Attached files
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S-1 - FORM S-1 - Knight-Swift Transportation Holdings Inc. | c58386sv1.htm |
EX-10.4 - EX-10.4 - Knight-Swift Transportation Holdings Inc. | c58386exv10w4.htm |
EX-10.3 - EX-10.3 - Knight-Swift Transportation Holdings Inc. | c58386exv10w3.htm |
EX-10.9 - EX-10.9 - Knight-Swift Transportation Holdings Inc. | c58386exv10w9.htm |
EX-10.5 - EX-10.5 - Knight-Swift Transportation Holdings Inc. | c58386exv10w5.htm |
EX-10.8 - EX-10.8 - Knight-Swift Transportation Holdings Inc. | c58386exv10w8.htm |
EX-23.1 - EX-23.1 - Knight-Swift Transportation Holdings Inc. | c58386exv23w1.htm |
EX-21.1 - EX-21.1 - Knight-Swift Transportation Holdings Inc. | c58386exv21w1.htm |
EX-10.6 - EX-10.6 - Knight-Swift Transportation Holdings Inc. | c58386exv10w6.htm |
Exhibit 10.7
SWIFT TRANSPORTATION CO., INC. RETIREMENT PLAN
THIS
PLAN, hereby adopted this 6th day of April, 2007, by Swift
Transportation Co., Inc., an Arizona corporation, (herein referred to as the Employer).
W I T N E S S E T H:
WHEREAS, the Employer heretofore established a 401(k) Profit Sharing Plan on February 27,
1992, effective January 1, 1992, (hereinafter called the Effective Date) known as Swift
Transportation Co., Inc. Retirement Plan (herein referred to as the Plan) in recognition of the
contribution made to its successful operation by its employees and for the exclusive benefit of its
eligible employees; and
WHEREAS, the Plan was subsequently amended, with the most recent amendment being the Eighth
Amendment dated July 31, 2006; and
WHEREAS, effective January 1, 2007, the Trustee, Capital Bank and Trust Company was terminated
by the Employer and the Employer appointed Frontier Trust Company, FSB to serve as Trustee (the
Trustee), as of January 1, 2007; and
WHEREAS, the Employer has adopted the Trustees Trust Agreement; and
WHEREAS, under the terms of the Plan, the Employer has the ability to amend the Plan;
NOW, THEREFORE, effective January 1, 2007, except as otherwise provided, the Employer in
accordance with the provisions of the Plan pertaining to amendments thereof, hereby amends the Plan
in its entirety and restates the Plan to provide as follows:
ARTICLE I
DEFINITIONS
DEFINITIONS
1.1 Act means the Employee Retirement Income Security Act of 1974, as it may be amended from
time to time.
1.2 Administrator means the Employer unless another person or entity has been designated by
the Employer pursuant to Section 2.2 to administer the Plan on behalf of the Employer.
1.3 Affiliated Employer means any corporation which is a member of a controlled group of
corporations (as defined in Code Section 414(b)) which includes the Employer, any affiliate or
subsidiary thereof; any trade or business (whether or not incorporated) which is under common
control (as defined in Code Section 414(c)) with the Employer (or its parent, Swift Transportation
co., Inc., a Nevada corporation (Swift), any affiliate or subsidiary thereof; any organization
(whether or not incorporated) which is a member of an affiliated service group (as
1
defined in Code Section 414(m)) which includes the Employer or Swift; and any other entity
required to be aggregated with the Employer pursuant to Regulations under Code Section 414(o).
1.4 Aggregate Account means, with respect to each Participant, the value of all accounts
maintained on behalf of a Participant, whether attributable to Employer or Employee contributions,
subject to the provisions of Section 8.2.
1.5 Anniversary Date means the last day of the Plan Year.
1.6 Annuity Starting Date means, with respect to any Participant, the first day of the first
period for which an amount is paid as an annuity, or, in the case of a benefit not payable in the
form of an annuity, the first day on which all events have occurred which entitles the Participant
to such benefit.
1.7 Beneficiary means the person (or entity) to whom the share of a deceased Participants
total account is payable, subject to the restrictions of Sections 6.2 and 6.6.
1.8 Code means the Internal Revenue Code of 1986, as amended or replaced from time to time.
1.9 Compensation with respect to any Participant means such Participants 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 Employer maintaining the Plan to the extent that the amounts are includible in gross income
(including, but not limited to, commissions paid salesmen, compensation for services on the basis
of a percentage of profits, commissions on insurance premiums, tips, bonuses, fringe benefits, and
reimbursements or other expense allowances under a nonaccountable plan as described in
Regulation 1.62-2(c)) for a Plan Year.
Compensation shall exclude (a)(1) contributions made by the Employer to a plan of deferred
compensation to the extent that the contributions are not includible in the gross income of the
Participant for the taxable year in which contributed, (2) Employer contributions made on behalf of
an Employee to a simplified employee pension plan described in Code Section 408(k) to the extent
such contributions are excludable from the Employees gross income, (3) any distributions from a
plan of deferred compensation; (b) amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by an Employee either becomes freely
transferable or is no longer subject to a substantial risk of forfeiture; (c) amounts realized from
the sale, exchange or other disposition of stock acquired under a qualified stock option; and
(d) other amounts which receive special tax benefits, or contributions made by the Employer
(whether or not under a salary reduction agreement) towards the purchase of any annuity contract
described in Code Section 403(b) (whether or not the contributions are actually excludable from the
gross income of the Employee).
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For purposes of this Section, the determination of Compensation shall be made by:
(a) excluding (even if includible in gross income) reimbursements or other
expense allowances, fringe benefits (cash or noncash), moving expenses, deferred
compensation, and welfare benefits.
(b) excluding amounts which are contributed by the Employer pursuant to a
salary reduction agreement and which are not includible in the gross income of the
Participant under Code Sections 125, 132(f)(4), 402(e)(3), 402(h)(1)(B), 403(b) or
457(b), and Employee contributions described in Code Section 414(h)(2) that are
treated as Employer contributions.
For a Participants initial year of participation, Compensation shall be recognized as of such
Employees effective date of participation pursuant to Section 3.2.
Compensation in excess of $150,000 (or such other amount provided in the Code) shall be
disregarded for all purposes other than for purposes of salary deferral elections pursuant to
Section 4.2. Such amount shall be adjusted for increases in the cost of living in accordance with
Code Section 401(a)(17)(B), except that the dollar increase in effect on January 1 of any calendar
year shall be effective for the Plan Year beginning with or within such calendar year. For any
short Plan Year the Compensation limit shall be an amount equal to the Compensation limit for the
calendar year in which the Plan Year begins multiplied by the ratio obtained by dividing the number
of full months in the short Plan Year by twelve (12).
If any class of Employees is excluded from the Plan, then Compensation for any Employee who
becomes eligible or ceases to be eligible to participate during a Plan Year shall only include
Compensation while the Employee is an Eligible Employee.
For purposes of this Section, if the Plan is a plan described in Code Section 413(c) or 414(f)
(a plan maintained by more than one Employer), the limitation applies separately with respect to
the Compensation of any Participant from each Employer maintaining the Plan.
1.10 Contract or Policy means any life insurance policy, retirement income policy or
annuity contract (group or individual) issued pursuant to the terms of the Plan. In the event of
any conflict between the terms of this Plan and the terms of any contract purchased hereunder, the
Plan provisions shall control.
1.11 Deferred Compensation with respect to any Participant means the amount of the
Participants total Compensation which has been contributed to the Plan in accordance with the
Participants deferral election pursuant to Section 4.2 excluding any such amounts distributed as
excess annual additions pursuant to Section 4.10(a).
1.12 Designated Investment Alternative means a specific investment identified by name by the
Employer (or such other Fiduciary who has been given the authority to select investment options) as
an available investment under the Plan to which Plan assets may be invested by the Trustee pursuant
to the investment direction of a Participant.
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1.13 Directed Investment Option means one or more of the following:
(a) a Designated Investment Alternative.
(b) any other investment permitted by the Plan and the Participant Direction
Procedures to which Plan assets may be invested by the Trustee pursuant to the
investment direction of a Participant.
1.14 Early Retirement Date means any Anniversary Date (prior to the Normal Retirement Date)
coinciding with or following the date on which a Participant or Former Participant attains age 55,
and has completed at least 6 Years of Service with the Employer (Early Retirement Age). A
Participant shall become fully Vested upon satisfying this requirement if still employed at Early
Retirement Age.
A Former Participant who separates from service after satisfying the service requirement for
Early Retirement and who thereafter reaches the age requirement contained herein shall be entitled
to receive benefits under this Plan.
1.15 Elective Contribution means the Employer contributions to the Plan of Deferred
Compensation excluding any such amounts distributed as excess annual additions pursuant to
Section 4.10(a). In addition, any Employer Qualified Non-Elective Contribution made pursuant to
Section 4.1(c) and Section 4.6(b) which is used to satisfy the Actual Deferral Percentage tests
shall be considered an Elective Contribution for purposes of the Plan. Any contributions deemed to
be Elective Contributions (whether or not used to satisfy the Actual Deferral Percentage tests or
the Actual Contribution Percentage tests) shall be subject to the requirements of Sections 4.2(b)
and 4.2(c) and shall further be required to satisfy the nondiscrimination requirements of
Regulation 1.401(k)-1(b)(5) and Regulation 1.401(m)-1(b)(5), the provisions of which are
specifically incorporated herein by reference.
1.16 Eligible Employee means any Employee.
Employees who are Leased Employees within the meaning of Code Sections 414(n)(2) and 414(o)(2)
shall not be eligible to participate in this Plan.
Employees whose employment is governed by the terms of a collective bargaining agreement
between Employee representatives (within the meaning of Code Section 7701(a)(46)) and the Employer
under which retirement benefits were the subject of good faith bargaining between the parties will
not be eligible to participate in this Plan unless such agreement expressly provides for coverage
in this Plan.
Employees who are nonresident aliens (within the meaning of Code Section 7701(b)(1)(B)) and
who receive no earned income (within the meaning of Code Section 911(d)(2)) from the Employer which
constitutes income from sources within the United States (within the meaning of Code
Section 861(a)(3)) shall not be eligible to participate in this Plan.
Employees of Affiliated Employers shall be eligible to participate in this Plan as long as the
Employees of such Affiliated employers have met the conditions of eligibility to participate in the
Plan set forth in Section 3.1, provided, that any Period of Service with an
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Affiliated Employer during any period of time that such Affiliated Employer was not considered
an Affiliated Employer with Employer (as set forth in Section 1.3 above) shall not be taken into
account for either eligibility or vesting purposes. All Affiliated Employers must have adopted
this Plan in writing.
Employees classified by the Employer as independent contractors who are subsequently
determined by the Internal Revenue Service to be Employees shall not be Eligible Employees.
1.17 Employee means any person who is employed by the Employer or Affiliated Employer, and
excludes any person who is employed as an independent contractor. Employee shall include Leased
Employees within the meaning of Code Sections 414(n)(2) and 414(o)(2) unless such Leased Employees
are covered by a plan described in Code Section 414(n)(5) and such Leased Employees do not
constitute more than 20% of the recipients non-highly compensated work force. Notwithstanding the
foregoing, Leased Employees shall exclude owner-operators or independent contractors and drivers
who are employed by any company which has entered into a sub-haul agreement with Employer or any
Affiliated Employer.
1.18 Employer means Swift Transportation Co., Inc., an Arizona corporation, and any
successor which shall maintain this Plan; and any predecessor which has maintained this Plan. The
Employer is a corporation, with principal offices in the State of Arizona. In addition, where
appropriate, the term Employer shall include any Affiliated Employer and Participating Employer (as
defined in Section 10.1) which shall adopt this Plan.
1.19 Excess Aggregate Contributions means, with respect to any Plan Year, the excess of the
aggregate amount of the Employer matching contributions made pursuant to Section 4.1(b) and any
qualified non-elective contributions or elective deferrals taken into account pursuant to
Section 4.7(c) on behalf of Highly Compensated Participants for such Plan Year, over the maximum
amount of such contributions permitted under the limitations of Section 4.7(a) (determined by
hypothetically reducing contributions made on behalf of Highly Compensated Participants in order of
the actual contribution ratios beginning with the highest of such ratios). Such determination shall
be made after first taking into account corrections of any Excess Deferred Compensation pursuant to
Section 4.2 and taking into account any adjustments of any Excess Contributions pursuant to
Section 4.6.
1.20 Excess Compensation with respect to any Participant means the Participants
Compensation which is in excess of the Taxable Wage Base. For any short year, the Taxable Wage Base
shall be reduced by a fraction, the numerator of which is the number of full months in the short
year and the denominator of which is twelve (12).
1.21 Excess Contributions means, with respect to a Plan Year, the excess of Elective
Contributions used to satisfy the Actual Deferral Percentage tests made on behalf of Highly
Compensated Participants for the Plan Year over the maximum amount of such contributions permitted
under Section 4.5(a) (determined by hypothetically reducing contributions made on behalf of Highly
Compensated Participants in order of the actual deferral ratios beginning with the highest of such
ratios). Excess Contributions shall be treated as an annual addition pursuant to Section 4.9(b).
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1.22 Excess Deferred Compensation means, with respect to any taxable year of a Participant,
the excess of the aggregate amount of such Participants Deferred Compensation and the elective
deferrals pursuant to Section 4.2(f) actually made on behalf of such Participant for such taxable
year, over the dollar limitation provided for in Code Section 402(g), which is incorporated herein
by reference. Excess Deferred Compensation shall be treated as an annual addition pursuant to
Section 4.9(b) when contributed to the Plan unless distributed to the affected Participant not
later than the first April 15th following the close of the Participants taxable year.
Additionally, for purposes of Sections 8.2 and 4.4(f), Excess Deferred Compensation shall continue
to be treated as Employer contributions even if distributed pursuant to Section 4.2(f). However,
Excess Deferred Compensation of Non-Highly Compensated Participants is not taken into account for
purposes of Section 4.5(a) to the extent such Excess Deferred Compensation occurs pursuant to
Section 4.2(d).
1.23 Fiduciary means any person who (a) exercises any discretionary authority or
discretionary control respecting management of the Plan or exercises any authority or control
respecting management or disposition of its assets, (b) renders investment advice for a fee or
other compensation, direct or indirect, with respect to any monies or other property of the Plan or
has any authority or responsibility to do so, or (c) has any discretionary authority or
discretionary responsibility in the administration of the Plan.
1.24 Fiscal Year means the Employers accounting year of 12 months commencing on January 1
of each year and ending the following December 31.
1.25 Forfeiture means that portion of a Participants Account that is not Vested, and occurs
on the earlier of:
(a) the distribution of the entire Vested portion of the Participants Account
of a Former Participant who has severed employment with the Employer. For purposes
of this provision, if the Former Participant has a Vested benefit of zero, then such
Former Participant shall be deemed to have received a distribution of such Vested
benefit as of the year in which the severance of employment occurs, or
(b) the last day of the Plan Year in which a Former Participant who has severed
employment with the Employer incurs five (5) consecutive 1-Year Breaks in Service.
Regardless of the preceding provisions, if a Former Participant is eligible to share in the
allocation of Employer contributions or Forfeitures in the year in which the Forfeiture would
otherwise occur, then the Forfeiture will not occur until the end of the first Plan Year for which
the Former Participant is not eligible to share in the allocation of Employer contributions or
Forfeitures. Furthermore, the term Forfeiture shall also include amounts deemed to be Forfeitures
pursuant to any other provision of this Plan.
1.26 Former Employer means any corporation, limited liability company or partnership (a
Company) from which the Employer has acquired either substantially all of such Companys assets
or all of the outstanding stock or ownership interest of such Company through merger or
acquisition.
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1.27 Former Participant means a person who has been a Participant, but who has ceased to be
a Participant for any reason.
1.28 415 Compensation with respect to any Participant means such Participants 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 Employer maintaining the Plan to the extent that the amounts are includible in gross
income (including, but not limited to, commissions paid salesmen, compensation for services on the
basis of a percentage of profits, commissions on insurance premiums, tips, bonuses, fringe
benefits, and reimbursements or other expense allowances under a nonaccountable plan as described
in Regulation 1.62-2(c)) for a Plan Year.
415 Compensation shall exclude (a)(1) contributions made by the Employer to a plan of
deferred compensation to the extent that, the contributions are not includible in the gross income
of the Participant for the taxable year in which contributed, (2) Employer contributions made on
behalf of an Employee to a simplified employee pension plan described in Code Section 408(k) to the
extent such contributions are excludable from the Employees gross income, (3) any distributions
from a plan of deferred compensation; (b) amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property) held by an Employee either becomes freely
transferable or is no longer subject to a substantial risk of forfeiture; (c) amounts realized from
the sale, exchange or other disposition of stock acquired under a qualified stock option; and
(d) other amounts which receive special tax benefits, or contributions made by the Employer
(whether or not under a salary reduction agreement) towards the purchase of any annuity contract
described in Code Section 403(b) (whether or not the contributions are actually excludable from the
gross income of the Employee).
For purposes of this Section, the determination of 415 Compensation shall include any
elective deferral (as defined in Code Section 402(g)(3)), and any amount which is contributed or
deferred by the Employer at the election of the Participant and which is not includible in the
gross income of the Participant by reason of Code Sections 125, 132(f)(4) or 457.
1.29 414(s) Compensation means any definition of compensation that satisfies the
nondiscrimination requirements of Code Section 414(s) and the Regulations thereunder. The period
for determining 414(s) Compensation must be either the Plan Year or the calendar year ending with
or within the Plan Year. An Employer may further limit the period taken into account to that part
of the Plan Year or calendar year in which an Employee was a Participant in the component of the
Plan being tested. The period used to determine 414(s) Compensation must be applied uniformly to
all Participants for the Plan Year.
1.30 414(s) Compensation means any definition of compensation that satisfies the
nondiscrimination requirements of Code Section 414(s) and the Regulations thereunder.
For purposes of performing the Actual Deferral Percentage Tests under Plan Section 4.5 and the
Actual Contribution Percentage Tests under Plan Section 4.7, 414(s) Compensation shall be
determined using the Safe Harbor Alternative Definition under Treasury Regs. §1.414(s)-1(c)(3),
which excludes the following (even if includable in gross income): reimbursements or other expense
allowances, fringe benefits (cash and noncash), moving expenses, deferred compensation, and welfare
benefits.
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The period for determining 414(s) Compensation must be either the Plan Year or the calendar
year ending with or within the Plan Year. An Employer may further limit the period taken into
account to that part of the Plan Year or calendar year in which an Employee was a Participant in
the component of the Plan being tested. The period used to determine 414(s) Compensation must be
applied uniformly to all Participants for the Plan Year.
For Plan Years beginning after December 31, 1996, for purposes of this Section, the family
member aggregation rules of Code Section 414(q)(6) (as in effect prior to the Small Business Job
Protection Act of 1996) are eliminated.
1.31 Highly Compensated Participant means any Highly Compensated Employee who is eligible to
participate in the component of the Plan being tested.
1.32 Hour of Service means, for purposes of eligibility for participation, each hour for
which an Employee is paid or entitled to payment for the performance of duties for the Employer.
1.33 Hour of Service means, for purposes of vesting and benefit accrual, (1) each hour for
which an Employee is directly or indirectly compensated or entitled to compensation by the Employer
for the performance of duties (these hours will be credited to the Employee for the computation
period in which the duties are performed); (2) each hour for which an Employee is directly or
indirectly compensated or entitled to compensation by the Employer (irrespective of whether the
employment relationship has terminated) for reasons other than performance of duties (such as
vacation, holidays, sickness, jury duty, disability, lay-off, military duty or leave of absence)
during the applicable computation period (these hours will be calculated and credited pursuant to
Department of Labor regulation 2530.200b-2 which is incorporated herein by reference); (3) each
hour for which back pay is awarded or agreed to by the Employer without regard to mitigation of
damages (these hours will be credited to the Employee for the computation period or periods to
which the award or agreement pertains rather than the computation period in which the award,
agreement or payment is made). The same Hours of Service shall not be credited both under (1)
or (2), as the case may be, and under (3).
Notwithstanding (2) above, (i) no more than 501 Hours of Service are required to be credited
to an Employee on account of any single continuous period during which the Employee performs no
duties (whether or not such period occurs in a single computation period); (ii) an hour for which
an Employee is directly or indirectly paid, or entitled to payment, on account of a period during
which no duties are performed is not required to be credited to the Employee if such payment is
made or due under a plan maintained solely for the purpose of complying with applicable workers
compensation, or unemployment compensation or disability insurance laws; and (iii) Hours of Service
are not required to be credited for a payment which solely reimburses an Employee for medical or
medically related expenses incurred by the Employee.
For purposes of (2) above, a payment shall be deemed to be made by or due from the Employer
regardless of whether such payment is made by or due from the Employer directly, or indirectly
through, among others, a trust fund, or insurer, to which the Employer contributes or pays premiums
and regardless of whether contributions made or due to the trust fund, insurer,
8
or other entity are for the benefit of particular Employees or are on behalf of a group of
Employees in the aggregate.
