement

o            3) All items in Regulation
§1.414(s)-1(c)(3) (i.e., expense allowances,
fringe benefit, moving expenses, etc.)

o            4) Post-Severance Compensation
(1)

o            5) Deemed 125 Compensation (1)

o            6) Bonuses (1)

o            7) Overtime (1)

o            8) Commissions (1)

x          9) Other (describe)
(1) See 3 in Addendum

 

(1)         If
checked, the Plan’s definition of compensation may fail to satisfy the safe
harbor requirements unless such compensation is excluded only with respect to
Highly Compensated Employees under paragraph (e) below

 

(e)          o    The amounts excluded under (d)(4) – (9) will only
be excluded with respect: (check all that apply)

	
   

  	
  o

  	
  Highly Compensated
  Employees

  
	
   

  	
  o

  	
  Other (cannot be a class that only includes NHCEs)

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

11.7             Code §415(c)(3) Compensation
for Top Heavy Allocation Purposes and Key Employee Determinations. An Employee’s Code §415(c)(3) Compensation used to determine any
Top Heavy Minimum Allocations and whether an Employee is also a Key Employee is
based on the selection below.

 

x   Form W-2 Compensation

o    Code §3401 Compensation

o    Safe Harbor Code §415 Compensation

o    Statutory Code §415 Compensation

 

11.8             Code §415(c)(3) Compensation
for Code §415 Limitation Determinations. An Employee’s
Code §415(c)(3) Compensation used to determine the Employee’s Annual
Addition limitation under Article 6 of the Basic Plan is based on the
selection below.

 

x   Form W-2 Compensation

o    Code §3401 Compensation

o    Safe Harbor Code §415 Compensation

o    Statutory Code §415 Compensation

 

23

 

11.9             Code §415(c)(3) Compensation
for Highly Compensated Employee Determinations and Other Statutory Purposes. An Employee’s Code §415(c)(3) Compensation used to determine
whether the Employee is also a Highly Compensated Employee, and for other
statutory purposes that do not appear elsewhere in this Adoption Agreement, is
based on the selection below.

 

x   Form W-2 Compensation

o    Code §3401 Compensation

o    Safe Harbor Code §415 Compensation

o    Statutory Code §415 Compensation

 

Section 12.  x  Allocation of Forfeitures

 

12.1            Time When Forfeitures Occur. Forfeitures of any kind will occur: (check one)

 

x          When
a Terminated Participant’s entire Vested Account has been distributed (or after
5 consecutive Breaks in Service, if earlier)

o    After a Terminated Participant incurs
             (max. 5) consecutive Breaks in Service

 

12.2            o    ACP Safe Harbor Matching
Contributions. Forfeitures of ACP Safe Harbor
Matching Contributions which are not used to pay administrative expenses as
permitted under Section 3.13(b) of the Basic Plan will be allocated
(or used) as follows:

 

(a)   Forfeitures
attributable to ACP Safe Harbor Matching Contributions will be: (check
one)

o    1) Used to reduce Employer contributions as described in
Section 3.13(b)(2) of the Basic Plan

o    2) Added to Employer contributions as described in Section 3.13(b)(2) of
the Basic Plan

o    3) Allocated to Benefiting Participants pro-rata based
on his or her Compensation for the Plan Year

 

(b)          o    Participants Eligible to Be
Benefiting Participants.  The following are eligible to be Benefiting
Participants for an Allocation Period with respect to Forfeitures allocated
under paragraph (a)(3) above:

o    Those who are Participants for Elective Deferral
purposes (whether they defer or not)

o    Those who are Participants for Non-Safe Harbor
Matching Contribution purposes

o    Those who are Participants for Non-Safe Harbor
Non-Elective Contribution purposes

 

12.3            x   Non-Safe Harbor Matching Contributions. Forfeitures of Non-Safe Harbor Matching Contributions which are not used
to pay administrative expenses as permitted under Section 3.13(b) of
the Basic Plan will be allocated (or used) as follows:

 

(a)   Forfeitures
attributable to Non-Safe Harbor Matching Contributions will be: (check
one)

x   1) Used to reduce Employer contributions as described in
Section 3.13(b)(2) of the Basic Plan

o    2) Added to Employer contributions as described in Section 3.13(b)(2) of
the Basic Plan

o    3) Allocated to Benefiting Participants in the manner
selected in paragraphs (b), (c) and (d) below

 

(b)          o    Method of Allocation.  Forfeitures allocated under
(a)(3) will be allocated to each Benefiting Participant as follows:

o    Pro-rata based on his or her Compensation for the Plan
Year

o    Pro-rata based on his or her Elective Deferrals for
the Plan Year

o    Pro-rata based on his or her Non-Safe Harbor Matching
Contributions for the Plan Year

o    Pro-rata based on his or her Non-Safe Harbor Matching
Contribution Account balance

 

(c)          o    Participants Eligible to Be
Benefiting Participants.  The following are eligible to be Benefiting
Participants for an Allocation Period with respect to Forfeitures allocated
under paragraph (a)(3) above:

o    Those who are Participants for Elective Deferral
purposes

o    Those who are Participants for Non-Safe Harbor
Matching Contribution purposes

o    Those who are Participants for Non-Safe Harbor
Non-Elective Contribution purposes

 

(d)          o    Benefiting Participants.  Any Participant selected in paragraph (c) <
o who is a NHCE for the Allocation Period
> will be a Benefiting Participant for purposes of the allocations under
paragraph (a)(3) above, provided the Participant also satisfies the
applicable requirements in Section 6.2 of the Adoption Agreement.

 

24

 

12.4            o    Non-Safe Harbor Non-Elective Contributions. Forfeitures of Non-Safe Harbor Non-Elective Contributions which are not
used to pay administrative expenses as permitted under Section 3.13(b) of
the Basic Plan will be allocated (or used) as follows:

 

(a)   Forfeitures
attributable to Non-Safe Harbor Non-Elective Contributions will be: (check
one)

o    1) Used to reduce Employer contributions as described in
Section 3.13(b)(2) of the Basic Plan

o    2) Added to Employer contributions as described in Section 3.13(b)(2) of
the Basic Plan

o    3) Allocated to Benefiting Participants in the manner
selected in paragraphs (b), (c) and (d) below

 

(b)          o    Method of Allocation.  Forfeitures allocated under
(a)(3) will be allocated to each Benefiting Participant as follows:

o    Pro-rata based on his or her Compensation for the Plan
Year

o    Pro-rata based on his or her Elective Deferrals for
the Plan Year

o    Pro-rata based on his or her Non-Safe Harbor
Non-Elective Contributions for the Plan Year

o    Pro-rata based on his or her Non-Safe Harbor
Non-Elective Contribution Account balance

 

(c)          o    Participants Eligible to Be
Benefiting Participants.  The following are eligible to be Benefiting
Participants for an Allocation Period with respect to Forfeitures allocated
under paragraph (a)(3) above:

o    Those who are Participants for Elective Deferral
purposes

o    Those who are Participants for Non-Safe Harbor
Matching Contribution purposes

o    Those who are Participants for Non-Safe Harbor
Non-Elective Contribution purposes

 

(d)          o    Benefiting Participants.  Any Participant selected in paragraph (c) <
o who is a NHCE for the Allocation Period
> will be a Benefiting Participant for purposes of the allocations under
paragraph (a)(3) above, provided the Participant also satisfies the
applicable requirements in Section 7.3 of the Adoption Agreement.

 

Section 13.  Allocation of Earnings and Losses

 

13.1            Allocation Method. Investment earnings and losses will be allocated to each Participant’s
Account in a non-discriminatory manner in accordance with the terms of Section 3.12
of the Basic Plan.

 

Section 14.  Normal and Early Retirement Age

 

14.1            Normal Retirement Age. The Plan’s Normal Retirement Age
is Age 65  (max. 65)

 

o    Or the                 
(max. 5th) anniversary of becoming a
Participant in the Plan, if later

o            Or the date the Participant is credited with at least                 
Years/Periods of Service, if later, but in no event later than
the later of Age 65 or the 5th anniversary of becoming a
Participant in the Plan

 

14.2            Normal Retirement Date. The Plan’s Normal Retirement Date is as selected below. (check one)

 

o    The Anniversary Date following the date a Participant
reaches Normal Retirement Age

o    The Anniversary Date nearest the date a Participant
reaches Normal Retirement Age

o    The first day of the month following the date a
Participant reaches Normal Retirement Age

o    The first day of the month nearest the date a
Participant reaches Normal Retirement Age

x   The same date a Participant reaches Normal Retirement
Age

 

14.3            o    Early Retirement Age. Early Retirement is permitted,
and the Plan’s Early Retirement Age is Age               
(max. 64)

 

o    Or if later, the date the Participant is credited with
at least                 
Years/Periods of Service

o    Provided the Participant is also credited with at
least                 
Years/Periods of Service

 

14.4            o    Early Retirement Date. The Early
Retirement Date is as selected below. (check one)

 

o    Any Anniversary Date after a Participant reaches Early
Retirement Age

o    The first day of any month after a Participant reaches
Early Retirement Age

o    Any date after a Participant reaches Early Retirement
Age

 

25

 

Section 15.  Distribution Provisions

 

15.1            Normal Form of Distribution
for Distributions Other Than Death Benefits. The benefit
payable to a Participant who Terminates Employment with the Employer for
reasons other than death will be distributed in the manner selected below.

 

(a)   x   Lump Sum Payment < x
and the Optional Forms of Distribution are: (check all that apply) >

 

x   Installment payments

o    Partial payments as requested from time to time by the
Participant

o    Any form of annuity which can be purchased from an
insurance company (subject to the QJSA rules)

 

(b)   o    Installment Payments < o
and the Optional Forms of Distribution are: (check all that apply) >

 

o    A lump sum payment

o    Partial payments as requested from time to time by the
Participant

o    Any form of annuity which can be purchased from an
insurance company (subject to the QJSA rules)

 

(c)   o    Qualified Joint and Survivor
Annuity < o and the Optional Forms of Distribution
are: (check all that apply) >

 

o    A lump sum payment

o    Installment payments

o    Partial payments as requested from time to time by the
Participant

o    Any other form of annuity which can be purchased from
an insurance company

 

15.2            Distribution of Benefits Because
of Retirement. With respect
to a Participant who Terminates Employment because of retirement or on or after
his or her Normal (or Early) Retirement Date, distribution will be made in a
form permitted under Section 15.1 and will occur
within an administratively reasonable time after the Participant’s Normal (or
Early) Retirement Date.

 

15.3            Distribution of Benefits Because
of Disability. With respect
to a Participant who Terminates Employment because of his or her Disability,
distribution will be made in a form permitted under Section 15.1 and in
accordance with the provisions selected below.

 

(a)          Time of
Distribution. Distribution of a Disability Benefit will be made:  (check
one)

o    Within an administratively reasonable time after
Termination of Employment

x   In accordance with the distribution requirements in Section 15.5
below

 

(b)          Definition
of Disability. A
Participant will be considered to have suffered a Disability for Plan purposes if the
Participant suffers a mental or physical impairment while still an Employee
which: (check all that apply)

o            In
the opinion of a physician acceptable to the Administrator, totally and
permanently prevents the Participant from engaging in any occupation for pay or
profit.

x          In
the opinion of a physician acceptable to the Administrator, totally and
permanently prevents the Participant from performing customary and usual duties
for the Employer

o            In
the opinion of the Social Security Administration, qualifies the Participant
for disability benefits under the Social Security Act in effect on the date the
Participant suffers the mental or physical impairment.

o            In
the opinion of the insurance company, qualifies the Participant for benefits
under an Employer-sponsored long-term disability plan which is administered by
an independent third party.

 

(c)          o    Exceptions. Notwithstanding (b) above, a
Participant will not be considered to have suffered a Disability for purposes
of the Plan if the mental or physical impairment is the result
of: (check all that apply)

o    The illegal use of drugs or intoxicants

o    An intentionally self-inflicted injury or sickness

o    An injury suffered as a result of an unlawful or
criminal act by the Participant

 

15.4            Distribution of Benefits Upon
Death. With respect to any portion of a
deceased Participant’s Vested Aggregate Account which is subject to the QJSA
requirements, any death benefit payable therefrom to such deceased Participant’s
surviving Spouse will be distributed as a Qualified Pre-Retirement Survivor
Annuity unless the QPSA has been waived by the Participant in accordance with Section 5.8
of the Basic Plan (or has been waived by the surviving Spouse if elected in
paragraph (c) below). With respect to any death benefit payable to a
non-Spouse Beneficiary, any death benefit payable to a surviving Spouse where
the QPSA has been waived, or any death benefit payable from a portion of a
deceased Participant’s Vested Aggregate Account which is not subject to the
QJSA requirements, any such death benefit will be distributed in the form of
distribution selected in paragraph (a) below.

 

26

 

(a)          Form of distribution (other
than a required QPSA). A Beneficiary can elect to have a death
benefit (other than a QPSA) to which he or she is entitled distributed in the
following manner:  (check all that apply)

x   In a lump sum payment

x   In installment payments (if elected by the
Beneficiary)

o    In partial payments as requested from time to time by
the Beneficiary

o    Any form of annuity which can be purchased from an
insurance company (subject to the QPSA rules)

 

(b)          Value of QPSA. With respect to
any portion of a deceased Participant’s Vested Aggregate Account which is
subject to the QJSA requirements, the value of a QPSA is:

o    50% of the deceased
Participant’s Vested Aggregate Account

o    100%  of the deceased Participant’s Vested
Aggregate Account

 

(c)          Spousal
Waiver of QPSA. With respect to any portion of a deceased Participant’s
Vested Aggregate Account which is subject to the QJSA requirements, if a
Participant did not waive the QPSA prior to death, the deceased Participant’s
surviving Spouse is < o not > permitted to waive the QPSA after the
Participant’s death.

 

15.5            Distribution of Benefits for
Reasons Other than Retirement, Death or Disability. With respect to a Participant
who Terminates Employment for reasons other than retirement, death or
Disability, distribution will be made in a form permitted under Section 15.1
and will occur within an administratively reasonable
time after the date selected below.

 

o    The Participant has a 1-year Break in Service

o    The Participant has           
(max. 5) consecutive 1-year Breaks in
Service

o    The end of the Plan Year in which the Participant
Terminates Employment

o    The Participant Terminates Employment

o    The Participant Terminates Employment, but not more
than             
days after Termination of Employment

o    The Participant Terminates Employment, but not earlier
than             
days after Termination of Employment

o    The next Valuation Date of the Plan

x   The Participant requests payment

o    The date the Participant reaches his or her Normal (or
Early) Retirement Age under the Plan

 

15.6            x   Mandatory Cash-Outs. Subject to Section 5.5 of the
Basic Plan, the Administrator will distribute
a Vested Aggregate Account without the consent of any Participant who
Terminates Employment based on the threshold selected below.

 

x   $5,000 < o including > < x excluding > Rollover Contributions

o    $1,000 including Rollover Contributions

o    $              
(must be less than $5,000 but more than $1,000) including Rollover Contributions

o    $              
(must be less than $1,000) including Rollover Contributions

 

15.7            x   In-Service Distributions. Distributions may be made to a Participant < o who is a NHCE > while he or
she is still employed by the Employer as selected below.

 

(a)          x   Distributions to Participants
Still Employed After Normal Retirement Age. Subject to Section 4.2
of the Basic Plan, a Participant who has reached Normal Retirement Age but has
not Terminated Employment with the Employer can withdraw all or any portion of
his or her Vested Aggregate Account balance.

 

(b)          x   Distributions to Participants
Still Employed Before Normal Retirement Age. Subject to Section 5.17
of the Basic Plan, a Participant who has not reached Normal Retirement Age and
has not Terminated Employment with the Employer can withdraw all or any portion
of his or her Vested Interest in the account or accounts selected below.

 

(1)         Elective
Deferral, QMAC/QNEC Accounts and ADP Safe Harbor Contribution Accounts. A Participant who has reached Age 591/2 (at
least 591/2)  can withdraw all or a portion of his or
her: (check all that apply)

 

x   Elective Deferral Account

x   Qualified Matching Contribution Account

x   Qualified Non-Elective Contribution Account

o    ADP Safe Harbor Contribution Account

 

27

 

(2)         Non-Safe Harbor Matching
Contribution Accounts, Non-Safe Harbor Non-Elective Contribution Accounts and
ACP Safe Harbor Contribution Accounts. A Participant who has satisfied the conditions
selected in subparagraph (3) below can withdraw all or a portion of his or
her: (check all that apply)

 

x   Vested Non-Safe Harbor Matching Contribution Account

o    Vested Non-Safe Harbor Non-Elective Contribution
Account

o    Vested ACP Safe Harbor Contribution Account

 

(3)         Conditions
for Withdrawals Under Subparagraph (2). A Participant must satisfy the conditions selected
below in order to make a withdrawal as selected in subparagraph (2) above.
(check all that apply)

 

o    The Participant must have a 100% Vested Interest in
the account

x   The Participant must have reached Age 591⁄2

o    The Participant must have been a Participant for at
least 5 years

o    The amount being distributed must have accumulated in
the account for at least 2 years

	
  o

  	
  Other

  	
   

  

 

 

15.8            x   Financial Hardship
Distributions. A Participant < x who is still
an Employee > can take a
hardship distribution from the Plan, subject to Section 5.16 of the Basic
Plan and subject to the terms and conditions set forth in an administrative
policy regarding financial hardship distributions.

 

15.9            Definition of Spouse.  For purposes of
the Plan, a Spouse is the person to whom a Participant is legally married < o  throughout the one year period
ending on the earlier of the Annuity Starting Date or the date of the Participant’s
death >.

 

15.10     QDRO Distributions.  Benefits
payable pursuant to a Qualified Domestic Relations Order are distributable as
selected below.

o    Such benefits cannot be distributed until the affected
Participant has reached the Earliest Retirement Age

x          Such
benefits can be distributed at any time (even if the affected Participant has
not yet reached the Earliest Retirement Age)

 

15.11      Required Minimum Distributions. In applying the required minimum
distribution requirements set forth in Section 5.9 of the Basic Plan, the
following provisions will apply:

 

(a)   Required
Beginning Date. The Required Beginning Date for Participants who are not 5% owners is: (check
one)

o            (1)   April 1st of the calendar year following the calendar
year in which the Employee reaches Age 701/2

x          (2)   April 1st of the calendar year following the later of
the calendar year in which the Employee reaches Age 701/2 or the calendar year in which the Employee
retires

 

(b)   Required
Distributions After Death. If a Participant dies before
distributions are required to begin and there is a Designated Beneficiary, Section 5.9
of the Basic Plan requires that a Participant’s entire interest be distributed
to the Designated Beneficiary by December 31st of the calendar year
containing the 5th anniversary of the Participant’s death < x but the Participant or Designated
Beneficiary may elect the Life Expectancy method as described in Section 5.9
of the Basic Plan >.

 

(c)  Effective
Date. The required minimum distribution rules apply to distributions
made on or after January 1, 2003 < o and also to distributions made on or
after                                                     
(must be on or after January 1, 2002) >.

 

Section 16.  x  Loans, Insurance and
Directed Investments

 

16.1            x   Loans to Participants. Subject to Section 7.1 of
the Basic Plan and a written procedure established by the Employer, loans can
be made to Participants from the Plan < o beginning                                         
(must be after the later of the Plan’s original
effective date or the restatement date) >.

 

16.2            o    Purchase of Insurance. Subject to Section 7.2 of
the Basic Plan, insurance Policies can be purchased on the life of a
Participant at the direction of the following: (check all that apply)

o    The Administrator

o    The Participant

 

16.3            x   Directed Investment Accounts. Subject to Section 7.4 of
the Basic Plan and a written procedure established by the Employer,
Participants can direct the investment of one or more of the their accounts
maintained by the Plan < o beginning                                         
(must be after the later of the Plan’s original
effective date or the restatement date) >.

 

28

 

Section 17.  Top Heavy Allocations

 

17.1            Who Receives the Allocation. Subject to Section 3.14 of
the Basic Plan, a Top Heavy Allocation will be made in each Top Heavy Plan Year
to each Participant who is employed on the last day of the Plan Year < x and is a Non-Key Employee >.

 

17.2            Top Heavy Ratio. In determining the Top Heavy
Ratio, the interest and mortality factors set forth in Section 1.191(d) of
the Basic Plan will be used < o  except as selected below  (check
all that apply)  >.

 

o         % interest will used prior to reaching
Normal Retirement Age.

o         % interest will used after reaching
Normal Retirement Age.

o    The                                                                 
mortality table will be used after reaching Normal Retirement Age.

 

17.3            Participation in Multiple Plans. An eligible Participant as
described in Section 17.1 above who participates in this Plan and in one
or more defined benefit plans or in one or more other defined contribution
Plans that are part of a Top Heavy Required Aggregation Group will receive the
minimum Top Heavy benefit in the manner described in Section 3.14 of the
Basic Plan.

 

Section 18.  Testing Elections

 

18.1            ADP Testing. The ADP Test will be determined as selected below. (check one)

 

o    Current year testing

x   Prior year testing

o    Prior year testing for the first Plan Year and current
year testing thereafter, subject to Section 1.7 of the Basic Plan

 

18.2            ACP Testing. The ACP Test (if applicable) will be determined as selected below. (check one)

 

o    Current year testing

x   Prior year testing

o    Prior year testing for the first Plan Year and current
year testing thereafter, subject to Section 1.5 of the Basic Plan

 

18.3            Hypothetical Entry Date for
Otherwise Excludable Participants.  For any Plan
Year in which a determination of Otherwise Excludable Participants must be
made, the Hypothetical Entry Date related to any determination of an Otherwise
Excludable Participant for purposes that include, but are not limited to, the
ACP Test and/or the application of the general nondiscrimination test under
Code §401(a)(4) (including determining the amount of, and which
Participants are subject to, the Minimum Aggregate Allocation Gateway or
Minimum Allocation Gateway requirement) is: (check one)

 

o    The date that the Employee satisfies the maximum
statutory age and service requirements under Code §410(a)(1)(A)

x          The
Employee’s maximum statutory entry date under Code §410(a)(4) after the
Employee satisfies the maximum statutory age and service requirements under
Code §410(a)(1)(A)

o    The Employee’s Entry Date(s) under Section 3.3
for the component of the Plan for which the determination relates

 

18.4            o    Calendar Year Election. The calendar
year election is being made for the purpose of determining who is a HCE.

 

18.5            x   Top Paid Group Election. The top paid group election is being made for the purpose of determining
who is a HCE.

 

Section 19.  o  401(k) SIMPLE
Provisions

 

19.1            o    Election of SIMPLE Provisions. The Sponsoring Employer elects to have the 401(k) SIMPLE Provisions
described in Section 3.16 of the Basic Plan apply, and the Employer will
make the contribution selected in (a) or (b) below.

 

(a)          o    Matching Contributions. The Employer
will make a Matching
Contribution equal to each “eligible employee’s” Elective Deferral up to a
limit of < o  3% > < o               % > of Compensation determined
without regard to Code §401(a)(17). If the percentage is less than 3%, the
restrictions in Section 3.16(f) of the Basic Plan apply.

 

(b)          o    Non-Elective Contributions. The Employer
will make a Non-Elective Contribution equal to 2% of the compensation of each “eligible employee”
who makes at least $                          (max. $5,000) of Compensation
for the year.

 

29

 

19.2            o    Revocation of SIMPLE Provisions.
The Sponsoring Employer revokes the 401(k) SIMPLE
Provisions previously elected, effective as of January 1 next following
the date this Section 19.2 is signed and dated below by the Sponsoring
Employer.

 

	
  By

  	
   

  	
  (on
  behalf of the Employer)

  	
  Dated

  	
   

  

 

Section 20.  Miscellaneous Provisions

 

20.1            Limitation Year. In applying the limitations under Code §415, the Limitation Year will
be:

 

x   Plan Year

o    The Fiscal Year ending on or within the Plan Year

o    The calendar year ending on or within the Plan Year

 

20.2            Failsafe Allocations. o For any Plan Year in which the Plan fails to satisfy the average benefit
percentage test of Code §410(b)(2) or the average benefits test of
Regulation §1.401(a)(4), in accordance with Section 3.15 of the Basic Plan
to the extent necessary to insure that the Plan satisfies one of the tests set
forth in Code §410(b)(1)(A) (in which the Plan initially fails to benefit
at least 70% of Non-Highly Compensated Employees) or Code §410(b)(1)(B) (in
which the Plan initially fails to benefit a percentage of Non-Highly
Compensated Employees that is at least 70% of the percentage of Highly
Compensated Employees who benefit under the Plan), an additional Employer
contribution may be made and allocated for certain Participants who are not
Benefiting Participants for that Plan Year pursuant to the rankings below.

 

(a)   Participants
eligible for the failsafe allocation will first be ranked by their (check one)

o    Hours of Service (or months of Service if
Elapsed Time) beginning with the < o highest > < o lowest > number

o    Compensation beginning with the < o highest > < o lowest > amount

 

(b)   o    Before an allocation is made, the
Participants in (a) will be further ranked  (check one)

o    Beginning with those who are employed on the last day
of Plan Year

o    Beginning with those who are credited with at least
1,000 hours of service (6 months of service if
elapsed time)

 

20.3            Multiple Defined Contribution
Plans.  If a Participant (a) is or was covered under two or more current or
terminated plans sponsored by the same Employer (or Employers in the same
controlled or affiliated service group); or (b) is covered under either a
welfare benefit fund as defined in Code §419(e), or an individual medical
account as defined in Code §415(l)(2) under which amounts are treated as
Annual Additions with respect to any Participant in this Plan, Annual Additions
will be adjusted as follows:

 

x   As set forth in Article 6 of the Basic Plan so the Annual
Additions under this Plan will be reduced first

o    As set forth in the Annual Addition Adjustment
Addendum.

 

20.4            x   Protected Benefits.  The benefits
set forth in the “Protected Benefits Addendum” are also permitted.

 

20.5            o    Domestic Partners. A Participant’s Domestic Partner
is treated as a Spouse under the terms of Plan.

 

20.6            Prototype Sponsor Information. The Prototype Sponsor certifies that it will inform the Sponsoring
Employer of any amendments to the Plan or of the Prototype Sponsor’s
discontinuance or abandonment of the Plan. For more information about the Plan,
a Sponsoring Employer may contact the Prototype Sponsor (or its authorized
representative) at the following address:

 

Prototype Sponsor Charles
Schwab Trust Co.

 

Address 215 Fremont Street

 

City San Francisco State  CA ZIP Code  94105 Phone  (888) 444-4015

 

20.7            Reliance. The adopting Employer may rely on
an opinion letter issued by the Internal Revenue Service as evidence that the
plan is qualified under Code §401 only to the extent provided in Revenue
Procedure 2005-16. The Employer may not rely on the opinion letter in certain
other circumstances or with respect to certain qualification requirements that
are specified in the opinion letter issued with respect to the plan and in
Revenue Procedure 2005-16. In order to have reliance in such circumstances or
with respect to such qualification requirements, application for a
determination letter must be made to Employee Plans Determinations of the
Internal Revenue Service. This Adoption Agreement may be used only in conjunction with Basic Plan #01. The
appropriateness of the adoption of this Plan and the terms of the Adoption
Agreement, its qualification with the IRS, and the tax and employee benefit
consequences are the responsibility of the Employer and its tax and legal
advisors. Failure to properly complete this Adoption Agreement may result in
disqualification of the Plan.

 

30

 

Section 21.  Signature Provisions

 

21.1    Signature of the Sponsoring
Employer

 

	
  By

  	
   

  	
   

  	
  Date

  	
   

  
	
   

  	
   

  	
   

  
	
  Print
  Name

  	
   

  	
   

  	
  Title

  	
   

  
							

 

21.2    Signature of the Individual
Trustees (the individual
Trustees may sign here in lieu of executing the separate trust document)

 

 

	
  Trustee
  #1

  	
   

  	
   

  	
  Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Print
  Name

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Trustee
  #2

  	
   

  	
   

  	
  Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Print
  Name

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Trustee
  #3

  	
   

  	
   

  	
  Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Print
  Name

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Trustee
  #4

  	
   

  	
   

  	
  Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Print
  Name

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Trustee
  #5

  	
   

  	
   

  	
  Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Print
  Name

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Trustee
  #6

  	
   

  	
   

  	
  Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Print
  Name

  	
   

  	
   

  	
   

  
									

 

21.3    Signature of the Corporate
Trustee (the Corporate
Trustee may sign here in lieu of executing the separate trust document)

 

 

	
  By

  	
   

  	
   

  	
  Date

  	
   

  
	
   

  	
   

  	
   

  
	
  Print
  Name

  	
   

  	
   

  	
  Title

  	
   

  
							

 

21.4    Signature of the Custodian (complete only if a custodian has been appointed)

 

 

	
  By

  	
   

  	
   

  	
  Date

  	
   

  
	
   

  	
   

  	
   

  
	
  Print
  Name

  	
   

  	
   

  	
  Title

  	
   

  
							

 

31

 

CHARLES SCHWAB TRUST COMPANY

 

PROTOTYPE DEFINED CONTRIBUTION RETIREMENT PLAN

 

BASIC PLAN # 01

 

 

Table of Contents

 

	
  Article 1

  	
   

  	
   

  	
  2

  
	
  Definitions

  	
   

  	
  2

  
	
   

  	
  1.1

  	
  ACP Test

  	
  2

  
	
   

  	
  1.2

  	
  ACP Safe Harbor Matching
  Contribution

  	
  2

  
	
   

  	
  1.3

  	
  ACP Safe Harbor Matching
  Contribution Account

  	
  2

  
	
   

  	
  1.4

  	
  Actual Contribution
  Percentage

  	
  2

  
	
   

  	
  1.5

  	
  Actual Contribution
  Percentage Test

  	
  2

  
	
   

  	
  1.6

  	
  Actual Deferral Percentage

  	
  2

  
	
   

  	
  1.7

  	
  Actual Deferral Percentage
  Test

  	
  3

  
	
   

  	
  1.8

  	
  Administrator

  	
  3

  
	
   

  	
  1.9

  	
  Adopting Employer

  	
  3

  
	
   

  	
  1.10

  	
  ADP Safe Harbor Contribution

  	
  3

  
	
   

  	
  1.11

  	
  ADP Safe Harbor Matching
  Contribution

  	
  3

  
	
   

  	
  1.12

  	
  ADP Safe Harbor Matching
  Contribution Account

  	
  4

  
	
   

  	
  1.13

  	
  ADP Safe Harbor Non-Elective
  Contribution

  	
  4

  
	
   

  	
  1.14

  	
  ADP Safe Harbor Non-Elective
  Contribution Account

  	
  4

  
	
   

  	
  1.15

  	
  ADP Test

  	
  4

  
	
   

  	
  1.16

  	
  Affiliated Employer

  	
  4

  
	
   

  	
  1.17

  	
  Age

  	
  4

  
	
   

  	
  1.18

  	
  Aggregate Normal Allocation
  Rate

  	
  4

  
	
   

  	
  1.19

  	
  Allocation Period

  	
  5

  
	
   

  	
  1.20

  	
  Allocation Rate

  	
  5

  
	
   

  	
  1.21

  	
  Anniversary Date

  	
  5

  
	
   

  	
  1.22

  	
  Annuity Starting Date

  	
  6

  
	
   

  	
  1.23

  	
  Annual Additions

  	
  6

  
	
   

  	
  1.24

  	
  Applicable Contribution Rate

  	
  6

  
	
   

  	
  1.25

  	
  Applicable Plan Year

  	
  6

  
	
   

  	
  1.26

  	
  Basic Plan

  	
  6

  
	
   

  	
  1.27

  	
  Beneficiary

  	
  6

  
	
   

  	
  1.28

  	
  Benefiting Participant

  	
  7

  
	
   

  	
  1.29

  	
  Break in Service

  	
  7

  
	
   

  	
  1.30

  	
  Broadly Available Allocation
  Rates

  	
  7

  
	
   

  	
  1.31

  	
  Broadly Available Separate
  Plans

  	
  7

  
	
   

  	
  1.32

  	
  Cash or Deferred Contribution

  	
  7

  
	
   

  	
  1.33

  	
  Catch-Up Contribution

  	
  7

  
	
   

  	
  1.34

  	
  Catch-Up Contribution Limit

  	
  8

  
	
   

  	
  1.35

  	
  Code

  	
  8

  
	
   

  	
  1.36

  	
  Code §3401 Compensation

  	
  8

  
	
   

  	
  1.37

  	
  Code §401(a)(17) Compensation
  Limit

  	
  8

  
	
   

  	
  1.38

  	
  Code
  §414(s) Compensation

  	
  8

  
	
   

  	
  1.39

  	
  Code
  §415(c)(3) Compensation

  	
  8

  
	
   

  	
  1.40

  	
  Committee

  	
  9

  
	
   

  	
  1.41

  	
  Compensation

  	
  9

  
	
   

  	
  1.42

  	
  Compensation Determination
  Period

  	
  10

  
	
   

  	
  1.43

  	
  Contribution Percentage

  	
  10

  
	
   

  	
  1.44

  	
  Contribution Percentage
  Amounts

  	
  11

  
	
   

  	
  1.45

  	
  Counting of Hours Method

  	
  13

  
	
   

  	
  1.46

  	
  Current Year Testing Method

  	
  13

  
	
   

  	
  1.47

  	
  Deductible Employee
  Contribution

  	
  13

  
	
   

  	
  1.48

  	
  Deductible Employee Contribution
  Account

  	
  13

  
	
   

  	
  1.49

  	
  Deemed Aggregated Allocation
  Groups

  	
  13

  
	
   

  	
  1.50

  	
  Deemed Code §125 Compensation

  	
  13

  
	
   

  	
  1.51

  	
  Deemed IRA Contribution

  	
  13

  
	
   

  	
  1.52

  	
  Deemed IRA Contribution
  Account

  	
  13

  
	
   

  	
  1.53

  	
  Designated Beneficiary

  	
  13

  
	
   

  	
  1.54

  	
  Determination Date

  	
  13

  
	
   

  	
  1.55

  	
  Disability

  	
  14

  
	
   

  	
  1.56

  	
  Distribution Calendar Year

  	
  14

  
	
   

  	
  1.57

  	
  Domestic Partner

  	
  14

  
	
   

  	
  1.58

  	
  Early Retirement Age

  	
  14

  

 

 

	
   

  	
  1.59

  	
  Early Retirement Date

  	
  14

  
	
   

  	
  1.60

  	
  Earned Income

  	
  14

  
	
   

  	
  1.61

  	
  Elapsed Time Method

  	
  15

  
	
   

  	
  1.62

  	
  Elective Deferral

  	
  15

  
	
   

  	
  1.63

  	
  Eligibility Computation Period

  	
  15

  
	
   

  	
  1.64

  	
  Eligible Employee

  	
  15

  
	
   

  	
  1.65

  	
  Employee

  	
  15

  
	
   

  	
  1.66

  	
  Employee Contribution

  	
  16

  
	
   

  	
  1.67

  	
  Employer

  	
  16

  
	
   

  	
  1.68

  	
  Employment Commencement Date

  	
  16

  
	
   

  	
  1.69

  	
  Equivalent Accrual Rate

  	
  16

  
	
   

  	
  1.70

  	
  ERISA

  	
  16

  
	
   

  	
  1.71

  	
  Excess Annual Additions

  	
  17

  
	
   

  	
  1.72

  	
  Excess Aggregate Contributions

  	
  17

  
	
   

  	
  1.73

  	
  Excess Compensation

  	
  17

  
	
   

  	
  1.74

  	
  Excess Contributions

  	
  17

  
	
   

  	
  1.75

  	
  Excess Elective Deferrals

  	
  17

  
	
   

  	
  1.76

  	
  401(k) Plan

  	
  17

  
	
   

  	
  1.77

  	
  401(m) Plan

  	
  17

  
	
   

  	
  1.78

  	
  Fiscal Year

  	
  17

  
	
   

  	
  1.79

  	
  Forfeiture

  	
  17

  
	
   

  	
  1.80

  	
  Forfeiture Account

  	
  18

  
	
   

  	
  1.81

  	
  Form W-2 Compensation

  	
  18

  
	
   

  	
  1.82

  	
  Gradually Increasing Age or
  Service Schedule

  	
  18

  
	
   

  	
  1.83

  	
  HCE

  	
  19

  
	
   

  	
  1.84

  	
  Highly Compensated Employee

  	
  19

  
	
   

  	
  1.85

  	
  Hour of Service

  	
  19

  
	
   

  	
  1.86

  	
  Hypothetical Entry Date

  	
  20

  
	
   

  	
  1.87

  	
  Immediately Distributable

  	
  20

  
	
   

  	
  1.88

  	
  Independent Contractor

  	
  20

  
	
   

  	
  1.89

  	
  Key Employee

  	
  20

  
	
   

  	
  1.90

  	
  Leased Employee

  	
  21

  
	
   

  	
  1.91

  	
  Life Expectancy

  	
  21

  
	
   

  	
  1.92

  	
  Limitation Year

  	
  21

  
	
   

  	
  1.93

  	
  Mandatory Employee
  Contribution

  	
  21

  
	
   

  	
  1.94

  	
  Mandatory Employee
  Contribution Account

  	
  21

  
	
   

  	
  1.95

  	
  Matching Contribution

  	
  21

  
	
   

  	
  1.96

  	
  Matching Contribution Account

  	
  21

  
	
   

  	
  1.97

  	
  Matching Rate

  	
  21

  
	
   

  	
  1.98

  	
  Maternity or Paternity Leave

  	
  22

  
	
   

  	
  1.99

  	
  Maximum Excess Percentage

  	
  22

  
	
   

  	
  1.100

  	
  Minimum Aggregate Allocation
  Gateway

  	
  22

  
	
   

  	
  1.101

  	
  Minimum Allocation Gateway

  	
  23

  
	
   

  	
  1.102

  	
  Named Fiduciary

  	
  23

  
	
   

  	
  1.103

  	
  NHCE

  	
  23

  
	
   

  	
  1.104

  	
  Non-Elective Contribution

  	
  24

  
	
   

  	
  1.105

  	
  Non-Highly Compensated
  Employee

  	
  24

  
	
   

  	
  1.106

  	
  Non-Key Employee

  	
  24

  
	
   

  	
  1.107

  	
  Non-Safe Harbor
  401(k) Plan

  	
  24

  
	
   

  	
  1.108

  	
  Non-Safe Harbor
  401(m) Plan

  	
  24

  
	
   

  	
  1.109

  	
  Non-Safe Harbor Matching
  Contribution

  	
  24

  
	
   

  	
  1.110

  	
  Non-Safe Harbor Matching
  Contribution Account

  	
  24

  
	
   

  	
  1.111

  	
  Non-Safe Harbor Non-Elective
  Contribution

  	
  24

  
	
   

  	
  1.112

  	
  Non-Safe Harbor Non-Elective
  Contribution Account

  	
  24

  
	
   

  	
  1.113

  	
  Normal Accrual Rate

  	
  24

  
	
   

  	
  1.114

  	
  Normal Form of
  Distribution

  	
  24

  
	
   

  	
  1.115

  	
  Normal Retirement Age

  	
  24

  
	
   

  	
  1.116

  	
  Normal Retirement Date

  	
  24

  
	
   

  	
  1.117

  	
  OASI Percentage

  	
  24

  
	
   

  	
  1.118

  	
  One Year Holdout Rule

  	
  25

  
	
   

  	
  1.119

  	
  Otherwise Excludable
  Participant

  	
  25

  
	
   

  	
  1.120

  	
  Optional Form of
  Distribution

  	
  25

  

 

 

	
   

  	
  1.121

  	
  Participant

  	
  25

  
	
   

  	
  1.122

  	
  Participant’s Account

  	
  25

  
	
   

  	
  1.123

  	
  Participant’s Account Balance

  	
  25

  
	
   

  	
  1.124

  	
  Period of Service

  	
  25

  
	
   

  	
  1.125

  	
  Period of Severance

  	
  30

  
	
   

  	
  1.126

  	
  Permissive Aggregation Group

  	
  30

  
	
   

  	
  1.127

  	
  Plan

  	
  30

  
	
   

  	
  1.128

  	
  Plan Year

  	
  30

  
	
   

  	
  1.129

  	
  Policy

  	
  30

  
	
   

  	
  1.130

  	
  Post-Severance Compensation

  	
  30

  
	
   

  	
  1.131

  	
  Pre-Tax Elective Deferral

  	
  30

  
	
   

  	
  1.132

  	
  Pre-Tax Elective Deferral
  Account

  	
  30

  
	
   

  	
  1.133

  	
  Prevailing Wage Account

  	
  30

  
	
   

  	
  1.134

  	
  Prevailing Wage Contribution

  	
  30

  
	
   

  	
  1.135

  	
  Prevailing Wage Employee

  	
  30

  
	
   

  	
  1.136

  	
  Prevailing Wage Law

  	
  31

  
	
   

  	
  1.137

  	
  Primarily Defined Benefit in
  Character

  	
  31

  
	
   

  	
  1.138

  	
  Prior Year Testing Method

  	
  31

  
	
   

  	
  1.139

  	
  QJSA

  	
  31

  
	
   

  	
  1.140

  	
  QMAC

  	
  31

  
	
   

  	
  1.141

  	
  QMAC Account

  	
  31

  
	
   

  	
  1.142

  	
  QNEC

  	
  31

  
	
   

  	
  1.143

  	
  QNEC Account

  	
  31

  
	
   

  	
  1.144

  	
  QPSA

  	
  31

  
	
   

  	
  1.145

  	
  Qualified Joint and Survivor
  Annuity

  	
  31

  
	
   

  	
  1.146

  	
  Qualified Matching
  Contribution

  	
  31

  
	
   

  	
  1.147

  	
  Qualified Matching
  Contribution Account

  	
  32

  
	
   

  	
  1.148

  	
  Qualified Non-Elective
  Contribution

  	
  32

  
	
   

  	
  1.149

  	
  Qualified Non-Elective
  Contribution Account

  	
  32

  
	
   

  	
  1.150

  	
  Qualified Pre-Retirement
  Survivor Annuity

  	
  32

  
	
   

  	
  1.151

  	
  Reemployment Commencement
  Date

  	
  32

  
	
   

  	
  1.152

  	
  Regulation

  	
  32

  
	
   

  	
  1.153

  	
  Representative Contribution
  Rate

  	
  33

  
	
   

  	
  1.154

  	
  Representative Matching Rate

  	
  33

  
	
   

  	
  1.155

  	
  Required Aggregation Group

  	
  33

  
	
   

  	
  1.156

  	
  Required Beginning Date

  	
  33

  
	
   

  	
  1.157

  	
  Rollover

  	
  34

  
	
   

  	
  1.158

  	
  Rollover Contribution

  	
  34

  
	
   

  	
  1.159

  	
  Rollover Contribution Account

  	
  34

  
	
   

  	
  1.160

  	
  Rollover Participant

  	
  34

  
	
   

  	
  1.161

  	
  Roth Elective Deferral

  	
  34

  
	
   

  	
  1.162

  	
  Roth Elective Deferral
  Account

  	
  34

  
	
   

  	
  1.163

  	
  Rule of Parity

  	
  34

  
	
   

  	
  1.164

  	
  Safe Harbor Code §415
  Compensation

  	
  35

  
	
   

  	
  1.165

  	
  Safe Harbor
  401(k) Contribution

  	
  35

  
	
   

  	
  1.166

  	
  Safe Harbor 401(k) Plan

  	
  36

  
	
   

  	
  1.167

  	
  Safe Harbor 401(m) Plan

  	
  36

  
	
   

  	
  1.168

  	
  Safe Harbor Notice

  	
  36

  
	
   

  	
  1.169

  	
  Safe Harbor Participant

  	
  36

  
	
   

  	
  1.170

  	
  Self-Employed Individual

  	
  36

  
	
   

  	
  1.171

  	
  Service

  	
  36

  
	
   

  	
  1.172

  	
  Sponsoring Employer

  	
  36

  
	
   

  	
  1.173

  	
  Spousal

  	
  36

  
	
   

  	
  1.174

  	
  Spouse

  	
  36

  
	
   

  	
  1.175

  	
  Statutory Code §415
  Compensation

  	
  36

  
	
   

  	
  1.176

  	
  Substantially Equal

  	
  37

  
	
   

  	
  1.177

  	
  Taxable Wage Base

  	
  37

  
	
   

  	
  1.178

  	
  Terminated (or Terminates)
  Employment

  	
  37

  
	
   

  	
  1.179

  	
  Termination of Employment

  	
  38

  
	
   

  	
  1.180

  	
  Terminated Participant

  	
  38

  
	
   

  	
  1.181

  	
  Third-Step Integration
  Percentage

  	
  38

  
	
   

  	
  1.182

  	
  Top Heavy

  	
  38

  

 

 

	
   

  	
  1.183

  	
  Top Heavy Minimum Allocation

  	
  38

  
	
   

  	
  1.184

  	
  Top Heavy Ratio

  	
  38

  
	
   

  	
  1.185

  	
  Transfer Contribution

  	
  39

  
	
   

  	
  1.186

  	
  Transfer Contribution Account

  	
  40

  
	
   

  	
  1.187

  	
  Trustee

  	
  40

  
	
   

  	
  1.188

  	
  Trust (or Trust Fund)

  	
  40

  
	
   

  	
  1.189

  	
  Valuation Calendar Year

  	
  40

  
	
   

  	
  1.190

  	
  Valuation Date

  	
  40

  
	
   

  	
  1.191

  	
  Vested Aggregate Account

  	
  40

  
	
   

  	
  1.192

  	
  Vested, Vested Interest and
  Vesting

  	
  40

  
	
   

  	
  1.193

  	
  Vesting Computation Period

  	
  40

  
	
   

  	
  1.194

  	
  Voluntary Employee
  Contribution

  	
  40

  
	
   

  	
  1.195

  	
  Voluntary Employee
  Contribution Account

  	
  40

  
	
   

  	
  1.196

  	
  Year of Service

  	
  40

  
	
  Article 2

  	
   

  	
  46

  
	
  Plan Participation

  	
  46

  
	
   

  	
  2.1

  	
  Eligibility Requirements

  	
  46

  
	
   

  	
  2.2

  	
  Entry Date

  	
  47

  
	
   

  	
  2.3

  	
  Waiver of Participation

  	
  47

  
	
   

  	
  2.4

  	
  Reemployment

  	
  47

  
	
  Article 3

  	
   

  	
  48

  
	
  Contributions and Allocations

  	
  48

  
	
   

  	
  3.1

  	
  General Contribution and
  Allocation Provisions

  	
  48

  
	
   

  	
  3.2

  	
  Elective Deferrals

  	
  49

  
	
   

  	
  3.3

  	
  Mandatory Employee
  Contributions

  	
  51

  
	
   

  	
  3.4

  	
  Non-Safe Harbor Matching
  Contributions

  	
  51

  
	
   

  	
  3.5

  	
  Non-Safe Harbor Non-Elective
  Contributions

  	
  53

  
	
   

  	
  3.6

  	
  Prevailing Wage Contributions

  	
  55

  
	
   

  	
  3.7

  	
  Qualified Matching
  Contributions

  	
  56

  
	
   

  	
  3.8

  	
  Qualified Non-Elective
  Contributions

  	
  56

  
	
   

  	
  3.9

  	
  Rollover Contributions

  	
  57

  
	
   

  	
  3.10

  	
  Safe Harbor
  401(k) Contributions

  	
  57

  
	
   

  	
  3.11

  	
  Voluntary Employee
  Contributions

  	
  58

  
	
   

  	
  3.12

  	
  Allocation of Earnings and
  Losses

  	
  59

  
	
   

  	
  3.13

  	
  Forfeitures and Their Usage

  	
  59

  
	
   

  	
  3.14

  	
  Top Heavy Minimum Allocation

  	
  60

  
	
   

  	
  3.15

  	
  Failsafe Allocation

  	
  61

  
	
   

  	
  3.16

  	
  SIMPLE 401(k) Provisions

  	
  62

  
	
   

  	
  3.17

  	
  Deemed IRA Contributions

  	
  64

  
	
   

  	
  3.18

  	
  Actual Deferral Percentage
  Test and Correction

  	
  67

  
	
   

  	
  3.19

  	
  Actual Contribution
  Percentage Test and Correction

  	
  69

  
	
   

  	
  3.20

  	
  ADP Safe Harbor Contributions

  	
  71

  
	
   

  	
  3.21

  	
  ACP Safe Harbor Contributions

  	
  76

  
	
   

  	
  3.22

  	
  General Non-Discrimination
  Test Requirements

  	
  77

  
	
   

  	
  3.23

  	
  Annual Overall and Cumulative
  Permitted Disparity Limit

  	
  78

  
	
  Article 4

  	
   

  	
  81

  
	
  Plan Benefits

  	
   

  	
  81

  
	
   

  	
  4.1

  	
  Benefit Upon Normal (or
  Early) Retirement

  	
  81

  
	
   

  	
  4.2

  	
  Benefit Upon Late Retirement

  	
  81

  
	
   

  	
  4.3

  	
  Benefit Upon Death

  	
  81

  
	
   

  	
  4.4

  	
  Benefit Upon Disability

  	
  81

  
	
   

  	
  4.5

  	
  Benefit Upon Termination of
  Employment

  	
  81

  
	
   

  	
  4.6

  	
  Determination of Vested
  Interest

  	
  81

  
	
  Article 5

  	
   

  	
  85

  
	
  Distribution of Benefits

  	
  85

  
	
   

  	
  5.1

  	
  Distribution of Benefit Upon
  Retirement

  	
  85

  
	
   

  	
  5.2

  	
  Distribution of Benefit Upon
  Death

  	
  85

  
	
   

  	
  5.3

  	
  Distribution of Benefit Upon
  Disability

  	
  88

  
	
   

  	
  5.4

  	
  Distribution of Benefit Upon
  Termination of Employment

  	
  88

  
	
   

  	
  5.5

  	
  Mandatory Cash-Out of
  Benefits

  	
  89

  

 

 

	
   

  	
  5.6

  	
  Restrictions on Immediate
  Distributions

  	
  90

  
	
   

  	
  5.7

  	
  Accounts of Reemployed
  Participants

  	
  91

  
	
   

  	
  5.8

  	
  Waiver of Benefits and
  Spousal Consent

  	
  93

  
	
   

  	
  5.9

  	
  Required Minimum
  Distributions

  	
  95

  
	
   

  	
  5.10

  	
  Statutory Commencement of
  Benefits

  	
  98

  
	
   

  	
  5.11

  	
  Post-Termination Earnings

  	
  99

  
	
   

  	
  5.12

  	
  Distribution in the Event of
  Legal Incapacity

  	
  99

  
	
   

  	
  5.13

  	
  Missing Payees and Unclaimed
  Benefits

  	
  99

  
	
   

  	
  5.14

  	
  Direct Rollovers

  	
  99

  
	
   

  	
  5.15

  	
  Distribution of Property

  	
  100

  
	
   

  	
  5.16

  	
  Financial Hardship
  Distributions

  	
  101

  
	
   

  	
  5.17

  	
  In-Service Distributions

  	
  101

  
	
   

  	
  5.18

  	
  Distribution of Excess
  Elective Deferrals

  	
  102

  
	
   

  	
  5.19

  	
  Distribution of Excess
  Contributions

  	
  103

  
	
   

  	
  5.20

  	
  Distribution of Excess
  Aggregate Contributions

  	
  104

  
	
   

  	
  5.21

  	
  Distribution of an Employee’s
  Rollover Contribution Account

  	
  106

  
	
   

  	
  5.22

  	
  Distribution of a
  Participant’s Transfer Contribution Account

  	
  107

  
	
   

  	
  5.23

  	
  Distribution of Voluntary
  Employee Contributions

  	
  108

  
	
   

  	
  5.24

  	
  Distribution of Mandatory
  Employee Contributions

  	
  108

  
	
  Article 6

  	
   

  	
  109

  
	
  Code §415 Limitations

  	
  109

  
	
   

  	
  6.1

  	
  Maximum Annual Additions

  	
  109

  
	
   

  	
  6.2

  	
  Adjustments to Maximum Annual
  Additions

  	
  109

  
	
   

  	
  6.3

  	
  Multiple Plans and Multiple
  Employers

  	
  109

  
	
   

  	
  6.4

  	
  Adjustment for Excess Annual
  Additions

  	
  109

  
	
  Article 7

  	
   

  	
  111

  
	
  Loans, Insurance and Directed
  Investments

  	
  111

  
	
   

  	
  7.1

  	
  Loans to Participants

  	
  111

  
	
   

  	
  7.2

  	
  Insurance on Participants

  	
  112

  
	
   

  	
  7.3

  	
  Key Man Insurance

  	
  113

  
	
   

  	
  7.4

  	
  Directed Investment Accounts

  	
  114

  
	
  Article 8

  	
   

  	
  115

  
	
  Duties of the Administrator

  	
  115

  
	
   

  	
  8.1

  	
  Appointment, Resignation,
  Removal and Succession

  	
  115

  
	
   

  	
  8.2

  	
  General Powers and Duties

  	
  115

  
	
   

  	
  8.3

  	
  Functioning of the Committee

  	
  115

  
	
   

  	
  8.4

  	
  Multiple Administrators

  	
  115

  
	
   

  	
  8.5

  	
  Correcting Administrative
  Errors

  	
  115

  
	
   

  	
  8.6

  	
  Promulgating Notices and
  Procedures

  	
  115

  
	
   

  	
  8.7

  	
  Employment of Agents and
  Counsel

  	
  116

  
	
   

  	
  8.8

  	
  Compensation and Expenses

  	
  116

  
	
   

  	
  8.9

  	
  Claims Procedures

  	
  116

  
	
   

  	
  8.10

  	
  Qualified Domestic Relations
  Orders

  	
  116

  
	
   

  	
  8.11

  	
  Appointment of an Investment
  Manager

  	
  116

  
	
  Article 9

  	
  117

  
	
  Trustee Provisions

  	
  117

  
	
   

  	
  9.1

  	
  Appointment, Resignation,
  Removal and Succession

  	
  117

  
	
   

  	
  9.2

  	
  Powers and Duties of the
  Trustee

  	
  117

  
	
  Article 10

  	
   

  	
  118

  
	
  Adopting Employers

  	
  118

  
	
   

  	
  10.1

  	
  Plan Contributions

  	
  118

  
	
   

  	
  10.2

  	
  Plan Amendments

  	
  118

  
	
   

  	
  10.3

  	
  Plan Expenses

  	
  118

  
	
   

  	
  10.4

  	
  Employee Transfers

  	
  118

  
	
   

  	
  10.5

  	
  Multiple Employer Provisions
  Under Code §413(c)

  	
  118

  
	
   

  	
  10.6

  	
  Termination of Adoption

  	
  119

  
	
  Article 11

  	
   

  	
  120

  
	
  Amendment, Termination,
  Merger and Elective Transfers

  	
  120

  
	
   

  	
  11.1

  	
  Plan Amendment

  	
  120

  

 

 

	
   

  	
  11.2

  	
  Termination of the Plan

  	
  122

  
	
   

  	
  11.3

  	
  Merger or Consolidation

  	
  122

  
	
   

  	
  11.4

  	
  Plan-to-Plan Elective
  Transfers

  	
  123

  
	
  Article 12

  	
   

  	
  124

  
	
  Miscellaneous Provisions

  	
  124

  
	
   

  	
  12.1

  	
  No Contract of Employment

  	
  124

  
	
   

  	
  12.2

  	
  Title to Assets

  	
  124

  
	
   

  	
  12.3

  	
  Qualified Military Service

  	
  124

  
	
   

  	
  12.4

  	
  Domestic Partner’s Rights

  	
  124

  
	
   

  	
  12.5

  	
  Fiduciaries and Bonding

  	
  124

  
	
   

  	
  12.6

  	
  Severability of Provisions

  	
  124

  
	
   

  	
  12.7

  	
  Interpretation of the Plan
  and Trust

  	
  124

  
	
   

  	
  12.8

  	
  Costs and Expenses of Legal
  Action

  	
  125

  
	
   

  	
  12.9

  	
  Qualified Plan Status

  	
  125

  
	
   

  	
  12.10

  	
  Mailing of Notices to
  Administrator, Employer or Trustee

  	
  125

  
	
   

  	
  12.11

  	
  Participant Notices and
  Waivers of Notices

  	
  125

  
	
   

  	
  12.12

  	
  Evidence Furnished Conclusive

  	
  125

  
	
   

  	
  12.13

  	
  Release of Claims

  	
  125

  
	
   

  	
  12.14

  	
  Deductible Employee
  Contributions

  	
  125

  
	
   

  	
  12.15

  	
  No Duplication of Benefits

  	
  126

  
	
   

  	
  12.16

  	
  Discontinued Contributions

  	
  126

  
	
   

  	
  12.17

  	
  Multiple Copies of Plan,
  Trust and/or Adoption Agreement

  	
  126

  
	
   

  	
  12.18

  	
  Loss of Prototype Status

  	
  126

  
	
   

  	
  12.19

  	
  Limitation of Liability and
  Indemnification

  	
  126

  
	
   

  	
  12.20

  	
  Written Elections and Forms

  	
  126

  
	
   

  	
  12.21

  	
  Assignment and Alienation of
  Benefits

  	
  126

  
	
   

  	
  12.22

  	
  Exclusive Benefit Rule

  	
  126

  
	
   

  	
  12.23

  	
  Prior Provisions of Amended
  and Restated Plans

  	
  126

  
	
   

  	
  12.24

  	
  Dual and Multiple Trusts

  	
  126

  

 

 

Charles
Schwab Trust Company

Prototype
Defined Contribution Retirement Plan

 

Preamble

 

This document is a
basic Prototype Defined Contribution Retirement Plan. The sponsor of this
prototype is Charles Schwab Trust Company or its successor (hereinafter
sometimes referred to as the Prototype Sponsor). The Prototype Sponsor has
designated this Prototype Defined Contribution Retirement Plan as Basic Plan
Number 01. Basic Plan 01 and its companion Adoption Agreements include
provisions for a money purchase plan, a profit sharing plan, and a 401(k) plan.

 

A Sponsoring
Employer may adopt one or more plans by executing a completed Adoption
Agreement for each type of plan adopted. A Sponsoring Employer may adopt one or
more trusts to hold some or all retirement plan assets. The documents mentioned
in this section, taken together, constitute the Charles Schwab Trust Company Prototype
Defined Contribution Retirement Plan and Trust. In addition, additional
Employers may adopt this Plan as an Adopting Employer by completing the
Adopting Employer Addendum. To the extent an Adopting Employer is not an
Affiliated Employer, the Plan will become a multiple employer plan as set forth
in Code §413 and will cease to be a Prototype Plan.

 

The seven Adoption
Agreements included with the Basic Plan permit a Sponsoring Employer to adopt
provisions for one of the following types of plans on a standardized or
non-standardized basis: profit sharing, money purchase pension, or 401(k) cash
or deferred. The Adoption Agreements permit both integrated and non-integrated
formulas, though these terms do not appear in the title of the Adoption
Agreements. A defined contribution plan using an integrated formula for
allocation of Employer contributions and/of forfeitures is “integrated.” The
term “integrated” means a plan which relies on disparities permitted by Code
§401(a)(5) and §401(l) to satisfy the non-discrimination requirements
of Code §401(a)(4). The non-standardized Adoption Agreements includes
provisions for cross-tested allocations.

 

It is contemplated
that this prototype retirement program may be used to continue previously
established plans. In this successor plan use, execution of an Adoption
Agreement constitutes an amendment to the original plan.

 

1

 

Article 1

Definitions

 

1.1                   ACP Test. The term “ACP Test” means the Actual
Contribution Percentage Test.

 

1.2                   ACP Safe Harbor Matching
Contribution. The term “ACP
Safe Harbor Matching Contribution” means an Employer contribution (including an
ADP Safe Harbor Matching Contribution) made to this or any other defined
contribution plan on behalf of a Participant on account of a Participant’s
Elective Deferrals and/or a Participant’s Employee Contributions made by such
Participant under a plan maintained by the Sponsoring Employer, which falls
within the requirements of the ACP Safe Harbor as set forth in Code §401(m)(11)
and Section 3.21 of the Basic Plan and which is intended  to automatically satisfy the requirements of
the ACP Test for a Plan Year.

 

1.3                   ACP Safe Harbor Matching
Contribution Account. The
term “ACP Safe Harbor Matching Contribution Account” means the account to which
a Participant’s ACP Safe Harbor Matching Contributions are credited.

 

1.4                   Actual Contribution
Percentage. The term “Actual
Contribution Percentage” means, for a specified group of Participants (either
Highly Compensated Employees or Non-Highly Compensated Employees) for a Plan
Year, the average of the Contribution Percentages of the “Eligible Participants”
in a group. An Actual Contribution Percentage for a specified group of
Participants will be calculated to the nearest hundredth of a percentage point.
For purposes of this definition, the term “Eligible” Participant” means any
Employee (either a Highly Compensated Employee or a Non-Highly Compensated
Employee) who is eligible (a) to make a Voluntary Employee Contribution, (b) to
make a Mandatory Employee Contribution, (c) to make an Elective Deferral
(if the Sponsoring Employer takes such Elective Deferrals into account in the
calculation of the Contribution Percentage), (d) to receive a Matching
Contribution (including Forfeitures that are contingent upon the Participant
making Elective Deferrals or Employee Contributions), or (e) to receive a
Qualified Matching Contribution. If an Employee Contribution is required as a
condition of participation in the Plan, then any Employee who would be a
Participant if such Employee made such a contribution will be treated as an “Eligible
Participant” on behalf of whom no Employee Contributions are made.

 

1.5                   Actual Contribution
Percentage Test. The term “Actual
Contribution Percentage Test” means the nondiscrimination test of Section 3.19
that is performed each Plan Year on a Non-Safe Harbor 401(m) Plan. In any
Plan Year, if ACP Safe Harbor Matching Contributions (including, if applicable,
ADP Safe Harbor Matching Contributions) satisfy the requirements of Section 3.21,
then the Actual Contribution Percentage Test will be deemed to be satisfied
with respect to such ACP Safe Harbor Matching Contributions of that Plan Year.
Notwithstanding the foregoing, a Plan that makes ACP Safe Harbor Matching
Contributions that satisfy the requirements of Section 3.21 is deemed to
have elected the Current Year Testing Method, regardless of the testing method
(Prior Year Testing or Current Year Testing) actually elected in the Adoption
Agreement.

 

1.6                   Actual Deferral Percentage. The term “Actual Deferral Percentage” means,
for a specified group of Participants (either Highly Compensated Employees or
Non-Highly Compensated Employees) for a Plan Year, the average of the ratios
(calculated separately to the nearest hundredth of a percentage point for each
Participant in such group) of (a) the amount of Employer contributions
actually paid over to the Trust on behalf of such Participant for the Plan Year
to (b) the Code §414(s) Compensation of such Participant for such
Plan Year. For purposes of computing Actual Deferral Percentages, an Employee
who would be a Participant but for the failure to make Elective Deferrals will
be treated as a Participant on whose behalf no Elective Deferrals are made and
such Participant’s ratio will equal zero (0). An Actual Deferral Percentage for
a specified group of Participants will be calculated to the nearest hundredth
of a percentage point. Employer contributions actually paid over to the Trust
on behalf of such Participant (either a HCE or a NHCE) for the Plan Year will
include:

 

(a)          Elective Deferrals. Any Elective Deferrals made pursuant to the
Participant’s deferral election (including Excess Elective Deferrals of Highly
Compensated Employees), but excluding the following:

 

(1)          Excess Elective Deferrals of
NHCEs. Excess Elective
Deferrals of NHCEs that arise solely from Elective Deferrals made under this
Plan or plans of this Sponsoring Employer;

 

(2)          Elective Deferrals Treated
as Catch-Up Contributions.
Elective Deferrals that are treated as Catch-Up Contributions under Code §414(v) because
the Elective Deferrals exceed a statutory limit or employer-provided limit
(within the meaning of Regulation §1.414(v)–1(b)(1)) for the Plan Year for
which the Elective Deferrals were made, or for any other Plan Year;

 

2

 

(3)   Elective Deferrals in the
ACP Test. Elective Deferrals
that are taken into account in the Actual Contribution Percentage Test
(provided the ADP Test is satisfied both with and without the exclusion of
these Elective Deferrals); and

 

(4)          Additional Elective
Deferrals Pursuant to Code §414(u). Additional Elective Deferrals that are made pursuant to Code §414(u) by
reason of a Participant’s qualified military service for the Plan Year for
which the contributions are made, or for any other Plan Year.

 

(b)         QNECs and QMACs. In the discretion of the Sponsoring
Employer, Qualified Non-Elective Contributions and Qualified Matching
Contributions.

 

1.7                   Actual Deferral Percentage
Test. The term “Actual
Deferral Percentage Test” means the nondiscrimination test of Section 3.18
that is performed each Plan Year on a Non-Safe Harbor 401(k) Plan. In any
Plan Year, if ADP Safe Harbor Contributions satisfy the requirements of Section 3.20,
then the Actual Deferral Percentage Test will be deemed to be satisfied with
respect to any Elective Deferrals of that Plan Year. Notwithstanding the
foregoing, a Plan that makes ADP Safe Harbor Matching Contributions that
satisfy the requirements of Section 3.20 is deemed to have elected the
Current Year Testing Method, regardless of the testing method (Prior Year
Testing Method or Current Year Testing Method) actually elected in the Adoption
Agreement.

 

1.8                   Administrator. The term “Administrator” means the Sponsoring
Employer unless the Sponsoring Employer appoints another Administrator in the
Adoption Agreement pursuant to Section 8.1 of the Basic Plan. The term “Administrator”
also means a Qualified Termination Administrator (“QTA”) charged with the task
of holding the assets of an orphan plan as permitted by the Department of
Labor. A QTA will be an eligible custodian such as a bank, mutual fund house,
or insurance company. Third party record-keepers cannot be QTAs. However, in
the case of a one participant-owner only plan, the spouse of a deceased owner
can continue to operate the Plan, pursuant to Revenue Procedure 2006-27.

 

1.9                   Adopting Employer. The term “Adopting Employer” means any entity
which adopts this Plan with the consent of the Sponsoring Employer. In addition
to all other terms and conditions in the Plan, Adopting Employers will be, and
must comply with, the terms and conditions set forth in Article 10. If the
Plan is utilizing a standardized Adoption Agreement, then any Affiliated
Employer is automatically considered to be an Adopting Employer. If the Plan is
utilizing a non-standardized Adoption Agreement, then an Affiliated Employer is
not considered an Adopting Employer unless such Affiliated Employer has
specifically adopted the Plan.

 

1.10            ADP Safe Harbor
Contribution. The term “ADP
Safe Harbor Contribution” means an ADP Safe Harbor Matching Contribution and/or
an ADP Safe Harbor Non-Elective Contribution.

 

1.11            ADP Safe Harbor Matching
Contribution. The term “ADP
Safe Harbor Matching Contribution” means an Employer contribution made to this
or any other defined contribution plan on behalf of a Participant (a) on
account of Elective Deferrals made by such Participant under a plan maintained
by the Sponsoring Employer, (b) in which a Participant will have a 100%
Vested Interest at all times, and (c) which falls within the requirements
of the ADP Safe Harbor as set forth in Code §401(k)(12) and Section 3.20
of the Basic Plan and which is intended to automatically satisfy the
requirements of the ADP Test and the ACP Test for a Plan Year. ADP Safe Harbor
Matching Contributions can be either “Basic” or “Enhanced” as elected in the
Adoption Agreement. ADP Safe Harbor Matching Contributions can only be
distributed upon the earliest to occur of the following dates: (a) a
Participant Terminates Employment (separates from service, for Plan Years
beginning before 2002) with the Employer; (b) a Participant dies; (c) a
Participant suffers a Disability; (d) an event that is described in Code
§401(k)(10) occurs; or (e) a Participant reaches Age 591⁄2 (if on or
before such date, a pre-retirement in-service withdrawal of ADP Safe Harbor
Matching Contributions is elected in the Adoption Agreement). With respect to
clause (d) of the prior sentence, ADP Safe Harbor Matching Contributions
can be distributed (in a lump sum only) upon termination of the Plan, so long
as the Sponsoring Employer (or an Affiliated Employer) does not maintain an
alternative defined contribution plan at any time during the period beginning
on the date of Plan termination and ending 12 months after all assets have been
distributed from the terminated Plan. However, if at all times during the
24-month period beginning 12 months before the date of Plan’s termination,
fewer than 2% of the Employees eligible to participate in the 401(k) Plan
as of the date of the Plan’s termination are eligible to participate in the
other defined contribution plan, then the other defined contribution plan is
not an alternative defined contribution plan. In addition, a defined
contribution plan is not an alternative defined contribution plan if it is an
employee stock ownership plan as defined in Code §4975(e)(7) or Code §409(a),
a simplified employee pension as defined in 

 

3

 

Code
§408(k), a SIMPLE IRA plan as defined in Code §408(p), a plan or contract that
is described in Code §403(b), or a plan that is described in Code §457(b) or
Code §457(f). For Plan Years beginning before 2002, ADP Safe Harbor Matching
Contributions could also be distributed (in a lump sum only) upon (a) the
disposition by a corporation to an unrelated corporation of substantially all
of the assets (within the meaning of Code §409(d)(2)) used in a trade or
business of such corporation if such corporation continues to maintain the Plan
after the disposition, but only with respect to employees who continue
employment with the corporation acquiring such assets; or (b) the
disposition by a corporation to an unrelated entity of such corporation’s
interest in a subsidiary (within the meaning of Code §409(d)(3)) if such
corporation continues to maintain the Plan, but only with respect to employees
who continue employment with such subsidiary.

 

1.12            ADP Safe Harbor Matching
Contribution Account. The
term “ADP Safe Harbor Matching Contribution Account” means the account to which
a Participant’s ADP Safe Harbor Matching Contributions are credited.

 

1.13            ADP Safe Harbor Non-Elective
Contribution. The term “ADP
Safe Harbor Non-Elective Contribution” means a Non-Elective Contribution in
which a Participant will have a 100% Vested Interest at all times, which falls
within the requirements of the ADP Safe Harbor under Code §401(k)(12) and Section 3.20
of the Basic Plan, and which is intended to automatically satisfy the
requirements of the ADP Test for a Plan Year. ADP Safe Harbor Non-Elective
Contributions can only be distributed upon the earliest to occur of the
following dates: (a) a Participant Terminates Employment (separates from
service, for Plan Years beginning before 2002) with the Employer; (b) a
Participant dies; (c) a Participant suffers a Disability; (d) an
event that is described in Code §401(k)(10) occurs; or (e) a
Participant reaches Age 591⁄2 (if on or before such date, a pre-retirement
in-service withdrawal of ADP Safe Harbor Non-Elective Contributions is elected
in the Adoption Agreement). With respect to clause (d) of the prior
sentence, ADP Safe Harbor Non-Elective Contributions can be distributed (in a
lump sum only) upon termination of the Plan, so long as the Sponsoring Employer
(or an Affiliated Employer) does not maintain an alternative defined
contribution plan at any time during the period beginning on the date of Plan
termination and ending 12 months after all assets have been distributed from
the terminated Plan. However, if at all times during the 24-month period
beginning 12 months before the date of Plan termination, fewer than 2% of the
Employees who were eligible to participate in the 401(k) Plan as of the
date of Plan termination are eligible to participate in the other defined
contribution plan, then the other defined contribution plan is not an
alternative defined contribution plan. Also, a defined contribution plan is not
an alternative defined contribution plan if it is an employee stock ownership
plan as defined in Code §4975(e)(7) or Code §409(a), a simplified employee
pension as defined in Code §408(k), a SIMPLE IRA plan as defined in Code
§408(p), a plan or contract  that is
described in Code §403(b), or a plan that is described in Code §457(b) or
§457(f). For Plan Years beginning before 2002, ADP Safe Harbor Non-Elective
Contributions could also be distributed (in a lump sum only) upon (a) the
disposition by a corporation to an unrelated corporation of substantially all
of the assets (within the meaning of Code §409(d)(2)) used in a trade or
business of such corporation if such corporation continues to maintain the Plan
after the disposition, but only with respect to employees who continue
employment with the corporation acquiring such assets; or (b) the
disposition by a corporation to an unrelated entity of such corporation’s
interest in a subsidiary (within the meaning of Code §409(d)(3)) if such
corporation continues to maintain the Plan, but only with respect to employees
who continue employment with such subsidiary.