For purposes of this Section, Hours of Service will be credited for employment with other
Affiliated Employers, except for any period of time that such employer was not considered an
Affiliated Employer as defined in Section 1.3 above. No credit will be given for predecessor
service for an Hour of Service with that Affiliated Employer prior to the time such Employer was
considered an Affiliated Employer with Employer. . The provisions of Department of Labor
regulations 2530.200b-2(b) and (c) are incorporated herein by reference.
1.34 Income means the income or losses allocable to Excess Deferred Compensation, Excess
Contributions or Excess Aggregate Contributions which amount shall be allocated in the same manner
as income or losses are allocated pursuant to Section 4.4(e).
1.35 Investment Manager means an entity that (a) has the power to manage, acquire, or
dispose of Plan assets and (b) acknowledges fiduciary responsibility to the Plan in writing. Such
entity must be a person, firm, or corporation registered as an investment adviser under the
Investment Advisers Act of 1940, a bank, or an insurance company.
1.36 Key Employee means an Employee as defined in Code Section 416(i) and the Regulations
thereunder. Generally, any Employee or former Employee (as well as each of the Employees or former
Employees Beneficiaries) is considered a Key Employee if the Employee, at any time during the Plan
Year that contains the Determination Date or any of the preceding four (4) Plan Years, has been
included in one of the following categories:
(a) an officer of the Employer (as that term is defined within the meaning of
the Regulations under Code Section 416) having annual 415 Compensation greater
than 50 percent of the amount in effect under Code Section 415(b)(1)(A) for any such
Plan Year.
(b) one of the ten employees having annual 415 Compensation from the Employer
for a Plan Year greater than the dollar limitation in effect under Code
Section 415(c)(1)(A) for the calendar year in which such Plan Year ends and owning
(or considered as owning within the meaning of Code Section 318) both more than
one-half percent interest and the largest interests in the Employer.
(c) a five percent owner of the Employer. Five percent owner means any
person who owns (or is considered as owning within the meaning of Code Section 318)
more than five percent (5%) of the outstanding stock of the Employer or stock
possessing more than five percent (5%) of the total combined voting power of all
stock of the Employer or, in the case of an unincorporated business, any person who
owns more than five percent (5%) of the capital or profits interest in the Employer.
In determining percentage ownership hereunder, employers that would otherwise be
aggregated under Code Sections 414(b), (c), (m) and (o) shall be treated as separate
employers.
(d) a one percent owner of the Employer having an annual 415 Compensation
from the Employer of more than $150,000. One percent owner means any person who
owns (or is considered as owning within the meaning of
9
Code Section 318) more than one percent (1%) of the outstanding stock of the
Employer or stock possessing more than one percent (1%) of the total combined voting
power of all stock of the Employer or, in the case of an unincorporated business,
any person who owns more than one percent (1%) of the capital or profits interest in
the Employer. In determining percentage ownership hereunder, employers that would
otherwise be aggregated under Code Sections 414(b), (c), (m) and (o) shall be
treated as separate employers. However, in determining whether an individual has
415 Compensation of more than $150,000, 415 Compensation from each employer
required to be aggregated under Code Sections 414(b), (c), (m) and (o) shall be
taken into account.
For purposes of this Section, the determination of 415 Compensation shall be made by
including amounts which are contributed by the Employer pursuant to a salary reduction agreement
and which are not includible in the gross income of the Participant under Code Sections 125,
132(f)(4), 402(e)(3), 402(h)(1)(B), 403(b) or 457(b), and Employee contributions described in Code
Section 414(h)(2) that are treated as Employer contributions.
1.37 Late Retirement Date means the Anniversary Date coinciding with or next following a
Participants actual Retirement Date after having reached Normal Retirement Date.
1.38 Leased Employee means any person (other than an Employee of the recipient Employer) who
pursuant to an agreement between the recipient Employer and any other person or entity (leasing
organization) has performed services for the recipient (or for the recipient and related persons
determined in accordance with Code Section 414(n)(6)) on a substantially full time basis for a
period of at least one year, and such services are performed under primary direction or control by
the recipient Employer. Contributions or benefits provided a Leased Employee by the leasing
organization which are attributable to services performed for the recipient Employer shall be
treated as provided by the recipient Employer. Furthermore, Compensation for a Leased Employee
shall only include Compensation from the leasing organization that is attributable to services
performed for the recipient Employer. A Leased Employee shall not be considered an Employee of the
recipient Employer:
(a) if such employee is covered by a money purchase pension plan providing:
(1) a nonintegrated employer contribution rate of at least 10% of
compensation, as defined in Code Section 415(c)(3);
(2) immediate participation;
(3) full and immediate vesting; and
(b) if Leased Employees do not constitute more than 20% of the recipient
Employers nonhighly compensated work force.
Notwithstanding any other provision of this Agreement to the contrary, any driver who is an
owner-operator or works as an employee or owner-operator for a company providing sub-haul services
to Employer shall not be eligible to participate in this Plan.
10
1.39 Non-Elective Contribution means the Employer contributions to the Plan excluding,
however, contributions made pursuant to the Participants deferral election provided for in
Section 4.2 and any Qualified Non-Elective Contribution used in the Actual Deferral Percentage
tests.
1.40 Non-Highly Compensated Participant means any Participant who is not a Highly
Compensated Employee. However, for purposes of Section 4.5(a) and Section 4.6, if the prior year
testing method is used, a Non-Highly Compensated Participant shall be determined using the
definition of Highly Compensated Employee in effect for the preceding Plan Year.
1.41 Non-Key Employee means any Employee or former Employee (and such Employees or former
Employees Beneficiaries) who is not, and has never been a Key Employee.
1.42 Normal Retirement Age means the Participants 65th birthday, or the Participants 5th
anniversary of joining the Plan, if later. A Participant shall become fully Vested in the
Participants Account upon attaining Normal Retirement Age.
1.43 Normal Retirement Date means the Anniversary Date coinciding with or next following the
Participants Normal Retirement Age.
1.44 1-Year Break in Service means, for purposes of eligibility for participation, a Period
of Severance of at least 12 consecutive months.
1.45 1-Year Break in Service means, for purposes of vesting, the applicable computation
period during which an Employee has not completed more than 500 Hours of Service with the Employer.
Further, solely for the purpose of determining whether a Participant has incurred a 1-Year Break in
Service, Hours of Service shall be recognized for authorized leaves of absence and maternity and
paternity leaves of absence. Years of Service and 1-Year Breaks in Service shall be measured on
the same computation period.
Authorized leave of absence means an unpaid, temporary cessation from active employment with
the Employer pursuant to an established nondiscriminatory policy, whether occasioned by illness,
military service, or any other reason.
A maternity or paternity leave of absence means an absence from work for any period by
reason of the Employees pregnancy, birth of the Employees child, placement of a child with the
Employee in connection with the adoption of such child, or any absence for the purpose of caring
for such child for a period immediately following such birth or placement. For this purpose, Hours
of Service shall be credited for the computation period in which the absence from work begins, only
if credit therefore is necessary to prevent the Employee from incurring a 1-Year Break in Service,
or, in any other case, in the immediately following computation period. The Hours of Service
credited for a maternity or paternity leave of absence shall be those which would normally have
been credited but for such absence, or, in any case in which the Administrator is unable to
determine such hours normally credited, eight (8) Hours of Service per day. The total Hours of
Service required to be credited for a maternity or paternity leave of absence shall not exceed
the number of Hours of Service needed to prevent the Employee from incurring a 1-Year Break in
Service.
11
1.46 Participant means any Eligible Employee who participates in the Plan and has not for
any reason become ineligible to participate further in the Plan.
1.47 Participant Direction Procedures means such instructions, guidelines or policies, the
terms of which are incorporated herein, as shall be established pursuant to Section 4.12 and
observed by the Administrator and applied and provided to Participants who have Participant
Directed Accounts.
1.48 Participants Account means the account established and maintained by the Administrator
for each Participant with respect to such Participants total interest in the Plan and Trust
resulting from the Employer Non-Elective Contributions.
A separate accounting shall be maintained with respect to that portion of the Participants
Account attributable to Employer matching contributions made pursuant to Section 4.1(b), Employer
discretionary contributions made pursuant to Section 4.1(d) and any Employer Qualified Non-Elective
Contributions.
1.49 Participants Combined Account means the total aggregate amount of each Participants
Elective Account and Participants Account.
1.50 Participants Directed Account means that portion of a Participants interest in the
Plan with respect to which the Participant has directed the investment in accordance with the
Participant Direction Procedure.
1.51 Participants Elective Account means the account established and maintained by the
Administrator for each Participant with respect to the Participants total interest in the Plan and
Trust resulting from the Employer Elective Contributions used to satisfy the Actual Deferral
Percentage tests. A separate accounting shall be maintained with respect to that portion of the
Participants Elective Account attributable to such Elective Contributions pursuant to Section 4.2
and any Employer Qualified Non-Elective Contributions.
1.52 Participants Transfer/Rollover Account means the account established and maintained by
the Administrator for each Participant with respect to the Participants total interest in the Plan
resulting from amounts transferred to this Plan from a direct plan-to-plan transfer and/or with
respect to such Participants interest in the Plan resulting from amounts transferred from another
qualified plan or conduit Individual Retirement Account in accordance with Section 4.11.
A separate accounting shall be maintained with respect to that portion of the Participants
Transfer/Rollover Account attributable to transfers (within the meaning of Code Section 414(l)) and
rollovers.
1.53 Period of Service means the aggregate of all periods commencing with the Employees
first day of employment or reemployment with the Employer or Affiliated Employer and ending on the
date a 1-Year Break in Service begins. The first day of employment or reemployment is the first day
the Employee performs an Hour of Service. An Employee will also receive partial credit for any
Period of Severance of less than twelve (12) consecutive months. Fractional periods of a year will
be expressed in terms of days. For Affiliated Employers, the first day of employment or
re-employment shall only be considered to be the later of the actual
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date of employment or re-employment by the Employer or the first day such Affiliated Employer
became an Affiliated Employer within the meaning of Section 1.3 and the Code.
1.54
Period of Severance means a continuous period of time during which the Employee is not
employed by the Employer. Such period begins on the date the Employee retires, quits or is
discharged, or if earlier, the twelve (12) month anniversary of the date on which the Employee was
otherwise first absent from service.
In the case of an individual who is absent from work for maternity or paternity reasons, the
twelve (12) consecutive month period beginning on the first anniversary of the first day of such
absence shall not constitute a 1-Year Break in Service. For purposes of this paragraph, an absence
from work for maternity or paternity reasons means an absence (a) by reason of the pregnancy of the
individual, (b) by reason of the birth of a child of the individual, (c) by reason of the placement
of a child with the individual in connection with the adoption of such child by such individual, or
(d) for purposes of caring for such child for a period beginning immediately following such birth
or placement.
1.55 Plan means this instrument, including all amendments thereto.
1.56 Plan Year means the Plans accounting year of twelve (12) months commencing on January
1 of each year and ending the following December 31.
1.57 Pre-Retirement Survivor Annuity means an immediate annuity for the life of the
Participants spouse, the payments under which must be equal to the benefit which can be purchased
with 50% of the accounts of a Participant.
A proportionate share of each of the Participants accounts shall be used to provide the
Pre-Retirement Survivor Annuity.
1.58 Qualified Non-Elective Contribution means any Employer contributions made pursuant to
Section 4.1(c) and Section 4.6(b) and Section 4.8(f). Such contributions shall be considered an
Elective Contribution for the purposes of the Plan and may be used to satisfy the Actual Deferral
Percentage tests or the Actual Contribution Percentage tests.
1.59 Regulation means the Income Tax Regulations as promulgated by the Secretary of the
Treasury or a delegate of the Secretary of the Treasury, and as amended from time to time.
1.60 Retired Participant means a person who has been a Participant, but who has become
entitled to retirement benefits under the Plan.
1.61 Retirement Date means the date as of which a Participant retires whether such
retirement occurs on a Participants Normal Retirement Date, Early or Late Retirement Date (see
Section 6.1).
1.62 Taxable Wage Base means, with respect to any Plan Year, the contribution and benefit
base in effect under Section 230 of the Social Security Act at the beginning of the Plan Year.
13
1.63 Terminated Participant means a person who has been a Participant, but whose employment
has been terminated other than by death or retirement.
1.64 Top Heavy Plan means a plan described in Section 8.2(a).
1.65 Top Heavy Plan Year means a Plan Year during which the Plan is a Top Heavy Plan.
1.66 Trustee means the person or entity named as trustee herein or in any separate trust
forming a part of this Plan, and any successors.
1.67 Trust Fund means the assets of the Plan and Trust as the same shall exist from time to
time.
1.68 Valuation Date means the Anniversary Date and may include any other date or dates
deemed necessary or appropriate by the Administrator for the valuation of the Participants
accounts during the Plan Year, which may include any day that the Trustee, any transfer agent
appointed by the Trustee or the Employer or any stock exchange used by such agent, are open for
business.
1.69 Vested means the nonforfeitable portion of any account maintained on behalf of a
Participant.
1.70 Year of Service means the computation period of twelve (12) consecutive months, herein
set forth, during which an Employee has at least 1000 Hours of Service.
For vesting purposes, the computation periods shall be the Plan Year, including periods prior
to the Effective Date of the Plan.
The computation period shall be the Plan Year if not otherwise set forth herein.
Notwithstanding the foregoing, for any short Plan Year, the determination of whether an
Employee has completed a Year of Service shall be made in accordance with Department of Labor
regulation 2530.203-2(c). However, in determining whether an Employee has completed a Year of
Service for benefit accrual purposes in the short Plan Year, the number of the Hours of Service
required shall be proportionately reduced based on the number of full months in the short Plan
Year.
Years of Service with any Affiliated Employer shall be recognized, but only subsequent to the
time such company became an Affiliated Employer.
ARTICLE II
ADMINISTRATION
ADMINISTRATION
2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER
(a) In addition to the general powers and responsibilities otherwise provided
for in this Plan, the Employer shall be empowered to appoint and remove the Trustee
and the Administrator from time to time as it deems necessary
14
for the proper administration of the Plan to ensure that the Plan is being
operated for the exclusive benefit of the Participants and their Beneficiaries in
accordance with the terms of the Plan, the Code, and the Act. The Employer may
appoint counsel, specialists, advisers, agents (including any nonfiduciary agent)
and other persons as the Employer deems necessary or desirable in connection with
the exercise of its fiduciary duties under this Plan. The Employer may compensate
such agents or advisers from the assets of the Plan as fiduciary expenses (but not
including any business (settlor) expenses of the Employer), to the extent not paid
by the Employer.
(b) The Employer may, by written agreement or designation, appoint at its
option an Investment Manager (qualified under the Investment Company Act of 1940 as
amended), investment adviser, or other agent to provide direction to the Trustee
with respect to any or all of the Plan assets. Such appointment shall be given by
the Employer in writing in a form acceptable to the Trustee and shall specifically
identify the Plan assets with respect to which the Investment Manager or other agent
shall have authority to direct the investment.
(c) The Employer shall establish a funding policy and method, i.e., it shall
determine whether the Plan has a short run need for liquidity (e.g., to pay
benefits) or whether liquidity is a long run goal and investment growth (and
stability of same) is a more current need, or shall appoint a qualified person to do
so. The Employer or its delegate shall communicate such needs and goals to the
Trustee, who shall coordinate such Plan needs with its investment policy. The
communication of such a funding policy and method shall not, however, constitute a
directive to the Trustee as to the investment of the Trust Funds. Such funding
policy and method shall be consistent with the objectives of this Plan and with the
requirements of Title I of the Act.
(d) The Employer shall periodically review the performance of any Fiduciary or
other person to whom duties have been delegated or allocated by it under the
provisions of this Plan or pursuant to procedures established hereunder. This
requirement may be satisfied by formal periodic review by the Employer or by a
qualified person specifically designated by the Employer, through day-to-day conduct
and evaluation, or through other appropriate ways.
2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer shall be the Administrator. The Employer may appoint any person, including, but
not limited to, the Employees of the Employer, to perform the duties of the Administrator. Any
person so appointed shall signify acceptance by filing written acceptance with the Employer. Upon
the resignation or removal of any individual performing the duties of the Administrator, the
Employer may designate a successor.
2.3 POWERS AND DUTIES OF THE ADMINISTRATOR
The primary responsibility of the Administrator is to administer the Plan for the exclusive
benefit of the Participants and their Beneficiaries, subject to the specific terms of the Plan. The
Administrator shall administer the Plan in accordance with its terms and shall have the
15
power and discretion to construe the terms of the Plan and to determine all questions arising
in connection with the administration, interpretation, and application of the Plan. Any such
determination by the Administrator shall be conclusive and binding upon all persons. The
Administrator may establish procedures, correct any defect, supply any information, or reconcile
any inconsistency in such manner and to such extent as shall be deemed necessary or advisable to
carry out the purpose of the Plan; provided, however, that any procedure, discretionary act,
interpretation or construction shall be done in a nondiscriminatory manner based upon uniform
principles consistently applied and shall be consistent with the intent that the Plan shall
continue to be deemed a qualified plan under the terms of Code Section 401(a), and shall comply
with the terms of the Act and all regulations issued pursuant thereto. The Administrator shall have
all powers necessary or appropriate to accomplish the Administrators duties under the Plan.
The Administrator shall be charged with the duties of the general administration of the Plan
as set forth under the terms of the Plan, including, but not limited to, the following:
(a) the discretion to determine all questions relating to the eligibility of
Employees to participate or remain a Participant hereunder and to receive benefits
under the Plan;
(b) to compute, certify, and direct the Trustee with respect to the amount and
the kind of benefits to which any Participant shall be entitled hereunder;
(c) to authorize and direct the Trustee with respect to all discretionary or
otherwise directed disbursements from the Trust;
(d) to maintain all necessary records for the administration of the Plan;
(e) to interpret the provisions of the Plan and to make and publish such rules
for regulation of the Plan as are consistent with the terms hereof;
(f) to determine the size and type of any Contract to be purchased from any
insurer, and to designate the insurer from which such Contract shall be purchased;
(g) to compute and certify to the Employer and to the Trustee from time to time
the sums of money necessary or desirable to be contributed to the Plan;
(h) to consult with the Employer and the Trustee regarding the short and
long-term liquidity needs of the Plan in order that the Trustee can exercise any
investment discretion in a manner designed to accomplish specific objectives;
(i) to prepare and implement a procedure for notifying Participants and
Beneficiaries of their rights to elect joint and survivor annuities and
Pre-Retirement Survivor Annuities as required by the Act and regulations thereunder;
16
(j) to prepare and implement a procedure to notify Eligible Employees that they
may elect to have a portion of their Compensation deferred or paid to them in cash;
(k) to act as the named Fiduciary responsible for communications with
Participants as needed to maintain Plan compliance with Act Section 404(c),
including, but not limited to, the receipt and transmitting of Participants
directions as to the investment of their account(s) under the Plan and the
formulation of policies, rules, and procedures pursuant to which Participants may
give investment instructions with respect to the investment of their accounts;
(l) to determine the validity of, and take appropriate action with respect to,
any qualified domestic relations order received by it; and
(m) to assist any Participant regarding the Participants rights, benefits, or
elections available under the Plan.
2.4 RECORDS AND REPORTS
The Administrator shall keep a record of all actions taken and shall keep all other books of
account, records, policies, and other data that may be necessary for proper administration of the
Plan and shall be responsible for supplying all information and reports to the Internal Revenue
Service, Department of Labor, Participants, Beneficiaries and others as required by law.
2.5 APPOINTMENT OF ADVISERS
The Administrator, or the Trustee with the consent of the Administrator, may appoint counsel,
specialists, advisers, agents (including nonfiduciary agents) and other persons as the
Administrator or the Trustee deems necessary or desirable in connection with the administration of
this Plan, including but not limited to agents and advisers to assist with the administration and
management of the Plan, and thereby to provide, among such other duties as the Administrator may
appoint, assistance with maintaining Plan records and the providing of investment information to
the Plans investment fiduciaries and to Plan Participants.
2.6 PAYMENT OF EXPENSES
All expenses of administration may be paid out of the Trust Fund unless paid by the Employer.
Such expenses shall include any expenses incident to the functioning of the Administrator, or any
person or persons retained or appointed by any named Fiduciary incident to the exercise of their
duties under the Plan, including, but not limited to, fees of accountants, counsel, Investment
Managers, agents (including nonfiduciary agents) appointed for the purpose of assisting the
Administrator or the Trustee in carrying out the instructions of Participants as to the directed
investment of their accounts and other specialists and their agents, the costs of any bonds
required pursuant to Act Section 412, and other costs of administering the Plan. Until paid, the
expenses shall constitute a liability of the Trust Fund.