 

1.14            ADP Safe Harbor Non-Elective
Contribution Account. The
term “ADP Safe Harbor Non-Elective Contribution Account” means the account to
which a Participant’s ADP Safe Harbor Non-Elective Contributions are credited.

 

1.15            ADP Test. The term “ADP Test” means the Actual Deferral
Percentage Test.

 

1.16            Affiliated Employer. The term “Affiliated Employer” means any of
the following: (1) a controlled group of corporations as defined in Code
§414(b); (2) a trade or business (whether or not incorporated) under
common control as described in Code §414(c); (3) any organization (whether
or not incorporated) which is a member of an affiliated service group as
described in Code §414(m); and (4) any other entity required to be
aggregated as described in Code §414(o). Any Periods of Service or Years of
Service with an Affiliated Employer will only be taken into account as
otherwise provided under the Plan.

 

1.17            Age. The term “Age” means actual attained age
unless otherwise specified.

 

1.18            Aggregate Normal Allocation
Rate. The term “Aggregate
Normal Allocation Rate” means the sum of the Employee’s Allocation Rate under
the defined contribution plan(s) and the equivalent normal allocation rate
under the defined benefit plan(s), determined in the following manner:

 

4

 

(a)          Aggregate Allocation Rates. An Employee’s Aggregate Normal Allocation
Rate is determined by treating all defined contribution plans that are part of
the combination of defined benefit plan(s) and defined contribution plan(s) as
a single plan, and all defined benefit plans that are part of the combination
of defined benefit plan(s) and defined contribution plan(s) as a
separate single plan. Furthermore, an equivalent normal allocation rate for the
Employee is determined pursuant to Regulation §1.401(a)(4)–8(c)(2).

 

(b)         Options Applied on an
Aggregate Basis. The
optional rules in Regulation §1.401(a)(4)–2(c)(2)(iv) (imputation of
permitted disparity) and (v) (grouping of rates) may not be used to
determine an Employee’s allocation or equivalent normal allocation rate, but
may be applied to determine an Employee’s Aggregate Normal Allocation Rate by
substituting the Aggregate Normal Allocation Rate (determined without regard to
the option) for the Employee’s Allocation Rate in that Regulation section where
appropriate.

 

(c)          Consistency Rule.  Aggregate Normal Allocation Rates must be determined
in a consistent manner for all employees for the Plan Year. The same
measurement periods and interest rates must be used, and any available options
must be applied consistently, if at all, for the entire combination of defined
benefit and defined contribution plan(s). Options that are not permitted to be
used under Regulation §1.401(a)(4)–8 in cross-testing a defined contribution
plan or a defined benefit plan (such as measurement periods that include future
periods, non-standard interest rates, the option to disregard compensation
adjustments described in §1.401(a)(4)–13(d), or the option to disregard Plan
provisions providing for actuarial increases after normal retirement age under
Regulation §1.401(a)(4)–3(f)(3)) may not be used in testing a combination of
defined benefit and defined contribution plan(s) on either a benefits or
contributions basis, because their use would inevitably result in inconsistent
determinations under the defined contribution and defined benefit plan(s).

 

1.19            Allocation Period. The term “Allocation Period” means a period
of 12 consecutive months or less for which (a) an Employer contribution is
made and allocated under the terms of the Plan; (b) Forfeitures are
allocated under the terms of the Plan; and/or (c) earnings and losses are
allocated under the terms of the Plan.

 

1.20            Allocation Rate. The term “Allocation Rate” means the
following:

 

(a)          General Definition. Generally, the term “Allocation Rate” means,
for a Participant for a Plan Year, the sum of the allocations to the
Participant’s Account for the Plan Year, expressed as a percentage of Code §414(s) Compensation,
subject to the following rules:

 

(1)          Allocations Taken into
Account. The allocations
used to determine an Allocation Rate for a Plan Year include all Employer
contributions and forfeitures that are allocated or treated as allocated to the
Participant’s Account under the Plan for the Plan Year, other than amounts
described in paragraph (a)(2). For this purpose, Employer contributions include
Annual Additions described in Regulation §1.415-6(b)(2)(i) (regarding
amounts arising from certain transactions between the Plan and the Employer).
If this Plan is subject to Code §412, then an Employer contribution is used in
the Plan Year for which the Employer contribution is required to be contributed
and allocated to the Participant’s Account under the plan, even if all or part
of the required contribution is not actually made.

 

(2)          Allocations Not Taken into
Account. Allocations of
income, expenses, gains, and losses attributable to the balance in a
Participant’s Account are not used to determine an Allocation Rate.

 

(b)         Definition for Limitation of
Allocation Rates for Non-Safe Harbor Non-Elective Contributions. For purposes of determining the limitation
in the number of Allocation Rates that are permitted when the Sponsoring
Employer elects in the Adoption Agreement to allocate Non-Safe Harbor
Non-Elective Contributions using allocation groups, the term “Allocation Rate”
means the amount of Non-Safe Harbor Non-Elective Contributions allocated to a
Benefiting Participant for a Plan Year, expressed as a percentage of Code §414(s) Compensation.
The number of eligible NHCEs to which a particular Allocation Rate applies must
reflect a reasonable classification of Employees.

 

1.21            Anniversary Date. The term “Anniversary Date” means the last
day of the Plan Year unless another Anniversary Date is elected in the Adoption
Agreement.

 

5

 

1.22            Annuity Starting Date. The term “Annuity Starting Date” means the
first day of the first period for which a benefit is paid as an annuity, in the
case of a benefit not payable as an annuity, the first day all events have
occurred which entitle the Participant to the benefit. The first day of the
first period for which a benefit is to be paid by reason of Disability will be
treated as the Annuity Starting Date only if it is not an auxiliary benefit.

 

1.23            Annual Additions. The term “Annual Additions” means the sum of
the following amounts credited to a Participant’s Account for any Limitation
Year: (a) Employer contributions; (b) Employee contributions; (c) Forfeitures;
(d) amounts allocated to an individual medical account, as defined in Code
§415(l)(2), which is part of a pension or annuity plan maintained by the
Employer; and (e) amounts derived from contributions paid or accrued that
are attributable to post-retirement medical benefits, allocated to the separate
account of a Key Employee, as defined in Code §419A(d)(3), under a welfare
fund, as defined in Code §419(e), maintained by the Employer. Notwithstanding
the foregoing, a Participant’s Annual Additions do not include a Participant’s
rollovers, loan repayments, Catch-up Contributions, repayments of either prior
Plan distributions or prior distributions of Mandatory Employee Contributions,
direct transfers of contributions from another plan to this Plan, deductible
contributions to a simplified employee pension plan, or voluntary deductible
contributions.

 

1.24            Applicable Contribution Rate.
The term “Applicable
Contribution Rate,” for a Participant who is a Non-Highly Compensated Employee,
means (a) for purposes of the ADP Test, the sum of the Qualified Matching
Contributions used in the ADP Test for the Participant who is a Non-Highly Compensated
Employee for the Plan Year and the Qualified Non-Elective Contributions made
for the Participant who is a Non-Highly Compensated Employee for the Plan Year,
divided by the Participant’s Code §414(s) Compensation for the Plan Year;
and (b) for purposes of the ACP Test, the sum of the Matching
Contributions used under the Contribution Percentage Amounts for the
Participant who is a Non-Highly Compensated Employee for the Plan Year and the
Qualified Non-Elective Contributions made for the Participant who is a
Non-Highly Compensated Employee for the Plan Year, divided by the Participant’s
Code §414(s) Compensation for the Plan Year.

 

1.25            Applicable Plan Year. The term “Applicable Plan Year” means (a) for
any Plan Year in which the Prior Year Testing Method is being used, the Plan
Year prior to the Plan Year that is being tested; and (b) for any Plan
Year in which the Current Year Testing Method is being used, the Plan Year that
is being tested.

 

1.26            Basic Plan. The term “Basic Plan” means this document and
any amendment thereto including amendments made via page changes and/or
Employer resolutions.

 

1.27            Beneficiary. The term “Beneficiary” means the recipient
designated by a Participant to receive the benefit payable upon the Participant’s
death, or the recipient designated by a Beneficiary to receive any benefit
which may be payable in the event of the Beneficiary’s death prior to receiving
the entire death benefit to which the Beneficiary is entitled. All such
Beneficiary designations will be made in accordance with the following:

 

(a)          Beneficiary Designations By
a Participant. Subject to
the provisions of Section 5.8 regarding the rights of a Participant’s
Spouse, each Participant may designate a Beneficiary in writing with the
Administrator. If a Participant designates his or her Spouse and the
Participant and his or her Spouse are legally divorced subsequent to the date
of the designation, then the designation of such Spouse as a Beneficiary
hereunder will be deemed null and void unless the Participant, subsequent to
the legal divorce, reaffirms the designation in writing. In the absence of any
other designation, the Participant will be deemed to have designated the
following Beneficiaries in the following order, provided however, that with
respect to clauses (1) and (2) following, such Beneficiaries are then
living: (1) the Participant’s Spouse, (2) the Participant’s issue per
stirpes; and (3) the Participant’s estate.

 

(b)         Beneficiary Designations By
a Beneficiary. In the
absence of a Beneficiary designation or other directive from a Participant to
the contrary, any Beneficiary may name his or her own Beneficiary under Section 5.2(d) of
the Basic Plan to receive any benefits payable in the event of the Beneficiary’s
death prior to the receipt of all the Participant’s death benefits to which the
Beneficiary was entitled.

 

(c)          Beneficiaries Considered
Contingent Until the Death of the Participant. Notwithstanding any provision in this Section to
the contrary, any Beneficiary named hereunder will be considered a contingent
Beneficiary until the death of the Participant (or Beneficiary, as the case may
be), and until such time will have no rights granted to Beneficiaries under the
Plan.

 

6

 

1.28            Benefiting Participant. The term “Benefiting Participant” means a
Participant who is eligible to receive an allocation of any type of Employer
contributions or related Forfeitures as of the last day of an Allocation Period
in accordance with the allocation conditions set forth in the Adoption
Agreement. Whether a Participant is a Benefiting Participant for any Allocation
Period is determined separately for each type of contribution. Notwithstanding
the foregoing, a Participant on whose behalf Prevailing Wage Contributions are
made during the Plan Year will be a Benefiting Participant for that Plan Year
with respect to those contributions regardless of the number of Hours of
Service the Participant completes in that Plan Year.

 

1.29            Break in Service. The term “Break in Service” means the
following:

 

(a)          For Purposes of Counting of
Hours Method. With respect
to any provision of the Plan in which Service is determined by the Counting of
Hours Method, the term “Break in Service” means a 12-consecutive month
computation period (as elected in the Adoption Agreement) during which an
Employee is not credited with more than 500 (or such lesser number as elected
in the Adoption Agreement) Hours of Service. If any computation period is less
than 12 consecutive months, then the Hours of Service threshold set forth in
the preceding sentence will be proportionately reduced (if the Hours of Service
threshold is greater than one).

 

(b)         For Purposes of Elapsed Time
Method. With respect to any
provision of the Plan in which Service is determined by the Elapsed Time
Method, the term “Break in Service” means a 1-Year Period of Severance.

 

(c)          For 401(k) Purposes. With respect to the Elective Deferral
component of a 401(k) Plan, a Participant who incurs a Break in Service
but who does not Terminate Employment may continue to have Elective Deferrals
made on their behalf to the Plan. However such Participant will not be eligible
to receive an allocation of any Non-Safe Harbor Matching Contributions or
Non-Safe Harbor Non-Elective Contributions (if any) unless such Participant is
also a Benefiting Participant.

 

1.30            Broadly Available Allocation
Rates. The term “Broadly
Available Allocation Rates” means, for Plan Years beginning on or after January 1,
2002, that each Allocation Rate is currently available during the Plan Year
(within the meaning of Regulation §1.401(a)(4)-4(b)(2)) to a group of Employees
that satisfies the requirements of Code §410(b) without regard to the
average benefit percentage test of Regulation §1.410(b)-5. If two Allocation
Rates could be permissively aggregated under Regulation §1.401(a)(4)-4(d)(4),
assuming that the Allocation Rates were treated as benefits, rights, or
features, then the Allocation Rates may be aggregated and treated as a single
Allocation Rate. However, the disregarding of the age and service conditions as
set forth in Regulation §1.401(a)(4)-4(b)(2)(ii)(A) does not apply for
purposes of this definition. Furthermore, in determining whether the Plan has
Broadly Available Allocation Rates, differences in Allocation Rates
attributable solely to the use of permitted disparity as described in
Regulation §1.401(1)-2 are disregarded.

 

1.31            Broadly Available Separate
Plans. The term “Broadly
Available Separate Plans” means, for Plan Years beginning on or after January 1,
2002, a combination of defined benefit plan(s) and defined contribution
plan(s) that would satisfy the requirements of Code §410(b) and the
nondiscrimination in amount requirement of Regulation §1.401(a)(4)–1(b)(2) if
each plan were tested separately and assuming that the average benefit
percentage test of Regulation §1.410(b)–5 were satisfied. For this purpose, all
defined contribution plans that are part of the combination of defined benefit
and defined contribution plans are treated as a single defined contribution
plan, and all defined benefit plans that are part of the combination of defined
benefit and defined contribution plans are treated as a single defined benefit
plan. In addition, if permitted disparity under Regulation §1.401(a)(4)–7 is
used for a Participant for purposes of satisfying the separate testing
requirement for plans of one type, then permitted disparity may not be used in
satisfying the separate testing requirement for plans of the other type for the
Participant.

 

1.32            Cash or Deferred
Contribution. The term “Cash
or Deferred Contribution” means an Employer amount that the Participant can
elect, subject to the provisions of Section 3.2(b), to have the Employer
either (a) provide to the Participant as cash; or (b) contribute to
the Plan as an Elective Deferral on behalf of the Participant, which
contribution defers the receipt of Compensation by the Participant.

 

1.33            Catch-Up Contribution. The term “Catch-Up Contribution” means
Elective Deferrals made to the Plan that are in excess of an otherwise
applicable Plan limit and that are made by Participants who are age 50 or over
by the end of their taxable year. An otherwise applicable Plan limit is a limit
in the Plan that applies to Elective Deferrals without regard to Catch-Up
Contributions, such as (a) the limit on Annual Additions; (b) the
dollar limit on Elective Deferrals under Code §402(g) (not counting
Catch-Up Contributions); (c) the limit imposed by the ADP Test under §
401(k)(3); or (d) a Plan imposed limit set

 

7

 

forth in a resolution
properly executed by the Employer which is considered to be an amendment to the
Plan. Catch-Up Contributions are not subject to the limit on Annual Additions,
are not counted in the ADP Test, and are not counted in determining the Top
Heavy Minimum Allocations under Code §416. However, Catch-Up Contributions made
in prior years are counted in determining whether the Plan is Top-Heavy.
Provisions in the Plan relating to Catch-Up Contributions apply to Elective
Deferrals made to the Plan after 2001. The total amount of Catch-Up
Contributions for any taxable year will not exceed the Catch-Up Contribution
Limit

 

1.34            Catch-Up Contribution Limit.
The term “Catch-Up
Contribution Limit” means the statutory limit on Catch-Up Contributions for a
Participant for any taxable year. A Participant’s Catch-Up Contributions for a
taxable year may not exceed (a) the dollar limit on Catch-Up Contributions
under Code §414(v)(2)(B)(i) for the taxable year, or (b) when added to
other Elective Deferrals, 100% of the Participant’s Compensation for the
taxable year. The dollar limit on Catch-Up Contributions under Code
§414(v)(2)(B)(i) is $1,000 for taxable years beginning in 2002, increasing
by $1,000 for each year thereafter up to $5,000 for taxable years beginning in
2006 and later years. After 2006, the $5,000 limit will be adjusted by the
Secretary of the Treasury for cost-of-living increases under Code
§414(v)(2)(C). Any such adjustments will be in multiples of $500. Different
limits apply to Catch-Up Contributions under SIMPLE 401(k) plans.

 

1.35            Code. The term “Code” means the Internal Revenue
Code of 1986, as amended, the Regulations, and rulings promulgated thereunder
by the Internal Revenue Service. All citations to sections of the Code and
Regulations are to such sections as they may from time to time be amended or
renumbered.

 

1.36            Code §3401 Compensation. The term “Code §3401 Compensation” means
wages within the meaning of Code §3401(a) (for purposes of income tax withholding
at the source), but determined without regard to any rules that limit the
remuneration included in wages based on the nature or location of the
employment or the services performed (such as the exception for agricultural
labor in Code §3401(a)(2)).

 

1.37            Code §401(a)(17)
Compensation Limit. The term
“Code §401(a)(17) Compensation Limit” means, for any Plan Year and/or
Limitation Year which begins on or after January 1, 2002, the statutory
limit that applies to each Participant’s annual Compensation for a specific
Compensation Determination Period which is taken into account under the Plan;
such annual Compensation will not exceed $200,000. However, the $200,000
statutory limit on annual Compensation will be adjusted for cost-of-living
increases in accordance with Code §401(a)(17)(B). The cost-of-living adjustment
in effect for a calendar year applies to annual Compensation for the
Compensation Determination Period that begins with or within such calendar
year. If a Compensation Determination Period is less than 12 consecutive
months, then the Code §401(a)(17) Compensation Limit will be multiplied by a
fraction, the numerator of which is the number of months in the Compensation
Determination Period, and the denominator of which is 12. If Compensation for
any prior Compensation Determination Period is used in determining a
Participant’s Plan benefits for the current Plan Year, then the annual
Compensation for such prior Compensation Determination Period is subject to the
applicable Code §401(a)(17) Compensation Limit as in effect for that prior
Compensation Determination Period.

 

1.38            Code §414(s) Compensation.
The term “Code §414(s) Compensation”
means, for testing purposes (including, but not limited to, the ADP Test and
the ACP Test), any compensation that qualifies as a nondiscriminatory
definition of compensation under Code §414(s) and the Regulations
thereunder. The Administrator is not bound by any elections made in the
Adoption Agreement in determining Code §414(s) Compensation. The
Administrator may determine on an annual basis (and within its discretion) Code
§414(s) Compensation, which will be applied consistently to all
Participants for a Plan Year; to all applicable tests that are administered for
such Plan Year; and to all plans (including this Plan) of the Sponsoring
Employer and Adopting Employers for such Plan Year. Code §414(s) Compensation
may be determined over the Plan Year for which the applicable test is being
performed or the calendar year ending within such Plan Year. In determining Code
§414(s) Compensation, the Administrator within its discretion may take
into consideration only the Compensation received while the Employee is a
Participant under the component of the Plan being tested,  and/or only the Compensation for the portion
of the Plan Year during which the Plan was a 401(k) Plan.

 

1.39            Code §415(c)(3) Compensation.
The term “Code §415(c)(3) Compensation”
means, for the specific purposes and as elected by the Sponsoring Employer in
the Adoption Agreement, either Form W-2 Compensation, Code §3401
Compensation, Safe Harbor Code §415 Compensation, or Statutory Code §415
Compensation during the entire Compensation Determination Period that
statutorily applies, subject to the following rules:

 

8

 

(a)          Exclusions to Compensation
Do Not Apply. Code §415(c)(3) Compensation
includes any amounts that may be elected to be excluded from Compensation in
the Adoption Agreement.

 

(b)         Inclusion of Certain
Amounts. Code §415(c)(3) Compensation
includes any elective deferral as defined in Code §402(g)(3) and any
amount which is contributed or deferred by the Employer at the election of the
Employee which are not includible in gross income by reason of Code §125 (and
if elected in the Adoption Agreement, Deemed Code §125 Compensation), Code
§132(f)(4), or Code §457.

 

(c)          Imputed Compensation when
Participant Becomes Disabled.
If elected in the Adoption Agreement and a Participant becomes permanently and
totally disabled (as defined in Code §22(e)(3)) then notwithstanding anything
in this Section to the contrary, Code §415(c)(3) Compensation will be
imputed during the time that the Participant is permanently and totally
disabled. The rate that Code §415(c)(3) Compensation will be imputed to
such Participant is equal to the rate of Code §415(c)(3) Compensation that
was paid to the Participant immediately before becoming permanently and totally
disabled. The total period in which Code §415(c)(3) Compensation will be
imputed to a Participant who becomes permanently and totally disabled will be
determined pursuant to a nondiscriminatory policy established by the
Administrator; however, if Code §415(c)(3) Compensation is imputed to a
Participant who is a Highly Compensated Employee pursuant to this paragraph,
then the continuation of Non-Safe Harbor Non-Elective Contributions to such
Participant will be for a fixed or determinable period pursuant to Code
§415(c)(3)(C).

 

(d)         Treatment of Post-Severance
Compensation. Effective January 1,
2005, Code §415(c)(3) Compensation includes Post-Severance Compensation.

 

1.40            Committee. The term “Committee” means the
administrative/advisory group that the Sponsoring Employer may establish, to
which the Sponsoring Employer may delegate certain of the Sponsoring Employer’s
responsibilities as Administrator. The Sponsoring Employer is permitted to
select another name for such administrative/advisory group. The Sponsoring
Employer may appoint one or more members to the Committee. Members of the
Committee need not be Participants or Beneficiaries, and officers and directors
of the Sponsoring Employer are not precluded from serving as members of the
Committee.

 

1.41            Compensation. The term “Compensation” means, for each
component or type of contribution under the Plan, an Employee’s Form W-2
Compensation, Code §3401 Compensation, or Safe Harbor Code §415 Compensation,
as elected by the Sponsoring Employer in the Adoption Agreement, for the
Compensation Determination Period as elected by the Sponsoring Employer in the
Adoption Agreement, subject to the following provisions:

 

(a)          Treatment of Elective
Deferrals and Certain Other Amounts. Any elective deferral as defined in Code §402(g)(3) and any
amount which is contributed or deferred by the Employer at the election of the
Employee which are not includible in gross income by reason of Code §125 (and
if elected in the Adoption Agreement, Deemed Code §125 Compensation), Code
§132(f)(4), or Code §457 will be included in Compensation or will be excluded
from Compensation, as elected in the Adoption Agreement.

 

(b)         Compensation Prior to
Becoming a Participant. If
the Sponsoring Employer elects in the Adoption Agreement that Compensation
received prior to becoming a Participant is not taken in account for allocation
purposes, then the Entry Date of Section 2.2 to determine when an Eligible
Employee becomes a Participant will be separately determined for each component
or type of contribution under the Plan.

 

(c)          Compensation of
Self-Employed Individuals.
For purposes of this Plan, the Compensation of a Self-Employed Individual will
be equal to his or her Earned Income; however, such Compensation will not
exceed the Code §401(a)(17) Compensation Limit.

 

(d)         Code §401(a)(17)
Compensation Limit. In
determining Compensation for all purposes other than for Elective Deferral
purposes under Code §402(g), a Participant’s Compensation for any Compensation
Determination Period will not exceed the Code §401(a)(17) Compensation Limit.

 

(e)          Prevailing Wage
Compensation. With respect
to Prevailing Wage Contribution, the term “Compensation” will be limited to
Compensation paid for services performed under a Prevailing Wage Law.

 

9

 

(f)            Compensation for a Safe
Harbor 401(k) Plan or Safe Harbor 401(m) Plan. The term “Compensation” means, for purposes
of a Safe Harbor 401(k) Plan or Safe Harbor 401(m) Plan, Compensation
as elected by the Sponsoring Employer in the Adoption Agreement, except that no
dollar limit, other than the Code §401(a)(17) Limit, applies to the Compensation
of a NHCE. Furthermore, Compensation for a Safe Harbor 401(k) Plan or Safe
Harbor 401(m) Plan must qualify as a nondiscriminatory definition of
compensation under Code §414(s) and the Regulations thereunder.

 

(g)         Imputed Compensation when
Participant Becomes Disabled.
If elected in the Adoption Agreement and a Participant becomes permanently and
totally disabled (as defined in Code §22(e)(3)) then notwithstanding anything
in this Section to the contrary, Compensation will be imputed during the
time that the Participant is permanently and totally disabled for purposes of
determining and allocating Non-Safe Harbor Non-Elective Contributions. The rate
that Compensation will be imputed to such Participant is equal to the rate of
Compensation that was paid to the Participant immediately before becoming
permanently and totally disabled. The total period in which Compensation will
be imputed to a Participant who becomes permanently and totally disabled will
be determined pursuant to a nondiscriminatory policy established by the
Administrator; however, if Compensation is imputed to a Participant who is a
Highly Compensated Employee pursuant to this paragraph, then the continuation
of Non-Safe Harbor Non-Elective Contributions to such Participant will be for a
fixed or determinable period pursuant to Code §415(c)(3)(C). Any Non-Safe
Harbor Non-Elective Contributions that are made on behalf of a Participant with
respect to imputed Compensation must be nonforfeitable when made.

 

(h)         Compensation for Permitted
Disparity Purposes. If a
Non-Safe Harbor Non-Elective Contribution is determined and/or allocated
according to the rules of permitted disparity under Code §401(l) and
the Regulations thereunder, then Compensation for such purposes must qualify as
a nondiscriminatory definition of compensation under Code §414(s) and the
Regulations thereunder.

 

1.42            Compensation Determination
Period. The term “Compensation
Determination Period” means, for each definition of Compensation as it relates
to a particular component or type of contribution under the Plan, either the
Plan Year, the Fiscal Year ending with or within the Plan Year, or the calendar
year ending with or within the Plan Year, as elected in the Adoption Agreement.
However, for purposes of a specific statutory determination (e.g. whether an
Employee is a Highly Compensated Employee), the term “Compensation
Determination Period” means the period that is stated in this Plan.

 

1.43            Contribution Percentage. The term “Contribution Percentage” means the
ratio (expressed as a percentage and calculated to the nearest hundredth of a
percentage point) of the Participant’s Contribution Percentage Amounts to the
Participant’s Code §414(s) Compensation for the Plan Year, subject to the
following rules:

 

(a)          Contribution Percentage for
an HCE in Multiple 401(m) Plans of the Sponsoring Employer. The Contribution Percentage for any
Participant who is a Highly Compensated Employee for the Plan Year and who is
eligible to have Contribution Percentage Amounts allocated to such Participant’s
accounts under two or more Code §401(m) plans that are maintained by the
Sponsoring Employer, will be determined as if the total of such Contribution
Percentage Amounts was made under each 401(m) plan. If a Highly
Compensated Employee participates in two or more Code §401(m) plans of the
Sponsoring Employer that have different plan years, all Contribution Percentage
Amounts made during the Plan Year under all such Code §401(m) plans will
be aggregated. For Plan Years beginning prior to 2006 (or the year of such
earlier effective date as may be provided in a separate amendment for
implementing the final §401(m) Regulations and as permitted by such
Regulations), all such Code §401(m) plans ending with or within the same
calendar year will be treated as a single Code §401(m) plan.
Notwithstanding the foregoing, certain plans will be treated as separate if
mandatorily disaggregated under the Code §401(m) Regulations.

 

(b)         Contribution Percentage for
a Participant without Contributions. If no Employee Contributions, Matching Contributions, Elective
Contributions, or Qualified Non-Elective Contributions are taken into account
in the ACP Test with respect to a Participant for the Plan Year, then the
Contribution Percentage of the Participant is zero (0).

 

10

 

1.44            Contribution Percentage
Amounts. The term “Contribution
Percentage Amounts” means the sum of the Employee Contributions, Non-Safe
Harbor Matching Contributions, Qualified Matching Contributions, Elective Deferrals,
and Qualified Non-Elective Contributions made under the Plan on behalf of the
Participant for the Plan Year. The calculation of a Participant’s Contribution
Percentage Amounts is subject to the following rules:

 

(a)          Timing of Employee
Contributions. An amount
withheld from an Employee’s pay (or a payment by the Employee to an agent of
the Plan) is treated as contributed as an Employee Contribution at the time of
such withholding (or payment) if the paid funds are transmitted to the Trust
within a reasonable period after the withholding (or payment).

 

(b)         Recharacterized Elective
Contributions Are Included.
Excess Contributions which are recharacterized in accordance with Regulation
§1.401(k)–2(b)(3) are taken into account as Employee Contributions for the
Plan Year that includes the time at which the Excess Contribution is includible
in the gross income of the Employee under Regulation §1.401(k)–2(b)(3)(ii).

 

(c)          Matching Contributions That
Are Included. A Matching
Contribution is used in determining a Participant’s Contribution Percentage
Amount for a Plan Year only if each of the following requirements is satisfied:

 

(1)          Matching Contribution
Allocated Within the Plan Year.
The Matching Contribution is allocated to the Employee’s Matching Contribution
Account under the terms of the Plan as of an allocation date within that Plan
Year.

 

(2)          Matching Contribution
Relates to Deferrals or Employee Contributions for the Plan Year. The Matching Contribution is made on account
of (or the Matching Contribution is allocated on the basis of) the Participant’s
Elective Deferrals or Employee Contributions for that Plan Year.

 

(3)          Matching Contribution Must
Be Contributed within 12 Months. The Matching Contribution is actually paid to the Trust no later than
the end of the 12-month period immediately following the Plan Year that
contains the allocation date for the Matching Contribution.

 

(d)         Elective Deferrals May Be
Included in the Contribution Percentage Amounts. The Sponsoring Employer also may elect to use
Elective Deferrals in the Contribution Percentage Amounts so long as (a) the
ADP Test is met before the Elective Deferrals are used in the ACP Test, and (b) the
ADP Test continues to be met following the exclusion of the Elective Deferrals
used to meet the ACP Test, subject to the following rules:

 

(1)          Elective Deferrals in a Safe
Harbor 401(k) Plan Cannot Be Used. Elective Deferrals in a Safe Harbor 401(k) Plan described in
Regulation §1.401(k)–3 cannot be used as Contribution Percentage Amounts.

 

(2)          Plans Must Be Permitted to
be Aggregated. The plan that
provides for Employee Contributions and/or Matching Contributions and the plan
to which the Elective Deferrals are made are plans that would be permitted to
be aggregated under Regulation §1.401(m)–1(b)(4).

 

(3)          Plan Year Change and
Aggregation. If the Plan
Year of the plan that provides for Employee Contributions and/or Matching
Contributions is changed to satisfy the requirement under Regulation §1.410(b)–7(d)(5) that
aggregated plans have the same Plan Year, then Elective Deferrals may be taken
into account in the resulting short Plan Year, but only if such Elective
Deferrals could have been taken into account under an ADP Test for a plan with
that same short Plan Year.

 

(e)          Qualified Non-Elective
Contributions that may be used as Contribution Percentage Amounts. Qualified Non-Elective Contributions may be
taken into account in determining a Participant’s Contribution Percentage
Amounts for a Plan Year, but only to the extent that the Qualified Non-Elective
Contributions satisfy the following requirements:

 

(1)          Timing of Allocation. The Qualified Non-Elective Contribution is
allocated to the Participant’s Account as of a date within that Plan Year
(within the meaning of Regulation §1.401(k)–2(a)(4)(i)(A)). Consequently, under
the Prior Year Testing Method, in order to be used in calculating the
Contribution Percentage Amounts for a Participant who is a Non-Highly
Compensated Employees for the Applicable Plan Year (the Plan Year prior to the
Plan Year that is being tested), the Qualified Non-Elective Contribution must
be contributed no later than the end of the 12-month period following the
Applicable Year even though the Applicable Year is different than the Plan Year
that is being tested. 

 

11

 

Furthermore, under the Current Year Testing Method, in order to be
taken into account in calculating the Contribution Percentage Amounts for a
Participant who is a Non-Highly Compensated Employees for the Applicable Plan
Year (the Plan Year that is being tested), the Qualified Non-Elective
Contribution must be contributed no later than the end of the 12-month period
following the Plan Year that is being tested.

 

(2)      Requirement
that Qualified Non-Elective Contributions Satisfy Code §401(a)(4).  The amount of Qualified Non-Elective
Contributions satisfies the requirements of Code §401(a)(4) and Regulation
§1.401(a)(4)—1(b)(2). If the Sponsoring Employer is applying the special rule for
Employer-wide plans in Regulation §1.414(r)—1(c)(2)(ii) with respect to the
Plan, then the determination of whether the Qualified Non-Elective
Contributions satisfy the requirements of Code §401(a)(4) must be made on
an Employer-wide basis, regardless of whether the plans to which the Qualified
Non-Elective Contributions are made are satisfying the requirements of Code
§410(b) on an Employer-wide basis. If the Sponsoring Employer is treated
as operating qualified separate lines of business and does not apply the
special rule for Employer-wide plans in Regulation §1.414(r)—1(c)(2)(ii) with
respect to the Plan, then the determination of whether the Qualified
Non-Elective Contributions satisfy the requirements of Code §401(a)(4) is
not permitted to be made on an Employer-wide basis regardless of whether the
plans to which the Qualified Non-Elective Contributions are made are satisfying
the requirements of Code §410(b) on an Employer-wide basis.

 

(3)          Aggregation
Must Be Permitted.  The plan that provides for Employee Contributions and/or Matching
Contributions and the plan to which the Qualified Non-Elective Contributions
are made, are plans that would be permitted to be aggregated under Regulation
§1.401(m)—1(b)(4). If the Plan Year of the plan that provides for Employee
Contributions and/or Matching Contributions is changed to satisfy the
requirement under Regulation §1.410(b)—7(d)(5) that aggregated plans have
the same Plan Year, then Qualified Non-Elective Contributions may be taken into
account in the resulting short Plan Year, but only if such Qualified
Non-Elective Contributions could have been taken into account under an ADP Test
for a plan with that same short Plan Year.

 

(4)          Limitation
on Disproportionate QNECs.  Qualified Non-Elective Contributions cannot be taken
into account for purposes of the Contribution Percentage Amounts of a Plan Year
for a Non-Highly Compensated Employee to the extent that the QNECs exceed the
product of (i) that Non-Highly Compensated Employee’s Code §414(s) Compensation,
multiplied by (i) the greater of (A) 5% (or 10% of a Non-Highly
Compensated Employee’s Code §414(s) Compensation with respect to an
Employer’s obligation to make Prevailing Wage Contributions to the Plan), or (B) two
times the Plan’s Representative Contribution Rate. Any Qualified Non-Elective
Contribution taken into account under an ADP Test under Regulation §1.401(k)—2(a)(6) (including
the determination of the Representative Contribution Rate for purposes of
Regulation §1.401(k)—2(a)(6)(iv)(B)), is not permitted to be taken into account
for purposes of the ACP Test (including the determination of the Representative
Contribution Rate for purposes of the ACP Test).

 

(5)          Prohibition
Against Double-Counting. Qualified Non-Elective Contributions cannot be taken into account for
purposes of the Contribution Percentage Amounts to the extent such
contributions are taken into account for purposes of satisfying any other ACP
Test, any ADP Test, or the requirements of Regulation §1.401(k)—3, §1.401(m)—3
or §1.401(k)—4. Qualified Non-Elective Contributions that are made pursuant to
Regulation §1.401(k)—3(b) cannot be taken into account under the ACP Test.

 

(6)          Switching
the Testing Method.
If this Plan switches from the Current Year Testing Method to the Prior Year
Testing Method pursuant to Regulation §1.401(m)—2(c)(1), Qualified Non-Elective
Contributions that are taken into account under the Current Year Testing Method
for a Plan Year may not be taken into account under the Prior Year Testing
Method for the next Plan Year.

 

(f)            Qualified
Matching Contributions Used to Satisfy ADP Test Are Excluded.  Qualified Matching Contributions that are
taken into account for the ADP Test of Code §401(k)(3) under Regulation
§1.401(k)—2(a)(6) are not taken into account in determining a Participant’s
Contribution Percentage Amounts.

 

12

 

(g)         Forfeited
Matching Contributions Are Excluded. Contribution Percentage Amounts will not include
either the non-Vested portion of Matching Contributions that are forfeited to
correct Excess Aggregate Contributions, or Matching Contributions (both the
Vested and non-Vested portions) that are forfeited because they relate to
Excess Deferrals, Excess Contributions, or Excess Aggregate Contributions.

 

(h)         Additional
Employee Contributions or Matching Contributions of Code §414(u) Are Excluded.  Contribution Percentage Amounts will not
include additional Employee Contributions and Matching Contributions that are
made by reason of a Participant’s qualified military service under Code §414(u) for
the Plan Year for which the contributions are made, or for any other Plan Year.

 

1.45            Counting of Hours Method. The term “Counting of Hours Method” means
a method for crediting service for eligibility, for Vesting, for determining a
Participant’s allocation, and/or for applying the allocation conditions as
elected in the Adoption Agreement. Under the Counting of Hours Method, an
Employee is credited with the number of Hours of Service for which the Employee
is paid or entitled to payment (or such other circumstances for which Hours of
Service are credited), pursuant to the definition of Hour of Service.

 

1.46            Current Year Testing Method. The term “Current Year Testing Method”
means the nondiscrimination testing method in which (a) for purposes of
the ADP Test, the ADP for Participants who are Highly Compensated Employees for
the Plan Year that is being tested is compared to the ADP for Participants who
are Non-Highly Compensated Employees for the Plan Year that is being tested;
and (b) for purposes of the ACP Test, the ACP for Participants who are Highly
Compensated Employees for the Plan Year that is being tested is compared to the
ACP for Participants who are Non-Highly Compensated Employees for the Plan Year
that is being tested.

 

1.47            Deductible Employee Contribution.
The term “Deductible
Employee Contribution” means a contribution that was made by a Participant to
this Plan or to a predecessor plan for any Plan Year beginning before January 1,
1987 and which was tax deductible by the Participant at the time it was made.

 

1.48            Deductible Employee Contribution
Account. The term
“Deductible Employee Contribution Account” means the account to which a
Participant’s Deductible Employee Contributions have been allocated.

 

1.49            Deemed Aggregated Allocation
Groups. The term “Deemed
Aggregated Allocation Groups” means, for purposes of determining the limitation
in the number of Allocation Rates that are permitted when the Sponsoring
Employer elects in the Adoption Agreement to allocate Non-Safe Harbor
Non-Elective Contributions using allocation groups, all of the separate
allocation groups that have the same Allocation Rate. No Employee can be
assigned to more than one Deemed Aggregated Allocation Group for a Plan Year.

 

1.50            Deemed Code §125 Compensation. The term “Deemed §125 Compensation” means
an amount that is excludable from the gross income of the Employee under Code
§106 that is not available to the Employee in cash in lieu of group health
coverage under a Code §125 arrangement solely because that Employee is not able
to certify that he or she has other health coverage. Amounts are Deemed Code
§125 Compensation only if the Employer does not otherwise request or collect
information regarding the Employee’s other health coverage as part of the
enrollment process for the health plan.

 

1.51            Deemed IRA Contribution. The term “Deemed IRA Contribution” means
an Individual Retirement Account contribution made to this Plan, as elected in
the Adoption Agreement.

 

1.52            Deemed IRA Contribution Account. The term “Deemed IRA Contribution Account”
means the account to which a Participant’s Deemed IRA Contributions are
allocated.

 

1.53            Designated Beneficiary. The term “Designated Beneficiary” means,
for purposes of required minimum distributions under Section 5.9, the
individual who is designated as the Beneficiary pursuant to the provisions of
the Plan and is the Designated Beneficiary under Code §401(a)(9), the
previously final Regulation §1.401(a)(9)-1, Q&A-4, and the final Regulation
§1.401(a)(9)-4.

 

1.54            Determination Date. The term “Determination Date” means, for
any Plan Year subsequent to the first Plan Year of the Plan, the last day of
the preceding Plan Year. For the first Plan Year of the Plan, the term “Determination
Date” means the last day of that first Plan Year.

 

13

 

1.55            Disability. The term “Disability” means the
following, as elected by the Sponsoring Employer:

 

(a)          Definition.
The term “Disability”
means a physical or mental impairment arising after an Employee has become a
Participant which, as elected in the Adoption Agreement, either (1) in the
opinion of a physician acceptable to the Administrator, totally and permanently
prevents the Participant from engaging in any occupation for pay or profit; (2) in
the opinion of a physician acceptable to the Administrator, totally and
permanently prevents the Participant from performing his or her customary and
usual duties for the Employer; (3) in the opinion of the Social Security
Administration, qualifies the Participant for disability benefits under the
Social Security Act in effect on the date that the Participant suffers the
mental or physical impairment; or (4) in the opinion of the insurance
company, qualifies the Participant for benefits under an Employer-sponsored
long-term disability plan which is administered by an independent third party.
With regard go clause (1) and clause (2) above, if a difference of
opinion arises between the Participant and the Administrator as to whether the
Participant has suffered a Disability, it will be settled by a majority decision
of three physicians, one to be appointed by the Administrator, one to be
appointed by the Participant, and the third to be appointed by the two
physicians first appointed herein.

 

(b)         Definition
of Disability If No Long-Term Disability Plan In Place and/or In Force. If the definition (or one of the
definitions) of Disability as elected by the Sponsoring Employer is the one in
paragraph (a)(4) above (a mental or physical impairment which, in the
opinion of the insurance company, qualifies the Participant for benefits under
an Employer-sponsored long-term disability plan which is administered by an
independent third party) and there is not an Employer-sponsored long-term
disability plan in place and/or in force at any point while the election of
this definition of Disability is in effect, then this definition of Disability
will be replaced by the provisions of paragraph (a)(3) above (a mental or
physical impairment which, in the opinion of the Social Security
Administration, qualifies the Participant for disability benefits under the
Social Security Act in effect on the date that the Participant suffers the
mental or physical impairment) during the time that an Employer-sponsored
long-term disability plan is not in place and/or in force.

 

(c)          Exceptions.  Notwithstanding the foregoing to the
contrary, the term “Disability” will not include any physical or mental
impairment that is the result of any of the following exceptions, if elected in
the Adoption Agreement: (1) the excessive use of drugs, intoxicants, or
other substances; (2) an intentionally self-inflicted injury or sickness;
or (3) an injury suffered as a result of an unlawful or criminal act by
the Participant.

 

1.56            Distribution Calendar Year. The term “Distribution Calendar Year”
means, for purposes of required minimum distributions under Section 5.9, a
calendar year for which a minimum distribution is required. For distributions
beginning before the Participant’s death, the first Distribution Calendar Year
is the calendar year immediately preceding the calendar year that contains the
Participant’s Required Beginning Date. If a Participant elects the Life
Expectancy method, then for distributions beginning after the Participant’s
death, the first Distribution Calendar Year is the calendar year in which
distributions are required to begin under Section 5.9(b)(2)(B). The
required minimum distribution for the Participant’s first Distribution Calendar
Year will be made on or before the Participant’s Required Beginning Date. The
required minimum distribution for other Distribution Calendar Years, including
the required minimum distribution for the Distribution Calendar Year in which
the Participant’s Required Beginning Date occurs, will be made on or before December 31
of that Distribution Calendar Year.

 

1.57            Domestic Partner. The term “Domestic Partner” means the
individual who is recognized to be the domestic partner of the Participant
through policies and procedures that are established by the Sponsoring Employer
and that may reflect the law of a State or a Commonwealth (or a political
subdivision of a State or a Commonwealth).

 

1.58            Early Retirement Age. The term “Early Retirement Age” means the
Early Retirement Age, if any, as elected by the Sponsoring Employer in the
Adoption Agreement.

 

1.59            Early Retirement Date. The term “Early Retirement Date” means
the Early Retirement Date, if any, as elected by the Sponsoring Employer in the
Adoption Agreement.

 

1.60            Earned Income. The term “Earned Income” means the net
earnings from self-employment in the trade or business with respect to which
the Plan is established, for which personal services of the individual are a
material income-producing factor. Net earnings will be determined without
regard to items not included in gross income and the deductions allocable
thereto. Net earnings will be reduced by deductible contributions by the
Employer to a qualified retirement plan. Net earnings will be determined with
regard to the deduction allowed to the Employer by Code §164(f) for
taxable years beginning after December 31, 1989.

 

14

 

1.61            Elapsed Time Method. The term “Elapsed Time Method” means a
method for crediting service for eligibility, for Vesting, for determining a
Participant’s allocation, and/or for applying the allocation conditions as
elected in the Adoption Agreement, pursuant to the definition of Period of
Service.

 

1.62            Elective Deferral. The term “Elective Deferral” means
Employer contributions made to the Plan at the election of the Participant in
lieu of cash Compensation, and will include contributions made pursuant to a
salary deferral agreement or other deferral mechanism. In any taxable year, a
Participant’s Elective Deferral is the sum of all Employer contributions made
on behalf of such Participant pursuant to an election to defer under (a) any
qualified cash or deferred arrangement under Code §401(k); (b) any salary
reduction simplified employee pension described in Code §408(k)(6); (c) any
SIMPLE IRA Plan described in Code §408(p); (d) any plan under Code
§501(c)(18); and (e) any Employer contributions made on the behalf of a
Participant for the purchase of an annuity contract under Code §403(b) pursuant
to a Salary Deferral Agreement. For years beginning after 2005, the term “Elective
Deferral” includes Pre-Tax Elective Deferrals and Roth Elective Deferrals. An
Elective Deferral must relate to Compensation that either (a) would have
been received by the Employee in the Plan Year but for the Employee’s election
to defer; or (b) if elected by  the
Sponsoring Employer for purposes of the ADP Test, is attributable to services
performed by the Employee in the Plan Year and, but for the Employee’s election
to defer, would have been received by the Employee within 21⁄2 months after the
close of the Plan Year. If elected by  the
Sponsoring Employer for purposes of the ADP Test, then this Plan will provide
for Elective Deferrals that relate to Compensation that would have been
received after the close of a Plan Year to be considered for such prior Plan
Year rather than the Plan Year in which the Compensation would have been
received.

 

1.63            Eligibility Computation Period. The term “Eligibility Computation Period”
means a period of twelve (12) consecutive months, which is used for purposes of
eligibility to participate in the Plan (or a component of the Plan). An
Employee’s initial Eligibility Computation Period will begin on his or her
Employment Commencement Date. As elected in the Adoption Agreement, either (a) each
subsequent Eligibility Computation Period will begin on each anniversary of the
Employee’s Employment Commencement Date; or (b) the second Eligibility
Computation Period will begin on the first day of the Plan Year which begins
prior to the first anniversary of the Employee’s Employment Commencement Date
(regardless of whether the Employee is credited with a specific number of Hours
of Service during the initial Eligibility Computation Period) and each
subsequent Eligibility Computation Period will consist of each subsequent Plan
Year.

 

1.64            Eligible Employee. The term “Eligible Employee” means any
Employee who is a member of an eligible class of Employees and who is not
excluded from participating in the Plan (or a component of the Plan), as
elected by the Sponsoring Employer in the Adoption Agreement. In addition, if
the Plan utilizes the failsafe allocation provisions of Section 3.15, then
the term “ Eligible Employee” means any Employee who receives a failsafe
allocation, even if such Employee was previously excluded from participating in
the Plan (or a component of the Plan). Furthermore, the Sponsoring Employer may
elect at any time to reclassify any Employee that had been excluded from
participating in the Plan (or a component of the Plan) to be an Eligible
Employee through a Plan amendment that is retroactively applied for one or more
prior Plan Years because the Plan (or a component of the Plan) failed to
satisfy for such Plan Year one of the tests set forth in Code §410(b)(1)(A), (B) or
(C), or for any other reason required to maintain the tax exempt status of the
Plan.

 

1.65            Employee. The term “Employee” means (a) any
person who is reported on the payroll records of the Employer as an employee
and who is deemed by the Employer to be a common law employee; (b) any
person who is reported on the payroll records of an Affiliated Employer as an
employee and who is deemed by the Affiliated Employer to be a common law
employee (even if the Affiliated Employer is not an Adopting Employer), except
for purposes of determining eligibility to participate in the Plan if the
Sponsoring Employer utilizes a Non-Standardized Adoption Agreement; (c) any
Self-Employed Individual who derives Earned Income from the Employer; and (d) any
person who is considered a Leased Employee but who (1) is not covered by a
plan described in Code §414(n)(5), or (2) is covered by a plan described
in Code §414(n)(5) but Leased Employees constitute more than 20% of the
Employer’s non-highly compensated workforce. However, the term “Employee” will
not include an Independent Contractor. If an Independent Contractor is later
determined by the Employer, a court, or governmental agency to be an Employee
or to have been an Employee of the Employer or an Affiliated Employer, and so
long as such individual is an Eligible Employee, then such individual will only
be eligible to participate in the Plan in accordance with the requirements of
the Employee Plans Compliance Resolution System (EPCRS) under Revenue Procedure
2006-27 and subsequent guidance.

 

15

 

1.66            Employee Contribution. The term “Employee Contribution” means
any contribution made to the Plan by or on behalf of a Participant that is
included in the Participant’s gross income in the year in which the
contribution is made (other than Roth Elective Deferrals) and that is
maintained under a separate account to which earnings and losses are allocated.
Employee Contributions include Voluntary Employee Contributions and Mandatory
Employee Contributions.

 

1.67            Employer. The term “Employer” means the Sponsoring
Employer and any Adopting Employer.

 

1.68            Employment Commencement Date. The term “Employment Commencement Date”
means the first day that an Employee is credited with an Hour of Service for an
Employer or an Affiliated Employer.

 

1.69            Equivalent Accrual Rate. The term “Equivalent Accrual Rate” means
the annual benefit that is the result of normalizing the increase in the
Participant’s Account balance during the measurement period, divided by the
number of years in which the Participant benefited under the Plan during the
measurement period, and expressed either as a dollar amount or as a percentage
of the Participant’s average annual Code §414(s) Compensation. A
measurement period that includes future years may not be used. For purposes of
determining an Equivalent Accrual Rate, the following rules apply:

 

(a)          Determination
of Account Balance.  The increase in the Participant’s Account balance
during the measurement period taken into account does not include income,
expenses, gains, or losses allocated during the measurement period that are
attributable to the Participant’s Account balance as of the beginning of the
measurement period, but does include any additional amounts that would have
been included in the increase in the Participant’s Account balance but for the
fact that the additional amounts were previously distributed (including a
reasonable adjustment for interest). If the measurement period is the current
Plan Year, the Sponsoring Employer may also elect to disregard the income,
expenses, gains, and losses allocated during the current Plan Year that are
attributable to the increase in the Participant’s Account balance since the
beginning of the Plan Year, and thus determine the increase in Participant’s
Account balance during the Plan Year taking into account only allocations
described in Regulation §1.401(a)(4)-2(c)(2)(ii). In addition, the Sponsoring
Employer may disregard distributions to a Non-Highly Compensated Employee as
well as distributions to any Employee in Plan Years beginning before a selected
date no later than January 1, 1986.

 

(b)         Normalization.  The Participant’s Account balance
determined under paragraph (a) is normalized into a single-sum benefit
that is immediately and unconditionally payable to the Employee. A standard
interest rate, and a straight life annuity factor that is based on the same or
a different standard interest rate and on a standard mortality table, must be
used in normalizing this benefit. In addition, no mortality may be assumed
prior to the Employee’s testing age.

 

(c)          Options.  Any of the optional rules in
Regulation §1.401(a)(4)-3(d)(3) (e.g., imputation of permitted disparity)
may be applied in determining an Employee’s Equivalent Accrual Rate by
substituting the Employee’s Equivalent Accrual Rate (determined without regard
to this option) for the Employee’s Normal Accrual Rate where appropriate. For
this purpose, however, the last sentence of the fresh-start alternative in
Regulation §1.401(a)(4)-3(d)(3)(iii)(A) (dealing with Compensation
adjustments to the frozen accrued benefit) is not applicable. No other options
are available in determining an Employee’s Equivalent Accrual Rate except those
(e.g., selection of alternative measurement periods) specifically provided in
this definition. None of the optional special rules in Regulation
§1.401(a)(4)-3(f) (e.g., determination of benefits on other than a Plan
Year basis under Regulation §1.401(a)(4)-3(f)(6)) is available.

 

(d)         Consistency
Rule.  Equivalent
Accrual Rates must be determined in a consistent manner for all Employees for
the Plan Year. The same measurement periods and standard interest rates must be
used, and any available options must be applied consistently if at all.

 

1.70            ERISA. The term “ERISA” means the Employee
Retirement Income Security Act of 1974, as amended, the Department of Labor
Regulations, and Advisory Opinions and other rulings promulgated by the
Department of Labor (or any agency thereunder). All citations to sections of
ERISA and the Department of Labor Regulations are to such sections as they may
from time to time be amended or renumbered.

 

16

 

1.71            Excess Annual Additions. The term “Excess Annual Additions” means
an amount of Annual Additions credited to a Participant’s Account that exceeds
the maximum Annual Additions limitation set forth in Section 6.1 for any
Limitation Year. If Excess Annual Additions are treated according to Section 6.4,
then such Excess Annual Additions will not be deemed Annual Additions.

 

1.72            Excess Aggregate Contributions. The term “Excess Aggregate Contributions”
means, with respect to any Plan Year, the excess of (a) the aggregate
Contribution Percentage Amounts used in computing the numerator of the
Contribution Percentage actually made on behalf of Participants who are Highly
Compensated Employees for such Plan Year, over (b) the maximum
Contribution Percentage Amounts permitted by the ACP Test (determined by
hypothetically reducing Contribution Percentage Amounts made on behalf of
Participants who are Highly Compensated Employees in order of their
Contribution Percentages beginning with the highest of such Contribution
Percentages). Such determination will be made after first determining Excess
Elective Deferrals and then determining Excess Contributions.

 

1.73            Excess Compensation. The term “Excess Compensation” means the
amount of a Benefiting Participant’s Compensation in excess of (a) the
Taxable Wage Base in effect on the first day of the Plan Year, (b) a
percentage (that is less than 100% percent) of the Taxable Wage Base in effect
on the first day of the Plan Year, or (c) a stated dollar amount that is
less than the Taxable Wage Base in effect on the first day of the Plan
Year, as elected in the Adoption Agreement.

 

1.74            Excess Contributions. The term “Excess Contributions” means,
with respect to any Plan Year, the excess of (a) the aggregate amount of
Employer contributions actually taken into account in computing the Actual
Deferral Percentage of HCEs for such Plan Year, over (b) the maximum
amount of such contributions permitted by the ADP Test (determined by
hypothetically reducing contributions made on behalf of HCEs in the order of
their Actual Deferral Percentages, beginning with the highest of such
percentages).

 

1.75            Excess Elective Deferrals. The term “Excess Elective Deferrals”
means those Elective Deferrals of a Participant that either (a) are made
during the Participant’s taxable year and exceed the dollar limitation under
Code §402(g) (including, if applicable, the Catch-up Contribution Limit as
defined in Code §414(v)) for such taxable year; or (b) are made during a
calendar year and exceed the dollar limitation under Code §402(g) (including,
if applicable, the Catch-Up Contribution Limit as defined in Code §414(v)) for
the Participant’s taxable year beginning in such calendar year, counting only
Elective Deferrals made under this Plan and any other plan, contract or
arrangement maintained by the Sponsoring Employer.

 

1.76            401(k) Plan. The term “401(k) Plan” means a plan
which permits the plan’s participants to have Elective Deferrals made on their
behalf to the plan.

 

1.77            401(m) Plan.
The term “401(m) Plan”
means a plan which permits or requires the plan’s participants to make Employee
Contributions to the plan, and/or which allocates Matching Contributions to
participants in the plan.

 

1.78            Fiscal Year. The term “Fiscal Year” means either (a) the
Sponsoring Employer’s 12 consecutive month accounting year beginning and ending
on the dates indicated in Adoption Agreement, or (b) the Sponsoring Employer’s
52-53 week accounting year that either begins or ends on the date indicated in
Adoption Agreement (unless there is a short Fiscal Year as elected in the
Adoption Agreement). If the Fiscal Year is changed, a short Fiscal Year is
established beginning the day after the last day of the Fiscal Year in effect
before this change and ending on the last day of the new Fiscal Year.

 

1.79            Forfeiture. The term “Forfeiture” means generally the
amount by which a Participant’s Account balance attributable to Employer
contributions exceeds his or her Vested Interest in the Participant’s Account
balance attributable to Employer contributions upon the date the Sponsoring
Employer elects in the Adoption Agreement. Furthermore, the term “Forfeiture”
means the non-Vested portion of Matching Contributions that are removed from a
Participant’s Account to correct Excess Aggregate Contributions, and Matching
Contributions (both the Vested and non-Vested portions) removed from a
Participant’s Account because such Matching Contributions relate to Excess
Deferrals, Excess Contributions, or Excess Aggregate Contributions. Lastly, the
term “Forfeiture” means any amount that is removed from a Participant’s Account
pursuant to any Employee Plans Compliance Resolution System (EPCRS) program or
any other correction guidance that is issued by the Internal Revenue Service.
No Forfeitures will occur solely because (a) a Participant withdrawals
Employee Contributions from the Plan; (b) a Participant withdrawals
Elective Deferrals from the Plan; or (c) a Participant transfers
employment from the Sponsoring Employer to an Affiliated Employer or Adopting
Employer (or vice versa).

 

17

 

1.80            Forfeiture Account. The term “Forfeiture Account” means the
notational bookkeeping account into which all Forfeitures are placed pending
allocation (or other use) pursuant to Section 3.13(b).

 

1.81            Form W-2 Compensation. The term “Form W-2 Compensation”
means wages within the meaning of Code §3401(a) and all other payments of
compensation to an Employee by the Employer (in the course of the Employer’s
trade or business) which is actually paid or made available and is included in
the Employee’s gross income for which the Employer is required to furnish the
Employee a Form W-2 under Code §6041(d), §6051(a)(3) and §6052. Form W-2
Compensation must be determined without regard to any rules under Code
§3401(a) that limit remuneration included in wages based on the nature or
location of the employment or services performed (such as the exception for
agricultural labor in Code §3401(a)(2)).

 

1.82            Gradually Increasing Age or
Service Schedule. The
term “Gradually Increasing Age or Service Schedule” means, for Plan Years
beginning on or after January 1, 2002, that the allocation formula for all
Participants under the Plan provides for a single schedule of Allocation Rates
under which:

 

(a)          Series of
Bands.  The schedule
defines a series of bands based on Age, Years of Service (or Periods of
Service), or the number of points representing the sum of Age and Years of
Service (or Periods of Service) with respect to age and service points, under
which the same Allocation Rate applies to all employees whose Age, Years of
Service (or Periods of Service), or Age and service points are within each
band; and

 

(b)         Smoothly
Increasing at Regular Intervals.  The Allocation Rates under the schedule increase
smoothly at regular intervals, within the following meanings:

 

(1)          Smoothly
Increasing Schedule of Allocation Rates.  A schedule of Allocation Rates increases smoothly if
the Allocation Rate for each band within the schedule is greater than the
Allocation Rate for the immediately preceding band (i.e., the band with the
next lower number of years of Age, Years of Service (or Periods of Service), or
Age and service points) by no more than 5 percentage (5%). However, a schedule
of Allocation Rates will not be treated as increasing smoothly if the ratio of
the allocation rate for any band to the rate for the immediately preceding band
is more than 2.0 or if it exceeds the ratio of Allocation Rates between the two
immediately preceding bands.

 

(2)          Regular
Intervals.  A schedule of Allocation Rates has regular intervals of Age, Years of
Service (or Periods of Service), or Age and service points, if each band, other
than the band associated with the highest Age, Years of Service (or Periods of
Service), or Age and service points, is the same length. For this purpose, if
the schedule is based on Age, the first band is deemed to be of the same length
as the other bands if it ends at or before age 25. If the first age band ends
after Age 25, then, in determining whether the length of the first band is the
same as the length of other bands, the starting age for the first age band is
permitted to be treated as Age 25 or any Age earlier than 25. For a schedule of
allocation rates based on Age and service points, the rules of the
preceding two sentences are applied by substituting 25 Age and service points
for age 25. For a schedule of allocation rates based on service, the starting
service for the first service band is permitted to be treated as one Year of
Service (or Period of Service) or any lesser amount of service.

 

(c)          Minimum
Allocation Rates Permitted.  A schedule of Allocation Rates under the Plan is considered
to increase smoothly at regular intervals if a minimum uniform Allocation Rate
is provided for all Participants or the Top Heavy Minimum Allocation described
in Code §416(c)(2) is provided for all Non-Key Employees (either because
the Plan is Top Heavy or without regard to whether the Plan is Top Heavy) if
the schedule satisfies one of the following conditions:

 

(1)          Hypothetical
Schedule.  The Allocation Rates under the Plan that are greater than the minimum
Allocation Rate can be included in a hypothetical schedule of Allocation Rates
that increases smoothly at regular intervals, where the hypothetical schedule
has a lowest allocation rate no lower than 1% of Code §414(s) Compensation;
or

 

18

 

(2)          Schedule of
Allocation Rates based on Age.  If the Plan is using a schedule of Allocation Rates
based on Age, for each Age band in the schedule that provides an Allocation
Rate greater than the minimum Allocation Rate, then there could be a
Participant in that Age band with an Equivalent Accrual Rate that is less than
or equal to the Equivalent Accrual Rate that would apply to a Participant whose
Age is the highest Age for which the Allocation Rate equals the minimum
Allocation Rate.

 

1.83            HCE. The term “HCE” means a Highly Compensated
Employee.

 

1.84            Highly Compensated Employee. The term “Highly Compensated Employee”
means any Employee who (a) was a 5% owner as defined in Code §416(i)(1)(B)(i) at
any time during the Plan Year or during the look-back year. In determining
whether an Employee is a Highly Compensated Employee based on his or her status
as a 5% owner, the look-back year will be the 12-month period immediately
preceding the Plan Year for which the determination is being made; or (b) for
the look-back year, had Code §415(c)(3) Compensation in excess of $80,000
as adjusted  under Code §415(d) (except
that the base period will be the calendar quarter ending September 30,
1996). In determining if an Employee is a Highly Compensated Employee based on
Code §415(c)(3) Compensation, the look-back year will be the 12-month
period immediately preceding the Plan Year for which the determination is being
made, unless the Sponsoring Employer elects in the Adoption Agreement for any
Plan Year that the look-back year will be the calendar year beginning with or
within the look-back year; and the top paid group election set forth in Code
§414(q)(3) will not be applied to this Plan unless otherwise elected for
any Plan Year by the Sponsoring Employer in the Adoption Agreement. In
determining if an individual is a highly compensated former Employee, the rules for
determining which Employees are Highly Compensated Employees for the Plan Year
for which the determination is being made (in accordance with Temporary
Regulation §1.414(q)-1T, A-4 and Notice 97-45) will be applied. If the Employer
maintains more than one qualified retirement plan, the terms of this Section will
be applied in a uniform, consistent manner to all such plans.

 

1.85            Hour of Service. The term “Hour of Service” means, with
respect to any Plan provision in which Service is determined by the Elapsed
Time Method, each hour for which an Employee is paid, or is entitled to
payment, by the Employer or an Affiliated Employer for the performance of
duties. With respect to any Plan provision in which Service is determined by
the Counting of Hours Method, the term “Hour of Service” means the following:

 

(a)          Determination
of Hours.  The term “Hour of Service” means (1) each hour for which an
Employee is paid, or entitled to payment, for the performance of duties for the
Employer or an Affiliated Employer, which will be credited to the Employee for
the computation period in which the duties are performed; (2) each hour
for which an Employee is paid, or entitled to payment, by the Employer or an
Affiliated 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, except that no more than 501
Hours of Service will be credited under this clause (2) for any single
continuous period (regardless of whether such period occurs in a single
computation period); and (3) each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to by the Employer or an
Affiliated Employer, except that the same Hours of Service will not be credited
both under clause (1) or clause (2), as the case may be, and under this
clause (3), and these Hours of Service 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 Service under this paragraph will be calculated and credited pursuant
to Department of Labor Regulation §2530.200b-2, which is incorporated herein by
reference. Furthermore, Hours of Service will be credited for any individual
who is considered to be an Employee under Code §414(n) for purposes of
this Plan.

 

(b)         Maternity/Paternity
Leave.  Solely for
purposes of determining whether a Break in Service has occurred in a
computation period for purposes of an Employee’s eligibility for Plan
participation, Vesting, and benefit accrual/allocation, an individual on
Maternity or Paternity Leave will receive credit for up to 501 Hours of Service
which would otherwise have been credited to such individual but for such
absence, or in any case in which such hours cannot be determined, eight (8) Hours
of Service per day of such absence. The Hours of Service credited for a
Maternity or Paternity Leave will be credited in the computation period in
which the absence begins if the crediting is necessary to prevent a Break in
Service in that computation period, or in all other cases, in the following
computation period.

 

(c)          Use
of Equivalencies.  Notwithstanding paragraph (a), the Administrator may elect for all
Employees or for one or more different classifications of Employees (provided
such classifications are reasonable, are consistently applied, and are
nondiscriminatory) to apply one or more of the following equivalency methods in
determining an Employee’s Hours of 

 

19

 

Service. Under such equivalency methods, an Employee will be credited
with (1) 190 Hours of Service for each month that he or she would credited
with at least one Hour of Service during that month; (2) 95 Hours of
Service for each semi-monthly period that he or she would credited with at
least one Hour of Service during that semi-monthly period; (3) 45 Hours of
Service for each week that he or she would credited with at least one Hour of
Service during that week; and/or (4) 10 Hours of Service for each day that
he or she would credited with at least one Hour of Service during that day.

 

1.86            Hypothetical
Entry Date. The
term “Hypothetical Entry Date” means, with respect to a Plan (or a component of
a Plan) that provides that Otherwise Excludable Participants are eligible to
participate in the Plan (or component of the Plan), the date that an Otherwise
Excludable Participant would hypothetically enter the Plan (or component of the
Plan) and would no longer be considered an Otherwise Excludable Participant had
the Plan (or component of the Plan) utilized the statutory minimum age and
service requirements under Code §410(a)(1)(A) as the eligibility
requirements for the Plan (or component of the Plan), as elected in the
Adoption Agreement.

 

1.87            Immediately Distributable. The term “Immediately Distributable”
means any part of the Participant’s benefit that could be distributed to the
Participant (or the Participant’s surviving Spouse) before the Participant
reaches (or would have reached if not deceased) the later of his or her Normal
Retirement Age or Age 62.

 

1.88            Independent Contractor. The term “Independent Contractor” means
an individual who is not reported on the payroll records of the Employer or an
Affiliated Employer as a common law employee. The determination of whether an
individual is an Independent Contractor will be based upon the facts and
circumstances and upon the guidance of Revenue Ruling 87-41.

 

1.89            Key Employee. The term “Key Employee” means, in
determining whether the Plan is Top Heavy for Plan Years beginning on or after January 1,
2002, any Employee, former Employee or deceased Employee who at any time during
the Plan Year that includes the Determination Date is (a) an officer of
the Employer having annual Code §415(c)(3) Compensation greater than
$130,000 (as adjusted under Code §416(i)(1)(A) for Plan Years beginning
after December 31, 2002); (b) a 5% owner as defined in Code
§416(i)(1)(B)(i); or (c) a 1% owner as defined in Code §416(i)(1)(B)(ii) whose
annual Code §415(c)(3) Compensation is more than $150,000. The
determination of who is a Key Employee will be made in accordance with Code
§416(i)(1), the applicable Regulations, and other guidance issued thereunder.
With respect to Employees who are treated as Key Employees by reason of being
officers pursuant to clause (a), the following rules apply:

 

(a)          Definition
of Officer.  The term “officer” means generally an administrative executive who is
in regular and continued service (a continuity of service), and excludes an
individual who is employed for a special and single transaction. Whether an
individual is an officer will be determined upon the basis of all the facts and
circumstances, including the source of the individual’s authority, the term for
which the individual is elected or appointed, and the nature and extent of the
individual’s duties. An Employee who merely has the title of an officer but not
the authority of an officer is not an officer for purposes of determining
whether the Employee is a Key Employee. Similarly, an Employee who does not
have the title of an officer but has the authority of an officer is an officer
for purposes of determining whether the Employee is a Key Employee.

 

(b)         Number
of Officers Taken Into Account. There is no minimum number of officers that must be
taken into account. After aggregating all Employees (including Leased
Employees) of the Sponsoring Employer and Affiliated Employers, there is a
maximum limit to the number of officers that are to be taken into account as
officers for the entire group consisting of the Sponsoring Employer and
Affiliated Employers. The number of Employees that the Sponsoring Employer and
Affiliated Employers has for the Plan Year containing the Determination Date is
the greatest number of Employees the Sponsoring Employer and Affiliated
Employers had during that Plan Year, and Employees include only those
individuals who perform services for the Sponsoring Employer and Affiliated
Employers during that Plan Year. However, in determining the number of officers
taken into account, Employees described in Code §414(q)(5) will be
excluded. If the number of Employees (including part-time Employees) of the
Sponsoring Employer and Affiliated Employers is less than or equal to 30
Employees, then no more than 3 Employees will be treated as Key Employees for
the Plan Year containing the Determination Date by reason of being officers. If
the number of Employees of the Sponsoring Employer and Affiliated Employers is
greater than 30 but less than or equal to 500, then no more than 10% of the
number of Employees will be treated as Key Employees by reason of being
officers. If 10% of the number of Employees is not an integer, then the maximum
number of individuals to be treated as Key Employees by reason of being
officers will be increased to the next integer. If the number of Employees of
the Sponsoring Employer and Affiliated Employers exceeds 500, then no more than
50 Employees will be treated as Key Employees for the Plan Year containing the
Determination Date by reason of being 

 

20

 

officers. This limited number of officers is comprised of the
individual officers, selected from the group of all individuals who are
officers in the Plan Year containing the Determination Date, who have annual
Code §415(c)(3) Compensation during the Plan Year containing the
Determination Date greater than $130,000 (as adjusted under Code §416(i)(1) for
Plan Years beginning after December 31, 2002), and who had the largest
annual Code §415(c)(3) Compensation during the Plan Year containing the
Determination Date.

 

1.90            Leased Employee. The term “Leased Employee” means any
person (other than an Employee of the recipient-Employer) who pursuant to an
agreement between the recipient-Employer and other person (known as the “Leasing
Organization”) has performed services for the recipient-Employer (or for the
recipient-Employer and related persons determined in accordance with Code
§414(n)(6)) on a substantially full time basis for a period of at least one
year, and such services are performed under primary direction or control by the
recipient-Employer. Contributions or benefits provided to a Leased Employee by
the Leasing Organization which are attributable to services performed for the
recipient-Employer will be treated as provided by the recipient-Employer. A
Leased Employee will not be considered an Employee of the recipient-Employer if
(a) such Leased Employee is covered by a money purchase plan providing (1) a
non-integrated Employer contribution rate of at least 10% of the Leased
Employee’s Code §415(c)(3) Compensation; (2) immediate participation
in such plan; and (3) full and immediate vesting; and (b) Leased
Employees do not constitute more than 20% of the recipient-Employer’s
non-highly compensated work force.

 

1.91            Life Expectancy. The term “Life Expectancy” means, for
purposes of required minimum distributions under Section 5.9, life
expectancy as computed by use of the Single Life Table in Regulation
§1.401(a)(9)-9, Q&A 1.

 

1.92            Limitation Year. The term “Limitation Year” means the
12-consecutive month period elected in the Adoption Agreement. If the
Limitation Year is amended to a different 12-consecutive month period, then the
new Limitation Year must begin on a date within the Limitation Year in which
the amendment is made.

 

1.93            Mandatory Employee Contribution. The term “Mandatory Employee Contribution”
means an Employee Contribution that equals the specified percentage of a
Participant’s Compensation which the Participant must contribute to the Plan in
order to receive an allocation of Employer contributions and Forfeitures for
the Allocation Period.

 

1.94            Mandatory Employee Contribution
Account. The term
“Mandatory Employee Contribution Account” means the account to which a
Participant’s Mandatory Employee Contribution” are allocated.

 

1.95            Matching Contribution. The term “Matching Contribution” means
either (a) an ADP Safe Harbor Matching Contribution, (b) an ACP Safe
Harbor Matching Contribution, (c) a Qualified Matching Contribution, or (d) a
Non-Safe Harbor Matching Contribution, depending on the context in which the
term is used in either the Basic Plan or in the Adoption Agreement.

 

1.96            Matching Contribution Account. The term “Matching Contribution Account”
means the sub-account to which a Participant’s Matching Contributions are
allocated.

 

1.97            Matching Rate. The term “Matching Rate” means:

 

(a)          Matching
Contributions With Respect to Elective Deferrals.  If the Plan provides a Matching
Contribution with respect to a Participant’s Elective Deferrals (but not Employee
Contributions), then generally the Non-Safe Harbor Matching Contributions made
for a Participant divided by the Participant’s Elective Deferrals for the Plan
Year. If the Matching Rate is not the same for all levels of Elective Deferrals
for a Participant, the Participant’s Matching Rate is determined by assuming
that a Participant’s Elective Deferrals are equal to 6% of such Participant’s
Code §414(s) Compensation.

 

(b)         Matching
Contributions With Respect to Elective Deferrals and Employee Contributions. If the Plan provides a Matching
Contribution with respect to a Participant’s Employee Contributions and
Elective Deferrals, then generally the Non-Safe Harbor Matching Contributions
made for a Participant divided by the sum of the Participant’s Employee
Contributions and Elective Deferrals for the Plan Year. If the Matching Rate is
not the same for all levels of Employee Contributions and Elective Deferrals
for a Participant, the Participant’s Matching Rate is determined by assuming
that the sum of a Participant’s Employee Contributions and Elective Deferrals
is equal to 6% of the Participant’s Code §414(s) Compensation.

 

21

 

(c)   Matching
Contributions With Respect to Employee Contributions. If the Plan provides a Matching
Contribution with respect to a Participant’s Employee Contributions (but not
Elective Deferrals), then generally the Non-Safe Harbor Matching Contributions made
for a Participant divided by the Participant’s Employee Contributions for the
Plan Year. If the Matching Rate is not the same for all levels of Employee
Contributions for a Participant, the Participant’s Matching Rate is determined
by assuming that a Participant’s Employee Contributions are equal to 6% of such
Participant’s Code §414(s) Compensation.

 

1.98   Maternity or Paternity Leave. The term “Maternity or Paternity Leave” means an Employee’s absence
from work because of (a) the Employee’s pregnancy; (b) the birth of
the Employee’s child; (c) the placement of a child with the Employee in
connection with the adoption of such child by the Employee; or (d) the
need to care for such child for a period beginning immediately following the
child’s birth or placement as set forth above.

 

1.99   Maximum Excess Percentage. The term “Maximum Excess Percentage” means the percentage derived by
dividing the Employer’s contribution by the sum of the total Compensation of
all Benefiting Participants plus the total Excess Compensation of all
Benefiting Participants.

 

1.100 Minimum Aggregate Allocation
Gateway. The term “Minimum
Aggregate Allocation Gateway” means, for Plan Years beginning on or after January 1,
2002, in the case where this Plan (or any other defined contribution plan that
is aggregated with this Plan) is aggregated with any defined benefit plan for
purposes of applying the general test for non-discrimination based upon
Equivalent Accrual Rates for the defined contribution plan(s), a minimum
Aggregate Normal Allocation Rate that must be provided to each Non-Highly
Compensated Employee. Notwithstanding the above, in determining the Benefiting
Participants for purposes of the Minimum Aggregate Allocation Gateway, the
permissive disaggregation rules under Regulation §1.410(b)-6(b)(3)(ii) and
§1.410(b)-7(c)(3) will be applied. The Minimum Aggregate Allocation
Gateway is subject to the following rules:

 

(a)   Minimum
Aggregate Allocation Gateway Amount.  The amount of the Minimum Aggregate Allocation Gateway
is equal to the lesser of :

 

(1)       7.5% of Code §415(c)(3) Compensation;
or

 

(2)       An Aggregate Normal Allocation Rate based
upon the following formulae:

 

(A)      One-Third Formula. If the Aggregate Normal Allocation Rate of the HCE with the highest
aggregate allocation rate is less than 15%, then the Aggregate Normal
Allocation Rate for each NHCE must be at least one-third (1/3) of the Aggregate
Normal Allocation Rate of the HCE with the highest Aggregate Normal Allocation
Rate;

 

(B)       5% Formula. If the Aggregate Normal Allocation Rate of the HCE with the highest
Aggregate Normal Allocation Rate is between 15% and 25%, then the Aggregate
Normal Allocation Rate for each NHCE must be at least 5% of Code §415(c)(3) Compensation;
or

 

(C)       5% Plus Formula. If the Aggregate Normal Allocation Rate of the HCE with the highest
Aggregate Normal Allocation Rate exceeds 25%, then the Aggregate Normal
Allocation Rate for each NHCE must be at least 5% plus one percentage point for
each five percentage point increment (or portion thereof) by which the
Aggregate Normal Allocation Rate of the HCE with the highest Aggregate Normal
Allocation Rate exceeds 25% (e.g., if the Aggregate Normal Allocation Rate of
the HCE with the highest Aggregate Normal Allocation Rate exceeds 25% but not
30%, then the Aggregate Normal Allocation Rate for each NHCE must be at least
6%; if the Aggregate Normal Allocation Rate of the HCE with the highest
Aggregate Normal Allocation Rate exceeds 30% but not 35%, then the Aggregate
Normal Allocation Rate for each NHCE must be at least 7%).

 

(b)   Averaging
of Equivalent Allocation Rates for NHCEs.  For purposes of this definition, the Plan is permitted
to treat each Non-Highly Compensated Employee who benefits under the defined
benefit plan as having an equivalent normal allocation rate equal to the
average of the equivalent normal allocation rates under the defined benefit
plan for all Non-Highly Compensated Employees benefiting under that plan.

 

22

 

(c)   No
Permitted Disparity.  For purposes of this definition, the Aggregate Normal
Allocation Rate must not take into account the imputation of permitted
disparity under Regulation §1.401(a)(4)-7.

 

(d)   Compensation
Limited to Compensation after Entry Date.  For purposes of determining if the Minimum Aggregate
Allocation Gateway of paragraph (a) has been satisfied, Code §415(c)(3) Compensation
will be limited to the Participant’s Code §415(c)(3) Compensation on and
after a Participant’s Entry Date of the Plan’s component subject to the Minimum
Aggregate Allocation Gateway.

 

(e)   Treatment
of Otherwise Excludable Participants.  For purposes of the Minimum Aggregate Allocation
Gateway, Otherwise Excludable Participants will not be considered.

 

1.101 Minimum Allocation Gateway. The term “Minimum Allocation Gateway” means,
for Plan Years beginning on or after January 1, 2002, a minimum allocation
that must be provided to each Non-Highly Compensated Employee who receives an
allocation of any Non-Elective Contribution (including any ADP Safe Harbor
Non-Elective Contribution) or any Qualified Non-Elective Contribution under
this Plan (or any other defined contribution plan that is aggregated with this
Plan) that performs the general test for non-discrimination based upon
Equivalent Accrual Rates as set forth in Regulation §1.401(a)(4)-8.
Notwithstanding the above, in determining the Benefiting Participants for
purposes of the Minimum Allocation Gateway, the permissive disaggregation rules under
Regulation §1.410(b)-6(b)(3)(ii) and §1.410(b)-7(c)(3) will be
applied. The Minimum Allocation Gateway is subject to the following rules:

 

(a)   Minimum
Allocation Gateway Satisfied So Long As this Plan Is Not Aggregated with any
Defined Benefit Plan.  The Minimum Allocation Gateway can be utilized so long
as neither this Plan nor any other defined contribution plan (that is
aggregated with this Plan) is aggregated with any defined benefit plan in
applying the general test for non-discrimination based upon Equivalent Accrual
Rates for the defined contribution plan(s). If this Plan or any other defined
contribution plan (that is aggregated with this Plan) is aggregated with any
defined benefit plan for purposes of applying the general test for
non-discrimination based upon Equivalent Accrual Rates for the defined
contribution plan(s), then the Minimum Allocation Gateway pursuant to this
definition will not satisfy the requirements of Regulation §1.401(a)(4)-9.

 

(b)   Minimum
Allocation Gateway Amount.  The amount of the Minimum Allocation Gateway is equal
to the lesser of (1) five percent (5%) of the Participant’s Code §415(c)(3) Compensation;
or (2) one-third of the Allocation Rate of the Highly Compensated Employee
with the highest Allocation Rate.

 

(c)   Satisfaction
of Minimum Allocation Gateway.  The Minimum Allocation Gateway may be satisfied with
any Non-Elective Contributions (including any ADP Safe Harbor Non-Elective
Contributions) or any Qualified Non-Elective Contributions.

 

(d)   No
Permitted Disparity.  For purposes of this definition, allocations and
Allocation Rates must not take into account the imputation of permitted
disparity under §1.401(a)(4)-7.

 

(e)     Compensation
Limited to Compensation after Entry Date.  For purposes of determining if the Minimum Allocation
Gateway of paragraph (b) has been satisfied, Code §415(c)(3) Compensation
will be limited to the Participant’s Code §415(c)(3) Compensation on and
after a Participant’s Entry Date of the Plan’s component subject to the Minimum
Allocation Gateway.

 

(f)    Treatment
of Otherwise Excludable Participants.  For purposes of the Minimum Allocation Gateway,
Otherwise Excludable Participants will not be considered.

 

1.102 Named Fiduciary. The term “Named Fiduciary” means the
Administrator or other fiduciary named by the Administrator to control and
manage the operation and administration of the Plan. To the extent authorized
by the Administrator, a Named Fiduciary may delegate its responsibilities to a
third party or parties. The Employer is also a Named Fiduciary.

 

1.103 NHCE. The term “NHCE” means a Non-Highly Compensated
Employee.

 

23

 

1.104  Non-Elective Contribution. The term “Non-Elective Contribution” means an
ADP Safe Harbor Non-Elective Contribution, a Non-Safe Harbor Non-Elective
Contribution, and/or a Prevailing Wage Contribution that is not used to offset
any Matching Contribution or is not treated as a Qualified Non-Elective
Contribution or a Qualified Matching Contribution, depending on the context in
which the term is used in the Basic Plan or the Adoption Agreement.
Furthermore, the term “Non-Elective Contribution” means any Top Heavy Minimum
Allocation that may be required under the terms of the Plan.

 

1.105  Non-Highly Compensated Employee. The term “Non-Highly Compensated Employee”
means any Employee who is not a Highly Compensated Employee.

 

1.106  Non-Key Employee. The term “Non-Key Employee” means any
Employee who is not a Key Employee. A former Key Employee (a Key Employee
during any Plan Year prior to the Plan Year that includes the Determination
Date) is a Non-Key Employee for purposes of determining whether such former Key
Employee is required to receive a Top Heavy Minimum Allocation; however, a
former Key Employee is ignored for purposes of determining whether the Plan is
Top Heavy.

 

1.107  Non-Safe Harbor 401(k) Plan.
The term “Non-Safe Harbor
401(k) Plan” means a 401(k) Plan which does not automatically satisfy
the ADP Test under Code §401(k).

 

1.108  Non-Safe Harbor 401(m) Plan.
The term “Non-Safe Harbor
401(k) Plan” means a 401(m) Plan which does not automatically satisfy
the ACP Test under Code §401(m).

 

1.109  Non-Safe Harbor Matching
Contribution. The term “Non-Safe
Harbor Matching Contribution” means an Employer contribution made to this or
any other defined contribution plan on behalf of a Participant on account of a
Participant’s Elective Deferrals and/or a Participant’s Voluntary Employee
Contributions made by such Participant under a plan maintained by the
Sponsoring Employer. Non-Safe Harbor Matching Contributions are not intended to
automatically satisfy the ACP Test.

 

1.110  Non-Safe Harbor Matching
Contribution Account. The
term “Non-Safe Harbor Matching Contribution Account” means the account to which
a Participant’s Non-Safe Harbor Matching Contributions are allocated.

 

1.111  Non-Safe Harbor Non-Elective
Contribution. The term “Non-Safe
Harbor Non-Elective Contribution” means an Employer contribution that (a) is
allocated to a Participant’s Non-Safe Harbor Non-Elective Contribution Account,
(b) the Participant may not elect to receive in cash until such
contributions are distributed from the Plan; and (c) is not intended to be
used to automatically satisfy the ADP Test. In the case of a profit sharing or
money purchase plan that does not have Matching Contributions, the term “Non-Safe
Harbor Non-Elective Contribution” means the Employer contribution.

 

1.112  Non-Safe Harbor Non-Elective
Contribution Account. The
term “Non-Safe Harbor Non-Elective Contribution Account” means the account to
which a Participant’s Non-Safe Harbor Non-Elective Contributions are allocated.

 

1.113  Normal Accrual Rate. The term “Normal Accrual Rate” means, for a
Participant for a Plan Year, the increase in the Participant’s accrued benefit
(within the meaning of Code §411(a)(7)(A)(i)) during the measurement period,
divided by the Participant’s testing service during the measurement period, and
expressed either as a dollar amount or as a percentage of the Participant’s
average annual Code §414(s) Compensation.

 

1.114  Normal Form of Distribution.
The term “Normal Form of
Distribution” means the form in which a Participant’s benefit will be
distributed absent an election to the contrary, as elected in the Adoption
Agreement.

 

1.115  Normal Retirement Age. The term “Normal Retirement Age” means the
Normal Retirement Age as elected by the Sponsoring Employer in the Adoption
Agreement. There is no mandatory retirement Age.

 

1.116  Normal Retirement Date. The term “Normal Retirement Date” means the
Normal Retirement Date as elected by the Sponsoring Employer in the Adoption
Agreement.

 

1.117  OASI Percentage. The term “OASI Percentage” means the portion
of the rate of tax in effect at the beginning of the Plan Year pursuant to Code
§3111(a) which is attributable to old-age insurance.

 

24

 

1.118  One Year Holdout Rule. The term “One Year Holdout Rule” means a rule that
applies to an Employee who Terminates Employment with the Employer and the
Employee is subsequently reemployed by the Employer after incurring a Break in
Service. Pursuant to the One Year Holdout Rule, an Employee’s Year(s) of
Service or Periods of Service that were completed prior to the Break in Service
will be recognized only after the Employee has completed one (1) Year of
Service or 1-Year Period of Service, as applicable, after the Employee’s
Reemployment Commencement Date. In the case of the Counting of Hours Method,
such prior Year(s) of Service will be recognized retroactively as of the
first day of the computation period in which the Employee completes one (1) Year
of Service. In the case of the Elapsed Time Method, such prior Periods of
Service will be recognized retroactively as of the Employee’s Reemployment
Commencement Date.

 

1.119  Otherwise Excludable Participant.
The term “Otherwise
Excludable Participant” means a Participant in the Plan (or a component of the
Plan) who (a) has not satisfied the statutory minimum age and service
requirements set forth in Code §410(a)(1)(A), and (b) has not reached such
Participant’s Hypothetical Entry Date.

 

1.120  Optional Form of
Distribution. The term “Optional
Form of Distribution” means a form of distribution other than the Normal Form of
Distribution, as elected in the Adoption Agreement.

 

1.121  Participant. The term “Participant” means any Eligible
Employee who has met the eligibility and participation requirements of the
Plan. In addition, if the Plan utilizes the failsafe allocation provisions of Section 3.15,
then the term “Participant” means any Employee who receives a failsafe
allocation, even if such Employee is not an Eligible Employee and/or has not
satisfied the eligibility and participation requirements of the Plan.
Furthermore, the Sponsoring Employer may elect at any time to reclassify any
Employee that had been excluded from participating in the Plan (or a component
of the Plan) to be a Participant through a Plan amendment that is retroactively
applied for one or more prior Plan Years because the Plan (or a component of
the Plan) failed to satisfy for such Plan Year one of the tests set forth in
Code §410(b)(1)(A), (B) or (C), or for any other reason required to
maintain the tax exempt status of the Plan. However, an individual who is no
longer an Employee will cease to be a Participant if his or her entire Plan
benefit (a) is fully guaranteed by an insurance company and legally
enforceable at the sole choice of such individual against such insurance
company, provided that a contract, Policy, or certificate describing the
individual’s Plan benefits has been issued to such individual; (b) is paid
in a lump sum distribution which represents such individual’s entire interest
in the Plan; or (c) is paid in some other form of distribution and the
final payment thereunder has been made.

 

1.122  Participant’s Account. The term “Participant’s Account” means the
account to which is allocated a Participant’s share of Employer contributions
and Employee Contributions; earnings or losses; and, if applicable,
Forfeitures. A Participant’s Account will also include the proceeds of any
Policies purchased on the Participant’s life under Section 7.2. Each
Participant’s Account will be divided (where applicable) into the following
sub-accounts for accounting purposes: the Pre-Tax Elective Deferral Account;
the Roth Elective Deferral Account; the Non-Safe Harbor Matching Contribution
Account; the Non-Safe Harbor Non-Elective Contribution Account; the Qualified
Matching Contribution Account; the Qualified Non-Elective Contribution Account;
the ADP Safe Harbor Matching Contribution Account; the ADP Safe Harbor
Non-Elective Contribution Account; the ACP Safe Harbor Matching Contribution
Account; the Voluntary Employee Contribution Account; the Mandatory Employee
Contribution Account; the Deemed IRA Contribution Account; the Rollover
Contribution Account; the Transfer Account; and any other sub-accounts the
Administrator may determine necessary from time to time.

 

1.123  Participant’s Account Balance. The term “Participant’s Account Balance”
means, for purposes of required minimum distributions under Section 5.9,
the balance of the Participant’s Account as of the last Valuation Date in the
Valuation Calendar Year, increased by any contributions made and allocated or
forfeitures allocated to the Account 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 Participant’s 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.

 

1.124  Period of Service. The term “Period of Service” means, with
respect to any provision of the Plan in which service is determined by the
Elapsed Time Method, a period of time during which the Employee is employed
with the Employer or an Affiliated Employer (or any business entity which was
an Adopting Employer) commencing on an Employee’s Employment Commencement Date
or Reemployment Commencement Date and ending on the date that the Employee’s
Period of Severance begins, and a 1-Year Period of Service and all other
Periods of Service will be determined in accordance with the following
provisions:.

 

25

 

(a)   Definition
of Period of Severance and 1-Year Period of Severance.  The term “Period of Severance” means a
continuous period of time during which the Employee is not employed by the
Employer. A Period of Severance begins on the earlier of: (1) the date on
which an Employee retires, dies, quits or is discharged from employment by the
Employer or an Affiliated Employer, or (2) the first anniversary of the
first date on which an Employee remains absent from service with the Employer
or an Affiliated Employer (with or without pay) for any reason other than the
Employee retiring, dying, quitting or being discharged from employment by the
Employer or an Affiliated Employer, such as for vacation, holiday, illness,
incapacity (including disability), layoff, jury duty, military duty or leave of
absence. However, in the case of an Employee who is absent from work for
Maternity or Paternity Leave, the 12-consecutive month period beginning on the
first anniversary of the first date of such absence under clause (2) of
the previous sentence will not constitute a Period of Severance. A Period of
Severance ends as of an Employee’s Reemployment Commencement Date. The term “1-Year
Period of Severance” means a 12-consecutive month Period of Severance during
which an Employee fails to perform an Hour of Service.

 

(b)   Hours
of Service During a Period of Severance.  If an Employee performs an Hour of Service during a
period which would otherwise be considered a Period of Severance under
paragraph (a), then the Plan must count such period as a Period of Service and the
Employee will receive credit for such Period of Service.

 

(c)   Definition
of 1-Year Period of Service.  The term “1-Year Period of Service” means a
12-consecutive month Period of Service. An Employee will receive credit for
Periods of Service of less than 12-consecutive months by aggregating (subject
to the limitations below) all non-successive Periods of Service and all Periods
of Service which are fractional years or which do not constitute a whole 1-Year
Period of Service, regardless of whether consecutive. Fractional periods of a
year are expressed in terms of days, on the basis that a day of service is
credited if an Employee is credited with an Hour of Service during such day,
and on the basis that 12 months of service (30 days being deemed to be a month
of service in the case of the aggregation of fractional months of service) or
365 days of service equals a 1-Year Period of Service. An Employee will also be
credited for all purposes, as applicable, with a fractional Period of Service
for any Period of Severance that is less than a 1-Year Period of Severance.

 

(d)   Prior
Service Credit.  If the Employer maintains (or has ever maintained) any plan of a
predecessor employer, then service during the existence of such predecessor
plan with such predecessor employer will be credited as Periods of Service with
the Employer. In addition, if elected in Section 2.2 of the Adoption
Agreement, then predecessor service with the entity or entities named in the
Adoption Agreement will be credited as Periods of Service with the Employer for
the purposes elected in the Adoption Agreement. For purposes of the prior
sentence, the following rules will apply: If the Employer does not
maintain (and has never maintained) a plan of a predecessor employer and if
predecessor service of that predecessor employer is credited in a standardized
Adoption Agreement, then such service will be limited to five 1-Year Periods of
Service pursuant to Regulation §1.401(a)(4)-5(a)(3). If the Employer does not
maintain (and has never maintained) a plan of a predecessor employer, if
predecessor service of that predecessor employer is credited in a
non-standardized Adoption Agreement and if such predecessor service exceeds
five 1-Year Periods of Service, the crediting of such service must comply with
the requirements of Regulation §1.401(a)(4)-11(d).

 

(e)   Reemployment
of an Employee Before a Break In Service and Before Eligibility Requirements
Are Satisfied.  For any Plan Year in which the eligibility requirements in Section 2.1
are based on the Elapsed Time Method, if an Employee Terminates Employment with
the Employer prior to satisfying the eligibility requirements in Section 2.1
and the Employee is subsequently reemployed by the Employer before incurring a
Break in Service, then the Employee’s pre-termination Period of Service will be
counted in determining the satisfaction of such eligibility requirements and
for all other purposes, as applicable. Furthermore, the Employee will also be
credited for all purposes, as applicable, with a fractional Period of Service
for any Period of Severance that is less than a 1-Year Period of Severance. If
the Employee has satisfied the eligibility requirements in Section 2.1
when such fractional Period of Service of the previous sentence is added to
such Employee’s pre-termination Period of Service, then the Employee will
become a Participant in the Plan as of the later of (1) the date that the
Employee would enter the Plan had the Employee not Terminated Employment with
the Employer, or (2) the Employee’s Reemployment Commencement Date.

 

26

 

(f)    Reemployment
of an Employee Before a Break In Service and After Eligibility Requirements Are
Satisfied.  For any Plan Year in which the eligibility requirements in Section 2.1
are based on the Elapsed Time Method, if an Employee Terminates Employment
prior to the Employee’s Entry Date in Section 2.2, the Employee had
satisfied the eligibility requirements in Section 2.1 as of the Employee’s
Termination of Employment, and the Employee is subsequently reemployed by the
Employer before incurring a Break in Service, then (1) the Employee will
become a Participant as of the later of (A) the date the Employee would
enter the Plan had the Employee not Terminated Employment with the Employer, or
(B) the Employee’s Reemployment Commencement Date, and (2) the
Employee’s pre-termination Period of Service will be counted for all purposes.
The Employee will also be credited for all purposes, as applicable, with a
fractional Period of Service for any Period of Severance less than a 1-Year
Period of Severance.

 

(g)   Reemployment
of a Participant Before a Break In Service. For any Plan Year in which the eligibility
requirements in Section 2.1 are based on the Elapsed Time Method, if an
Employee Terminates Employment after becoming a Participant and is subsequently
reemployed by the Employer before incurring a Break in Service, then (1) the
reemployed Employee will reenter the Plan as of the Employee’s Reemployment
Commencement Date, and (2) the Employee’s pre-termination Period of
Service will be counted for all purposes, as applicable. Furthermore, the
Employee will also be credited for all purposes, as applicable, with a
fractional Period of Service for any Period of Severance that is less than a 1-Year
Period of Severance.

 

(h)   Reemployment
of an Employee After a Break In Service and Before Entry Date.  For any Plan Year in which the
eligibility requirements in Section 2.1 are based on the Elapsed Time
Method, if an Employee Terminates Employment with the Employer either prior to
or after satisfying the eligibility requirements in Section 2.1 (but
before the Employee’s Entry Date in Section 2.2) and the Employee is
subsequently reemployed by the Employer after incurring a Break in Service,
then the Employee’s Period of Service that was completed prior to the Break in
Service will be recognized, subject to the following provisions:

 

(1)       Determination
of Period of Service for Eligibility Purposes. The following provisions apply to determining any
Period of Service for eligibility purposes:

 

(A)     One Year Holdout Rule.  If
the Sponsoring Employer elects the One Year Holdout Rule in the Adoption
Agreement, any Period of Service that was completed prior to an Employee’s
Break(s) in Service will not be counted in determining an Employee’s
eligibility to participate in the Plan until the Employee satisfies the One
Year Holdout Rule. If the Employee has not satisfied the eligibility
requirements as set forth in Section 2.1 as of the Employee’s Reemployment
Commencement Date and then satisfies the One Year Holdout Rule, then the
Employee will become a Participant in the Plan as of the Entry Date in Section 2.2
after the Employee has satisfied the eligibility requirements in Section 2.1
(including, if applicable, an Entry Date that may occur during the One Year
Holdout Rule period after the Employee’s Reemployment Commencement Date).
If the Employee has satisfied the eligibility requirements in Section 2.1
as of the Employee’s Reemployment Commencement Date and then satisfies the One
Year Holdout Rule, the reemployed Employee will enter the Plan retroactively as
of his or her Reemployment Commencement Date. If the Sponsoring Employer has
elected the Rule of Parity in the Adoption Agreement (in addition to the
One Year Holdout Rule), then the recognition of any Period of Service completed
prior to an Employee’s Break(s) in Service will be subject to both the One
Year Holdout Rule and the Rule of Parity.

 

(B)      Rule of Parity. If the Sponsoring
Employer elects the Rule of Parity in the Adoption Agreement, then any
Period of Service that was completed prior to an Employee’s Break(s) in
Service will not be counted in determining an Employee’s eligibility to
participate in the Plan if that Period of Service is disregarded pursuant to
the Rule of Parity. If such former Employee’s Period of Service is
disregarded under the Rule of Parity, then the reemployed Employee will be
treated as a new Employee for purposes of Section 2.1 as of the Employee’s
Reemployment Commencement Date. If the Employee has not satisfied the
eligibility requirements in Section 2.1 as of the Employee’s Reemployment
Commencement Date and such former Employee’s Period of Service is not
disregarded under the Rule of Parity, then the Employee will become a Participant
in the Plan as of the Entry Date in Section 2.2 after the Employee has
satisfied the eligibility requirements in Section 2.1. If the Employee has
satisfied the eligibility requirements in Section 2.1 as of the Employee’s
Reemployment Commencement Date and such former Employee’s Period of Service is
not disregarded under the Rule of Parity, then the reemployed Employee
will enter the Plan as of the Employee’s Reemployment Commencement Date.

 

27

 

(2)       Determination
of Period of Service for Vesting Purposes.  The following provisions apply to determining any
Period of Service for Vesting purposes:

 

(A)     One Year Holdout Rule. If the Sponsoring Employer elects the One Year Holdout Rule in the
Adoption Agreement, any Period of Service completed prior to an Employee’s
Break(s) in Service will not be counted in determining an Employee’s
Vesting Interest in the Participant’s Account balance until the Employee
satisfies the One Year Holdout Rule. If the Employee satisfies the One Year
Holdout Rule, the Employee’s Period of Service for Vesting purposes will
include the Period of Service that was completed prior to an Employee’s Break(s) in
Service, retroactively to the Employee’s Reemployment Commencement Date. Furthermore,
if the Sponsoring Employer has elected the Rule of Parity in the Adoption
Agreement (in addition to the One Year Holdout Rule), then the recognition of
any Period of Service that was completed prior to an Employee’s Break(s) in
Service will be subject to both the One Year Holdout Rule and the Rule of
Parity.

 

(B)      Rule of Parity. If the Sponsoring Employer elects the Rule of Parity in the
Adoption Agreement, any Period of Service completed prior to an Employee’s
Break(s) in Service will not be counted for purposes of determining an
Employee’s Vesting Interest in the Participant’s Account balance if that Period
of Service is disregarded pursuant to the Rule of Parity. If such former
Employee’s Period of Service is disregarded under the Rule of Parity, then
the reemployed Employee will be treated as a new Employee for purposes of
determining an Employee’s Vesting Interest in the Participant’s Account balance
as of the Employee’s Reemployment Commencement Date.

 

(3)       Determination
of Period of Service for Benefit Accrual/Allocation Purposes.  The following provisions apply to
determining any Period of Service for benefit accrual or allocation purposes:

 

(A)     One Year Holdout Rule.  If
the Sponsoring Employer elects the One Year Holdout Rule in the Adoption
Agreement, any Period of Service completed prior to an Employee’s Break(s) in
Service will not be counted for benefit accrual or allocation purposes until
the Employee satisfies the One Year Holdout Rule. If the Employee satisfies the
One Year Holdout Rule, then the Employee’s Period of Service for benefit
accrual or allocation purposes will include the Period of Service that was
completed prior to an Employee’s Break(s) in Service, retroactively to the
Employee’s Reemployment Commencement Date. Furthermore, if the Sponsoring
Employer has elected the Rule of Parity in the Adoption Agreement (in
addition to the One Year Holdout Rule), then the recognition of any Period of
Service that was completed prior to an Employee’s Break(s) in Service will
be subject to both the One Year Holdout Rule and the Rule of Parity.

 

(B)      Rule of Parity. If the Sponsoring Employer elects the Rule of Parity in the
Adoption Agreement, any Period of Service completed prior to an Employee’s
Break(s) in Service will not be counted for benefit accrual or allocation
purposes if that Period of Service is disregarded pursuant to the Rule of
Parity. If such former Employee’s Period of Service is disregarded under the Rule of
Parity, then the reemployed Employee will be treated as a new Employee for
benefit accrual or allocation purposes as of the Employee’s Reemployment
Commencement Date.

 

(i)    Reemployment
of a Participant After a Break In Service.  With respect to any provision of the Plan in which
service is determined by the Elapsed Time Method, if an Employee (1) was a
Participant in the Plan, (2) Terminates Employment with the Employer, and (3) is
subsequently reemployed by the Employer after incurring a Break in Service,
then the Employee’s Period of Service that was completed prior to the Break in
Service will be recognized, subject to the following provisions:

 

(1)       Determination
of Period of Service for Eligibility Purposes. The following provisions apply to determining any
Period of Service for eligibility purposes:

 

(A)     One Year Holdout Rule. If the Sponsoring Employer elects the One Year Holdout Rule in the
Adoption Agreement, any Period of Service completed prior to an Employee’s
Break(s) in Service will not be counted for purposes of determining an
Employee’s eligibility to participate in the Plan until the Employee satisfies
the One Year Holdout Rule. If the Employee satisfies the One Year Holdout Rule,
then the reemployed Employee will enter the Plan retroactively as of the
Employee’s Reemployment Commencement Date. Furthermore, if the Sponsoring
Employer has elected the Rule of Parity in the Adoption Agreement (in 

 

28

 

addition to the One Year Holdout Rule), then the recognition of any
Period of Service that was completed prior to an Employee’s Break(s) in
Service will be subject to both the One Year Holdout Rule and the Rule of
Parity.

 

(B)      Rule of Parity. If the Sponsoring Employer elects the Rule of Parity in the
Adoption Agreement, any Period of Service completed prior to an Employee’s
Break(s) in Service will not be counted in determining an Employee’s
eligibility to participate in the Plan if that Period of Service is disregarded
under the Rule of Parity. If such former Employee’s Period of Service is
disregarded under the Rule of Parity, then the reemployed Employee will be
treated as a new Employee for purposes of Section 2.1 as of the Employee’s
Reemployment Commencement Date. If such former Employee’s Period of Service is
not disregarded under the Rule of Parity, then the reemployed Employee
will reenter the Plan as of the Employee’s Reemployment Commencement Date.

 

(2)       Determination
of Period of Service for Vesting Purposes.  The following provisions apply to determining any
Period of Service for Vesting purposes:

 

(A)     One Year Holdout Rule.  If
the Sponsoring Employer elects the One Year Holdout Rule in the Adoption
Agreement, any Period of Service completed prior to an Employee’s Break(s) in
Service will not be counted in determining an Employee’s Vesting Interest in
the Participant’s Account balance until the Employee satisfies the One Year
Holdout Rule. If the Employee satisfies the One Year Holdout Rule, then the
Employee’s Period of Service for Vesting purposes will include the Period of
Service that was completed prior to an Employee’s Break(s) in Service,
retroactively to the Employee’s Reemployment Commencement Date. Furthermore, if
the Sponsoring Employer has elected the Rule of Parity in the Adoption
Agreement (in addition to the One Year Holdout Rule), then the recognition of
any Period of Service that was completed prior to an Employee’s Break(s) in
Service will be subject to both the One Year Holdout Rule and the Rule of
Parity.

 

(B)      Rule of Parity. If the Sponsoring Employer elects the Rule of Parity in the
Adoption Agreement, any Period of Service completed prior to an Employee’s
Break(s) in Service will not be counted in determining an Employee’s
Vesting Interest in the Participant’s Account balance if that Period of Service
is disregarded pursuant to the Rule of Parity. If such former Employee’s
Period of Service is disregarded under the Rule of Parity, then the
reemployed Employee will be treated as a new Employee for purposes of
determining an Employee’s Vesting Interest in the Participant’s Account balance
as of the Employee’s Reemployment Commencement Date.

 

(3)       Determination
of Period of Service for Benefit Accrual/Allocation Purposes.  The following provisions apply to
determining any Period of Service for benefit accrual or allocation purposes:

 

(A)     One Year Holdout Rule.  If
the Sponsoring Employer elects the One Year Holdout Rule in the Adoption
Agreement, any Period of Service completed prior to an Employee’s Break(s) in
Service will not be counted for benefit accrual or allocation purposes until
the Employee satisfies the One Year Holdout Rule. If the Employee satisfies the
One Year Holdout Rule, then the Employee’s Period of Service for benefit
accrual or allocation purposes will include the Period of Service that was
completed prior to an Employee’s Break(s) in Service, retroactively to the
Employee’s Reemployment Commencement Date. Furthermore, if the Sponsoring
Employer has elected the Rule of Parity in the Adoption Agreement (in
addition to the One Year Holdout Rule), then the recognition of any Period of
Service that was completed prior to an Employee’s Break(s) in Service will
be subject to both the One Year Holdout Rule and the Rule of Parity.

 

(B)      Rule of Parity. If the Sponsoring Employer elects the Rule of Parity in the
Adoption Agreement, any Period of Service completed prior to an Employee’s
Break(s) in Service will not be counted for benefit accrual or allocation
purposes if that Period of Service is disregarded pursuant to the Rule of
Parity. If such former Employee’s Period of Service is disregarded under the Rule of
Parity, then the reemployed Employee will be treated as a new Employee for
benefit accrual or allocation purposes as of the Employee’s Reemployment
Commencement Date.

 

29

 

(j)    Ignoring
Service for Eligibility If Service Requirement Is More Than 1-Year Period Of
Service.  Notwithstanding anything in the Plan to the contrary, if this Plan (or
a component of the Plan) provides in the Adoption Agreement that (1) an
Employee must complete more than either a 1-Year Period of Service or a
12-month Period of Service for eligibility purposes, and (2) such Employee
will have a 100% Vested Interest in the Participant’s Account (or the
sub-Account that relates to such component) upon becoming a Participant in the
Plan, then with respect to an Employee who incurs a Break in Service before
satisfying such eligibility requirement, the Employee’s Period of Service that
was completed prior to the Employee’s Break(s) in Service will not be
counted for eligibility purposes.

 

1.125  Period of Severance. See the definition of Period of Service in Section 1.124
above.

 

1.126  Permissive Aggregation Group. The term “Permissive Aggregation Group” means
a group consisting of the Required Aggregation Group plus any other plan or
plans of the Employer which, when considered as a group with the Required
Aggregation Group, would continue to satisfy the requirements of Code §401(a)(4) and
§410.

 

1.127  Plan. The term “Plan” means the retirement plan
program established by a Sponsoring Employer using the Basic Plan together with
an Adoption Agreement and Trust or Custodial Agreement, as amended from time to
time.

 

1.128  Plan Year. The term “Plan Year” means the Plan’s 12
consecutive month accounting year as elected in the Adoption Agreement (unless
there is a short Plan Year as elected in the Adoption Agreement). If the Plan
Year is changed, a short Plan Year is established beginning the day after the
last day of the Plan Year in effect before this change and ending on the last
day of the new Plan Year.

 

1.129  Policy. The term “Policy” means a life insurance
policy or annuity contract purchased pursuant to the provisions of Section 7.2
of the Basic Plan.

 

1.130  Post-Severance
Compensation. (1)
The term “Post-Severance Compensation” means the following amounts that are
paid within 21⁄2 months after an Employee’s Termination of Employment: (a) payments
that, absent a Termination of Employment, would have been paid to the Employee
while the Employee continued in employment with the Employer and are regular
compensation for services during the Employee’s regular working hours,
compensation for services outside the employee’s regular working hours (such as
overtime or shift differential), commissions, bonuses, or other similar
compensation; and (b) payments for accrued bona fide sick, vacation, or
other leave, but only if the Employee would have been able to use the leave if
employment had continued. Any other payment that is not described in clauses (a) and
(b) above is not considered Post-Severance Compensation if paid after
Termination of Employment, even if it is paid within 21⁄2 months following
Termination of Employment; for example, Post-Severance Compensation does not
include amounts paid after Termination of Employment that are severance pay,
unfunded nonqualified deferred compensation, or parachute payments within the
meaning of Code §280G(b)(2). However, the rule of the prior sentence does
not apply to payments to an individual who does not currently perform services
for the Employer by reason of qualified military service (as that term is used
in Code §414(u)(1)) to the extent those payments do not exceed the amounts the
individual would have received if the individual had continued to perform
services for the Employer rather than entering qualified military service;
those payments are considered Compensation.

 

1.131  Pre-Tax Elective Deferral. The term “Pre-Tax Elective Deferral” means an
Elective Deferral that is not includible in gross income at the time deferred.

 

1.132  Pre-Tax Elective Deferral
Account. The term “Pre-Tax
Elective Deferral Account” means the sub-account of a Participant’s Account to
which his or her Pre-Tax Elective Deferrals are allocated.

 

1.133  Prevailing Wage Account. The term “Prevailing Wage Account” means the
sub-account to which a Participant’s Prevailing Wage contributions are
allocated.

 

1.134  Prevailing Wage Contribution. The term “Prevailing Wage Contribution” means
an Employer contribution made to the Plan under a Prevailing Wage Law on behalf
of a Prevailing Wage Employee.

 

1.135  Prevailing Wage Employee. The term “Prevailing Wage Employee” means any
hourly paid Employee who is an Eligible Employee and performs services for the
Employer under a contract covered by a Prevailing Wage Law.

 

30

 

1.136  Prevailing Wage Law. The term “Prevailing Wage Law” means any
statute or ordinance that requires the Employer to pay its Employees working on
public contracts at wage rates not less than those determined pursuant to that
statute or ordinance to be the prevailing wages for comparable classes of
workers in the geographical area where that contract is performed, including
the Davis-Bacon Act as set forth in 40 U.S.C. §276(a) et. seq., as amended
from time to time, and any similar federal, state or municipal prevailing wage
statutes.

 

1.137  Primarily Defined Benefit in
Character. The term “Primarily
Defined Benefit in Character” means, for Plan Years beginning on or after January 1,
2002, a combination of defined benefit plan(s) and defined contribution
plan(s) in which, for more than 50% of Non-Highly Compensated Employees
benefiting under the combination of defined benefit and defined contribution
plans, the Normal Accrual Rate for the Non-Highly Compensated Employees attributable
to benefits provided by the defined benefit plan(s) that are part of the
combination exceeds the Equivalent Accrual Rate for the Non-Highly Compensated
Employees attributable to contributions under the defined contribution plan(s) that
are part of the combination.

 

1.138  Prior Year Testing Method. The term “Prior Year Testing Method” means
the nondiscrimination testing method in which (a) for purposes of the ADP
Test, the ADP for Participants who are HCEs for the Plan Year being tested is
compared to the ADP for Participants who are NHCEs for the Plan Year prior to
the Plan Year being tested; and (b) for purposes of the ACP Test, the ACP
for Participants who are HCEs for the Plan Year being tested is compared to the
ACP for Participants who are NHCEs for the Plan Year prior to the Plan Year
being tested.

 

1.139  QJSA. The term “QJSA” means a Qualified Joint and
Survivor Annuity.

 

1.140  QMAC. The term “QMAC” means a Qualified Matching
Contribution.

 

1.141  QMAC Account. The term “QMAC Account” means a Qualified
Matching Contribution Account.

 

1.142  QNEC. The term “QNEC” means a Qualified
Non-Elective Contribution.

 

1.143  QNEC Account. The term “QNEC Account” means a Qualified
Non-Elective Contribution Account.

 

1.144  QPSA. The term “QPSA” means a Qualified
Pre-Retirement Survivor Annuity.

 

1.145  Qualified Joint and Survivor
Annuity. The term “Qualified
Joint and Survivor Annuity” means, with respect to a Participant who is married
on the Annuity Starting Date and has not died before such date, an immediate annuity
for the life of the Participant with a survivor benefit for the life of the
Participant’s surviving Spouse which is not less than 50% nor more than 100% of
the annuity that is payable during the joint lives of the Participant and his
or her Spouse and which is the amount of benefit which can be purchased with
the Participant’s Vested Aggregate Account balance. The survivor benefit will
be 50% unless a higher percentage is elected by the Participant at the time
that the Qualified Joint and Survivor Annuity is to be distributed. With
respect to a Participant who is not married on the Annuity Starting Date and
has not died before such date, the term “Qualified Joint and Survivor Annuity”
means an immediate annuity for his or her life.

 

1.146  Qualified Matching Contribution. The term “Qualified Matching Contribution”
means an Employer contribution made to this or any other defined contribution
plan on behalf of a Participant on account of Elective Deferrals, Voluntary
Employee Contributions, and/or Mandatory Employee Contributions made by such
Participant under a plan maintained by the Sponsoring Employer, that is subject
to the distribution (but financial hardship distributions are not permitted)
and nonforfeitability requirements of Code §401(k) when made to the Plan.  Qualified Matching Contributions are available for either the ADP Test
or the ACP Test. Qualified Matching Contributions may be used to satisfy the
Top Heavy Minimum Allocation requirement pursuant to Section 3.14(e).
Qualified Matching Contributions can only be distributed upon the earliest to
occur of the following dates: (a) a Participant Terminates Employment
(separates from service, for Plan Years beginning before 2002) with the
Employer; (b) a Participant dies; (c) a Participant suffers a
Disability; (d) an event that is described in Code §401(k)(10) occurs;
or (e) a Participant reaches Age 591⁄2 (if on or before such date, a
pre-retirement in-service withdrawal of Qualified Matching Contributions is
elected in the Adoption Agreement). With respect to clause (d) of the
prior sentence, Qualified Matching Contributions can be distributed (in a lump
sum only) upon termination of the Plan, so long as the Sponsoring Employer (or
an Affiliated Employer) does not maintain an alternative defined contribution
plan at any time during the period beginning on the date of Plan termination
and ending 12 months after all assets have been distributed from the terminated
Plan. However, if at all times during the 24-month period beginning 12 months
before the date of Plan’s termination, fewer than 2% of the Employees who were
eligible to participate in the 401(k) Plan as of the date of Plan termination
are eligible to participate

 

31

 

in the other defined contribution plan, then the other defined
contribution plan is not an alternative defined contribution plan. In addition,
a defined contribution plan is not an alternative defined contribution plan if
the defined contribution plan is an employee stock ownership plan as defined in
Code §4975(e)(7) or Code §409(a), a simplified employee pension as defined
in Code §408(k), a SIMPLE IRA plan as defined in Code §408(p), a plan or
contract that is described in Code §403(b), or a plan that is described in Code
§457(b) or Code §457(f).

 

1.147     Qualified Matching Contribution
Account. The term
“Qualified Matching Contribution Account” means the sub-account of a
Participant’s Account to which his or her Qualified Matching Contributions are
allocated.

 

1.148     Qualified Non-Elective
Contribution. The
term “Qualified Non-Elective Contribution” means an Employer contribution
(other than a Matching Contribution or a Qualified Matching Contribution) that
is allocated to Participant’s Account and that satisfies the following
requirements: (a) a Qualified Non-Elective Contribution may be used for
the purpose of satisfying either the ADP Test or the ACP Test; (b) a
Participant may not elect to receive a Qualified Non-Elective Contribution in
cash until distributed from the Plan; (c) a Qualified Non-Elective
Contribution is subject to the distribution (but financial hardship
distributions are not permitted) and nonforfeitability requirements of Code
§401(k) when made to the Plan. Qualified Non-Elective Contributions may be
used to satisfy the Top Heavy Minimum Allocation requirement pursuant to Section 3.14(e).
Any allocation formula for a Qualified Non-Elective Contribution must satisfy
the additional requirements specified in Regulation §1.401(k)-2(a)(6) in
order to be used in the ADP Test and Regulation §1.401(m)-2(a)(6) in order
to be used in the ACP Test. Qualified Non-Elective Contributions can only be
distributed upon the earliest to occur of the following dates: (a) a
Participant Terminates Employment (separates from service, for Plan Years
beginning before 2002) with the Employer; (b) a Participant dies; (c) a
Participant suffers a Disability; (d) an event that is described in Code
§401(k)(10) occurs; or (e) a Participant reaches Age 591⁄2 (if on or
before such date, a pre-retirement in-service withdrawal of Qualified
Non-Elective Contributions is elected in the Adoption Agreement). With respect
to clause (d) of the prior sentence, Qualified Non-Elective Contributions
can be distributed (in a lump sum only) upon termination of the Plan, so long
as the Sponsoring Employer (or an Affiliated Employer) does not maintain an
alternative defined contribution plan at any time during the period beginning
on the date of Plan termination and ending 12 months after all assets have been
distributed from the terminated Plan. However, if at all times during the
24-month period beginning 12 months before the date of Plan’s termination,
fewer than 2% of the Employees who were eligible to participate in the 401(k) Plan
as of the date of the Plan’s termination are eligible to participate in the
other defined contribution plan, then the other defined contribution plan is
not an alternative defined contribution plan. In addition, a defined
contribution plan is not an alternative defined contribution plan if the
defined contribution plan is an employee stock ownership plan as defined in
Code §4975(e)(7) or Code §409(a), a simplified employee pension as defined
in Code §408(k), a SIMPLE IRA plan as defined in Code §408(p), a plan or contract
that is described in Code §403(b), or a plan described in Code §457(b) or
§457(f).

 

1.149     Qualified Non-Elective
Contribution Account. The term “Qualified Non-Elective Contribution Account” means the
sub-account of a Participant’s Account to which Qualified Non-Elective
Contributions are allocated.

 

1.150     Qualified Pre-Retirement Survivor
Annuity. The term
“Qualified Pre-Retirement Survivor Annuity” means a survivor annuity for the
life of a deceased Participant’s surviving Spouse which is equal to the amount
of benefit which can be purchased by such percentage as elected in the Adoption
Agreement (but not less than 50%) of the deceased Participant’s Vested
Aggregate Account determined at the date of death. In determining a Participant’s
Vested Aggregate Account hereunder, any security interest held by the Plan
because of a loan outstanding to the Participant will be taken into
consideration and, if applicable, the Participant’s own deductible
contributions made for Plan Years prior to January 1, 1989 will be
disregarded.

 

1.151     Reemployment Commencement Date. The term “Reemployment Commencement Date”
means the first day on which an Employee performs an Hour of Service for an
Employer or an Affiliated Employer following the Employee’s Termination of Employment.

 

1.152     Regulation. The term “Regulation” means any
regulation as promulgated by the Secretary of the Treasury or delegates of the
Treasury Department, as amended and/or renumbered from time to time. If this
Plan references a regulation that is promulgated by any other Department,
Agency, Commission, or other federal entity, then the name of such Department,
Agency, Commission, or other federal entity will be referenced with such
regulation.

 

32

 

1.153     Representative
Contribution Rate. The
term “Representative Contribution Rate” means the lowest Applicable
Contribution Rate of any Participant who is a NHCE among a group of
Participants who are NHCEs that consists of half of all Participants who are
NHCEs for the Plan Year (or, if greater, the lowest Applicable Contribution
Rate of any Participant who is a NHCE in the group of all Participants who are
NHCEs for the Plan Year and who is employed by the Sponsoring Employer on the
last day of the Plan Year).

 

1.154     Representative Matching Rate. The term “Representative Matching Rate”
means the following:

 

(a)          Matching
Contributions With Respect to Elective Deferrals.  If the Plan provides a Matching
Contribution with respect to a Participant’s Elective Deferrals, then the
lowest Matching Rate for any Participant who is a NHCE among a group of
Participants who are NHCEs that consists of half of all Participants who are
NHCEs in the Plan for the Plan Year who make Elective Deferrals for the Plan
Year (or, if greater, the lowest Matching Rate for all Participants who are
NHCEs in the Plan who are employed by the Sponsoring Employer on the last day
of the Plan Year and who make Elective Deferrals for the Plan Year).

 

(b)         Matching
Contributions With Respect to Elective Deferrals and Employee Contributions.  If the Plan provides a Matching
Contribution with respect to the sum of a Participant’s Employee Contributions
and Elective Deferrals, then the lowest Matching Rate for any Participant who
is a NHCE among a group of Participants who are NHCEs that consists of half of
all Participants who are NHCEs in the Plan for the Plan Year who make either
Employee Contributions or Elective Deferrals for the Plan Year (or, if greater,
the lowest Matching Rate for all Participants who are NHCEs in the Plan who are
employed by the Sponsoring Employer on the last day of the Plan Year and who
make either Employee Contributions or Elective Deferrals for the Plan Year).

 

(c)          Matching
Contributions With Respect to Employee Contributions.  If the Plan provides a Matching
Contribution with respect to a Participant’s Employee Contributions (but not
Elective Deferrals), then the lowest Matching Rate for any Participant who is a
NHCE among a group of Participants who are NHCEs that consists of half of all
Participants who are NHCEs in the Plan for the Plan Year who make Employee
Contributions for the Plan Year (or, if greater, the lowest Matching Rate for
all Participants who are NHCEs in the Plan who are employed by the Sponsoring
Employer on the last day of the Plan Year and who make Employee Contributions
for the Plan Year).

 

1.155     Required Aggregation Group. The term “Required Aggregation Group”
means a group consisting of (a) each qualified plan of the Employer in
which at least one Key Employee participates or participated at any time during
the Plan Year containing the Determination Date or any of the four preceding
Plan Years (regardless of whether the plan has terminated); and (b) any
other qualified plan of the Employer which enables a plan described in clause (a) to
satisfy the requirements of Code §401(a)(4) or §410.

 

1.156     Required Beginning Date. The term “Required Beginning Date” means,
with respect to a Participant who is a 5% owner as defined in Code
§416(i)(1)(B)(i), April 1st of the calendar year following the calendar
year in which the Participant reaches Age 701⁄2. With respect to Participants who
are not 5% owners, the term “Required Beginning Date” means the date elected by
the Sponsoring Employer in Section 15.11(a) of the Adoption
Agreement, subject to paragraphs (a), (b) and (c) below.

 

(a)          Election
to Defer Distribution.  If Section 15.11(a)(2) of the Adoption
Agreement is elected and this is an amended Plan, then any Participant (other
than a 5% owner) who attains Age 701⁄2 in years after 1995 may elect by April 1
of the calendar year following the calendar year in which the Participant
attains Age 701⁄2 (or by December 31, 1997 in the case of a Participant who
attains Age 701⁄2 in 1996), to defer distributions until April 1 of the
calendar year following the calendar year in which the Participant retires. If
no such election is made, then the Participant will begin receiving
distributions by April 1 of the calendar year following the calendar year
in which such Participant attains Age 701⁄2.

 

(b)         Election
to Suspend Distribution.  If Section 15.11(a)(2) of the Adoption
Agreement is elected and this is an amended Plan, then any Participant (other
than a 5% owner) who attains Age 701⁄2 in years prior to 1997 may elect to cease
distributions and recommence distributions by April 1 of the calendar year
following the calendar year in which the Participant retires. In such an event,
the Administrator may, on a uniform non-discriminatory basis, elect that a new
Annuity Starting Date will occur upon the distribution recommencement date.

 

33

 

(c)          Elimination
of Pre-Retirement Age 701⁄2 Distribution Option.  If Section 15.11(a)(2) of the
Adoption Agreement is elected and this is an amended Plan, then the
pre-retirement Age 701⁄2 distribution option will only be eliminated for
Employees who reach Age 701⁄2 in or after a calendar year that begins after the
later of December 31, 1998 or the adoption date of the GUST restatement of
this Plan. The pre-retirement Age 701⁄2 distribution option is an optional form
of benefit under which benefits payable in a particular distribution form
(including any modifications that may be elected after benefit commencement)
begin at a time during the period that begins on or after January 1st of
the calendar year in which an Employee reaches Age 701⁄2 and ends April 1 of
the immediately following calendar year.

 

1.157     Rollover. The term “Rollover” means a Rollover
Contribution.

 

1.158     Rollover Contribution. The term “Rollover Contribution” means an
amount which is eligible for tax free rollover treatment and is transferred to
this Plan from one or more of the plans the Sponsoring Employer elects in the
Adoption Agreement, which plans, effective as of January 1, 2002 (or such
later date pursuant to written procedures established and adopted by the
Administrator), may include: a qualified plan under Code §401(a); a qualified
annuity plan under Code §403(a); a qualified annuity under Code §403(b); an
individual retirement account under Code §408(a), without regard to whether the
individual retirement account is a “conduit individual retirement account”; an
individual retirement annuity under Code §408(b), without regard to whether the
individual retirement annuity is a “conduit individual retirement annuity”; and
an eligible plan under Code §457(b) which is maintained by a state,
political subdivision of a state, or any agency or instrumentality of a state
or political subdivision of a state. If this Plan accepts a Rollover
Contribution of Roth Elective Deferrals, this Plan will separately account for
the Roth Elective Deferrals and for any prior (and subsequent) earnings or
losses attributable to such Roth Elective Deferrals. A direct or indirect
transfer as defined in Code §401(a)(11) of assets from a defined benefit plan,
a money purchase plan, a target benefit plan, a stock bonus plan, or a profit
sharing plan that provided for a life annuity form of payment to the
Participant will not be considered a Rollover Contribution, but will be considered
a Transfer Contribution. Similarly, any Elective Deferrals (including QNECs,
QMACs, and ADP Safe Harbor Contributions) which are transferred to this Plan in
a direct or indirect trustee-to-trustee transfer from another qualified plan
and which are subject to the limitations in Regulation §1.401(k)-1(d) will
not be considered a Rollover Contribution, but will be considered a Transfer
Contribution.

 

1.159     Rollover Contribution Account. The term “Rollover Contribution Account”
means the account to which a Participant’s Rollover Contributions, if any, are
allocated.

 

1.160     Rollover Participant. The term “Rollover Participant” means an
Employee who has made a Rollover Contribution into the Plan but who is not
eligible to participate in any other component of the Plan.

 

1.161     Roth Elective Deferral. The term “Roth Elective Deferral” means a
Participant’s Elective Deferral that (a) is includible in the Participant’s
gross income at the time that the Elective Deferral is deferred, and (b) has
been irrevocably designated as a Roth Elective Deferral by the Participant in
his or her deferral election. A Participant’s Roth Elective Deferrals will be
allocated to the Participant’s Roth Elective Deferral Account.

 

1.162     Roth Elective Deferral Account. The term “Roth Elective Deferral Account”
means the account into which a Participant’s Roth Elective Deferrals are
allocated and deposited. No contributions other than Roth Elective Deferrals
and properly attributable earnings will be credited to each Participant’s Roth
Elective Deferral Account; and gains, losses and other credits or charges will
be allocated on a reasonable and consistent basis to such Roth Elective
Deferral Account. The Plan will maintain a record of the amount of Roth
Elective Deferrals in each Participant’s Roth Elective Deferral Account.
Distributions from a Participant’s Roth Elective Deferral Account (other than
corrective distributions) are not includible in the Participant’s gross income
if the distribution is made after 5 years and after the Participant’s death,
disability, or age 591⁄2. Earnings on corrective distributions of Roth Elective
Deferrals are includible in the Participant’s gross income in the same manner
as earnings on corrective distributions of Pre-tax Elective Deferrals; however,
corrective distributions of Roth Elective Deferrals are not includible in the
Participant’s gross income.

 

1.163     Rule of Parity. The term “Rule of Parity” means a rule that
is used for purposes of determining an Employee’s eligibility to participate in
the Plan, Vesting, and benefit accrual/allocation (if applicable) to determine
the Year(s) of Service or 1-Year Period(s) of Service of a non-Vested
Employee who Terminates Employment and is subsequently reemployed by the
Employer after incurring a Break in Service, determined as follows: Year(s) of
Service or 1-Year Period(s) of Service, as applicable, completed prior to
the Employee’s Break(s) in Service will not be counted if the Employee’s
total number of consecutive Break(s) in Service equals or exceeds the
greater of (a) five, or (b) the Employee’s aggregate number of Year(s) of
Service or

 

34

 

1-Year Period(s) of Service, as applicable, credited prior to
incurring the Break(s) in Service. In computing an Employee’s aggregate
number of Year(s) of Service or 1-Year Period(s) of Service under
this Section, Year(s) of Service or 1-Year Period(s) of Service, as
applicable, previously disregarded under prior applications of the Rule of
Parity will not be counted.

 

1.164     Safe Harbor Code §415
Compensation. The
term “Safe Harbor Code §415 Compensation” means an Employee’s compensation as
determined under Regulation §1.415-2(d)(10), to wit: Earned Income, wages,
salaries, fees for professional services and other amounts received (without
regard to whether or not an amount is paid in cash) for personal services
actually rendered in the course of employment with the Sponsoring Employer
maintaining the Plan to the extent that the amounts are includable in gross
income (including, but not limited to, commissions paid salespersons,
compensation for services based on a percentage of profits, commissions on
insurance premiums, tips, bonuses, fringe benefits, and reimbursements, or
other expense allowances under a non-accountable plan as described in
Regulation §1.62-2(c)). Safe Harbor Code §415 Compensation includes amounts
paid or made available to the Employee. An Employee’s Safe Harbor Code §415
Compensation will be determined in accordance with the following provisions:

 

(a)          Exclusion
of Certain Amounts.
Safe Harbor Code §415 Compensation does not include the following: (1) Employer
contributions made by the Employer to a plan of deferred compensation to the
extent that, before the application of the Code §415 limitations to that plan,
the contributions are not includible in the Employee’s gross income for the
taxable year in which contributed; Employer contributions made on behalf of an
Employee to a simplified employee pension described in Code §408(k) for
the taxable year in which contributed; 
and any distributions from a plan of deferred compensation for Code §415
purposes, regardless of whether such amounts are includible in the Employee’s
gross income when distributed; (2) Amounts realized from the exercise of a
non-qualified stock option, or when restricted stock (or property) held by an
Employee either becomes freely transferable or is no longer subject to a
substantial risk of forfeiture; (3) Amounts realized from the sale,
exchange or other disposition of stock acquired under a qualified stock option;
and (4) Other amounts which receive special tax benefits, such as premiums
for group-term life insurance (but only to the extent that the premiums are not
includible in the gross income of the employee), or contributions made by an
Employer (whether or not under a salary deferral agreement) towards the
purchase of an annuity described in Code §403(b) (regardless of whether
such the contributions are excludible from an Employee’s gross income).

 

(b)         Inclusion
of Certain Amounts.  Safe Harbor Code §415 Compensation includes any elective deferral as
defined in Code §402(g)(3) and any amount which is contributed or deferred
by the Employer at the election of the Employee which are not includible in
gross income by reason of Code §125 (and if elected in the Adoption Agreement,
Deemed Code §125 Compensation), Code §132(f)(4), or Code §457.

 

(c)          Imputed
Compensation when Participant Becomes Disabled. If elected in the Adoption Agreement and a
Participant becomes permanently and totally disabled (as defined in Code
§22(e)(3)) then notwithstanding anything in this Section to the contrary,
Safe Harbor Code §415 Compensation will be imputed during the time that the
Participant is permanently and totally disabled for purposes of determining and
allocating Non-Safe Harbor Non-Elective Contributions. The rate that Safe
Harbor Code §415 Compensation will be imputed to such Participant is equal to
the rate of Safe Harbor Code §415 Compensation that was paid to the Participant
immediately before becoming permanently and totally disabled. The total period
in which Safe Harbor Code §415 Compensation will be imputed to a Participant
who becomes permanently and totally disabled will be determined pursuant to a
nondiscriminatory policy established by the Administrator; however, if Safe
Harbor Code §415 Compensation is imputed to a Participant who is a Highly
Compensated -Employee pursuant to this paragraph, then the continuation of
Non-Safe Harbor Non-Elective Contributions to such Participant will be for a
fixed or determinable period pursuant to Code §415(c)(3)(C). Any Non-Safe
Harbor Non-Elective Contributions that are made on behalf of a Participant with
respect to imputed Safe Harbor Code §415 Compensation must be nonforfeitable
when made.

 

(d)         Treatment
of Post-Severance Compensation.  Effective January 1, 2005, Safe Harbor Code §415
Compensation includes Post-Severance Compensation.

 

1.165     Safe Harbor 401(k) Contribution.
The term “Safe
Harbor 401(k) Contribution” means, collectively or separately, depending
on the context in which the term is used, an ACP Safe Harbor Matching
Contribution, an ADP Safe Harbor Matching Contribution, and/or an ADP Safe
Harbor Non-Elective Contribution.

 

35

 

1.166     Safe Harbor 401(k) Plan. The term “Safe Harbor 401(k) Plan”
means a 401(k) Plan which automatically satisfies the ADP Test under Code
§401(k), pursuant to Section 3.20.

 

1.167     Safe Harbor 401(m) Plan. The term “Safe Harbor 401(m) Plan”
means a 401(m) Plan which automatically satisfies the ACP Test under Code
§401(m) , pursuant to Section 3.21.

 

1.168     Safe Harbor Notice. The term “Safe Harbor Notice” means a
written notice provided by the Employer to all Eligible Employees in accordance
with Regulation §1.401(k)-3(d) and/or §1.401(m)-3(e) and complies
with the requirements of Section 3.20 and/or 3.21. In addition to any
other election periods that may be provided under the Plan, each Eligible
Employee may make an initial Elective Deferral election or modify a prior
Elective Deferral election during the 30-day period immediately following his
or her receipt of a Safe Harbor Notice.

 

1.169     Safe Harbor Participant. The term “Safe Harbor Participant” means
each Employee who satisfies all of the following conditions: (a) the
Employee is an Eligible Employee for Safe Harbor 401(k) Contribution
purposes under Sections 3.1(b) and/or (c) of the Adoption Agreement; (b) the
Employee has satisfied the age and/or service requirements for Safe Harbor 401(k) Contribution
purposes under Sections 3.2(b) and/or (c) of the Adoption Agreement
(unless such requirements have been waived with respect to the Employee under
Sections 3.4(b) and/or (c) of the Adoption Agreement; (c) the
Employee has entered the Plan as a Participant for Safe Harbor 401(k) Contribution
purposes under Sections 3.3(b) and/or (c) of the Adoption Agreement;
and (d) the Employee is eligible to make an Elective Deferral to the Plan
at any time during the Plan Year or would be eligible to make Elective
Deferrals but for a suspension due to a financial hardship distribution or a
statutory limitation (such as the limits of Code §402(g) or §415).

 

1.170     Self-Employed Individual. The term “Self-Employed Individual” means
an individual who owns an interest in the Employer (other than a stock
interest) and has Earned Income for the taxable year from the trade or business
for which the Plan is established or would have had Earned Income but for the
fact that the trade or business had no net profits for the taxable year.

 

1.171     Service. The term “Service” means (a) Years
of Service when the Counting of Hours Method is being used and (b) Periods
of Service when the Elapsed Time Method is being used.

 

1.172     Sponsoring Employer. The term “Sponsoring Employer” means the
business entity named in Section 1.2 of the Adoption Agreement that
sponsors the Plan under the terms of the Adoption Agreement (and any successor
thereto that elects to assume sponsorship of this Plan).

 

1.173     Spousal. The term “Spousal” means of, or related
to, a Spouse.

 

1.174     Spouse. The term “Spouse” means the person to
whom a Participant is legally married, and, if elected in the Adoption
Agreement, the Participant must be married to such person throughout the one
year period ending on the earlier of the Annuity Starting Date or the
Participant’s death in order for the person to be considered the Participant’s
Spouse. Furthermore, a former Spouse will be treated as the Participant’s
Spouse or surviving Spouse to the extent provided under a qualified domestic
relations order as described in Code §414(p).

 

1.175     Statutory Code §415 Compensation.
The term “Statutory
Code §415 Compensation” means, in applying the Code §415 limits, an Employee’s
compensation as determined under Regulation §1.415-2(d)(2) and (3), to
wit:

 

(a)          Amounts
includable as Statutory Code §415 Compensation.  Statutory Code §415 Compensation  includes all of the following: (1) wages,
salaries, fees for professional services and other amounts received (without
regard to whether or not an amount is paid in cash) for personal services
actually rendered in the course of employment with the Sponsoring Employer
maintaining the Plan to the extent that the amounts are includable in gross
income (including, but not limited to, commissions paid salespersons, compensation
for services based on a percentage of profits, commissions on insurance
premiums, tips, bonuses, fringe benefits, and reimbursements, or other expense
allowances under a non-accountable plan as described in Regulation §1.62-2(c));
(2) in the case of a Self-Employed Individual, Earned Income; (3) amounts
described in Code §104(a)(3), §105(a) and 105(h), but only to the extent
these amounts are includible in the gross income of the Employee; (4) amounts
paid or reimbursed by the Employer for moving expenses incurred by the
Employee, but only to the extent that at the time of the payment it is
reasonable to believe that these amounts are not deductible by the Employee
under Code §217; (5) the value of a non-qualified stock option granted to
an Employee by the Employer, but only to the extent that the value of the
option is includible in the gross income of the Employee for the taxable year
in which granted; 

 

36

 

and (6) the amount includible in the gross income of an Employee
upon making the election described in Code §83(b). Clauses (1) and (2) above
include foreign earned income (as defined in Code §911(b)), regardless of
whether excludible from gross income under Code §911. Compensation determined
under clause (1) above is to be determined without regard to the
exclusions from gross income in Code §931 and §933. Similar principles are to
be applied with respect to income subject to Code §931 and §933 in determining
compensation described in clause (2). Statutory Code §415 Compensation includes
amounts paid or made available to the Employee.

 

(b)         Exclusion
of Certain Amounts.  Statutory Code §415 Compensation does not include (1) Employer
contributions made by the Employer to a plan of deferred compensation to the
extent that, before the application of the Code §415 limitations to that plan,
the contributions are not includible in the Employee’s gross income for the
taxable year in which contributed; Employer contributions made on behalf of an
Employee to a simplified employee pension described in Code §408(k) for
the taxable year in which contributed; 
and any distributions from a plan of deferred compensation for Code §415
purposes, regardless of whether such amounts are includible in the Employee’s
gross income when distributed; (2) amounts realized from the exercise of a
non-qualified stock option, or when restricted stock (or property) held by an
Employee either becomes freely transferable or is no longer subject to a
substantial risk of forfeiture; (3) amounts realized from the sale,
exchange or other disposition of stock acquired under a qualified stock option;
and (4) other amounts which receive special tax benefits, such as premiums
for group-term life insurance (but only to the extent that the premiums are not
includible in the gross income of the employee), or contributions made by an
Employer (whether or not under a salary deferral agreement) towards the
purchase of an annuity described in Code §403(b) (regardless of whether
such the contributions are excludible from an Employee’s gross income).

 

(c)          Inclusion
of Certain Amounts.  Statutory Code §415 Compensation includes any elective deferral as
defined in Code §402(g)(3) and any amount which is contributed or deferred
by the Employer at the election of the Employee which are not includible in
gross income by reason of Code §125 (and if elected in the Adoption Agreement,
Deemed Code §125 Compensation), Code §132(f)(4), or Code §457.

 

(d)         Imputed
Compensation when Participant Becomes Disabled. If elected in the Adoption Agreement and a
Participant becomes permanently and totally disabled (as defined in Code
§22(e)(3)) then notwithstanding anything in this Section to the contrary,
Statutory Code §415 Compensation will be imputed during the time that the
Participant is permanently and totally disabled. The rate that Statutory Code
§415 Compensation will be imputed to such Participant is equal to the rate of
Statutory Code §415 Compensation that was paid to the Participant immediately
before becoming permanently and totally disabled. The total period in which
Statutory Code §415 Compensation will be imputed to a Participant who becomes
permanently and totally disabled will be determined pursuant to a
nondiscriminatory policy established by the Administrator; however, if
Statutory Code §415 Compensation is imputed to a Participant who is a Highly
Compensated Employee pursuant to this paragraph, then the continuation of
Non-Safe Harbor Non-Elective Contributions to such Participant will be for a
fixed or determinable period pursuant to Code §415(c)(3)(C).

 

(e)          Treatment
of Post-Severance Compensation.  Effective January 1, 2005, Statutory Code §415
Compensation includes Post-Severance Compensation.

 

1.176     Substantially Equal.  The term “Substantially Equal” means a
series of installment payments in which a single installment payment is equal
to the Participant’s Account balance as of the most recent Valuation Date
divided by the remaining duration of the installment payments; or such other
method to determine a series of installment payments that are substantially
equal that may be established by the Administrator.

 

1.177     Taxable Wage Base. The term “Taxable Wage Base” means the
contribution and benefit base under Social Security Act §230 (42 U.S.C. §430)
in effect as of the beginning of the Plan Year.

 

1.178     Terminated (or Terminates)
Employment. The
terms “Terminated Employment” and “Terminates Employment” mean that a person
has incurred a Termination of Employment.

 

37

 

1.179     Termination of Employment. The term “Termination of Employment”
means that a person ceases to be an Employee with the Employer or an Affiliated
Employer, taking into account the following: (1) the existence of a
controlled group; (2) the existence of an affiliated service group; (3) whether
the person has gone to work for an Adopting Employer; (4) whether the
person’s new employer has been substituted as the sponsor of the Plan (or a
spun-off portion of the Plan); and (5) whether there has been a transfer
of Plan assets and liabilities of the person’s benefits from this Plan to a
plan sponsored by the person’s new employer.