17
2.7 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed in writing with the Administrator. Written
notice of the disposition of a claim shall be furnished to the claimant within ninety (90) days
after the application is filed, or such period as is required by applicable law or Department of
Labor regulation. In the event the claim is denied, the reasons for the denial shall be
specifically set forth in the notice in language calculated to be understood by the claimant,
pertinent provisions of the Plan shall be cited, and, where appropriate, an explanation as to how
the claimant can perfect the claim will be provided. In addition, the claimant shall be furnished
with an explanation of the Plans claims review procedure.
2.8 CLAIMS REVIEW PROCEDURE
Any Employee, former Employee, or Beneficiary of either, who has been denied a benefit by a
decision of the Administrator pursuant to Section 2.7 shall be entitled to request the
Administrator to give further consideration to a claim by filing with the Administrator a written
request for a hearing. Such request, together with a written statement of the reasons why the
claimant believes the claim should be allowed, shall be filed with the Administrator no later than
sixty (60) days after receipt of the written notification provided for in Section 2.7. The
Administrator shall then conduct a hearing within the next sixty (60) days, at which the claimant
may be represented by an attorney or any other representative of such claimants choosing and
expense and at which the claimant shall have an opportunity to submit written and oral evidence and
arguments in support of the claim. At the hearing (or prior thereto upon five (5) business days
written notice to the Administrator) the claimant or the claimants representative shall have an
opportunity to review all documents in the possession of the Administrator which are pertinent to
the claim at issue and its disallowance. Either the claimant or the Administrator may cause a court
reporter to attend the hearing and record the proceedings. In such event, a complete written
transcript of the proceedings shall be furnished to both parties by the court reporter. The full
expense of any such court reporter and such transcripts shall be borne by the party causing the
court reporter to attend the hearing. A final decision as to the allowance of the claim shall be
made by the Administrator within sixty (60) days of receipt of the appeal (unless there has been an
extension of sixty (60) days due to special circumstances, provided the delay and the special
circumstances occasioning it are communicated to the claimant within the sixty (60) day period).
Such communication shall be written in a manner calculated to be understood by the claimant and
shall include specific reasons for the decision and specific references to the pertinent Plan
provisions on which the decision is based.
ARTICLE III
ELIGIBILITY
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
Any Eligible Employee who has completed a six (6) month Period of Service with the Employer
and has attained age 19 shall be eligible to participate hereunder as of the date such Employee has
satisfied such requirements. However, any Employee who was a Participant in the Plan prior to the
effective date of this amendment and restatement shall continue to participate in the Plan.
18
3.2 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee shall become a Participant effective as of the earlier of the first day
of the Plan Year or the first day of the seventh month of such Plan Year coinciding with or next
following the date such Employee met the eligibility requirements of Section 3.1, provided said
Employee was still employed as of such date (or if not employed on such date, as of the date of
rehire if a 1-Year Break in Service has not occurred or, if later, the date that the Employee would
have otherwise entered the Plan had the Employee not terminated employment).
If an Employee, who has satisfied the Plans eligibility requirements and would otherwise have
become a Participant, shall go from a classification of a noneligible Employee to an Eligible
Employee, such Employee shall become a Participant on the date such Employee becomes an Eligible
Employee or, if later, the date that the Employee would have otherwise entered the Plan had the
Employee always been an Eligible Employee.
If an Employee, who has satisfied the Plans eligibility requirements and would otherwise
become a Participant, shall go from a classification of an Eligible Employee to a noneligible class
of Employees, such Employee shall become a Participant in the Plan on the date such Employee again
becomes an Eligible Employee, or, if later, the date that the Employee would have otherwise entered
the Plan had the Employee always been an Eligible Employee. However, if such Employee incurs a
1-Year Break in Service, eligibility will be determined under the Break in Service rules set forth
in Section 3.7.
3.3 DETERMINATION OF ELIGIBILITY
The Administrator shall determine the eligibility of each Employee for participation in the
Plan based upon information furnished by the Employer. Such determination shall be conclusive and
binding upon all persons, as long as the same is made pursuant to the Plan and the Act. Such
determination shall be subject to review pursuant to Section 2.8.
3.4 TERMINATION OF ELIGIBILITY
In the event a Participant shall go from a classification of an Eligible Employee to an
ineligible Employee, such Former Participant shall continue to vest in the Plan for each Year of
Service completed while a noneligible Employee, until such time as the Participants Account is
forfeited or distributed pursuant to the terms of the Plan. Additionally, the Former Participants
interest in the Plan shall continue to share in the earnings of the Trust Fund.
3.5 OMISSION OF ELIGIBLE EMPLOYEE
If, in any Plan Year, any Employee who should be included as a Participant in the Plan is
erroneously omitted and discovery of such omission is not made until after a contribution by the
Employer for the year has been made and allocated, then the Employer shall make a subsequent
contribution, if necessary after the application of Section 4.4(c), so that the omitted Employee
receives a total amount which the Employee would have received (including both Employer
contributions and earnings thereon) had the Employee not been omitted. Such contribution shall be
made regardless of whether it is deductible in whole or in part in any taxable year under
applicable provisions of the Code.
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3.6 INCLUSION OF INELIGIBLE EMPLOYEE
If, in any Plan Year, any person who should not have been included as a Participant in the
Plan is erroneously included and discovery of such inclusion is not made until after a contribution
for the year has been made and allocated, the Employer shall be entitled to recover the
contribution made with respect to the ineligible person provided the error is discovered within
twelve (12) months of the date on which it was made. Otherwise, the amount contributed with respect
to the ineligible person shall constitute a Forfeiture for the Plan Year in which the discovery is
made. Notwithstanding the foregoing, any Deferred Compensation made by an ineligible person shall
be distributed to the person (along with any earnings attributable to such Deferred Compensation).
3.7 REHIRED EMPLOYEES AND BREAKS IN SERVICE
(a) If any Participant becomes a Former Participant due to severance from
employment with the Employer and is reemployed by the Employer before a 1-Year Break
in Service occurs, the Former Participant shall become a Participant as of the
reemployment date.
(b) If any Participant becomes a Former Participant due to severance from
employment with the Employer and is reemployed after a 1-Year Break in Service has
occurred, Years and Periods of Service shall include Years and Periods of Service
prior to the 1-Year Break in Service subject to the following rules:
(1) In the case of a Former Participant who under the Plan does not have a
nonforfeitable right to any interest in the Plan resulting from Employer
contributions, Years or Periods of Service, whichever is applicable, before
a period of 1-Year Break in Service will not be taken into account if the
number of consecutive 1-Year Breaks in Service equal or exceed the greater
of (A) five (5) or (B) the aggregate number of pre-break Years or Periods of
Service, whichever is applicable. Such aggregate number of Years or Periods
of Service, whichever is applicable, will not include any Years or Periods
of Service, whichever is applicable, disregarded under the preceding
sentence by reason of prior 1-Year Breaks in Service.
(2) A Former Participant shall participate in the Plan as of the date of
reemployment.
(c) After a Former Participant who has severed employment with the Employer
incurs five (5) consecutive 1-Year Breaks in Service, the Vested portion of said
Former Participants Account attributable to pre-break service shall not be
increased as a result of post-break service. In such case, separate accounts will be
maintained as follows:
(1) one account for nonforfeitable benefits attributable to pre-break
service; and
20
(2) one account representing the Participants Employer derived account
balance in the Plan attributable to post-break service.
(d) If any Participant becomes a Former Participant due to severance of
employment with the Employer and is reemployed by the Employer before five (5)
consecutive 1-Year Breaks in Service, and such Former Participant had received a
distribution of the entire Vested interest prior to reemployment, then the forfeited
account shall be reinstated only if the Former Participant repays the full amount
which had been distributed. Such repayment must be made before the earlier of
five (5) years after the first date on which the Participant is subsequently
reemployed by the Employer or the close of the first period of five (5) consecutive
1-Year Breaks in Service commencing after the distribution. If a distribution occurs
for any reason other than a severance of employment, the time for repayment may not
end earlier than five (5) years after the date of distribution. In the event the
Former Participant does repay the full amount distributed, the undistributed
forfeited portion of the Participants Account must be restored in full, unadjusted
by any gains or losses occurring subsequent to the Valuation Date preceding the
distribution. The source for such reinstatement may be Forfeitures occurring during
the Plan Year. If such source is insufficient, then the Employer will contribute an
amount which is sufficient to restore any such forfeited Accounts provided, however,
that if a discretionary contribution is made for such year pursuant to Section
4.1(d), such contribution will first be applied to restore any such Accounts and the
remainder shall be allocated in accordance with Section 4.4.
If a non-Vested Former Participant was deemed to have received a distribution
and such Former Participant is reemployed by the Employer before five (5)
consecutive 1-Year Breaks in Service, then such Participant will be deemed to have
repaid the deemed distribution as of the date of reemployment.
3.8 ELECTION NOT TO PARTICIPATE
An Employee may, subject to the approval of the Employer, elect voluntarily not to participate
in the Plan. The election not to participate must be irrevocable and communicated to the Employer,
in writing, within a reasonable period of time before the beginning of the first Plan Year.
ARTICLE IV
CONTRIBUTION AND ALLOCATION
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER CONTRIBUTION
For each Plan Year, the Employer shall contribute to the Plan:
(a) The amount of the total salary reduction elections of all Participants made
pursuant to Section 4.2(a), which amount shall be deemed an Employer Elective
Contribution.
(b) On behalf of each Participant who is eligible to share in matching
contributions for the Plan Year, a mandatory matching contribution
21
equal to 100% of each such Participants Deferred Compensation (but excluding
catch-up contributions as defined in Code Section 414(v)), which amount shall be
deemed an Employer Non-Elective Contribution; provided, however, only salary
reductions up to 3% of a Participants Compensation earned during the Plan Year
shall be considered in connection with such matching contribution.
(c) On behalf of each Non-Highly Compensated Participant who is eligible to
share in the Qualified Non-Elective Contribution for the Plan Year, a discretionary
Qualified Non-Elective Contribution equal to a uniform percentage of each eligible
individuals Compensation, the exact percentage, if any, to be determined each year
by the Employer. Any Employer Qualified Non-Elective Contribution shall be deemed an
Employer Elective Contribution.
(d) A discretionary amount, which amount, if any, shall be deemed an Employer
Non-Elective Contribution.
(e) Additionally, to the extent necessary, the Employer shall contribute to the
Plan the amount necessary to provide the top heavy minimum contribution. All
contributions by the Employer shall be made in cash or in such property as is
acceptable to the Trustee.
4.2 PARTICIPANTS SALARY REDUCTION ELECTION
(a) Each Participant may elect to defer a portion of Compensation which would
have been received in the Plan year (except for the deferral election) by up to the
maximum amount which will not cause the Plan to violate the provisions of Section
4.5(a) and 4.9; however, any Highly Compensated Participant is limited to a maximum
deferral amount of $7,500.00 for the Plan Years beginning after December 31, 2005
(excluding any contribution classified as a catch-up contribution pursuant to Code
Section 414(v)). A deferral election (or modification of an earlier election) may
not be made with respect to Compensation which is currently available on or before
the date the Participant executed such election. For purposes of this Section,
compensation shall be determined prior to any reductions made pursuant to Code
Section 125, 132(f)(4) for Plan Years beginning after December 31, 2000, 402(e)(3),
402(h)(1)(B), 403(b) or 457(b), and Employee contributions described in Code Section
414(h)(2) that are treated as Employer contributions.
The amount by which Compensation is reduced shall be that Participants
Deferred Compensation and be treated as an Employer elective Contribution and
allocated to that Participants Elective Account.
(b) The balance in each Participants Elective Account shall be fully Vested at
all times and, except as otherwise provided herein, shall not be subject to
Forfeiture for any reason.
22
(c) Notwithstanding anything in the Plan to the contrary, amounts held in the
Participants Elective Account may not be distributable earlier than:
(1) a Participants separation from service, or death;
(2) a Participants attainment of age 59 1/2;
(3) the termination of the Plan without the existence at the time of Plan
termination of another defined contribution plan or the establishment of a
successor defined contribution plan by the Employer or an Affiliated
Employer within the period ending twelve months after distribution of all
assets from the Plan maintained by the Employer. For this purpose, a defined
contribution plan does not include an employee stock ownership plan (as
defined in Code Section 4975(e)(7) or 409), a simplified employee pension
plan (as defined in Code Section 408(k)), or a simple individual retirement
account plan (as defined in Code Section 408(p));
(4) the date of disposition by the Employer to an entity that is not an
Affiliated Employer of substantially all of the assets (within the meaning
of Code Section 409(d)(2)) used in a trade or business of such corporation
if such corporation continues to maintain this Plan after the disposition
with respect to a Participant who continues employment with the corporation
acquiring such assets;
(5) the date of disposition by the Employer or an Affiliated Employer who
maintains the Plan of its interest in a subsidiary (within the meaning of
Code Section 409(d)(3)) to an entity which is not an Affiliated Employer but
only with respect to a Participant who continues employment with such
subsidiary; or
(6) the proven financial hardship of a Participant, subject to the
limitations of Section 6.11.
(d) For each Plan Year, a Participants Deferred Compensation made under this
Plan and all other plans, contracts or arrangements of the Employer maintaining this
Plan shall not exceed, during any taxable year of the Participant, the limitation
imposed by Code Section 402(g), as in effect at the beginning of such taxable year.
If such dollar limitation is exceeded, a Participant will be deemed to have notified
the Administrator of such excess amount which shall be distributed in a manner
consistent with Section 4.2(f). The dollar limitation shall be adjusted annually
pursuant to the method provided in Code Section 415(d) in accordance with
Regulations.
(e) In the event a Participant has received a hardship distribution from the
Participants Elective Account pursuant to Section 6.11(b) or pursuant to Regulation
1.401(k)-1(d)(2)(iv)(B) from any other plan maintained by the Employer, then such
Participant shall not be permitted to elect to have Deferred Compensation
contributed to the Plan for a period of six (6) months following the receipt of the
distribution. Furthermore, the dollar limitation under Code
23
Section 402(g) shall be reduced, with respect to the Participants taxable year
following the taxable year in which the hardship distribution was made, by the
amount of such Participants Deferred Compensation, if any, pursuant to this Plan
(and any other plan maintained by the Employer) for the taxable year of the hardship
distribution.
(f) If a Participants Deferred Compensation under this Plan together with any
elective deferrals (as defined in Regulation 1.402(g)-1(b)) under another qualified
cash or deferred arrangement (as described in Code Section 401(k)), a simplified
employee pension (as described in Code Section 408(k)(6)), a simple individual
retirement account plan (as described in Code Section 408(p)), a salary reduction
arrangement (within the meaning of Code Section 3121(a)(5)(D)), a deferred
compensation plan under Code Section 457(b), or a trust described in Code
Section 501(c)(18) cumulatively exceed the limitation imposed by Code Section 402(g)
(as adjusted annually in accordance with the method provided in Code Section 415(d)
pursuant to Regulations) for such Participants taxable year, the Participant may,
not later than March 1 following the close of the Participants taxable year, notify
the Administrator in writing of such excess and request that the Participants
Deferred Compensation under this Plan be reduced by an amount specified by the
Participant. In such event, the Administrator may direct the Trustee to distribute
such excess amount (and any Income allocable to such excess amount) to the
Participant not later than the first April 15th following the close of the
Participants taxable year. Any distribution of less than the entire amount of
Excess Deferred Compensation and Income shall be treated as a pro rata distribution
of Excess Deferred Compensation and Income. The amount distributed shall not exceed
the Participants Deferred Compensation under the Plan for the taxable year (and any
Income allocable to such excess amount). Any distribution on or before the last day
of the Participants taxable year must satisfy each of the following conditions:
(1) the distribution must be made after the date on which the Plan received
the Excess Deferred Compensation;
(2) the Participant shall designate the distribution as Excess Deferred
Compensation; and
(3) the Plan must designate the distribution as a distribution of Excess
Deferred Compensation.
Any distribution made pursuant to this Section 4.2(f) shall be made first from
unmatched Deferred Compensation and, thereafter, from Deferred Compensation which is
matched. Matching contributions which relate to such Deferred Compensation shall be
forfeited.
(g) Notwithstanding Section 4.2(f) above, a Participants Excess Deferred
Compensation shall be reduced, but not below zero, by any distribution of Excess
Contributions pursuant to Section 4.6(a) for the Plan Year beginning with or within
the taxable year of the Participant.
24
(h) At Normal Retirement Date, or such other date when the Participant shall be
entitled to receive benefits, the fair market value of the Participants Elective
Account shall be used to provide additional benefits to the Participant or the
Participants Beneficiary.
(i) Employer Elective Contributions made pursuant to this Section may be
segregated into a separate account for each Participant in a federally insured
savings account, certificate of deposit in a bank or savings and loan association,
money market certificate, or other short-term debt security acceptable to the
Trustee until such time as the allocations pursuant to Section 4.4 have been made.
(j) The Employer and the Administrator shall implement the salary reduction
elections provided for herein in accordance with the following:
(1) A Participant must make an initial salary deferral election within a
reasonable time, not to exceed thirty (30) days, after entering the Plan
pursuant to Section 3.2. If the Participant fails to make an initial salary
deferral election within such time, then such Participant may thereafter
make an election in accordance with the rules governing modifications. The
Participant shall make such an election by entering into a written salary
reduction agreement with the Employer and filing such agreement with the
Administrator. Such election shall initially be effective beginning with the
pay period following the acceptance of the salary reduction agreement by the
Administrator, shall not have retroactive effect and shall remain in force
until revoked.
(2) A Participant may modify a prior election during the Plan Year and
concurrently make a new election by filing a written notice with the
Administrator within a reasonable time before the pay period for which such
modification is to be effective. However, modifications to a salary deferral
election shall only be permitted semi-annually, during election periods
established by the Administrator prior to the first day of a Plan Year and
the first day of the seventh month of a Plan Year. Any modification shall
not have retroactive effect and shall remain in force until revoked.
(3) A Participant may elect to prospectively revoke the Participants salary
reduction agreement in its entirety at any time during the Plan Year by
providing the Administrator with thirty (30) days written notice of such
revocation (or upon such shorter notice period as may be acceptable to the
Administrator). Such revocation shall become effective as of the beginning
of the first pay period coincident with or next following the expiration of
the notice period. Furthermore, the termination of the Participants
employment, or the cessation of participation for any reason, shall be
deemed to revoke any salary reduction agreement then in effect, effective
immediately following the close of the pay period within which such
termination or cessation occurs.
25
4.3 TIME OF PAYMENT OF EMPLOYER CONTRIBUTION
The Employer may make its contribution to the Plan for a particular Plan Year at such time as
the Employer, in its sole discretion, determines. If the Employer makes a contribution for a
particular Plan Year after the close of that Plan Year, the Employer will designate to the Trustee
the Plan Year for which the Employer is making its contribution.
4.4 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS
(a) The Administrator shall establish and maintain an account in the name of
each Participant to which the Administrator shall credit as of each Anniversary
Date, or other Valuation Date, all amounts allocated to each such Participant as set
forth herein.
(b) The Employer shall provide the Administrator with all information required
by the Administrator to make a proper allocation of the Employer contributions for
each Plan Year. Within a reasonable period of time after the date of receipt by the
Administrator of such information, the Administrator shall allocate such
contribution as follows:
(1) With respect to the Employer Elective Contribution made pursuant to
Section 4.1(a), to each Participants Elective Account in an amount equal to
each such Participants Deferred Compensation for the year.
(2) With respect to the Employer Non-Elective Contribution made pursuant to
Section 4.1(b), to each Participants Account in accordance with
Section 4.1(b).
Only Participants who have completed a combined Year of Service during the
Plan Year with the Employer and/or a Former Employer and are actively
employed on the last day of the Plan Year shall be eligible to share in the
matching contribution for the year. Any such matching contribution,
however, shall only relate to a Participants Deferred Compensation and/or
Compensation for the year earned while employed by the Employer (and shall
not take into consideration any Compensation earned while the Participant
was employed by a Former Employer).
(3) With respect to the Employer Qualified Non-Elective Contribution made
pursuant to Section 4.1(c), to each Participants Elective Account when used
to satisfy the Actual Deferral Percentage tests or Participants Account
in accordance with Section 4.1(c).
Only Non-Highly Compensated Participants who have completed a Year of
Service during the Plan Year with the Employer and/or a Former Employer and
are actively employed on the last day of the Plan Year shall be eligible to
share in the Qualified Non-Elective Contribution for the year.
26
(4) With respect to the Employer Non-Elective Contribution made pursuant to
Section 4.1(d), to each Participants Account in the same proportion that
each such Participants Compensation for the year bears to the total
Compensation of all Participants for such year.
Only Participants who have completed a Year of Service during the Plan Year
with the Employer and/or a Former Employer and are actively employed on the
last day of the Plan Year shall be eligible to share in the discretionary
contribution for the year. Any such discretionary contribution, however,
shall only relate to a Participants Compensation for the Plan Year earned
while employed by the Employer (and shall not take into consideration any
Compensation paid by the Participant while employed by a Former Employer).