 

1.180     Terminated Participant. The term “Terminated Participant” means a
Participant who has Terminated Employment for reasons other than retirement,
death or Disability.

 

1.181     Third-Step Integration
Percentage. The
term “Third-Step Integration Percentage” means (a) 2.7% if the Sponsoring
Employer elects an integration percentage of 5.7% in the Adoption Agreement; (b) 2.4%
if the Sponsoring Employer elects an integration percentage of 5.4% in the
Adoption Agreement; and (c) 1.3% if the Sponsoring Employer elects an
integration percentage of 4.3% in the Adoption Agreement.

 

1.182     Top Heavy. The term “Top Heavy” means for the Plan
Year containing the Determination Date that (a) the Top Heavy Ratio for
this Plan exceeds 60% and this Plan is not part of any Required Aggregation
Group or Permissive Aggregation Group; or (b) this Plan is a part of a
Required Aggregation Group but not part of a Permissive Aggregation Group and
the Top Heavy Ratio for the Required Aggregation Group exceeds 60%; or (c) this
Plan is a part of a Required Aggregation Group and part of a Permissive
Aggregation Group and the Top Heavy Ratio for the Permissive Aggregation Group
exceeds 60%.

 

1.183     Top Heavy Minimum Allocation. The term “Top Heavy Minimum Allocation”
means an amount of Employer contributions and Forfeitures that is subject to
the following rules:

 

(a)          DB
Plan not Part of Required Aggregation Group or Permissive Aggregation
Group with This Plan.  If a defined benefit plan is not part of a Required
Aggregation Group or a Permissive Aggregation Group with this Plan, then the
Top Heavy Minimum Allocation equals an Employee’s Code §415(c)(3) Compensation
multiplied by the lesser of (1) three percent (3%), or (2) the
largest percentage of Employer contributions (including any Elective Deferrals
made on behalf of a Key Employee to a 401(k) Plan maintained by the
Employer) and Forfeitures that are allocated to the Participant’s Account of a
Key Employee for that Plan Year, expressed as a percentage of such Key Employee’s
Code §415(c)(3) Compensation.

 

(b)         Certain
Contributions Cannot Be Used to Satisfy Top Heavy Minimum Allocation.  Elective Deferrals that are made on
behalf of a Participant to a 401(k) Plan (and, for Plan Years beginning
before 2002, Matching Contributions) cannot be used to satisfy the Top Heavy
Minimum Allocation.

 

(c)          Social
Security Contribution Disregarded.  The Top Heavy Minimum Allocation is determined without
regard to any Social Security contribution.

 

(d)         Forfeiture
of Top Heavy Minimum Allocation.  The Top Heavy Minimum Allocation (to the extent
required to be nonforfeitable under Code §416(b)) may not be forfeited under
Code §411(a)(3)(B) or §411(a)(3)(D).

 

1.184     Top Heavy Ratio. The term “Top Heavy Ratio” means for Plan
Years beginning on or after January 1, 2002, in determining if this Plan
is Top Heavy, a ratio that is calculated in accordance with the following
provisions:

 

(a)          Employer Only Maintains DC
Plans. If the Employer maintains one or more defined contribution
plans (including any Simplified Employee Pension Plan) and the Employer has not
maintained any defined benefit plan which during the 5-year period ending on
the Determination Date(s) has or has had accrued benefits, then the Top
Heavy Ratio for this Plan alone, for the Required Aggregation Group, or for the
Permissive Aggregation Group as appropriate is a fraction, the numerator of
which is the sum of the Participant’s Account balances of all Key Employees as
of the Determination Date(s) (including any part of any Participant’s
Account balance distributed during the 1-year period ending on the
Determination Date(s); however, including any part of any Participant’s Account
balance distributed during the 5-year period ending on the Determination Date
in the case of a distribution made for a reason other than Termination of
Employment, death, or Disability), and the denominator of which is the sum of
all Participant’s Account balances (including any part of any Participant’s
Account balance distributed in the 1-year period ending on the Determination
Date(s); however, including any part of any Participant’s Account balance
distributed during the 5-year period ending on the Determination Date in the
case of a distribution made for a reason other
than Termination of Employment, death, or Disability), both computed in 

 

38

 

accordance with Code §416 and the Regulations thereunder. Both the
numerator and denominator of the Top Heavy Ratio are increased to reflect any
contribution that is not actually made as of the Determination Date, but which
is required to be taken into account on that Determination Date under Code §416
and the Regulations thereunder.

 

(b)         Employer
Maintains Both DC and DB Plans.  If the Employer maintains one or more defined
contribution plans (including any Simplified Employee Pension Plan) and the
Employer maintains or has maintained one or more defined benefit plans which
during the 5-year period ending on the Determination Date(s) has or has
had any accrued benefits, then the Top Heavy Ratio for any Required Aggregation
Group or for any Permissive Aggregation Group as appropriate is a fraction, the
numerator of which is the sum of the Participant’s Account balances under the
aggregated defined contribution plan or plans for all Key Employees, determined
in accordance with paragraph (a) above, and the present value of accrued
benefits under the aggregated defined benefit plan or plans for all Key
Employees as of the Determination Date(s), and the denominator of which is the
sum of the Participant’s Account balances under the aggregated defined
contribution plan or plans for all Participants, determined in accordance with
paragraph (a) above, and the present value of accrued benefits under the
defined benefit plan or plans for all Participants as of the Determination
Date(s), all determined in accordance with Code §416 and the Regulations
thereunder. The accrued benefits under a defined benefit plan in both the
numerator and denominator of the Top Heavy Ratio are increased for any
distribution of an accrued benefit made in the 1-year period ending on the
Determination Date (or the 5-year period ending on the Determination Date in
the case of a distribution made for a reason other than Termination of
Employment, death, or Disability).

 

(c)          Value
of Participant’s Account Balances and the Present Value of Accrued Benefits.  For purposes of paragraphs (a) and
(b), the value of the Participant’s Account balances and the present value of
accrued benefits will be determined as of the most recent Valuation Date that
falls within or ends with the 12-month period ending on the Determination Date,
except as provided in Code §416 and the Regulations for the first and second
Plan Years of a defined benefit plan. The Participant’s Account balances and
accrued benefits will be disregarded for a Participant (1) who is not a
Key Employee during the 12-month period ending on the Determination Date but
was a Key Employee in a prior year, or (2) who has not been credited with
at least one Hour of Service with any Employer maintaining the Plan at any time
during the 1-year period ending on the Determination Date. The calculation of
the Top Heavy Ratio and the extent to which distributions, Rollover
Contributions, and Transfer Contributions are taken into account will be made
in accordance with Code §416 and the Regulations thereunder. Deductible
employee contributions will not be taken into account in computing the Top
Heavy Ratio. When aggregating plans, the value of the Participant’s Account
balances and accrued benefits will be calculated with reference to the
Determination Dates that fall within the same calendar year. The accrued
benefit of a Participant other than a Key Employee will be determined under (1) the
method, if any, that uniformly applies for accrual purposes under all defined
benefit plans maintained by the Employer, or (2) if there is no such
method, then as if such benefit accrued not more rapidly than the slowest
accrual rate permitted under the fractional rule of Code §411(b)(1)(C).

 

(d)         Computing
Present Values.  In establishing the present value of accrued benefits to compute the
Top Heavy Ratio, benefits not in pay status are handled on the basis that
retirement occurs on the automatic vesting date or, if later, the date of
reference. Benefits are discounted only for interest and mortality. Unless
otherwise elected in the Adoption Agreement, the following factors apply: (1) with
respect to the interest assumption: (i) pre-retirement: 6% interest, and (ii) post-retirement:
5% interest; and (2) with respect to the mortality assumption: (i) pre-retirement:
no mortality assumption, and (ii)  post-retirement: the mortality assumption
will be the 1994 Group Annuity Reserving Mortality Table projected to 2002
based on a fixed blend of 50% of the unloaded Male mortality rates and 50% of
the unloaded Female mortality rates (the 1994 GAR Mortality Table) as set forth
in Revenue Ruling 2001-62.

 

1.185     Transfer Contribution. The term “Transfer Contribution” means a
non-taxable transfer of a Participant’s benefit directly or indirectly from
another qualified plan to this Plan. Transfer Contributions include assets
transferred to this Plan from another plan as a result of a merger or similar
transaction involving this Plan and the other plan. Any direct or indirect
transfer as defined in Code §401(a)(11) of assets from a defined benefit plan,
a money purchase plan, a target benefit plan, a stock bonus plan, or a profit
sharing plan that provided for a life annuity form of payment to the
Participant will be considered a Transfer Contribution. Elective Deferrals
(including QNECs, QMACs, and ADP Safe Harbor Contributions) which are
transferred to 

 

39

 

this Plan in a direct or indirect trustee-to-trustee transfer from
another qualified plan and which remain subject to the limitations in
Regulation §1.401(k)-1(d) will be considered a Transfer Contribution. The
assets that are transferred from another qualified plan in a plan-to-plan
elective transfer pursuant to Section 11.4 will also be considered a
Transfer Contribution.

 

1.186     Transfer Contribution Account. The term “Transfer Contribution Account”
means the account to which a Participant’s Transfer Contributions, if any, are
allocated.

 

1.187     Trustee. The term “Trustee” means the persons or
entity named as trustee or trustees of the Trust.

 

1.188     Trust (or Trust Fund). The term “Trust” or “Trust Fund” means
the assets of the Plan.

 

1.189     Valuation Calendar Year.
The term “Valuation
Calendar Year” means, for purposes of required minimum distributions under Section 5.9,
the calendar year immediately preceding a Distribution Calendar Year.

 

1.190     Valuation Date. The term “Valuation Date” means the date
when the Trustee determines the value of the Trust Fund. A Valuation Date of
the Trust Fund must occur as of the last day of each Plan Year. However, the
Administrator can value all or any portion of the assets of the Trust Fund more
frequently, including, but not limited to, semi-annually, quarterly, monthly,
or daily; the Administrator may implement any additional Valuation Dates for
any reason. For purposes of calculating the Top Heavy Ratio, the term “Valuation
Date” means the date when the Participant’s Account balances or accrued
benefits are valued.

 

1.191     Vested Aggregate Account. The term “Vested Aggregate Account” means
a Participant’s Vested Interest in the aggregate value of his or her
Participant’s Account and any accounts attributable to the Participant’s own
Plan contributions (including the Participant’s Rollover Contribution Account
and Transfer Contribution Account).

 

1.192     Vested, Vested Interest and
Vesting. The
terms “Vested,” “Vested Interest” and “Vesting” mean a Participant’s
nonforfeitable percentage in an account maintained on his or her behalf under
the Plan. A Participant’s Vested Interest in his or her Participant’s Account
will be determined in accordance with Section 4.6.

 

1.193     Vesting Computation Period. The term “Vesting Computation Period”
means a period of twelve (12) consecutive months, which is used for purposes of
determining a Participant’s Vested Interest in the Plan (or a component of the
Plan). As elected in the Adoption Agreement, either (a) each Vesting
Computation Period will consist of each Plan Year; or (b) an Employee’s
initial Vesting Computation Period will begin on the Employee’s Employment
Commencement Date, and each subsequent Vesting Computation Period will begin on
each anniversary of the Employee’s Employment Commencement Date.

 

1.194     Voluntary Employee Contribution. The term “Voluntary Employee Contribution”
means an Employee Contribution which is made voluntarily to the Plan by a
Participant.

 

1.195     Voluntary Employee Contribution
Account. The term
“Voluntary Employee Contribution Account” means the sub-account to which a
Participant’s Voluntary Employee Contributions, if any, are allocated.

 

1.196     Year of Service. The term “Year of Service” means, with
respect to any provision of the Plan in which service is determined by the
Counting of Hours Method, a 12-consecutive month computation period during
which an Employee is credited with the specified number of Hours of Service as
elected in the Adoption Agreement with the Employer or an Affiliated Employer
(or any business entity which was an Adopting Employer), determined in
accordance with the following provisions:

 

(a)          Year
of Service for Eligibility.  For any Plan Year in which the eligibility
requirements under Section 2.1 are based on Years of Service, then a Year
of Service is an Eligibility Computation Period during which an Employee is
credited with at least the number of Hours of Service (but not more than 1,000
Hours of Service) as elected in the Adoption Agreement. If the Employee is
credited with 1,000 Hours of Service (or such lesser number of Hours of Service
as elected in the Adoption Agreement) in both the initial Eligibility
Computation Period and the second Eligibility Computation Period, then the
Employee will be credited with two Years of Service for eligibility purposes.
If any Eligibility Computation Period is less than 12 months, then the Hours of
Service requirement set forth herein will be proportionately reduced (if the
Hours of Service requirement is greater than one Hour of Service) for purposes
of determining whether an Employee is credited with a Year of Service during
such short Eligibility Computation Period. As elected in the Adoption
Agreement, in 

 

40

 

determining the eligibility requirements under Section 2.1 and the
applicable Entry Date under Section 2.2, an Employee will be deemed to
have completed a Year of Service on either (1) the last day of the
applicable Eligibility Computation Period during which the Employee is credited
with the required Hours of Service; or (2) the same date that the Employee
is credited with the applicable Hours of Service requirement, even if such date
occurs before the last day of the Eligibility Computation Period.

 

(b)         Year
of Service for Vesting.  For any Plan Year in which a Participant’s Vested
Interest under Section 4.6 is based on Years of Service, then a Year of
Service is a Vesting Computation Period during which an Employee is credited
with at least the number of Hours of Service (but not more than 1,000 Hours of
Service) as elected in the Adoption Agreement. If any Vesting Computation
Period is less than 12 months, then the Hours of Service requirement set forth
herein will be proportionately reduced (if the Hours of Service requirement is
greater than one Hour of Service) for purposes of determining whether an
Employee is credited with a Year of Service during such short Vesting
Computation Period. Alternatively, with respect to a short Vesting Computation
Period, an Employee will be credited with a Year of Service pursuant to
Department of Labor Regulation §2530.203-2(c).

 

(c)          Year
of Service for Benefit Accrual/Allocation Purposes.  For any Plan Year in which a Participant’s
benefit accrual and/or allocations are based on Years of Service, a Year of
Service is a 12-consecutive month benefit accrual computation period during
which an Employee is credited with at least the number of Hours of Service (but
not more than 1,000 Hours of Service) as elected in the Adoption Agreement. The
benefit accrual computation period will be the Plan Year. If any benefit
accrual computation period is less than 12 months, then the Hours of Service
requirement set forth herein will be proportionately reduced (if the Hours of
Service requirement is greater than one (1) Hour of Service) for purposes
of determining whether an Employee is credited with a Year of Service during
such short benefit accrual computation period.

 

(d)         Prior
Service Credit.  If the Employer maintains (or has ever maintained) any plan of a
predecessor employer, service during the existence of such predecessor plan
with such predecessor employer will be credited as Years of Service with the
Employer. In addition, if elected in Section 2.2 of the Adoption
Agreement, predecessor service with the entity or entities named in the
Adoption Agreement will be credited as Years of Service with the Employer for
the purposes elected in the Adoption Agreement. For purposes of the prior
sentence, the following rules will apply: (1) if the Employer does
not maintain (and has never maintained) any plan of a predecessor employer and
if predecessor service of that predecessor employer is credited in a
standardized Adoption Agreement, then such service will be limited to five
Years of Service pursuant to Regulation §1.401(a)(4)-5(a)(3); and (2) if
the Employer does not maintain (and has never maintained) any plan of a
predecessor employer, if predecessor service of that predecessor employer is
credited in a non-standardized Adoption Agreement and if such predecessor
service exceeds five Years of Service, the crediting of such service must
comply with the requirements of Regulation §1.401(a)(4)-11(d).

 

(e)          Reemployment
of an Employee Before a Break In Service and Before Eligibility Requirements
Are Satisfied.  For any Plan Year in which the eligibility requirements under Section 2.1
are based on Years of Service, if an Employee Terminates Employment with the
Employer prior to satisfying the eligibility requirements in Section 2.1
and the Employee is subsequently reemployed by the Employer before incurring a
Break in Service, then (1) the Employee’s pre-termination Year(s)  of
Service (and Hours of Service during any computation period) will be counted in
determining the satisfaction of such eligibility requirements, and for all
other purposes, as applicable, and (2) the Eligibility Computation Period,
Vesting Computation Period, and/or benefit accrual computation period, as
applicable, will remain unchanged.

 

(f)            Reemployment
of an Employee Before a Break In Service and After Eligibility Requirements Are
Satisfied.  For any Plan Year in which the eligibility requirements under Section 2.1
are based on Years of Service, if an Employee Terminates Employment with the
Employer prior to the Employee’s Entry Date in Section 2.2, the Employee
had satisfied the eligibility requirements in Section 2.1 as of the
Employee’s Termination of Employment, and the Employee is subsequently
reemployed by the Employer before incurring a Break in Service, then (1) the
Employee will become a Participant as of the later of (A) the date that
the Employee would enter the Plan had he or she not Terminated Employment with
the Employer, or (B) the Employee’s Reemployment Commencement Date, (2) the
Employee’s pre-termination Year(s) of Service (and Hours of Service during
any computation period) will be counted for all purposes, and (3) the
Vesting Computation Period and/or benefit accrual computation period, as
applicable, will remain unchanged.

 

41

 

(g)   Reemployment
of a Participant Before a Break In Service.  For any Plan Year in which the eligibility
requirements under Section 2.1 are based on Years of Service, if an
Employee Terminates Employment after becoming a Participant and is subsequently
reemployed by the Employer before incurring a Break in Service, then (1) the
reemployed Employee will reenter the Plan as of the Employee’s Reemployment
Commencement Date, (2) the Employee’s pre-termination Year(s) of
Service (and Hours of Service during any computation period) will be counted
for all purposes, as applicable, and (3) the Vesting Computation Period
and/or benefit accrual computation period, as applicable, will remain
unchanged.

 

(h)   Reemployment of an Employee
After a Break In Service and Before Entry Date.  For any Plan Year in
which the eligibility requirements under Section 2.1 are based on Years of
Service, if an Employee Terminates Employment with the Employer either prior to
or after satisfying the eligibility requirements in Section 2.1 (but
before the Employee’s Entry Date in Section 2.2) and the Employee is
subsequently reemployed by the Employer after incurring a Break in Service,
then the Employee’s Year(s) of Service that were completed prior to the
Break in Service will be recognized, subject to the following provisions:

 

(1)   Determination
of Years of Service for Eligibility Purposes. The following provisions apply to determining Year(s) of
Service for eligibility purposes:

 

(A)  One
Year Holdout Rule.  If the Sponsoring Employer elects the One Year Holdout
Rule in the Adoption Agreement, any Year(s) of Service completed
prior to an Employee’s Break(s) in Service will not be counted in
determining an Employee’s eligibility to participate in the Plan until the
Employee satisfies the One Year Holdout Rule. If the Employee has not satisfied
the eligibility requirements in Section 2.1 as of the Employee’s
Reemployment Commencement Date and then satisfies the One Year Holdout Rule,
then the Employee will become a Participant in the Plan as of the Entry Date in
Section 2.2 after the Employee has satisfied the eligibility requirements
in Section 2.1 (including, if applicable, an Entry Date that may occur
during the One Year Holdout Rule period after the Employee’s Reemployment
Commencement Date). If the Employee has satisfied the eligibility requirements
in Section 2.1 as of the Employee’s Reemployment Commencement Date and
then satisfies the One Year Holdout Rule, then the reemployed Employee will
enter the Plan as of the first day of the Eligibility Computation Period in
which the Employee completes one Year of Service. Furthermore, if the
Sponsoring Employer has elected the Rule of Parity in the Adoption
Agreement (in addition to the One Year Holdout Rule), then the recognition of
any Year(s) of Service that were completed prior to an Employee’s Break(s) in
Service will be subject to both the One Year Holdout Rule and the Rule of
Parity.

 

(B)   Rule of Parity. If the Sponsoring Employer elects the Rule of
Parity in the Adoption Agreement, any Year(s) of Service completed prior
to an Employee’s Break(s) in Service will not be counted in determining an
Employee’s eligibility to participate in the Plan if those Year(s) of
Service are disregarded pursuant to the Rule of Parity. If such former
Employee’s Year(s) of Service are disregarded under the Rule of
Parity, then (A) the reemployed Employee will be treated as a new Employee
for purposes of Section 2.1 and (B) the Employee’s Eligibility
Computation Period will commence on the Employee’s Reemployment Commencement
Date and subsequent Eligibility Computation Periods will be based upon the
provisions of the definition of Eligibility Computation Period (with the
Reemployment Commencement Date substituted for the Employment Commencement
Date, if applicable). If the Employee has not satisfied the eligibility
requirements in Section 2.1 as of the Employee’s Reemployment Commencement
Date and such former Employee’s Year(s) of Service are not disregarded
under the Rule of Parity, then the Eligibility Computation Periods will
remain unchanged. If the Employee has satisfied the eligibility requirements in
Section 2.1 as of the Employee’s Reemployment Commencement Date and such
former Employee’s Year(s) of Service are not disregarded under the Rule of
Parity, the reemployed Employee will enter the Plan as of the Employee’s
Reemployment Commencement Date.

 

(2)   Determination of Years of
Service for Vesting Purposes. The following provisions apply to
determining Year(s) of Service for Vesting purposes:

 

(A)  One Year Holdout Rule.
If the Sponsoring Employer elects the One Year Holdout Rule in the
Adoption Agreement, any Year(s) of Service completed prior to an Employee’s
Break(s) in Service will not be counted in determining an Employee’s
Vesting Interest in the Participant’s Account balance until the Employee
satisfies the One Year Holdout Rule. If the Employee satisfies the One Year
Holdout Rule, then the Employee’s Year(s) of 

 

42

 

Service for Vesting purposes will include Year(s) of Service that
were completed prior to an Employee’s Break(s) in Service, retroactively
to the first day of the Vesting Computation Period in which the Employee
completes one (1) Year of Service. Furthermore, if the Sponsoring Employer
has elected the Rule of Parity in the Adoption Agreement (in addition to
the One Year Holdout Rule), then the recognition of any Year(s) of Service
that were completed prior to an Employee’s Break(s) in Service will be
subject to both the One Year Holdout Rule and the Rule of Parity.

 

(B)   Rule of Parity. If the Sponsoring Employer elects the Rule of
Parity in the Adoption Agreement, any Year(s) of Service completed prior
to an Employee’s Break(s) in Service will not be counted in determining an
Employee’s Vesting Interest in the Participant’s Account balance if those Year(s) of
Service are disregarded pursuant to the Rule of Parity. If such former
Employee’s Year(s) of Service are disregarded under the Rule of
Parity and the Sponsoring Employer elects in the Adoption Agreement that the
Vesting Computation Period is based on an Employee’s 12-month employment year,
then the Employee’s Vesting Computation Period will commence on the Employee’s
Reemployment Commencement Date (and subsequent Vesting Computation Periods will
commence on anniversaries of the Employee’s Reemployment Commencement Date). If
such former Employee’s Year(s) of Service are not disregarded under the Rule of
Parity, then the Vesting Computation Periods will remain unchanged.

 

(3)   Determination of Years of
Service for Benefit Accrual/Allocation Purposes. The following
provisions apply to determining Year(s) of Service for benefit accrual or
allocation purposes:

 

(A)  One Year Holdout Rule. If
the Sponsoring Employer elects the One Year Holdout Rule in the Adoption
Agreement, any Year(s) of Service completed prior to an Employee’s Break(s) in
Service will not be counted for benefit accrual or allocation purposes until
the Employee satisfies the One Year Holdout Rule. If the Employee satisfies the
One Year Holdout Rule, the Employee’s Year(s) of Service for benefit
accrual or allocation purposes will include Year(s) of Service that were
completed prior to an Employee’s Break(s) in Service, retroactively to the
first day of the Plan Year in which the Employee completes one Year of Service.
Furthermore, if the Sponsoring Employer has elected the Rule of Parity in
the Adoption Agreement (in addition to the One Year Holdout Rule), then the
recognition of any Year(s) of Service that were completed prior to an Employee’s
Break(s) in Service will be subject to both the One Year Holdout Rule and
the Rule of Parity.

 

(B)   Rule of Parity. If the Sponsoring Employer elects the Rule of
Parity in the Adoption Agreement, then any Year(s) of Service completed
prior to an Employee’s Break(s) in Service will not be counted for benefit
accrual or allocation purposes if those Year(s) of Service are disregarded
pursuant to the Rule of Parity.

 

(i)    Reemployment of a Participant
After a Break In Service. For any Plan Year in which the eligibility
requirements under Section 2.1 are based on Years of Service, if an
Employee (1) was a Participant in the Plan, (2) Terminates Employment
with the Employer, and (3) is subsequently reemployed by the Employer
after incurring a Break in Service, then the Employee’s Year(s) of Service
that were completed prior to the Break in Service will be recognized, subject
to the following provisions:

 

(1)   Determination of Years of
Service for Eligibility Purposes. The following provisions apply to
determining Year(s) of Service for eligibility purposes:

 

(A)  One Year Holdout Rule. If
the Sponsoring Employer elects the One Year Holdout Rule in the Adoption
Agreement, any Year(s) of Service completed prior to an Employee’s Break(s) in
Service will not be counted in determining an Employee’s eligibility to
participate in the Plan until the Employee satisfies the One Year Holdout Rule.
If the Employee satisfies the One Year Holdout Rule, then the reemployed
Employee will reenter the Plan as of the first day of the Eligibility
Computation Period in which the Employee completes one Year of Service. If the
Sponsoring Employer has elected the Rule of Parity in the Adoption
Agreement (in addition to the One Year Holdout Rule), the recognition of any
Year(s) of Service completed prior to an Employee’s Break(s) in
Service will be subject to both the One Year Holdout Rule and the Rule of
Parity.

 

43

 

(B)   Rule of Parity.
If the Sponsoring Employer elects the Rule of Parity in the Adoption
Agreement, any Year(s) of Service completed prior to an Employee’s Break(s) in
Service will not be counted in determining an Employee’s eligibility to
participate in the Plan if those Year(s) of Service are disregarded
pursuant to the Rule of Parity. If such former Employee’s Year(s) of
Service are disregarded under the Rule of Parity, then (A) the
reemployed Employee will be treated as a new Employee for purposes of Section 2.1
and (B) the Employee’s Eligibility Computation Period will commence on the
Employee’s Reemployment Commencement Date and subsequent Eligibility
Computation Periods will be based upon the provisions of the definition of
Eligibility Computation Period (with the Reemployment Commencement Date
substituted for the Employment Commencement Date, if applicable). If such
former Employee’s Year(s) of Service are not disregarded under the Rule of
Parity, then the reemployed Employee will reenter the Plan as of the Employee’s
Reemployment Commencement Date.

 

(2)   Determination of Years of
Service for Vesting Purposes.  The following provisions apply to
determining Year(s) of Service for Vesting purposes:

 

(A)  One Year Holdout Rule.
If the Sponsoring Employer elects the One Year Holdout Rule in the
Adoption Agreement, any Year(s) of Service completed prior to an Employee’s
Break(s) in Service will not be counted in determining an Employee’s
Vesting Interest in the Participant’s Account balance until the Employee
satisfies the One Year Holdout Rule. If the Employee satisfies the One Year
Holdout Rule, then the Employee’s Year(s) of Service for Vesting purposes
will include Year(s) of Service that were completed prior to an Employee’s
Break(s) in Service, retroactively to the first day of the Vesting
Computation Period in which the Employee completes one (1) Year of
Service. Furthermore, if the Sponsoring Employer has elected the Rule of
Parity in the Adoption Agreement (in addition to the One Year Holdout Rule),
then the recognition of any Year(s) of Service that were completed prior
to an Employee’s Break(s) in Service will be subject to both the One Year
Holdout Rule and the Rule of Parity.

 

(B)   Rule of Parity.
If the Sponsoring Employer elects the Rule of Parity in the Adoption
Agreement, then any Year(s) of Service that were completed prior to an
Employee’s Break(s) in Service will not be counted for purposes of
determining an Employee’s Vesting Interest in the Participant’s Account balance
if those Year(s) of Service are disregarded pursuant to the Rule of
Parity. If such former Employee’s Year(s) of Service are disregarded under
the Rule of Parity and the Sponsoring Employer elects in the Adoption
Agreement that the Vesting Computation Period is based on an Employee’s
12-month employment year, then the Employee’s Vesting Computation Period will
commence on the Employee’s Reemployment Commencement Date (and subsequent
Vesting Computation Periods will commence on anniversaries of the Employee’s
Reemployment Commencement Date). If such former Employee’s Year(s) of
Service are not disregarded under the Rule of Parity, then the Vesting
Computation Periods will remain unchanged.

 

(3)   Determination of Years of
Service for Benefit Accrual/Allocation Purposes. The following
provisions apply to determining Year(s) of Service for benefit accrual or allocation
purposes:

 

(A)  One Year Holdout Rule.
If the Sponsoring Employer elects the One Year Holdout Rule in the
Adoption Agreement, any Year(s) of Service completed prior to an Employee’s
Break(s) in Service will not be counted for benefit accrual or allocation
purposes until the Employee satisfies the One Year Holdout Rule. If the
Employee satisfies the One Year Holdout Rule, the Employee’s Year(s) of
Service for benefit accrual or allocation purposes will include Year(s) of
Service that were completed prior to an Employee’s Break(s) in Service,
retroactively to the first day of the Plan Year in which the Employee completes
one Year of Service. Furthermore, if the Sponsoring Employer has elected the Rule of
Parity in the Adoption Agreement (in addition to the One Year Holdout Rule),
then the recognition of any Year(s) of Service that were completed prior
to an Employee’s Break(s) in Service will be subject to both the One Year
Holdout Rule and the Rule of Parity.

 

(B)   Rule of Parity.  If
the Sponsoring Employer elects the Rule of Parity in the Adoption
Agreement, then any Year(s) of Service that were completed prior to an
Employee’s Break(s) in Service will not be counted for benefit accrual or
allocation purposes if those Year(s) of Service are disregarded pursuant
to the Rule of Parity.

 

44

 

(j)    Ignoring Service For
Eligibility If Service Requirement Is More Than 1 Year Of Service. Notwithstanding anything in the Plan
to the contrary, if this Plan (or a component of the Plan) provides in the
Adoption Agreement that an Employee must complete more than one (1) Year
of Service for eligibility purposes, and such Employee will have a 100% Vested
Interest in the Participant’s Account (or the sub-Account that relates to such
component) upon becoming a Participant in the Plan, then with respect to an
Employee who incurs a Break in Service before satisfying such eligibility
requirement (1) the Employee’s Year(s) of Service (and Hours of
Service) that were completed prior to the Employee’s Break(s) in Service
will not be counted for eligibility purposes, and (2) the Employee’s
Eligibility Computation Period will commence on the Employee’s Reemployment
Commencement Date and subsequent Eligibility Computation Periods will be based
upon the provisions of the definition of Eligibility Computation Period (with
the Reemployment Commencement Date substituted for the Employment Commencement
Date, if applicable).

 

45

 

Article 2

Plan Participation

 

2.1      Eligibility Requirements. If
this is an amended Plan, any Eligible Employee who is a Participant on the day
before the effective date in the Adoption Agreement will continue to
participate in the Plan. Otherwise, an Eligible Employee will be eligible to
become a Participant in the Plan upon satisfying the eligibility requirements
as elected in the Adoption Agreement, subject to the following provisions:

 

(a)   Age and Service Requirements.
An Eligible Employee must satisfy any age and/or service requirements indicated
in the Adoption Agreement for each applicable type of contribution. If the
Sponsoring Employer elects in the Adoption Agreement that the service
requirement for participation with respect to one or more components of the
Plan is the lesser of 1 Year of Service or a stated number of consecutive
months, weeks, or days of employment, then an Employee will only be deemed to
have completed a month, week, or day of employment for any calendar month,
week, or day during which the Employee (1) is continuously employed with
the Employer or an Affiliated Employer without interruption for that entire
calendar month, week, or day except for those interruptions that are described
in the definition of Hour of Service, and (2) if elected in the Adoption
Agreement, is credited with the number of Hours of Service for that month,
week, or day as indicated in the Adoption Agreement. For purposes of the prior
sentence, the determination of whether an Eligible Employee has satisfied the
stated number of consecutive months, weeks, or days of employment will be made
on the basis of an Eligibility Computation Period; if an Eligible Employee does
not satisfy the stated number of consecutive months, weeks, or days of
employment during an Eligibility Computation Period, then such Eligible
Employee has not satisfied the stated number of consecutive months, weeks, or
days of employment, until satisfied during a subsequent Eligibility Computation
Period.

 

(b)   Eligible Employees.
All Eligible Employees will be eligible to participate in the Plan (or a
component of the Plan);  however, the
following Employees are not Eligible Employees in the Plan (or a component of
the Plan), if elected in the Adoption Agreement:

 

(1)       Union Employees.
Employees whose employment is governed by a collective bargaining agreement
between Employee representatives and the Employer in which retirement benefits
were the subject of good faith bargaining unless such collective bargaining
agreement expressly provides for the inclusion of such Employees as
Participants in the Plan.

 

(2)       Non-Resident Aliens.
Employees who are non-resident aliens who do not receive earned income (within
the meaning of Code §911(d)(2)) from the Employer which constitutes income from
sources within the United States (within the meaning of Code §861(a)(3)).

 

(3)       “Merger and Acquisition”
Employees. Persons who became Employees as the result of a “Code
§410(b)(6)(C) transaction”. These Employees will be excluded during the
period beginning on the date of the transaction and ending on the last day of
the first Plan Year beginning after the date of the transaction. A “Code
§410(b)(6)(C)” transaction” is an asset or stock acquisition, merger, or
similar transaction involving a change in the employer of the employees of a trade
or business.

 

(4)       Highly Compensated Employees.
Employees who are Highly Compensated Employees (or any subgroup of Employees
who are Highly Compensated Employees).

 

(5)       Leased Employees. For non-standardized plans only, any
person who is considered a Leased Employee but who (1) is not covered by a
plan described in Code §414(n)(5), or (2) is covered by a plan described
in Code §414(n)(5) but Leased Employees constitute more than 20% of the
Employer’s non-highly compensated workforce.

 

(6)       Employees of Non-Adopting
Affiliated Employers. For non-standardized plans only, Employees who
are employed by an Affiliated Employer which is not an Adopting Employer.

 

(7)       Key Employees. For non-standardized plans only,
Employees who are Key Employees.

 

(8)       Employees Who Are Paid By
Salary. For
non-standardized plans only, Employees whose Compensation is primarily in the
form of a salary.

 

46

 

(9)       Employees Who Are Paid By the
Hour. For non-standardized plans only, Employees whose Compensation
is primarily paid on an hourly basis.

 

(10)     Employees Who Are Paid In
Commissions. For non-standardized plans only, Employees whose
Compensation is primarily in the form of commissions.

 

(11)     Other. For
non-standardized plans only, any other Employees who are not Eligible Employees
as elected and specified in the Adoption Agreement.

 

(c)   Participation By Employees
Whose Status Changes. If an Employee who is not an Eligible Employee
with respect to a particular type of contribution (or a component of the Plan)
becomes an Eligible Employee for such contribution (or component), then the
Employee will participate in the Plan immediately with respect to that type of
contribution (or component), so long as (1) the Employee has satisfied the
minimum age and service requirements for that type of contribution (or
component) and (2) the Employee would have previously become a Participant
with respect to that type of contribution (or component) had the Employee
always been an Eligible Employee for that type of contribution (or component).
The participation of a Participant who is no longer an Eligible Employee with
respect to a particular type of contribution (or component) will be suspended
and such Participant will be entitled to an allocation of that type of
contribution (and any applicable Forfeitures) for the Allocation Period only to
the extent of any applicable Hours of Service or Periods of Service completed
while an Eligible Employee for that type of contribution (or component). In
addition to satisfying any other conditions, the Sponsoring Employer may elect
in the Adoption Agreement that the Employee must be an Eligible Employee on the
last day of the Allocation Period in which such participation is suspended.
Upon again becoming an Eligible Employee with respect to that type of
contribution (or component), a suspended Participant will immediately resume
eligibility with respect to that type of contribution. Years of Service or
Periods of Service while an Employee is not an Eligible Employee will be
recognized for purposes of determining the Vested Interest of such Employee
with respect to a particular type of contribution (or component) in accordance
with Section 4.6.

 

2.2      Entry Date. An
Eligible Employee who has satisfied the eligibility requirements as elected in
the Adoption Agreement will enter the Plan as a Participant on the “Entry Date”
that is elected in the Adoption Agreement. Furthermore, if the Sponsoring
Employer elects in the Adoption Agreement to waive the age and/or service requirements
for the Plan (or a component of the Plan) as of a specified date, then an
Eligible Employee will enter the Plan (or that component of the Plan) as of
such specified date. Notwithstanding the foregoing, an Eligible Employee who is
also a Prevailing Wage Employee will enter the Plan as a Participant with
respect to Compensation received under a Prevailing Wage Law on the date the
Employee first receives such Compensation; however, if the Sponsor Employer
elects in the Adoption Agreement a later Entry Date with respect to Prevailing
Wage Contributions, then such later Entry Date will apply.

 

2.3      Waiver of Participation. A
waiver of participation is not permitted except to the extent a valid waiver
was made under the terms of the prior Plan. If this is an amendment and
restatement of this Plan, then all prior irrevocable waivers will remain in
effect after the adoption date of this amendment and restatement. If a prior
Plan document permitted revocable waivers of participation, then any Eligible
Employee who had previously waived participation on a revocable basis may
revoke such waiver and participate in the Plan; however, such Eligible Employee
may not waive participation again on or after the adoption date of this
amendment and restatement.

 

2.4      Reemployment. If an
Employee Terminates Employment and is subsequently reemployed by the Employer
or an Affiliated Employer, such Employee’s Years of Service and/or Periods of
Service for purposes of eligibility (as well as the time such Employee enters
or reenters the Plan as a Participant) will be determined in accordance with
the rules described in the definition of Years of Service and/or Periods
of Service, as applicable.

 

47

 

Article 3

Contributions and Allocations

 

3.1      General Contribution and
Allocation Provisions. The Employer intends to make contributions to
the Plan, unless the Plan is a frozen Plan, subject to the following
provisions:

 

(a)   Types and Amount of
Contributions. The types (and, if applicable, the amount) of
contributions that may be made to the Plan are those that are elected in the
Adoption Agreement. The type and the amount of the contribution will be
determined by the Employer, and such determination by the Employer will be
binding on the Trustee, Administrator and all Participants and may not be
reviewed in any manner.

 

(b)   No Guarantee. The
Employer does not guarantee either the making of Employer contributions or the
payment of benefits under the Plan. The Employer reserves the right to reduce,
suspend or discontinue contributions for any reason at any time; however, if
the Plan is deemed to be terminated as a result of such reduction, suspension
or discontinuance, then the provisions of Article 9 will become effective.

 

(c)   Taxable Wage Base. If
a contribution and/or allocation utilize the Taxable Wage Base, then the
Taxable Wage Base that is used for a Plan Year will be determined as of the
beginning of the Plan Year.

 

(d)   Effect of Waiver of Funding.
If the Plan is a money purchase Plan and the Employer amends the Plan because
of a waiver of the minimum funding requirement under Code §412(d), then such
Plan will be considered to be an individually designed plan and will no longer
be considered a prototype plan.

 

(e)   Limitations on Contributions.
Notwithstanding any provision of this Article, (1) no Employer
contribution will be made for any Participant who is not a Benefiting
Participant for an Allocation Period unless otherwise required by the Top Heavy
Minimum Allocation provisions in Section 3.14; and (2) if the Plan
provides contributions or benefits for Employees some or all of whom are
owner-employees as defined in Code §401(c)(3), such contributions or benefits
can only be provided with respect to the Earned Income of such owner-employees
derived from the trade or business with respect to which the Plan is
established.

 

(f)    Frequency of Contributions
and Allocations. Any Employer contribution that is made under the
terms of the Plan may, at the election of the Administrator, be contributed (1) each
payroll period; (2) each month; (3) each Plan quarter; (4) on an
annual basis; or (5) on any Allocation Period as determined by the
Employer, provided that such Allocation Period does not discriminate in favor
of Highly Compensated Employees. The Employer may elect a different Allocation
Period for each type of Employer contribution. Employer contributions will be
allocated based on the applicable Allocation Period.

 

(g)   Form of Contribution.
If the Plan is not subject to Code §412, the contribution is not used to reduce
an obligation or liability of an Employer to the Plan, and the contribution is
unencumbered and discretionary, then the contribution (if any) may consist of (1) cash;
(2) cash equivalencies (3) qualifying employer real property and/or
qualifying employer securities as defined in ERISA §407(d)(4) and ERISA
§407(d)(5), provided the acquisition of such qualifying employer real property
and/or qualifying employer securities satisfies the requirements of ERISA
§408(e); or (4) any other property that is not prohibited under Code §4975
and that is acceptable to the Trustee under the terms of the Trust agreement.
If the Plan is subject to Code §412, the contribution is used to reduce an
obligation or liability of an Employer, or the contribution is encumbered and
not discretionary, then the contribution will consist of (1) cash; or (2) cash
equivalencies; such Employer’s contribution will not consist of any non-cash or
non-cash equivalency assets to the Trust.

 

(h)   Refund of Contributions.
Contributions that are made to the Plan by the Employer can only be returned to
the Employer in accordance with the following provisions:

 

(1)   Failure of Plan to Initially
Qualify. If the Plan fails to initially satisfy the requirements of
Code §401(a) and the Employer declines to amend the Plan to satisfy such
requirements, then contributions that were made prior to the date such
qualification is denied must be returned to the Employer within one year of the
date of such denial, but only if the application for the qualification is made
by the time prescribed by law for filing the Employer’s tax return for the
taxable year in which the Plan is adopted, or by such later date as the
Secretary of the Treasury may prescribe.

 

48

 

(2)   Contributions Made Under a
Mistake of Fact. If a
contribution is attributable in whole or in part to a good faith mistake of
fact, including a good faith mistake in determining the deductibility of the
contribution under Code §404, an amount may be returned to the Employer equal
to the excess of the amount that had been contributed over the amount that
would have been contributed if the mistake of fact had not occurred (which
excess will hereafter be known as a “Mistaken Contribution”). Earnings
attributable to a Mistaken Contribution will not be returned, but losses
attributable to the Mistaken Contribution will reduce the amount so returned.
The Mistaken Contribution will be returned within one year of the date the
Mistaken Contribution was made or the deduction disallowed, as the case may be.

 

(3)   Nondeductible Contributions.
Except to the extent that an Employer may intentionally make a nondeductible
contribution, for example, to correct an administrative error or restore a
Forfeiture, Employer contributions are conditioned on deductibility and will
otherwise be returned to the Employer.

 

(4)   Prevailing Wage
Contributions. Notwithstanding the foregoing, Prevailing Wage
Contributions that would otherwise be returned to the Employer for the reasons
described in paragraphs (1) or (2) above will instead be distributed
to the affected Participants.

 

3.2      Elective Deferrals. If
the Plan is a 401(k) Plan, then the Employer will contribute each
Participant’s Elective Deferrals to the Plan, determined in accordance with and
subject to the following provisions:

 

(a)   Amount of Elective Deferrals. Each Participant may enter into and
submit to the Administrator at any time a Salary Deferral Agreement authorizing
the Employer to withhold all or a portion of the Participant’s Compensation,
specifying the amount (either in whole percentage increments of Compensation or
in whole dollar amounts as designated by the Participant; but the Administrator
will have the right to direct that such increments of Compensation be rounded
to the next highest or lowest dollar or percentage) and type (either Roth
Elective Deferrals (if permitted by the Plan), Pre-Tax Elective Deferrals, or a
specific combination of Roth Elective Deferrals (if permitted by the Plan) and
Pre-Tax Elective Deferrals). The amount withheld will be deemed an Elective
Deferral that the Employer will contribute to the Plan on behalf of the
Participant. Such Salary Deferral Agreement will be effective as soon as
administratively feasible after receipt of the Salary Deferral Agreement,
unless a later pay period is specified by the Participant. A Participant’s
Salary Deferral Agreement will remain in effect until superseded by another
Salary Deferral Agreement (subject to the Automatic Enrollment provisions of
paragraph (g) below). The Administrator, pursuant to an administrative
policy regarding Elective Deferrals that is promulgated under Section 8.6,
will designate the effective date of such elections that are submitted to the
Administrator, and the frequency of such elections (and the frequency of
modifications to such elections) but not less frequently than once per Plan
Year. In addition, other Elective Deferral provisions may be set forth in such
administrative policy, including, but not limited to, provisions that (1) set
the maximum Elective Deferral percentage for Participants who are Highly
Compensated Employees (if such percentage is less than the maximum percentage
set forth above); (2) describe a program of automatic increases to a Participants’
Elective Deferral percentage as elected by the Administrator and/or the
Participant; and (3) permit a Participant to identify separate components
of the Participant’s Compensation (such as base salary, bonuses, etc.) and to
specify that a different Elective Deferral percentage (or dollar amount) apply
to each such component.

 

(b)   Cash or Deferred Option.
For any Plan Year, the Employer may declare a Cash or Deferred Contribution. In
such event, the Employer will provide each Participant who is entitled to this
Cash or Deferred Contribution the right to elect to receive as cash some or all
of such Participant’s Cash or Deferred Contribution. Any amount that a
Participant elects not to receive as cash will be deemed an Elective Deferral
of the Participant, will be contributed to the Plan within 21⁄2 months after the
end of the Plan Year, and will be allocated to the Participant’s Elective
Deferral Account.

 

(c)   Roth Elective Deferrals.
If elected in the Adoption Agreement, a Participant may elect to classify all
or a portion of an Elective Deferral as a Roth Elective Deferral.

 

(d)   Reclassification Not
Permitted. An Elective
Deferral contributed to the Plan as one type of Elective Deferral (either a
Roth Elective Deferral or a Pre-Tax Elective Deferral) may not later be
reclassified as the other type of Elective Deferral.

 

49

 

(e)   Catch-Up Contributions.
If elected in the Adoption Agreement, Catch-Up Contributions are permitted and
Participants who are age 50 or over by the end of their taxable years will be
eligible. If this Plan is a Safe Harbor 401(k) Plan, Catch-Up
Contributions will be treated as Elective Deferrals and will be matched in
accordance with the Safe Harbor Matching Contribution formula(s) elected
in the Adoption Agreement. If this is a Non-Safe Harbor 401(k) Plan,
Catch-Up Contributions will be matched in accordance with the Non-Safe Harbor
Matching Contribution formula (if any) elected in the Adoption Agreement unless
the Sponsoring Employer elects not to match Catch-Up Contributions in the
Adoption Agreement.

 

(f)    Limitations on Elective
Deferrals. In no event
may Elective Deferrals be more than the maximum dollar amount permitted for the
Participant’s taxable year beginning in that calendar year under Code §402(g).
Elective Deferrals that exceed the applicable Code §402(g) limit are
Excess Elective Deferrals and will be distributed to the affected Participants
under Section 5.18. No Participant will be permitted to have Elective
Deferrals made under this Plan, or any other plan, contract or arrangement
maintained by the Sponsoring Employer, during any calendar year, in excess of
the dollar limit in Code §402(g) in effect for the Participant’s taxable
year beginning in such calendar year. The dollar limitation in Code §402(g) is
$11,000 for taxable years beginning in 2002, and increasing by $1,000 each
taxable year thereafter up to $15,000 for taxable years beginning in 2006 and
later years. After 2006, the $15,000 limit will be adjusted by the Secretary of
the Treasury for cost-of-living increases under Code §402(g)(4). Adjustments
will be in multiples of $500. Catch-Up Contributions will not be used in
determining the Code §402(g) limitations.

 

(g)   Automatic Enrollment.
If elected in the Adoption Agreement, the Employer may establish an automatic
enrollment program. The terms of the automatic enrollment program (which may
include, but are not limited to, the Elective Deferral percentage or amount,
any automatic increases that apply to that Elective Deferral percentage or
amount, the portion of the Elective Deferral which is considered a Pre-Tax
Elective Deferral and, if available in this Plan, the portion which is
considered a Roth Elective Deferral, and the Participants to whom the automatic
enrollment program applies) will be set forth from time to time in an
administrative policy regarding Elective Deferrals that is promulgated under Section 8.6
by the Administrator; if the Administrator does not adopt such administrative
policy, then the terms of the notice that is issued to Participants regarding
the automatic enrollment program will define the terms and conditions of the
automatic enrollment program regarding Elective Deferrals for the Plan Year.

 

(h)   Salary Deferral Agreement.
Salary Deferral Agreements may be entered into as of such date or dates (but at
least once per Plan Year) as established by the Administrator in an
administrative policy regarding Elective Deferrals promulgated under Section 8.6.
A Participant may thereafter modify a Salary Deferral Agreement to increase or
decrease the percentage or amount being withheld as permitted under such
administrative policy. The Participant may also at any time suspend or cancel
his or her Salary Deferral Agreement upon reasonable written notice to the
Administrator. If a Participant cancels or suspends his or her Salary Deferral
Agreement, the Participant will not be permitted to put a new Salary Deferral
Agreement into effect until such time as set forth in such administrative
policy. If necessary to insure that the Plan satisfies the ADP Test or upon a
Participant reaching the Elective Deferral limit of Code §402(g) with
respect to such Participant’s Elective Deferrals in the Plan, then the
Sponsoring Employer may temporarily suspend a Participant’s Salary Deferral
Agreement upon notice to the Participant. If a Participant has not elected in
his or her Salary Deferral Agreement to withhold at the maximum rate permitted
by the Plan for a Plan Year and the Participant wants to increase the total amount
withheld for that Plan Year up to the maximum permitted rate, then the
Participant can make a supplemental election at any time during the last two
months of the Plan Year to withhold an additional amount for one or more pay
periods (including, if elected in the Adoption Agreement, Catch-Up
Contributions not in excess of the Catch-Up Contribution Limit). An Elective
Deferral will constitute a payroll deduction authorization for purposes of
applicable state law. If automatic enrollment is elected in the Adoption
Agreement pursuant to paragraph (g) above, then the Participant must be
given an effective opportunity to elect a different amount (including no
amount).

 

(i)    ADP Testing.
Elective Deferrals in a Non-Safe Harbor 401(k) Plan must satisfy the ADP
Test of Section 3.18 for a Plan Year, and Elective Deferrals in a Non-Safe
Harbor 401(k) Plan that do not satisfy the ADP Test for a Plan Year will
utilize the correction methods of such Section.

 

(j)    Distribution of Elective
Deferrals. Elective Deferrals can only be distributed upon the
earliest to occur of the following dates: (1) a Participant Terminates
Employment (separates from service, for Plan Years beginning before 2002) with
the Employer; (2) a Participant dies; (3) a Participant suffers a
Disability; (4) an event that is described in Code §401(k)(10) occurs;
(5) a Participant reaches Age 591⁄2 (if on or before such date, a
pre-retirement in-service withdrawal of 

 

50

 

Elective Deferrals is elected in the Adoption Agreement); or (6) if
financial hardship distributions are elected in the Adoption Agreement, the
Participant qualifies for a financial hardship distribution under Section 5.16.
With respect to clause (4) of the prior sentence, Elective Deferrals can
be distributed (in a lump sum only) upon termination of the Plan, so long as
the Sponsoring Employer (or an Affiliated Employer) does not maintain an
alternative defined contribution plan at any time during the period beginning
on the date of Plan termination and ending 12 months after all assets have been
distributed from the terminated Plan. However, if at all times during the
24-month period beginning 12 months before the date of Plan’s termination,
fewer than 2% of the Employees who were eligible to participate in the 401(k) Plan
as of the date of the Plan’s termination are eligible to participate in the
other defined contribution plan, the other defined contribution plan is not an
alternative defined contribution plan. A defined contribution plan is also not
an alternative defined contribution plan if the defined contribution plan is an
employee stock ownership plan as defined in Code §4975(e)(7) or Code
§409(a), a simplified employee pension as defined in Code §408(k), a SIMPLE IRA
plan as defined in Code §408(p), a plan or contract that is described in Code§
403(b), or a plan that is described in Code §457(b) or Code §457(f).

 

(k)   Allocation of Elective
Deferrals. Participant’s Pre-tax Elective Deferrals will be
allocated to the Participant’s Pre-Tax Elective Deferral Account. Each
Participant’s Roth Elective Deferrals (if any) will be allocated to the
Participant’s Roth Elective Deferral Account.

 

3.3      Mandatory Employee Contributions.
If elected in the Adoption Agreement, then each Participant must
make Mandatory Employee Contributions under the terms and conditions as elected
in the Adoption Agreement, in order to receive an allocation of Employer
contributions and Forfeitures for an Allocation Period. Mandatory Employee
Contributions will be allocated to a Participant’s Mandatory Employee
Contribution Account in which the Participant will have a 100% Vested Interest.
A Participant can elect to discontinue (or resume) Mandatory Employee
Contributions in accordance with procedures established by the Administrator.
Mandatory Employee Contribution Accounts will be administered as follows:

 

(a)   Investment of Accounts.
The Administrator may choose for investment purposes either to segregate
Mandatory Employee Contribution Accounts into separate interest bearing
accounts or to invest Mandatory Employee Contribution Accounts as part of the
general Trust Fund (in which case Mandatory Employee Contribution Accounts will
share in net income and losses in the manner elected in the Adoption
Agreement), except for that portion of a Participant’s Mandatory Employee
Contribution Account which a Participant may be permitted to self-direct
pursuant to Section 7.4.

 

(b)   Discontinuance of
Contributions in the Event of a Hardship Distribution. If a Participant receives a financial
hardship distribution under Section 5.16 (or receive a financial hardship
distribution under Regulation §1.401(k)-1(d)(3)(iv)(E) from any other
Employer maintained plan as defined in Regulation §1.401(k)-1(d)(3)(iv)(F)), he
or she will be barred from making Mandatory Employee Contributions for a period
of 6 months after the distribution or, such other period of time as set forth
in an administrative policy regarding financial hardship distributions
promulgated under Section 8.6 by the Administrator.

 

(c)   ACP Testing. Any
Mandatory Employee Contributions made for a Plan Year must satisfy the ACP Test
of Section 3.19 for a Plan Year. Mandatory Employee Contributions that do
not satisfy the ACP Test will utilize the correction methods of such Section.

 

(d)   Right to Make Each Rate of
Mandatory Employee Contributions. The right to make each rate of
Mandatory Employee Contributions (determining the rate based on the Plan’s
definition of the Compensation out of which the Mandatory Employee
Contributions are made (regardless of whether that definition of Compensation
satisfies Code §414(s)), and treating different rates as existing if they are
based on definitions of Compensation or other requirements or formulas that are
not substantially the same) must not discriminate in favor of Highly
Compensated Employees.

 

3.4      Non-Safe Harbor Matching
Contributions. If the Plan
is a 401(m) Plan, then the Employer may make Non-Safe Harbor Matching
Contributions as elected in the Adoption Agreement and/or in one or more
Non-Safe Harbor Matching Contribution Addenda, subject to the following
provisions:

 

(a)   ACP Testing.
Non-Safe Harbor Matching Contributions made for a Plan Year must satisfy the
ACP Test of Section 3.19 for a Plan Year. Non-Safe Harbor Matching Contributions
that do not satisfy the ACP Test will utilize the correction methods of such
Section.

 

51

 

(b)   Treatment
as QMACs.  The Administrator may elect to treat all or any portion of a Non-Safe
Harbor Matching Contribution as a QMAC sufficient to satisfy the ADP Test, to
the extent that such QMAC is not used to satisfy the ACP Test (but, so long as
the QMAC is not precluded from being used in the ACP Test pursuant to Section 3.18(j)(4)(B)).

 

(c)   True-Ups. If (1) the
Allocation Period for Non-Safe Harbor Matching Contributions is a computation
period that is less than the Plan Year, and (2) on the last day of any
Plan Year, the dollar amount of the Non-Safe Harbor Matching Contributions made
on behalf of a Benefiting Participant is less than the dollar amount that would
have been made had the Non-Safe Harbor Matching Contributions been contributed
for an Allocation Period of a Plan Year, then the Employer may elect, pursuant
to the Employer’s discretion, for any Plan Year to make an additional Non-Safe
Harbor Matching Contribution so that the Non-Safe Harbor Matching Contribution
contributed for a Benefiting Participant is equal to the Non-Safe Harbor
Matching Contribution that would have been made had the Non-Safe Harbor
Matching Contributions been contributed for an Allocation Period of the Plan
Year. However, any such additional Non-Safe Harbor Matching Contributions can
only be made to the Plan on a uniform, nondiscriminatory basis. In order to
determine the group of Participants who are eligible to receive the additional
Non-Safe Harbor Matching Contributions of this paragraph, the Employer may
impose allocation conditions that are different from the allocation conditions
used to determine Benefiting Participants for purposes of other Non-Safe Harbor
Matching Contributions.

 

(d)   Prorating the Code
§401(a)(17) Compensation Limit for Each Allocation Period. If the
Allocation Period for Non-Safe Harbor Matching Contributions is a computation
period that is less than the Plan Year, then the Employer may elect, pursuant
to the Employer’s discretion, for any Plan Year to prorate the Code §401(a)(17)
Compensation Limit to each Allocation Period of the Plan Year. However, any
prorating of the Code §401(a)(17) Compensation Limit can only be made on a
uniform, nondiscriminatory basis.

 

(e)   Excess Elective Deferrals and
Excess Contributions Not Required to Be Matched. Notwithstanding the above, to the
extent Non-Safe Harbor Matching Contributions (including Qualified Matching
Contributions) are contributed on an annual basis, no Non-Safe Harbor Matching
Contribution (including Qualified Matching Contributions) will be required with
respect to that portion of an Elective Deferral which for that Plan Year is
determined to be either an Excess Elective Deferral (unless the Excess Elective
Deferral is for a Non-Highly Compensated Employee) or an Excess Contribution.
Furthermore, Matching Contributions (including Qualified Matching
Contributions) that have been allocated to a Participant’s Account must be
forfeited if the contributions to which they relate are Excess Deferrals
(unless the Excess Elective Deferrals are for Non-Highly Compensated
Employees), Excess Contributions, or Excess Aggregate Contributions.

 

(f)    Discretionary Formulas.
If the Sponsoring Employer elects a discretionary formula in Section 6.1(a) of
the 401(k) Plan Adoption Agreement (standardized or non-standardized), the
Sponsoring Employer’s discretion in establishing a formula for any Allocation
Period includes, but is not limited to, establishing the amount of the
contributions, the rate of match, as well as establishing a maximum Non-Safe
Harbor Matching Contribution per Participant (either as a dollar maximum per
Participant, a maximum percentage of each Participant’s Compensation, and/or a
maximum amount of each Participant’s Elective Deferrals that will be recognized
for matching purposes). In addition, the Employer must, on or before the due
date (plus any extensions) for filing the Employer’s tax return, adopt a
written resolution (or other written action) which describes the rate of match
and the maximum limitations, if any, imposed on the Non-Safe Harbor Matching
Contribution for the Allocation Period. Any such Matching Contribution will
then be allocated to each Benefiting Participant’s Non-Safe Harbor Matching
Contribution Account in the ratio that each such Benefiting Participant’s
Elective Deferrals for the Allocation Period bears to the total Elective
Deferrals of all such Benefiting Participants for the Allocation Period,
subject to any maximum limitations imposed on the allocation in the written
resolution (or other written action).

 

(g)   Right to Each Rate of Match.
The right to each rate of Non-Safe Harbor Matching Contributions
(determining the rate using the amount of Non-Safe Harbor Matching
Contributions, Elective Deferrals, Voluntary Employee Contributions, and
Mandatory Employee Contributions determined after any corrections under
Regulation §1.401(k)—2(b)(1)(i) and §1.401(m)—2(b)(1)(i), and treating
different rates as existing if they are based on definitions of Compensation or
other requirements or formulas that are not substantially the same) must not
discriminate in favor of Highly Compensated Employees.

 

52

 

(h)   Allocation of Non-Safe Harbor
Matching Contributions. Non-Safe
Harbor Matching Contributions contributed on a Participant’s behalf will be
allocated to the Participant’s Non-Safe Harbor Matching Contribution Account.
All such allocations will be made in the manner elected by the Sponsoring
Employer in the Adoption Agreement and/or the Non-Safe Harbor Matching
Contribution Addendum. A Participant who makes an Elective Deferral during the
Allocation Period will be eligible to receive an allocation of Non-Safe Harbor
Matching Contributions for that Allocation Period as elected by the Sponsoring
Employer in the Adoption Agreement. If the Sponsoring Employer elects in the
Adoption Agreement to impose a service requirement (e.g., 1,000 Hours of
Service) in order for a Participant to receive an allocation of Non-Safe Harbor
Matching Contributions for an Allocation and the Allocation Period is less than
12 consecutive months, any such service requirement will be proportionately
reduced.

 

3.5      Non-Safe Harbor Non-Elective
Contributions. The
Employer may make Non-Safe Harbor Non-Elective Contributions as elected in the
Adoption Agreement and/or in one or more Non-Safe Harbor Non-Elective
Contribution Addenda, subject to the following provisions:

 

(a)   Allocation of Non-Safe Harbor
Non-Elective Contributions. A Participant will be eligible to
receive an allocation of the Employer’s Non-Safe Harbor Non-Elective
Contributions for that Allocation Period as elected by the Sponsoring Employer
in the Adoption Agreement. If the Sponsoring Employer elects in the Adoption
Agreement to impose a service requirement (e.g., 1,000 Hours of Service) in
order for a Participant to receive an allocation of Non-Safe Harbor
Non-Elective Contributions for an Allocation and the Allocation Period is less
than 12 consecutive months, any such service requirement will be
proportionately reduced.

 

(1)   Allocations
Using a Compensation Ratio.  If the Sponsoring Employer elects in the Adoption
Agreement to allocate Non-Safe Harbor Non-Elective Contributions using a
Compensation ratio, then the allocation will be made to each Benefiting
Participant’s Non-Elective Contribution Account in the ratio that his or her
Compensation for the Allocation Period bears to the total Compensation of all
Benefiting Participants for the Allocation Period.

 

(2)   Allocations Using the Per
Capita Method. If the
Sponsoring Employer elects in the Adoption Agreement to allocate Non-Safe
Harbor Non-Elective Contributions on a per capita basis, then the allocation
will be made to each Benefiting Participant’s Non-Elective Contribution Account
in an equal dollar amount for the Allocation Period.

 

(3)   Allocations Using Points.
If the Sponsoring Employer elects in the Adoption Agreement to allocate
Non-Safe Harbor Non-Elective Contributions based on points awarded to a
Participant as elected in the Adoption Agreement, then the allocation will be
made to each Benefiting Participant’s Non-Elective Contribution Account in the
ratio that each Benefiting Participant’s allocation points for the Allocation
Period bears to the total allocation points of all Benefiting Participants for
the Allocation Period.

 

(4)   Allocations Using Permitted
Disparity. If the Sponsoring Employer elects in the Adoption
Agreement to allocate Non-Safe Harbor Non-Elective Contributions using
permitted disparity, then the allocation will be made using either a 2-step
method, a 4-step method, or both, as elected in the Adoption Agreement, in
accordance with the following provisions:

 

(A)  2-Step
Method Only.  If the Sponsoring Employer elects the 2-step method for all Allocation
Periods, then the contribution will be allocated in the following manner:

 

(i)    Step 1.  An amount will be allocated equal to the
lesser of [a] the Maximum Excess Percentage multiplied by a Benefiting
Participant’s Excess Compensation; or [b] as elected in the Adoption Agreement,
either [1] the greater of 5.7% or the OASI Percentage, [2] 5.4%, or [3]
4.3%, multiplied by a Benefiting Participant’s Excess Compensation.

 

(ii)   Step
2. The balance of
the Employer’s contribution will be allocated in the ratio that his or her
Compensation bears to the total Compensation of all Benefiting Participants.

 

(B)   4-Step
Method Only.  If the Sponsoring Employer elects the 4-step method for all Allocation
Periods, then the contribution will be allocated in the following manner:

 

53

 

(i)    Step
1.  First, an
amount will be allocated in the ratio that his or her Compensation bears to the
total Compensation of all Benefiting Participants, but the maximum amount
allocated under this subparagraph will not exceed 3% of a Benefiting
Participant’s Compensation. Solely for purposes of the allocation made under
this subparagraph (i), the term Benefiting Participant also means any
Participant entitled to a Top Heavy Minimum Allocation under Section 3.14.

 

(ii)   Step 2.  Next, an amount will be allocated in the
ratio that a Benefiting Participant’s Excess Compensation bears to the total
Excess Compensation of all Benefiting Participants, but the maximum amount
allocated under this subparagraph will not exceed 3% of a Benefiting
Participant’s Excess Compensation.

 

(iii)  Step 3.  Next, an amount will be allocated in the
ratio that a Benefiting Participant’s Compensation plus Excess Compensation
bears to the total Compensation plus Excess Compensation of all Benefiting
Participants, but the maximum amount allocated under this subparagraph will not
exceed the Third-Step Integration Percentage of a Benefiting Participant’s
Compensation plus Excess Compensation.

 

(iv)  Step
4. The balance
of the contribution will be allocated in the ratio that a Benefiting
Participant’s Compensation bears to the total Compensation of all Benefiting
Participants.

 

(C)   2-Step
Method and 4-Step Method.  If the Sponsoring Employer elects to use the 2-step
method in non-Top Heavy Allocation Periods and the 4-step method in Top Heavy
Allocation Periods, then the contribution will be allocated as set forth in Section 3.5(a)(4)(A) during
non-Top Heavy Allocation Periods and as set forth in Section 3.5(a)(4)(B) during
Top Heavy Allocation Periods.

 

(5)   Allocations Using Allocation
Groups. If the Sponsoring Employer elects in the Adoption Agreement
to allocate Non-Safe Harbor Non-Elective Contributions using allocation groups,
then the allocation for each Allocation Group will be made pursuant to the “Allocation
Group Addendum” that is attached to the Adoption Agreement; the allocation for
each Benefiting Participant will be made to each Benefiting Participant’s
Non-Elective Contribution Account. The Employer must notify the Trustee of the
amount of the Non-Safe Harbor Non-Elective Contribution to be allocated each
Allocation Group.

 

If the Sponsoring Employer
elects in the Adoption Agreement to allocate Non-Safe Harbor Non-Elective
Contributions using allocation groups, the Sponsoring Employer may elect in the
“Allocation Group Addendum” either that each Benefiting Participant of the
Employer will constitute a “separate allocation group” or that specific
Benefiting Participants of the Employer will be grouped together in “separate
allocation groups” for purposes of allocating Non-Safe Harbor Non-Elective Contributions.
However, only a limited number of Allocation Rates is permitted, and the number
of Allocation Rates cannot be greater than the maximum allowable number of
Allocation Rates. The maximum allowable number of Allocation Rates is equal to
the sum of the allowable number of Allocation Rates for eligible Non-Highly
Compensated Employees (eligible NHCEs) and the allowable number of Allocation
Rates for eligible Highly Compensated Employees (eligible HCEs). The allowable
number of Allocation Rates for eligible HCEs is equal to the number of eligible
HCEs, limited to 25. The allowable number of NHCE Allocation Rates depends on
the number of eligible NHCEs, limited to 25. If the Plan has only one or two
eligible NHCEs, the allowable number of NHCE Allocation Rates is one. If the
Plan has 3 to 8 eligible NHCEs, then the allowable number of NHCE Allocation
Rates cannot exceed two. If the Plan has 9 to 11 eligible NHCEs, then the
allowable number of NHCE Allocation Rates cannot exceed three. If the Plan has
12 to 19 eligible NHCEs, then the allowable number of NHCE Allocation Rates
cannot exceed four. If the Plan has 20 to 29 eligible NHCEs, then the allowable
number of NHCE Allocation Rates cannot exceed five. If the Plan has 30 or more
eligible NHCEs, then the allowable number of NHCE Allocation Rates cannot
exceed the number of eligible NHCEs divided by five (rounded down to the next
whole number if the result of dividing is not a whole number), but will not
exceed 25.

 

The allocation will be made as follows: First, the total amount of
Non-Safe Harbor Non-Elective Contributions is allocated among the Deemed
Aggregated Allocation Groups in portions determined by the Employer. Second,
within each Deemed Aggregated Allocation Group, the allocated portion is allocated
to each Benefiting Participant in the ratio that such Benefiting Participant’s
Compensation, bears to the total Compensation of all each Benefiting
Participants in the group.

 

54

 

(6)   Allocations Using Age
Weighting.  If the Sponsoring Employer elects in the Adoption
Agreement to allocate Non-Safe Harbor Non-Elective Contributions using age
weighting, then a Benefiting Participant’s Age Weighting Factor for any Plan
Year will be determined by multiplying the Benefiting Participant’s
Compensation by the appropriate percentage (based upon the Benefiting
Participant’s Age) set forth in the “Age-Weighted Table Addendum” that is
attached to the Adoption Agreement. The allocation will be made to each
Benefiting Participant’s Non-Elective Contribution Account in the ratio that
his or her Age Weighting Factor for the Allocation Period bears to the total
Age Weighting Factors of all Benefiting Participants for the Allocation Period.

 

(b)   Effect of Top Heavy on
Allocation Method. Notwithstanding anything in the Section to
the contrary, if the Plan is Top Heavy for any Plan Year, and if the allocation
method that is elected in the Adoption Agreement (along with any other
allocations that are permitted to be used to satisfy the Top Heavy Minimum
Allocation requirements of Section 3.14) does not satisfy the Top Heavy
Minimum Allocation requirements (because, for example, either a
Benefiting Participant’s Compensation that is used
in the allocation method does not satisfy Code §415(c)(3) Compensation,
the Compensation Determination Period is other than the entire Plan Year, or
the allocation method is not sufficient to allocate the Top Heavy Minimum
Allocation to any Non-Key Employee), then the Top Heavy Minimum Allocation will
be allocated first before (or, simultaneous with, if no Key Employee has any
Employer contributions (including any Elective Deferrals made on behalf of a
Key Employee to a 401(k) Plan maintained by the Employer) or Forfeitures
allocated to the Participant’s Account for that Plan Year) any allocations
under the allocation method. However, the allocation method may take into
account such Top Heavy Minimum Allocation.

 

3.6      Prevailing Wage Contributions.  If elected in the Adoption Agreement, the
Employer will make Prevailing Wage Contributions to the Plan for the Prevailing
Wage Service of each Prevailing Wage Employee, subject to the following
provisions:

 

(a)   Amount of Prevailing Wage
Contributions. The Prevailing Wage Contribution for each Prevailing
Wage Employee will be based on the hourly contribution rate required under the
applicable Prevailing Wage Law for each such Employee’s employment
classification at which Prevailing Wage Law services are performed by each such
Employee that are not being paid as wages or being used to provide other
benefits.

 

(b)   Frequency of Prevailing Wage
Contributions. Prevailing Wage Contributions will be contributed to
the Plan as frequently as required under the applicable Prevailing Wage Law.

 

(c)   Allocation/Utilization of
Prevailing Wage Contributions. Prevailing Wage Contributions will be
allocated/utilized in any (or all) of the following ways:

 

(1)   Used as a Qualified
Non-Elective Contribution for a 401(k) Plan and/or a 401(m) Plan.
If the Plan is a 401(k) Plan and/or a 401(m) Plan, then all or any
portion of a Participant’s Prevailing Wage Contributions can be used as a
Qualified Non-Elective Contribution.