(c) On or before each Anniversary Date any amounts which became Forfeitures
since the last Anniversary Date may be made available to reinstate previously
forfeited account balances of Former Participants, if any, in accordance with
Section 3.7(d), be used to satisfy any contribution that may be required pursuant to
Section 3.5 and/or 6.9, or be used to pay any administrative expenses of the Plan.
The remaining Forfeitures, if any, shall be used to reduce the contribution of the
Employer hereunder for the Plan Year in which such Forfeitures occur in the
following manner:
(1) Forfeitures attributable to Employer matching contributions made
pursuant to Section 4.1(b) shall be used to reduce the Employer contribution
for the Plan Year in which such Forfeitures occur.
(2) Forfeitures attributable to Employer discretionary contributions made
pursuant to Section 4.1(d) shall be used to reduce the Employer contribution
for the Plan Year in which such Forfeitures occur.
Notwithstanding anything above to the contrary, any Forfeitures which are received
by the Plan as a result of the merger of the Plan with the M.S. Carriers, Inc.
Retirement Savings Plan (the MSC Plan) and the assumption by the Plan of all
assets and liabilities of the MSC Plan, the Forfeitures received by the Plan from
the MSC Plan may only be utilized to pay administrative expenses of the merged Plan.
(d) For any Top Heavy Plan Year, Non-Key Employees not otherwise eligible to
share in the allocation of contributions as provided above, shall receive the
minimum allocation provided for in Section 4.4(f) if eligible pursuant to the
provisions of Section 4.4(h).
(e) As of each Valuation Date, before allocation of Employer contributions for
the entire Plan Year, any earnings or losses (net appreciation or net depreciation)
of the Trust Fund shall be allocated in the same proportion that each Participants
and Former Participants nonsegregated accounts bear to the total of all
Participants and Former Participants nonsegregated accounts as of
27
such date. Earnings or losses with respect to a Participants Directed Account
shall be allocated in accordance with Section 4.12.
Participants transfers from other qualified plans deposited in the general
Trust Fund shall share in any earnings and losses (net appreciation or net
depreciation) of the Trust Fund in the same manner provided above. Each segregated
account maintained on behalf of a Participant shall be credited or charged with its
separate earnings and losses.
(f) Minimum Allocations Required for Top Heavy Plan Years: Notwithstanding the
foregoing, for any Top Heavy Plan Year, the sum of the Employer contributions
allocated to the Participants Combined Account of each Non-Key Employee shall be
equal to at least three percent (3%) of such Non-Key Employees 415 Compensation
(reduced by contributions and forfeitures, if any, allocated to each Non-Key
Employee in any defined contribution plan included with this Plan in a Required
Aggregation Group). However, if (1) the sum of the Employer contributions allocated
to the Participants Combined Account of each Key Employee for such Top Heavy Plan
Year is less than three percent (3%) of each Key Employees 415 Compensation and
(2) this Plan is not required to be included in an Aggregation Group to enable a
defined benefit plan to meet the requirements of Code Section 401(a)(4) or 410, the
sum of the Employer contributions allocated to the Participants Combined Account of
each Non-Key Employee shall be equal to the largest percentage allocated to the
Participants Combined Account of any Key Employee. However, in determining whether
a Non-Key Employee has received the required minimum allocation, such Non-Key
Employees Deferred Compensation and matching contributions needed to satisfy the
Actual Contribution Percentage tests pursuant to Section 4.7(a) shall not be taken
into account.
However, no such minimum allocation shall be required in this Plan for any
Non-Key Employee who participates in another defined contribution plan subject to
Code Section 412 included with this Plan in a Required Aggregation Group.
(g) For purposes of the minimum allocations set forth above, the percentage
allocated to the Participants Combined Account of any Key Employee shall be equal
to the ratio of the sum of the Employer contributions allocated on behalf of such
Key Employee divided by the 415 Compensation for such Key Employee.
(h) For any Top Heavy Plan Year, the minimum allocations set forth above shall
be allocated to the Participants Combined Account of all Non-Key Employees who are
Participants and who are employed by the Employer on the last day of the Plan Year,
including Non-Key Employees who have (1) failed to complete a Year of Service; and
(2) declined to make mandatory contributions (if required) or, in the case of a cash
or deferred arrangement, elective contributions to the Plan.
28
(i) For the purposes of this Section, 415 Compensation in excess of $150,000
(or such other amount provided in the Code) shall be disregarded. Such amount shall
be adjusted for increases in the cost of living in accordance with Code
Section 401(a)(17)(B), except that the dollar increase in effect on January 1 of any
calendar year shall be effective for the Plan Year beginning with or within such
calendar year. If 415 Compensation for any prior determination period is taken
into account in determining a Participants minimum benefit for the current Plan
Year, the 415 Compensation for such determination period is subject to the
applicable annual 415 Compensation limit in effect for that prior period. For this
purpose, in determining the minimum benefit in Plan Years beginning on or after
January 1, 1989, the annual 415 Compensation limit in effect for determination
periods beginning before that date is $200,000 (or such other amount as adjusted for
increases in the cost of living in accordance with Code Section 415(d) for
determination periods beginning on or after January 1, 1989, and in accordance with
Code Section 401(a)(17)(B) for determination periods beginning on or after
January 1, 1994). For determination periods beginning prior to January 1, 1989, the
$200,000 limit shall apply only for Top Heavy Plan Years and shall not be adjusted.
For any short Plan Year the 415 Compensation limit shall be an amount equal to the
415 Compensation limit for the calendar year in which the Plan Year begins
multiplied by the ratio obtained by dividing the number of full months in the short
Plan Year by twelve (12).
(j) Notwithstanding anything herein to the contrary, Participants who
terminated employment for any reason during the Plan Year shall share in the salary
reduction contributions made by the Employer for the year of termination without
regard to the Hours of Service credited.
(k) Notwithstanding anything in this Section to the contrary, all information
necessary to properly reflect a given transaction may not be available until after
the date specified herein for processing such transaction, in which case the
transaction will be reflected when such information is received and processed.
Subject to express limits that may be imposed under the Code, the processing of any
contribution, distribution or other transaction may be delayed for any legitimate
business reason (including, but not limited to, failure of systems or computer
programs, failure of the means of the transmission of data, force majeure, the
failure of a service provider to timely receive values or prices, and the correction
for errors or omissions or the errors or omissions of any service provider). The
processing date of a transaction will be binding for all purposes of the Plan.
(l) Notwithstanding anything to the contrary, if this is a Plan that would
otherwise fail to meet the requirements of Code Section 410(b)(1)(B) and the
Regulations thereunder because Employer contributions would not be allocated to a
sufficient number or percentage of Participants for a Plan Year, then the following
rules shall apply:
(1) The group of Participants eligible to share in the Employers
contribution for the Plan Year shall be expanded to include the minimum
number of Participants who would not otherwise be eligible as are
29
necessary to satisfy the applicable test specified above. The specific
Participants who shall become eligible under the terms of this paragraph
shall be those who have not separated from service prior to the last day of
the Plan Year and have completed the greatest Period of Service in the Plan
Year.
(2) If after application of paragraph (1) above, the applicable test is
still not satisfied, then the group of Participants eligible to share in the
Employers contribution for the Plan Year shall be further expanded to
include the minimum number of Participants who have separated from service
prior to the last day of the Plan Year as are necessary to satisfy the
applicable test. The specific Participants who shall become eligible to
share shall be those Participants who have completed the greatest Period of
Service in the Plan Year before terminating employment.
(3) Nothing in this Section shall permit the reduction of a Participants
accrued benefit. Therefore any amounts that have previously been allocated
to Participants may not be reallocated to satisfy these requirements. In
such event, the Employer shall make an additional contribution equal to the
amount such affected Participants would have received had they been included
in the allocations, even if it exceeds the amount which would be deductible
under Code Section 404. Any adjustment to the allocations pursuant to this
paragraph shall be considered a retroactive amendment adopted by the last
day of the Plan Year.
(4) Notwithstanding the foregoing, if the portion of the Plan which is not a
Code Section 401(k) or 401(m) plan would fail to satisfy Code Section 410(b)
if the coverage tests were applied by treating those Participants whose only
allocation would otherwise be provided under the top heavy formula as if they
were not currently benefiting under the Plan, then, for purposes of this
Section 4.4(l), such Participants shall be treated as not benefiting and
shall therefore be eligible to be included in the expanded class of
Participants who will share in the allocation provided under the Plans non
top heavy formula.
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS
(a) Maximum Annual Allocation: For each Plan Year, the annual allocation
derived from Employer Elective Contributions to a Highly Compensated Participants
Elective Account shall satisfy one of the following tests:
(1) The Actual Deferral Percentage for the Highly Compensated Participant
group shall not be more than the Actual Deferral Percentage of the
Non-Highly Compensated Participant group (for the preceding Plan Year if the
prior year testing method is used to calculate the Actual Deferral
Percentage for the Non-Highly Compensated Participant group) multiplied by
1.25, or
30
(2) The excess of the Actual Deferral Percentage for the Highly
Compensated Participant group over the Actual Deferral Percentage for the
Non-Highly Compensated Participant group (for the preceding Plan Year if the
prior year testing method is used to calculate the Actual Deferral
Percentage for the Non-Highly Compensated Participant group) shall not be
more than two percentage points. Additionally, the Actual Deferral
Percentage for the Highly Compensated Participant group shall not exceed
the Actual Deferral Percentage for the Non-Highly Compensated Participant
group (for the preceding Plan Year if the prior year testing method is used
to calculate the Actual Deferral Percentage for the Non-Highly Compensated
Participant group) multiplied by 2. The provisions of Code Section 401(k)(3)
and Regulation 1.401(k)-1(b) are incorporated herein by reference.
However, in order to prevent the multiple use of the alternative method
described in (2) above and in Code Section 401(m)(9)(A), any Highly
Compensated Participant eligible to make elective deferrals pursuant to
Section 4.2 and to make Employee contributions or to receive matching
contributions under this Plan or under any other plan maintained by the
Employer or an Affiliated Employer shall have a combination of such
Participants Elective Contributions and Employer matching contributions
reduced pursuant to Section 4.6(a) and Regulation 1.401(m)-2, the provisions
of which are incorporated herein by reference.
(b) For the purposes of this Section Actual Deferral Percentage means, with
respect to the Highly Compensated Participant group and Non-Highly Compensated
Participant group for a Plan Year, the average of the ratios, calculated separately
for each Participant in such group, of the amount of Employer Elective Contributions
allocated to each Participants Elective Account for such Plan Year, to such
Participants 414(s) Compensation for such Plan Year. The actual deferral ratio
for each Participant and the Actual Deferral Percentage for each group shall be
calculated to the nearest one-hundredth of one percent. Employer Elective
Contributions allocated to each Non-Highly Compensated Participants Elective
Account shall be reduced by Excess Deferred Compensation to the extent such excess
amounts are made under this Plan or any other plan maintained by the Employer.
Notwithstanding the above, if the prior year test method is used to calculate
the Actual Deferral Percentage for the Non-Highly Compensated Participant group
for the first Plan Year of this amendment and restatement, the Actual Deferral
Percentage for the Non-Highly Compensated Participant group for the preceding Plan
Year shall be calculated pursuant to the provisions of the Plan then in effect.
(c) For the purposes of Sections 4.5(a) and 4.6, a Highly Compensated
Participant and a Non-Highly Compensated Participant shall include any Employee
eligible to make a deferral election pursuant to Section 4.2, whether or not such
deferral election was made or suspended pursuant to Section 4.2.
31
Notwithstanding the above, if the prior year testing method is used to
calculate the Actual Deferral Percentage for the Non-Highly Compensated
Participant group for the first Plan Year of this amendment and restatement, for
purposes of Section 4.5(a) and 4.6, a Non-Highly Compensated Participant shall
include any such Employee eligible to make a deferral election, whether or not such
deferral election was made or suspended, pursuant to the provisions of the Plan in
effect for the preceding Plan Year.
(d) For the purposes of this Section and Code Sections 401(a)(4), 410(b) and
401(k), if two or more plans which include cash or deferred arrangements are
considered one plan for the purposes of Code Section 401(a)(4) or 410(b) (other than
Code Section 410(b)(2)(A)(ii)), the cash or deferred arrangements included in such
plans shall be treated as one arrangement. In addition, two or more cash or deferred
arrangements may be considered as a single arrangement for purposes of determining
whether or not such arrangements satisfy Code Sections 401(a)(4), 410(b) and 401(k).
In such a case, the cash or deferred arrangements included in such plans and the
plans including such arrangements shall be treated as one arrangement and as one
plan for purposes of this Section and Code Sections 401(a)(4), 410(b) and 401(k).
Any adjustment to the Non-Highly Compensated Participant actual deferral ratio for
the prior year shall be made in accordance with Internal Revenue Service Notice 98-1
and any superseding guidance. Plans may be aggregated under this paragraph (d) only
if they have the same plan year. Notwithstanding the above, if two or more plans
which include cash or deferred arrangements are permissively aggregated under
Regulation 1.410(b)-7(d), all plans permissively aggregated must use either the
current year testing method or the prior year testing method for the testing year.
Notwithstanding the above, an employee stock ownership plan described in Code
Section 4975(e)(7) or 409 may not be combined with this Plan for purposes of
determining whether the employee stock ownership plan or this Plan satisfies this
Section and Code Sections 401(a)(4), 410(b) and 401(k).
(e) For the purposes of this Section, if a Highly Compensated Participant is a
Participant under two or more cash or deferred arrangements (other than a cash or
deferred arrangement which is part of an employee stock ownership plan as defined in
Code Section 4975(e)(7) or 409) of the Employer or an Affiliated Employer, all such
cash or deferred arrangements shall be treated as one cash or deferred arrangement
for the purpose of determining the actual deferral ratio with respect to such Highly
Compensated Participant. However, if the cash or deferred arrangements have
different plan years, this paragraph shall be applied by treating all cash or
deferred arrangements ending with or within the same calendar year as a single
arrangement.
(f) For the purpose of this Section, when calculating the Actual Deferral
Percentage for the Non-Highly Compensated Participant group, the prior year testing
method shall be used. Any change from the current year testing method to the prior
year testing method shall be made pursuant to Internal
32
Revenue Service Notice 98-1, Section VII (or superseding guidance), the
provisions of which are incorporated herein by reference.
(g) Notwithstanding anything in this Section to the contrary, the provisions of
this Section and Section 4.6 may be applied separately (or will be applied
separately to the extent required by Regulations) to each plan within the meaning of
Regulation 1.401(k)-1(g)(11). Furthermore, the provisions of Code Section
401(k)(3)(F) may be used to exclude from consideration all Non-Highly Compensated
Employees who have not satisfied the minimum age and service requirements of Code
Section 410(a)(1)(A).
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS
In the event (or if it is anticipated) that the initial allocations of the Employer Elective
Contributions made pursuant to Section 4.4 do (or might) not satisfy one of the tests set forth in
Section 4.5(a), the Administrator shall adjust Excess Contributions pursuant to the options set
forth below:
(a) On or before the fifteenth day of the third month following the end of each
Plan Year, but in no event later than the close of the following Plan Year, the
Highly Compensated Participant having the largest dollar amount of Elective
Contributions shall have a portion of such Participants Elective Contributions
distributed until the total amount of Excess Contributions has been distributed, or
until the amount of such Participants Elective Contributions equals the Elective
Contributions of the Highly Compensated Participant having the second largest dollar
amount of Elective Contributions. This process shall continue until the total amount
of Excess Contributions has been distributed. In determining the amount of Excess
Contributions to be distributed with respect to an affected Highly Compensated
Participant as determined herein, such amount shall be reduced pursuant to
Section 4.2(f) by any Excess Deferred Compensation previously distributed to such
affected Highly Compensated Participant for such Participants taxable year ending
with or within such Plan Year.
(1) With respect to the distribution of Excess Contributions pursuant to
(a) above, such distribution:
(i) may be postponed but not later than the close of the Plan Year
following the Plan Year to which they are allocable;
(ii) shall be adjusted for Income; and
(iii) shall be designated by the Employer as a distribution of Excess
Contributions (and Income).
(2) Any distribution of less than the entire amount of Excess Contributions
shall be treated as a pro rata distribution of Excess Contributions and
Income.
33
(3) Matching contributions which relate to Excess Contributions shall be
forfeited unless the related matching contribution is distributed as an
Excess Aggregate Contribution pursuant to Section 4.8.
(b) Notwithstanding the above, within twelve (12) months after the end of the
Plan Year, the Employer may make a special Qualified Non-Elective Contribution in
accordance with one of the following provisions which contribution shall be
allocated to the Participants Elective Account of each Non-Highly Compensated
Participant eligible to share in the allocation in accordance with such provision.
The Employer shall provide the Administrator with written notification of the amount
of the contribution being made and for which provision it is being made pursuant to:
(1) A special Qualified Non-Elective Contribution may be made on behalf of
Non-Highly Compensated Participants in an amount sufficient to satisfy (or
to prevent an anticipated failure of) one of the tests set forth in
Section 4.5(a). Such contribution shall be allocated in the same proportion
that each Non-Highly Compensated Participants 414(s) Compensation for the
year (or prior year if the prior year testing method is being used) bears to
the total 414(s) Compensation of all Non-Highly Compensated Participants for
such year.
(2) A special Qualified Non-Elective Contribution may be made on behalf of
Non-Highly Compensated Participants in an amount sufficient to satisfy (or
to prevent an anticipated failure of) one of the tests set forth in
Section 4.5(a). Such contribution shall be allocated in the same proportion
that each Non-Highly Compensated Participant electing salary reductions
pursuant to Section 4.2 in the same proportion that each such Non-Highly
Compensated Participants Deferred Compensation for the year (or at the end
of the prior Plan Year if the prior year testing method is being used) bears
to the total Deferred Compensation of all such Non-Highly Compensated
Participants for such year.
(3) A special Qualified Non-Elective Contribution may be made on behalf of
Non-Highly Compensated Participants in an amount sufficient to satisfy (or
to prevent an anticipated failure of) one of the tests set forth in
Section 4.5(a). Such contribution shall be allocated in equal amounts (per
capita).
(4) A special Qualified Non-Elective Contribution may be made on behalf of
Non-Highly Compensated Participants electing salary reductions pursuant to
Section 4.2 in an amount sufficient to satisfy (or to prevent an anticipated
failure of) one of the tests set forth in Section 4.5(a). Such contribution
shall be allocated for the year (or at the end of the prior Plan Year if the
prior year testing method is used) to each Non-Highly Compensated
Participant electing salary reductions pursuant to Section 4.2 in equal
amounts (per capita).
34
(5) A special Qualified Non-Elective Contribution may be made on behalf of
Non-Highly Compensated Participants in an amount sufficient to satisfy (or
to prevent an anticipated failure of) one of the tests set forth in
Section 4.5(a). Such contribution shall be allocated to the Non-Highly
Compensated Participant having the lowest 414(s) Compensation, until one of
the tests set forth in Section 4.5(a) is satisfied (or is anticipated to be
satisfied), or until such Non-Highly Compensated Participant has received
the maximum annual addition pursuant to Section 4.9. This process shall
continue until one of the tests set forth in Section 4.5(a) is satisfied (or
is anticipated to be satisfied).
Notwithstanding the above, at the Employers discretion, Non-Highly Compensated
Participants who are not employed at the end of the Plan Year (or at the end of the
prior Plan Year if the prior year testing method is being used) shall not be
eligible to receive a special Qualified Non-Elective Contribution and shall be
disregarded.
Notwithstanding the above, if the testing method changes from the current year
testing method to the prior year testing method, then for purposes of preventing the
double counting of Qualified Non-Elective Contributions for the first testing year
for which the change is effective, any special Qualified Non-Elective Contribution
on behalf of Non-Highly Compensated Participants used to satisfy the Actual
Deferral Percentage or Actual Contribution Percentage test under the current year
testing method for the prior year testing year shall be disregarded.
(c) If during a Plan Year, it is projected that the aggregate amount of
Elective Contributions to be allocated to all Highly Compensated Participants under
this Plan would cause the Plan to fail the tests set forth in Section 4.5(a), then
the Administrator may automatically reduce the deferral amount of affected Highly
Compensated Participants, beginning with the Highly Compensated Participant who has
the highest deferral ratio until it is anticipated the Plan will pass the tests or
until the actual deferral ratio equals the actual deferral ratio of the Highly
Compensated Participant having the next highest actual deferral ratio. This process
may continue until it is anticipated that the Plan will satisfy one of the tests set
forth in Section 4.5(a). Alternatively, the Employer may specify a maximum
percentage of Compensation that may be deferred.
(d) Any Excess Contributions (and Income) which are distributed on or after
2 1/2 months after the end of the Plan Year shall be subject to the ten percent
(10%) Employer excise tax imposed by Code Section 4979.