 

(2)   Used as a Qualified Matching
Contribution for a 401(k) Plan and/or a 401(m) Plan. If
the Plan is a 401(k) Plan and/or a 401(m) Plan, then all or any
portion of a Participant’s Prevailing Wage Contributions can be used as a
Qualified Matching Contributions, to the extent that the Participant has
Elective Deferrals made to the Plan on his or her behalf.

 

(3)   Allocated to the Prevailing
Wage Account. All or any portion of a Participant’s Prevailing Wage
Contributions can be allocated to the Prevailing Wage Account of each
Participant eligible to share in the allocation of such Prevailing Wage
Contributions; and/or

 

(4)   Offset Other Contributions. All
or any portion of a Participant’s Prevailing Wage Contributions can be used
first to offset any type(s) of Employer contributions (other than Elective
Deferrals). If Prevailing Wage Contributions remain after the offset(s) of
the prior sentence, then the remaining Prevailing Wage Contributions will be
allocated to the Prevailing Wage Account of each Participant eligible to share
in the allocation of such remaining Prevailing Wage Contributions.

 

55

 

3.7      Qualified Matching Contributions.
If the Plan is a
401(k) Plan or a 401(m) Plan, then the Employer may make a Qualified
Matching Contribution in such amount as the Employer, in its sole discretion,
may determine, subject to the following provisions:

 

(a)   Contributions Treated as
Qualified Matching Contributions. The Employer may elect to treat
all or any portion of a Matching Contribution as a Qualified Matching
Contribution. Furthermore, the Employer may elect to treat all or any portion
of a Participant’s Prevailing Wage Contribution as a Qualified Matching
Contribution, to the extent that the Participant has Elective Deferrals made on
his or her behalf, in which event such Prevailing Wage Contributions will be
subject to same Vesting and distribution requirements that apply to Qualified
Matching Contributions.

 

(b)   Allocation of Qualified
Matching Contributions. Qualified Matching Contributions (QMACs),
and any Non-Safe Harbor Matching Contributions that are treated as QMACs, will
be allocated to the Qualified Matching Contribution Account of each Eligible
Participant for that Allocation Period. Such contributions will be allocated in
the manner elected by the Administrator, subject to the following:

 

(1)   Permissible Methods of Allocation.
The Administrator may elect to make the allocation from one of the following
allocation methods: (A) pro-rata based on the Compensation of each
Eligible Participant; (B) pro-rata based on the Compensation of each
Eligible Participant starting with the Eligible Participant with the lowest
amount of Compensation and working up until the ADP Test or the ACP Test is
satisfied; (C) pro-rata based on the Elective Deferrals of each Eligible
Participant starting with the Eligible Participant with the lowest amount of
Elective Deferrals and working up until the ADP Test or the ACP Test is
satisfied; (D) per capita to each Eligible Participant; (E) per
capita based on the Compensation of each Eligible Participant starting with the
Eligible Participant with the lowest amount of Compensation and working up
until the ADP Test or the ACP Test is satisfied; or (F) per capita based
on the Elective Deferrals of each Eligible Participant starting with the
Eligible Participant with the lowest amount of Elective Deferrals and working
up until the ADP Test or the ACP Test is satisfied.

 

(2)   Maximum Permissible
Allocation. Notwithstanding anything in this paragraph (b) to
the contrary, the Sponsoring Employer may limit the maximum amount of QMACs
that will be allocated for any Allocation Period to an Eligible Participant, to
the limitation on disproportionate QMACs as described in Section 3.18(j)(4)(B) for
purposes of the ADP Test or the limitation on disproportionate Matching
Contributions as described in Section 3.19(h) or (i) for
purposes of the ACP Test.

 

(3)   Eligible Participants.
As used in this paragraph (b), the term “Eligible Participant” means any
Participant who is a NHCE and who makes an Elective Deferral during the
Allocation Period being tested. Furthermore, the Administrator may elect to
limit the allocations of QMACs only to Eligible Participants who are employed
on the last day of the Allocation Period. In addition, if this 401(k) Plan
and/or this 401(m) Plan provides that Otherwise Excludable Participants are
eligible to participate and if the plan applies Code §410(b)(4)(B) in
determining whether the 401(k) Plan and/or the 401(m) Plan meets the
requirements of Code §410(b)(1), then the Administrator may elect to limit the
allocations of QMACs only to either: (A) Participants who are Non-Highly
Compensated Employees and who are Otherwise Excludable Participants; or (B) Participants
who are Non-Highly Compensated Employees and who are not Otherwise Excludable
Participants. The Administrator may also elect to allocate QMACs to one or more
Participants who are Highly Compensated Employees.

 

3.8      Qualified Non-Elective
Contributions.  If the Plan is a Code §401(k) Plan or a Code §401(m) Plan,
then the Employer may make a Qualified Non-Elective Contribution to the Plan in
such amount as the Employer, in its sole discretion, may determine, subject to
the following provisions:

 

(a)   Contributions Treated as
Qualified Non-Elective Contributions. The Employer may elect to
treat all or any portion of a Non-Safe Harbor Non-Elective Contribution as a
Qualified Non-Elective Contribution. The Employer may also elect to treat all
or any portion of a Participant’s Prevailing Wage Contribution as a Qualified
Non-Elective Contribution, in which event such Prevailing Wage Contributions
will be subject to same Vesting and distribution requirements that apply to
Qualified Non-Elective Contributions.

 

56

 

(b)   Allocation of Qualified
Non-Elective Contributions. Qualified Non-Elective Contributions
(QNECS), Non-Safe Harbor Non-Elective Contributions that are treated as QNECS,
and Prevailing Wage Contributions that are treated as QNECS will be allocated
to the Qualified Non-Elective Contribution Account of each Eligible Participant
for that Allocation Period. Such contributions will be allocated in the manner
elected by the Administrator, subject to the following:

 

(1)   Permissible Methods of
Allocation. The Administrator may elect to make the allocation from
one of the following allocation methods: (A) pro-rata based on the
Compensation of each Eligible Participant; (B) pro-rata based on the
Compensation of each Eligible Participant starting with the Eligible
Participant with the lowest amount of Compensation and working up until the ADP
Test or the ACP Test is satisfied; (C) per capita to each Eligible
Participant; or (D) per capita based on the Compensation of each Eligible
Participant starting with the Eligible Participant with the lowest amount of
Compensation and working up until the ADP Test or the ACP Test is satisfied.

 

(2)   Maximum Permissible
Allocation. Notwithstanding anything in this paragraph (b) to
the contrary, the Sponsoring Employer may limit the maximum amount of QNECs to
be allocated for any Allocation Period to an Eligible Participant, to the
limitation on disproportionate QNECs as described in paragraph 3.18(j)(4)(A) for
purposes of the ADP Test or Section 1.44(e)(4) for purposes of the
ACP Test.

 

(3)   Eligible Participants. As used in this paragraph (b), the
term “Eligible Participant” means any Participant (A) who is a NHCE, and (B) who
is eligible, in the Administrator’s discretion, either to make an Elective
Deferral (regardless of whether such Participant actually makes an Elective
Deferral) and/or to receive a Non-Safe Harbor Matching Contribution (regardless
of whether such Participant actually receives a Non-Safe Harbor Matching
Contribution) during the Allocation Period being tested. Furthermore, the
Administrator may elect to limit the allocations of QNECs only to Eligible
Participants who are employed on the last day of the Allocation Period. In
addition, if this 401(k) Plan and/or this 401(m) Plan provides that
Otherwise Excludable Participants are eligible to participate and if the plan
applies Code §410(b)(4)(B) in determining whether the 401(k) Plan
and/or the 401(m) Plan meets the requirements of Code §410(b)(1), then the
Administrator may elect to limit the allocations of QNECs only to either: (A) Participants
who are Non-Highly Compensated Employees and who are Otherwise Excludable
Participants; or (B) Participants who are Non-Highly Compensated Employees
and who are not Otherwise Excludable Participants. Lastly, the Administrator
may elect to allocate QNECs to one or more Participants who are Highly
Compensated Employees.

 

3.9      Rollover Contributions. If elected in the Adoption Agreement,
then subject to any changes, limitations, or effective dates adopted by written
notice and/or procedures established and adopted by the Administrator pursuant
to Section 8.6, any Employee who is permitted to make Rollover
Contributions as elected in the Adoption Agreement may make such Rollover
Contributions into the Plan from the types of plans as elected in the Adoption
Agreement. Rollover Contributions can also include various types of rollovers
as elected in the Adoption Agreement. Rollover Contributions will be allocated
to an Employee’s Rollover Contribution Account in which the Employee will have
a 100% Vested Interest. If enumerated in the Effective Date Addendum, then this
Plan will not permit an Employee to make additional Rollover Contributions to
the Plan on or after the date that is enumerated in the Effective Date
Addendum. However, any Rollover Contributions made before such date will
continue to be maintained in the Employee’s Rollover Contribution Account. The
Administrator may choose for investment purposes either to segregate Rollover
Contribution Accounts into separate interest bearing accounts or to invest
Rollover Contribution Accounts as part of the general Trust Fund, except for
that portion of an Employee’s Rollover Contribution Account which he or she may
be permitted to self-direct under Section 7.4.

 

3.10    Safe Harbor 401(k) Contributions.  If the Plan is a 401(k) Plan, then
the Employer may make Safe Harbor 401(k) Contributions as elected in the
Adoption Agreement, subject to the following provisions:

 

(a)   ADP Safe Harbor Non-Elective
Contributions. If the Employer elects in the Adoption Agreement (or
to the extent the Employer amends the Plan either by amending the Adoption
Agreement or via the Safe Harbor Notice), then the Employer will make an ADP
Safe Harbor Non-Elective Contribution equal to 3% (or such higher percentage as
elected by the Employer) of the Compensation of each Safe Harbor Participant.
The Employer may elect in the Adoption Agreement to make this ADP Safe Harbor
Non-Elective Contribution to a money purchase plan named in the Adoption
Agreement. For any Allocation Period in which the Employer elects to make an
ADP Safe Harbor Non-Elective Contribution to the named 

 

57

 

money purchase plan, an ADP Safe Harbor Non-Elective Contribution will
be made to this Plan in lieu of the ADP Safe Harbor Non-Elective Contribution
to the money purchase plan unless each Safe Harbor Participant under this Plan
also participates in such other plan and such other plan has the same Plan Year
as this Plan. Such ADP Safe Harbor Non-Elective Contribution will be subject to
the provisions of Section 3.20.

 

(b)   ADP Safe Harbor Matching
Contributions. If elected in the Adoption Agreement, an ADP Safe
Harbor Matching Contribution (whether “Basic” or “Enhanced” as elected in the
Adoption Agreement) will be made that is equal to the amount specified in the
Adoption Agreement, subject to the provisions of Section 3.20.

 

(c)   ACP Safe Harbor Matching
Contributions. If elected in the Adoption Agreement, the Employer
may also make additional ACP Safe Harbor Matching Contributions for each
Allocation Period. Such ACP Safe Harbor Matching Contribution will be subject
to the provisions of Section 3.21.

 

(d)   True-Ups. If (1) the
Allocation Period for either ADP Safe Harbor Matching Contributions and/or ACP
Safe Harbor Matching Contributions (which contributions, for purposes of this
paragraph, will hereafter be known as “Safe Harbor Matching Contributions”) is
a computation period that is less than the Plan Year, and (2) on the last
day of any Plan Year, the dollar amount of the Safe Harbor Matching
Contributions made on behalf of a Benefiting Participant is less than the
dollar amount that would have been made had the Safe Harbor Matching
Contributions been contributed for an Allocation Period of a Plan Year, then
the Employer may elect, pursuant to the Employer’s discretion and subject to any
Safe Harbor Notice requirements, for any Plan Year to make an additional Safe
Harbor Matching Contribution so that the Safe Harbor Matching Contribution
contributed for a Benefiting Participant is equal to the Safe Harbor Matching
Contribution that would have been made had the Safe Harbor Matching
Contributions been contributed for an Allocation Period of the Plan Year.
However, any such additional Safe Harbor Matching Contributions can only be
made to the Plan on a uniform, nondiscriminatory basis.

 

(e)   Prorating the Code
§401(a)(17) Compensation Limit for Each Allocation Period. If the Allocation Period for either
ADP Safe Harbor Matching Contributions and/or ACP Safe Harbor Matching
Contributions is a computation period that is less than the Plan Year, then the
Employer may elect, pursuant to the Employer’s discretion and subject to any
Safe Harbor Notice requirements, for any Plan Year to prorate the Code
§401(a)(17) Compensation Limit to each Allocation Period of the Plan Year.
However, any prorating of the Code §401(a)(17) Compensation Limit can only be
made on a uniform, nondiscriminatory basis.

 

(f)    Allocation of Safe Harbor 401(k) Contributions.
Safe Harbor 401(k) Contributions will be allocated as follows: (1) ADP
Safe Harbor Matching Contributions will be allocated to a Participant’s ADP
Safe Harbor Matching Contribution Account; (2) ADP Safe Harbor
Non-Elective Contributions will be allocated to a Participant’s ADP Safe Harbor
Non-Elective Contribution Account; and (3) ACP Safe Harbor Matching Contributions
will be allocated to a Participant’s ACP Safe Harbor Matching Contribution
Account.

 

3.11    Voluntary Employee Contributions.
If elected in the
Adoption Agreement, each Participant may make Voluntary Employee Contributions
for a Plan Year, but no later than 30 days after the end of the Plan Year for
which such Voluntary Employee Contribution is deemed to be made. Such Voluntary
Employee Contributions will be allocated to a Participant’s Voluntary Employee
Contribution Account in which the Participant will have a 100% Vested Interest.
If enumerated in the Effective Date Addendum, then this Plan will not permit a
Participant to make additional Voluntary Employee Contributions to the Plan on
or after the date that is enumerated in the Effective Date Addendum. However,
any Voluntary Employee Contributions made before such date will continue to be
maintained in the Participant’s Voluntary Employee Contribution Account.
Voluntary Employee Contribution Accounts will be administered in accordance
with the following provisions:

 

(a)   Investment of Accounts.
The Administrator may choose for investment purposes either to segregate
Voluntary Employee Contribution Accounts into separate interest bearing
accounts or to invest Voluntary Employee Contribution Accounts as part of the
general Trust Fund (in which case Voluntary Employee Contribution Accounts will
share in net income and losses in the manner elected in the Adoption
Agreement), except for that portion of a Participant’s Voluntary Employee
Contribution Account which a Participant may be permitted to self-direct
pursuant to Section 7.4.

 

58

 

(b)   Discontinuance of
Contributions in the Event of a Financial Hardship Distribution. If
a Participant receives a financial hardship distribution under Section 5.16
(or receives a financial hardship distribution from any other Employer
maintained plan), he or she will be barred from making Voluntary Employee
Contributions for a period of 6 months after the distribution, or such other
period of time as set forth in an administrative policy regarding financial
hardship distributions promulgated by the Administrator.

 

(c)   ACP Testing. Any Voluntary Employee Contributions
made for a Plan Year must satisfy the ACP Test of Section 3.19 for a Plan
Year. Voluntary Employee Contributions that do not satisfy the ACP Test will
utilize the correction methods of such Section.

 

(d)   Right to Make Each Rate of
Voluntary Employee Contributions. The right to make each rate of Voluntary Employee Contributions
(determining the rate based on the Plan’s definition of the Compensation out of
which the Voluntary Employee Contributions are made (regardless of whether that
definition of Compensation satisfies Code §414(s)), and treating different
rates as existing if they are based on definitions of Compensation or other
requirements or formulas that are not substantially the same) must not
discriminate in favor of Highly Compensated Employees.

 

3.12    Allocation of Earnings and
Losses. As of each Valuation Date, amounts in Participants’
accounts/sub-accounts which have not been segregated from the general Trust
Fund for investment purposes (accounts which have been segregated include any
Directed Investment Accounts established under Section 7.4) and which have
not been distributed since the prior Valuation Date will have the net income of
the Trust Fund that has been earned since the prior Valuation Date allocated in
accordance with such rules and procedures that are established by the
Administrator and that are applied in a uniform and nondiscriminatory manner
based upon the investments of the Trust Fund and the Participants’
accounts/sub-accounts to which the net income is allocated. For purposes of
this Section, the term “net income” means the net of any interest, dividends,
unrealized appreciation and depreciation, capital gains and losses, and
investment expenses of the Trust Fund determined on each Valuation Date.
However, Participants’ accounts/sub-accounts which have been segregated from
the general Trust Fund for investment purposes (accounts which have been
segregated include any Directed Investment Accounts established under Section 7.4)
will only have the net income earned thereon allocated thereto. Policy
dividends or credits will be allocated to the Participant’s Account for whose
benefit the Policy is held.

 

3.13    Forfeitures and Their Usage. The
following provisions relate to Forfeitures and their usage and allocation:

 

(a)   Provisions Related to
Forfeitures. The following provisions relate to Forfeitures:

 

(1)   Distribution of Entire Vested
Interest (or After 5 Consecutive Breaks in Service, If Earlier). If
the Sponsoring Employer elects in the Adoption Agreement that a Forfeiture of
the non-Vested portion of the Participant’s Account balance attributable to
Employer contributions will occur as of the earlier of: (A) the date that
the Participant who Terminated Employment receives a distribution of his or her
Vested Interest under Article 5, or (B) the date that the Participant
incurs five consecutive Breaks in Service after Termination of Employment, then
the provisions of this paragraph apply. Effective as of the first day of Plan
Year beginning in 2006 (or such earlier effective date as may be provided in a
separate amendment for implementing the final §401(k) Regulations and as
permitted by such Regulations) with respect to any 401(k) Plan, a
Forfeiture of the non-Vested portion of the Participant’s Account balance
attributable to Employer contributions will not occur pursuant to the
provisions of clause (A) of the prior sentence unless the entire Elective
Deferral Account of the Participant who Terminated Employment is or has been
distributed. Furthermore, if a Participant’s Vested Interest in the entire
Participant’s Account balance attributable to Employer contributions is zero on
the date that the Participant Terminates Employment, then the Participant will
be deemed to have received a distribution of such Vested Interest on the date
of such Termination of Employment and a Forfeiture of the Participant’s Account
attributable to Employer contributions will occur pursuant to the provisions of
clause (A) on the date of such Termination of Employment.

 

(2)   Consecutive Breaks in
Service.  If the Sponsoring Employer elects in the Adoption Agreement
that a Forfeiture of the non-Vested portion of the Participant’s Account
attributable to Employer contributions will occur when a Participant incurs a
specified number of consecutive Breaks in Service (up to a maximum of five (5) consecutive
Breaks in Service) after Termination of Employment, then a Forfeiture will not
occur prior to such date, even if the Participant receives a distribution of
the entire Vested Interest in the Participant’s Account balance attributable to
Employer contributions prior to such date.

 

59

 

(b)   Usage and Allocation of
Forfeitures. On each
annual Valuation Date, the Administrator may elect to use all or any portion of
the Forfeiture Account to pay administrative expenses incurred by the Plan. The
portion of the Forfeiture Account that is not used to pay administrative
expenses will be used first to restore previous Forfeitures of Participants’
Accounts pursuant to Section 5.7 and/or to restore Participants’ Accounts
pursuant to Section 5.13. The portion of the Forfeiture Account that is
not used to pay administrative expenses and is not used to satisfy the
provisions of the previous sentence will then be allocated/used as elected in
the Adoption Agreement pursuant to either (1) or (2) as follows:

 

(1)   Profit Sharing and Money
Purchase Plans. For a profit sharing plan or money purchase plan,
the Forfeiture Account, as elected in the Adoption Agreement, will either (A) be
allocated to Participants in the manner elected; (B) be used to reduce the
Employer’s contribution; or (C) be added to the Employer’s contribution,
to be allocated therewith in the manner elected in the Adoption Agreement.

 

(2)   401(k) Plans.
For a 401(k) Plan, the Forfeiture Account will, as elected in the Adoption
Agreement, either (A) be allocated to Participants in the manner elected; (B) be
used to reduce any Employer contribution (or combination of Employer
contributions), as determined by the Administrator; or (C) be added to any
Employer contribution (or combination of Employer contributions), as determined
by the Administrator, to be allocated therewith in the manner elected in the
Adoption Agreement.

 

3.14    Top Heavy Minimum Allocation. In any Plan Year in which the Plan is Top
Heavy and a Key Employee receives an allocation of Employer contributions or
Forfeitures, each Participant who is described in paragraph (a) below will
receive a Top Heavy Minimum Allocation determined in accordance with the
following:

 

(a)   Participants Who Must Receive
the Top Heavy Minimum Allocation. The Top Heavy Minimum Allocation will be made for each
Participant who is a Non-Key Employee (and to any other Participant (including
any Key Employee), if elected in the Adoption Agreement) who is employed by an
Employer on the last day of the Plan Year, even if such Participant (1) fails
to complete any minimum Hours of Service or Period of Service that is required
to receive an allocation of Employer contributions or Forfeitures for the Plan
Year; (2) fails to make Elective Deferrals if this Plan is a 401(k) Plan;
(3) fails to make a Mandatory Employee Contribution to the Plan; or (4) receives
Compensation that is less than a stated amount. The Top Heavy Minimum
Allocation is not required to be allocated to any Rollover Participant.

 

(b)   Participation in Multiple
Defined Contribution Plans. If (1) this Plan is not part of a
Required Aggregation Group or a Permissive Aggregation Group with a defined
benefit plan, (2) this Plan is part of a Required Aggregation Group or a
Permissive Aggregation Group with one or more defined contribution plans, (3) a
Participant who is described in paragraph (a) participates in this Plan
and in one or more defined contribution plans that are part of the Required
Aggregation Group or the Permissive Aggregation Group, and (4) the
allocation of Employer contributions and Forfeitures of each plan that is part
of the Required Aggregation Group or the Permissive Aggregation Group (when
each plan is considered separately) is insufficient to satisfy the Top Heavy
Minimum Allocation requirement with respect to such Participant, the Top Heavy
Minimum Allocation requirement will nevertheless be satisfied if the aggregate
allocation of Employer contributions and Forfeitures that are made on behalf of
such Participant under this Plan and all other defined contribution plans that
are part of the Required Aggregation Group or the Permissive Aggregation Group
(and any other defined contribution plan that is sponsored by the Employer) is
sufficient to satisfy the Top Heavy Minimum Allocation requirement. However, if
the aggregate allocation of Employer contributions and Forfeitures that are
made on behalf of a Participant under this Plan and all other defined
contribution plans that are part of the Required Aggregation Group or the Permissive
Aggregation Group (and any other defined contribution plan that is sponsored by
the Employer) is not sufficient to satisfy the Top Heavy Minimum Allocation
requirement, then the Employer will make an additional contribution on behalf
of such Participant to this Plan and/or to one or more defined contribution
plans that are part of the Required Aggregation Group or the Permissive
Aggregation Group (or any other defined contribution plan that is sponsored by
the Employer) in order that the aggregate allocation of Employer contributions
and Forfeitures that are made on behalf of such Participant under this Plan and
all defined contribution plans that are part of the Required Aggregation Group
or the Permissive Aggregation Group (and any other defined contribution plan
that is sponsored by the Employer) satisfies the Top Heavy Minimum Allocation
requirement.

 

60

 

(c)   DB Plan Part of Required
Aggregation Group or Permissive Aggregation Group. If this Plan is part
of a Required Aggregation Group or a Permissive Aggregation Group with a
defined benefit plan, then the Sponsoring Employer may, in the Sponsoring
Employer’s discretion and in a uniform non-discriminatory manner which is
intended to satisfy the requirements of Code §416(f) regarding the
preclusion of required duplication and inappropriate omission of Top Heavy
minimum benefits or Top Heavy Minimum Allocations, determine to satisfy the
requirements of Code §416 with respect to each Participant described in
paragraph (a) who participates in this Plan and in the defined benefit
plan which is part of the Required Aggregation Group or the Permissive
Aggregation Group, by any of the following methods:

 

(1)   Defined Benefit Minimum
Benefit. A defined benefit minimum, which is an accrued benefit at
any point in time equal to at least the product of (A) an Employee’s
average annual Code §415(c)(3) Compensation for the period of consecutive
years (not exceeding five) when the Employee had the highest aggregate Code §415(c)(3) Compensation
from the Employer and (B) the lesser of 2% per Year of Service or 1-Year
Period of Service, as applicable, with the Employer or 20%, subject to the rules of
Code §416 and the Regulations thereunder.

 

(2)   Floor Offset Arrangement.
A floor offset approach, pursuant to Revenue Ruling 76-259, under which the
defined benefit minimum of the defined benefit plan that is provided pursuant
to paragraph (c)(1) is offset by the benefits provided under the defined
contribution plan.

 

(3)   Using Comparability.
A demonstration, using a comparability analysis pursuant to Revenue Ruling
81-202, that the plans are providing benefits at least equal to the defined
benefit minimum that is provided pursuant to paragraph (c)(1).

 

(4)   5% Defined Contribution
Allocation. An allocation of Employer contributions and Forfeitures
that are made on behalf of such Participant under this Plan (or any defined
contribution plan that is sponsored by the Employer) equal 5% of an Employee’s
Code §415(c)(3) Compensation for each Plan Year that the Required
Aggregation Group or the Permissive Aggregation Group is Top Heavy.

 

(d)   Frozen DB Plan after December 31,
2001. In determining Top Heavy minimum benefits or Top Heavy Minimum
Allocations in any Plan Year which begins after December 31, 2001, a
defined benefit plan in which no Key Employee and no former Key Employee
benefits (within the meaning of Code §410(b)) in the defined benefit plan
during a Plan Year will be disregarded in determining whether the defined
benefit plan is part of a Required Aggregation Group or a Permissive
Aggregation Group with this Plan.

 

(e)   Contributions That Can Be
Used to Satisfy Top Heavy Minimum. All Employer contributions to the Plan (other than (1) Elective
Deferrals that are made on behalf of a Participant to a 401(k) Plan and (2) for
Plan Years beginning before 2002, Matching Contributions) will be taken into
account in determining if the Employer has satisfied the Top Heavy minimum
benefit and/or Top Heavy Minimum Allocation requirements of this Section.
Furthermore, the following Employer contributions that are made on behalf of a
Participant to a 401(k) Plan may be taken into account in determining
whether the Top Heavy minimum benefit and/or Top Heavy Minimum Allocation
requirements have been satisfied: Non-Safe Harbor Non-Elective Contributions;
Qualified Non-Elective Contributions; ADP Safe Harbor Non-Elective
Contributions; for Plan Years beginning after 2001, Matching Contributions
(including Qualified Matching Contributions); and any other Employer
contributions as may be permitted by law.

 

(f)    Safe Harbor Plan and SIMPLE
401(k) Plan Exceptions. The
Top Heavy Minimum Allocation requirements will not apply to the Plan for any
Plan Year in which the Plan is a 401(k) Plan that consists solely of
Elective Deferrals, ADP Safe Harbor Contributions which meet the requirements
of Code §401(k)(12), and, if applicable, ACP Safe Harbor Matching Contributions
(including ADP Safe Harbor Matching Contributions) which meet the requirements
of Code §401(m)(11), so long as each Participant (1) who is a Non-Key
Employee and (2) who is eligible to make Elective Deferrals is also a Safe
Harbor Participant for such Plan Year. Also, a SIMPLE 401(k) Plan is not
subject to the Top Heavy Minimum Allocation requirements.

 

3.15    Failsafe Allocation. If elected in the Adoption Agreement and
the Plan (or a component of the Plan) for any Plan Year fails to satisfy the
nondiscriminatory classification test of Code §410(b)(2)(A)(i) and
Regulation §1.410(b)-4 and/or the average benefit percentage test of Code
§410(b)(2)(A)(ii) and Regulation §1.410(b)-5, then certain allocations
will be made under this Section only to the extent necessary to insure
that the Plan (or such component of the Plan) for such Plan Year satisfies one
of the tests set forth in either Code §410(b)(1)(A) (in which the Plan
initially fails to benefit at least 70% of the non-excludable 

 

61

 

NHCEs), or Code §410(b)(1)(B) (in which the Plan
initially fails to benefit a percentage of the non-excludable NHCEs that is at
least 70% of the percentage of the non-excludable HCEs), pursuant to the
following rules:

 

(a)   Order
of Accrual Groups. To
satisfy one of the above tests for such Plan Year, an allocation may be made to
certain Employees in the following groups (hereafter know as “Accrual Groups”)
in the following order:

 

(1)   First
Accrual Group.  First, an allocation may be made to that group of Employees who were
Participants for the Plan Year but who did not receive an allocation for the
Plan Year.

 

(2)   Second
Accrual Group.  Next, an allocation may be made to that group of Employees who have not
yet satisfied the eligibility requirements of Section 2.1 and who are
Eligible Employees.

 

(3)   Third
Accrual Group.  Next, an allocation may be made to that group of Employees who have
satisfied the eligibility requirements of Section 2.1 and who are not
Eligible Employees.

 

(4)   Fourth
Accrual Group.  Finally, an allocation may be made to that group of Employees who have
not yet satisfied the eligibility requirements of Section 2.1 and who are
not Eligible Employees.

 

(b)   Priority
within an Accrual Group.  To determine each Employee’s priority within an Accrual
Group, Employees will be ranked as elected in the Adoption Agreement.

 

(c)   Employees
Who Share and the Amount of Allocation.  Only those Employees who are required to benefit under
the Plan (or the component of the Plan) for the Plan Year in order to satisfy
one of the above tests will be entitled to an allocation, even if the number of
Employees who are required to benefit is less than the total number of
Employees within a specific Accrual Group. Such allocation will be made on the
same basis as, and using the same allocation formula and method as, the
allocation that is made to each Participant who is an otherwise Benefiting
Participant for such Plan Year with respect to the Plan (or such component of
the Plan). The right of an Employee who is eligible to receive an allocation
under this Section for a Plan Year will be fixed as of the last day of
such Plan Year.

 

3.16    SIMPLE
401(k) Provisions. If the Sponsoring Employer elects in the Adoption Agreement to have the
SIMPLE 401(k) provisions apply, the following provisions will apply each
Year the election is in effect:

 

(a)   Certain
Conditions Which Must Be Satisfied.  The following conditions must be satisfied each Year
(as defined in paragraph (b) below) in order for the terms of this Section to
apply: (1) the Employer adopting this amendment must be an Eligible
Employer (as defined in paragraph (b) below); (2) no contributions
are made, or benefits accrued for services during the Year, on behalf of any
Eligible Employee (as defined in paragraph (b) below) under any other
plan, contract, pension, or trust described in Code §219(g)(5)(A) or (B),
maintained by the Employer; and (3) if the Sponsoring Employer has elected
the SIMPLE 401(k) provisions in the Adoption Agreement, then to the extent
that any other provision of the Plan is inconsistent with the provisions of
this Section, the provisions of this Section will govern.

 

(b)   Definitions.  The following terms have the following
meanings for purposes of this Section:

 

(1)   Year.
The term “Year”
means the calendar year.

 

(2)   Eligible
Employee. The
term “Eligible Employee” means any Employee who is entitled to make Elective
Deferrals under the terms of this Section of the Plan.

 

(3)   Eligible
Employer. The
term “Eligible Employer” means, with respect to any Year, an Employer that had
no more than 100 Employees who received at least $5,000 of Compensation from
the Employer for the preceding Year. In applying the preceding sentence, all
Employees of controlled groups of corporations under Code §414(b), all
Employees of trades or businesses (whether incorporated or not) under common
control under Code §414(c), all Employees of affiliated service groups under
Code §414(m), and Leased Employees required to be treated as the Employer’s
Employees under Code §414(n), are taken into account. An Eligible Employer that
adopts this amendment and fails to be an Eligible Employer for any subsequent
Year is treated as an Eligible Employer for the 2 Years 

 

62

 

following the last Year the Employer was an Eligible
Employer. If the failure is due to any acquisition, disposition, or similar
transaction involving an Eligible Employer, the preceding sentence applies only
if the provisions of Code §410(b)(6)(C)(i) are satisfied.

 

(4)   Compensation. The term “Compensation” means the sum of
the wages, tips and other compensation from the Employer subject to federal
income tax withholding (as described in Code §6051(a)(3)) and the Employee’s
Elective Deferrals made under this or any other 401(k) Plan, and, if
applicable, elective deferrals under a Code §408(p) SIMPLE plan, a SARSEP,
or a Code §403(b) annuity contract and compensation deferred under a Code
§457 plan, required to be reported by the Employer on Form W-2 as
described in Code §6051(a)(8). For Self-Employed Individuals, the term “Compensation”
means net earnings from self-employment determined under Code §1402(a) prior
to subtracting any contributions made under this Plan on behalf of the
individual. The Code §401(a)(17) Compensation Limit applies to the Compensation
under this Section except with respect to Matching Contributions, if any,
made in accordance with paragraph (f) below.

 

(c)   Salary
Reduction Election.  Each Eligible Employee may make a salary reduction election to have his
or her Compensation reduced for the Year in any amount selected by the Eligible
Employee. The Employer will make a salary reduction contribution to the Plan,
as an Elective Deferral, in the amount by which the Eligible Employee’s
Compensation has been reduced. The limitation on salary reduction contributions
is $7,000 for 2002 and increasing by $1,000 for each Year thereafter up to
$10,000 for 2005 and later Years. After 2005, the $10,000 limit will be
adjusted (but only in $500 increments) by the Secretary of the Treasury for
cost-of-living increases under Code §408(p)(2)(E). Beginning in 2002, the
amount of an Eligible Employee’s salary reduction contributions permitted for a
Year is increased for Eligible Employees aged 50 or over by the end of the Year
by the amount of allowable Catch-Up Contributions. The Catch-Up Contribution
Limit in a SIMPLE 401(k) Plan is $500 for 2002, increasing by $500 for
each Year thereafter up to $2,500 for 2006. After 2006, the Catch-Up
Contribution Limit of $2,500 will be adjusted by the Secretary of the Treasury
for cost-of-living increases under Code §414(v)(2)(C). Any such adjustments
will be in multiples of $500. Catch-Up Contributions are otherwise treated the
same as other salary reduction contributions.

 

(d)   Election
Period.  In addition
to any other election periods provided under the Plan, each Eligible Employee
may make or modify a salary reduction election during the 60-day period
immediately preceding each January 1st. For the Year that an Eligible
Employee becomes eligible to make Elective Deferrals under this Section, the
60-day election period requirement of this Section is deemed satisfied if
the Eligible Employee may make or modify a salary reduction election during a
60-day period that includes either the date the Eligible Employee becomes
eligible or the day before. An Eligible Employee may terminate a salary
reduction election any time during the Year.

 

(e)   Notice
Requirements.  The Employer will notify each Eligible Employee prior to the 60-day
election period described in paragraph (d) that he or she can make a
salary reduction election or modify a prior election in that period. The
notification will indicate whether the Employer will provide a 3% Matching
Contribution of paragraph (f) or a 2% Non-Elective Contribution of
paragraph (g).

 

(f)    Matching
Contributions.  If elected in the Adoption Agreement, the Employer will contribute a
Matching Contribution each Year on behalf of each Eligible Employee who makes a
salary reduction election under paragraph (c) above. The amount of the
Matching Contribution will be equal to the Eligible Employee’s Elective
Deferrals up to, as elected in the Adoption Agreement, either (1) a limit
of 3% of the Eligible Employee’s Compensation for the full calendar Year; or (2) a
reduced limit, provided the following requirements are met: (A) The limit
is not reduced below 1%; (B) The limit is not reduced for more than 2
calendar Years during the 5-Year period ending with the calendar Year the
reduction is effective; and (C) each Eligible Employee is notified of the
reduced Matching Contribution limit within a reasonable period of time before
such Eligible Employee’s 60-day election period for that calendar Year. For
purposes of (B) above, the limit is not reduced for any Year that any SIMPLE
Plan of the Employer is not in effect or for any calendar Year with respect to
which the Employer makes Non-Elective Contributions to a SIMPLE Plan.

 

(g)   Non-Elective
Contributions.  If elected in the Adoption Agreement by the Sponsoring Employer, the Employer
will contribute a Non-Elective Contribution of 2% of Compensation for the full
calendar Year for each Eligible Employee who received at least $5,000 of
Compensation from the Employer for the Year, or such lesser amount of
Compensation as elected in the Adoption Agreement.

 

63

 

(h)   Limitation
on Other Contributions.  No Employer or Employee contributions may be made to
this Plan for the Year other than salary reduction contributions of paragraph (c) above,
Matching Contributions of paragraph (f) above, Non-Elective Contributions
of paragraph (g) above, and Rollover Contributions as described in
Regulation §1.402(c)-2, Q & A-1(a).

 

(i)    Code
§415 Limitations.  The provisions of this Plan implementing the limitations of Code §415
apply to Matching Contributions and Non-Elective Contributions.

 

(j)    Vesting.  All benefits attributable to
contributions made under this Section are 100% Vested at all times and all
previous contributions made under the Plan are 100% Vested as of the beginning
of the Year that the SIMPLE 401(k) provisions of this Section apply
to the Plan.

 

(k)   Top
Heavy Rules.  The Plan is not treated as a Top Heavy Plan under Code §416 for any
Year for which the provisions of this Section are effective and satisfied.

 

(l)    Nondiscrimination
Tests.  The Plan is
treated as meeting the requirements of Code §401(k)(3)(A)(ii) and §401(m)(2) for
any Year for which the provisions of this Section are effective and
satisfied.

 

3.17    Deemed IRA Contributions. If the Sponsoring Employer elects in the Adoption Agreement, then each
Participant may make Deemed IRA Contributions to the Plan and the following
provisions will apply:

 

(a)   Limitations
on Deemed IRA Contributions. No Deemed IRA Contributions will be accepted unless
such contributions are in cash. The total of such contributions will not exceed
the following annual cash contribution limit: (1) $3,000 for any taxable
year beginning in 2002 through 2004; (2) $4,000 for any taxable year
beginning in 2005 through 2007; and (3) $5,000 for any taxable year
beginning in 2008 and years thereafter. After 2008, the annual cash
contribution limit of the prior sentence will be adjusted by the Secretary of
the Treasury for cost-of-living increases under Code §219(b)(5)(C). Such
adjustments will be in multiples of $500. In the case of Participants who are
age 50 or over by the end of their taxable years, the annual cash contribution
limit is increased by $500 for each taxable year beginning in 2002 through 2005
and $1,000 for each taxable year beginning in 2006 and years thereafter.

 

(b)   Investments
of Contributions. A
Participant’s Deemed IRA Contribution Account will be invested in such assets
as permitted by Code §408. If a Participant’s Deemed IRA Contribution Account
acquires collectibles within the meaning of Code §408(m) after December 31,
1981, then such assets of the Deemed IRA Contribution Account will be treated
as a distribution in an amount equal to the cost of such collectibles. No
portion of a Participant’s Deemed IRA Contribution Account will be invested in
life insurance contracts.

 

(c)   100%
Vesting and Separate Records. An Employee will have a 100% Vested Interest in his
or her Deemed IRA Contribution Account at all times. Separate records will be
maintained for each Participant.

 

(d)   Application
of Code §408(a)(6) to Participant’s Deemed IRA Contribution Account. Notwithstanding any provision of this
Plan to the contrary, the distribution of a Participant’s interest in the
Participant’s Deemed IRA Contribution Account will be made in accordance with
the requirements of Code §408(a)(6) and the Regulations thereunder, the
provisions of which are herein incorporated by reference. If distributions are
made from an annuity contract purchased from an insurance company, then
distributions thereunder must satisfy the requirements of Temporary Regulations
§1.401(a)(9)-6T, Q&A-4, rather than paragraphs (d)(1)(A), (d)(1)(B) and
(d)(1)(C) below and Section 5.9. The required minimum distributions
calculated for this Deemed IRA Contribution Account may be withdrawn from
another IRA of the individual in accordance with Regulation §1.408-8,
Q&A-9. Distribution of a Participant’s interest in the Participant’s Deemed
IRA Contribution Account will be made in accordance with the following:

 

(1)   General
Rules.  All
distributions from Participant’s Deemed IRA Contribution Account will be made
in accordance with the following general rules:

 

(A)  Required
Beginning Date.
The entire value of the account of the individual for whose benefit the account
is maintained will commence to be distributed no later than April 1st
following the calendar year in which such individual attains age 701⁄2 (known as
the “Required Beginning Date”) over the life of such individual or the lives of
such individual and his or her designated beneficiary;

 

64

 

(B)   Distributable
Amount. The
amount to be distributed each year, beginning with the calendar year in which
the individual attains age 701⁄2 and continuing through the year of death, will
not be less than the quotient obtained by dividing the value of the Deemed IRA
Contribution Account as of the end of the preceding year by the distribution
period in the Uniform Lifetime Table in Regulation §1.401(a)(9)-9, Q&A-2, using
the individual’s age as of his or her birthday in the year. However, if the
individual’s sole designated beneficiary is his or her surviving spouse and
such spouse is more than 10 years younger than the individual, then the
distribution period is determined under the Joint and Last Survivor Table in
Regulation §1.401(a)(9)-9, Q&A-3, using the ages as of the individual’s and
spouse’s birthdays in the year.

 

(C)   Timing of
Distributions. The
required minimum distribution for the year that the individual attains age 701⁄2
can be made as late as April 1st of the following year. The required
minimum distribution for any other year must be made by the end of such year.

 

(2)   Required
Minimum Distributions After the Participant’s Death. Required minimum distributions will be
made after a Participant’s death in accordance with the following provisions:

 

(A)  Death
On or After Required Beginning Date. If the individual dies on or after the Required
Beginning Date, his or her remaining interest will be distributed at least as
rapidly as follows:

 

(i)    Surviving
Spouse Is Not Sole Designated Beneficiary. If the designated beneficiary is someone other than
the individual’s surviving spouse, the remaining interest will be distributed
over the remaining life expectancy of the designated beneficiary, with such
life expectancy determined using the beneficiary’s age as of his or her
birthday in the year following the year of the individual’s death, or over the
period described in paragraph (d)(2)(A)(iii) below if longer.

 

 (ii)  Surviving
Spouse Is Sole Designated Beneficiary. If the individual’s sole designated beneficiary is
the individual’s surviving spouse, the remaining interest will be distributed
over such spouse’s life or over the period described in paragraph (d)(2)(A)(iii) below
if longer. Any interest remaining after such spouse’s death will be distributed
over such spouse’s remaining life expectancy determined using the spouse’s age
as of his or her birthday in the year of the spouse’s death, or, if the
distributions are being made over the period described in  paragraph (d)(2)(A)(iii) below, over
such period.

 

(iii)  No Designated Beneficiary. If there is no designated beneficiary,
or if applicable by operation of paragraph (d)(2)(A)(i) or (d)(2)(A)(ii) above,
the remaining interest will be distributed over the individual’s remaining life
expectancy determined in the year of the individual’s death.

 

(iv)  Amount
of Distribution.
The amount to be distributed each year under paragraph (d)(2)(A)(i),
(d)(2)(A)(ii), or (d)(2)(A)(iii), beginning with the calendar year following
the calendar year of the individual’s death, is the quotient obtained by
dividing the value of the Deemed IRA Contribution Account as of the end of the
preceding year by the remaining life expectancy specified in such paragraph.
Life expectancy is determined using the Single Lifetime Table in Regulation
§1.401(a)(9)-9, Q&A-1. If distributions are being made to a surviving
spouse as the sole designated beneficiary, such spouse’s remaining life
expectancy for a year is the number in the Single Life Table corresponding to
such spouse’s age in the year. In all other cases, remaining life expectancy
for a year is the number in the Single Life Table corresponding to the
beneficiary’s or individual’s age in the year specified in paragraph
(d)(2)(A)(i), (d)(2)(A)(ii), or (d)(2)(A)(iii) and reduced by 1 for each
subsequent year.

 

(B)   Death Before
Required Beginning Date.  If the individual dies before the required beginning
date, his or her entire interest will be distributed at least as rapidly as
follows:

 

(i)    Surviving
Spouse Is Not Sole Designated Beneficiary. If the designated beneficiary is someone other than
the individual’s surviving spouse, the entire interest will be distributed,
starting by the end of the calendar year following the calendar year of the
individual’s death, over the remaining life expectancy of the designated
beneficiary, with such life expectancy determined using the age of the
beneficiary as of his or her birthday in the year following the year of  the individual’s death, or, if elected, in
accordance with paragraph (d)(2)(B)(iii) below.

 

65

 

 (ii)  Surviving
Spouse Is Sole Designated Beneficiary. If the individual’s sole designated beneficiary is the
individual’s surviving spouse, the entire interest will be distributed,
starting by the end of the calendar year following the calendar year of the
individual’s death (or by the end of the calendar year in which the individual
would have attained age 70 1/2, if later), over such spouse’s life, or, if
elected, in accordance with paragraph (d)(2)(B)(iii) below. If the
surviving spouse dies before distributions are required to begin, the remaining
interest will be distributed, starting by the end of the calendar year
following the calendar year of the spouse’s death, over the spouse’s designated
beneficiary’s remaining life expectancy in determined using such beneficiary’s
age as of his or her birthday in the year following the death of the spouse,
or, if elected, will be distributed in accordance with paragraph (d)(2)(B)(iii) below.
If the surviving spouse dies after distributions are required to begin, any
remaining interest will be distributed over the spouse’s remaining life
expectancy determined using the spouse’s age as of his or her birthday in the
year of the spouse’s death.

 

(iii)  No Designated Beneficiary. If there is no designated beneficiary, or
if applicable by operation of paragraph (d)(2)(B)(i) or (d)(2)(B)(ii) above,
the entire interest will be distributed by the end of the calendar year
containing the fifth anniversary of the individual’s death (or of the spouse’s
death in the case of the surviving spouse’s death before distributions are
required to begin under paragraph (d)(2)(B)(ii) above).

 

(iv)  Amount
of Distribution. The
amount to be distributed each year under paragraph (d)(2)(B)(i) or
(d)(2)(B)(ii) above is the quotient obtained by dividing the value of the
Deemed IRA Contribution Account as of the end of the preceding year by the
remaining life expectancy specified in such paragraph. Life expectancy is
determined using the Single Lifetime Table in Regulation §1.401(a)(9)-9,
Q&A-1. If distributions are being made to a surviving spouse as the sole
designated beneficiary, such spouse’s remaining life expectancy for a year is
the number in the Single Life Table corresponding to such spouse’s age in the
year. In all other cases, remaining life expectancy for a year is the number in
the Single Life Table corresponding to the beneficiary’s age in the year
specified in paragraph (d)(2)(B)(i) or (d)(2)(B)(ii) and reduced by 1
for each subsequent year.

 

(3)   Value
of the Deemed IRA Contribution Account. The “value” of the Deemed IRA Contribution Account
includes the amount of any outstanding rollover, transfer and
recharacterization under Regulation §1.408-8, Q&A-7 and Q&A-8.

 

(4)   Spousal
Treatment of Deemed IRA Contribution Account. If the sole designated beneficiary is the surviving
spouse, the spouse may elect to treat the Deemed IRA Contribution Account as
his or her own IRA. This election will be deemed to have been made if such
surviving spouse makes a contribution to the Deemed IRA Contribution Account or
fails to take required distributions as a beneficiary.

 

(e)   No
Commingling Permitted. The assets of the Deemed IRA Contribution Account will not be
commingled with other property except in a common trust fund or common
investment fund.

 

(f)    Trustee
to Furnish Information.  The Trustee of a Deemed IRA Contribution Account will
furnish annual calendar-year reports concerning the status of the account and
such information concerning required minimum distributions as is prescribed by
the IRS.

 

(g)   Substitution
of Trustee. A
non-bank Trustee or custodian will substitute another Trustee or custodian if
the non-bank Trustee or custodian receives notice from the IRS that such
substitution is required because it has failed to comply with the requirements
of Regulation §1.408-2(e).

 

(h)   Definition
of Compensation for Deduction Limits.  For purposes of determining the deductible limits for
Deemed IRA Contributions, the term “Compensation” means wages, salaries,
professional fees, or other amounts derived from or received for personal
services actually rendered (including, but not limited to commissions paid
salesmen, compensation for services on the basis of a percentage of profits,
commissions on insurance premiums, tips, and bonuses) and includes earned
income, as defined in Code §401(c)(2) (reduced by the deduction the self
employed individual takes for contributions made to a self-employed retirement
plan). For purposes of this definition, Code §401(c) will be applied as if
the term trade or business for purposes of Code §1402 included services derived
from or received as earnings or profits from property (including but not
limited to interest and dividends) or amounts not includible in gross income. 

 

66

 

Compensation also does not include any amount received
as a pension or annuity or as deferred compensation. The term “Compensation”
will include any amount includible in the individual’s gross income under Code
§71 with respect to a divorce or separation instrument described in Code
§71(b)(2)(A).

 

3.18    Actual
Deferral Percentage Test and Correction. If a 401(k) Plan is subject to the Actual
Deferral Percentage Test (ADP Test) for a Plan Year, then the following rules will
apply:

 

(a)   The
ADP Test.  The ADP for Participants who are Highly Compensated Employees for the
Plan Year that is being tested and the ADP for Participants who are Non-Highly
Compensated Employees for the Applicable Plan Year must satisfy one of the
following tests:

 

(1)   1.25
Test.  The ADP for
Participants who are Highly Compensated Employees for the Plan Year that is
being tested will not exceed the ADP for Participants who are Non-Highly
Compensated Employees for the Applicable Plan Year multiplied by 1.25; or

 

(2)   Multiplied
By 2 or 2% Test.  The ADP for Participants who are Highly Compensated Employees for the
Plan Year that is being tested will not exceed the ADP for Participants who are
Non-Highly Compensated Employees for the Applicable Plan Year multiplied by
2.0, provided, that the ADP for Participants who are Highly Compensated
Employees for the Plan Year that is being tested does not exceed the ADP for
Participants who are Non-Highly Compensated Employees for the Applicable Plan
Year by more than 2 percentage points.

 

(b)   Testing
Methods and Restriction.  The Sponsoring Employer may elect either the Prior
Year Testing Method or Current Year Testing Method in the Adoption Agreement.
However, once the Sponsoring Employer has elected the Current Year Testing
Method, the Sponsoring Employer can elect the Prior Year Testing Method for a
Plan Year only if the Plan has used the Current Year Testing Method for each of
the preceding five (5) Plan Years (or if lesser, the number of Plan Years
that the Plan has been in existence) or if, as a result of a merger or
acquisition described in Code §410(b)(6)(C)(i), the Employer maintains both a
401(k) plan using the Prior Year Testing Method and a 401(k) plan
using Current Year Testing Method and the change is made within the transition
period described in Code §410(b)(6)(C)(ii).

 

(c)   Prior
Year Testing Method for the First Plan Year.  If the Sponsoring Employer has elected the Prior Year
Testing Method for the first Plan Year that the Plan permits any Participant to
make Elective Deferrals (and this is not a successor plan), then the ADP for
Participants who are Non-Highly Compensated Employees for the prior Plan Year
will be the greater of (1) three percent (3%), or (2) the ADP for
Participants who are Non-Highly Compensated Employees for the first Plan Year.

 

(d)   HCEs
as Sole Participants in Plan Year Being Tested.  If the Sponsoring Employer has elected
the Prior Year Testing Method and if there are no Participants who were
Non-Highly Compensated Employees in the prior Plan Year, then the Plan will be
deemed to satisfy the ADP Test for the Plan Year that is being tested.
Similarly, if the Sponsoring Employer has elected the Current Year Testing
Method and if there are no Participants who are Non-Highly Compensated
Employees in the current Plan Year, then the Plan will be deemed to satisfy the
ADP Test for the Plan Year that is being tested. The provisions of this paragraph
may be utilized with the permissive disaggregation rule of Section 3.18(e)(2).

 

(e)   Special
Rule for Early Participation.  If this 401(k) Plan provides that Otherwise
Excludable Participants are eligible to participate and if the Plan applies
Code §410(b)(4)(B) in determining whether the 401(k) Plan meets the
requirements of Code §410(b)(1), then in determining whether the 401(k) Plan
satisfies the ADP Test, the Sponsoring Employer may, in the Sponsoring Employer’s
discretion (but is not required to), either:

 

(1)   Early
Participation Rule.  Pursuant to Code §401(k)(3)(F), perform the ADP Test for the Plan
(determined without regard to disaggregation under Regulation §1.410(b)—7(c)(3)),
by using the ADP for all Participants who are Highly Compensated Employees for
the Plan Year  and the ADP for
Participants who are Non-Highly Compensated Employees for the Applicable Plan
Year, disregarding all Otherwise Excludable Participants who are Non-Highly
Compensated Employees; or

 

67

 

(2)   Permissive
Disaggregation Rule.  Pursuant to Regulation §1.401(k)—1(b)(4), disaggregate the Plan into
separate plans and perform the ADP Test separately for all Participants who are
Otherwise Excludable Participants and for all Participants who are not
Otherwise Excludable Participants.

 

(f)    HCEs
and NHCEs for a Particular Plan Year.  A Participant is a Highly Compensated Employee for a
particular Plan Year if that Participant meets the definition of a Highly
Compensated Employee in effect for that Plan Year. Similarly, a Participant is
a Non-Highly Compensated Employee for a particular Plan Year if the Participant
does not meet the definition of a Highly Compensated Employee in effect for
that Plan Year.

 

(g)   ADP
for an HCE in Multiple CODAs of the Sponsoring Employer. The ADP for any Participant who is a
Highly Compensated Employee for the Plan Year and who is eligible to have
Elective Deferrals (and Qualified Non-Elective Contributions or Qualified
Matching Contributions, or both, if treated as Elective Deferrals for purposes
of the ADP Test) allocated to such Participant’s accounts under two or more
cash or deferral arrangements (CODAs) described in Code §401(k), that are
maintained by the Sponsoring Employer, will be determined as if such Elective
Deferrals (and, if applicable, such Qualified Non-Elective Contributions or
Qualified Matching Contributions, or both) were made under a single
arrangement. If a Highly Compensated Employee participates in two or more CODAs
of the Sponsoring Employer that have different plan years, all Elective
Deferrals made during the Plan Year under all such arrangements will be
aggregated. For Plan Years beginning prior to 2006 (or the year of such earlier
effective date as may be provided in a separate amendment for implementing the
final §401(k) Regulations and as permitted by such Regulations), all such
CODAs ending with or within the same calendar year will be treated as a single
arrangement. Notwithstanding the foregoing, certain plans will be treated as
separate if mandatorily disaggregated under the §401(k) Regulations.

 

(h)   Plan
Aggregation and Coverage Change Rules.  If this Plan satisfies the requirements of Code
§401(k), §401(a)(4), or §410(b) only by being aggregated with one or more
other plans of the Sponsoring Employer, or if one or more other plans satisfy
the requirements of Code §401(k), §401(a)(4), or §410(b) only by being
aggregated with this Plan, then this Section will be applied by
determining the ADP of the Employees as if all such plans (including this Plan)
were a single plan. If the Prior Year Testing Method is being used and if more
than 10% of the Employer’s NHCEs are involved in a plan coverage change as
defined in Regulation §1.401(k)-2(c)(4), then any adjustments to the Non-Highly
Compensated Employees’ ADP for the prior Plan Year will be made in accordance
with such Regulations. Plans may be aggregated in order to satisfy Code §401(k) only
if they have the same Plan Year and use the same ADP testing method (the Prior
Year Testing Method or the Current Year Testing Method).

 

(i)    Contributions
Must Be Made Within 12 Months.  Elective Deferrals, Qualified Non-Elective
Contributions, and Qualified Matching Contributions must be made, for purposes
of determining the ADP Test, by the end of the 12-month period immediately
following the Plan Year to which the contributions relate.

 

(j)    Correction
Methods for Failed ADP Test.  If a 401(k) Plan is subject to the Actual
Deferral Percentage Test (ADP Test) for a Plan Year and the Plan fails to
satisfy the ADP Test for such Plan Year, then the Sponsoring Employer will use
one or more of the following correction methods to satisfy the ADP Test for
such Plan Year (and the Sponsoring Employer has the discretion to determine
which one or more of the correct methods may be used to satisfy the ADP Test):

 

(1)   Distribution
of Excess Contributions Plus Income or Loss.  Excess Contributions of Highly Compensated
Employee(s), plus any income and minus any loss allocable to such Excess
Contributions, may be distributed pursuant to Section 5.19.

 

(2)   Recharacterization
as Voluntary Employee Contributions.  If the Sponsoring Employer elects in the Adoption
Agreement to permit Voluntary Employee Contributions and if elected by a
Participant, then, subject to the ACP Test and to the extent that the
recharacterization does not create Excess Aggregation Contributions, Elective
Deferrals allocated to a Highly Compensated Employee as Excess Contributions
may be recharacterized as Voluntary Employee Contributions. Such Participant
will treat Excess Contributions allocated to such Participant as an amount
distributed to the Participant and then contributed by the Participant to the
Plan as Voluntary Employee Contributions. Recharacterized amounts will remain
nonforfeitable. Amounts may not be recharacterized by a HCE to the extent that
such amount in combination with other Voluntary Employee Contributions made by
that Employee would exceed any stated limit under the Plan on Voluntary
Employee Contributions. Recharacterization must occur no later than 21⁄2

 

68

 

months after the last day of the Plan Year in which
such Excess Contributions arose and is deemed to occur no earlier than the date
that the last Highly Compensated Employee is informed in writing of the amount
recharacterized and the consequences thereof.

 

(3)   Recharacterization
as Catch-Up Contributions.  If the Sponsoring Employer elects in the Adoption
Agreement to permit Catch-Up Contributions, then (i) to the extent that a
catch-up eligible Participant who is a Highly Compensated Employee is to
receive a distribution of Excess Contributions, and (ii) to the extent
that such catch-up eligible Participant has not exceeded the Participant’s
Catch-Up Contribution Limit, the Excess Contributions of such Participant may
be recharacterized as Catch-Up Contributions (to the extent that the
recharacterized Catch-Up Contributions do not cause the Catch-Up Contribution
Limit to be exceeded for the taxable year of the Participant).

 

(4)   QMACs
and QNECs. The
Sponsoring Employer may make Qualified Matching Contributions pursuant to Section 3.7
and/or Qualified Non-Elective Contributions pursuant to Section 3.8 to
satisfy the ADP Test., subject to the following limitations:

 

(A)  Limitation
on Disproportionate QNECs.  Qualified Non-Elective Contributions cannot be taken
into account in the ADP Test of a Plan Year for a NHCE to the extent the QNECs
exceed the product of (i) that NHCE’s Code §414(s) Compensation,
multiplied by (ii) the greater of [a] 5% (or 10% of a NHCE’s Code §414(s) Compensation
with respect to an Employer’s obligation to make Prevailing Wage Contributions
to the Plan), or [b] two times the Plan’s Representative Contribution Rate. Any
QNEC used in an ACP Test under Regulation §1.401(m)—2(a)(6) (including the
determination of the Representative Contribution Rate for purposes of
Regulation §1.401(m)—2(a)(6)(v)(B)), cannot be used for purposes of the ADP
Test (including the determination of the Representative Contribution Rate for
purposes of the ADP Test).

 

(B)   Limitation
on QMACs.
Qualified Matching Contributions are permitted to be used in the ADP Test only
to the extent that such Qualified Matching Contributions are Matching
Contributions that are not precluded from being taken into account under the
ACP Test for the Plan Year under the rules of Regulation §1.401(m)—2(a)(5)(ii).

 

(C)   Prohibition
Against Double-Counting. Qualified Non-Elective Contributions and Qualified Matching
Contributions cannot be taken into account in the ADP Test to the extent such
contributions are taken into account for purposes of satisfying any other ADP
Test, any ACP Test, or the requirements of Regulation §1.401(k)—3, §1.401(m)—3
or §1.401(k)—4. Matching Contributions that are made pursuant to Regulation
§1.401(k)—3(c) cannot be taken into account under the ADP Test.
Furthermore, if this Plan switches from the Current Year Testing Method to the
Prior Year Testing Method pursuant to Regulation §1.401(k)—2(c), then Qualified
Non-Elective Contributions that are taken into account under the Current Year
Testing Method for a Plan Year may not be taken into account under the Prior
Year Testing Method for the next Plan Year.

 

3.19    Actual
Contribution Percentage Test and Correction. If a 401(m) Plan is subject to the Actual
Contribution Percentage Test (ACP Test) for a Plan Year, then the following rules will
apply:

 

(a)   The
ACP Test.  The ACP for Participants who are Highly Compensated Employees for the
Plan Year that is being tested and the ACP for Participants who are Non-Highly
Compensated Employees for the Applicable Plan Year must satisfy one of the
following tests:

 

(1)   1.25
Test.  The ACP for
Participants who are Highly Compensated Employees for the Plan Year that is
being tested will not exceed the ACP for Participants who are Non-Highly
Compensated Employees for the Applicable Plan Year multiplied by 1.25; or

 

(2)   Multiplied
By 2 or 2% Test.  The ACP for Participants who are Highly Compensated Employees for the
Plan Year that is being tested will not exceed the ACP for Participants who are
Non-Highly Compensated Employees for the Applicable Plan Year multiplied by
2.0, provided, that the ACP for Participants who are Highly Compensated
Employees for the Plan Year that is being tested does not exceed the ACP for
Participants who are Non-Highly Compensated Employees for the Applicable Plan
Year by more than 2 percentage points.

 

69

 

(b)   Testing
Methods and Restriction.  The Sponsoring Employer may elect either the Prior
Year Testing Method or Current Year Testing Method in the Adoption Agreement.
However, once the Sponsoring Employer has elected the Current Year Testing
Method, the Sponsoring Employer can elect the Prior Year Testing Method for a
Plan Year only if the Plan has used the Current Year Testing Method for each of
the preceding five (5) Plan Years (or if lesser, the number of Plan Years
that the Plan has been in existence) or if, as a result of a merger or
acquisition described in Code §410(b)(6)(C)(i), the Employer maintains both a
401(m) plan using the Prior Year Testing Method and a 401(m) plan
using Current Year Testing Method and the change is made within the transition
period described in Code §410(b)(6)(C)(ii).

 

(c)   Prior
Year Testing Method for the First Plan Year.  If the Sponsoring Employer has elected the Prior Year
Testing Method for the first Plan Year that the Plan permits any Participant to
make Employee Contributions, provides for Non-Safe Harbor Matching
Contributions, or both (and this is not a successor plan), then the ACP for
Participants who are Non-Highly Compensated Employees for the prior Plan Year
will be the greater of (1) three percent (3%), or (2) the ACP for
Participants who are Non-Highly Compensated Employees for the first Plan Year.

 

(d)   HCEs
as Sole Participants in Plan Year Being Tested.  If the Sponsoring Employer has elected
the Prior Year Testing Method and if there are no Participants who were
Non-Highly Compensated Employees in the prior Plan Year, then the Plan will be
deemed to satisfy the ACP Test for the Plan Year that is being tested.
Similarly, if the Sponsoring Employer has elected the Current Year Testing
Method and if there are no Participants who are Non-Highly Compensated
Employees in the current Plan Year, then the Plan will be deemed to satisfy the
ACP Test for the Plan Year that is being tested. The provisions of this
paragraph may be utilized with the permissive disaggregation rule of Section 3.19(e)(2).

 

(e)   Special
Rule for Early Participation.  If this 401(m) Plan provides that Otherwise
Excludable Participants are eligible to participate and if the Plan applies
Code §410(b)(4)(B) in determining whether the 401(m) Plan meets the
requirements of Code §410(b)(1), then in determining whether the 401(m) Plan
satisfies the ACP Test, the Sponsoring Employer may, in the Sponsoring Employer’s
discretion (but is not required to), either:

 

(1)   Early
Participation Rule.  Pursuant to Code §401(m)(5)(C), perform the ACP Test for the Plan
(determined without regard to disaggregation under Regulation §1.410(b)—7(c)(3)),
by using the ACP for all Participants who are Highly Compensated Employees for
the Plan Year  and the ACP for
Participants who are Non-Highly Compensated Employees for the Applicable Plan
Year, disregarding all Otherwise Excludable Participants who are Non-Highly
Compensated Employees; or

 

(2)   Permissive
Disaggregation Rule.  Pursuant to Regulation §1.401(m)—1(b)(4), disaggregate the Plan into
separate plans and perform the ACP Test separately for all Participants who are
Otherwise Excludable Participants and for all Participants who are not
Otherwise Excludable Participants.

 

(f)    HCEs
and NHCEs for a Particular Plan Year.  A Participant is a Highly Compensated Employee for a
particular Plan Year if that Participant meets the definition of a Highly
Compensated Employee in effect for that Plan Year. Similarly, a Participant is
a Non-Highly Compensated Employee for a particular Plan Year if the Participant
does not meet the definition of a Highly Compensated Employee in effect for
that Plan Year.

 

(g)   Plan
Aggregation and Coverage Change Rules.  If this Plan satisfies the requirements of Code
§401(m), §401(a)(4), or §410(b) only by being aggregated with one or more
other plans of the Sponsoring Employer, or if one or more other plans satisfy
the requirements of Code §401(m), §401(a)(4), or §410(b) only by being
aggregated with this Plan, then this Section will be applied by
determining the ACP of the Employees as if all such plans (including this Plan)
were a single plan. If the Plan uses the Prior Year Testing Method and if more
than 10% of the Employer’s NHCEs are involved in a plan coverage change as
defined in Regulation §1.401(m)-2(c)(4), then any adjustments to the NHCEs’ ACP
for the prior Plan Year will be made in accordance with such Regulations. Plans
may be aggregated in order to satisfy Code §401(m) only if they have the
same Plan Year and use the same ACP testing method (the Prior Year Testing
Method or the Current Year Testing Method).

 

70

 

(h)   Disproportionate
Matching Contributions With Respect to Elective Deferrals Excluded From ACP
Test. A Matching
Contribution with respect to an Elective Deferral for a Participant who is a
Non-Highly Compensated Employee is not taken into account under the ACP Test
for a Plan Year to the extent that the Matching Contribution exceeds the
greatest of (1) 5% of such Participant’s Code §414(s) Compensation; (2) 100%
of the Participant’s Elective Deferrals for the Plan Year; and (3) the
product of 2 times the Plan’s Representative Matching Rate and the Participant’s
Elective Deferrals for the Plan Year.

 

(i)    Disproportionate
Matching Contributions With Respect to Employee Contributions Excluded From ACP
Test. If the Plan
provides a Match Contribution with respect to the sum of a Participant’s
Employee Contributions and Elective Deferrals, then the sum of the Participant’s
Employee Contributions and Elective Deferrals is substituted for the amount of
the Participant’s Elective Deferrals in paragraph (h). Similarly, if the Plan
provides a Match Contribution with respect to a Participant’s Employee
Contributions (but not Elective Deferrals), then the Participant’s Employee
Contributions are substituted for the amount of the Participant’s Elective
Deferrals in paragraph (h).

 

(j)    Matching
Contributions Taken Into Account Under Safe Harbor Provisions. If this Plan satisfies the ACP safe
harbor requirements of Code §401(m)(11) for a Plan Year but nonetheless must
satisfy the ACP Test because the Plan provides for Employee Contributions for
such Plan Year, then the Sponsoring Employer is permitted (but is not required)
to apply the ACP Test by disregarding all Matching Contributions with respect
to all Participants. In addition, if this Plan satisfies the ADP safe harbor
requirements of Regulation §1.401(k)—3 for a Plan Year using ADP Safe Harbor
Matching Contributions but does not satisfy the ACP safe harbor requirements of
Code §401(m)(11) for such Plan Year, then the Sponsoring Employer is permitted
(but is not required) to apply the ACP Test by excluding Matching Contributions
with respect to all Participants that do not exceed 4% of each Participant’s
Code §414(s) Compensation. If the Plan disregards any Matching
Contributions pursuant to this paragraph, then this disregard must be applied
to all Participants.

 

(k)   Multiple
Use Test.  Effective for Plan Years beginning after December 31, 2001, the
multiple use test is repealed and does not apply to this Plan, pursuant to
EGTRRA §666.

 

(l)    Correction
Methods for Failed ACP Test.  If a 401(m) Plan is subject to the Actual
Contribution Percentage Test (ACP Test) for a Plan Year and the Plan fails to
satisfy the ACP Test for such Plan Year, then the Sponsoring Employer will use
one or more of the following correction methods to satisfy the ACP Test for
such Plan Year (and the Sponsoring Employer has the discretion to determine
which one or more of the correct methods may be used to satisfy the ACP Test):

 

(1)   Distribution
of Excess Aggregate Contributions Plus Income or Loss.  Excess Aggregate Contributions of Highly
Compensated Employee(s), plus any income and minus any loss allocable to such
Excess Aggregate Contributions, may be forfeited (if forfeitable) and may be
distributed (if non-forfeitable), pursuant to Section 5.20.

 

(2)   QNECs
and QMACs.  The Sponsoring Employer may make Qualified Matching
Contributions pursuant to Section 3.7 and/or Qualified Non-Elective
Contributions pursuant to Section 3.8 to satisfy the ACP Test, subject to
the following limitations: (A) Qualified Non-Elective Contributions are
permitted to be used in the ACP Test only to the extent that such Qualified
Non-Elective Contributions satisfy the limitations of Section 1.44(e); and
(B) Qualified Matching Contributions are permitted to be used in the ACP
Test only to the extent that such Qualified Matching Contributions satisfy the
limitations of Sections 1.44(c), 1.44(f), 1.44(g), and either 3.19(h) or
3.19(i).

 

3.20    ADP Safe
Harbor Contributions. A 401(k) Plan that satisfies the ADP Safe Harbor Contribution
requirements of Code §401(k)(12) for a Plan Year is a Safe Harbor 401(k) Plan
if it satisfies the following requirements:

 

(a)   ADP
Safe Harbor Contribution. The Sponsoring Employer makes an ADP Safe Harbor
Contribution on behalf of each Safe Harbor Participant, equal to either an ADP
Safe Harbor Non-Elective Contribution or an ADP Safe Harbor Matching
Contribution, that satisfies the following requirements:

 

(1)   ADP
Safe Harbor Non-Elective Contribution.  An ADP Safe Harbor Non-Elective Contribution equal to
at least three percent (3%) of the Safe Harbor Participant’s Compensation for
the Plan Year; or

 

71

 

(2)   ADP
Safe Harbor Matching Contribution.  An ADP Safe Harbor Matching Contribution in an amount
determined under either a basic matching formula or an enhanced matching
formula, that satisfies the following requirements:

 

(A)  Basic
Matching Formula.  An ADP Safe Harbor Matching Contribution in an amount equal to the sum
of (i) 100% of the amount of the Safe Harbor Participant’s Elective
Deferrals that do not exceed 3% of the Safe Harbor Participant’s Compensation;
plus (ii) 50% of the amount of the Safe Harbor Participant’s Elective
Deferrals that exceed 3% of the Safe Harbor Participant’s Compensation but that
do not exceed 5% of the Safe Harbor Participant’s Compensation.

 

(B)   Enhanced
Matching Formula.  An ADP Safe Harbor Matching Contribution formula that, at any rate of
Safe Harbor Participant’s Elective Deferrals, provides an aggregate amount of
ADP Safe Harbor Matching Contributions that is at least equal to the aggregate
amount of ADP Safe Harbor Matching Contributions that would have been provided
under the basic matching formula of paragraph (a)(2)(A). Furthermore, the ratio
of a Safe Harbor Participant’s ADP Safe Harbor Matching Contributions under the
enhanced matching formula for a Plan Year to the Safe Harbor Participant’s
Elective Deferrals may not increase as the amount of a Safe Harbor Participant’s
Elective Deferrals increases.

 

(C)   Limitation
on HCE Matching Contributions.  The ratio of ADP Safe Harbor Matching Contributions to
Elective Deferrals of a Safe Harbor Participant who is a Highly Compensated
Employee must not exceed the ratio of ADP Safe Harbor Matching Contributions to
Elective Deferrals of any Safe Harbor Participant who is a Non-Highly
Compensated Employee with Elective Deferrals at the same percentage of
Compensation as any Highly Compensated Employee.

 

(D)  ADP
Safe Harbor Matching Contributions on Employee Contributions.  ADP Safe Harbor Matching Contributions
may be made on both Elective Deferrals and Employee Contributions if the ADP
Safe Harbor Matching Contributions are made with respect to the sum of Elective
Deferrals and Employee Contributions on the same terms as ADP Safe Harbor
Matching Contributions that are made with respect to Elective Deferrals alone.
Alternatively, ADP Safe Harbor Matching Contributions may be made on both
Elective Deferrals and Employee Contributions if the ADP Safe Harbor Matching
Contributions on Elective Deferrals are not affected by the amount of Employee
Contributions.

 

(E)   Periodic
Matching Contributions. If the Employer elects to contribute and allocate separately ADP Safe
Harbor Matching Contributions for an Allocation Period of less than the Plan
Year (e.g., each payroll period or with respect to all payroll periods ending
with or within each month or quarter of a Plan Year), then such ADP Safe Harbor
Matching Contributions with respect to any Elective Deferrals made during a
Plan Year quarter will be contributed to the Plan by the last day of the
immediately following Plan Year quarter.

 

(F)   Catch-Up
Contributions.  With respect to ADP Safe Harbor Matching Contributions, Catch-Up
Contributions will be treated as any other Elective Deferrals and will be
matched according to the ADP Safe Harbor Matching Contribution formula as if
the Catch-Up Contributions were any other Elective Deferrals.

 

(G)   Permissible
Restrictions on Elective Deferrals by NHCEs.  Elective Deferrals by Safe Harbor Participants who are
NHCEs cannot be restricted, except pursuant to the following rules:

 

(i)    Restrictions
on Election Periods.  The Plan may limit the frequency and duration of periods in which Safe
Harbor Participants may make or change cash or deferred elections under the
Plan. However, a Safe Harbor Participant must have a reasonable opportunity
(including a reasonable period after receipt of the Safe Harbor Notice) to make
or change a cash or deferred election for the Plan Year. A 30-day period is
deemed to be a reasonable period to make or change a cash or deferred election.

 

72

 

(ii)   Restrictions
on Amount of Elective Deferrals.  The Plan may limit the amount of Elective Deferrals
that may be made by a Safe Harbor Participant, provided that each Safe Harbor
Participant who is a NHCE is permitted (unless restricted under paragraph
(a)(2)(G)(iv)) to make Elective Deferrals in an amount that is at least
sufficient to receive the maximum amount of ADP Safe Harbor Matching
Contributions available under the Plan for the Plan Year, and the Safe Harbor
Participant who is a NHCE is permitted to elect any lesser amount of Elective
Deferrals. However, the Plan may limit cash or deferred elections to whole
percentages of Compensation or whole dollar amounts.

 

(iii)  Restrictions
on Types of Compensation that May Be Deferred. The Plan may limit the types of
Compensation that may be deferred by a Safe Harbor Participant, provided that
each Safe Harbor Participant who is a Non-Highly Compensated Employee is
permitted to make Elective Deferrals under a definition of Compensation that is
a reasonable definition of compensation within the meaning of Regulation
§1.414(s)—1(d)(2). Therefore, the definition of Compensation from which
Elective Deferrals may be made is not required to satisfy the nondiscrimination
requirement of Regulation §1.414(s)—1(d)(3).

 

(iv)  Restrictions
Due to Limitations Under the Code.  The Plan may limit the amount of Elective Deferrals
made by an a Safe Harbor Participant under the Plan either [a] because of the
limitations of Code §402(g) or §415; or [b] because, on account of a
financial hardship distribution, the Safe Harbor Participant’s ability to make
Elective Deferrals has been suspended for 6 months in accordance with
Regulation §1.401(k)—1(d)(3)(iv)(E).

 

(b)   Safe
Harbor Notice.  The
Sponsoring Employer must give a Safe Harbor Notice to each Safe Harbor Participant,
which must satisfy the following content and timing requirements:

 

(1)   Safe
Harbor Notice Must Be Written.  The Safe Harbor Notice must be in writing or in such
other form of communication as permitted by Regulation §1.401(a)—21.

 

(2)   Content
Requirements.  The content requirement for a Safe Harbor Notice is satisfied if the
Safe Harbor Notice is sufficiently accurate and comprehensive to inform the
Safe Harbor Participant of the Safe Harbor Participant’s rights and obligations
under the plan; and the Safe Harbor Notice is written in a manner calculated to
be understood by the average Safe Harbor Participant in the Plan. A Safe Harbor
Notice will satisfy this content requirement if the Safe Harbor Notice
accurately describes (A) the ADP Safe Harbor Contribution formula used by
the Plan (including a description of the levels of ADP Safe Harbor Matching
Contributions, if any, available under the Plan); (B) any other
contributions under the Plan or Matching Contributions to another plan on
account of Elective Deferrals or Employee Contributions under this plan
(including the potential for discretionary Matching Contributions) and the
conditions under which such contributions are made; (C) the plan to which
the ADP Safe Harbor Contribution will be made (if different than this Plan); (D) the
type and amount of Compensation that may be deferred under the Plan; (E) how
to make cash or deferred elections, including any administrative requirements
that apply to such elections; (F) the periods available under the plan for
making cash or deferred elections; (G) the distribution and Vesting
provisions applicable to contributions under the Plan; and (H) information
that makes it easy to obtain additional information about the Plan (including
an additional copy of the summary plan description) such as telephone numbers,
addresses and, if applicable, electronic addresses, of individuals or offices
from whom Safe Harbor Participants can obtain such Plan information. The Safe
Harbor Notice may cross-reference relevant portions of a summary plan
description that provides the same information that would be provided (or is
concurrently provided) to Safe Harbor Participants, with respect to information
described in: (i) paragraph (b)(2)(B) (relating to any other
contributions under the Plan); (ii) paragraph (b)(2)(C) (relating to
the plan to which safe harbor contributions will be made); and/or (iii) paragraph
(b)(2)(D) (relating to the type and amount of Compensation that may be
deferred under the Plan).

 

(3)   Timing
Requirement.  The
timing requirement for a Safe Harbor Notice is satisfied if the Safe Harbor
Notice is provided within a reasonable period before the beginning of the Plan
Year (or, in the Plan Year in which an Employee will become a Safe Harbor
Participant, within a reasonable period before the Employee becomes a Safe
Harbor Participant). The determination of whether a Safe Harbor Notice
satisfies the timing requirement is based on all of the relevant facts and
circumstances. However, this timing requirement is deemed to be satisfied if at
least 30 days, but not more than 90 days, or any other reasonable period,
before the beginning of a Plan Year, the Safe Harbor Notice is 

 

73

 

given to each Safe Harbor Participant for the Plan
Year. In the case of an Employee who does not receive the Safe Harbor Notice
within the period described in the previous sentence because the Employee
becomes a Safe Harbor Participant after the 90th day before the beginning of
the Plan Year, the timing requirement is deemed to be satisfied if the Safe
Harbor Notice is provided no more than 90 days before the Employee becomes a
Safe Harbor Participant (and no later than the date that the Employee becomes a
Safe Harbor Participant). The preceding sentence would apply in the case of any
Employee who becomes a Safe Harbor Participant for the first Plan Year under a
newly established plan that provides for Elective Deferrals, or would apply in
the case of the first Plan Year in which an Employee becomes a Safe Harbor
Participant under an existing plan that provides for Elective Deferrals.

 

(c)   Plan
Year Requirement.  Except
as provided in this paragraph or paragraph (d), the Sponsoring Employer must
adopt ADP Safe Harbor Contribution provisions before the first day of the Plan
Year and remain in effect for an entire 12-month Plan Year. In addition, except
as provided in paragraph (e), if the Plan includes ADP Safe Harbor Contribution
provisions, then the Plan cannot be amended to change such provisions for that
Plan Year. Moreover, if ADP Safe Harbor Non-Elective Contributions or ADP Safe
Harbor Matching Contributions will be made to another plan for a Plan Year,
provisions under that other plan that specify that the ADP Safe Harbor
Contributions will be made and provide that the contributions will be ADP Safe
Harbor Non-Elective Contributions or ADP Safe Harbor Matching Contributions
must also be adopted before the first day of that Plan Year. A 401(k) Plan
will be considered to be a Safe Harbor 401(k) Plan  for a Plan Year of less than 12 months,
pursuant to the following rules:

 

(1)   Initial
Plan Year.  If this Plan is a newly established plan (other than a successor plan
within the meaning of Regulation §1.401(k)—2(c)(2)(iii)), then the Plan Year
may be less than 12 months, provided that the Plan Year is at least 3 months
long (or, in the case of a newly established Employer that establishes the Plan
as soon as administratively feasible after the employer comes into existence, a
shorter period). Similarly, a cash or deferred arrangement may be added to an
existing profit sharing, stock bonus, or pre-ERISA money purchase pension plan
for the first time during that Plan Year, provided that (A) the Plan is
not a successor plan; and (B) the cash or deferred arrangement is made
effective no later than 3 months prior to the end of the Plan Year.

 

(2)   Change
of Plan Year.  If the Plan has a short Plan Year as a result of changing its Plan
Year, then the Plan Year may be less than 12 months, provided that (A) the
Plan satisfied the requirements of this Section for the immediately
preceding Plan Year; and (B) the Plan satisfies the requirements of this Section (determined
without regard to paragraph (e)) for the immediately following Plan Year (or
for the immediately following 12 months if the immediately following Plan Year
is less than 12 months).

 

(3)   Final
Plan Year. If the
Plan terminates during a Plan Year, then the final Plan Year may be less than
12 months, provided that the Plan satisfies the requirement of this Section through
the date of termination and either (A) the Plan satisfies the requirements
of paragraph (e), treating the termination of the Plan as a reduction or
suspension of ADP Safe Harbor Matching Contributions, other than the
requirement that Safe Harbor Participants have a reasonable opportunity to
change their cash or deferred elections and, if applicable, Employee
Contribution elections; or (B) the Plan termination is in connection with
a transaction described in Code §410(b)(6)(C) or the employer incurs a
substantial business hardship comparable to a substantial business hardship
described in Code §412(d).

 

(d)   Contingent
ADP Safe Harbor Non-Elective Contributions.  Notwithstanding paragraph (c), if the Plan that
provides for the use of the Current Year Testing Method, then the Plan may be
amended after the first day of the Plan Year and no later than 30 days before
the last day of the Plan Year to adopt ADP Safe Harbor Non-Elective
Contributions for the Plan Year, effective as of the first day of the Plan
Year, but only if the Plan provides the contingent Safe Harbor Notice and
follow-up Safe Harbor Notice:

 

(1)   Contingent
Safe Harbor Notice Provided.  The requirement to provide the contingent
Safe Harbor Notice is satisfied, if the Plan provides a Safe Harbor Notice that
would satisfy the requirements of paragraph (b), except that, in lieu of
setting forth the ADP Safe Harbor Contributions used under the Plan as set
forth in paragraph (b)(2)(A), the Safe Harbor Notice specifies that the Plan
may be amended during the Plan Year to include the ADP Safe Harbor Non-Elective
Contribution and that, if the Plan is amended, a follow-up Safe Harbor Notice
will be provided.

 

74

 

(2)   Follow-up
Safe Harbor Notice Requirement.  The requirement to provide the follow-up Safe Harbor
Notice is satisfied if, no later than 30 days before the last day of the Plan
Year, each Safe Harbor Participant is given a Safe Harbor Notice that states
that the ADP Safe Harbor Non-Elective Contribution will be made for the Plan
Year. The Safe Harbor Notice must be in writing or in such other form of
communication as permitted by Regulation §1.401(a)—21 and is permitted to be
combined with a contingent Safe Harbor Notice for the next Plan Year.

 

(e)   Permissible
Reduction or Suspension of ADP Safe Harbor Matching Contributions.  If the Plan provides for ADP Safe Harbor
Matching Contributions for a Plan Year, then the Plan may be amended during the
Plan Year to reduce or suspend ADP Safe Harbor Matching Contributions on future
Elective Deferrals (and, if applicable, Employee Contributions), provided that:

 

(1)   Supplemental
Notice.  All Safe
Harbor Participants are provided a supplemental notice in writing or in such
other form of communication as permitted by Regulation §1.401(a)—21, that
explains (A) the consequences of the amendment which reduces or suspends
ADP Safe Harbor Matching Contributions on future Elective Deferrals and, if
applicable, Employee Contributions; (B) the procedures for changing their
cash or deferred election and, if applicable, their Employee Contribution
elections; and (C) the effective date of the amendment.

 

(2)   Effective
Date.  The
reduction or suspension of ADP Safe Harbor Matching Contributions is effective
no earlier than the later of (A) 30 days after Safe Harbor Participants
are provided the supplemental notice, or (B) the date that the amendment
is adopted.

 

(3)   Opportunity
to Change Deferral Elections.  Safe Harbor Participants are given a reasonable
opportunity (including a reasonable period after receipt of the supplemental
notice) prior to the reduction or suspension of safe harbor matching
contributions to change their cash or deferred elections and, if applicable,
their Employee Contribution elections.

 

(4)   Satisfaction
of ADP Test.  The Plan is amended to provide that the ADP Test will be satisfied for
the entire Plan Year in which the reduction or suspension occurs using the
Current Year Testing Method.

 

(5)   Satisfaction
through Effective Date. The Plan satisfies the requirements of this Section (other than
this paragraph) with respect to Elective Deferrals and/or Employee
Contributions through the effective date of the amendment.

 

(f)    Additional
Rules.  The
following additional rules apply to ADP Safe Harbor Contributions:

 

(1)   ADP
Safe Harbor Contributions Taken into Account.  An ADP Safe Harbor Contribution is taken into account
for purposes of this Section for a Plan Year if the ADP Safe Harbor
Contribution would be taken into account for such Plan Year under the rules of
Regulation §1.401(k)—2(a) or §1.401(m)—2(a). Thus, an ADP Safe Harbor
Matching Contribution must be made within 12 months after the end of the Plan
Year. Similarly, an Elective Deferral that would be taken into account for a
Plan Year under Regulation §1.401(k)—2(a)(4)(i)(B)(2) must be taken into
account for such Plan Year for purposes of this Section, even if the
Compensation would have been received after the close of the Plan Year.

 

(2)   Use
of ADP Safe Harbor Non-Elective Contributions for Other Non-Discrimination
Tests.  ADP Safe
Harbor Non-Elective Contributions may also be taken into account for purposes
of determining whether the Plan satisfies Code §401(a)(4). Thus, ADP Safe
Harbor Non-Elective Contributions are not subject to the limitations on
Qualified Non-Elective Contributions under Regulation §1.401(k)—2(a)(6)(ii),
but are subject to the rules generally applicable to Non-Elective
Contributions under Code §401(a)(4) and Regulation §1.401(a)(4)—1(b)(2)(ii).
However, pursuant to Code §401(k)(12)(E)(ii), ADP Safe Harbor Matching
Contributions and ADP Safe Harbor Non-Elective Contributions may not be taken
into account under the Plan (or any other plan) for purposes of Code §401(l) (including
the imputation of permitted disparity under Regulation §1.401(a)(4)—7).

 

(3)   Early
Participation Rule.  The Plan is permitted to apply the rules of Code
§410(b)(4)(B) to treat the Plan as two separate plans for purposes of Code
§410(b) and apply the safe harbor requirements to one plan and apply the
requirements of Regulation §1.401(k)—2 to the other plan.

 

75

 

(4)   Satisfying
ADP Safe Harbor Contribution Requirements under Another Plan. ADP Safe Harbor Non-Elective
Contributions or ADP Safe Harbor Matching Contributions may be made to this
Plan or to another defined contribution plan that satisfies Code §401(a) or
§403(a). If ADP Safe Harbor Contributions are made to another defined
contribution plan, then this Plan must specify the plan to which the ADP Safe
Harbor Contributions are being made and the ADP Safe Harbor Contribution
requirements of paragraph (a) must be satisfied in the other defined
contribution plan in the same manner as if the ADP Safe Harbor Contributions
were made to this Plan. The plan to which the ADP Safe Harbor Contributions are
being made must have the same Plan Year as this Plan, and each Safe Harbor
Participant under this Plan must be eligible under the same conditions under
the other defined contribution plan. The plan to which the ADP Safe Harbor
Contributions are being made need not be a plan that can be aggregated with
this Plan.

 

(5)   Contributions
Used Only Once.  ADP
Safe Harbor Non-Elective Contributions or ADP Safe Harbor Matching
Contributions cannot be used to satisfy the ADP Safe Harbor Contribution
requirements for more than one plan.

 

3.21    ACP Safe
Harbor Contributions. Matching Contributions (including, if applicable, ADP Safe Harbor
Matching Contributions) that satisfy the ACP Safe Harbor Matching Contribution
requirements of Code §401(m)(11) for a Plan Year are ACP Safe Harbor Matching
Contributions in a Safe Harbor 401(m) Plan if such contributions
(including, if applicable, ADP Safe Harbor Matching Contributions) satisfy the
following requirements:

 

(a)   Satisfaction
of ADP Safe Harbor Contribution Requirements.  The Plan must satisfy the ADP Safe Harbor Contribution
requirements of Section 3.20 with either ADP Safe Harbor Non-Elective
Contributions (including contingent ADP Safe Harbor Non-Elective Contributions
of Section 3.20(d)) or ADP Safe Harbor Matching Contributions. Pursuant to
Code §401(k)(12)(E)(ii), the ADP Safe Harbor Contribution requirements must be
satisfied without regard to Code §401(l).

 

(b)   Limitation
on Matching Contributions.  The Plan that provides for ACP Safe Harbor Matching
Contributions must satisfy the following limitations:

 

(1)   Matching
Contribution Rate Must Not Increase.  The ratio of Matching Contributions on behalf of a
Safe Harbor Participant for a Plan Year to the Safe Harbor Participant’s Elective
Deferrals and Employee Contributions, cannot not increase as the amount of a
Safe Harbor Participant’s Elective Deferrals and Employee Contributions
increases;

 

(2)   Matching
Contribution Cannot Be Made for Deferrals in Excess of 6% of Compensation.  Matching Contributions cannot be made
with respect to Elective Deferrals or Employee Contributions that exceed six
percent (6%) of the Safe Harbor Participant’s Compensation;

 

(3)   Discretionary
Matching Contribution Cannot Exceed 4% of Compensation. If Matching Contributions are
discretionary, then the Matching Contributions cannot exceed 4% of the Safe
Harbor Participant’s Compensation; and

 

(4)   Limitation
on Rate of Match.
The ratio of Matching Contributions on behalf of a Safe Harbor Participant who
is a HCE to his or her Elective Deferrals or Employee Contributions (or to the
sum thereof) for that Plan Year is no greater than the ratio of Matching
Contributions to Elective Deferrals or Employee Contributions (or the sum of
Elective Deferrals and Employee Contributions) that would apply with respect to
any Safe Harbor Participant who is a NHCE for whom the Elective Deferrals or
Employee Contributions (or the sum of Elective Deferrals and Employee
Contributions) are the same percentage of Compensation. The determination of
the rate of Matching Contributions will be made pursuant to the rules of
Regulation §1.401(m)-3(d)(4) and §1.401(m)-3(d)(5).

 

(5)   Catch-Up
Contributions.  With respect to ACP Safe Harbor Matching Contributions, Catch-Up
Contributions will be treated as any other Elective Deferrals and will be
matched according to the ACP Safe Harbor Matching Contribution formula as if
the Catch-Up Contributions were Elective Deferrals.

 

76

 

(6)   Permissible
Restrictions on Elective Deferrals or Employee Contributions by NHCEs. Elective Deferrals and/or Employee
Contributions by Safe Harbor Participants who are NHCEs cannot be restricted,
except pursuant to the rules of Section 3.20(a)(2)(G) (which rules will
apply to Elective Deferrals and/or Employee Contributions) and Regulation
§1.401(m)-3(d)(6).

 

(c)   Safe
Harbor Notice.  The
Sponsoring Employer must give a Safe Harbor Notice to each Safe Harbor
Participant that satisfies the content and timing requirements of Section 3.20(b) and
Reg. §1.401(k)-3(d).

 

(d)   Plan
Year Requirement. The
Sponsoring Employer must adopt ACP Safe Harbor Matching Contributions
provisions before the first day of the Plan Year and remain in effect for an
entire 12-month Plan Year, subject to the rules and exceptions of Section 3.20(c) (which
will apply to ACP Safe Harbor Matching Contributions) and Regulation
§1.401(m)-3(f). For purposes of an initial Plan Year of a Plan, the amendment
providing for ACP Safe Harbor Matching Contributions must be made effective at
the same time as the adoption of a cash or deferred arrangement that satisfies
the requirements of Regulation §1.401(k)-3.

 

(e)   Permissible
Reduction or Suspension of ACP Safe Harbor Matching Contributions.  If the Plan provides for ACP Safe Harbor
Matching Contributions for a Plan Year, then the Plan may be amended during the
Plan Year to reduce or suspend ACP Safe Harbor Matching Contributions on future
Elective Deferrals (and, if applicable, Employee Contributions), subject to the
rules of Section 3.20(e) (which rules will apply to ACP
Safe Harbor Matching Contributions) and Regulation §1.401(m)-3(h).

 

(f)    Additional
Rules.  The
following additional rules apply to ACP Safe Harbor Matching
Contributions:

 

(1)   ACP
Safe Harbor Matching Contributions Taken into Account.  An ACP Safe Harbor Matching Contribution
is taken into account for purposes of this Section for a Plan Year,
pursuant to the same rules of Section 3.20(f)(1) and Regulation
§1.401(k)-3(h)(1).

 

(2)   Early
Participation Rule.  The Plan is permitted to apply the rules of Code
§410(b)(4)(B) to treat the 401(m) Plan as two separate plans for
purposes of Code §410(b) and apply the safe harbor requirements to one
plan and apply the requirements of Regulation §1.401(m)—2 to the other plan.

 

(3)   Satisfying
ACP Safe Harbor Matching Contribution Requirements Under Another Plan.  ACP Safe Harbor Matching Contributions
may be made to this Plan or to another defined contribution plan that satisfies
Code §401(a) or §403(a), pursuant to the same rules of Section 3.20(f)(4) and
Regulation §1.401(k)-3(h)(4). Consequently, each Safe Harbor Participant who is
a NHCE under the plan providing for ACP Safe Harbor Matching Contributions must
be eligible under the same conditions under the other defined contribution plan
and the plan to which the contributions are made must have the same Plan Year
as the plan providing the ACP Safe Harbor Matching Contributions.

 

(4)   ACP
Safe Harbor Matching Contributions Used Only Once. ACP Safe Harbor Matching Contributions cannot
be used to satisfy the ACP Safe Harbor Matching Contribution requirements for
more than one plan.

 

(5)   Plan
Must Satisfy ACP Test With Respect to Employee Contributions.  If this Plan permits Employee
Contributions, then in addition to satisfying the requirements of this Section,
the Plan must also satisfy the ACP Test. However, the ACP Test is permitted to
be performed disregarding some or all ACP Safe Harbor Matching Contributions
when this Section is satisfied with respect to the ACP Safe Harbor Matching
Contributions, pursuant to Section 3.19(j) and Regulation
§1.401(m)-2(a)(5)(iv).

 

3.22    General
Non-Discrimination Test Requirements. For Plan Years beginning on or after January 1,
2002, if the Sponsoring Employer applies the general test for non-discrimination
as set forth in Code §401(a)(4) based upon Equivalent Accrual Rates to
demonstrate that a Non-Safe Harbor Non-Elective Contribution that is made to
this Plan is non-discriminatory, or if a Non-Safe Harbor Non-Elective
Contribution that is made to this Plan is aggregated with one or more other
plans of the Sponsoring Employer so that the Sponsoring Employer can apply the
general test for non-discrimination set forth in Code §401(a)(4) based
upon Equivalent Accrual Rates for the defined contribution plan(s) (including
this Plan) to demonstrate that the plans (including this Plan) are
non-discriminatory, then the following rules will apply:

 

77

 

(a)   Defined
Contribution Rule.  If this Plan (or any defined contribution plan(s) which are
aggregated with this Plan) is not aggregated with any defined benefit plan of
the Sponsoring Employer for purposes of applying the general test for
non-discrimination based upon Equivalent Accrual Rates for this Plan (or any
defined contribution plan(s) which are aggregated with this Plan), then
any NHCE who is a Participant in this Plan (or, if any defined contribution
plan(s) are aggregated with this Plan, any NHCE who is a Participant in
this Plan or the other defined contribution plan(s)) and who receives an
allocation of Non-Elective Contributions and/or QNECs must receive an
allocation of Non-Elective Contributions and/or QNECs that is at least equal to
the Minimum Allocation Gateway for the Plan Year, subject to the following
provisions:

 

(1)   Circumstances
When Minimum Allocation Gateway Not Required.  The Minimum Allocation Gateway requirement need not be
satisfied if this Plan (or the group of any defined contribution plan(s) which
are aggregated with this Plan) has Broadly Available Allocation Rates or a
Gradually Increasing Age or Service Schedule.

 

(2)   Treatment
of Otherwise Excludable Participants. For purposes of this paragraph (a), Otherwise
Excludable Participants will not be considered.

 

(b)   Combination
of Defined Benefit/Defined Contribution Rule.  If this Plan (or any defined contribution plan(s) which
are aggregated with this Plan) is aggregated with any defined benefit plan for
purposes of applying the general test for non-discrimination based upon
Equivalent Accrual Rates for this Plan (or any defined contribution plan(s) which
are aggregated with this Plan), then the Aggregate Normal Allocation Rate of
each Non-Highly Compensated Employee in any plan that is part of the aggregated
defined benefit plan(s) and defined contribution plan(s) (including
this Plan) must be at least equal to the Minimum Aggregate Allocation Gateway
for the Plan Year, subject to the following provisions:

 

(1)   Circumstances
When Minimum Aggregate Allocation Gateway Not Required. The Minimum Aggregate Allocation Gateway
requirement need not be satisfied if the aggregated combination of defined
benefit plan(s) and defined contribution plan(s) (including this
Plan) either is Primarily Defined Benefit in Character or consists of Broadly
Available Separate Plans.

 

(2)   Treatment
of Otherwise Excludable Participants.  For purposes of this paragraph (b), Otherwise
Excludable Participants will not be considered.

 

3.23    Annual
Overall and Cumulative Permitted Disparity Limit. In any Plan Year, if an Employee benefits
under more than one plan, then the annual overall permitted disparity limit of
this Section is satisfied only if an Employee’s Total Annual Disparity
Fraction does not exceed one. Furthermore, the cumulative permitted disparity
limit for a Participant is 35 Total Cumulative Permitted Disparity Years. The
following rules apply in determining compliance with the two prior
sentences:

 

(a)   Plans
Taken into Account.  All plans of the Employer are taken into account. In addition, all
plans of any other employer are taken into account for all Service with the
other employer for which the Employee receives credit for purposes of
allocations/benefit accruals under any plan of the current Employer.

 

(b)   Application
of the Limit. The
limit of this Section takes into account the disparity provided under a
section 401(l) plan, as defined in Regulation §1.401(a)(4)-12, and the
permitted disparity imputed under a plan that satisfies Code §401(a)(4) by
relying on Regulation §1.401(a)(4)-7.

 

(c)   Total Annual
Disparity Fraction.  The term “Total Annual Disparity Fraction” means the sum of the
Employee’s Annual Disparity Fractions for a Plan Year. An Employee’s Total
Annual Disparity Fraction is determined as of the end of each Plan Year, based
on the Employee’s Annual Disparity Fractions under all plans with plan years
ending in the current Plan Year. The following subparagraphs determine an
Employee’s Annual Disparity Fractions:

 

(1)   Annual Disparity Fraction for a Defined Contribution
Plan. The Annual Disparity
Fraction for an Employee benefiting under a defined contribution plan that is a
section 401(l) plan, as defined in Regulation §1.401(a)(4)-12, is a
fraction: (A) the numerator of which is the disparity provided under the
plan for the Plan Year; and (B) the denominator of which is the maximum
excess allowance under Regulation §1.401(l)-2(b)(2) for the Plan Year.

 

78

 

(2)   Annual Disparity Fraction for a Defined Benefit Excess
Plan. The Annual Disparity
Fraction for an Employee benefiting under a defined benefit excess plan that is
a section 401(l) plan, as defined in Regulation §1.401(a)(4)-12, is a
fraction: (A) the numerator of which is the disparity provided under the
plan for the Plan Year; and (B) the denominator of which is the maximum
excess allowance under Regulation §1.401(l)-3(b)(2) for the Plan Year.

 

(3)   Annual Disparity Fraction for a Defined Benefit Offset
Plan. In general, the Annual
Disparity Fraction for an Employee benefiting under a defined benefit offset
plan that is a section 401(l) plan, as defined in Regulation
§1.401(a)(4)-12, is a fraction: (A) the numerator of which is the
disparity provided under the plan for the Plan Year; and (B) the
denominator of which is the maximum offset allowance under Regulation
§1.401(l)-3(b)(3) for the Plan Year. However, if a defined benefit offset
plan applies an offset of a specified percentage of the employee’s PIA, as
permitted under Regulation §1.401(l)-3(c)(2)(ix), then the numerator of the
prior sentence is the offset percentage used in the Code §401(l) overlay
under the plan.

 

(4)   Annual Disparity Fraction for a Plan that Imputes
Disparity. The Annual
Disparity Fraction for an Employee benefiting under a plan that imputes
permitted disparity with respect to the Employee under Regulation
§1.401(a)(4)-7 is one.

 

(5)   Annual Disparity Fraction for a Plan that Neither is a Section 401(l) Plan
Nor Imputes Disparity The
Annual Disparity Fraction for an Employee benefiting under a plan that neither
is a section 401(l) plan as defined in Regulation §1.401(a)(4)-12 nor
imputes permitted disparity under Regulation §1.401(a)(4)-7 is zero.

 

(6)   Determination of Annual Disparity Fractions.  Generally, a separate Annual Disparity
Fraction is determined for each plan under which the Employee benefits. If two
plans are aggregated and treated as a single plan for purposes of Code
§401(a)(4), a single annual disparity fraction applies to the aggregated plan.
However, if a plan provides an allocation or benefit equal to the sum of two or
more formulas, then each formula is considered a separate plan for purposes of
this Section. If a plan provides an allocation or benefit equal to the greater
of two or more formulas, then an Annual Disparity Fraction is calculated for
the Employee under each formula and the largest of the fractions is the
Employee’s Annual Disparity Fraction under the plan.

 

(d)   Adjustment
to Plans if Total Annual Disparity Fraction Exceeds One. If (1) this Plan utilizes the
disparity provided under a section 401(l) plan as defined in Regulation
§1.401(a)(4)-12 and/or the permitted disparity imputed under a plan that
satisfies Code §401(a)(4) by relying on Regulation §1.401(a)(4)-7, and (2) the
Total Annual Disparity Fraction exceeds one, then the following provisions will
apply in a uniform manner for all Employees:

 

(1)   Other Plan(s) have Adjustment Method. If the other plan(s) have a method to
adjust Employer-provided contributions or benefits to assure that the Total
Annual Disparity Fraction does not exceed one, then the adjustment method of
the other plan(s) will apply.

 

(2)   Other Plan(s) do not have Adjustment Method. If the other plan(s) do not have a
method to adjust employer-provided contributions or benefits to assure that the
Total Annual Disparity Fraction does not exceed one, then the Sponsoring
Employer will establish an administrative policy that is promulgated under Section 8.6
that adjusts Employer-provided contributions or benefits so that the Total
Annual Disparity Fraction does not exceed one.

 

(3)   Special Rule for Multiple Prototypes Using this
Same Basic Plan. Notwithstanding
anything in this Section to the contrary, if multiple prototype plans
(including this Plan) utilize this same Prototype Basic Plan, then the
Sponsoring Employer will establish an administrative policy that is promulgated
under Section 8.6 that adjusts Employer-provided contributions or benefits
so that the Total Annual Disparity Fraction does not exceed one.

 

79

 

(e)   Cumulative
Permitted Disparity Limit.  Effective for Plan Years beginning on or after January 1,
1995, the cumulative permitted disparity limit for a Participant is 35 Total
Cumulative Permitted Disparity Years. The term “Total Cumulative Permitted
Disparity Years” means the number of Plan Years credited to the Participant for
allocation or accrual purposes under this Plan, and under any other qualified
plan or simplified employee pension plan (whether or not terminated) ever
maintained by the Employer. For purposes of determining the Participant’s
cumulative permitted disparity limit, all Plan Years ending in the same
calendar year are treated as the same Plan Year. If the Participant has not
benefited under a defined benefit or target benefit plan for any Plan Year
beginning on or after January 1, 1994, then the Participant has no
cumulative disparity limit. For purposes of the prior sentence, a Participant
is not treated as benefiting under a defined benefit plan for a Plan Year if
the defined benefit plan was not a section 401(l) plan within the meaning
of Regulation §1.401(a)(4)-12 for that Plan Year and did not impute permitted
disparity under Regulation §1.401(a)(4)-7 for that Plan Year.

 

80

 

Article 4

Plan
Benefits

 

4.1      Benefit
Upon Normal (or Early) Retirement. Every Participant who has reached Normal (or Early)
Retirement Age will be entitled upon subsequent Termination of Employment with
the Employer to receive his or her Vested Aggregate Account balance determined
as of the most recent Valuation Date coinciding with or immediately preceding
the date of distribution. Distribution will be made under Section 5.1.

 

4.2      Benefit
Upon Late Retirement. A Participant who has reached Normal Retirement Age may elect to remain
employed by the Employer and retire at a later date. Such Participant will
continue to participate in the Plan and his or her Participant’s Account will
continue to receive allocations under Article 3. Upon actual retirement,
the Participant will be entitled to his or her Vested Aggregate Account balance
determined as of the most recent Valuation Date coinciding with or immediately
preceding the date of distribution. In addition, if elected in the Adoption
Agreement, a Participant who elects late retirement may at any time (1) choose
to have distributed prior to actual retirement all or part of his or her Vested
Aggregate Account balance determined as of the most recent Valuation Date
coinciding with or immediately preceding the date of distribution; or (2) choose
to have such Vested Aggregate Account balance transferred to another qualified
retirement plan maintained by the Employer. Upon actual retirement, the
Participant will be entitled to his or her undistributed Vested Aggregate
Account balance determined as of the most recent Valuation Date coinciding with
or immediately preceding the date of distribution. Distribution will be made
under Section 5.1.

 

4.3      Benefit
Upon Death. Upon
the death of a Participant prior to Termination of Employment with the
Employer, or upon the death of a Terminated Participant prior to distribution
of his or her Vested Aggregate Account, his or her Beneficiary will be entitled
to the Participant’s Vested Aggregate Account balance determined as of the most
recent Valuation Date coinciding with or immediately preceding the date of
distribution. If any Beneficiary who is living on the date of the Participant’s
death dies prior to receiving his or her entire death benefit, the portion of
such death benefit will be paid in a lump sum to the estate of such deceased
Beneficiary. The Administrator’s determination that a Participant has died and
that a particular person has a right to receive a death benefit will be final.
Distribution will be made under Section 5.2.

 

4.4      Benefit Upon Disability. If a Participant suffers a Disability prior to
Termination of Employment with the Employer, or if a Terminated Participant
suffers a Disability prior to distribution of his or her Vested Aggregate
Account, he or she will be entitled to his or her Vested Aggregate Account
balance determined as of the most recent Valuation Date coinciding with or
immediately preceding the date of distribution. Distribution will be made under
Section 5.3.

 

4.5      Benefit
Upon Termination of Employment. A Terminated Participant will be entitled to his or
her Vested Aggregate Account balance as of the most recent Valuation Date
coinciding with or immediately preceding the date of distribution. Distribution
to a Terminated Participant who does not die prior to distribution or who does
not suffer a Disability prior to distribution will be made under Section 5.4

 

4.6      Determination
of Vested Interest. A
Participant’s Vested Interest in his or her Participant’s Account will be
determined in accordance with the following provisions:

 

(a)   100%
Vesting Upon Retirement, Death or Disability.  A Participant will have a 100% Vested Interest in his
or her Participant’s Account upon reaching Normal Retirement Age prior to
Termination of Employment. If elected in the Adoption Agreement, a Participant
will also have a 100% Vested Interest therein upon (1) his or her
retirement at Early Retirement; (2) his or her Disability prior to
Termination of Employment; or (3) his or her death prior to Termination of
Employment.

 

(b)   100%
Vesting of Elective Deferral Accounts and Certain Other Accounts.  A Participant will at all times have a
100% Vested Interest in his or her Elective Deferral Account, ADP Safe Harbor
Non-Elective Contribution Account, ADP Safe Harbor Matching Contribution
Account, Qualified Matching Contribution Account, Qualified Non-Elective
Contribution Account, Voluntary Employee Contribution Account, Mandatory
Employee Contribution Account and Deemed IRA Contribution Account.

 

81

 

(c)          Vesting
of All Other Contributions.  A Participant’s Vested Interest in all Employer
contribution accounts not specified in paragraph (b) will be determined by
the Vesting schedule or schedules as elected in the Adoption Agreement. If the
Counting of Hours Method is used for Vesting purposes, then a Participant’s
Vested Interest will be based on the Years of Service that are credited to such
Participant. If the Elapsed Time Method is used for Vesting purposes, then a
Participant’s Vested Interest will be based on the 1-Year Periods of Service
that are credited to the Participant. If elected in the Adoption Agreement,
then in determining a Participant’s Vested Interest under this paragraph, a
Participant’s Years of Service or 1-Year Periods of Service will be disregarded
(1) during any period for which the Employer did not maintain this Plan or
a predecessor plan; (2) if the Counting of Hours Method is used for
Vesting purposes, then before the Vesting Computation Period in which the
Participant attains Age 18; (3) if the Elapsed Time Method is used for
Vesting purposes, then before the 1-Year Period of Service in which the
Participant attains Age 18; (4) if the Counting of Hours Method is used
for Vesting purposes, then during any Vesting Computation Period for which the
Participant fails to make Mandatory Employee Contributions to the Plan, if
applicable to the Plan; and/or (5) if the Elapsed Time Method is used for
Vesting purposes, then during any 1-Year Period of Service for which the
Participant fails to make Mandatory Employee Contributions to the Plan, if
applicable to the Plan. For Plan Years beginning before 2002, Matching
Contributions could Vest according to any Vesting schedule that satisfied Code
§411(a)(2) (and Code §416(b) if the Plan was Top Heavy). The Vesting
schedules available in the Adoption Agreement are described in more detail
below:

 

(1)   7 Year
Graded

 

	
  Years/Periods

  of Service

  	
   

  	
  Vested

  Percentage

  	
   

  
	
  1

  	
   

  	
  0

  	
  %

  
	
  2

  	
   

  	
  0

  	
  %

  
	
  3

  	
   

  	
  20

  	
  %

  
	
  4

  	
   

  	
  40

  	
  %

  
	
  5

  	
   

  	
  60

  	
  %

  
	
  6

  	
   

  	
  80

  	
  %

  
	
  7

  	
   

  	
  100

  	
  %

  

 

(2)   6 Year
Graded

 

	
  Years/Periods 

  of Service

  	
   

  	
  Vested

  Percentage

  	
   

  
	
  1

  	
   

  	
  0

  	
  %

  
	
  2

  	
   

  	
  20

  	
  %

  
	
  3

  	
   

  	
  40

  	
  %

  
	
  4

  	
   

  	
  60

  	
  %

  
	
  5

  	
   

  	
  80

  	
  %

  
	
  6

  	
   

  	
  100

  	
  %

  

 

82

 

(3)   5 Year Cliff

 

	
  Years/Periods

  of Service

  	
   

  	
  Vested

  Percentage

  	
   

  
	
  1

  	
   

  	
  0

  	
  %

  
	
  2

  	
   

  	
  0

  	
  %

  
	
  3

  	
   

  	
  0

  	
  %

  
	
  4

  	
   

  	
  0

  	
  %

  
	
  5

  	
   

  	
  100

  	
  %

  

 

(4)   3 Year Cliff

 

	
  Years/Periods

  of Service

  	
   

  	
  Vested

  Percentage

  	
   

  
	
  1

  	
   

  	
  0

  	
  %

  
	
  2

  	
   

  	
  0

  	
  %

  
	
  3

  	
   

  	
  100

  	
  %

  

 

(5)   Full and
Immediate.  A Participant’s Account will be 100% Vested upon entering the Plan as a
Participant and at all times thereafter.

 

(6)   Other.  A Participant’s Account will be Vested in
accordance with the schedule entered on the Adoption Agreement; provided,
however, that any schedule entered for a non-Top Heavy Plan Year must be at
least as favorable as either the 7 Year Graded Vesting schedule of subparagraph
(1) above or the 5 Year Cliff Vesting schedule of subparagraph (3) above.
Furthermore, any schedule entered for a Top Heavy Plan Year must be at least as
favorable as either the 6 Year Graded Vesting schedule of subparagraph (2) above
or the 3 Year Cliff Vesting schedule of subparagraph (3) above.

 

(d)         Vesting
in a Top Heavy Plan Year.  In a Top Heavy Plan Year, a Participant’s Vested
Interest in all Employer contributions allocated to his or her Participant’s
Account which are subject to a non-Top Heavy Vesting schedule will be
determined by the Top Heavy Vesting schedule as elected in the Adoption
Agreement. If this Plan ceases to be Top Heavy and the non-Top Heavy Vesting
schedule again becomes effective, a Participant’s Vested Interest as determined
under the Top Heavy Vesting schedule cannot be reduced. Furthermore, any such
reverting back to the non-Top Heavy Vesting schedule will be considered an
amendment to this Section and will be treated in accordance with paragraph
(g) below pertaining to amendments to a Vesting schedule. Only those
Years/Periods of Service which are included in determining a Participant’s
Vested Interest in a non-Top Heavy Plan Year will be included in determining a
Participant’s Vested Interest in a Top Heavy Plan Year hereunder.

 

(e)          Vesting
Requirement upon Complete Termination or Discontinuance of Contributions.  Upon a complete termination of the Plan,
or, in the case of a Plan to which Code §412 does not apply, upon a complete
discontinuance of contributions under the Plan, then (1) any Participant
who is affected by such complete termination or, if applicable, such complete
discontinuance of contributions; (2) any Participant who has not
Terminated Employment with the Employer; (3) any Participant who has
Terminated Employment with the Employer and has not received a complete
distribution of the Participant’s Vested Aggregate Account; and (4) any
Participant who has Terminated Employment but has not incurred five consecutive
Breaks in Service; will have a 100% Vested Interest in his or her unpaid
Participant’s Account.

 

83

 

(f)            Vesting
Requirement upon Partial Termination Upon partial termination of the Plan, only a
Participant who has Terminated Employment because of the event which causes the
partial termination but who has not incurred five consecutive Breaks in Service
will have a 100% Vested Interest in his or her unpaid Participant’s Account as
of the date of partial termination.

 

(g)         Amendments
to the Vesting Schedule.  No amendment to the Plan may directly or indirectly
reduce a Participant’s Vested Interest in his or her Participant’s Account. If
the Plan is amended in any way that directly or indirectly affects the
computation of a Participant’s Vested Interest in his or her Participant’s
Account, or the Plan is deemed amended by an automatic change to or from a Top
Heavy Vesting schedule, then the following provisions will apply:

 

(1)          Participant
Election.  Any Participant with at least three Years/Periods of Service may, by
filing a written request with the Administrator, elect to have the Vested
Interest in his or her Participant’s Account computed by the Vesting schedule
in effect prior to the amendment. A Participant who fails to make an election
will have the Vested Interest computed under the new schedule. The period in
which the election may be made will begin on the date the amendment is adopted
or is deemed to be made and will end on the latest of (A) 60 days after
the amendment is adopted; (B) 60 days after the amendment becomes
effective; or (C) 60 days after the Participant is issued written notice
of the amendment by the Employer or Administrator.

 

(2)          Preservation
of Vested Interest.  Notwithstanding the foregoing to the contrary, if the vesting schedule
is amended, then in the case of an Employee who is a Participant as of the
later of the date such amendment is adopted or the date it becomes effective,
the Vested Interest in his or her Participant’s Account determined as of such
date will not be less than his or her Vested Interest computed under the Plan
without regard to such amendment.

 

84

 

Article 5

Distribution of Benefits

 

5.1                   Distribution
of Benefit Upon Retirement. Unless a mandatory cash-out occurs under Section 5.5,
the retirement benefit a Participant is entitled to receive under Section 4.1
or 4.2 will be distributed as follows:

 

(a)          Normal
Form of Distribution in a 401(k) Plan or Profit Sharing Plan.  If the Plan is either a 401(k) Plan
or a profit sharing plan, then a Participant’s benefit will be distributed in
the form that is elected by the Sponsoring Employer in the Adoption Agreement;
the permitted Normal Forms of Distribution are (1) a Qualified Joint and
Survivor Annuity; (2) a lump sum payment; or (3) Substantially Equal
monthly, quarterly, semi-annual or annual cash installment payments over a
period certain which does not extend beyond the life of the Participant; the
joint lives of the Participant and a designated Beneficiary; or a period
certain not extending beyond the life expectancy of the Participant and a
designated Beneficiary. If the Normal Form of Distribution is
Substantially Equal installment payments, then the lump sum value of the
Participant’s benefit either may be segregated and separately invested and the
Substantially Equal installments will be paid from the Plan; may remain
invested in the Trust’s assets and the Substantially Equal installments will be
paid from the Plan; or may be used to purchase a nontransferable immediate or deferred
annuity that is selected by the Employer and that complies with the terms of
the Plan from an insurance company to provide for such Substantially Equal
installments.

 

(b)         Normal
Form of Distribution in a Money Purchase Pension Plan.  If the Plan is a money purchase pension
plan, then the Normal Form of Distribution is a Qualified Joint and
Survivor Annuity if the Participant has not died before the Annuity Starting
Date.

 

(c)          Optional
Forms of Distribution.  If elected by the Sponsoring Employer in the Adoption
Agreement, then a Participant may waive the Normal Form of Distribution
and elect to have his or her benefit distributed in an Optional Form of
Distribution. The permitted Optional Forms of Distribution are (1) a lump
sum payment; (2) Substantially Equal monthly, quarterly, semi-annual or
annual cash installment payments over a period certain which does not extend
beyond the life of the Participant, the joint lives of the Participant and a
designated Beneficiary, or a period certain not extending beyond the life
expectancy of the Participant and a designated Beneficiary. If an Optional Form of
Distribution is Substantially Equal installment payments, then the lump sum
value of the Participant’s benefit either may be segregated and separately
invested and the Substantially Equal installments will be paid from the Plan;
may remain invested in the Trust’s assets and the Substantially Equal
installments will be paid from the Plan; or may be used to purchase a
nontransferable immediate or deferred annuity that is selected by the Employer
and that complies with the terms of the Plan from an insurance company to
provide for such Substantially Equal installments; (3) a non-transferable
annuity which can be purchased from an insurance company and complies with the
terms of the Plan; and/or (4) in designated sums from time to time as
elected by the Participant. All Optional Forms of Distribution that are elected
by the Sponsoring Employer in the Adoption Agreement are available on a
non-discriminatory basis and are not subject to the Administrator’s discretion.

 

(d)         Partial
Distributions.  If a Participant receives a distribution of less than 100% of his or
her Vested Aggregate Account balance, then the Administrator will determine the
portion (including zero) of the distribution that will be made from each of the
Participant’s sub-accounts, provided that any such determination is made in a
uniform nondiscriminatory manner.

 

(e)          Time
of Distribution.  Distribution will be made under this Section (1) within a
reasonable time after the Participant’s actual retirement at Normal Retirement
Date (or Early Retirement Date, if applicable), or (2) within a reasonable
time after the date that a Participant who elects late retirement under Section 4.2
requests payment as permitted thereunder.

 

5.2                   Distribution
of Benefit Upon Death. Unless a mandatory cash-out occurs under Section 5.5, the death
benefit a deceased Participant’s Beneficiary is entitled to receive under Section 4.3
will be distributed as follows:

 

(a)          Surviving
Spouse.  If a
Participant has a surviving Spouse on the date of the Participant’s death, then
the deceased Participant’s surviving Spouse will be entitled to receive a death
benefit determined in accordance with the following provisions:

 

85

 

(1)          Normal
Form of Distribution Is a Qualified Joint and Survivor Annuity.  If the Normal Form of Distribution
elected under Section 5.1 is a Qualified Joint and Survivor Annuity, a
Participant dies before the Annuity Starting Date, and the Participant has a
surviving Spouse on the date of the Participant’s death, then notwithstanding
any other Beneficiary designation made by the Participant, the Participant’s
surviving Spouse will receive a minimum death benefit as a QPSA unless such
QPSA has been waived in accordance with the terms of Section 5.8. If the
QPSA has been waived, then the benefit (and any additional death benefit to
which the surviving Spouse is entitled) will be distributed in the alternate
form(s) that are elected by the Sponsoring Employer in the Adoption
Agreement. The alternate forms of distribution permitted under the Adoption
Agreement are (A) a lump sum payment; (B) Substantially Equal
monthly, quarterly, semi-annual or annual cash installment payments over a
period certain which does not extend beyond the life of the surviving Spouse
(or beyond the life expectancy of the surviving Spouse). If an alternate form
of distribution is Substantially Equal installment payments, then the lump sum
value of the Participant’s benefit either may be segregated and separately
invested and the Substantially Equal installments will be paid from the Plan;
may remain invested in the Trust’s assets and the Substantially Equal
installments will be paid from the Plan; or may be used to purchase a
nontransferable immediate or deferred annuity that is selected by the Employer
and that complies with the terms of the Plan from an insurance company to
provide for such Substantially Equal installments; (C) a non-transferable
annuity which can be purchased from an insurance company and complies with the
terms of the Plan; and/or (D) in designated sums from time to time as
elected by the Beneficiary. All alternate forms of distribution that are
elected by the Sponsoring Employer in the Adoption Agreement are available on a
non-discriminatory basis and are not subject to the Administrator’s discretion.

 

(2)          Normal
Form of Distribution Is Not a Qualified Joint and Survivor Annuity.  If the Normal Form of Distribution
elected under Section 5.1 is not a Qualified Joint and Survivor Annuity
and the Participant has a surviving Spouse on the date of the Participant’s
death, then notwithstanding any other Beneficiary designation made by a
Participant, the deceased Participant’s surviving Spouse will be entitled to
receive 100% of the deceased Participant’s death benefit unless the surviving
Spouse has waived that right in accordance with the terms of Section 5.8.
If the Normal Form of Distribution elected under Section 5.1 has been
waived, then the benefit will be distributed to the surviving Spouse in the
alternate form(s) that are elected by the Sponsoring Employer in the
Adoption Agreement. The alternate forms of distribution permitted under the
Adoption Agreement are (A) a lump sum payment; (B) Substantially
Equal monthly, quarterly, semi-annual or annual cash installment payments over
a period certain which does not extend beyond the life of the surviving Spouse
(or beyond the life expectancy of the surviving Spouse). If an alternate form
of distribution is Substantially Equal installment payments, then the lump sum
value of the Participant’s benefit either may be segregated and separately
invested and the Substantially Equal installments will be paid from the Plan;
may remain invested in the Trust’s assets and the Substantially Equal
installments will be paid from the Plan; or may be used to purchase a
nontransferable immediate or deferred annuity that is selected by the Employer
and that complies with the terms of the Plan from an insurance company to
provide for such Substantially Equal installments; (C) a non-transferable
annuity which can be purchased from an insurance company and complies with the
terms of the Plan; and/or (D) in designated sums from time to time as
elected by the Beneficiary. All alternate forms of distribution that are
elected by the Sponsoring Employer in the Adoption Agreement are available on a
non-discriminatory basis and are not subject to the Administrator’s discretion.

 

(3)          Time
of Distribution.  Any death benefit payable to a surviving Spouse will be distributed
within a reasonable time after the death of the Participant, but not later than
December 31st of the calendar year which contains the fifth anniversary of
the date of the Participant’s death pursuant to Section 5.9(b)(2)(A), if
required minimum distributions to the Participant have not begun. However, if
the Life Expectancy rule is elected in the Adoption Agreement and the
surviving Spouse elects the Life Expectancy rule under Section 5.9(b)(2)(B),
then the surviving Spouse may elect to defer distribution of the death benefit,
but distribution to the surviving Spouse must begin no later than December 31st
of the calendar year in which the deceased Participant would have attained Age
701⁄2.

 

(4)          Death
of Surviving Spouse Before Distribution Begins.  If the surviving Spouse dies before distribution
begins, then distribution will be made as if the surviving Spouse were the
Participant. If the Normal Form of Distribution that is elected under Section 5.1
is a Qualified Joint and Survivor Annuity and the QPSA has not been waived, or
if the Sponsoring Employer elects in the Adoption Agreement to permit a
Participant (or, if no election has been made by the Participant prior to the
Participant’s death, then the Participant’s surviving Spouse) to elect the Life
Expectancy rule and the Participant (or, if no election has been made by
the Participant prior to the Participant’s death, then the 

 

86

 

Participant’s surviving Spouse) elects the Life Expectancy rule, then
distribution will be considered to have begun when the deceased Participant
would have reached Age 701⁄2 even if payments have been made to the surviving
Spouse before that date. Furthermore, if distribution to the surviving Spouse
commences in the form of an irrevocable annuity over a period permitted under
subparagraph (a)(1) above before the deceased Participant would have
reached Age 701⁄2, then distribution will be considered to have begun on the
actual annuity commencement date.

 

(b)         Non-Spouse
Beneficiary.  Any death benefit payable to a non-Spouse Beneficiary will be
distributed to the Beneficiary in accordance with the following provisions:

 

(1)   Form of
Distribution.  Any such death benefit will be distributed to the Beneficiary in the
form(s) that are elected by the Sponsoring Employer in the Adoption
Agreement. The forms of distribution permitted under the Adoption Agreement are
(A) a lump sum payment; (B) Substantially Equal monthly, quarterly,
semi-annual or annual cash installment payments over a period certain which
does not extend beyond the life of the Beneficiary (or beyond the life
expectancy of the Beneficiary). If a form of distribution is Substantially
Equal installment payments, then the lump sum value of the Participant’s
benefit either may be segregated and separately invested and the Substantially
Equal installments will be paid from the Plan; may remain invested in the Trust’s
assets and the Substantially Equal installments will be paid from the Plan; or
may be used to purchase a nontransferable immediate or deferred annuity that is
selected by the Employer and that complies with the terms of the Plan from an
insurance company to provide for such Substantially Equal installments; (C) a
non-transferable annuity which can be purchased from an insurance company and
complies with the terms of the Plan; and/or (D) in designated sums from
time to time as elected by the Beneficiary. All forms of distribution that are
elected by the Sponsoring Employer in the Adoption Agreement are available on a
non-discriminatory basis and are not subject to the Administrator’s discretion.

 

(2)   Time of
Distribution.  Any death benefit payable to a non-Spouse Beneficiary will be
distributed within a reasonable time after the death of the Participant, but
not later than December 31st of the calendar year which contains the fifth
anniversary of the date of the Participant’s death pursuant to Section 5.9(b)(2)(A),
if required minimum distributions to the Participant have not begun. However,
if the Life Expectancy rule is elected in the Adoption Agreement and the
non-Spouse Beneficiary elects the Life Expectancy rule pursuant to Section 5.9(b)(2)(B),
then distribution of the death benefit to a non-Spouse Beneficiary must begin
no later than December 31st of the calendar year immediately following the
calendar year in which the Participant died.

 

(c)   Distribution
If the Participant or Other Payee Is In Pay Status.  If a Participant or Beneficiary who has
begun receiving distribution of his or her benefit dies before the entire
benefit is distributed, then the balance thereof will be distributed to the
Participant’s Beneficiary (or Beneficiary’s Beneficiary) at least as rapidly as
under the method of distribution being used on the date of the Participant’s or
Beneficiary’s death.

 

(d)   Payments to
a Beneficiary of a Beneficiary.  In the absence of a Beneficiary designation or other
directive from the deceased Participant to the contrary, any Beneficiary may
name his or her own Beneficiary to receive any benefits payable in the event of
the Beneficiary’s death prior to receiving the entire death benefit to which
the Beneficiary is entitled; if a Beneficiary has not named his or her own
Beneficiary, then the Beneficiary’s estate will be the Beneficiary. If any
benefit is payable under this paragraph to a Beneficiary of the deceased
Participant’s Beneficiary, to the estate of the deceased Participant’s
Beneficiary, or to any other Beneficiary or the estate thereof, then subject to
the limitations regarding the latest dates for benefit payment of this Section and
Section 5.9, the Administrator may (1) continue to pay the remaining
value of such benefits in the amount and form that has already commenced, (2) pay
such benefits in any other manner permitted under the Plan for distribution of
benefits upon death, and/or (3) if payments have not already commenced,
pay such benefits in any other manner permitted under the Plan for distribution
of benefits upon death. Distribution to the Beneficiary of a Beneficiary must
begin no later than the date that a distribution would have been made to the
Participant’s Beneficiary. The Administrator’s determination under this
paragraph will be final and will be applied in a uniform manner that does not
discriminate in favor of Participants who are Highly Compensated Employees.

 

87

 

(e)   Partial
Distributions.  If a Participant’s Beneficiary receives a distribution of less than
100% of the Participant’s Vested Aggregate Account balance, then the
Administrator will determine the portion (including zero) of the distribution
that will be made from each of the Participant’s sub-accounts, provided that
any such determination is made in a uniform manner that does not discriminate
in favor of Participants who are Highly Compensated Employees.

 

5.3                   Distribution
of Benefit Upon Disability. Unless a mandatory cash-out occurs under Section 5.5,
the Disability benefit a Participant is entitled to receive under Section 4.4
will be distributed in the following manner:

 

(a)          Normal
Form of Distribution in a 401(k) Plan or Profit Sharing Plan.  If the Plan is either a 401(k) Plan
or a profit sharing plan, then a Participant’s benefit will be distributed in
the form that is elected by the Sponsoring Employer in the Adoption Agreement;
the permitted Normal Forms of Distribution are (1) a Qualified Joint and
Survivor Annuity; (2) a lump sum payment; or (3) Substantially Equal
monthly, quarterly, semi-annual or annual cash installment payments over a period
certain which does not extend beyond the life of the Participant; the joint
lives of the Participant and a designated Beneficiary; or a period certain not
extending beyond the life expectancy of the Participant and a designated
Beneficiary. If the Normal Form of Distribution is Substantially Equal
installment payments, then the lump sum value of the Participant’s benefit
either may be segregated and separately invested and the Substantially Equal
installments will be paid from the Plan; may remain invested in the Trust’s
assets and the Substantially Equal installments will be paid from the Plan; or
may be used to purchase a nontransferable immediate or deferred annuity that is
selected by the Employer and that complies with the terms of the Plan from an
insurance company to provide for such Substantially Equal installments.

 

(b)   Normal Form of
Distribution in a Money Purchase Pension Plan.  If the Plan is a money purchase pension plan, then the
Normal Form of Distribution is a Qualified Joint and Survivor Annuity if
the Participant has not died before the Annuity Starting Date.

 

(c)          Optional
Forms of Distribution.  If elected by the Sponsoring Employer in the Adoption
Agreement, then a Participant may waive the Normal Form of Distribution
and elect to have his or her benefit distributed in an Optional Form of
Distribution. The permitted Optional Forms of Distribution are (1) a lump
sum payment; (2) Substantially Equal monthly, quarterly, semi-annual or
annual cash installment payments over a period certain which does not extend
beyond the life of the Participant; the joint lives of the Participant and a
designated Beneficiary; or a period certain not extending beyond the life
expectancy of the Participant and a designated Beneficiary. If an Optional Form of
Distribution is Substantially Equal installment payments, then the lump sum
value of the Participant’s benefit either may be segregated and separately
invested and the Substantially Equal installments will be paid from the Plan;
may remain invested in the Trust’s assets and the Substantially Equal
installments will be paid from the Plan; or may be used to purchase a
nontransferable immediate or deferred annuity that is selected by the Employer
and that complies with the terms of the Plan from an insurance company to
provide for such Substantially Equal installments; (3) a non-transferable
annuity which can be purchased from an insurance company and complies with the
terms of this Plan; and/or (4) in designated sums from time to time as
elected by the Participant. All Optional Forms of Distribution that are elected
by the Sponsoring Employer in the Adoption Agreement are available on a
non-discriminatory basis and are not subject to the Administrator’s discretion.

 

(d)   Partial
Distributions.  If a Participant receives a distribution of less than 100% of his or
her Vested Aggregate Account balance, then the Administrator will determine the
portion (including zero) of the distribution that will be made from each of the
Participant’s sub-accounts, provided that any such determination is made in a
uniform nondiscriminatory manner.

 

(e)   Time of
Distribution.  Distribution will be made under this Section (1) if elected
in the Adoption Agreement, within an administratively reasonable time after the
date on which a Participant who suffers a Disability Terminates Employment with
the Employer on account of the Disability; or (2) if elected in the
Adoption Agreement, on the date that a distribution is to be made to a
Terminated Participant under Section 5.4

 

5.4                   Distribution
of Benefit Upon Termination of Employment. Unless a mandatory cash-out occurs under Section 5.5
or a distribution occurs under Section 5.1, 5.2, or 5.3, the benefit that
a Terminated Participant is entitled to receive under Section 4.5 will be
distributed in the following manner:

 

88

 

(a)          Normal
Form of Distribution in a 401(k) Plan or Profit Sharing Plan.  If the Plan is either a 401(k) Plan
or a profit sharing plan, then a Participant’s benefit will be distributed in
the form that is elected by the Sponsoring Employer in the Adoption Agreement;
the permitted Normal Forms of Distribution are (1) a Qualified Joint and
Survivor Annuity; (2) a lump sum payment; or (3) Substantially Equal
monthly, quarterly, semi-annual or annual cash installment payments over a
period certain which does not extend beyond the life of the Participant; the
joint lives of the Participant and a designated Beneficiary; or a period
certain not extending beyond the life expectancy of the Participant and a
designated Beneficiary. If the Normal Form of Distribution is
Substantially Equal installment payments, then the lump sum value of the
Participant’s benefit either may be segregated and separately invested and the
Substantially Equal installments will be paid from the Plan; may remain
invested in the Trust’s assets and the Substantially Equal installments will be
paid from the Plan; or may be used to purchase a nontransferable immediate or
deferred annuity that is selected by the Employer and that complies with the
terms of the Plan from an insurance company to provide for such Substantially
Equal installments.

 

(b)         Normal
Form of Distribution in a Money Purchase Pension Plan.  If the Plan is a money purchase pension
plan, then the Normal Form of Distribution is a Qualified Joint and
Survivor Annuity if the Participant has not died before the Annuity Starting
Date.

 

(c)   Optional
Forms of Distribution.  If elected by the Sponsoring Employer in the Adoption
Agreement, then a Participant may waive the Normal Form of Distribution
and elect to have his or her benefit distributed in an Optional Form of
Distribution. The permitted Optional Forms of Distribution are (1) a lump
sum payment; (2) Substantially Equal monthly, quarterly, semi-annual or
annual cash installment payments over a period certain which does not extend
beyond the life of the Participant; the joint lives of the Participant and a
designated Beneficiary; or a period certain not extending beyond the life
expectancy of the Participant and a designated Beneficiary. If an Optional Form of
Distribution is Substantially Equal installment payments, then the lump sum
value of the Participant’s benefit either may be segregated and separately
invested and the Substantially Equal installments will be paid from the Plan;
may remain invested in the Trust’s assets and the Substantially Equal
installments will be paid from the Plan; or may be used to purchase a
nontransferable immediate or deferred annuity that is selected by the Employer
and that complies with the terms of the Plan from an insurance company to
provide for such Substantially Equal installments; (3) a non-transferable
annuity which can be purchased from an insurance company and complies with the
terms of this Plan; and/or (4) in designated sums from time to time as
elected by the Participant. All Optional Forms of Distribution that are elected
by the Sponsoring Employer in the Adoption Agreement are available on a
non-discriminatory basis and are not subject to the Administrator’s discretion.

 

(d)         Partial
Distributions.  If a Participant receives a distribution of less than 100% of his or
her Vested Aggregate Account balance, then the Administrator will determine the
portion (including zero) of the distribution that will be made from each of the
Participant’s sub-accounts, provided that any such determination is made in a
uniform nondiscriminatory manner.

 

(e)   Time of
Distribution.  Distribution will be made under this Section within an
administratively reasonable time after the occurrence of the event as elected
by the Sponsoring Employer in the Adoption Agreement.

 

5.5                   Mandatory
Cash-Out of Benefits. If elected in the Adoption Agreement, the Vested Aggregate Account of a
Participant who has Terminated Employment, who is entitled to a distribution
under Sections 5.1, 5.2, 5.3 or 5.4 and who satisfies the requirements below
will be distributed without the Participant’s consent in accordance with the
following:

 

(a)          General
Rule.  Distribution
can only be made under this Section if a Participant’s Vested Aggregate
Account balance on or after the date of Termination of Employment does not
exceed the amount elected in the Adoption Agreement. Distribution will be made
as soon as administratively feasible after the Participant Terminates
Employment.

 

(b)         Later
Distribution if Account Falls to the Threshold.  If a Participant would have received a distribution
under paragraph (a) but for the fact that his or her Vested Aggregate
Account exceeded the cash-out threshold elected in the Adoption Agreement, and
if at a later time the Participant’s Vested Aggregate Account is reduced to an
amount not greater than the cash-out threshold, the Administrator will
distribute such Vested Aggregate Account in a lump sum without the Participant’s
consent as soon as administratively feasible after the date the Participant’s
Vested Aggregate Account no longer exceeds the cash-out threshold.

 

89

 

(c)          Cash-out
Threshold and the Participant’s Rollover Contribution Account.  If the cash-out threshold elected in the
Adoption Agreement is $5,000, then effective January 1, 2002, the
determination of whether a Participant’s Vested Aggregate Account exceeds
$5,000 may be made by excluding the Participant’s Rollover Contribution Account
(if any). If the cash-out threshold elected in the Adoption Agreement is any
amount other than $5,000, the determination of whether a Participant’s Vested
Aggregate Account balance exceeds such amount must be made by including the
Participant’s Rollover Contribution Account (if any).

 

(d)         Cash-out Threshold Exceeds $1,000.  If the cash-out threshold exceeds $1,000 at any time, then
a mandatory cash-out distribution under this paragraph will, at the election of
the Participant, be made as a lump sum cash payment or as a direct rollover
under Section 5.14. Prior to March 28, 2005, if the Participant does
not elect to have the distribution paid directly to an eligible retirement plan
specified by the Participant in a direct rollover or to receive the distribution
as a lump sum cash payment, then the Administrator will pay the distribution as
a lump sum cash payment. However, if the cash-out threshold ever exceeds $1,000
on or after March 28, 2005, the remaining provisions of this paragraph
apply. In the event of a mandatory cash-out distribution greater than $1,000,
if the Participant does not elect to have such distribution paid directly to an
eligible retirement plan specified by the Participant in a direct rollover or
to receive the distribution as a lump sum cash payment, the Administrator will
pay the distribution in an automatic direct rollover to an individual
retirement plan designated by the Administrator. Such individual retirement
plan, as defined in Code §7701(a)(37), may be either an individual retirement
account within the meaning of Code §408(a) or an individual retirement
annuity within the meaning of Code §408(b); either of which will subsequently
be referred to as an IRA. The Administrator will establish the IRA at a
qualified financial institution by selecting an IRA trustee, custodian or
issuer that is unrelated to the Employer or the Administrator (unless
subsequent rules or Regulations permit otherwise), and will make the
initial investment choices for the IRA. An automatic direct rollover will occur
not less than 30 days and not more than 90 days (or such other time as
permitted by law) after the Code §402(f) notice with the explanation of
the automatic direct rollover is provided to the Participant. The determination
of whether a mandatory cash-out distribution exceeds $1,000 will be made by
including the Participant’s Rollover Contribution Account (if any).

 

(e)          Cash-out Threshold Does Not Exceed $1,000.  If the cash-out threshold is $1,000 or less at any time, a
mandatory cash-out distribution under this paragraph will, at the election of
the Participant, be made as a lump sum cash payment or as a direct rollover
under Section 5.14. If the Participant does not elect to have the
distribution paid directly to an eligible retirement plan specified by the
Participant in a direct rollover or to receive the distribution as a lump sum
cash payment, the Administrator will pay the distribution as a lump sum cash
payment; any such lump sum cash payment will occur not less than 30 days and
not more than 90 days (or such other time as permitted by law) after the Code
§402(f) notice is provided to the Participant.

 

5.6                   Restrictions
on Immediate Distributions. If a Participant’s Vested Aggregate Account balance
exceeds the amount set forth in paragraph (a) of this Section and is
Immediately Distributable, then such account can only be distributed in
accordance with the following provisions:

 

(a)          General
Rule.  If (1) the
Vested Aggregate Account balance (effective January 1, 2002, determined
before taking into account the Participant’s Rollover Contribution Account) of
a Participant who has Terminated Employment exceeds $5,000, or if there are
remaining payments to be made with respect to a particular distribution option
that previously commenced, and (2) such amount is Immediately
Distributable, then the Participant (and, with respect to any portion of the
Participant’s Account which is subject to the Qualified Joint and Survivor
Annuity requirements of Code §401(a)(11) and Code §417, the Participant’s
Spouse, if any (or where either the Participant or Spouse has died, the
survivor)), must consent to any distribution of such amount. If (1) the
Vested Aggregate Account balance (effective January 1, 2002, determined
before taking into account the Participant’s Rollover Contribution Account) of
a Participant who has Terminated Employment does not exceed $5,000, but (if
applicable) exceeds the cash-out threshold that the Sponsoring Employer elects
in the Adoption Agreement, and (2) such amount is Immediately Distributable,
then only the Participant (or where the Participant has died, the Participant’s
Spouse or Beneficiary) must consent to any distribution of such amount.

 

(b)         General
Consent Requirement.  The consent of the Participant (and, with respect to any portion of the
Participant’s Account which is subject to the Qualified Joint and Survivor
Annuity requirements of Code §401(a)(11) and Code §417, the Participant’s
Spouse, if any (or where either the Participant or Spouse has died, the
survivor)) to any benefit that is Immediately Distributable must be obtained in
writing within the 90-day period (or such other period as may be required 

 

90

 

by law) ending on the Annuity Starting Date. However, (1) with
respect to any portion of the Participant’s Account which is not subject to the
Qualified Joint and Survivor Annuity requirements of Code §401(a)(11) and Code
§417, the Participant will not be required to consent to a distribution that is
required by Code §401(a)(9) or §415; and (2) with respect to any
portion of the Participant’s Account which is subject to the Qualified Joint
and Survivor Annuity requirements of Code §401(a)(11) and Code §417, (A) only
the Participant must consent to the distribution of a Qualified Joint and
Survivor Annuity while the benefit is Immediately Distributable, and (B) neither
the Participant (nor the Participant’s Spouse, if any) will be required to
consent to a distribution that is required under the terms of Code §401(a)(9) or
Code §415.