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) The Actual Contribution Percentage for the Highly Compensated Participant
group shall not exceed the greater of:
(1) 125 percent of such percentage for the Non-Highly Compensated
Participant group (for the preceding Plan Year if the prior year testing
35
method is used to calculate the Actual Contribution Percentage for the
Non-Highly Compensated Participant group); or
(2) the lesser of 200 percent of such percentage for the Non-Highly
Compensated Participant group (for the preceding Plan Year if the prior year
testing method is used to calculate the Actual Contribution Percentage for
the Non-Highly Compensated Participant group), or such percentage for the
Non-Highly Compensated Participant group (for the preceding Plan Year if the
prior year testing method is used to calculate the Actual Contribution
Percentage for the Non-Highly Compensated Participant group) plus 2
percentage points. However, to prevent the multiple use of the alternative
method described in this paragraph and Code Section 401(m)(9)(A), any Highly
Compensated Participant eligible to make elective deferrals pursuant to
Section 4.2 or any other cash or deferred arrangement maintained by the
Employer or an Affiliated Employer and to make Employee contributions or to
receive matching contributions under this Plan or under any plan maintained
by the Employer or an Affiliated Employer shall have a combination of
Elective Contributions and Employer matching contributions reduced pursuant
to Regulation 1.401(m)-2 and Section 4.8(a). The provisions of Code
Section 401(m) and Regulations 1.401(m)-1(b) and 1.401(m)-2 are incorporated
herein by reference.
(b) For the purposes of this Section and Section 4.8, Actual Contribution
Percentage for a Plan Year means, with respect to the Highly Compensated
Participant group and Non-Highly Compensated Participant group (for the preceding
Plan Year if the prior year testing method is used to calculate the Actual
Contribution Percentage for the Non-Highly Compensated Participant group), the
average of the ratios (calculated separately for each Participant in each group and
rounded to the nearest one-hundredth of one percent) of:
(1) the sum of Employer matching contributions made pursuant to Section
4.1(b) on behalf of each such Participant for such Plan Year; to
(2) the Participants 414(s) Compensation for such Plan Year.
Notwithstanding the above, if the prior year testing method is used to
calculate the Actual Contribution Percentage for the Non-Highly Compensated
Participant group for the first Plan Year of this amendment and restatement, for
purposes of Section 4.7(a), the Actual Contribution Percentage for the Non-Highly
Compensated Participant group for the preceding Plan Year shall be determined
pursuant to the provisions of the Plan then in effect.
(c) For purposes of determining the Actual Contribution Percentage, only
Employer matching contributions contributed to the Plan prior to the end of the
succeeding Plan Year shall be considered. In addition, the Administrator may elect
to take into account, with respect to Employees eligible to have Employer matching
contributions pursuant to Section 4.1(b) allocated to their accounts,
36
elective deferrals (as defined in Regulation 1.402(g)-1(b)) and qualified
non-elective contributions (as defined in Code Section 401(m)(4)(C)) contributed to
any plan maintained by the Employer. Such elective deferrals and qualified
non-elective contributions shall be treated as Employer matching contributions
subject to Regulation 1.401(m)-1(b)(5) which is incorporated herein by reference.
However, the Plan Year must be the same as the plan year of the plan to which the
elective deferrals and the qualified non-elective contributions are made.
(d) For purposes of this Section and Code Sections 401(a)(4), 410(b) and
401(m), if two or more plans of the Employer to which matching contributions,
Employee contributions, or both, are made are treated as one plan for purposes of
Code Sections 401(a)(4) or 410(b) (other than the average benefits test under Code
Section 410(b)(2)(A)(ii)), such plans shall be treated as one plan. In addition, two
or more plans of the Employer to which matching contributions, Employee
contributions, or both, are made may be considered as a single plan for purposes of
determining whether or not such plans satisfy Code Sections 401(a)(4), 410(b) and
401(m). In such a case, the aggregated plans must satisfy this Section and Code
Sections 401(a)(4), 410(b) and 401(m) as though such aggregated plans were a single
plan. Any adjustment to the Non-Highly Compensated Participant actual contribution
ratio for the prior year shall be made in accordance with Internal Revenue Service
Notice 98-1 and any superseding guidance. Plans may be aggregated under this
paragraph (d) only if they have the same plan year. Notwithstanding the above, if
two or more plans which include cash or deferred arrangements are permissively
aggregated under Regulation 1.410(b)-7(d), all plans permissively aggregated must
use either the current year testing method or the prior year testing method for the
testing year.
Notwithstanding the above, an employee stock ownership plan described in Code
Section 4975(e)(7) or 409 may not be aggregated with this Plan for purposes of
determining whether the employee stock ownership plan or this Plan satisfies this
Section and Code Sections 401(a)(4), 410(b) and 401(m).
(e) If a Highly Compensated Participant is a Participant under two or more
plans (other than an employee stock ownership plan as defined in Code
Section 4975(e)(7) or 409) which are maintained by the Employer or an Affiliated
Employer to which matching contributions, Employee contributions, or both, are made,
all such contributions on behalf of such Highly Compensated Participant shall be
aggregated for purposes of determining such Highly Compensated Participants actual
contribution ratio. However, if the plans have different plan years, this paragraph
shall be applied by treating all plans ending with or within the same calendar year
as a single plan.
(f) For purposes of Sections 4.7(a) and 4.8, a Highly Compensated Participant
and Non-Highly Compensated Participant shall include any Employee eligible to have
Employer matching contributions (whether or not a deferral election was made or
suspended) allocated to the Participants account for the Plan Year.
37
Notwithstanding the above, if the prior year testing method is used to
calculate the Actual Contribution Percentage for the Non-Highly Compensated
Participant group for the first Plan Year of this amendment and restatement, for the
purposes of Section 4.7(a), a Non-Highly Compensated Participant shall include any
such Employee eligible to have Employer matching contributions (whether or not a
deferral election was made or suspended) allocated to the Participants account for
the preceding Plan Year pursuant to the provisions of the Plan then in effect.
(g) For the purpose of this Section, when calculating the Actual Contribution
Percentage for the Non-Highly Compensated Participant group, the prior year testing
method shall be used. Any change from the current year testing method to the prior
year testing method shall be made pursuant to Internal Revenue Service Notice 98-1,
Section VII (or superseding guidance), the provisions of which are incorporated
herein by reference.
(h) Notwithstanding anything in this Section to the contrary, the provisions of
this Section and Section 4.8 may be applied separately (or will be applied
separately to the extent required by Regulations) to each plan within the meaning of
Regulation 1.401(k)-1(g)(11). Furthermore, the provisions of Code
Section 401(k)(3)(F) may be used to exclude from consideration all Non-Highly
Compensated Employees who have not satisfied the minimum age and service
requirements of Code Section 410(a)(1)(A).
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) In the event (or if it is anticipated) that the Actual Contribution
Percentage for the Highly Compensated Participant group exceeds (or might exceed)
the Actual Contribution Percentage for the Non-Highly Compensated Participant
group pursuant to Section 4.7(a), the Administrator (on or before the fifteenth day
of the third month following the end of the Plan Year, but in no event later than
the close of the following Plan Year) shall direct the Trustee to distribute to the
Highly Compensated Participant having the largest dollar amount of contributions
determined pursuant to Section 4.7(b)(1), the Vested portion of such contributions
(and Income allocable to such contributions) and, if forfeitable, forfeit such
non-Vested contributions attributable to Employer matching contributions (and Income
allocable to such forfeitures) until the total amount of Excess Aggregate
Contributions has been distributed, or until the Participants remaining amount
equals the amount of contributions determined pursuant to Section 4.7(b)(1) of the
Highly Compensated Participant having the second largest dollar amount of
contributions. This process shall continue until the total amount of Excess
Aggregate Contributions has been distributed.
If the correction of Excess Aggregate Contributions attributable to Employer
matching contributions is not in proportion to the Vested and non-Vested portion of
such contributions, then the Vested portion of the Participants Account
attributable to Employer matching contributions after the correction shall be
subject to Section 6.5(h).
38
(b) Any distribution and/or forfeiture of less than the entire amount of Excess
Aggregate Contributions (and Income) shall be treated as a pro rata distribution
and/or forfeiture of Excess Aggregate Contributions and Income. Distribution of
Excess Aggregate Contributions shall be designated by the Employer as a distribution
of Excess Aggregate Contributions (and Income). Forfeitures of Excess Aggregate
Contributions shall be treated in accordance with Section 4.4.
(c) Excess Aggregate Contributions, including forfeited matching contributions,
shall be treated as Employer contributions for purposes of Code Sections 404 and 415
even if distributed from the Plan.
Forfeited matching contributions that are reallocated to Participants Accounts
for the Plan Year in which the forfeiture occurs shall be treated as an annual
addition pursuant to Section 4.9(b) for the Participants to whose Accounts they are
reallocated and for the Participants from whose Accounts they are forfeited.
(d) The determination of the amount of Excess Aggregate Contributions with
respect to any Plan Year shall be made after first determining the Excess
Contributions, if any, to be treated as after-tax voluntary Employee contributions
due to recharacterization for the plan year of any other qualified cash or deferred
arrangement (as defined in Code Section 401(k)) maintained by the Employer that ends
with or within the Plan Year or which are treated as after-tax voluntary Employee
contributions due to recharacterization pursuant to Section 4.6(a).
(e) If during a Plan Year the projected aggregate amount of Employer matching
contributions to be allocated to all Highly Compensated Participants under this Plan
would, by virtue of the tests set forth in Section 4.7(a), cause the Plan to fail
such tests, then the Administrator may automatically reduce proportionately or in
the order provided in Section 4.8(a) each affected Highly Compensated Participants
projected share of such contributions by an amount necessary to satisfy one of the
tests set forth in Section 4.7(a).
(f) Notwithstanding the above, within twelve (12) months after the end of the
Plan Year, the Employer may make a special Qualified Non-Elective Contribution in
accordance with one of the following provisions which contribution shall be
allocated to the Participants Account of each Non-Highly Compensated eligible to
share in the allocation in accordance with such provision. The Employer shall
provide the Administrator with written notification of the amount of the
contribution being made and for which provision it is being made pursuant to:
(1) A special Qualified Non-Elective Contribution may be made on behalf of
Non-Highly Compensated Participants in an amount sufficient to satisfy (or
to prevent an anticipated failure of) one of the tests set forth in
Section 4.7. Such contribution shall be allocated in the same proportion
that each Non-Highly Compensated Participants 414(s) Compensation for
39
the year (or prior year if the prior year testing method is being used)
bears to the total 414(s) Compensation of all Non-Highly Compensated
Participants for such year.
(2) A special Qualified Non-Elective Contribution may be made on behalf of
Non-Highly Compensated Participants in an amount sufficient to satisfy (or
to prevent an anticipated failure of) one of the tests set forth in
Section 4.7. Such contribution shall be allocated in the same proportion
that each Non-Highly Compensated Participant electing salary reductions
pursuant to Section 4.2 in the same proportion that each such Non-Highly
Compensated Participants Deferred Compensation for the year (or at the end
of the prior Plan Year if the prior year testing method is being used) bears
to the total Deferred Compensation of all such Non-Highly Compensated
Participants for such year.
(3) A special Qualified Non-Elective Contribution may be made on behalf of
Non-Highly Compensated Participants in an amount sufficient to satisfy (or
to prevent an anticipated failure of) one of the tests set forth in
Section 4.7. Such contribution shall be allocated in equal amounts (per
capita).
(4) A special Qualified Non-Elective Contribution may be made on behalf of
Non-Highly Compensated Participants electing salary reductions pursuant to
Section 4.2 in an amount sufficient to satisfy (or to prevent an anticipated
failure of) one of the tests set forth in Section 4.7. Such contribution
shall be allocated for the year (or at the end of the prior Plan Year if the
prior year testing method is used) to each Non-Highly Compensated
Participant electing salary reductions pursuant to Section 4.2 in equal
amounts (per capita).
(5) A special Qualified Non-Elective Contribution may be made on behalf of
Non-Highly Compensated Participants in an amount sufficient to satisfy (or
to prevent an anticipated failure of) one of the tests set forth in
Section 4.7. Such contribution shall be allocated to the Non-Highly
Compensated Participant having the lowest 414(s) Compensation, until one of
the tests set forth in Section 4.7 is satisfied (or is anticipated to be
satisfied), or until such Non-Highly Compensated Participant has received
the maximum annual addition pursuant to Section 4.9. This process shall
continue until one of the tests set forth in Section 4.7 is satisfied (or is
anticipated to be satisfied).
Notwithstanding the above, at the Employers discretion, Non-Highly Compensated
Participants who are not employed at the end of the Plan Year (or at the end of the
prior Plan Year if the prior year testing method is being used) shall not be
eligible to receive a special Qualified Non-Elective Contribution and shall be
disregarded.
Notwithstanding the above, if the testing method changes from the current year
testing method to the prior year testing method, then for purposes of
40
preventing the double counting of Qualified Non-Elective Contributions for the
first testing year for which the change is effective, any special Qualified
Non-Elective Contribution on behalf of Non-Highly Compensated Participants used to
satisfy the Actual Deferral Percentage or Actual Contribution Percentage test
under the current year testing method for the prior year testing year shall be
disregarded.
(g) Any Excess Aggregate Contributions (and Income) which are distributed on or
after 2 1/2 months after the end of the Plan Year shall be subject to the ten
percent (10%) Employer excise tax imposed by Code Section 4979.
4.9 MAXIMUM ANNUAL ADDITIONS
(a) Notwithstanding the foregoing, the maximum annual additions credited to a
Participants accounts for any limitation year shall equal the lesser of:
(1) $30,000 adjusted annually as provided in Code Section 415(d) pursuant to the
Regulations, or (2) twenty-five percent (25%) of the Participants
415 Compensation for such limitation year. If the Employer contribution that
would otherwise be contributed or allocated to the Participants accounts would
cause the annual additions for the limitation year to exceed the maximum annual
additions, the amount contributed or allocated will be reduced so that the annual
additions for the limitation year will equal the maximum annual additions, and
any amount in excess of the maximum annual additions, which would have been
allocated to such Participant may be allocated to other Participants. For any short
limitation year, the dollar limitation in (1) above shall be reduced by a
fraction, the numerator of which is the number of full months in the short
limitation year and the denominator of which is twelve (12).
(b) For purposes of applying the limitations of Code Section 415, annual
additions means the sum credited to a Participants accounts for any limitation
year of (1) Employer contributions, (2) Employee contributions, (3) forfeitures,
(4) amounts allocated, after March 31, 1984, to an individual medical account, as
defined in Code Section 415(l)(2) which is part of a pension or annuity plan
maintained by the Employer and (5) amounts derived from contributions paid or
accrued after December 31, 1985, in taxable years ending after such date, which are
attributable to post-retirement medical benefits allocated to the separate account
of a key employee (as defined in Code Section 419A(d)(3)) under a welfare benefit
plan (as defined in Code Section 419(e)) maintained by the Employer. Except,
however, the 415 Compensation percentage limitation referred to in
paragraph (a)(2) above shall not apply to: (1) any contribution for medical benefits
(within the meaning of Code Section 419A(f)(2)) after separation from service which
is otherwise treated as an annual addition, or (2) any amount otherwise treated as
an annual addition under Code Section 415(l)(1).
(c) For purposes of applying the limitations of Code Section 415, the transfer
of funds from one qualified plan to another is not an annual addition. In
addition, the following are not Employee contributions for the purposes of
Section 4.9(b)(2): (1) rollover contributions (as defined in Code
41
Sections 402(e)(6), 403(a)(4), 403(b)(8) and 408(d)(3)); (2) repayments of
loans made to a Participant from the Plan; (3) repayments of distributions received
by an Employee pursuant to Code Section 411(a)(7)(B) (cash-outs); (4) repayments of
distributions received by an Employee pursuant to Code Section 411(a)(3)(D)
(mandatory contributions); and (5) Employee contributions to a simplified employee
pension excludable from gross income under Code Section 408(k)(6).
(d) For purposes of applying the limitations of Code Section 415, the
limitation year shall be the Plan Year.
(e) For the purpose of this Section, all qualified defined contribution plans
(whether terminated or not) ever maintained by the Employer shall be treated as one
defined contribution plan.
(f) For the purpose of this Section, if the Employer is a member of a
controlled group of corporations, trades or businesses under common control (as
defined by Code Section 1563(a) or Code Section 414(b) and (c) as modified by Code
Section 415(h)), is a member of an affiliated service group (as defined by Code
Section 414(m)), or is a member of a group of entities required to be aggregated
pursuant to Regulations under Code Section 414(o), all Employees of such Employers
shall be considered to be employed by a single Employer.
(g) If this is a plan described in Code Section 413(c) (other than a plan
described in Code Section 413(f)), then all of the benefits or contributions
attributable to a Participant from all of the Employers maintaining this Plan shall
be taken into account in applying the limits of this Section with respect to such
Participant. Furthermore, in applying the limitations of this Section with respect
to such a Participant, the total 415 Compensation received by the Participant from
all of the Employers maintaining the Plan shall be taken into account.
(h)(1) If a Participant participates in more than one defined contribution plan
maintained by the Employer which have different Anniversary Dates, the maximum
annual additions under this Plan shall equal the maximum annual additions for
the limitation year minus any annual additions previously credited to such
Participants accounts during the limitation year.
(2) If a Participant participates in both a defined contribution plan
subject to Code Section 412 and a defined contribution plan not subject to
Code Section 412 maintained by the Employer which have the same Anniversary
Date, annual additions will be credited to the Participants accounts
under the defined contribution plan subject to Code Section 412 prior to
crediting annual additions to the Participants accounts under the defined
contribution plan not subject to Code Section 412.
(3) If a Participant participates in more than one defined contribution plan
not subject to Code Section 412 maintained by the Employer which have the
same Anniversary Date, the maximum annual additions under this Plan shall
equal the product of (A) the maximum annual additions for the limitation
year minus any annual additions previously credited
42
under subparagraphs (1) or (2) above, multiplied by (B) a fraction (i) the
numerator of which is the annual additions which would be credited to such
Participants accounts under this Plan without regard to the limitations of
Code Section 415 and (ii) the denominator of which is such annual
additions for all plans described in this subparagraph.
(i) Notwithstanding anything contained in this Section to the contrary, the
limitations, adjustments and other requirements prescribed in this Section shall at
all times comply with the provisions of Code Section 415 and the Regulations
thereunder.
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
(a) If, as a result of a reasonable error in estimating a Participants
Compensation, a reasonable error in determining the amount of elective deferrals
(within the meaning of Code Section 402(g)(3)) that may be made with respect to any
Participant under the limits of Section 4.9 or other facts and circumstances to
which Regulation 1.415-6(b)(6) shall be applicable, the annual additions under
this Plan would cause the maximum annual additions to be exceeded for any
Participant, the excess amount will be disposed of in one of the following
manners, as uniformly determined by the Administrator for all Participants similarly
situated.
(1) Any unmatched Deferred Compensation and, thereafter, proportionately
from Deferred Compensation which is matched and matching contributions which
relate to such Deferred Compensation, will be reduced to the extent they
would reduce the excess amount. The Deferred Compensation (and any gains
attributable to such Deferred Compensation) will be distributed to the
Participant and the Employer matching contributions (and any gains
attributable to such matching contributions) will be used to reduce the
Employer contribution in the next limitation year;
(2) If, after the application of subparagraph (1) above, an excess amount
still exists, and the Participant is covered by the Plan at the end of the
limitation year, the excess amount will be used to reduce the Employer
contribution for such Participant in the next limitation year, and each
succeeding limitation year if necessary;
(3) If, after the application of subparagraphs (1) and (2) above, an excess
amount still exists, and the Participant is not covered by the Plan at the
end of the limitation year, the excess amount will be held unallocated
in a Section 415 suspense account. The Section 415 suspense account will
be applied to reduce future Employer contributions for all remaining
Participants in the next limitation year, and each succeeding limitation
year if necessary;
(4) If a Section 415 suspense account is in existence at any time during
the limitation year pursuant to this Section, it will not participate
43
in the allocation of investment gains and losses of the Trust Fund. If a
Section 415 suspense account is in existence at any time during a
particular limitation year, all amounts in the Section 415 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. Except as provided in (1) above, excess
amounts may not be distributed to Participants or Former Participants.
(b) For purposes of this Article, excess amount for any Participant for a
limitation year shall mean the excess, if any, of (1) the annual additions which
would be credited to the Participants account under the terms of the Plan without
regard to the limitations of Code Section 415 over (2) the maximum annual
additions determined pursuant to Section 4.9.
(c) For purposes of this Section, Section 415 suspense account shall mean an
unallocated account equal to the sum of excess amounts for all Participants in the
Plan during the limitation year.
4.11 ROLLOVERS AND PLAN-TO-PLAN TRANSFERS FROM QUALIFIED PLANS
(a) With the consent of the Administrator, amounts may be transferred (within
the meaning of Code Section 414(l)) to this Plan from other tax qualified plans
under Code Section 401(a) by Participants, provided the trust from which such funds
are transferred permits the transfer to be made and the transfer will not jeopardize
the tax exempt status of the Plan or Trust or create adverse tax consequences for
the Employer. Prior to accepting any transfers to which this Section applies, the
Administrator may require an opinion of counsel that the amounts to be transferred
meet the requirements of this Section. The amounts transferred shall be set up in a
separate account herein referred to as a Participants Transfer/Rollover Account.
Furthermore, for vesting purposes, the Participants portion of the Participants
Transfer/Rollover Account attributable to any transfer shall be subject to
Section 6.4(b).
Except as permitted by Regulations (including Regulation 1.411(d)-4), amounts
attributable to elective contributions (as defined in Regulation 1.401(k)-1(g)(3)),
including amounts treated as elective contributions, which are transferred from
another qualified plan in a plan-to-plan transfer (other than a direct rollover)
shall be subject to the distribution limitations provided for in
Regulation 1.401(k)-1(d).
(b) With the consent of the Administrator, the Plan may accept a rollover by
Participants, provided the rollover will not jeopardize the tax exempt status of
the Plan or create adverse tax consequences for the Employer. Prior to accepting any
rollovers to which this Section applies, the Administrator may require the
Employee to establish (by providing opinion of counsel or otherwise) that the
amounts to be rolled over to this Plan meet the requirements of this Section. The
amounts rolled over shall be set up in a separate account herein
44
referred to as a Participants Transfer/Rollover Account. Such account shall
be fully Vested at all times and shall not be subject to Forfeiture for any reason.
For purposes of this Section, the term qualified plan shall mean any tax
qualified plan under Code Section 401(a), or, any other plans from which
distributions are eligible to be rolled over into this Plan pursuant to the Code.
The term rollover means: (i) amounts transferred to this Plan directly from
another qualified plan; (ii) distributions received by an Employee from other
qualified plans which are eligible for tax-free rollover to a qualified plan and
which are transferred by the Employee to this Plan within sixty (60) days following
receipt thereof; (iii) amounts transferred to this Plan from a conduit individual
retirement account provided that the conduit individual retirement account has no
assets other than assets which (A) were previously distributed to the Employee by
another qualified plan, (B) were eligible for tax-free rollover to a qualified
plan and (C) were deposited in such conduit individual retirement account within
sixty (60) days of receipt thereof; (iv) amounts distributed to the Employee from a
conduit individual retirement account meeting the requirements of clause
(iii) above, and transferred by the Employee to this Plan within sixty (60) days of
receipt thereof from such conduit individual retirement account; and (v) any other
amounts which are eligible to be rolled over to this Plan pursuant to the Code.
(c) Amounts in a Participants Transfer/Rollover Account shall be held by the
Trustee pursuant to the provisions of this Plan and may not be withdrawn by, or
distributed to the Participant, in whole or in part, except as provided in Section
6.10 and paragraph (d) of this Section. The Trustee shall have no duty or
responsibility to inquire as to the propriety of the amount, value or type of assets
transferred, nor to conduct any due diligence with respect to such assets; provided,
however, that such assets are otherwise eligible to be held by the Trustee under the
terms of this Plan.
(d) At such date when the Participant or the Participants Beneficiary shall be
entitled to receive benefits, the Participants Transfer/Rollover Account shall be
used to provide additional benefits to the Participant or the Participants
Beneficiary. Any distributions of amounts held in a Participants Transfer/Rollover
Account shall be made in a manner which is consistent with and satisfies the
provisions of Section 6.5, including, but not limited to, all notice and consent
requirements of Code Sections 417 and 411(a)(11) and the Regulations thereunder.
Furthermore, such amounts shall be considered as part of a Participants benefit in
determining whether an involuntary cash-out of benefits may be made without
Participant consent.
(e) The Administrator may direct that Employee transfers and rollovers made
after a Valuation Date be segregated into a separate account for each Participant
until such time as the allocations pursuant to this Plan have been made, at which
time they may remain segregated or be invested as part of the general Trust Fund or
be directed by the Participant pursuant to Section 4.12.
(f) Notwithstanding anything herein to the contrary, a transfer directly to
this Plan from another qualified plan (or a transaction having the effect of such
45
a transfer) shall only be permitted if it will not result in the elimination or
reduction of any Section 411(d)(6) protected benefit as described in Section 7.1.
(g) Notwithstanding anything contained in this Section 4.11 of this Plan to the
contrary, in no event shall the Administrator be required to accept any asset rolled
over from another qualified plan other than cash. The Administrator, on a case by
case basis, may, in its sole discretion, accept a rollover of non-cash assets.
4.12 DIRECTED INVESTMENT ACCOUNT
(a) Participants may, subject to a procedure established by the Administrator
(the Participant Direction Procedures) and applied in a uniform nondiscriminatory
manner, direct the Trustee, in writing (or in such other form which is acceptable to
the Trustee), to invest all of their accounts in specific assets, specific funds or
other investments permitted under the Plan and the Participant Direction Procedures.
That portion of the interest of any Participant so directing will thereupon be
considered a Participants Directed Account.
(b) As of each Valuation Date, all Participant Directed Accounts shall be
charged or credited with the net earnings, gains, losses and expenses as well as any
appreciation or depreciation in the market value using publicly listed fair market
values when available or appropriate as follows:
(1) to the extent that the assets in a Participants Directed Account are
accounted for as pooled assets or investments, the allocation of earnings,
gains and losses of each Participants Directed Account shall be based upon
the total amount of funds so invested in a manner proportionate to the
Participants share of such pooled investment; and
(2) to the extent that the assets in the Participants Directed Account are
accounted for as segregated assets, the allocation of earnings, gains and
losses from such assets shall be made on a separate and distinct basis.
(c) Investment directions will be processed as soon as administratively
practicable after proper investment directions are received from the Participant. No
guarantee is made by the Plan, Employer, Administrator or Trustee that investment
directions will be processed on a daily basis, and no guarantee is made in any
respect regarding the processing time of an investment direction. Notwithstanding
any other provision of the Plan, the Employer, Administrator or Trustee reserves the
right to not value an investment option on any given Valuation Date for any reason
deemed appropriate by the Employer, Administrator or Trustee. Furthermore, the
processing of any investment transaction may be delayed for any legitimate business
reason (including, but not limited to, failure of systems or computer programs,
failure of the means of the transmission of data, force majeure, the failure of a
service provider to timely receive values or prices, and correction for errors or
omissions or the errors or omissions of any service provider). The processing date
of a transaction will be
46
binding for all purposes of the Plan and considered the applicable Valuation
Date for an investment transaction.
(d) The Participant Direction Procedures shall provide an explanation of the
circumstances under which Participants and their Beneficiaries may give investment
instructions, including, but need not be limited to, the following:
(1) the conveyance of instructions by the Participants and their
Beneficiaries to invest Participant Directed Accounts in Directed Investment
Options;
(2) the name, address and phone number of the Fiduciary (and, if applicable,
the person or persons designated by the Fiduciary to act on its behalf)
responsible for providing information to the Participant or a Beneficiary
upon request relating to the Directed Investment Options;
(3) applicable restrictions on transfers to and from any Designated
Investment Alternative;
(4) any restrictions on the exercise of voting, tender and similar rights
related to a Directed Investment Option by the Participants or their
Beneficiaries;
(5) a description of any transaction fees and expenses which affect the
balances in Participant Directed Accounts in connection with the purchase or
sale of Directed Investment Options; and
(6) general procedures for the dissemination of investment and other
information relating to the Designated Investment Alternatives as deemed
necessary or appropriate, including but not limited to a description of the
following:
(i) the investment vehicles available under the Plan, including
specific information regarding any Designated Investment Alternative;
(ii) any designated Investment Managers; and
(iii) a description of the additional information which may be
obtained upon request from the Fiduciary designated to provide such
information.
(e) Any information regarding investments available under the Plan, to the
extent not required to be described in the Participant Direction Procedures, may be
provided to the Participant in one or more written documents (or in any other form
including, but not limited to, electronic media) which are separate from the
Participant Direction Procedures and are not thereby incorporated by reference into
this Plan.
47
(f) The Administrator may, in its discretion, include in or exclude by
amendment or other action from the Participant Direction Procedures such
instructions, guidelines or policies as it deems necessary or appropriate to ensure
proper administration of the Plan, and may interpret the same accordingly.
4.13 QUALIFIED MILITARY SERVICE
Notwithstanding any provision of this Plan to the contrary, contributions, benefits and
service will be provided in accordance with Code Section 414(u).
ARTICLE V
VALUATIONS
VALUATIONS
5.1 VALUATION OF THE TRUST FUND
The Administrator shall direct the Trustee, as of each Valuation Date, to determine the net
worth of the assets comprising the Trust Fund as it exists on the Valuation Date. In determining
such net worth, the Trustee shall value the assets comprising the Trust Fund at their fair market
value (or their contractual value in the case of a Contract or Policy) as of the Valuation Date and
shall deduct all expenses for which the Trustee has not yet obtained reimbursement from the
Employer or the Trust Fund. The Trustee may update the value of any shares held in the Participant
Directed Account by reference to the number of shares held by that Participant, priced at the
market value as of the Valuation Date.
5.2 METHOD OF VALUATION
In determining the fair market value of securities held in the Trust Fund which are listed on
a registered stock exchange, the Administrator shall direct the Trustee to value the same at the
prices they were last traded on such exchange preceding the close of business on the Valuation
Date. If such securities were not traded on the Valuation Date, or if the exchange on which they
are traded was not open for business on the Valuation Date, then the securities shall be valued at
the prices at which they were last traded prior to the Valuation Date. Any unlisted security held
in the Trust Fund shall be valued at its bid price next preceding the close of business on the
Valuation Date, which bid price shall be obtained from a registered broker or an investment banker.
In determining the fair market value of assets other than securities for which trading or bid
prices can be obtained, the Trustee may appraise such assets itself, or in its discretion, employ
one or more appraisers for that purpose and rely on the values established by such appraiser or
appraisers.
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT
Every Participant may terminate employment with the Employer and retire for the purposes
hereof on the Participants Normal Retirement Date or Early Retirement Date. However, a Participant
may postpone the termination of employment with the Employer to a later date, in which event the
participation of such Participant in the Plan, including the right to receive allocations pursuant
to Section 4.4, shall continue until such Participants Late
48
Retirement Date. Upon a Participants Retirement Date or attainment of Normal Retirement Date
without termination of employment with the Employer, or as soon thereafter as is practicable, the
Trustee shall distribute, at the election of the Participant, all amounts credited to such
Participants Combined Account in accordance with Section 6.5.
6.2 DETERMINATION OF BENEFITS UPON DEATH
(a) Upon the death of a Participant before the Participants Retirement Date or
other termination of employment, all amounts credited to such Participants Combined
Account shall become fully Vested. The Administrator shall direct the Trustee, in
accordance with the provisions of Sections 6.6 and 6.7, to distribute the value of
the deceased Participants accounts to the Participants Beneficiary.
(b) Upon the death of a Former Participant, the Administrator shall direct the
Trustee, in accordance with the provisions of Sections 6.6 and 6.7, to distribute
any remaining Vested amounts credited to the accounts of a deceased Former
Participant to such Former Participants Beneficiary.
(c) The Administrator may require such proper proof of death and such evidence
of the right of any person to receive payment of the value of the account of a
deceased Participant or Former Participant as the Administrator may deem desirable.
The Administrators determination of death and of the right of any person to receive
payment shall be conclusive.
(d) Unless otherwise elected in the manner prescribed in Section 6.6, the
Participants surviving spouse shall receive a death benefit equal to the
Pre-Retirement Survivor Annuity. The Participant may designate a Beneficiary other
than the spouse to receive that portion of the Participants death benefit which is
not payable as a Pre-Retirement Survivor Annuity. The Participant may also designate
a Beneficiary other than the Participants spouse to receive the Pre-Retirement
Survivor Annuity but only if:
(1) the Participant and the Participants spouse have validly waived the
Pre-Retirement Survivor Annuity in the manner prescribed in Section 6.6, and
the spouse has waived the right to be the Participants Beneficiary, or
(2) the Participant is legally separated or has been abandoned (within the
meaning of local law) and the Participant has a court order to such effect
(and there is no qualified domestic relations order as defined in Code
Section 414(p) which provides otherwise), or
(3) the Participant has no spouse, or
(4) the spouse cannot be located.
In such event, the designation of a Beneficiary shall be made on a form
satisfactory to the Administrator. A Participant may at any time revoke a
designation of a Beneficiary or change a Beneficiary by filing written (or in such
49
other form as permitted by the Internal Revenue Service) notice of such
revocation or change with the Administrator. However, the Participants spouse must
again consent in writing (or in such other form as permitted by the Internal Revenue
Service) to any change in Beneficiary of that portion of the death benefit that
would otherwise be paid as a Pre-Retirement Survivor Annuity unless the original
consent acknowledged that the spouse had the right to limit consent only to a
specific Beneficiary and that the spouse voluntarily elected to relinquish such
right. A Participant may, at any time, designate a Beneficiary to receive death
benefits that are in excess of the Pre-Retirement Survivor Annuity without the
waiver or consent of the Participants spouse.
(e) In the event no valid designation of Beneficiary exists, or if the
Beneficiary is not alive at the time of the Participants death, the death benefit
will be paid in the following order of priority to:
(1) the Participants surviving spouse;
(2) the Participants children, including adopted children, per stirpes;
(3) the Participants surviving parents, in equal shares; or
(4) the Participants estate.
If the Beneficiary does not predecease the Participant, but dies prior to
distribution of the death benefit, the death benefit will be paid to the
Beneficiarys estate.
(f) Notwithstanding anything in this Section to the contrary, if a Participant
has designated the spouse as a Beneficiary, then a divorce decree or a legal
separation that relates to such spouse shall revoke the Participants designation of
the spouse as a Beneficiary unless the decree or a qualified domestic relations
order (within the meaning of Code Section 414(p)) provides otherwise.
6.3 DISABILITY RETIREMENT BENEFITS
No disability benefits, other than those payable upon termination of employment, are provided
in this Plan.
6.4 DETERMINATION OF BENEFITS UPON TERMINATION
(a) If a Participants employment with the Employer is terminated for any
reason other than death or retirement, then such Participant shall be entitled to
such benefits as are provided hereinafter pursuant to this Section 6.4.
Distribution of the funds due to a Terminated Participant shall be made on the
occurrence of an event which would result in the distribution had the Terminated
Participant remained in the employ of the Employer (upon the Participants death,
Early or Normal Retirement). However, at the election of the
50
Participant, the Administrator shall direct the Trustee that the entire Vested
portion of the Terminated Participants Combined Account be payable to such
Terminated Participant. Any distribution under this paragraph shall be made in a
manner which is consistent with and satisfies the provisions of Section 6.5,
including, but not limited to, all notice and consent requirements of Code Sections
417 and 411(a)(11) and the Regulations thereunder.
Notwithstanding the above, a Terminated Participant may request a distribution
of his entire Participants Elective Account prior to the date he would incur a
1-Year Break in Service. The request must be submitted in writing to the
Administrator within thirty days prior to a valuation date and the spouse of such
a Terminated Participant must consent to the distribution, regardless of the value
of such Participants Elective Account. The consent of a Terminated Participants
spouse shall be irrevocable and must acknowledge the effect of such election and be
witnessed by a notary public. Upon receipt of the written request with spousal
consent, the Plan Administrator shall, after crediting any income or loss to the
Participants Elective Account as of such valuation date, liquidate the shares in
each investment in the Participants Elective Account as soon as administratively
feasible. The proceeds of such liquidation shall then be distributed to the
Terminated Participant not later than 60 days after the valuation date.
Notwithstanding the foregoing, it may take up to six months from the time that a
request for distribution of a Participants Elective Account is received in order to
effect a distribution. If the Terminated Participant does not obtain spousal
consent for the distribution, the Terminated Participants Elective Account together
with the vested portion of the Participants combined Account shall be distributed
to him after he incurs a 1-Year Beak in Service according to the provisions of
Section 6.5, including, but not limited to, all notice and consent requirements of
Code Section 417 and 411(a)(11) and the Regulations thereunder.
If the value of a Terminated Participants Vested benefit derived from Employer
and Employee contributions does not exceed $5,000 ($3,500 for Plan Years beginning
prior to August 6, 1997), then the Administrator shall direct the Trustee to cause
the entire Vested benefit to be paid to such Participant in a single lump sum.
In the event of a mandatory distribution not exceeding $5,000 that is made in
accordance with the provisions of the Plan providing for an automatic distribution
to a Participant without the Participants consent, 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 (in accordance with the direct
rollover provisions of the Plan) or to receive the distribution directly, then the
Administrator shall pay the distribution in a direct rollover to an individual
retirement plan designated by the Administrator.
For purposes of this Section 6.4, if the value of a Terminated Participants
Vested benefit is zero, the Terminated Participant shall be deemed to have received
a distribution of such Vested benefit.
(b) The Vested portion of any Participants Account attributable to
51
Employer Non-Elective contributions made pursuant to Section 4.1(b) of this Plan
shall be a percentage of the total amount credited to the Participants Account
determined on the basis of the Participants number of Years of Service with the
Employer according to the following schedule:
Vesting Schedule
Years of Service | Percentage | |||
Less
than 2 |
0 | % | ||
2 |
20 | % | ||
3 |
40 | % | ||
4 |
60 | % | ||
5 |
100 | % |
(c)(1)
Discretionary Employer Non-Elective Contributions Pursuant to Plan
Section 4.1(d) Made Prior to January 1, 2007. The Vested portion of any
Participants Account attributable to discretionary Employer Non-Elective
contributions made pursuant to Section 4.1(d) of this Plan prior to January 1,
2007 shall be a percentage of the total amount credited to the Participants
Account determined on the basis of the Participants number of Years of Service
with the Employer according to the following schedule:
Vesting Schedule
Years of Service | Percentage | |
Less than 5 5 |
0% 100% |
Notwithstanding the vesting attributable to discretionary Employer Non-Elective
contributions made pursuant to Section 4.1(d) of this Plan prior to January 1,
2007 provided for in paragraph 6.4(c)(1) above, for any top Heavy Plan Year,
the Vested portion of the Participants Account attributable to Employer
discretionary contributions of any Participant who has an Hour of Service after
the Plan becomes top heavy shall be a percentage of the amount credited to the
Participants Account attributable to Employer discretionary contributions
determined on the basis of the Participants number of Years of Service with
the Employer according to the following schedule:
Vesting Schedule
Years of Service | Percentage | |
Less than 2 |
0% | |
2 |
20% | |
3 |
40% | |
4 |
60% | |
5 |
100% |
(c)(2) Discretionary Employer Non-Elective Contributions Pursuant to
52
Plan Section 4.1(d) Made After December 31, 2006. The Vested portion of any
Participants Account attributable to discretionary Employer Non-Elective
contributions made pursuant to Section 4.1(d) of this Plan after December 31, 2006
shall be a percentage of the total amount credited to the Participants Account
determined on the basis of the Participants number of Years of Service with the
Employer according to the following schedule:
Vesting Schedule
Years of Service | Percentage | |
Less than 2 |
0% | |
2 |
20% | |
3 |
40% | |
4 |
60% | |
5 |
100% |
(c) Notwithstanding the vesting schedule above, the Vested percentage of a
Participants Account shall not be less than the Vested percentage attained as of
the later of the effective date or adoption date of this amendment and restatement.
(d) Notwithstanding the vesting schedule above, upon the complete
discontinuance of the Employer contributions to the Plan or upon any full or partial
termination of the Plan, all amounts then credited to the account of any affected
Participant shall become 100% Vested and shall not thereafter be subject to
Forfeiture.
(e) The computation of a Participants nonforfeitable percentage of such
Participants interest in the Plan shall not be reduced as the result of any direct
or indirect amendment to this Plan. In the event that the Plan is amended to change
or modify any vesting schedule, or if the Plan is amended in any way that directly
or indirectly affects the computation of the Participants nonforfeitable
percentage, or if the Plan is deemed amended by an automatic change to a top heavy
vesting schedule, then each Participant with at least three (3) Years of Service as
of the expiration date of the election period may elect to have such Participants
nonforfeitable percentage computed under the Plan without regard to such amendment
or change. If a Participant fails to make such election, then such Participant shall
be subject to the new vesting schedule. The Participants election period shall
commence on the adoption date of the amendment and shall end sixty (60) days after
the latest of:
(1) the adoption date of the amendment,
(2) the effective date of the amendment, or
(3) the date the Participant receives written notice of the amendment from
the Employer or Administrator.
53
6.5 DISTRIBUTION OF BENEFITS
(a)(1) Unless otherwise elected as provided below, a Participant who is married
on the Annuity Starting Date and who does not die before the Annuity Starting Date
shall receive the value of all such Participants benefits in the form of a joint
and survivor annuity. The joint and survivor annuity is an annuity that commences
immediately and shall be equal in value to a single life annuity. Such joint and
survivor benefits following the Participants death shall continue to the spouse
during the spouses lifetime at a rate equal to fifty percent (50%) of the rate at
which such benefits were payable to the Participant. This joint and fifty percent
(50%) survivor annuity shall be considered the designated qualified joint and
survivor annuity and automatic form of payment for the purposes of this Plan.