 

(c)          Notification
Requirement.  The Administrator must notify the Participant (and, with respect to any
portion of the Participant’s Account which is subject to the Qualified Joint
and Survivor Annuity requirements of Code §401(a)(11) and Code §417, the Participant’s
Spouse) of the right to defer any distribution until it is no longer
Immediately Distributable. Notification will include a general explanation of
the material features and relative values of the optional forms of benefit
available in a manner that would satisfy the notice requirements of Code
§417(a)(3); and will be provided no less than 30 days or more than 90 days (or
such other period as may be required by law) prior to the Annuity Starting
Date. Notwithstanding the other requirements of this Section, the respective
notices prescribed by this Section need not be given to a Participant if: (1) the
Plan “fully subsidizes” the costs of a Qualified Joint and Survivor Annuity or
Qualified Pre-Retirement Survivor Annuity;, and (2) the Plan does not allow
the Participant to waive the Qualified Joint and Survivor Annuity or Qualified
Pre-Retirement Survivor Annuity, and does not allow a Participant who has a
Spouse to designate a non-Spouse Beneficiary. For purposes of this Section, a
plan fully subsidizes the costs of a benefit if no increases in cost, or
decreases in benefits to the Participant may result from the Participant’s
failure to elect another benefit.

 

(d)         Waiver
of 30-Day Requirement.  Notwithstanding anything in this Section to the
contrary, distribution of a Participant’s benefit may begin less than 30 days
after the notice described in paragraph (c) is given if (1) the
Administrator clearly informs the Participant that the Participant has a right
to a period of at least 30 days after receiving notice to consider the decision
of whether or not to elect a distribution; (2) the Participant, after
receiving the notice, affirmatively elects a distribution (or a particular
distribution option); and (3) with respect to any portion of the Participant’s
Account which is subject to the Qualified Joint and Survivor Annuity
requirements of Code §401(a)(11) and Code §417, the Participant does not revoke
the election at any time prior to the expiration of the 7-day period that
begins on the date the notice is given.

 

(e)          Consent
Not Needed on Plan Termination.  If upon Plan termination neither the Employer nor an
Affiliated Employer maintains another defined contribution plan other than an
employee stock ownership plan (ESOP) as defined in Code §4975(e)(7) or
§409(a), then the Participant’s benefit will, without the Participant’s consent
(and, with respect to any portion of the Participant’s Account which is subject
to the Qualified Joint and Survivor Annuity requirements of Code §401(a)(11)
and Code §417, without the Spouse’s consent), be distributed to the
Participant. If the Employer or an Affiliated Employer maintains another
defined contribution plan other than an ESOP, then the Participant’s benefit
will, without the Participant’s consent (and, with respect to any portion of
the Participant’s Account which is subject to the Qualified Joint and Survivor
Annuity requirements of Code §401(a)(11) and Code §417, without the Spouse’s
consent), be transferred to the other plan if the Participant does not consent
to an immediate distribution under this Section. Notwithstanding the foregoing,
this paragraph will not apply to any portion of the Participant’s Account which
is subject to the Qualified Joint and Survivor Annuity requirements of Code
§401(a)(11) and Code §417 if the Plan, upon termination, offers an annuity
option purchased from a commercial provider with respect to such portion of the
Participant’s Account.

 

5.7                   Accounts
of Reemployed Participants. If a Participant who is not 100% Vested in his or her Participant’s
Account Terminates Employment with the Employer, a Forfeiture of all or a
portion of the Participant’s Account of the Participant who has Terminated
Employment may have occurred, and the Participant is subsequently reemployed by
the Employer, then the Participant’s Account of the reemployed Participant will
be administered in accordance with the following provisions:

 

(a)          Reemployment
of a Participant After 5 Consecutive Breaks in Service.  If the Participant is reemployed by the
Employer after incurring five consecutive Breaks in Service, then any previous
Forfeiture of the Participant’s Account will not be restored under the terms of
this Plan.

 

91

 

(b)         Reemployment
of a Non-Vested Participant Before 5 Consecutive Breaks in Service.  If a Participant’s Vested Interest in the
entire Participant’s Account attributable to Employer contributions is 0% on
the date the Participant Terminates Employment, the Participant is deemed to
have received a distribution of such Vested Interest on the date of such
Termination of Employment pursuant to the Section 3.13(a)(1), a Forfeiture
of the Participant’s Account attributable to Employer contributions occurs on
the date of such Termination of Employment pursuant to the Section 3.13(a)(1),
and the Participant is subsequently reemployed by the Employer before incurring
five consecutive Breaks in Service, then the previous Forfeiture of such
Participant’s Account attributable to Employer contributions will be restored,
calculated as of the date that the Forfeiture occurred (unadjusted by
subsequent gains and losses). Furthermore, if a Participant’s Vested Interest
in the entire Participant’s Account attributable to Employer contributions is
0% on the date the Participant Terminates Employment, a Forfeiture of the
Participant’s Account attributable to Employer contributions occurs on the date
that a Participant incurs the number of consecutive Breaks in Service after
Termination of Employment that the Sponsoring Employer elects in the Adoption
Agreement pursuant to the Section 3.13(a)(2), and the Participant is
subsequently reemployed by the Employer before incurring five consecutive
Breaks in Service, then the previous Forfeiture of such Participant’s Account
attributable to Employer contributions will be restored, calculated as of the
date that the Forfeiture occurred (unadjusted by subsequent gains and losses).
Such restoration of the previous Forfeiture attributable to Employer
contributions will occur in the Plan Year that such Participant is reemployed
by the Employer.

 

(c)          Reemployment
of a Vested Participant Before 5 Consecutive Breaks in Service.  If a Participant’s Vested Interest in the
Participant’s Account balance attributable to Employer contributions is less
than a 100% (but greater than 0%) on the date that the Participant Terminates
Employment, a Forfeiture of the non-Vested portion of the Participant’s Account
balance attributable to Employer contributions of the Participant who has
Terminated Employment may have occurred, and the Participant is subsequently
reemployed by the Employer before incurring five consecutive Breaks in Service,
then the following provisions will apply:

 

(1)          Distribution
Has Occurred But No Forfeiture Has Occurred.  If a Forfeiture of the non-Vested portion of the
Participant’s Account attributable to Employer contributions has not occurred
but a distribution of all or a portion of the Participant’s Account of the
Participant who has Terminated Employment has occurred, then a separate
bookkeeping account will be established for the Participant’s Account at the
time of distribution; the Participant’s Vested Interest in the separate
bookkeeping account at any relevant time will be an amount (“X”) determined
according to the following formula: X = P(AB + (R x D)) - (R x D)). In applying
the formula, “P” is the Vested Interest at the relevant time, “AB” is the
respective account balance at the relevant time, “D” is the amount of the
distribution, and “R” is the ratio of the respective account balance at the
relevant time to the respective account balance after the distribution.

 

(2)          No
Distribution Has Occurred But Forfeiture Has Occurred.  If the Sponsoring Employer elects in the
Adoption Agreement that a Forfeiture will occur when a Participant who has
Terminated Employment incurs a specified number of consecutive Breaks in
Service that is less than five (5) consecutive Breaks in Service, a
Forfeiture of the non-Vested portion of the Participant’s Account balance
attributable to Employer contributions has occurred when a Participant who
Terminated Employment incurred the specified number of consecutive Breaks in
Service, and the Participant who has Terminated Employment is reemployed by the
Sponsoring Employer or an Affiliated Employer before incurring five (5) consecutive
Breaks in Service and before receiving any distribution of the Vested Interest
in his or her Participant’s Account balance attributable to Employer
contributions, then the previous Forfeiture of such Participant’s Account
balance attributable to Employer contributions will be restored, calculated as
of the date that the Forfeiture occurred (unadjusted by subsequent gains and
losses). Such restoration of the previous Forfeiture of such Participant’s
Account balance attributable to Employer contributions will occur in the Plan
Year that such Participant is reemployed by the Employer.

 

(3)   Both
Distribution and Forfeiture Have Occurred.  If a distribution of all or a portion of the Vested
Interest in the Participant’s Account of a Participant who has Terminated
Employment has occurred and a Forfeiture of the non-Vested portion of the
Participant’s Account attributable to Employer contributions has occurred
(which may not necessarily occur at the same time that the distribution
occurs), then the previous Forfeiture of such Participant’s Account balance
attributable to Employer contributions will be restored, calculated as of the
date the Forfeiture occurred (unadjusted by subsequent gains and losses) and
based upon the Sponsoring Employer’s decision whether the Participant is
required to repay to the Plan the full amount of all distribution(s) which
were attributable to Employer contributions (and if this Plan is a 401(k) Plan,
then effective as of the first day of Plan Year beginning in 2006 (or 

 

92

 

such earlier effective date as may be provided in a separate amendment
for implementing the final §401(k) Regulations and as permitted by such
Regulations), including Elective Deferrals). With respect to such decision of
the Sponsoring Employer whether the Participant is required to repay to the
Plan the full amount of all distribution(s) which were attributable to
Employer contributions (and if this Plan is a 401(k) Plan, then effective
as of the first day of Plan Year beginning in 2006 (or such earlier effective
date as may be provided in a separate amendment for implementing the final §401(k) Regulations
and as permitted by such Regulations), including Elective Deferrals) in order
to have the previous Forfeiture of such Participant’s Account balance
attributable to Employer contributions be restored, the following provisions
will apply:

 

(A)      Precedent
Established. Once
such decision by the Sponsoring Employer has been made, such decision will
establish precedence for the Plan and cannot be changed, altered or modified.

 

(B)   Time of
Restoration If Repayment Is Not Required.  If, based upon the Sponsoring Employer’s decision, the
Participant is not required to repay to the Plan the full amount of all
distribution(s) which were attributable to Employer contributions (and if
this Plan is a 401(k) Plan, then effective as of the first day of Plan
Year beginning in 2006 (or such earlier effective date as may be provided in a
separate amendment for implementing the final §401(k) Regulations and as
permitted by such Regulations), including Elective Deferrals) in order to have
the previous Forfeiture of such Participant’s Account balance attributable to Employer
contributions be restored, then such restoration will occur in the Plan Year in
which the Participant is reemployed by the Employer.

 

(C)   Time of
Restoration If Repayment Is Required. If, based upon the Sponsoring Employer’s decision,
the Participant is required to repay to the Plan the full amount of all
distribution(s) which were attributable to Employer contributions (and if
this Plan is a 401(k) Plan, then effective as of the first day of Plan
Year beginning in 2006 (or such earlier effective date as may be provided in a
separate amendment for implementing the final §401(k) Regulations and as
permitted by such Regulations), including Elective Deferrals) in order to have
the previous Forfeiture of such Participant’s Account balance attributable to
Employer contributions be restored, then, such repayment by the Participant
must be made before the earlier of (i) five years after the Participant’s
Reemployment Commencement Date, or (ii) the date on which the Participant
incurs five consecutive Breaks in Service following the date of distribution of
either the entire or the remaining Vested Interest in the Participant’s
Account. Such restoration of the previous Forfeiture of such Participant’s
Account balance attributable to Employer contributions will occur in the Plan
Year that the Participant repays to the Plan the full (or any remaining) amount
of the distribution which was attributable to Employer contributions (and if
this Plan is a 401(k) Plan, then effective as of the first day of Plan
Year beginning in 2006 (or such earlier effective date as may be provided in a
separate amendment for implementing the final §401(k) Regulations and as
permitted by such Regulations), including Elective Deferrals).

 

(d)         Sources
of Restoration of Previously Forfeited Amounts.  The sources to restore a previous Forfeiture of the
non-Vested portion of the Participant’s Account balance attributable to
Employer contributions pursuant to this Section will be made first by
using available Forfeitures to restore the previous Forfeiture and, if such
available Forfeitures are insufficient to restore the previous Forfeiture, by
the Employer making a special Employer contribution to the Plan to the extent
necessary to restore the previous Forfeiture.

 

5.8                   Waiver
of Benefits and Spousal Consent. If following provisions apply to a Participant’s (or,
where applicable, a Participant’s Spouse’s) waiver of benefits under the Plan:

 

(a)          Normal
Form of Distribution Is Not a QJSA. If the Normal Form of Distribution is not a
Qualified Joint and Survivor Annuity, all distributions can be made from the
Plan to a Participant without the consent of the Participant’s Spouse, except
for any portion of the Participant’s Account which is subject to the Qualified
Joint and Survivor Annuity requirements of Code §401(a)(11) and Code §417.
Subject to the provisions of the next sentence, with regard to a death benefit
payable to a Spouse, a Spouse can elect to waive such death benefit under Section 5.2
of the Plan, but the election will not be effective unless (1) the
election is in writing; (2) the election designates a specific Beneficiary
or form of benefit which may not be changed without Spousal consent (or the
Spouse’s consent expressly permits designations by the Participant without any

 

93

 

requirement of further Spousal consent); and (3) the Spouse’s
consent acknowledges the effect of the election and is witnessed by the
Administrator or a notary public. With regard to a distribution of any portion
of a Participant’s Account which is subject to the QJSA and QPSA requirements
of Code §401(a)(11) and Code §417, the provisions set forth in paragraph (b) below
apply.

 

(b)         Normal
Form of Distribution Is a QJSA. If the Normal Form of Distribution is a Qualified
Joint and Survivor Annuity, or with respect to any portion of a Participant’s
Account which is subject to the Qualified Joint and Survivor Annuity
requirements of Code §401(a)(11) and §417, the following provisions apply:

 

(1)   Election to
Waive a QJSA.  A married Participant’s election to waive a Qualified Joint and
Survivor Annuity, or an unmarried Participant’s election to waive a life
annuity, must be in writing and must be made during the 90-day period (or such
other period as may be required by law) ending on the Annuity Starting Date.
The election may be revoked in writing and a new election may be made at any
time and any number of times during the election period.

 

(2)   Election to
Waive a QPSA.  A married Participant’s election to waive a Qualified Pre-Retirement
Survivor Annuity must be in writing and must be made during an election period
beginning on the first day of the Plan Year in which the Participant reaches
Age 35 and ending on the date of his or her death. The election may be revoked
in writing and a new election made at any time and any number of times during
the election period. A terminated Participant’s election period concerning his
or her Vested Aggregate Account before Termination of Employment will not begin
later than such date. If elected in the Adoption Agreement and the Participant
has not completed a designation form specifying the time and/or form of payment
of the Qualified Pre-Retirement Survivor Annuity prior to the Participant’s
death, then the surviving Spouse may elect to receive the Qualified
Pre-Retirement Survivor Annuity in any optional form of payment permitted in Section 5.2
and as elected in the Adoption Agreement.

 

(3)   Special
Pre-Age 35 QPSA Election.  A Participant who has not yet reached Age 35 as of the
end of any current Plan Year may make a special election to waive a Qualified
Pre-Retirement Survivor Annuity for the period beginning on the date of such
election and ending on the first day of the Plan Year in which such Participant
reaches Age 35. This election will not be valid unless the Participant receives
the same written explanation of the Qualified Pre-Retirement Survivor Annuity
set forth in subparagraph (4). Qualified Pre-Retirement Survivor Annuity
coverage will be automatically reinstated as of the first day of the Plan Year
in which the Participant reaches Age 35. A new election to waive a Qualified
Pre-Retirement Survivor Annuity on or after such date is subject to the full
requirements of this Section.

 

(4)   Required
Written Explanation.  In the case of a Qualified Joint and Survivor Annuity, the
Administrator will no less than 30 days and no more than 90 days (or such other
period as may be required by law) prior to the Annuity Starting Date provide to
each Participant a written explanation of: (A) the terms and conditions of
a Qualified Joint and Survivor Annuity; (B) the Participant’s right to
make and the effect of an election to waive the Qualified Joint and Survivor
Annuity form of benefit; (C) the rights of a Participant’s Spouse; and (D) the
right to make, and the effect of, a revocation of a previous election to waive
the Qualified Joint and Survivor Annuity. The Annuity Starting Date for a
distribution in a form other than a Qualified Joint and Survivor Annuity may be
less than 30 days after receipt of the written explanation described in the
preceding sentence provided: (A) the Participant has been provided with
information that clearly indicates that the Participant has at least 30 days to
consider whether to waive the Qualified Joint and Survivor Annuity and elect
(with Spousal consent) to a form of distribution other than a Qualified Joint
and Survivor Annuity; (B) the Participant is permitted to revoke any
affirmative distribution election at least until the Annuity Starting Date or,
if later, at any time prior to the expiration of the 7-day period that begins
the day after the explanation of the Qualified Joint and Survivor Annuity is
provided to the Participant; and (C) the Annuity Starting Date is a date
after the date that the written explanation was provided to the Participant. In
the case of a Qualified Pre-Retirement Survivor Annuity, the Administrator will
provide each Participant within the Applicable Period as defined in paragraph (5) with
a written explanation of the Qualified Pre-Retirement Survivor Annuity in such
terms and in such manner as would be comparable to the written explanation
applicable to a Qualified Joint and Survivor Annuity as set forth herein.

 

94

 

(5)          Applicable
Period.  The term “Applicable
Period” means whichever of the following periods ends last: (A) the period
beginning with the first day of the Plan Year in which the Participant attains
Age 32 and ending with the close of the Plan Year preceding the Plan Year in which
the Participant attains Age 35; (B) a reasonable period after the
individual becomes a Participant in the Plan; (C) a reasonable period
ending after the requirements of Code §401(a)(11) apply to the Participant; or (D) a
reasonable period ending after the requirements of Code §417(a)(5) cease
to apply with respect to the Participant. For purposes of this paragraph, a
reasonable period means 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.

 

(6)          Participants
Who Terminate Before Age 35.  If a Participant Terminates Employment before the Plan
Year in which he or she reaches Age 35, then the notice required under
subparagraph (4) will be provided within the two year period beginning one
year prior to such Termination of Employment and ending one year after such
Termination of Employment. If such Participant thereafter returns to employment
with the Employer, then the Applicable Period for such Participant will be
redetermined.

 

(7)          Elections
Must Have Spousal Consent.  A Participant’s election not to receive a Qualified
Joint and Survivor Annuity or a Participant’s election not to receive a
Qualified Pre-Retirement Survivor Annuity will not be effective unless (A) the
Participant’s Spouse consents in writing to the election; (B) the election
designates a specific Beneficiary (or form of benefit) which may not be changed
without Spousal consent (or the consent of the Spouse expressly permits
designations by the Participant without any requirement of further Spousal
consent); and (C) the Spouse’s consent acknowledges the effect of the
election and is witnessed by the Administrator or a notary public.

 

(8)          Additional
Requirements and Exceptions For Spousal Consent.  Notwithstanding subparagraph (7) above, a Spouse’s
consent will not be required if there is no Spouse, if the Spouse cannot be
located, or if there are other circumstances (as set forth in the Code or
Regulations) which preclude the necessity of such Spouse’s consent. Any consent
by a Participant’s Spouse (or establishment that consent cannot be obtained)
will be effective only with respect to such Spouse. A consent that permits
designations by the Participant without any requirement of further Spousal
consent must acknowledge that the Spouse has the right to limit consent to a
specific Beneficiary, and a specific form of benefit where applicable, and that
the Spouse voluntarily elects to relinquish either or both of such rights. A
revocation of a prior election may be made by a Participant without the Spouse’s
consent at any time before benefits begin. No Spouse’s consent obtained under
subparagraph (7) will be valid unless the Participant has received notice
as provided in subparagraph (4) above.

 

5.9                   Required
Minimum Distributions. All distributions from the Plan will be determined and made in
accordance with the final and temporary Regulations under Code §401(a)(9) on
April 17, 2002. Pursuant to those Regulations, all distributions will be
determined in accordance with the following provisions:

 

(a)          General
Rules.  All
distributions hereunder will be made in accordance with the following general
rules:

 

(1)   Effective
Date.  Unless an
earlier effective date is specified in the Adoption Agreement, the provisions
of this Section will apply for purposes of determining required minimum
distributions for calendar years beginning with the 2003 calendar year.

 

(2)   Coordination
with Minimum Distribution Requirements Previously in Effect.  If the Adoption Agreement specifies an
effective date of this Section that is earlier than calendar years
beginning with the 2003 calendar year, then required minimum distributions for
2002 under this Section will be determined as follows: If the total amount
of 2002 required minimum distributions under the Plan made to the distributee
prior to the effective date of this Section equals or exceeds the required
minimum distributions determined under this Section, then no additional
distributions will be required to be made for 2002 on or after such date to the
distributee. If the total amount of 2002 required minimum distributions under
the plan made to the distributee prior to the effective date of this Section is
less than the amount determined under this Section, then required minimum
distributions for 2002 on and after such date will be determined so that the
total amount of required minimum distributions for 2002 made to the distributee
will be the amount determined under this Section.

 

(3)   Precedence.  The requirements of this Section will
take precedence over any inconsistent provisions of the Plan and any prior Plan
amendments.

 

95

 

(4)   Requirements
of Regulations Incorporated.  All distributions required under this Section will
be determined and made in accordance with the Regulations under Code
§401(a)(9).

 

(5)   TEFRA
§242(b)(2) Elections.  Notwithstanding the other provisions of this Section,
distributions may be made under a designation made before January 1, 1984,
in accordance with Tax Equity and Fiscal Responsibility Act (TEFRA) §242(b)(2) and
the provisions of the Plan that relate to TEFRA §242(b)(2).

 

(b)         Time
and Manner of Distribution. All required minimum distributions will be made from
the Plan in the following time and in the following manner:

 

(1)   Required
Beginning Date. The
Participant’s entire interest will be distributed, or begin to be distributed,
to the Participant no later than the Participant’s Required Beginning Date.

 

(2)   Death of
Participant Before Distributions Begin.  If the Participant dies before distribution begins,
the Participant’s entire interest will be distributed (or begin to be
distributed) not later than as follows:

(A)      5-Year
Rule Applies to All Distributions to Designated Beneficiaries.  If the Participant dies before distributions
begin and there is a Designated Beneficiary, the Participant’s entire interest
will be distributed to the Designated Beneficiary by December 31 of the
calendar year containing the fifth anniversary of the Participant’s death. If
the Participant’s surviving Spouse is the Participant’s sole Designated
Beneficiary and the surviving Spouse dies after the Participant but before
distributions to either the Participant or the surviving Spouse begin, this
subparagraph will apply as if the surviving Spouse were the Participant. This
subparagraph also applies to all distributions.

 

(B)   Life
Expectancy Rule.  Notwithstanding subparagraph (b)(2)(A), if the Sponsoring Employer
elects in the Adoption Agreement to permit a Participant (or, if no election
has been made by the Participant prior to the Participant’s death, then the
Participant’s Designated Beneficiary) to elect the Life Expectancy rule, then a
Participant (or, if no election has been made by the Participant prior to the
Participant’s death, then the Participant’s Designated Beneficiary) may elect
on an individual basis whether the Life Expectancy rule applies to
distributions after the death of a Participant who has a Designated
Beneficiary. The election must be made no later than September 30th of the
calendar year in which distribution would be required to begin under this
subparagraph (b)(2)(B). If neither the Participant nor the Beneficiary makes an
election under this subparagraph (or the election is received later than September 30th
of the calendar year in which distribution would be required to begin under
this subparagraph (b)(2)(B)), then distributions will be made in accordance
with the 5-Year rule of subparagraph (b)(2)(A) above. The following
provisions relate to the Life Expectancy rule under this subparagraph
(b)(2)(B):

 

(i)    Surviving
Spouse Is the Sole Designated Beneficiary.  If the Participant’s surviving Spouse is the sole
Designated Beneficiary, then distributions to the surviving Spouse will begin
by the later of [a] December 31 of the calendar year immediately following
the calendar year in which the Participant died, or [b] December 31 of the
calendar year in which the Participant would have attained age 701⁄2.

 

(ii)   Surviving
Spouse Is Not the Sole Designated Beneficiary.  If the Participant’s surviving Spouse is not the sole
Designated Beneficiary, then distributions to the Designated Beneficiary will
begin by December 31 of the calendar year immediately following the
calendar year in which the Participant died.

 

(iii)  No
Designated Beneficiary.  If there is no Designated Beneficiary as of September 30
of the year following the year of the Participant’s death, then the Participant’s
entire interest will be distributed by December 31 of the calendar year
containing the fifth anniversary of the Participant’s death.

 

(iv)  Surviving
Spouse Dies Before Distributions Begin.  If the Participant’s surviving Spouse is the
Participant’s sole Designated Beneficiary and the surviving Spouse dies after
the Participant but before distributions to the surviving Spouse begin, then
this subparagraph (b)(2)(B), other than subparagraph (b)(2)(B)(i), will apply
as if the surviving Spouse were the Participant.

 

96

 

(v)         Election
to Allow Designated Beneficiary Receiving Distributions Under 5-Year Rule to
Elect Life Expectancy Distributions.  A Designated Beneficiary who is receiving payments
under the 5-Year rule may make a new election to receive payments under
the Life Expectancy rule until December 31, 2003, provided that all
amounts that would have been required to be distributed under the Life
Expectancy rule for all Distribution Calendar Years before 2004 are
distributed by the earlier of December 31, 2003 or the end of the 5-Year
period.

 

(C)        Date
Distributions Are Deemed To Begin.  For purposes of this subparagraph (b)(2) and
paragraph (d), unless subparagraph (b)(2)(B)(iv) above applies,
distributions are considered to begin on the Participant’s Required Beginning
Date. If subparagraph (b)(2)(B)(iv) above applies, distributions are
considered to begin on the date distributions are required to begin to the
surviving Spouse under subparagraph (b)(2)(B)(i) above. If distributions
under an annuity purchased from an insurance company irrevocably commence to
the Participant before the Participant’s Required Beginning Date (or to the
Participant’s surviving Spouse before the date distributions are required to
begin to the surviving Spouse under subparagraph (b)(2)(B)(i)), then the date
distributions are considered to begin is the date distributions actually
commence.

 

(3)          Forms
of Distribution.  Unless the Participant’s interest is distributed as 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 paragraphs (c) and (d). If
the Participant’s interest is distributed as an annuity purchased from an
insurance company, distributions thereunder will be made in accordance with the
requirements of Code §401(a)(9) and the Regulations.

 

(c)          Required
Minimum Distributions During the Participant’s Lifetime.  The amount of required minimum
distributions during a Participant’s lifetime will be determined as follows:

 

(1)          Amount
of Required Distribution for Each Distribution Calendar Year.  During the Participant’s lifetime, the
minimum amount that will be distributed each Distribution Calendar Year is the
lesser of (A) the quotient obtained by dividing the Participant’s Account
Balance by the distribution period in the Uniform Lifetime Table set forth in
Regulation §1.401(a)(9)-9, using the Participant’s age as of the Participant’s
birthday in the Distribution Calendar Year; or (B) if the Participant’s
sole Designated Beneficiary for the Distribution Calendar Year is the
Participant’s Spouse, then the quotient obtained by dividing the Participant’s
Account Balance by the number in the Joint and Last Survivor Table set forth in
Regulation §1.401(a)(9)-9, using the Participant’s and Spouse’s attained ages
as of the Participant’s and Spouse’s birthdays in the Distribution Calendar
Year.

 

(2)          Required
Minimum Distributions Continue Through Year of Participant’s Death.  Required minimum distributions will be
determined under this paragraph (c) beginning with the first Distribution
Calendar Year and up to and including the Distribution Calendar Year that
includes the Participant’s date of death.

 

(d)         Required
Minimum Distributions After the Participant’s Death. Required minimum distributions will be
made after a Participant’s death in accordance with the following provisions:

 

(1)          Death
On or After Distributions Begins.  If a Participant dies on or after the date
distribution begins, then the amount of a required minimum distribution will be
determined as follows:

 

(A)      Participant
Survived by Designated Beneficiary.  If the Participant dies on or after the date
distributions begin and there is a Designated Beneficiary, then the minimum
amount that will be distributed for each Distribution Calendar Year after the
year of the Participant’s death is the quotient obtained by dividing the
Participant’s Account Balance by the longer of the remaining Life Expectancy of
the Participant or the remaining Life Expectancy of the Designated Beneficiary,
determined in accordance with the following provisions:

 

(i)    Calculation
of Participant’s Remaining Life Expectancy.  The Participant’s remaining Life Expectancy is
calculated using the age of the Participant in the year of death, reduced by
one for each subsequent year.

 

97

 

(ii)   Surviving
Spouse Is Sole Designated Beneficiary. If the Participant’s surviving Spouse is the
Participant’s sole Designated Beneficiary, then the remaining Life Expectancy
of the surviving Spouse is calculated for each Distribution Calendar Year after
the year of the Participant’s death using the surviving Spouse’s age as of the
Spouse’s birthday in that Distribution Calendar 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)  Surviving
Spouse Is Not Sole Designated Beneficiary. If the Participant’s surviving Spouse is not the
Participant’s sole Designated Beneficiary, then the Designated Beneficiary’s
remaining Life Expectancy is calculated using the age of the Beneficiary in the
year following the year of the Participant’s death, reduced by one for each
subsequent calendar year.

 

(B)   No
Designated Beneficiary.  If the Participant dies on or after the date
distributions begin and there is no Designated Beneficiary as of September 30
of the year after the year of the Participant’s death, then the minimum amount
that will be distributed for each Distribution Calendar Year after the year of
the Participant’s death is the quotient obtained by dividing the Participant’s
Account Balance by the Participant’s remaining Life Expectancy calculated using
the age of the Participant in the year of death, reduced by one each subsequent
year.

 

(2)          Death
Before the Date Distribution Begins.  If a Participant dies before the date distribution
begins, then the amount of a required minimum distribution will be determined
as follows:

 

(A)      Participant
Survived by Designated Beneficiary.  If (i) the Sponsoring Employer elects in the
Adoption Agreement to permit a Participant (or, if no election has been made by
the Participant prior to the Participant’s death, then the Participant’s
Designated Beneficiary) to elect the Life Expectancy rule of subparagraph
(b)(2)(B); (ii) the Participant dies before the date distributions begin;
and (iii) there is a Designated Beneficiary, then the minimum amount that
will be distributed for each Distribution Calendar Year after the year of the
Participant’s death is the quotient obtained by dividing the Participant’s
Account Balance by the remaining Life Expectancy of the Participant’s Designated
Beneficiary, determined as provided in subparagraph (d)(1).

 

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

 

(C)        Death
of Surviving Spouse Before Distributions to Surviving Spouse Are Required to
Begin.  If (i) the
Sponsoring Employer elects in the Adoption Agreement to permit a Participant
(or, if no election has been made by the Participant prior to the Participant’s
death, then the Participant’s Designated Beneficiary) to elect the Life
Expectancy rule of subparagraph (b)(2)(B); (ii) the Participant dies
before the date distributions begin; (iii) the Participant’s surviving
Spouse is the Participant’s sole Designated Beneficiary; and (iv) the
surviving Spouse dies before distributions are required to begin to the
surviving Spouse under subparagraph (b)(2)(B)(i), then this subparagraph (d)(2) will
apply as if the surviving Spouse were the Participant.

 

5.10            Statutory
Commencement of Benefits. Unless the Participant otherwise elects, distribution
of a Participant’s benefit must begin no later than the 60th day after the
latest of the close of the Plan Year in which the Participant (a) reaches
the earlier of Age 65 or Normal Retirement Age; (b) reaches the 10th
anniversary of the year that the Participant commenced Plan participation; or (c) Terminates
Employment with the Employer. However, the failure of a Participant (and, with
respect to any portion of the Participant’s Account which is subject to the
Qualified Joint and Survivor Annuity requirements of Code §401(a)(11) and Code
§417, the Participant’s Spouse) to consent to a distribution while a benefit is
Immediately Distributable will be deemed to be an election to defer the payment
(or the commencement of the payment) of any benefit sufficient to satisfy this
Section. In addition, if this Plan provides for an Early Retirement Date, then
a Participant who satisfied the service requirement (if applicable) for Early
Retirement Age prior to Termination of Employment will be entitled to receive
his or her Vested Aggregate Account balance, if any, upon (a) the
satisfaction of the age requirement (if applicable) for Early Retirement Age,
and (b) reaching the Participant’s Early Retirement Date.

 

98

 

5.11            Post-Termination
Earnings. As of
the Valuation Date coinciding with or next following the date a Participant
Terminates Employment with the Employer for any reason, the Administrator will,
until a distribution is made to the Participant or the Participant’s
Beneficiary in accordance with Sections 5.1, 5.2, 5.3, 5.4, or 5.5, direct the
Trustee in a uniform nondiscriminatory manner to either (a) invest the
Participant’s Vested Aggregate Account balance determined as of such Valuation
Date in a separate interest bearing account; or (b) leave the Participant’s
Vested Aggregate Account balance as part of the general Trust Fund. If the
Participant’s Vested Aggregate Account balance remains as part of the general
Trust Fund, then such account will either (a) share in the allocation of
net earnings and losses under Section 3.12 as a non-segregated account, or
(b) be granted interest at a rate consistent with the interest bearing
investments of the Trust Fund.

 

5.12            Distribution
in the Event of Legal Incapacity. If any person entitled to benefits (the “Payee”) is
under any legal incapacity by virtue of age or mental condition, then payments
may be made in one or more of the following ways as directed by the
Administrator: (a) to a court-appointed guardian of the Payee; (b) to
the person or entity that has a valid power of attorney of the Payee or the
Payee’s estate; (c) any other person or entity authorized under State (or
Commonwealth) law to receive benefits on behalf of the Payee; or (d) if
the Payee is a minor, to the authorized person or entity of the Payee (e.g.,
custodian or guardian) under any State’s (or Commonwealth’s) Uniform Transfers
to Minors Act or Uniform Gifts to Minors Act.

 

5.13            Missing
Payees and Unclaimed Benefits. With respect to a Participant or Beneficiary who has
not claimed any benefit (the “missing payee”) to which such missing payee is
entitled, and with respect to any Participant or Beneficiary who has not
satisfied the administrative requirements for benefit payment, the Administrator
may elect to either (a) to segregate the benefit into an interest bearing
account, in which event an annual maintenance fee as may be set from time to
time in a policy established by the Sponsoring Employer may be assessed against
the segregated account; (b) subject to a policy established by the
Administrator, distribute the benefit at any time in any manner which is
sanctioned by the Internal Revenue Service and/or the Department of Labor,
which may include (but not be limited to) (1) distribute the benefit in a
automatic direct rollover to an individual retirement plan designated by the
Administrator; such individual retirement plan, as defined in Code
§7701(a)(37), may be either an individual retirement account within the meaning
of Code §408(a) or an individual retirement annuity within the meaning of
Code §408(b); or (2) distribute the benefit to the Pension Benefit
Guarantee Corporation or any other authorized Federal Department or agency; (c) distribute
the benefit to any person or entity who is appointed under State (or
Commonwealth) law to act as a duly authorized guardian, legal representative,
conservator, or power of attorney; or (d) treat the entire benefit as a
Forfeiture. If a missing payee whose benefit has been forfeited is located, or
if a payee whose benefit has been forfeited for failure to satisfy the
administrative requirements for benefit payment subsequently satisfies such
administrative requirements and claims his or her benefit, and if the Plan has
not terminated (or if the Plan has terminated, all benefits have not yet been
paid), then the benefit will be restored. The Administrator, on a case by case
basis, may elect to restore the benefit by the use of earnings from
non-segregated assets of the Fund, by Employer contributions, by available
Forfeitures of the Forfeiture Account, or by any combination thereof. However,
if any such payee has not been located (or satisfied the administrative
requirements for benefit payment) by the time the Plan terminates and all
benefits have been distributed from the Plan, then the Forfeiture of such
unpaid benefit will not be restored.

 

5.14            Direct
Rollovers. This Section applies
to distributions made after December 31, 2001. Notwithstanding any
provision of the Plan to the contrary that would otherwise limit a distributee’s
election, a distributee may elect, at the time and in the manner prescribed by
the Plan, to have any portion of an eligible rollover distribution that is
equal to at least $500 paid directly to an eligible retirement plan specified
by the distributee in a direct rollover. If an eligible rollover distribution
is less than $500, then a distributee may not make the election described in
the preceding sentence to rollover a portion of the eligible rollover
distribution.

 

(a)   Definition
of Eligible Rollover Distribution.  The term “eligible rollover distribution” means 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 (1) 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; (2) any distribution to the extent such
distribution is required under Code §401(a)(9); (3) 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); (4) the portion of any distribution which is attributable to
a financial hardship distribution; and (5) any other distribution that is
reasonably expected to total less than $200 during a year.

 

99

 

(b)         Voluntary
and Mandatory Employee Contributions as Eligible Rollover Distributions.  Notwithstanding anything in the Plan to
the contrary, with respect to distributions made after December 31, 2001,
an eligible rollover distribution may include either Voluntary Employee
Contributions or Mandatory Employee Contributions which are not includible in
gross income; however, the portion of an eligible rollover distribution attributable
to Voluntary Employee Contributions or Mandatory Employee Contributions can be
paid only to an individual retirement account or annuity described in Code §408(a) or
(b), or to a qualified defined contribution plan described in Code §401(a) or
§403(a) that agrees to separately account for amounts so transferred,
including separately accounting for the portion of such distribution which is
includible in gross income and the portion of such distribution which is not so
includible. Furthermore, in accordance with the Job Creation and Worker
Assistance Act of 2002, when a distribution includes either Voluntary Employee
Contributions or Mandatory Employee Contributions which are not includible in
gross income, the amount that is rolled over will first be attributed to
amounts includible in gross income.

 

(c)          Definition
of Eligible Retirement Plan.  With respect to distributions made after December 31,
2001, the term “eligible retirement plan” means an individual retirement
account described in Code §408(a); an individual retirement annuity described
in Code §408(b); an annuity plan described in Code §403(a); an annuity contract
described in Code §403(b); a qualified trust described in Code §401(a); or an
eligible deferred compensation plan under Code §457(b) which is maintained
by a state, political subdivision of a state, or any agency or instrumentality
of a state or political subdivision of a state and which agrees to separately
account for amounts transferred into such plan from this Plan. This definition
of eligible retirement plan will also apply in the case of a distribution to a
surviving Spouse, or to a Spouse or former Spouse who is the alternate payee
under a qualified domestic relation order, as defined in Code §414(p); such
distribution will be made in the same manner as if the Spouse was the Employee.
If any portion of an eligible rollover distribution is attributable to payments
or distributions from an individual’s Roth Elective Deferral Account (or the
segregated portion of an individual’s Rollover Contribution Account that is
attributable to Roth Elective Deferrals), then an eligible retirement plan with
respect to such portion will only be either another plan’s designated Roth
account of the individual from whose account the payments or distributions were
made, or such individual’s Roth IRA.

 

(d)         Definition
of Distributee.  The term “distributee” means an Employee or former Employee. In
addition, an Employee’s or former Employee’s surviving Spouse and an Employee’s
or former Employee’s Spouse or former Spouse who is the alternate payee under a
qualified domestic relations order as defined in Code §414(p), are distributees
with regard to the interest of the Spouse or former Spouse. With respect to any
portion of a distribution that is made after December 31, 2006 from an
eligible retirement plan of a deceased Employee, a distributee for purposes of
a direct trustee-to trustee transfer will include an individual who is the
Designated Beneficiary of the Employee and who is not the surviving Spouse of
the Employee.

 

(e)          Definition
of Direct Rollover. The
term “Direct Rollover” means a payment by the Plan to the eligible retirement
plan that is specified by the distributee.

 

(f)            Direct
Rollover Rules for Roth Elective Deferral Account.  The Plan will not provide for a direct
rollover for distributions from a Participant’s Roth Elective Deferral 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 Participant’s Roth Elective Deferral Account is not taken
into account in determining whether distributions from the other Participant’s
Account(s) are reasonably expected to total less than $200 during a year.
Furthermore, the provision of this Section that allows a Participant 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 Participant’s Roth Elective Deferral Account as
a separate distribution from any amount distributed from the other Participant’s
Account(s) in the Plan, even if the amounts are distributed at the same
time.

 

5.15            Distribution
of Property. The
determination to pay any distribution in property will be made by the
Administrator in its sole discretion applied in a nondiscriminatory manner that
does not discriminate in favor of Participants who are HCEs. However, if this
is an amended or restated Plan, then the payee will have the right to elect a
full or partial distribution in property pursuant to and limited by the
provisions of Section 11.1(e).

 

100

 

5.16            Financial
Hardship Distributions. If the Plan is a profit sharing plan or a 401(k) Plan, and if
elected by the Sponsoring Employer in the Adoption Agreement, then a
Participant who is still an Employee may make a written request to the
Administrator that a distribution be made to the Participant because of his or
her immediate and heavy financial hardship. Any such distribution will be made
in accordance with the provisions of an administrative policy regarding
financial hardship distributions that is promulgated under Section 8.6 by
the Administrator; such administrative policy will include (but not be limited
to): (a) the Participant’s accounts (or sub-accounts) that are available
for financial hardship distributions; (b) the maximum percentages of such
accounts (or sub-accounts) that may be distributed for financial hardships; and
(c) the standards that will be used for determining whether a Participant
has incurred a financial hardship for purposes of financial hardship
distributions from accounts (or sub-accounts) other than Elective Deferrals.
Such standards must be based on non-discriminatory and objective criteria. If
the Plan is a 401(k) Plan, then any distribution under this Section of
a Participant’s Pre-Tax Elective Deferrals may include any allocable earnings
that are credited to such Participant’s Pre-Tax Elective Deferral Account as of
the later of December 31, 1988 or the end of the last Plan Year ending
before July 1, 1989, any Qualified Non-Elective Contributions (and
allocable earnings) as of the later of December 31, 1988 or the end of the
last Plan Year ending before July 1, 1989, and any Qualified Matching
Contributions (and allocable earnings) as of the later of December 31,
1988 or the end of the last Plan Year ending before July 1, 1989. If the
Normal Form of Distribution as elected in the Adoption Agreement is a
Qualified Joint and Survivor Annuity, then any distribution under this Section is
subject to the Spousal consent requirements of Code §401(a)(11) and §417,
pursuant to Section 5.8. If the Plan is a 401(k) Plan, then any
financial hardship distribution of Elective Deferrals from the Plan will comply
with the following provisions:

 

(a)          Immediate
and Heavy Financial Needs. The following are the only financial needs considered
immediate and heavy: (1) expenses incurred or necessary for medical care,
described in Code §213(d), of the Employee, the Employee’s Spouse or
dependents; (2) the purchase (excluding mortgage payments) of a principal
residence for the Employee; (3) payment of tuition and related educational
fees for the next 12 months of post-secondary education for the Employee, the
Employee’s Spouse, the Employee’s children or the Employee’s dependents; (4) payments
necessary to prevent the eviction of the Employee from, or a foreclosure on the
mortgage of, the Employee’s principal residence; (5) payments for funeral
or burial expenses for the Employee’s deceased parent, Spouse, children, or
dependents (as defined in Code §152, and for taxable years beginning on or
after January 1, 2005, without regard to Code §152(d)(1)(B)); or (6) expenses
for the repair of damage to the Employee’s principal residence that would
qualify for a casualty loss deduction under Code §165 (determined without
regard to whether the loss exceeds 10% of adjusted gross income). Clauses (5) and
(6) above only apply to Plan Years beginning after 2005.

 

(b)         Necessary
to Satisfy an Immediate and Heavy Financial Need. A financial hardship distribution will be
considered as necessary to satisfy an immediate and heavy financial need of the
Employee only if: (1) The distribution is not in excess of the amount of
the immediate and heavy financial need (including amounts necessary to pay any
federal, state or local income taxes or penalties reasonably anticipated to
result from the distribution); (2) the Employee has obtained all
distributions, other than financial hardship distributions, and all nontaxable
loans under all plans maintained by the Employer; and (3) effective as of January 1,
2002, all plans maintained by the Employer provide that the Employee’s Elective
Deferrals (and Employee Contributions) will be suspended for 6 months after the
receipt of the financial hardship distribution.

 

5.17            In-Service
Distributions. If
the Plan is a profit sharing plan or a 401(k) plan, and if elected in the
Adoption Agreement, and subject to the minimum Age and/or Service and/or
participation requirements elected in the Adoption Agreement, a Participant who
is still an Employee may request in writing to the Administrator that up to
100% of the Participant’s Vested Interest in the accounts elected by the
Sponsoring Employer in the Adoption Agreement be distributed to the
Participant, subject to the following provisions:

 

(a)          Amount
and Form of Distribution. The amount of a Participant’s Vested Interest for
distribution under this Section will be determined as of the Valuation
Date which coincides with or immediately precedes the date of distribution. Any
distribution under this Section will be made to the Participant in a
single payment; however, if the Normal Form of Distribution as elected in
the Adoption Agreement is a Qualified Joint and Survivor Annuity, then any
distribution under this Section is subject to the Spousal consent
requirements of Code §401(a)(11) and §417, pursuant to Section 5.8. When
feasible, any such distribution will be paid at the Participant’s direction
within 60 days of his or her request, but not later than a date as soon as
administratively practical following the next Valuation date after the
Administrator’s receipt of such request.

 

101

 

(b)         Frequency
of In-Service Distributions.  The frequency of in-service distributions to any
Participant under this Section will be determined pursuant to an
administrative policy regarding in-service distributions that is promulgated
under Section 8.6 by the Administrator.

 

(c)          Provisions
Applicable to 401(k) Plans.  If the Plan is a 401(k) plan, the minimum
attained age requirement which can be elected by the Sponsoring Employer in the
Adoption Agreement with respect to the distribution of amounts attributable to
a Participant’s Elective Deferrals, QNECs, QMACs, ADP Safe Harbor Non-Elective
Contributions and/or ADP Safe Harbor Matching Contributions is age 591⁄2.

 

(d)         Participants
Who Are Not 100% Vested.  If a distribution is made under this Section at a
time when the Participant has less than a 100% Vested Interest in his or her
Non-Safe Harbor Non-Elective Contribution sub-account and Matching Contribution
sub-account and such Vested Interest may increase, a separate account will be
established for the Participant’s Non-Safe Harbor Non-Elective Contribution
sub-account balance and the Participant’s Matching Contribution sub-account
balance at the time of distribution, and at any relevant time the Participant’s
Vested Interest in the separate account will be equal to an amount (“X”)
determined by the following formula: X = P(AB + (R x D)) - (R x D). In applying
the formula, “P” is the Vested Interest at the relevant time, “AB” is the
respective account balance at the relevant time, “D” is the amount of the distribution,
and “R” is the ratio of the respective account balance at the relevant time to
the respective account balance after distribution.

 

(e)          Restriction
on Certain Transfer Contribution Accounts.  Notwithstanding anything in this Section to the
contrary, no pre-retirement distribution can be made under this Section with
respect to Transfer Contribution Accounts (including post-transfer earnings
thereon) that are transferred into this Plan from a money purchase plan or
target benefit plan (other than any portion thereof which is attributable to
Voluntary Employee Contributions). Furthermore, if the Transfer Contributions
are Elective Deferrals (including QNECs, QMACs, and ADP Safe Harbor
Contributions) which are transferred to this Plan in a direct or indirect
trustee-to-trustee transfer from another qualified plan and which are subject
to the limitations in Regulation §1.401(k)-1(d), then the distribution of such
Transfer Contributions (including post-transfer earnings thereon) will be
subject to the limitations in Regulation §1.401(k)-1(d).

 

5.18            Distribution of Excess Elective
Deferrals. Excess
Elective Deferrals, plus any income and minus any loss allocable thereto, will
be distributed no later than April 15th to any Participant to whose
account Excess Elective Deferrals were allocated for the preceding taxable year
or calendar year and who claims Excess Elective Deferrals for such taxable year
or calendar year. Distribution of Excess Elective Deferrals will be made in
accordance with the following provisions:

 

(a)          Assignment
of Excess Elective Deferrals.  A Participant may assign to this Plan any Excess
Elective Deferrals made during a taxable year of the Participant by notifying
the Administrator on or before March 15th (or such later date as
established by the Administrator) of the subsequent year of the amount of the
Excess Elective Deferrals to be assigned to the Plan. A Participant will be
deemed to notify the Administrator of any Excess Elective Deferrals that arise
by taking into account only those Elective Deferrals made to this Plan and any
other plan, contract or arrangement of the Sponsoring Employer. Notwithstanding
any other provision of the Plan, Excess Elective Deferrals, plus any income and
minus any loss allocable to such Excess Elective Deferrals, will be distributed
no later than April 15 to any Participant to whose account Excess Elective
Deferrals were assigned for the preceding year and who claims Excess Elective
Deferrals for such taxable year or calendar year.

 

(b)         Determination
of Income or Loss.  Excess Elective Deferrals will be adjusted for any income or loss up to
the last day of the Plan Year, without considering the gap period or any
adjustment for income or loss during the gap period (the period between the end
of the Participant’s taxable year and the date of distribution). The Plan may
use any reasonable method for computing income or loss allocable to Excess
Elective Deferrals, provided such method is used consistently for all
Participants and for all corrective distributions under the Plan for the Plan
Year, and is used by the Plan for allocating income or loss to Participants’
Accounts.

 

102

 

(c)          Source
of Distribution.  Distribution of Excess Elective Deferrals will be taken from a
Participant’s investment options (if any) based on rules established by
the Administrator. In addition, for years beginning after 2005, unless a
different rule is established by the Administrator, distribution of Excess
Elective Deferrals will first be made from a Participant’s Roth Elective
Deferral Account before the Participant’s Pre-Tax Elective Deferral Account, to
the extent Roth Elective Deferrals were made for the year, unless the
Administrator permits the Participant to specify otherwise.

 

5.19            Distribution of Excess
Contributions. Notwithstanding
any other provision of the Plan, Excess Contributions, plus any income and
minus any loss allocable thereto, will be distributed no later than 12 months
after a Plan Year to Participants to whose accounts such Excess Contributions
were allocated for such Plan Year, except to the extent such Excess
Contributions are classified as Catch-up Contributions.

 

(a)          Allocation
to Highly Compensated Employees.  Excess Contributions will be allocated to the Highly
Compensated Employees with the largest amounts of Employer contributions taken
into account in calculating the ADP Test for the Plan Year in which the Excess
Contributions arose, beginning with the Highly Compensated Employee with the
largest amount of such Employer contributions and continuing in descending
order until all the Excess Contributions have been allocated. For purposes of
the preceding sentence, the “largest amount” is determined by including and
excluding such Employer contributions actually paid over to the Trust on behalf
of such Participant for the Plan Year that are described in Section 1.6. To the
extent a Highly Compensated Employee has not reached his or her Catch-Up
Contribution Limit, Excess Contributions allocated to such Highly Compensated
Employee are Catch-Up Contributions and will not be treated as Excess
Contributions. Excess Contributions will be treated as Annual Additions, even
if such Excess Contributions are distributed.

 

(b)         Distribution
of Excess Contributions After 21⁄2 Months.  If Excess Contributions (other than Catch-up
Contributions) are distributed more than 21⁄2 months (or such later time as may
be granted by future governmental guidance) after the last day of the Plan Year
in which such Excess Contributions arose, then a 10% excise tax will be imposed
on the Sponsoring Employer with respect to such Excess Contributions.

 

(c)          Determination
of Net Income or Loss.  For Plan Years beginning prior to January 1, 2006
(or such earlier effective date as may be provided in a separate amendment
implementing the final §401(k) Regulations and as permitted by such
Regulations), Excess Contributions will be adjusted for any income or loss up
to the end of the Plan Year and, at the discretion of the Administrator, may be
adjusted for income or loss during the period, if any, between the end of the
Plan Year and the actual date of distribution (the “gap period”). However,
effective as of the first day of the first Plan Year beginning on or after January 1,
2006 (or such earlier effective date as may be provided in a separate amendment
implementing the final §401(k) Regulations and as permitted by such
Regulations), Excess Contributions will be adjusted for any income or loss up
to the end of the Plan Year and during the gap period. Any adjustment for
income or loss during the gap period will be allocated in a consistent manner
to all Participants, and to all corrective distributions made for the Plan
Year, and will be the amount determined by one of the methods set forth either
in subparagraph (1), subparagraph (2), or subparagraph (3) below, as
elected by the Administrator:

 

(1)          Method
1. The amount
determined by multiplying the income or loss allocable to the Participant’s
Elective Deferrals (and QNECs or QMACs, or both, if such contributions are used
in the ADP Test) for the Plan Year and the gap period, by a fraction, the
numerator of which is the Participant’s Excess Contributions for the Plan Year
and the denominator of which is the Participant’s Elective Deferral Account
balance (and QNECs or QMACs, or both, if such contributions are used in the ADP
Test) as of the beginning of the Plan Year plus any Elective Deferrals (and
QNECs or QMACs, or both, if such contributions are used in the ADP Test)
allocated to the Participant during the Plan Year and gap period.

 

(2)          Method
2. The sum of (A) and
(B): (A) the amount determined by multiplying the income or loss allocable
to the Participant’s Elective Deferrals (and QNECs or QMACs, or both, if such
contributions are used in the ADP Test) for the Plan Year, by a fraction, the
numerator of which is the Participant’s Excess Contributions for the Plan Year
and the denominator of which is the Participant’s Elective Deferral Account
balance (and QNECs or QMACs, or both, if such contributions are used in the ADP
Test) as of the beginning of the Plan Year plus any Elective Deferrals (and
QNECs or QMACs, or both, if such contributions are used in the ADP Test)
allocated to the Participant during such Plan Year; 

 

103

 

plus (B) the amount of gap period income or loss
equal to 10% of the amount determined under clause (A) above multiplied by
the number of whole months between the end of the Plan Year and the
distribution date, counting the month of distribution if the distribution
occurs after the 15th day of such month.

 

(3)          Method
3. The amount
determined by any reasonable method of allocating income or loss to the
Participant’s Excess Contributions for the Plan Year and the gap period,
provided the method used is the same method used for allocating income or
losses to Participants’ Accounts. This Plan will not fail to use a reasonable
method for computing the income allocable to Excess Contributions merely
because the income allocable to such Excess Contributions is determined on a
date that is no more than 7 days before the distribution.

 

(d)         Accounting
for Excess Contributions.  Excess Contributions allocated to a Participant will
be distributed from the Participant’s Elective Deferral Account and QMAC Account
in proportion to the Participant’s Elective Deferrals and QMACs (to the extent
used in the ADP Test) for the Plan Year. Excess Contributions will be
distributed from the Participant’s QNEC Account only to the extent that the
Excess Contributions exceed the balance in the Participant’s Elective Deferral
Account and QMAC Account.

 

(e)          Source
and Ordering of Distribution.  Distribution of Excess Contributions will be taken
from a Participant’s investment options (if any) based on rules established
by the Administrator. For purposes of determining the sources of a distribution
of Excess Contributions, the sources will be distributed in the following order
(unless a policy for the order of the sources to distribute Excess
Contributions is established by the Administrator and such policy will
control): (1) unmatched Elective Deferrals, (2) matched Elective
Deferrals, (3) Qualified Matching Contributions (that are tested in the
ACP Test and that are utilized in (or shifted into) the ADP Test), and (4) Qualified
Non-Elective Contributions (to the extent that such contributions are utilized
in the ADP Test). In addition, for Plan Years beginning after 2005, unless a
different rule is established by the Administrator, distribution of
Elective Deferrals that are Excess Contributions will first be made from a
Participant’s Roth Elective Deferral Account before the Participant’s Pre-Tax
Elective Deferral Account, to the extent that Roth Elective Deferrals were made
for the Plan Year, unless the Administrator permits the Participant to specify
otherwise.

 

5.20            Distribution of Excess Aggregate
Contributions. Excess
Aggregate Contributions, plus any income and minus any loss allocable thereto,
will be forfeited, if forfeitable, or if not forfeitable, distributed no later
than 12 months after a Plan Year to Participants to whose Accounts such Excess
Aggregate Contributions were allocated for such Plan Year. Distribution will be
made in accordance with the following provisions:

 

(a)          Allocation
to Highly Compensated Employees.  Excess Aggregate Contributions will be allocated to
the Highly Compensated Employees with the largest Contribution Percentage
Amounts taken into account in calculating the ACP Test for the Plan Year in
which the Excess Aggregate Contributions arose, beginning with the Highly
Compensated Employee with the largest amount of such Contribution Percentage
Amounts and continuing in descending order until all the Excess Aggregate
Contributions have been allocated. For purposes of the preceding sentence, the “largest
amount” is determined by including and excluding such Employer contributions
and allocations that are described in the definition of “Contribution
Percentage Amounts.” Excess Aggregate Contributions will be treated as Annual
Additions, even if such Excess Aggregate Contributions are distributed.

 

(b)         Distribution
of Excess Aggregate Contributions After 21⁄2 Months.  If Excess Aggregate Contributions are
distributed more than 21⁄2 months after the last day of the Plan Year in which
such Excess Aggregate Contributions arose, then a ten percent (10%) excise tax
will be imposed on the Sponsoring Employer maintaining the Plan with respect to
such Excess Aggregate Contributions.

 

(c)          Forfeitures
of Excess Aggregate Contributions.  Forfeitures of Excess Aggregate Contributions will be
used and/or allocated pursuant to the provisions of Section 3.13(b).

 

(d)         Determination
of Net Income or Loss.  For Plan Years beginning prior to January 1, 2006
(or such earlier effective date as may be provided in a separate amendment implementing
the final §401(m) Regulations and as permitted by such Regulations),
Excess Aggregate Contributions will be adjusted for any income or loss up to
the end of the Plan Year and, at the discretion of the Administrator, may be
adjusted for income or loss during the period, if any, between the end of the
Plan Year and the actual date of distribution (the “gap period”). However,
effective as of the first day of the first Plan Year 

 

104

 

beginning on or after January 1, 2006 (or such
earlier effective date as may be provided in a separate amendment implementing
the final §401(m) Regulations and as permitted by such Regulations),
Excess Aggregate Contributions will be adjusted for any income or loss up to the
end of the Plan Year and during the gap period. Any adjustment for income or
loss during the gap period will be allocated in a consistent manner to all
Participants, and to all corrective distributions made for the Plan Year, and
will be the amount determined by one of the methods set forth either in
subparagraph (1), subparagraph (2), or subparagraph (3) below, as elected
by the Administrator:

 

(1)          Method
1. The amount
determined by multiplying the income or loss allocable to the Participant’s
Voluntary Employee Contributions, Mandatory Employee Contributions, Matching
Contributions (if not used in the ADP Test), QNECs (if not used in the ADP
Test) and, to the extent applicable, Elective Deferrals for the Plan Year and
the gap period, by a fraction, the numerator of which is such Participant’s
Excess Aggregate Contributions for the Plan Year and the denominator of which
is the Participant’s Account balance(s) attributable to Contribution
Percentage Amounts as of the beginning of the Plan Year, plus any additional
amounts attributable to Contribution Percentage Amounts allocated to the
Participant during such Plan Year and the gap period.

 

(2)          Method
2. The sum of (A) and
(B) as follows: (A) the amount determined by multiplying the income
or loss allocable to the Participant’s Voluntary Employee Contributions,
Mandatory Employee Contributions, Matching Contributions (if not used in the
ADP Test), QNECs (if not used in the ADP Test) and, to the extent applicable,
Elective Deferrals for the Plan Year, by a fraction, the numerator of which is
such Participant’s Excess Aggregate Contributions for the Plan Year and the
denominator of which is the Participant’s Account balance(s) attributable
to Contribution Percentage Amounts as of the beginning of the Plan Year, plus
any additional amounts attributable to Contribution Percentage Amounts
allocated to the Participant during such Plan Year; plus (B) the amount of
gap period income or loss equal to 10% of the amount determined under clause (A) above
multiplied by the number of whole months between the end of the Plan Year and
the distribution date, counting the month of distribution if the distribution
occurs after the 15th day of such month.

 

(3)          Method
3. The amount
determined by any reasonable method of allocating income or loss to the
Participant’s Excess Aggregate Contributions for the Plan Year and for the gap
period, provided the method used is the same method used for allocating income
or losses to Participants’ Accounts. This Plan will not fail to use a reasonable
method for computing the income allocable to Excess Aggregate Contributions
merely because the income allocable to such Excess Aggregate Contributions is
determined on a date that is no more than 7 days before the distribution.

 

(e)          Accounting
for Excess Aggregate Contributions.  Excess Aggregate Contributions that are allocated to a
Participant will be forfeited, if forfeitable, or will be distributed on a
pro-rata basis from the Participant’s Voluntary Employee Contribution Account,
Mandatory Employee Contribution Account, Matching Contribution Account and
Qualified Matching Contribution Account (and if applicable, from the
Participant’s Qualified Non-Elective Contribution Account, Pre-Tax Elective
Deferral Account, Roth Elective Deferral Account, or any combination thereof).

 

(f)            Source
and Ordering of Distribution.  Distribution of Excess Aggregate Contributions will be
taken from a Participant’s investment options (if any) based on rules established
by the Administrator. For purposes of determining the sources of a distribution
of Excess Aggregate Contributions, the sources will be distributed in the
following order (unless a policy for the order of the sources to distribute
Excess Aggregate Contributions is established by the Administrator and such policy
will control): (1) unmatched Voluntary Employee Contributions, (2) unmatched
Mandatory Employee Contributions, (3) unmatched Elective Deferrals (that are
tested in the ADP Test and that are utilized in (or shifted into) the ACP
Test), (4) matched Voluntary Employee Contributions and the Matching
Contributions that relate to such Voluntary Employee Contributions, (5) matched
Mandatory Employee Contributions and the Matching Contributions that relate to
such Mandatory Employee Contributions, (6) matched Elective Deferrals
(that are tested in the ADP Test and that are utilized in (or shifted into) the
ACP Test) and the Matching Contributions that relate to such Elective
Deferrals, (7) Non-Safe Harbor Matching Contributions, (8) ACP Safe
Harbor Matching Contributions (to the extent such contributions are subject to
the ACP Test), (9) ADP Safe Harbor Matching Contributions (to the extent
such contributions are subject to the ACP Test), (10) Qualified Matching
Contributions, and (11) Qualified Non-Elective Contributions (to the extent
that such contributions are  utilized in
the ACP Test). With respect to Elective Deferrals that are tested in the ADP
Test, that are utilized in (or shifted into) the ACP Test, and that become
Excess Aggregate Contributions, then for Plan Years beginning 

 

105

 

after 2005, unless a different rule is
established by the Administrator, distribution of Elective Deferrals that are
Excess Aggregate Contributions will first be made from a Participant’s Roth
Elective Deferral Account before the Participant’s Pre-Tax Elective Deferral
Account, to the extent that Roth Elective Deferrals were made for the Plan
Year, unless the Administrator permits the Participant to specify otherwise.

 

5.21            Distribution of an Employee’s
Rollover Contribution Account. An Employee’s Rollover Contribution Account will be
distributed from the Plan in accordance with the following provisions:

 

(a)          Time
of Distribution.  An Employee may request in writing a withdrawal of all or any portion
of his or her Rollover Contribution Account at any time prior to becoming a
Participant, and thereafter upon the earlier of (1) the date the Employee
is entitled to a distribution of his or her Participant’s benefits under the
provisions of Article 5, or (2) the soonest possible administratively
practical date after the Participant’s Termination of Employment. In addition,
an Employee may also withdraw all or any portion of his or her Rollover
Contribution Account at such other time as elected in the Adoption Agreement.
The Administrator may require advance notice of a reasonable period not to
exceed 60 days prior to the requested date of withdrawal. Any amount withdrawn
can only be redeposited to the Employee’s Rollover Contribution Account if so
elected in the Adoption Agreement and if the withdrawn distribution continues
to be deemed a Rollover (except for the fact that the amount originated from
this Plan). A withdrawal of all or any portion of an Employee’s Rollover
Contribution Account will not prevent an Employee from accruing any future
benefit attributable to Employer contributions. The Administrator may establish
rules or procedures regarding withdrawals from an Employee’s Rollover
Contribution Account.

 

(b)         Spousal
Consent Requirements Upon Withdrawal.  The following provisions apply to the requirement of
consent by the Employee’s Spouse with respect to a withdrawal of all or any
portion of an Employee’s Rollover Contribution Account:

 

(1)          Normal
Form of Distribution Is a QJSA. If the Plan is a money purchase pension plan or the
Normal Form of Distribution as elected in the Adoption Agreement is a
Qualified Joint and Survivor Annuity, then a withdrawal of all or any portion
of an Employee’s Rollover Contribution Account will be subject to the Spousal
consent requirements in Section 5.8 (pursuant to Revenue Ruling 2004-12),
unless the distribution is made in the form of a Qualified Joint and Survivor
Annuity.

 

(2)          Normal
Form of Distribution Is Not a QJSA. If the Plan is not a money purchase pension plan or
the Normal Form of Distribution as elected in the Adoption Agreement is
not a Qualified Joint and Survivor Annuity, then all or any portion of an
Employee’s Rollover Contribution Account can be withdrawn from the Plan without
the consent of the Employee’s Spouse.

 

(c)          Form of
Distribution.  The following provisions apply to the form of distribution with respect
to any withdrawal from the Rollover Contribution Account:

 

(1)          Normal
Form of Distribution Is a QJSA. If the Plan is a money purchase pension plan or the
Normal Form of Distribution as elected in the Adoption Agreement is a
Qualified Joint and Survivor Annuity, then a withdrawal of all or any portion
of an Employee’s Rollover Contribution Account will be subject to the Qualified
Joint and Survivor Annuity (QJSA) and Qualified Preretirement Survivor Annuity
(QPSA) requirements of this Article 5 (even if the Rollover Contribution
was not previously subject to the QJSA and QPSA rules); a withdrawal of all or
any portion of an Employee’s Rollover Contribution Account may also be made in
a lump-sum or in the same manner as the Participant Account under the other
provisions of this Article 5, subject to the Spousal consent requirements
of paragraph (b)(1).

 

(2)          Normal
Form of Distribution Is Not a QJSA. If the Plan is not a money purchase pension plan or
the Normal Form of Distribution as elected in the Adoption Agreement is
not a Qualified Joint and Survivor Annuity, then a withdrawal of all or any
portion of an Employee’s Rollover Contribution Account prior to the time that
the Employee is entitled to a distribution of his or her Participant Account
will only be distributed in a single payment. Any amount remaining in an
Employee’s Rollover Contribution Account at the time the Employee is entitled
to a distribution of his or her Participant Account will be distributed, at the
election of the Participant, in a lump-sum or in the same manner as the
Participant Account under the other provisions of this Article 5.

 

106

 

5.22            Distribution of a Participant’s
Transfer Contribution Account. A Participant’s Transfer Contribution Account will be
distributed from the Plan at the same time and in the same manner as the
Participant’s Account is distributed under Section 5.1, 5.2, 5.3, or 5.4,
subject to the following rules:

 

(a)          Spousal
Consent Requirements Upon Withdrawal.  The following provisions apply to the requirement of
consent by the Participant’s Spouse with respect to a withdrawal of all or any
portion of a Participant’s Transfer Contribution Account:

 

(1)          Transfers
Subject to Code §401(a)(11). If the Transfer Contribution was a direct or
indirect transfer as defined in Code §401(a)(11) from a defined benefit, money
purchase, or target benefit plan, or from a stock bonus or profit sharing plan
that provided for a joint and survivor annuity or a life annuity form of
payment to the Participant, then a withdrawal of all or any portion of such
Transfer Contribution (and post-transfer earnings thereon)  is subject to the Spousal consent requirements
set forth in Section 5.8.

 

(2)          Transfers
Not Subject to Code §401(a)(11). If the Transfer Contribution was not a direct or
indirect transfer as defined in Code §401(a)(11) from a defined benefit, money
purchase, or target benefit plan, or from a stock bonus or profit sharing plan
that provided for a joint and survivor annuity or a life annuity form of
payment to the Participant, then all or any portion of such Transfer
Contribution (and post-transfer earnings thereon) can be withdrawn without the
consent of the Participant’s Spouse.

 

(b)         Form of
Distribution.  A withdrawal of all or any portion of a Participant’s Transfer
Contribution Account will be made in the same manner as the Participant’s
Account under the other provisions of this Article 5, subject to the
Spousal consent requirements set forth in paragraph (a) above and Section 5.8.
However, notwithstanding the foregoing sentence to the contrary, if the
Transfer Contribution was a direct or indirect transfer as defined in Code
§401(a)(11) from a defined benefit plan; a money purchase plan; a target
benefit plan; or a stock bonus plan or a profit sharing plan that provided for
a joint and survivor annuity or a life annuity form of payment to the
Participant, then regardless of the Normal Form of Distribution, a
withdrawal of all or any portion of such Transfer Contribution will be subject
to the Qualified Joint and Survivor Annuity and Qualified Pre-Retirement
Survivor Annuity requirements of Code §401(a)(11) and Code §417, and will be
distributed in accordance with following provisions:

 

(1)          Distributions
Other Than Death.
If the Participant is married on the Annuity Starting Date and has not died
before such date, then such portion of the Participant’s Transfer Contribution
Account will be distributed in the form of a Qualified Joint and Survivor
Annuity. If the Participant is unmarried on the Annuity Starting Date and has
not died before such date, then such portion of the Participant’s Transfer
Contribution Account will be distributed as a life annuity. If a Participant
elects not to receive the annuity form of payment described above, then such
portion of the Participant’s Transfer Contribution Account will be distributed
in the manner described in Sections 5.1 through 5.4, as applicable. Any such
election by a Participant not to receive the annuity form of benefit described
in this paragraph must be made in accordance with the provisions set forth in Section 5.8(b).

 

(2)          Distributions
Upon Death.
Notwithstanding any other Beneficiary designation made by a Participant, if a
Participant is married on the date of his or her death and dies before the
Annuity Starting Date, then with respect to such portion of a deceased
Participant’s Transfer Contribution Account, the Participant’s surviving Spouse
will receive a minimum death benefit as a Qualified Pre-Retirement Survivor
Annuity unless such annuity has been waived under Section 5.8(b) of the Plan,
in which event such death benefit will be distributed to the surviving Spouse
in the manner described in Section 5.2.

 

(c)          Special
Rule for Withdrawal of Elective Deferral Transfers.  Notwithstanding anything in this Section to
the contrary, if the Transfer Contributions are Elective Deferrals (including
QNECs, QMACs, and ADP Safe Harbor Contributions) which are transferred to this
Plan in a direct or indirect trustee-to-trustee transfer from another qualified
plan and which are subject to the limitations in Regulation §1.401(k)-1(d),
then the distribution of such Transfer Contributions (including post-transfer
earnings thereon) will be subject to the limitations in Regulation
§1.401(k)-1(d).

 

107

 

5.23            Distribution of Voluntary
Employee Contributions. A Participant’s Voluntary Employee Contributions will be distributed
from the Plan in accordance with the following provisions:

 

(a)          Time
of Distribution.  A Participant’s Voluntary Employee Contribution Account will be
distributed no later than the earlier of (1) the date the Employee is
entitled to a distribution of his or her Participant’s Account balance under
the provisions of Article 5, or (2) the soonest possible
administratively practical date after the Participant’s Termination of
Employment. In addition, an Employee may also withdraw all or any portion of
his or her Voluntary Employee Contribution Account at such other time as
elected in the Adoption Agreement. The Administrator may require advance notice
of a reasonable period not to exceed 60 days prior to the requested date of
withdrawal. Withdrawals from a Voluntary Employee Contribution Account will not
prohibit a Participant from accruing any future benefit from Employer
contributions. A Participant’s request to make a withdrawal from his or her
Voluntary Employee Contribution Account must satisfy the applicable Spousal
consent requirements in Section 5.8. A withdrawal attributable to pre-1987
Voluntary Employee Contributions need not include earnings thereon.