However, the Participant may, without spousal consent, elect to receive a smaller
annuity benefit with continuation of payments to the spouse at a rate of
seventy-five percent (75%) or one-hundred percent (100%) of the rate payable to a
Participant during the Participants lifetime, which alternative joint and survivor
annuity shall be equal in value to the automatic joint and fifty percent (50%)
survivor annuity. An unmarried Participant shall receive the value of such
Participants benefit in the form of a life annuity. Such unmarried Participant,
however, may elect in writing to waive the life annuity. The election must comply
with the provisions of this Section as if it were an election to waive the joint and
survivor annuity by a married Participant, but without the spousal consent
requirement. The Participant may elect to have any annuity provided for in this
Section distributed upon the attainment of the earliest retirement age under the
Plan. The earliest retirement age is the earliest date on which, under the Plan,
the Participant could elect to receive retirement benefits.
(2) Any election to waive the joint and survivor annuity must be made by the
Participant in writing (or in such other form as permitted by the Internal
Revenue Service) during the election period and be consented to in writing
(or in such other form as permitted by the Internal Revenue Service) by the
Participants spouse. If the spouse is legally incompetent to give consent,
the spouses legal guardian, even if such guardian is the Participant, may
give consent. Such election shall designate a Beneficiary (or a form of
benefits) that may not be changed without spousal consent (unless the
consent of the spouse expressly permits designations by the Participant
without the requirement of further consent by the spouse). Such spouses
consent shall be irrevocable and must acknowledge the effect of such
election and be witnessed by a Plan representative or a notary public. Such
consent shall not be required if it is established to the satisfaction of
the Administrator that the required consent cannot be obtained because there
is no spouse, the spouse cannot be located, or other circumstances that may
be prescribed by Regulations. The election made by the Participant and
consented to by such Participants spouse may be revoked by the Participant
in writing (or in such other form as permitted by the Internal Revenue
Service) without the consent of the spouse at any time during the election
period. A revocation of a prior election shall cause the Participants
benefits to be distributed as a joint and survivor annuity. The number of
revocations shall not be limited. Any new election must comply with the
requirements of
54
this paragraph. A former spouses waiver shall not be binding on a new
spouse.
(3) The election period to waive the joint and survivor annuity shall be the
ninety (90) day period ending on the Annuity Starting Date.
(4) For purposes of this Section, spouse or surviving spouse means the
spouse or surviving spouse of the Participant, provided that a former spouse
will be treated as the spouse or surviving spouse and a current spouse will
not be treated as the spouse or surviving spouse to the extent provided
under a qualified domestic relations order as described in Code
Section 414(p).
(5) With regard to the election, the Administrator shall provide to the
Participant no less than thirty (30) days and no more than ninety (90) days
before the Annuity Starting Date a written (or in such other form as
permitted by the Internal Revenue Service) explanation of:
(i) the terms and conditions of the joint and survivor annuity,
(ii) the Participants right to make, and the effect of, an election
to waive the joint and survivor annuity,
(iii) the right of the Participants spouse to consent to any
election to waive the joint and survivor annuity, and
(iv) the right of the Participant to revoke such election, and the
effect of such revocation.
(6) Notwithstanding the above, if the Participant elects (with spousal
consent, if applicable) to waive the requirement that the explanation be
provided at least thirty (30) days before the Annuity Starting Date, the
election period shall be extended to the thirtieth (30th) day after the date
on which such explanation is provided to the Participant, unless the
thirty (30) day period is waived pursuant to the following provisions.
Any distribution provided for in this Section 6.5 may commence less
than thirty (30) days after the notice required by Code Section 417(a)(3) is
given provided the following requirements are satisfied:
(i) the Administrator clearly informs the Participant that the
Participant has a right to a period of thirty (30) days after
receiving the notice to consider whether to waive the joint and
survivor annuity and to elect (with spousal consent) to a form of
distribution other than a joint and survivor annuity;
(ii) the Participant is permitted to revoke an affirmative
distribution election at least until the Annuity Starting Date, or,
if later, at any time prior to the expiration of the seven (7) day
period
55
that begins the day after the explanation of the joint and survivor
annuity is provided to the Participant;
(iii) the Annuity Starting Date is after the date that the
explanation of the joint and survivor annuity is provided to the
Participant. However, the Annuity Starting Date may be before the
date that any affirmative distribution election is made by the
Participant and before the date that the distribution is permitted to
commence under (iv) below; and
(iv) distribution in accordance with the affirmative election does
not commence before the expiration of the seven (7) day period that
begins the day after the explanation of the joint and survivor
annuity is provided to the Participant.
(b) In the event a married Participant duly elects pursuant to paragraph (a)(2)
above not to receive benefits in the form of a joint and survivor annuity, or if
such Participant is not married, in the form of a life annuity, the Administrator,
pursuant to the election of the Participant, shall direct the Trustee to distribute
to a Participant or Beneficiary any amount to which the Participant or Beneficiary
is entitled under the Plan in one or more of the following methods:
(1) One lump-sum payment in cash.
(2) Payments over a period certain in monthly, quarterly, semiannual, or
annual cash installments. In order to provide such installment payments, the
Administrator may (A) segregate the aggregate amount thereof in a separate,
federally insured savings account, certificate of deposit in a bank or
savings and loan association, money market certificate or other liquid
short-term security or (B) purchase a nontransferable annuity contract for a
term certain (with no life contingencies) providing for such payment. The
period over which such payment is to be made shall not extend beyond the
Participants life expectancy (or the life expectancy of the Participant and
the Participants designated Beneficiary).
(3) Purchase of or providing an annuity. However, such annuity may not be in
any form that will provide for payments over a period extending beyond
either the life of the Participant (or the lives of the Participant and the
Participants designated Beneficiary) or the life expectancy of the
Participant (or the life expectancy of the Participant and the Participants
designated Beneficiary).
(c) The present value of a Participants joint and survivor annuity derived
from Employer and Employee contributions may not be paid without the Participants
and the Participants spouses written (or in such form as permitted by the Internal
Revenue Service) consent if the value exceeds $5,000 ($3,500 for Plan Years
beginning prior to August 6, 1997) and the benefit is immediately distributable.
However, spousal consent is not required if the distribution will be made in the
form of a joint and survivor annuity and the benefit is immediately
56
distributable. A benefit is immediately distributable if any part of the
benefit could be distributed to the Participant (or surviving spouse) before the
Participant attains (or would have attained if not deceased) the later of the
Participants Normal Retirement Age or age 62. Any consent required by this
Section 6.5(c) must be obtained not more than ninety (90) days before commencement
of the distribution and shall be made in a manner consistent with Section 6.5(a)(2).
If the value of the Participants benefit derived from Employer and Employee
contributions does not exceed $5,000 ($3,500 for Plan Years beginning prior to
August 6, 1997), then the Administrator shall direct the Trustee to immediately
distribute such benefit in a lump sum without the Participants and the
Participants spouses written consent. No distribution may be made under the
preceding sentence after the Annuity Starting Date unless the Participant and the
Participants spouse consent in writing (or in such form as permitted by the
Internal Revenue Service) to such distribution.
(d) The following rules will apply to the consent requirements set forth in
subsection (c):
(1) No consent shall be valid unless the Participant has received a general
description of the material features and an explanation of the relative
values of the optional forms of benefit available under the Plan that would
satisfy the notice requirements of Code Section 417.
(2) The Participant must be informed of the right to defer receipt of the
distribution. If a Participant fails to consent, it shall be deemed an
election to defer the commencement of payment of any benefit. However, any
election to defer the receipt of benefits shall not apply with respect to
distributions which are required under Section 6.5(e).
(3) Notice of the rights specified under this paragraph shall be provided no
less than thirty (30) days and no more than ninety (90) days before the
Annuity Starting Date.
Notwithstanding the above, the Annuity Starting Date may be a date prior to
the date the explanation is provided to the Participant if the distribution
does not commence until at least thirty (30) days after such explanation is
provided, subject to the waiver of the thirty (30) day period as provided
for in Section 6.5(a)(6).
(4) Written (or such other form as permitted by the Internal Revenue
Service) consent of the Participant to the distribution must not be made
before the Participant receives the notice and must not be made more than
ninety (90) days before the Annuity Starting Date.
(5) No consent shall be valid if a significant detriment is imposed under
the Plan on any Participant who does not consent to the distribution.
57
Any such distribution may commence less than thirty (30) days, subject to
Section 6.5(a)(6), after the notice required under Regulation 1.411(a)-11(c) is
given, provided that: (1) the Administrator clearly informs the Participant that the
Participant has a right to a period of at least thirty (30) days after receiving the
notice to consider the decision of whether or not to elect a distribution (and, if
applicable, a particular distribution option), and (2) the Participant, after
receiving the notice, affirmatively elects a distribution.
(e) Notwithstanding any provision in the Plan to the contrary, the distribution
of a Participants benefits, whether under the Plan or through the purchase of an
annuity contract, shall be made in accordance with the following requirements and
shall otherwise comply with Code Section 401(a)(9) and the Regulations thereunder
(including Regulation 1.401(a)(9)-2), the provisions of which are incorporated
herein by reference:
(1) A Participants benefits shall be distributed or must begin to be
distributed not later than April 1st of the calendar year following the
later of (i) the calendar year in which the Participant attains age 70 1/2
or (ii) the calendar year in which the Participant retires, provided,
however, that this clause (ii) shall not apply in the case of a Participant
who is a five (5) percent owner at any time during the Plan Year ending
with or within the calendar year in which such owner attains age 70 1/2.
Such distributions shall be equal to or greater than any required
distribution.
Alternatively, distributions to a Participant must begin no later than the
applicable April 1st as determined under the preceding paragraph and must be
made over the life of the Participant (or the lives of the Participant and
the Participants designated Beneficiary) or the life expectancy of the
Participant (or the life expectancies of the Participant and the
Participants designated Beneficiary) in accordance with Regulations.
(2) Distributions to a Participant and the Participants Beneficiaries shall
only be made in accordance with the incidental death benefit requirements of
Code Section 401(a)(9)(G) and the Regulations thereunder.
With respect to distributions under the Plan made for calendar years beginning
on or after January 1, 2002, the Plan will apply the minimum distribution
requirements of Code Section 401(a)(9) in accordance with the Regulations under Code
Section 401(a)(9) that were proposed on January 17, 2001, notwithstanding any
provision of the Plan to the contrary. This amendment shall continue in effect until
the end of the last calendar year beginning before the effective date of final
Regulations under Code Section 401(a)(9) or such other date specified in guidance
published by the Internal Revenue Service.
(f) For purposes of this Section, the life expectancy of a Participant and a
Participants spouse (other than in the case of a life annuity) may, at the election
of the Participant or the Participants spouse, be redetermined in accordance with
Regulations. The election, once made, shall be irrevocable. If no election is made
by the time distributions must commence, then the life expectancy of the Participant
58
and the Participants spouse shall not be subject to recalculation. Life
expectancy and joint and last survivor expectancy shall be computed using the return
multiples in Tables V and VI of Regulation 1.72-9.
(g) All annuity Contracts under this Plan shall be non-transferable when
distributed. Furthermore, the terms of any annuity Contract purchased and
distributed to a Participant or spouse shall comply with all of the requirements of
the Plan.
(h) If a distribution is made to a Participant who has not severed employment
and who is not fully Vested in the Participants Account and the Participant may
increase the Vested percentage in such account, then, at any relevant time the
Participants Vested portion of the account will be equal to an amount (X)
determined by the formula:
X
equals P(AB plus D) - D
For purposes of applying the formula: P is the Vested percentage at the
relevant time, AB is the account balance at the relevant time, and D is the amount
of distribution.
6.6 DISTRIBUTION OF BENEFITS UPON DEATH
(a) Unless otherwise elected as provided below, a Vested Participant who dies
before the Annuity Starting Date and who has a surviving spouse shall have the
Pre-Retirement Survivor Annuity paid to the surviving spouse. The Participants
spouse may direct that payment of the Pre-Retirement Survivor Annuity commence
within a reasonable period after the Participants death. If the spouse does not so
direct, payment of such benefit will commence at the time the Participant would have
attained the later of Normal Retirement Age or age 62. However, the spouse may elect
a later commencement date. Any distribution to the Participants spouse shall be
subject to the rules specified in Section 6.6(g).
(b) Any election to waive the Pre-Retirement Survivor Annuity before the
Participants death must be made by the Participant in writing (or in such other
form as permitted by the Internal Revenue Service) during the election period and
shall require the spouses irrevocable consent in the same manner provided for in
Section 6.5(a)(2). Further, the spouses consent must acknowledge the specific
nonspouse Beneficiary. Notwithstanding the foregoing, the nonspouse Beneficiary need
not be acknowledged, provided the consent of the spouse acknowledges that the spouse
has the right to limit consent only to a specific Beneficiary and that the spouse
voluntarily elects to relinquish such right.
(c) The election period to waive the Pre-Retirement Survivor Annuity shall
begin on the first day of the Plan Year in which the Participant attains age
thirty-five (35) and end on the date of the Participants death. An earlier waiver
(with spousal consent) may be made provided a written (or in such other form as
permitted by the Internal Revenue Service) explanation of the Pre-Retirement
Survivor Annuity is given to the Participant and such waiver becomes invalid at the
beginning
59
of the Plan Year in which the Participant turns age thirty-five (35). In the
event a Vested Participant separates from service prior to the beginning of the
election period, the election period shall begin on the date of such separation from
service.
(d) With regard to the election, the Administrator shall provide each
Participant within the applicable period, with respect to such Participant (and
consistent with Regulations), a written (or in such other form as permitted by the
Internal Revenue Service) explanation of the Pre-Retirement Survivor Annuity
containing comparable information to that required pursuant to Section 6.5(a)(5).
For the purposes of this paragraph, the term applicable period means, with respect
to a Participant, whichever of the following periods ends last:
(1) The period beginning with the first day of the Plan Year in which the
Participant attains age thirty-two (32) and ending with the close of the
Plan Year preceding the Plan Year in which the Participant attains age
thirty-five (35);
(2) A reasonable period after the individual becomes a Participant;
(3) A reasonable period ending after the Plan no longer fully subsidizes the
cost of the Pre-Retirement Survivor Annuity with respect to the Participant;
(4) A reasonable period ending after Code Section 401(a)(11) applies to the
Participant; or
(5) A reasonable period after separation from service in the case of a
Participant who separates before attaining age thirty-five (35). For this
purpose, the Administrator must provide the explanation beginning one (1)
year before the separation from service and ending one (1) year after such
separation. If such a Participant thereafter returns to employment with the
Employer, the applicable period for such Participant shall be redetermined.
For purposes of applying this Section 6.6(d), a reasonable period ending after
the enumerated events described in paragraphs (2), (3) and (4) is the end of the
two (2) year period beginning one (1) year prior to the date the applicable event
occurs, and ending one (1) year after that date.
(e) If the present value of the Pre-Retirement Survivor Annuity derived from
Employer and Employee contributions does not exceed $5,000 ($3,500 for Plan Years
beginning prior to August 6, 1997), then the Administrator shall direct the
immediate distribution of the present value of the Pre-Retirement Survivor Annuity
to the Participants spouse. No distribution may be made under the preceding
sentence after the Annuity Starting Date unless the spouse consents in writing (or
in such other form as permitted by the Internal Revenue Service) to such
distribution. If the value exceeds $5,000 ($3,500 for Plan Years beginning prior to
August 6, 1997), then an immediate distribution of the entire amount of the
Pre-Retirement Survivor Annuity may be made to the surviving spouse, provided such
surviving spouse consents in writing (or in such other form as
60
permitted by the Internal Revenue Service) to such distribution. Any consent
required under this paragraph must be obtained not more than ninety (90) days before
commencement of the distribution and shall be made in a manner consistent with
Section 6.5(a)(2).
(f)(1) To the extent the death benefit is not paid in the form of a
Pre-Retirement Survivor Annuity, it shall be paid to the Participants Beneficiary
by either of the following methods, as elected by the Participant (or if no election
has been made prior to the Participants death, by the Participants Beneficiary),
subject to the rules specified in Section 6.6(g):
(i) One lump-sum payment in cash.
(ii) Payment in monthly, quarterly, semi-annual, or annual cash
installments over a period to be determined by the Participant or the
Participants Beneficiary. After periodic installments commence, the
Beneficiary shall have the right to direct the Trustee to reduce the
period over which such periodic installments shall be made, and the
Trustee shall adjust the cash amount of such periodic installments
accordingly.
(2) In the event the death benefit payable pursuant to Section 6.2 is
payable in installments, then, upon the death of the Participant, the
Administrator may direct the Trustee to segregate the death benefit into a
separate account, and the Trustee shall invest such segregated account
separately, and the funds accumulated in such account shall be used for the
payment of the installments.
If death benefits in excess of the Pre-Retirement Survivor Annuity are to be
paid to the surviving spouse, such benefits may be paid pursuant to (1) and (2)
above, or used to purchase an annuity so as to increase the payments made pursuant
to the Pre-Retirement Survivor Annuity.
(g) Notwithstanding any provision in the Plan to the contrary, distributions
upon the death of a Participant shall be made in accordance with the following
requirements and shall otherwise comply with Code Section 401(a)(9) and the
Regulations thereunder. If the death benefit is paid in the form of a Pre-Retirement
Survivor Annuity, then distributions to the Participants surviving spouse must
commence on or before the later of: (1) December 31st of the calendar year
immediately following the calendar year in which the Participant died; or (2)
December 31st of the calendar year in which the Participant would have attained age
70 1/2. If it is determined, pursuant to Regulations, that the distribution of a
Participants interest has begun and the Participant dies before the entire interest
has been distributed, the remaining portion of such interest shall be distributed at
least as rapidly as under the method of distribution selected pursuant to
Section 6.5 as of the date of death. If a Participant dies before receiving any
distributions of the interest in the Plan or before distributions are deemed to have
begun pursuant to Regulations (and distributions are not to be made in the form of a
Pre-Retirement Survivor Annuity), then the death benefit shall be distributed to
61
the Participants Beneficiaries by December 31st of the calendar year in which
the fifth anniversary of the Participants date of death occurs.
However, the 5-year distribution requirement of the preceding paragraph shall
not apply to any portion of the deceased Participants interest which is payable to
or for the benefit of a designated Beneficiary. In such event, such portion may, at
the election of the Participant (or the Participants designated Beneficiary) be
distributed over the life of such designated Beneficiary (or over a period not
extending beyond the life expectancy of such designated Beneficiary) provided such
distribution begins not later than December 31st of the calendar year immediately
following the calendar year in which the Participant died. However, in the event the
Participants spouse (determined as of the date of the Participants death) is the
designated Beneficiary, the requirement that distributions commence within one year
of a Participants death shall not apply. In lieu thereof, distributions must
commence on or before the later of: (1) December 31st of the calendar year
immediately following the calendar year in which the Participant died; or
(2) December 31st of the calendar year in which the Participant would have attained
age 70 1/2. If the surviving spouse dies before distributions to such spouse begin,
then the 5-year distribution requirement of this Section shall apply as if the
spouse was the Participant.
(h) For purposes of Section 6.6(g), the election by a designated Beneficiary to
be excepted from the 5-year distribution requirement must be made no later than
December 31st of the calendar year following the calendar year of the Participants
death. Except, however, with respect to a designated Beneficiary who is the
Participants surviving spouse, the election must be made by the earlier of:
(1) December 31st of the calendar year immediately following the calendar year in
which the Participant died or, if later, December 31st of the calendar year in which
the Participant would have attained age 70 1/2; or (2) December 31st of the calendar
year which contains the fifth anniversary of the date of the Participants death. An
election by a designated Beneficiary must be in writing (or in such other form as
permitted by the Internal Revenue Service) and shall be irrevocable as of the last
day of the election period stated herein. In the absence of an election by the
Participant or a designated Beneficiary, the 5-year distribution requirement shall
apply.
(i) For purposes of this Section, the life expectancy of a Participant and a
Participants spouse (other than in the case of a life annuity) may, at the election
of the Participant or the Participants spouse, be redetermined in accordance with
Regulations. The election, once made, shall be irrevocable. If no election is made
by the time distributions must commence, then the life expectancy of the Participant
and the Participants spouse shall not be subject to recalculation. Life expectancy
and joint and last survivor expectancy shall be computed using the return multiples
in Tables V and VI of Regulation 1.72-9.
(j) For purposes of this Section, any amount paid to a child of the Participant
will be treated as if it had been paid to the surviving spouse if the amount becomes
payable to the surviving spouse when the child reaches the age of majority.
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6.7 TIME OF SEGREGATION OR DISTRIBUTION
Except as limited by Sections 6.5 and 6.6, whenever the Trustee is to make a distribution or
to commence a series of payments the distribution or series of payments may be made or begun on
such date or as soon thereafter as is practicable. However, unless a Former Participant elects in
writing to defer the receipt of benefits (such election may not result in a death benefit that is
more than incidental), the payment of benefits shall begin not later than the sixtieth (60th) day
after the close of the Plan Year in which the latest of the following events occurs: (a) the date
on which the Participant attains the earlier of age 65 or the Normal Retirement Age specified
herein; (b) the tenth (10th) anniversary of the year in which the Participant commenced
participation in the Plan; or (c) the date the Participant terminates service with the Employer.