 

(b)         Special
Rule for Withdrawal of Post-1986 Contributions.  Any distribution made under paragraph (a) which
is attributable to post-1986 Voluntary Employee Contributions can only be made
along with a portion of the earnings thereon, such earnings to be determined by
the following formula: DA [1-(V - V+E)]. For purposes of applying the
aforementioned formula, the term DA means the distribution amount, the term V
means the amount of Voluntary Employee Contributions, and the term V+E means
the amount of Voluntary Employee Contributions plus the earnings attributable
thereto.

 

5.24            Distribution of Mandatory
Employee Contributions. A Participant’s Mandatory Employee Contributions will only be
distributed after his or her Termination of Employment, will be used to provide
additional benefits to the Participant, and will be distributed in the time and
manner described in the other provisions of this Article 5.

 

108

 

Article 6

Code
§415 Limitations

 

6.1                   Maximum
Annual Additions. Subject
to Sections 6.2 and 6.3, the maximum Annual Additions made to a Participant’s
various accounts maintained under the Plan for any Limitation Year will not
exceed the lesser of the Dollar Limitation of paragraph (a) or the Compensation
Limitation of paragraph (b) below, as follows:

 

(a)          Dollar
Limitation.  For Limitation Years beginning on or after January 1, 2002, the
Dollar Limitation is $40,000 as adjusted in accordance with Code §415(d).

 

(b)         Compensation
Limitation.  For Limitation Years beginning on or after January 1, 2002, the
Compensation Limitation is an amount equal to 100% of the Participant’s Code
§415(c)(3) Compensation. However, this limitation will not apply to any
contribution made for medical benefits within the meaning of Code §401(h) or
Code §419A(f)(2) after Termination of Employment which is otherwise
treated as an Annual Addition under Code §415(l)(1) or Code §419A(d)(2).

 

6.2                   Adjustments
to Maximum Annual Additions. In applying the limitation on Annual Additions set
forth in Section 6.1, the following adjustments must be made:

 

(a)          Short
Limitation Year.  If a Limitation Year is less than 12 months, then the Dollar Limitation
of Section 6.1(a) will be adjusted by multiplying the Dollar
Limitation by a fraction, the numerator of which is the number of months
(including any fractional parts of a month) in the short Limitation Year and
the denominator of which is 12.

 

(b)         Multiple
Defined Contribution Plans.  If a Participant participates in multiple defined
contribution plans sponsored by the Employer which have different Anniversary
Dates, the maximum Annual Addition in this Plan for the Limitation Year will be
reduced by the Annual Additions credited to the Participant’s accounts in the
other defined contribution plans during the Limitation Year unless otherwise
elected in the Adoption Agreement. If a Participant participates in multiple
defined contribution plans sponsored by the Employer which have the same
Anniversary Date, then (1) if only one of the plans is subject to Code
§412, Annual Additions will first be credited to the Participant’s accounts in
the plan subject to Code §412; and (2) if none of the plans are subject to Code
§412, the maximum Annual Addition in this Plan for a given Limitation Year will
either (A) equal the product of (i) the maximum Annual Addition for
such Limitation Year minus any other Annual Additions previously credited to
the Participant’s account(s), multiplied by (ii) a fraction, the numerator
of which is the Annual Additions which would be credited to a Participant’s
accounts hereunder without regard to the Annual Additions limitation of Section 6.1
and the denominator of which is the Annual Additions for all plans described in
this paragraph, or (B) be reduced by the Annual Additions credited to the
Participant’s accounts in the other defined contribution plans for such
Limitation Year, or (C) be reduced as elected otherwise in the Adoption
Agreement.

 

6.3                   Multiple
Plans and Multiple Employers. All defined contribution plans (whether terminated or
not) sponsored by the Employer will be treated as one defined contribution
plan. In addition, all Affiliated Employers will be considered a single
Employer.

 

6.4                   Adjustment
for Excess Annual Additions. For any Limitation Year, if the Annual Additions
allocated to a Participant’s Account exceeds the Annual Additions limitation of
Section 6.1 because of an allocation of Forfeitures, a reasonable error in
estimating a Participant’s Compensation, a reasonable error in determining the
amount of elective contributions (within the meaning of Code §402(g)(3)), or because
of other limited facts and circumstances that the Commissioner finds justify
the availability of the rules set forth in this Section, then such
Participant’s Account will be adjusted as follows in order to reduce the Excess
Annual Additions:

 

(a)          Catch-Up
Contributions.  First, if Catch-Up Contributions are permitted, a catch-up eligible
Participant who has Excess Annual Additions which include Elective Deferrals
and who has not reached his or her Catch-Up Contribution Limit can
recharacterize such Excess Annual Additions as Catch-Up Contributions.

 

109

 

(b)         Return
of Employee Contributions and Elective Deferrals.  Then, Voluntary Employee Contributions,
if any, then Mandatory Employee Contributions, if any, and then, the amount of
Elective Deferrals and corresponding Employer Matching Contributions, if any,
to the extent that they would reduce the Excess Annual Additions, will be
calculated. Such Voluntary Employee Contributions, Mandatory Employee Contributions,
and Elective Deferrals plus attributable gains, will be distributed to the
Participant. Any Employer Matching Contribution amount as determined above will
be applied as described in (c) or (d) below, depending on whether the
Participant is covered by the Plan at the end of the Limitation Year.

 

(c)          Excess
Used To Reduce Employer Contributions If Participant Is Still Covered By The
Plan.  If, after
the application of paragraphs (a) and (b), Excess Annual Additions still
exist and the Participant is covered by the Plan at the end of the Limitation
Year, the Excess Annual Additions in the Participant’s Account will be used to
reduce Employer contributions (including any allocation of Forfeitures) for
such Participant in the next Limitation Year, and in each succeeding Limitation
Year if necessary.

 

(d)         Excess
Used To Reduce Employer Contributions If Participant Is Not Covered By The
Plan.  If, after the
application of paragraphs (a) and (b), Excess Annual Additions still exist
and the Participant is not covered by the Plan at the end of a Limitation Year,
the Excess Annual Additions will be held unallocated in a suspense account. The
suspense account will be applied to reduce future Employer contributions
(including the allocation of any Forfeitures) for all remaining Participants in
the next Limitation Year, and in each succeeding Limitation Year if necessary.

 

(e)          Suspense
Account.  If a suspense account is in existence at any time during a Limitation
Year pursuant to this Section, then such suspense account will not participate
in the allocation of the Trust’s investment gains and losses. If a suspense
account is in existence at any time during a particular Limitation Year, then
all amounts in the suspense account must be allocated and reallocated to
Participants’ Accounts before any Employer Contributions or any Employee
contributions may be made to the Plan for that Limitation Year. A suspense
account may not be distributed to Participants or former Participants.

 

110

 

Article 7

Loans,
Insurance and Directed Investments

 

7.1                   Loans to
Participants. If
elected in the Adoption Agreement, loans may be made from the Trust Fund to
Participants and Beneficiaries. If loans are available, then a Participant or
Beneficiary may make application to the Administrator requesting a loan. The
Administrator will have the sole right to approve or disapprove the
application. All loans must be evidenced by a legally enforceable agreement
(which may include more than one document) set forth in writing or in such
other form as may be approved by the Internal Revenue Service, and the terms of
such agreement must specify the amount and term of the loan, and the repayment
schedule. Loans will only be made in accordance with a separate written loan
program which satisfies the requirements of Code §72(p) and the
Regulations promulgated thereunder, and the following provisions:

 

(a)          General
Rules. Loans (1) will
be made available to all Participants and Beneficiaries on a reasonably
equivalent, non-discriminatory basis; (2) will not be made available to
HCEs in an amount greater than the amount made available to other Employees; (3) must
be adequately secured and bear a reasonable interest rate; and (4) cannot
exceed the present value of the Participant’s Vested Aggregate Account.

 

(b)         Spousal
Consent. If the
Plan is subject to Code §401(a)(11) and Code §417, then a Participant must
obtain the consent of his or her Spouse, if any, as set forth in Section 5.8
of the Plan, Code §401(a)(11), and Code §417 in order to use the remaining
Vested Interest of the Participant’s Account balance as security for the loan.
Spousal consent will be obtained no earlier than the beginning of the 90-day
period that ends on the date on which the loan is to be so secured. The consent
must be in writing, must acknowledge the effect of the loan, and must be
witnessed by a Plan representative or notary public. Such consent will
thereafter be binding upon the consenting Spouse or any subsequent Spouse with
respect to that loan. A new consent will be required if the remaining
Participant’s Account balance is used for renegotiation, extension, renewal, or
other revision of the loan. If valid Spousal consent has been obtained in
accordance with this paragraph, then, notwithstanding any other provision of
this Plan to the contrary, the Vested portion of the Participant’s Account
balance that is used as a security interest held by the Plan by reason of a
loan that is outstanding to the Participant will be taken into account in
determining the amount of the Vested portion of the Participant’s Account
balance payable at the time of death or distribution, but only if the reduction
is used as repayment of the loan. If less than 100% of the  Participant’s Account (determined without
regard to the preceding sentence) is payable to the surviving Spouse, then the
death benefit will be adjusted by first reducing the Vested portion of the
Participant’s Account balance by the amount of the security that is used for
the loan.

 

(c)          Maximum
Loan Amount. No
loan to a Participant or Beneficiary can be made to the extent such loan, when
added to the outstanding balance of all other loans to the Participant or
Beneficiary, would exceed the lesser of (1) $50,000 reduced by the excess
(if any) of the highest outstanding balance of loans during the one-year period
ending on the day before the loan is made, over the outstanding balance of
loans from the Plan on the date the loan is made; or (2) one-half the
present value of the Vested Portion of the Participant’s Vested Aggregate
Account. However, notwithstanding the limitation in clause (2) of the preceding
sentence, the written loan policy may permit a Participant whose Vested
Aggregate Account balance is $20,000 or less to borrow an amount that does not
exceed the lesser of $10,000 or 100% of the Participant’s Vested Aggregate
Account balance if adequate security is provided on the loan amount in excess
of that determined under clause (2). For the purpose of the limitations set
forth in this paragraph, all loans from the plans (including this Plan) of the
Sponsoring Employer and other Affiliated Employers are aggregated.

 

(d)         Minimum
Loan Amount. The
written loan policy may provide for a minimum loan not to exceed $1,000.

 

(e)          Loan
Repayments. Any
loan by its terms will require that repayment (of both principal and interest)
be amortized in level payments, not less frequently than quarterly, over a
period not extending beyond five years from the date of the loan, unless such
loan is used to acquire a dwelling unit which within a reasonable time
(determined at the time the loan is made) will be used as the principal
residence of the Participant.  In
the event of default, then foreclosure on the note and attachment of security
will not occur until a distributable event occurs in the Plan. However,
notwithstanding the foregoing to the contrary, loan repayments will be
suspended as permitted under Code §414(u)(4).

 

(f)            Assignments
and Pledges Treated as Loans. An assignment or pledge of any portion of the Participant’s
interest in the Plan and a loan, pledge, or assignment with respect to any
insurance contract purchased under the Plan, will be treated as a loan under
this Section.

 

111

 

(g)         Certain
Restrictions Eliminated. Effective for Plan loans made after December 31, 2001, any prior
Plan provisions that prohibited or otherwise restricted loans to any
owner-employee (as defined in Code §401(c)(3)) or shareholder-employee (as
defined in Code §4975(f)(6)(C)) will cease to apply. For this purpose, a
shareholder-employee means an Employee or officer of an electing small business
(Subchapter S) corporation who owns (or is considered as owning within the
meaning of Code §318(a)(1)), on any day during the taxable year of such
corporation, more than 5% of the outstanding stock of the corporation.

 

7.2                   Insurance
on Participants. If
elected in the Adoption Agreement, and pursuant to any rules or procedures
that are promulgated under Section 8.6 by the Administrator, the Trustee
may purchase life insurance Policies on the life of a Participant and/or the
Participant’s Spouse in accordance with the following:

 

(a)          Ownership
of Policies.  All life insurance Policies will be vested exclusively in the Trustee
and will be payable to the Trustee, subject to the rights of the Beneficiaries
hereunder unless the Trustee permits the designation of a named beneficiary
other than the Trustee. Notwithstanding the foregoing, no Trustee who is also a
Participant may, except in a fiduciary capacity, exercise any ownership rights
with respect to any Policy insuring the life of such Trustee in his or her
capacity as a Participant.

 

(b)         Primary
Limit on Premiums.  At the direction of the Administrator and/or the Participant, the
Trustee will purchase Policies on the life of the Participant, provided that
the aggregate premiums on ordinary life Policies must be less than 50% of the
Participant’s Account balance; (2) the aggregate premiums on term
Policies, universal Policies and all other Policies which are not ordinary life
insurance Policies must be less than 25% of the Participant’s Account balance;
and (3) the sum of one-half of the premiums on ordinary life insurance
Policies and the total of all other life insurance premiums cannot exceed 25%
of the Participant’s Account balance. For purposes of this Section, an ordinary
life insurance Policy is an insurance policy that has a non-decreasing death
benefit and also has a non-increasing premium.

 

(c)          Alternate
Limit on Premiums for Money Purchase Plans.  Notwithstanding paragraph (b) above, if this is a
money purchase pension plan, a Participant may, with the consent of the
Administrator, elect that up to 100% of his or her Rollover Contribution
Account and Voluntary Employee Contribution Account be used to purchase life
insurance Policies on the life of the Participant, on the life of the
Participant’s Spouse, and/or on the joint lives of the Participant and his or
her Spouse.

 

(d)         Alternate
Limit on Premiums for 401(k) and Profit Sharing Plans.  Notwithstanding paragraph (b) above,
if this is a 401(k) plan or a profit sharing plan, a Participant may elect
that up to 100% of his or her Rollover Contribution Account and Voluntary
Employee Contribution Account, and up to 100% of the portion of his or her
Vested Participant’s Account that has accumulated in the Plan for at least 2
years and is no longer subject to the distribution restrictions set forth in
Code §401(k)(2)(B), be used to purchase Policies on the life of the Participant,
the life of the Participant’s Spouse, and/or the joint lives of the Participant
and the Participant’s Spouse. Likewise, a Participant who has participated in
the Plan for at least 5 years may elect that up to 100% of his or her Rollover
Contribution Account and Voluntary Employee Contribution Account, and up to
100% of his or her Vested Participant’s Account balance that is no longer
subject to the distribution restrictions set forth in Code §401(k)(2)(B), be
used to purchase Policies on the life of the Participant, the life of the
Participant’s Spouse, and/or the joint lives of the Participant and his or her
Spouse.

 

(e)          Payment
of Premiums.  If Employer contributions are inadequate to pay premiums on Policies,
the Trustees may, at the direction of the Administrator, utilize other amounts
remaining in the Trust Fund to pay the premiums, allow the Policies to lapse,
reduce the Policies to a level at which they may be maintained, or borrow
against the Policies on a prorated basis if borrowing does not discriminate in
favor of Policies issued on the lives of Highly Compensated Employees. The
Trustees may also pay premiums from the loan values of the Policies themselves
if (1) any loan is made against all of the Policies in proportion to their
respective cash surrender values, and (2) all loans are repaid in
proportion to the cash surrender value of such Policies.

 

(f)            Policy
Dividends.  Any insurer payments which are paid to the Trustee on account of
experience credits, dividends, or surrender or cancellation credits, will be
applied by the Employer within the current or next succeeding Plan Year toward
premiums due.

 

112

 

(g)         Disposition
of Policies at Retirement.  When a Participant retires, the Trustee, at the
direction of the Administrator, must, with respect to any Policies that have
been purchased on the life of such Participant under this Section, either (1) transfer
them to the Participant, (2) with the Participant’s consent, borrow their
cash surrender values and transfer them to the Participant subject to the loan,
or (3) surrender them for their cash surrender values. If options (2) or
(3) are elected, the cash surrender values will be added to the
Participant’s Account for distribution in accordance with Section 5.1.

 

(h)         Disposition
of Policies Upon Termination.  If a Terminated Participant’s Vested Interest equals
or exceeds the cash surrender value of any Policies issued on his life, the
Trustee, with the consent of both the Administrator and the Terminated
Participant, will transfer such Policies to the Terminated Participant,
together with any restrictions the Administrator may impose concerning the
Terminated Participant’s right to surrender, assign, or otherwise realize cash
on such Policies prior to his Normal Retirement Date. If the Terminated
Participant’s Vested Interest is less than the cash surrender values of such
Policies, the Administrator may permit him or her to pay the Trustee the sum
required to make distribution equal to the value of the Policies being assigned
or transferred, or the Trustee may borrow the cash surrender values of the
Policies from the insurer and then assign the Policies to the Terminated
Participant. Under no circumstances will the Trust (or custodial account) retain
any part of the insurance Policy proceeds. If applicable to this Plan, then the
provisions of this paragraph also apply to a Participant who Terminates
Employment because of Disability.

 

(i)             Protection
of Fiduciaries and Insurers.  Neither the Trustee, the Employer, the Administrator,
nor any fiduciary (including any Named Fiduciary) will be responsible for the
validity of any Policy or the failure of any insurer to make payments
thereunder, or for the action of any person which may delay payment or render a
Policy void in whole or in part. No insurer will be deemed a party to this Plan
for any purpose or to be responsible for its validity; nor will it be required
to look into the terms of the Plan nor to question any action of the Trustee.
The obligations of the insurer will be determined solely by the Policy’s terms
and any other written agreements between it and the Trustee. The insurer will
act only at the written direction of the Trustee, and will be discharged from
all liability with respect to any amount paid to the Trustee. The insurer will
not be obligated to see that any money paid by it to the Trustee or any other
person is properly applied.

 

(j)             Non-Trusteed
Plan. If the Plan
is a non-trusteed Plan (a Plan designated only with Policies), then this
paragraph applies to the Plan. No Policy will be purchased under the Plan
unless such Policy or a separate definite written agreement between the
Employer and the insurer provides that no value under Policies providing
benefits under the Plan or credits determined by the insurer (on account of
dividends, earnings, or other experience rating credits; or surrender or
cancellation credits) with respect to such Policies may be paid or returned to
the Employer or diverted to or used for other than the exclusive benefit of the
Participants or their Beneficiaries. However, any contribution made by the
Employer because of a mistake of fact must be returned to the Employer within
one year of the contribution. If the Plan is funded by Policies that provide a
Participant’s benefit under the Plan, such Policies will constitute the
Participant’s Account balance. If the Plan is funded by group Policies, under a
group annuity or group insurance Policy, then premiums or other consideration
received by the insurance company must be allocated to Participants’ Accounts
under the Plan.

 

(k)          Conflict
With Plan.  If the provisions of any Policy purchased hereunder conflict with the
terms of this Plan, the Plan provisions will control.

 

7.3                   Key Man
Insurance. The
Administrator may instruct the Trustee to purchase insurance Policies on the
life of any Participant whose employment is deemed to be key to the Employer’s
financial success. Such key man Policies will be deemed to be an investment of
the Trust Fund and will be payable to the Trust Fund as the beneficiary
thereof. The Trustee may exercise any and all rights granted under such
Policies. Neither the Trustee, Employer, Administrator, nor any fiduciary
(including any Named Fiduciary) will be responsible for the validity of any Policy
or the failure of any insurer to make payments thereunder, or for the action of
any person which delays payment or renders a Policy void in whole or in part.
No insurer which issues a Policy will be deemed to be a party to this Plan for
any purpose or to be responsible for its validity; nor will any such insurer be
required to look into the terms of the Plan nor to question any action of the
Trustee. The obligations of the insurer will be determined solely by the Policy’s
terms and any other written agreements between it and the Trustee. The insurer
will act only at the written direction of the Trustee, and will be discharged
from all liability with respect to any amount paid to the Trustee. The insurer
will not be obligated to see that any money paid by it to the Trustee or any
other person is properly distributed or applied.

 

113

 

7.4                   Directed
Investment Accounts. Pursuant to any rules or procedures promulgated under Section 8.6
by the Administrator, Participants can direct the investment of a portion of
(or all of) one or more of their accounts (hereafter called Directed Investment
Accounts) established under the terms of the Plan. Investment directives will
only be given in accordance with an administrative policy regarding Directed
Investment Accounts that is promulgated under Section 8.6 by the
Administrator.  With respect to any
Participant who fails to exercise the right to direct the investment of his or
her Directed Investment Accounts, such Directed Investment Accounts will be
invested by the Trustee at the direction of the Administrator in a “default
investment,” selected by the Administrator, that is expected to produce a
favorable rate of return and that minimizes the overall risk of losing money.
With respect to Directed Investment Accounts, fiduciaries will only be
protected by ERISA §404(c) for a Plan Year if all of the requirements of
ERISA §404(c) and the Department of Labor Regulations thereunder are
complied with on each day of the Plan Year.

 

114

 

Article 8

Duties
of the Administrator

 

8.1                   Appointment,
Resignation, Removal and Succession. The Sponsoring Employer will serve as the
Administrator, unless the Sponsoring Employer elects in the Adoption Agreement
to appoint another Administrator. Each Administrator that is appointed will
continue until his death, resignation, or removal, and any Administrator may
resign by giving 30 days written notice to the Sponsoring Employer. If an
Administrator dies, resigns, or is removed, his successor will be appointed as
promptly as possible, and such appointment will become effective upon its
acceptance in writing by such successor. Pending the appointment and acceptance
of any successor Administrator, any then acting or remaining Administrator will
have full power to act.

 

8.2                   General
Powers and Duties. The
powers and duties of the Administrator include (a) appointing the Plan’s
attorney, accountant, actuary, or any other party needed to administer the Plan;
(b) directing the Trustees with respect to payments from the Trust Fund; (c) deciding
if a Participant is entitled to a benefit; (d) communicating with
Employees regarding their participation and benefits under the Plan, including
the administration of all claims procedures; (e) filing any returns and
reports with the Internal Revenue Service, Department of Labor, or any other
governmental agency; (f) reviewing and approving any financial reports,
investment reviews, or other reports prepared by any party under clause (a) above;
(g) establishing a funding policy and investment objectives consistent
with the purposes of the Plan and the ERISA; (h) construing and resolving
any question of Plan interpretation; and (i) making any findings of fact
the Administrator deems necessary to proper Plan administration.
Notwithstanding any contrary provision of this Plan, benefits under this Plan
will be paid only if the Administrator decides in its discretion that the
applicant is entitled to them. The Administrator’s interpretation of Plan
provisions, and any findings of fact, including eligibility to participate and
eligibility for benefits, are final and will not be subject to “de novo” review
unless shown to be arbitrary and capricious.

 

8.3                   Functioning
of the Committee. If
a Committee is established, a member of the Committee will serve until his or
her death, disability, removal by the Sponsoring Employer, or resignation. In
the event of any vacancy arising from the death, disability, removal, or
resignation of a member of the Committee, the Sponsoring Employer may, but is
not required to, appoint a successor to serve in his or her place. The
Committee will select a chairman and secretary from among its members. Members
of the Committee will serve without compensation. The Committee will act by
majority vote. The proper expenses of the Committee, and the compensation of
its agents, if any, that are appointed pursuant to Section 8.7, will be
paid directly by the Employer.

 

8.4                   Multiple
Administrators. If
more than one Administrator has been appointed by the Sponsoring Employer, the
Administrators may delegate specific responsibilities among themselves,
including the authority to execute documents unless the Sponsoring Employer
revokes such delegation. The Sponsoring Employer and Trustee will be notified
in writing of any such delegation of responsibilities, and the Trustee
thereafter may rely upon any documents executed by the appropriate
Administrator.

 

8.5                   Correcting
Administrative Errors. The Administrator will take such steps as the Administrator considers
necessary and appropriate to remedy administrative or operational errors,
including, but not be limited to, the following: (a) any action pursuant
to (1) any Employee Plans Compliance Resolution System (EPCRS) that is
issued by the Internal Revenue Service, (2) any asset management or fiduciary
conduct error correction program that is issued by the Department of Labor, or (3) any
other correction program issued by any Department or governmental agency; (b) a
reallocation of Plan assets; (c) an adjustment in the amount of future
payments to any Participant, Beneficiary or Alternate Payee; and (d) the
institution, prosecution, and/or settlement of legal actions to recover benefit
payments made in error or on the basis of incorrect or incomplete information.

 

8.6                   Promulgating
Notices and Procedures. The Sponsoring Employer and Administrator are given the power and
responsibility to promulgate certain written notices, policies and/or
procedures under the terms of the Plan and disseminate them to Participants,
and the Administrator may satisfy such responsibility by the preparation of any
such notice, policy and/or procedure in a written form which can be published
and communicated to a Participant in one or more of the following ways: (a) by
distribution in hard copy; (b) through distribution of a summary plan
description or summary of material modifications thereto which sets forth the
policy or procedure with respect to a right, benefit or feature offered under
the Plan; (c) by e-mail, either to a Participant’s personal e-mail address
or his or her Employer-maintained e-mail address; and (d) by publication
on a web-site accessible by the Participant, provided the Participant is
notified of said web-site publication. Any notice, policy and/or procedure provided
through an electronic medium will only be valid if the electronic medium which
is used is 

 

115

 

reasonably designed to provide the notice, policy
and/or procedure in a manner no less understandable to the Participant than a
written document, and under such medium, at the time the notice, policy and/or
procedure is provided, the Employee may request and receive the notice, policy
and/or procedure on a written paper document at no charge.

 

8.7                   Employment
of Agents and Counsel. The Administrator may appoint such actuaries, accountants, custodians,
counsel, agents, consultants, service companies and other persons deemed
necessary or desirable in connection with the administration and operation of
the Plan. Any person or company so appointed will exercise no discretionary
authority over investments or the disposition of Trust assets, and their
services and duties will be ministerial only and will be to provide the Plan
with those things required by law or by the terms of the Plan without in any
way exercising any fiduciary authority or responsibility under the Plan. The
duties of a third party Administrator will be to safe-keep the individual
records for all Participants and to prepare all required actuarial services and
disclosure forms under the supervision of the Administrator and any fiduciaries
of the Plan. It is expressly stated that the third party Administrator’s
services are only ministerial in nature and that under no circumstances will
such third party Administrator (a) exercise any discretionary authority
whatsoever over Plan Participants, Plan investments, or Plan benefits; or (b) be
given any authority or discretion concerning the management and operation of
the Plan that would cause them to become fiduciaries of the Plan.

 

8.8                   Compensation
and Expenses. The
Administrator may receive such compensation as agreed upon between the
Sponsoring Employer and the Administrator, provided that any person who already
receives full-time pay from the Employer may not receive any fees from the Plan
for services to the Plan as Administrator or in any other capacity, except for
reimbursement for expenses actually and properly incurred. The Sponsoring
Employer will pay all “settlor” expenses (as described in Department of Labor
Advisory Opinion 2001-01-A) incurred by the Administrator, the Committee or any
party that is appointed under Section 8.7 in the performance of their duties.
The Sponsoring Employer may pay, but is not required to pay, all “non-settlor”
expenses incurred by the Administrator, the Committee, or any party that is
appointed under Section 8.7 in the performance of their duties. Any “non-settlor”
expenses incurred by the Administrator, the Committee or any party that is
appointed under Section 8.7 that the Sponsoring Employer elects not to pay will
be reimbursed from Trust Fund assets. Any expenses paid from the Trust Fund
will be charged to each Adopting Employer in the ratio that each Adopting
Employer’s Participants’ Accounts bears to the total of all the Participants’
Accounts maintained by this Plan, or in any other reasonable method elected by
the Administrator.

 

8.9                   Claims
Procedures. The
claims procedure required under ERISA §503 and Department of Labor Regulations
thereunder is set forth in an administrative policy regarding claims procedures
that is promulgated under Section 8.6 by the Administrator. Such
administrative policy will be the sole and exclusive remedy for an Employee,
Participant or Beneficiary (“Claimant”) to make a claim for benefits under the
Plan.

 

8.10            Qualified Domestic Relations
Orders. A
Qualified Domestic Relations Order, or QDRO, is a signed domestic relations
order issued by a State or a Commonwealth court which creates, recognizes or
assigns to an alternate payee(s) the right to receive all or part of a
Participant’s Plan benefit. An alternate payee is a Spouse, former Spouse,
child, or other dependent of a Participant who is treated as a Beneficiary
under the Plan as a result of the QDRO. The Administrator will determine if a
domestic relations order received by the Plan is a Qualified Domestic Relations
Order based on an administrative policy regarding Qualified Domestic Relations
Orders that is promulgated under Section 8.6 by the Administrator.

 

8.11            Appointment of an Investment
Manager. The
Administrator, with the consent of the Sponsoring Employer, may appoint an
Investment Manager to manage and control the investment of all or any portion
of the assets of the Trust. Each Investment Manager must be a person (other
than the Trustee) who (a) has the power to manage, acquire, or dispose of
Plan assets, (b) is an investment adviser, a bank, or an insurance company
as described in ERISA §3(38)(B), and (c) acknowledges fiduciary
responsibility to the Plan in writing. The Administrator will enter into an
agreement with an Investment Manager that specifies the duties and compensation
of the Investment Manager and specifies any other terms and conditions under
which the Investment Manager will be retained. The Trustee is not liable for
any act or omission of an Investment Manager and is not liable for following an
Investment Manager’s advice with respect to duties delegated by the
Administrator to the Investment Manager. The Administrator can determine the
portion of the Plan’s assets to be invested by a designated Investment Manager
and can establish investment objectives and guidelines for the Investment
Manager to follow.

 

116

 

Article 9

Trustee
Provisions

 

9.1                   Appointment,
Resignation, Removal and Succession. The Trust established under the Plan will have one or
more individual Trustees, a corporate Trustee, or any combination thereof,
appointed as follows:

 

(a)          Appointment.  Each Trustee will be appointed and will
serve until a successor has been named or until such Trustee’s resignation,
death, incapacity, or removal, in which event the Sponsoring Employer will name
a successor Trustee. The term Trustee will include the original and any
successor Trustees.

 

(b)         Resignation.  A Trustee may resign at any time by
giving written notice to the Sponsoring Employer, unless such notice is waived
by the Sponsoring Employer. The Sponsoring Employer may remove a Trustee at any
time by giving such Trustee written notice. Such removal may be with or without
cause. Unless waived in writing by the Sponsor, if any Trustee who is an
Employee or an elected or appointed official resigns or terminates employment
with the Sponsoring Employer or an Adopting Employer, such termination will
constitute an immediate resignation as a Trustee of the Plan.

 

(c)          Successor
Trustee.  Each successor Trustee will succeed to the title to the Trust by
accepting the appointment in writing and by filing such written acceptance with
the former Trustee and the Sponsoring Employer. The former Trustee, upon
receipt of such acceptance, will execute all documents and perform all acts
necessary to vest the Trust Fund’s title of record in any successor Trustee. No
successor Trustee will be personally liable for any act or failure to act of
any predecessor Trustee.

 

(d)         Merger.  If any corporate Trustee, before or after
qualification, changes its name, consolidates or merges with another
corporation, or otherwise reorganizes, any resulting corporation that succeeds
to the retirement plan trustee business of such Trustee will become a Trustee
hereunder in lieu of such corporate Trustee.

 

9.2                   Powers
and Duties of the Trustee. The specific powers and duties of the Trustee will be
governed under the terms of a separate trust instrument entered into between
the Sponsoring Employer and the Trustee.

 

117

 

Article 10

Adopting
Employers

 

10.1            Plan Contributions. Unless otherwise agreed to by the
parties, or unless otherwise required by law, no Employer will have any
obligation to make contributions to this Plan for or on behalf of the Employees
of any other Employer. If an Employee is employed by more than one Employer,
any contributions made on his or her behalf will be prorated between those
Employers on the basis of the Compensation that the Employee received from each
Employer. If any Employer is unable to make a contribution for any Plan Year,
any Employer which is an Affiliated Employer of such Employer may make an
additional contribution to the Plan on behalf of any Employee of the
non-contributing Employer.

 

10.2            Plan Amendments. Any amendment to this Plan that is
adopted by the Sponsoring Employer, at any time, will be deemed to be accepted
by any Adopting Employer, unless such Adopting Employer is not an Affiliated
Employer and elects not to adopt a discretionary Plan amendment.

 

10.3            Plan Expenses. Any expenses paid from the Trust will be
charged to each Adopting Employer in the ratio that each Adopting Employer’s
Participants’ Accounts bears to the total of all the Participants’ Accounts
maintained by this Plan, or in any other reasonable method elected by the
Administrator.

 

10.4            Employee Transfers. An Employee’s transfer to or from an
Employer or Adopting Employer will not affect his or her Participant’s Account
balance and total Years of Service or Periods of Service.

 

10.5            Multiple Employer Provisions
Under Code §413(c). Notwithstanding
any other provision in the Plan, unless the Plan is a collectively bargained
plan under Regulation §1.413-1(a), the following provisions apply to any
Adopting Employer that is not also an Affiliated Employer:

 

(a)          Instances
of Separate Employer Testing.  Employees of any such Adopting Employer will be
treated separately for testing under Code §401(a)(4), §401(k), §401(m) and,
if the Sponsoring Employer and the Adopting Employer do not share Employees,
Code §416. Furthermore, the terms of Code §410(b) will be applied
separately on an employer-by-employer basis by the Sponsoring Employer (and the
Adopting Employers which are part of the Affiliated Group which includes the
Sponsoring Employer) and each Adopting Employer that is not an Affiliated
Employer of the Sponsoring Employer, taking into account the generally
applicable rules described in Code §401(a)(5), §414(b) and §414(c).

 

(b)         Instances
of Single Employer Testing.  Employees of the Adopting Employer will be treated as
part of a single Employer plan for purposes of eligibility to participate under
Article 2 and under the provisions of Code §410(a). Furthermore, the terms
of Code §411 relating to Vesting will be applied as if all Employees of all
such Adopting Employers and the Sponsoring Employer were employed by a single
Employer, except that the rules regarding Breaks in Service will be
applied under the Department of Labor Regulations.

 

(c)          Common
Trust.  Contributions
made by any Adopting Employer will be held in a common Trust Fund with
contributions made by the Sponsoring Employer, and all such contributions will
be available to pay the benefits of any Participant (or Beneficiary thereof)
who is an Employee of the Sponsoring Employer or any such Adopting Employer.

 

(d)         Common
Disqualification Provision.  The failure of the Sponsoring Employer or an Adopting
Employer to satisfy the qualification requirements under the provisions of Code
§401(a), as modified by the provisions of Code §413(c), will result in the
disqualification of the Plan for all such Employers maintaining the Plan.

 

(e)          Plan
Becomes Individually Designed.  If the combination of the Sponsoring Employer and/or
any Adopting Employer creates  a  multiple  employer  plan  as  defined  in  Code  §413(c)  and  any  applicable  transition  period  of  Code  §410(b)(6)(C)  has expired, then this Plan will be deemed to be an
individually designed plan.

 

118

 

10.6            Termination of Adoption. An Adopting Employer may terminate its
adoption of the Plan by delivering written notice to the Sponsoring Employer,
to the Administrator and to the Trustee (but in accordance with Article 11,
only the Sponsoring Employer can terminate the Plan). Upon any such termination
of adoption by an Adopting Employer, the Adopting Employer may request a
transfer of Trust Fund assets attributable to its Employees from this Plan to a
successor qualified retirement plan maintained by the Adopting Employer or its
successor. If such request is not made by the Adopting Employer, or if the
Administrator refuses to make the transfer because in its opinion a transfer
would operate to the detriment of any Participant, would jeopardize the
continued qualification of the Plan, or would not comply with any requirements
of the Code, Regulations, or rules promulgated by the Department of
Treasury or Internal Revenue Service, then termination of adoption by an
Adopting Employer as described in this Section will not be considered a
distributable event;  distribution of a
Participant’s Account of an Employee of the Adopting Employer will be made in
accordance with the provisions of Article 5 upon the death, retirement,
Disability, or the Termination of Employment from the Adopting Employer or
former Adopting Employer, as if such termination of adoption by the Adopting
Employer had not occurred.

 

119

 

Article 11

Amendment,
Termination, Merger and Elective Transfers

 

11.1            Plan Amendment. The Basic Plan and Adoption Agreements
can be amended at any time, and from time to time, in accordance with the
following provisions:

 

(a)          Amendment
by the Mass Submitter.  Subject to the requirements and limitations set forth
in paragraphs (d) and (e) below, the Mass Submitter may amend any part of
the Basic Plan and the Adoption Agreements. For purposes of this Plan, the Mass
Submitter is AccuDraft, Inc.

 

(b)         Amendment
by the Prototype Sponsor.  Subject to the requirements and limitations set forth
in paragraphs (d) and (e) below, the Prototype Sponsor may amend any part
of the Basic Plan and Adoption Agreements on behalf of each Employer
maintaining the Plan at the time of the amendment. Any amendment to the Basic
Plan does not require consent of an Employer, nor does an Employer have to
reexecute its Adoption Agreement with respect to an amendment. The Prototype
Sponsor will provide each Employer a copy of the amended Basic Plan (either by
providing substitute or additional pages, or by providing a restated Basic
Plan). An amendment by the Prototype Sponsor to an Adoption Agreement offered
under the Prototype Plan is not effective with respect to an Employer’s Plan
unless the Employer reexecutes the amended Adoption Agreement. For purposes of
amendments made by the Prototype Sponsor, the Mass Submitter will be recognized
as the agent of the Prototype Sponsor. If the Prototype Sponsor does not adopt
the amendments made by the Mass Submitter, it will no longer be identical to or
a minor modifier of the Mass Submitter plan.

 

(c)          Amendment
by the Sponsoring Employer.  Subject to the requirements and limitations set forth
in paragraphs (d) and (e) below, the Sponsoring Employer may amend
any part of the Basic Plan and the Adoption Agreements in accordance with the
following provisions:

 

(1)          Permissible
Amendments.  The Sponsoring Employer will have the right at any time to amend the
Adoption Agreement in the following manner without affecting the Plan’s status
as a Prototype Plan: (A) the Sponsoring Employer may change any optional
selections under the Adoption Agreement; (B) the Sponsoring Employer may
add additional language where authorized under the Adoption Agreement, including
language necessary to satisfy Code §415 or Code §416 due to the aggregation of
multiple plans; (C) the Sponsoring Employer may change the addendums to
the Adoption Agreement from time to time without having to reexecute the
signature page of the Adoption Agreement; (D) the Sponsoring Employer
may adopt any model, sample and/or “good faith” amendments
promulgated/suggested by the IRS, for which the IRS has provided guidance that
their adoption will not cause the Plan to be treated as an individually
designed plan; (E) the Sponsoring Employer may adopt any amendments that
it deems necessary to resolve qualification failures under any Employee Plans
Compliance Resolution System (EPCRS) that is promulgated by the Internal
Revenue Service; and (F) the Sponsoring Employer may adopt an amendment to
cure a coverage or nondiscrimination testing failure, as permitted under
applicable Regulations. The Sponsoring Employer may also amend the Plan at any
time for any other reason, including a waiver of the minimum funding
requirement under Code §412(d); however, such an amendment will cause the Plan
to lose its status as a Prototype Plan and become an individually designed
plan. The ability to amend the Plan as authorized under this Section applies
only to the Sponsoring Employer that executes the signature page of the
Adoption Agreement. Any amendment to the Plan by the Sponsoring Employer under
this Section applies to any Affiliated Employer that participates under
the Plan as an Adopting Employer. The Sponsoring Employer’s amendment of the
Plan from one type of defined contribution plan (e.g., a money purchase plan)
into another type of defined contribution plan (e.g., a profit sharing plan)
will not result in a partial termination or any other event that would require
full Vesting of some or all Plan Participants.

 

(2)          Manner
of Amending Adoption Agreements.  The Sponsoring Employer can at any time change any
election previously made in an Adoption Agreement (or any addendum previously
attached thereto) by (A) substituting pages with the new elections (or new
addendum) and executing an “Amendment By Page Substitution” and attaching
it as part of the Adoption Agreement; (B) executing an “Amendment By Section Replication”
in which the Section or Sections (or addendum or addendums) to be changed are
reproduced with the new elections selected, and attaching it 

 

120

 

as part of the Adoption Agreement; (C) executing
a properly worded resolution, certificate of action, or meeting minutes and
attaching it as part of the Adoption Agreement; or (D) creating and
distributing a Safe Harbor Notice (other than a contingent Safe Harbor Notice
as described in Section 3.20(d)) to Safe Harbor Participants.

 

(d)         General
Requirements.  An amendment of the Basic Plan or Adoption Agreement by the Mass
Submitter, the Prototype Sponsor, or the Sponsoring Employer must be in
writing. However, no such amendment or modification (1) can increase the
responsibilities of the Trustee or Administrator without their written consent;
(2) can deprive any Participant or Beneficiary of the benefits to which he
or she is entitled from the Plan; (3) can result in a decrease in the
amount of any Participant’s Account except as may be permitted under the terms
of Code §412(c)(8) if applicable; or (4) can, except as otherwise
provided, permit any part of the Trust Fund (other than as required to pay
taxes and administration expenses) to be used for or diverted to purposes other
than the exclusive benefit of the Participants or their Beneficiaries, or cause
or permit any portion of the Trust Fund to revert to or become the property of
the Employer. In addition, unless the provisions of paragraph (e) are
satisfied, no amendment to the Plan will have the effect of eliminating or
restricting the ability of a Participant or other payee to receive payment of
his or her Account balance or benefit entitlement under a particular optional
form of benefit provided under the Plan.

 

(e)          Elimination
of Optional Forms of Benefit.  No Plan amendment will be effective to eliminate or
restrict an optional form of benefit. The preceding sentence will not apply to
a Plan amendment that eliminates or restricts the ability of a Participant to
receive payment of the Participant’s Account balance under a particular
optional form of benefit (including annuities and installments) if the
amendment provides a single-sum distribution form that is otherwise identical
to the optional form of benefit being eliminated or restricted. For this
purpose, a single-sum distribution form is otherwise identical only if the
single-sum distribution form is identical in all respects to the eliminated or
restricted optional form of benefit (or would be identical except that it
provides greater rights to the Participant) except with respect to the timing
of payments after commencement. With respect to the modification or elimination
of an optional form of benefit under which benefits are distributable to a
Participant in a medium other than cash, the following provisions will apply:

 

(1)          Eliminating
Distributions Payable in Marketable Securities (other than Employer
Securities). If
the Plan includes an optional form of benefit under which benefits are
distributed in the form of Marketable Securities (other than Securities of the
Employer), then that optional form of benefit may be eliminated by a Plan
amendment (or the Plan’s amendment and restatement) by substituting cash for
the Marketable Securities as the medium of distribution.

 

(2)          Amendments
to Specify Medium of Distribution.  If the Plan includes an optional form of benefit under
which benefits are distributable to a Participant in a medium other than cash,
then the Plan may be amended (or may be amended and restated) to limit the
types of property in which distributions may be made to the Participant to the
types of property specified in the amendment (or the amendment and
restatement). For this purpose, the types of property specified in the
amendment (or the amendment and restatement) must include all types of property
(other than marketable securities that are not securities of the Employer) that
are allocated to the Participant’s Account on the effective date of the
amendment (or the amendment and restatement) and in which the Participant would
be able to receive a distribution immediately before the effective date of the
amendment (or the amendment and restatement) if a distributable event occurred.
In addition, a Plan amendment (or the Plan’s amendment and restatement) may
provide that the Participant’s right to receive a distribution in the form of
specified types of property is limited to the property allocated to the
Participant’s Account at the time of distribution that consists of property of
those specified types.

 

(3)          In-Kind
Distributions after Plan Termination.  If the Plan includes an optional form of benefit under
which benefits are distributed in specified property, then that optional form
of benefit may be modified for distributions after Plan termination by
substituting cash for the specified property as the medium of distribution to
the extent that, on Plan termination, an Employee has the opportunity to
receive the optional form of benefit in the form of the specified property.
However, if the Employer that maintains the terminating Plan also maintains
another plan that provides an optional form of benefit under which benefits are
distributed in the specified property, then this exception is not available.

 

121

 

(4)          Definitions
of Marketable Securities and Securities of the Employer. For purposes of this paragraph, the term “Marketable
Securities” means marketable securities as defined in Code §731(c)(2). The term
“Securities of the Employer” means securities of the Employer as defined in
Code §402(e)(4)(E)(ii).

 

(f)            Certain
Corrective Amendments.  To satisfy the minimum coverage requirements of Code
§410(b), the nondiscriminatory amount requirement of Regulation
§1.401(a)(4)-1(b)(2), or the nondiscriminatory plan amendment requirement of
Regulation §1.401(a)(4)-1(b)(4), a corrective amendment or change of the choice
of options in the Adoption Agreement may retroactively increase allocations for
Employees who benefited under the Plan during the Plan Year being corrected, or
may grant allocations to Employees who did not benefit under the Plan during
the Plan Year being corrected. To satisfy the nondiscriminatory current
availability requirement of Regulation §1.401(a)(4)-4(b) for benefits,
rights or features, a corrective amendment or change of the choice of options
in the Adoption Agreement may make a benefit, right or feature available to
Employees to whom it was previously not available. A corrective amendment or
change of the choice of options in the Adoption Agreement will not be effective
prior to the date of adoption unless it satisfies the applicable requirements
of Regulation §1.401(a)(4)-11(g)(3)(ii) through (vii), including the
requirement that, in order to be effective for the preceding Plan Year, such
amendment or change of the choice of options in the Adoption Agreement must be
adopted by the 15th day of the 10th month after the close of the preceding Plan
Year.

 

11.2            Termination of the Plan. The Sponsoring Employer at any time can
terminate the Plan and Trust in whole or in part in accordance with the
following provisions:

 

(a)          Termination
of Plan.  The Sponsoring Employer can terminate the Plan and Trust by filing
written notice thereof with the Administrator and Trustee and by completely
discontinuing contributions to the Plan. Upon any such termination, the Trust
Fund will continue to be administered until complete distribution has been made
to the Participants and other payees, which distribution must occur as soon as
administratively feasible after the termination of the Plan, and must be made
in accordance with the provisions of Article 5 of the Plan, including Section 5.6
where applicable. However, the Administrator may elect not to distribute the
Accounts of Participants and other payees upon termination of the Plan but
instead to transfer the entire Trust Fund assets and liabilities attributable
to this terminated Plan to another qualified plan maintained by the Employer or
its successor.

 

(b)         Vesting
Requirement upon Complete Termination or Discontinuance of Contributions.  Upon a complete termination of the Plan,
or, in the case of a Plan to which Code §412 does not apply, upon a complete
discontinuance of contributions under the Plan, then (1) any Participant
who is affected by such complete termination or, if applicable, such complete
discontinuance of contributions; (2) any Participant who has not
Terminated Employment with the Employer; (3) any Participant who has
Terminated Employment with the Employer and has not received a complete
distribution of the Participant’s Vested Aggregate Account; and (4) any
Participant who has Terminated Employment but has not incurred five consecutive
Breaks in Service; will have a 100% Vested Interest in his or her unpaid
Participant’s Account.

 

(c)          Vesting
Requirement upon Partial Termination Upon partial termination of the Plan, only a
Participant who has Terminated Employment because of the event which causes the
partial termination but who has not incurred five consecutive Breaks in Service
will have a 100% Vested Interest in his or her unpaid Participant’s Account as
of the date of partial termination.

 

(d)         Discontinuance
of Contributions.  The Sponsoring Employer may at any time completely discontinue
contributions to the Plan but continue the Plan in operation in all other
respects, in which event the Trust Fund will continue to be administered until
eventual full distribution of all benefits has been made to the Participants
and other payees in accordance with Article 5 after their Termination of
Employment for any reason. Discontinuance of contributions without an
additional notice of termination from the Sponsoring Employer to the
Administrator and Trustee will not constitute a termination of the Plan.

 

11.3            Merger or Consolidation. This Plan and Trust may not be merged or
consolidated with, nor may any of its assets or liabilities be transferred to,
any other plan, unless the benefits payable to each Participant if the Plan was
terminated immediately after such action would be equal to or greater than the
benefits to which such Participant would have been entitled if this Plan had
been terminated immediately before such action. For purposes of this Section,
the term “Code §410(b)(6)(C) Transaction” means an asset or stock
acquisition, merger, or similar transaction involving a change in the employer
of the employees of a

 

122

 

business. If the Employer acquires another company in
a Code §410(b)(6)(C) Transaction, employees of the acquired company may be
excluded from this Plan regardless of the provisions of Sections 2.1 and 2.2 of
the Plan and the Adoption Agreement during the period beginning on the date of
the transaction and ending on the last day of the Plan Year that begins after
the date of the Code §410(b)(6)(C) Transaction.

 

11.4            Plan-to-Plan Elective Transfers. To permit Participants to consolidate all
qualified defined contribution plan accounts into a single plan for
investments, distributions, loans and other administrative purposes, the
Sponsoring Employer may permit Participants to transfer amounts to and from
this Plan under the following rules:

 

(a)          Transfers
to This Plan.  If permitted by the Sponsoring Employer and subject to the provisions
of this Section, then a Participant may request that such Participant’s entire
account balance (both the vested interest and the non-vested interest) in
another qualified defined contribution plan maintained by the Sponsoring
Employer (or an Adopting Employer) be transferred in cash or in property into
this Plan. Such transferred amount into this Plan will be considered a Transfer
Contribution.

 

(b)         Transfers
from This Plan.  If permitted by the Sponsoring Employer, then a Participant may request
that such Participant’s Account balance (both the Vested Interest and the
Non-Vested Interest) in this Plan be transferred in cash or in property into
another qualified defined contribution plan of the Sponsoring Employer (or an
Adopting Employer).

 

(c)          Limitation
on Transfers.  A transfer into or from this Plan pursuant to this Section is only
permitted if the Participant is ineligible to actively participate at the same
time in the Sponsoring Employer’s (or an Adopting Employer’s) plan from which
the transfer is being made (the transferor plan) and the Sponsoring Employer’s
(or an Adopting Employer’s) plan into which the transfer is being made (the
transferee plan).

 

(d)         Plan
Accounts.  Transfer Contributions from another qualified defined contribution plan
into this Plan will maintain their identity as Elective Deferrals, Matching
Contributions, Voluntary Employee Contributions, Deductible Employee
Contributions, Non-Elective Contributions, Qualified Non-Elective
Contributions, Qualified Matching Contributions, Safe Harbor 401(k) Contributions,
and Rollover Contributions in this Plan. Such Transfer Contributions will be
accounted for separately in this Plan.

 

(e)          Protected
Benefits.  Any Transfer Contributions into this Plan that have benefits, rights
and features (including, but not limited to, certain optional forms of benefit
payments, such as annuities) required to be preserved by Code §411(d)(6) will
continue to be preserved and protected in this Plan to the extent required by
Code §411(d)(6). The Sponsoring Employer (or an Adopting Employer) reserves the
right to eliminate any benefits, rights and features (including, but not
limited to, certain optional forms of benefit payments) of any Transfer
Contributions into this Plan, to the extent permitted under Code §411(d)(6).

 

(f)            Vesting.  Transfer Contributions into this Plan
must Vest at least as rapidly under this Plan (the transferee plan) as they
would Vest under the plan from which the transfer is being made (the transferor
plan), as if the transfer had not occurred. If this Plan is the transferee plan
and the Vesting schedule under the transferor plan for a specific source of
transferred amounts (Matching Contributions or Non-Safe Harbor Non-Elective
Contributions) is less favorable than the Vesting schedule that applies to the
same component (Matching Contributions or Non-Safe Harbor Non-Elective
Contributions) in this Plan, the Administrator may apply, in a
non-discriminatory manner, the Vesting schedule of this Plan’s component
(Matching Contributions or Non-Safe Harbor Non-Elective Contributions) to that
portion of the Transfer Contributions.

 

(g)         Transfer
Requests Subject to Administrative Approval.  Any transfer into or from this Plan must be made in
cash or property acceptable to the Trustee. Any benefits, rights and features
of a Transfer Contribution required to be protected by Code §411(d)(6) must
be acceptable to and approved by the Administrator.

 

123

 

Article 12

Miscellaneous
Provisions

 

12.1            No Contract of Employment. Except as otherwise provided by law,
neither the establishment of this Plan, any modification hereto, the creation
of any fund or account, nor the payment of any benefits, will be construed as
giving any Participant or other person any legal or equitable rights against
the Employer, any officer or Employee thereof, or the Trustee, except as herein
provided. Further, under no circumstances will the terms of employment of any
Participant be modified or otherwise affected by this Plan.

 

12.2            Title to Assets. No Participant or Beneficiary will have
any right to, or any interest in, any assets of the Trust upon separation from
service with the Employer, Affiliated Employer, or Adopting Employer, except as
otherwise provided by the terms of the Plan.

 

12.3            Qualified Military Service. Notwithstanding any provision of this
Plan to the contrary, contributions, benefits and service credit with respect
to qualified military service will be provided in accordance with Code §414(u).

 

12.4            Domestic Partner’s Rights. If elected in the Adoption Agreement,
then a Domestic Partner will be afforded the same rights as a Spouse for
purposes of this Plan. However, until such time as ERISA recognizes Federal
enforcement rights of a Domestic Partner, enforcement of these rights by a
Domestic Partner will be based on a State’s (or Commonwealth’s) contract law
(without the necessity of proving adequate consideration or actual damages
under contract law) or other applicable law.

 

12.5            Fiduciaries and Bonding. Fiduciaries (including Named Fiduciaries)
of the Plan will have only those powers and duties specifically given to them
under the terms of this Plan. Every fiduciary other than a bank, an insurance
company, or a fiduciary of an Employer which has no common-law employees, will
be bonded in an amount not less than 10% of the amount of funds under the
fiduciary’s supervision, but the bond will not be less than $1,000 or more than
$500,000 or such other amount that may be required by law. The bond will
provide protection to the Plan against any loss for acts of fraud or dishonesty
by a fiduciary acting alone or in concert with others. The cost of such bond
will be an expense of either the Employer or the Trust, at the election of the
Sponsoring Employer.

 

12.6            Severability of Provisions. If any Plan provision is held invalid or
unenforceable, such invalidity or unenforceability will not affect any other
provision of this Plan, and this Plan will be construed and enforced as if such
provision had not been included.

 

12.7            Interpretation of the Plan and
Trust.  The
following provisions apply to the interpretation of the Plan and Trust:

 

(a)          Names. Names that are used in this Plan should
be used consistently in any appendixes, policies, procedures, and/or any other
documents which are legally binding upon the Plan. However, in documents that
are not considered to be part of this Plan, appendixes, policies or procedures
that are not legally binding upon the Plan; and that may be are distributed to
individuals (such as the SPDs, SMMs, notices, and election forms), names may
use plain English terms. These terms include, but are not limited to, the
following: in the case of a profit sharing plan, the Non-Elective Contribution
may be called the Employer contribution or the profit sharing contribution.
Similarly, the Non-Elective Contribution Account may be called the Participant’s
Account or the Participant’s profit sharing account.

 

(b)         Gender.
Words that are
used in the masculine gender may be construed as though they are also used in
the feminine or neuter gender, where applicable (and vice versa).

 

(c)          Number.  Words that are used in the singular form
may be construed as though they are also used in the plural form, where
applicable (and vice versa).

 

(d)         Headings
and Subheadings.  Headings and subheadings are inserted for convenience of reference.
Headings and subheadings constitute no part of this Plan and/or Trust and are
not to be considered in its construction or interpretation.

 

(e)          Single
Subparagraphs. This
Plan and/or Trust may have Sections and/or paragraphs that contain a single
subparagraph; such document construction will not constitute a Scrivener’s
error.

 

124

 

(f)            Application
of Law. This Plan
and/or Trust will be construed and interpreted in accordance with the Code and
ERISA. However, if the Plan needs to be construed and interpreted according to
a State’s or Commonwealth’s laws (to the extent that such laws are not
preempted by the provisions of the Code and ERISA), then this Plan will be
construed and interpreted according to the laws of the State or Commonwealth in
which the Sponsoring Employer maintains its principal place of business. Unless
the Trust otherwise provides, if the Trust needs to be construed and
interpreted according to a State’s or Commonwealth’s laws (to the extent that
such laws are not preempted by the provisions of the Code and ERISA), then the
Trust will be construed and interpreted according to the laws of the State or
Commonwealth in which the Sponsoring Employer maintains its principal place of
business.

 

(g)         Effective
Dates. This Plan
and Trust contains various effective dates, which include, but are not limited
to: (1) the effective date of the Plan and, if applicable, the effective
date of the amended and restated Plan; (2) the effective dates of legally
required or permitted provisions; (3) the effective dates of various
provisions in the Adoption Agreement; and (4) the effective dates of the
Effective Date Addendum (including, but not limited to, the effective date of
the freezing of the Plan, if applicable).

 

12.8            Costs and Expenses of Legal
Action. Unless
otherwise prohibited by law, either the Sponsoring Employer or the Trust, in
the sole discretion of the Sponsoring Employer, will reimburse the Trustee
and/or the Administrator for all costs, attorneys fees and other expenses
associated with any claim, suit or proceeding.

 

12.9            Qualified Plan Status. This Plan, the related Trust agreement
and the related Adoption Agreement are intended to be a qualified retirement
plan under the provisions of Code §401(a) and §501(a).

 

12.10     Mailing of Notices to
Administrator, Employer or Trustee. Notices, documents or forms required to be given to or
filed with the Administrator, the Employer or the Committee will be either hand
delivered or mailed by first class mail, postage prepaid, to the Committee or
the Employer, at the Employer’s principal place of business. Any notices,
documents or forms required to be given to or filed with the Trustee will be
either be hand delivered or mailed by first class mail, postage prepaid, to the
Trustee at its principal place of business.

 

12.11     Participant Notices and Waivers
of Notices. Whenever
written notice is required to be given under the terms of this Plan, such
notice will be deemed to be given on the date that such written notice is
either hand delivered to the recipient or deposited at a United States Postal
Service Station, first class mail, postage paid. Notice may be waived by any
party entitled to receive written notice concerning any matter under the terms
of this Plan.

 

12.12     Evidence Furnished Conclusive. Anyone required to give evidence under
the terms of the Plan may do so by certificate, affidavit, document or other
information that the person to act in reliance may consider pertinent, reliable
and genuine, and to have been signed, made or presented by the proper party or
parties. The fiduciaries of the Plan will be fully protected in acting and
relying upon any evidence described under this Section.

 

12.13     Release of Claims. Any payment to a Participant or
Beneficiary, his or her legal representative, or to a guardian or committee
appointed for such Participant or Beneficiary, will, to the extent thereof, be
in full satisfaction of all claims hereunder against the Administrator and the
Trustee, either of whom may require such Participant, legal representative,
Beneficiary, guardian or committee, as a condition precedent to such payment,
to execute a receipt and release thereof in such form as determined by the
Administrator or the Trustee.

 

12.14     Deductible Employee Contributions.
This Plan will not permit a Participant to make Deductible Employee
Contributions to the Plan for any Plan Year beginning on or after January 1,
1987, but any Deductible Employee Contributions which were made to the Plan prior to such date will continue to be
maintained in the Participant’s Deductible Employee Contributions Account in
which the Participant will have a 100% Vested Interest. Except for that portion
which a Participant self-directs pursuant to Section 7.4, the
Administrator may choose for investment purposes to either segregate such
accounts into separate interest bearing accounts or invest them as part of the
general Trust Fund, in which case such accounts will share in the allocation of
earnings and losses under Section 3.12 as non-segregated accounts.
However, no portion of a Participant’s Deductible Employee Contributions can be
invested in life insurance Policies under Section 7.2. A Participant may
withdraw amounts from his or her Deductible Employee Contributions Account only
if all other amounts credited to the Plan on his or her behalf, other than his
Participant’s Account, have been distributed to the Participant. Distributions
will be made pursuant to Article 5. Notwithstanding anything in this Section to
the contrary, if elected in the Adoption Agreement, then each Participant may
make Deemed IRA Contributions to the Plan, pursuant to Section 3.17.

 

125

 

12.15     No Duplication of Benefits. There will be no duplication of benefits under
the Plan because of employment by more than one participating Employer.

 

12.16     Discontinued Contributions. Any Participants’ Accounts (or
sub-Accounts) that were established for specific contributions to the Plan
which are (or were) subsequently discontinued will continue to be administered
in accordance with the Vesting and Forfeiture provisions of the Plan in effect
on the date that such contributions are (or were) discontinued.

 

12.17     Multiple Copies of Plan, Trust
and/or Adoption Agreement. This Plan, the related Trust agreement and the related
Adoption Agreement may be executed in any number of counterparts, each of which
will be deemed an original, but all of which will constitute one and the same
Agreement or Trust agreement, as the case may be, and will be binding on the
respective successors and assigns of the Employer and all other parties.

 

12.18     Loss of Prototype Status. If the Prototype Sponsor terminates the
services of the Mass Submitter, then this Plan will no longer qualify as a
Prototype Plan and will be considered an individually-designed plan.

 

12.19     Limitation of Liability and
Indemnification. In
addition to and in furtherance of any other limitations provided in the Plan,
and to the extent permitted by applicable law, the Employer will indemnify and
hold harmless its board of directors (collectively and individually), if any,
the Administrative/Advisory Committee (collectively and individually), if any,
and its officers, Employees, and agents against and with respect to any and all
expenses, losses, liabilities, costs, and claims, including legal fees to
defend against such liabilities and claims, arising out of their good-faith
discharge of responsibilities under or incident to the Plan, excepting only
expenses and liabilities resulting from willful misconduct. This indemnity will
not preclude such further indemnities as may be available under insurance
purchased by the Employer or as may be provided by the Employer under any
by-law, agreement, vote of shareholders or disinterested directors, or
otherwise, as such indemnities are permitted under state law. Payments with
respect to any indemnity and payment of expenses or fees under this Section will
be made only from assets of the Employer, and will not be made directly or
indirectly from assets of the Trust.

 

12.20     Written Elections and Forms. Whenever the word “written” or the words “in
writing” are used, such words will include any method of communication
permitted by the DOL with respect to such documentation. In a similar manner, the
word “form” will include any other method of election permitted under current
law. Such alternative methods will include, but not be limited to, electronic
modes to the extent permitted by law.

 

12.21     Assignment and Alienation of
Benefits. Except
as may otherwise be permitted under Code §401(a)(13)(C), as may otherwise be
permitted under a Qualified Domestic Relations Order as provided in Section 8.10,
or as may otherwise be permitted under Section 7.1 relating to loans to
Participants, no right or claim to, or interest in, any part of the Trust Fund,
or any payment therefrom, will be assignable, transferable, or subject to sale,
mortgage, pledge, hypothecation, commutation, anticipation, garnishment,
attachment, execution, or levy of any kind, and the Trustees will not recognize
any attempt to assign, transfer, sell, mortgage, pledge, hypothecate, commute,
or anticipate the same, except to the extent required by law.

 

12.22     Exclusive Benefit Rule. All contributions made by the Employer or
an Affiliated Employer to the Trust Fund will be used for the exclusive benefit
of the Participants who are Employees of the Employer or Affiliated Employer
and for their Beneficiaries and will not be used for nor diverted to any other
purpose except the payment of the costs of maintaining the Plan. All
contributions made by an Adopting Employer who is not an Affiliated Employer
will be used for the exclusive benefit of the Participants who are Employees of
the Adopting Employer and for their Beneficiaries and will not be used for nor
diverted to any other purpose except the payment of the Adopting Employers’
proportionate costs of maintaining the Plan.

 

12.23     Prior Provisions of Amended and
Restated Plans. If
the Plan’s effective date is prior to the first day of the first Plan Year
beginning on or after January 1, 2002 and this is an amendment and
restatement of the Plan, then the provisions of the prior Plan document in
effect prior to the first day of the first Plan Year beginning on or after January 1,
2002 will apply to this Plan; however, if any provisions of the prior Plan
document contradict any provisions of this Plan, then the provisions of this
Plan will apply.

 

12.24     Dual and Multiple Trusts. Plan assets may be held in two or more
separate trusts, or in trust and by an insurance company or by a trust and
under a custodial agreement. Plan assets may also be held in a common trust.

 

126Exhibit 10.1

 

SECOND
AMENDMENT

TO

LOAN AND SECURITY AGREEMENT

 

THIS SECOND AMENDMENT to Loan and Security Agreement (this “Amendment”)
is entered into this 27th day of March, 2009 by and between Silicon
Valley Bank (“Bank”) and SOURCE PHOTONICS, INC., a Delaware corporation,
FIBERXON, INC., a Delaware corporation and LUMINENTOIC, INC., a Delaware
corporation each with its principal place of business at 20550 Nordhoff Street,
Chatsworth, CA 91311 (FAX 818-349-9258) and FIBERXON (MACAO COMMERCIAL
OFFSHORE) LIMITED, an entity organized under the laws of Macao, registered with
the Commercial and Movable Assets Registry of Macau under No. 24468 (SO)
(each a “Borrower” and collectively “Borrowers”).

 

RECITALS

 

A.                                   Bank and Borrowers have entered
into that certain Loan and Security Agreement dated as of April 7, 2008,
as amended by that certain First Amendment to Loan and Security Agreement by
and between Bank and Borrowers dated as of July 24, 2008 (as the same may
from time to time be further amended, modified, supplemented or restated, the “Loan
Agreement”).

 

B.                                     Bank has extended credit to
Borrowers for the purposes permitted in the Loan Agreement.

 

C.                                     Borrowers have requested that
Bank amend the Loan Agreement to (i) extend the maturity date and (ii) make
certain other revisions to the Loan Agreement as more fully set forth herein.

 

D.                                    Bank has agreed to so amend
certain provisions of the Loan Agreement, but only to the extent, in accordance
with the terms, subject to the conditions and in reliance upon the representations
and warranties set forth below.

 

AGREEMENT

 

NOW,
THEREFORE, in
consideration of the foregoing recitals and other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, and
intending to be legally bound, the parties hereto agree as follows:

 

1.                                      Definitions. 
Capitalized terms used but not defined in this Amendment shall have the
meanings given to them in the Loan Agreement.

 

2.                                      Amendments
to Loan Agreement.

 

2.1                               Section 2.1 (Financing of Accounts.).  Section 2.1.1(b) is
amended in its entirety and replaced with the following:

 

“(b)                           Maximum Advances. 
The aggregate face amount of all Financed Receivables outstanding at any
time may not exceed the Facility Amount. 
The aggregate net amount of Advances made with respect to Financed
Receivables of Fiberxon Macao may not exceed (i) Seven Million Five
Hundred

 

 

Thousand Dollars ($7,500,000) at all times prior to June 30,
2009 and (ii) Five Million Dollars ($5,000,000) at all times thereafter.”

 

2.2                               Section 6.2 (Financial Statements,
Reports, Certificates.).  Section 6.2(a)(ii) is amended in
its entirety and replaced with the following:

 

“(ii) as soon as
available, but no later than (a) forty five (45) days after the last day
of each calendar quarter and (b) thirty (30) days after the last day of
each month, a company prepared consolidated and consolidating financial
statements prepared in accordance with GAAP (including P&L, balance sheet
and statement of cash flow) covering each Borrower and each of its Subsidiary’s
operations during the period certified by a Responsible Officer and in a form
acceptable to Bank;”

 

2.3                               Section 13 (Definitions). 
The following term and its definition is in  Section 13.1 of
the Loan Agreement is amended in its entirety and replaced with the following:

 

“Maturity
Date” is  April 5, 2010.

 

3.                                      Limitation
of Amendments.

 

3.1                               The amendments set forth in Section 3, above, are effective for the purposes set
forth herein and shall be limited precisely as written and shall not be deemed
to (a) be a consent to any amendment, waiver or modification of any other
term or condition of any Loan Document, or (b) otherwise prejudice any
right or remedy which Bank may now have or may have in the future under or in
connection with any Loan Document.

 

3.2                               This Amendment shall be construed in
connection with and as part of the Loan Documents and all terms, conditions,
representations, warranties, covenants and agreements set forth in the Loan
Documents, except as herein amended, are hereby ratified and confirmed and
shall remain in full force and effect.

 

4.                                      Representations and Warranties. 
To induce Bank to enter into this Amendment, each Borrower hereby
represents and warrants to Bank as follows:

 

4.1                               Immediately after giving effect to this
Amendment (a) the representations and warranties contained in the Loan
Documents are true, accurate and complete in all material respects as of the
date hereof (except to the extent such representations and warranties relate to
an earlier date, in which case they are true and correct as of such date), and (b) no
Event of Default has occurred and is continuing;

 

4.2                               Borrower has the power and authority to
execute and deliver this Amendment and to perform its obligations under the
Loan Agreement, as amended by this Amendment;

 

4.3                               The organizational documents of Borrower
delivered to Bank on the Effective Date (or on the date of the First Amendment
to Loan and Security Agreement with respect to Fiberxon Macao) remain true,
accurate and complete and have not been amended, supplemented or restated and
are and continue to be in full force and effect;

 

4.4                               The execution and delivery by Borrower of
this Amendment and the performance by Borrower of its obligations under the
Loan Agreement, as amended by this Amendment, have been duly authorized;

 

4.5                               The execution and delivery by Borrower of
this Amendment and the performance by Borrower of its obligations under the
Loan Agreement, as amended by this Amendment, do not and will not contravene (a) any
law or regulation binding on or affecting Borrower, (b) any contractual
restriction with a Person binding on Borrower, (c) any order, judgment or
decree of any court or other

 

2

 

governmental or public
body or authority, or subdivision thereof, binding on Borrower, or (d) the
organizational documents of Borrower;

 

4.6                               The execution and delivery by Borrower of
this Amendment and the performance by Borrower of its obligations under the
Loan Agreement, as amended by this Amendment, do not require any order,
consent, approval, license, authorization or validation of, or filing,
recording or registration with, or exemption by any governmental or public body
or authority, or subdivision thereof, binding on either Borrower, except as
already has been obtained or made; and

 

4.7                               This Amendment has been duly executed and
delivered by Borrower and is the binding obligation of Borrower, enforceable
against Borrower in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, liquidation,
moratorium or other similar laws of general application and equitable
principles relating to or affecting creditors’ rights.

 

5.                                      Counterparts. 
This Amendment may be executed in any number of counterparts and all of
such counterparts taken together shall be deemed to constitute one and the same
instrument.

 

6.                                      Effectiveness. 
This Amendment shall be deemed effective upon (a) the due execution
and delivery to Bank of this Amendment by each party hereto, and (b) Borrowers’
payment of an extension fee in an amount equal to Fifty Thousand Dollars
($50,000).

 

[Signature page follows.]

 

3

 

IN WITNESS
WHEREOF, the parties hereto have caused this Amendment to be executed as of the
date first written above.

 

	
  SOURCE PHOTONICS, INC.

  
	
   

  	
   

  
	
  By

  	
   

  	
  /s/ Brett Chloupek

  	
   

  
	
  Name:

  	
  Brett Chloupek

  
	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  FIBERXON, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
  /s/ Brett Chloupek

  	
   

  
	
  Name:

  	
  Brett Chloupek

  
	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  LUMINENTOIC, INC.

  
	
   

  	
   

  
	
  By

  	
   

  	
  /s/ Brett Chloupek

  	
   

  
	
  Name:

  	
  Brett Chloupek

  
	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  FIBERXON (MACAO COMMERCIAL OFFSHORE) LIMITED

  
	
   

  	
   

  
	
  By

  	
   

  	
  /s/ Anita Quan

  	
   

  
	
  Name:

  	
  Anita Quan

  
	
  Title:

  	
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
  BANK:

  	
   

  
	
   

  	
   

  
	
  SILICON VALLEY BANK

  
	
   

  
	
  By

  	
   

  	
  /s/ Ben Fargo

  	
   

  
	
  Name:

  	
  Ben Fargo

  
	
  Title:

  	
  Relationship Manager

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00156-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00156-of-00352.parquet"}]]