Notwithstanding the foregoing, the failure of a Participant and, if applicable, the
Participants spouse, to consent to a distribution that is immediately distributable (within the
meaning of Section 6.5), shall be deemed to be an election to defer the commencement of payment of
any benefit sufficient to satisfy this Section.
6.8 DISTRIBUTION FOR MINOR OR INCOMPETENT BENEFICIARY
In the event a distribution is to be made to a minor or incompetent Beneficiary, then the
Administrator may direct that such distribution be paid to the legal guardian, or if none in the
case of a minor Beneficiary, to a parent of such Beneficiary or a responsible adult with whom the
Beneficiary maintains residence, or to the custodian for such Beneficiary under the Uniform Gift to
Minors Act or Gift to Minors Act, if such is permitted by the laws of the state in which said
Beneficiary resides. Such a payment to the legal guardian, custodian or parent of a minor
Beneficiary shall fully discharge the Trustee, Employer, and Plan from further liability on account
thereof.
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
In the event that all, or any portion, of the distribution payable to a Participant or
Beneficiary hereunder shall, at the later of the Participants attainment of age 62 or Normal
Retirement Age, remain unpaid solely by reason of the inability of the Administrator, after sending
a registered letter, return receipt requested, to the last known address, and after further
diligent effort, to ascertain the whereabouts of such Participant or Beneficiary, the amount so
distributable shall be treated as a Forfeiture pursuant to the Plan. Notwithstanding the foregoing,
if the value of a Participants Vested benefit derived from Employer and Employee contributions
does not exceed $5,000 ($3,500 for Plan Years beginning prior to August 6, 1997), then the amount
distributable may, in the sole discretion of the Administrator, either be treated as a Forfeiture,
or be paid directly to an individual retirement account described in Code Section 408(a) or an
individual retirement annuity described in Code Section 408(b) at the time it is determined that
the whereabouts of the Participant or the Participants Beneficiary cannot be ascertained. In the
event a Participant or Beneficiary is located subsequent to the Forfeiture, such benefit shall be
restored, first from Forfeitures, if any, and then from an additional Employer contribution if
necessary. However, regardless of the preceding, a benefit which is lost by reason of escheat under
applicable state law is not treated as a Forfeiture for purposes of this Section nor as an
impermissible forfeiture under the Code.
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6.10 PRE-RETIREMENT DISTRIBUTION
At such time as a Participant shall have attained the age of 60 years, the Administrator, at
the election of the Participant who has not severed employment with the Employer, shall direct the
Trustee to distribute all or a portion of the amount then credited to the accounts maintained on
behalf of the Participant. However, no distribution from the Participants Account shall occur
prior to 100% vesting. In the event that the Administrator makes such a distribution, the
Participant shall continue to be eligible to participate in the Plan on the same basis as any other
Employee. Any distribution made pursuant to this Section shall be made in a manner consistent with
Section 6.5, including, but not limited to, all notice and consent requirements of Code Sections
417 and 411(a)(11) and the Regulations thereunder.
Notwithstanding the above, pre-retirement distributions from a Participants Elective Account
shall not be permitted prior to the Participant attaining age 59 1/2 except as otherwise permitted
under the terms of the Plan.
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP
(a) The Administrator, at the election of the Participant, shall direct the
Trustee to distribute to any Participant in any one Plan Year up to the lesser of
100% of the Participants Elective Account and Participants Transfer/Rollover
Account valued as of the last Valuation Date or the amount necessary to satisfy the
immediate and heavy financial need of the Participant. Any distribution made
pursuant to this Section shall be deemed to be made as of the first day of the Plan
Year or, if later, the Valuation Date immediately preceding the date of
distribution, and the Participants Elective Account and Participants
Transfer/Rollover Account shall be reduced accordingly. Withdrawal under this
Section is deemed to be on account of an immediate and heavy financial need of the
Participant only if the withdrawal is for:
(1) Medical expenses described in Code Section 213(d) incurred by the
Participant, the Participants spouse, or any of the Participants
dependents (as defined in Code Section 152) or necessary for these persons
to obtain medical care as described in Code Section 213(d);
(2) The costs directly related to the purchase (excluding mortgage payments)
of a principal residence for the Participant;
(3) Payment of tuition, related educational fees, and room and board
expenses for the next twelve (12) months of post-secondary education for the
Participant and the Participants spouse, children, or dependents; or
(4) Payments necessary to prevent the eviction of the Participant from the
Participants principal residence or foreclosure on the mortgage on that
residence.
(b) No distribution shall be made pursuant to this Section unless the
Administrator, based upon the Participants representation and such other facts as
64
are known to the Administrator, determines that all of the following conditions
are satisfied:
(1) The distribution is not in excess of the amount of the immediate and
heavy financial need of the Participant. The amount of the immediate and
heavy financial need may include any amounts necessary to pay any federal,
state, or local income taxes or penalties reasonably anticipated to result
from the distribution;
(2) The Participant has obtained all distributions, other than hardship
distributions, and all nontaxable (at the time of the loan) loans currently
available under all plans maintained by the Employer;
(3) The Plan, and all other plans maintained by the Employer, provide that
the Participants elective deferrals and after-tax voluntary Employee
contributions will be suspended for at least twelve (12) months after
receipt of the hardship distribution or, the Participant, pursuant to a
legally enforceable agreement, will suspend elective deferrals and after-tax
voluntary Employee contributions to the Plan and all other plans maintained
by the Employer for at least twelve (12) months after receipt of the
hardship distribution; and
(4) The Plan, and all other plans maintained by the Employer, provide that
the Participant may not make elective deferrals for the Participants
taxable year immediately following the taxable year of the hardship
distribution in excess of the applicable limit under Code Section 402(g) for
such next taxable year less the amount of such Participants elective
deferrals for the taxable year of the hardship distribution.
(c) Notwithstanding the above, distributions from the Participants Elective
Account pursuant to this Section shall be limited solely to the Participants total
Deferred Compensation as of the date of distribution, reduced by the amount of any
previous distributions pursuant to this Section and Section 6.10.
(d) Any distribution made pursuant to this Section shall be made in a manner
which is consistent with and satisfies the provisions of Section 6.5, including, but
not limited to, all notice and consent requirements of Code Sections 417 and
411(a)(11) and the Regulations thereunder.
6.12 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION
All rights and benefits, including elections, provided to a Participant in this Plan shall be
subject to the rights afforded to any alternate payee under a qualified domestic relations
order. Furthermore, a distribution to an alternate payee shall be permitted if such distribution
is authorized by a qualified domestic relations order, even if the affected Participant has not
separated from service and has not reached the earliest retirement age under the Plan. For the
purposes of this Section, alternate payee, qualified domestic relations order and earliest
retirement age shall have the meaning set forth under Code Section 414(p).
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6.13 DIRECT ROLLOVER
(a) Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a distributees election under this Section, a distributee may
elect, at the time and in the manner prescribed by the Administrator, to have any
portion of an eligible rollover distribution that is equal to at least $500 paid
directly to an eligible retirement plan specified by the distributee in a
direct rollover.
(b) For purposes of this Section the following definitions shall apply:
(1) An eligible rollover distribution is any distribution of all or any
portion of the balance to the credit of the distributee, except that an
eligible rollover distribution does not include: any distribution that is
one of a series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of the
distributee and the distributees designated beneficiary, or for a
specified period of ten years or more; any distribution to the extent such
distribution is required under Code Section 401(a)(9); the portion of any
other distribution that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation with respect
to employer securities); any hardship distribution described in Code
Section 401(k)(2)(B)(i)(IV); and any other distribution that is reasonably
expected to total less than $200 during a year.
(2) An eligible retirement plan is an individual retirement account
described in Code Section 408(a), an individual retirement annuity described
in Code Section 408(b), an annuity plan described in Code Section 403(a), or
a qualified trust described in Code Section 401(a), that accepts the
distributees eligible rollover distribution. However, in the case of an
eligible rollover distribution to the surviving spouse, an eligible
retirement plan is an individual retirement account or individual
retirement annuity.
(3) A distributee includes an Employee or former Employee. In addition,
the Employees or former Employees surviving spouse and the Employees or
former Employees spouse or former spouse who is the alternate payee under a
qualified domestic relations order, as defined in Code Section 414(p), are
distributees with regard to the interest of the spouse or former spouse.
(4) A direct rollover is a payment by the Plan to the eligible retirement
plan specified by the distributee.
66
ARTICLE VII
AMENDMENT, TERMINATION AND MERGERS
AMENDMENT, TERMINATION AND MERGERS
7.1 AMENDMENT
(a) The Employer shall have the right at any time to amend this Plan, subject
to the limitations of this Section. However, any amendment which affects the rights,
duties or responsibilities of the Trustee or Administrator may only be made with the
Trustees or Administrators written consent. Any such amendment shall become
effective as provided therein upon its execution. The Trustee shall not be required
to execute any such amendment unless the amendment affects the duties of the Trustee
hereunder.
(b) No amendment to the Plan shall be effective if it authorizes or permits any
part of the Trust Fund (other than such part as is required to pay taxes and
administration expenses) to be used for or diverted to any purpose other than for
the exclusive benefit of the Participants or their Beneficiaries or estates; or
causes any reduction in the amount credited to the account of any Participant; or
causes or permits any portion of the Trust Fund to revert to or become property of
the Employer.
(c) Except as permitted by Regulations (including Regulation 1.411(d)-4) or
other IRS guidance, no Plan amendment or transaction having the effect of a Plan
amendment (such as a merger, plan transfer or similar transaction) shall be
effective if it eliminates or reduces any Section 411(d)(6) protected benefit or
adds or modifies conditions relating to Section 411(d)(6) protected benefits which
results in a further restriction on such benefits unless such Section 411(d)(6)
protected benefits are preserved with respect to benefits accrued as of the later
of the adoption date or effective date of the amendment. Section 411(d)(6)
protected benefits are benefits described in Code Section 411(d)(6)(A), early
retirement benefits and retirement-type subsidies, and optional forms of benefit. A
Plan amendment that eliminates or restricts the ability of a Participant to receive
payment of the Participants interest in the Plan under a particular optional form
of benefit will be permissible if the amendment satisfies the conditions in (1) and
(2) below:
(1) The amendment provides a single-sum distribution form that is otherwise
identical to the optional form of benefit eliminated or restricted. For
purposes of this condition (1), a single-sum distribution form is otherwise
identical only if it 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.
(2) The amendment is not effective unless the amendment provides that the
amendment shall not apply to any distribution with an Annuity Starting Date
earlier than the earlier of: (i) the ninetieth (90th) day after the date the
Participant receiving the distribution has been furnished a summary that
reflects the amendment and that satisfies the Act
67
requirements at 29 CFR 2520.104b-3 (relating to a summary of material
modifications) or (ii) the first day of the second Plan Year following the
Plan Year in which the amendment is adopted.
7.2 TERMINATION
(a) The Employer shall have the right at any time to terminate the Plan by
delivering to the Trustee and Administrator written notice of such termination. Upon
any full or partial termination, all amounts credited to the affected Participants
Combined Accounts shall become 100% Vested as provided in Section 6.4 and shall not
thereafter be subject to forfeiture, and all unallocated amounts, including
Forfeitures, shall be allocated to the accounts of all Participants in accordance
with the provisions hereof.
(b) Upon the full termination of the Plan, the Employer shall direct the
distribution of the assets of the Trust Fund to Participants in a manner which is
consistent with and satisfies the provisions of Section 6.5. Distributions to a
Participant shall be made in cash or through the purchase of irrevocable
nontransferable deferred commitments from an insurer. Except as permitted by
Regulations, the termination of the Plan shall not result in the reduction of
Section 411(d)(6) protected benefits in accordance with Section 7.1(c).
7.3 MERGER, CONSOLIDATION OR TRANSFER OF ASSETS
This Plan may be merged or consolidated with, or its assets and/or liabilities may be
transferred to any other plan and trust only if the benefits which would be received by a
Participant of this Plan, in the event of a termination of the Plan immediately after such
transfer, merger or consolidation, are at least equal to the benefits the Participant would have
received if the Plan had terminated immediately before the transfer, merger or consolidation, and
such transfer, merger or consolidation does not otherwise result in the elimination or reduction of
any Section 411(d)(6) protected benefits in accordance with Section 7.1(c).
7.4 LOANS TO PARTICIPANTS
No loans to Participants or Beneficiaries shall be permitted under the Plan, provided,
however, in connection with the merger of the Plan with the MSC Plan, the Trustee may accept loans
which were made to participants in the MSC Plan that were in existence prior to the merger of the
two plans (a Prior Loan) and shall permit any Participant or Beneficiary with an outstanding
Prior Loan to continue to repay such Prior Loan. Participants who continue to be employed by the
Employer or any Affiliated Employer shall continue to repay such Prior Loans through payroll
deductions. Any Participant who, in the future, ceases to be employed by the Employer or any
Affiliated Employer prior to the maturity of a Prior Loan, must continue to repay the Prior Loan
via payments to the Trustee or the Trustees designated agent until the Prior Loan is repaid in
full, provided, however, nothing contained herein shall preclude a Participant or Beneficiary from
repaying a Prior Loan in full prior to its maturity. In the event that any Participant or
Beneficiary requests a distribution of any or any portion of their account balance under the Plan,
the Trustee shall deem the unpaid balance of the Prior Loan to have been distributed to such
Participant or Beneficiary. Similarly, in the event that a Participant defaults under a Prior
Loan, the Trustee shall consider the Prior Loan to be in default and deem the
68
balance of the Prior Loan to have been distributed to such Participant or Beneficiary. No
Prior Loan may be renewed or extended under any circumstances and no future loans may be made by
the Trustee. Any Prior Loans which are accepted by the Trustee must conform with all requirements
set forth under the Code and Regulations.
7.5 OTHER INVESTMENTS OF THE TRUST FUND
The Trustee, in addition to all powers and authorities under common law, statutory authority,
including the Act, and other provisions of the Plan, shall have the following powers and
authorities:
(a) To purchase, or subscribe for, any securities or mutual funds designated,
from time to time, by the Administrator as authorized investments under the Plan;
(b) To sell, exchange, convey, transfer or otherwise dispose of any such
securities or mutual funds acquired pursuant to the foregoing paragraph or to
dispose of employer securities authorized to be held pursuant to Section 7.5 above.
No person dealing with the Trustee shall be bound to see the application of the
purchase money or to inquire into the validity, expediency, or propriety of any such
sale or other disposition, with or without advertisement;
(c) To vote upon any securities or mutual funds; to give general or special
proxies or powers of attorney with or without power of substitution; to exercise any
conversion privileges, subscription rights or other options; to consent to, or
otherwise participate in corporate reorganizations or other changes affecting
corporate securities or mutual funds; and to delegate discretionary powers, and to
pay any assessments or charges in connection therewith; and generally to exercise
any of the powers of an owner with respect to securities or mutual funds;
(d) To cause any securities or mutual funds held by the Trustee to be
registered in the Trustees own name, in the name of one or more of the Trustees
nominees, in a clearing corporation, in a depository, or in book entry form or in
bearer form, but the books and records of the Trustee shall at all times show that
all such investments are part of the Trustee Fund;
(e) To keep such portion of the Trust Fund in cash or cash balances as the
Trustee may, from time to time, deem to be in the best interest of the Plan,
without liability for interest thereon;
(f) To invest in shares of investment companies registered under the Investment Company
Act of 1940;
(g) To deposit monies in federally insured savings accounts or certificates of
deposits in banks or savings and loan associations, including the
specific authority to make deposit into any savings accounts or certificates of
deposit of the Trustee (or a financial institution related to the Trustee);
(h) To do all such acts and exercise all such rights and privileges,
69
although not specifically mentioned herein, as the Trustee may deem necessary to
carry out the purposes of the Plan.
7.6 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE
(a) Unless otherwise agreed to by both the Trustee and the Employer, the
Trustee may resign at any time by delivering to the Employer, at least 30 days
before its effective date, a written notice of resignation.
(b) Unless otherwise agreed to by both the Trustee and the Employer, the
Employer may remove a Trustee at any time by delivering to the Trustee, at least 30
days before its effective date, written notice of such Trustees removal.
(c) Upon the resignation or removal of any Trustee, a successor may be
appointed by the Employer; and such successor, upon accepting such appointment in
writing and delivering same to the Employer, shall, without further act, become
vested with all powers and responsibilities of the predecessor, as if such successor
had been originally named as a Trustee herein.
(d) Whenever any Trustee hereunder ceases to serve in that capacity, such
Trustee shall furnish to the Employer and Administrator a written statement of
account with respect to the portion of the Plan Year during which the Trustee serves
in that capacity. Any such statement of account should be rendered to the Employer
no later than the due date of the annual statement of account for the Plan Year.
ARTICLE VIII
TOP HEAVY
TOP HEAVY
8.1 TOP HEAVY PLAN REQUIREMENTS
For any Top Heavy Plan Year, the Plan shall provide the special vesting requirements of Code
Section 416(b) pursuant to Section 6.4 of the Plan and the special minimum allocation requirements
of Code Section 416(c) pursuant to Section 4.4 of the Plan.
8.2 DETERMINATION OF TOP HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any Plan Year in which, as of the
Determination Date, (1) the Present Value of Accrued Benefits of Key Employees and
(2) the sum of the Aggregate Accounts of Key Employees under this Plan and all plans
of an Aggregation Group, exceeds sixty percent (60%) of the Present Value of Accrued
Benefits and the Aggregate Accounts of all Key and Non-Key Employees under this Plan
and all plans of an Aggregation Group.
If any Participant is a Non-Key Employee for any Plan Year, but such
Participant was a Key Employee for any prior Plan Year, such Participants Present
Value of Accrued Benefit and/or Aggregate Account balance shall not be taken into
account for purposes of determining whether this Plan is a Top Heavy Plan (or
whether any Aggregation Group which includes this Plan is a Top Heavy
70
Group). In addition, if a Participant or Former Participant has not performed
any services for any Employer maintaining the Plan at any time during the five year
period ending on the Determination Date, any accrued benefit for such Participant or
Former Participant shall not be taken into account for the purposes of determining
whether this Plan is a Top Heavy Plan.
(b) Aggregate Account: A Participants Aggregate Account as of the
Determination Date is the sum of:
(1) the Participants Combined Account balance as of the most recent
valuation occurring within a twelve (12) month period ending on the
Determination Date.
(2) an adjustment for any contributions due as of the Determination Date.
Such adjustment shall be the amount of any contributions actually made after
the Valuation Date but due on or before the Determination Date, except for
the first Plan Year when such adjustment shall also reflect the amount of
any contributions made after the Determination Date that are allocated as of
a date in that first Plan Year.
(3) any Plan distributions made within the Plan Year that includes the
Determination Date or within the four (4) preceding Plan Years. However, in
the case of distributions made after the Valuation Date and prior to the
Determination Date, such distributions are not included as distributions for
top heavy purposes to the extent that such distributions are already
included in the Participants Aggregate Account balance as of the Valuation
Date. Notwithstanding anything herein to the contrary, all distributions,
including distributions under a terminated plan which if it had not been
terminated would have been required to be included in an Aggregation Group,
will be counted. Further, distributions from the Plan (including the cash
value of life insurance policies) of a Participants account balance because
of death shall be treated as a distribution for the purposes of this
paragraph.
(4) any Employee contributions, whether voluntary or mandatory. However,
amounts attributable to tax deductible qualified voluntary employee
contributions shall not be considered to be a part of the Participants
Aggregate Account balance.
(5) with respect to unrelated rollovers and plan-to-plan transfers (ones
which are both initiated by the Employee and made from a plan maintained by
one employer to a plan maintained by another employer), if this Plan
provides the rollovers or plan-to-plan transfers, it shall always consider
such rollovers or plan-to-plan transfers as a distribution for the purposes
of this Section. If this Plan is the plan accepting such rollovers or
plan-to-plan transfers, it shall not consider such rollovers or plan-to-plan
transfers as part of the Participants Aggregate Account balance.
71
(6) with respect to related rollovers and plan-to-plan transfers (ones
either not initiated by the Employee or made to a plan maintained by the
same employer), if this Plan provides the rollover or plan-to-plan transfer,
it shall not be counted as a distribution for purposes of this Section. If
this Plan is the plan accepting such rollover or plan-to-plan transfer, it
shall consider such rollover or plan-to-plan transfer as part of the
Participants Aggregate Account balance, irrespective of the date on which
such rollover or plan-to-plan transfer is accepted.
(7) For the purposes of determining whether two employers are to be treated
as the same employer in (5) and (6) above, all employers aggregated under
Code Section 414(b), (c), (m) and (o) are treated as the same employer.
(c) Aggregation Group means either a Required Aggregation Group or a
Permissive Aggregation Group as hereinafter determined.
(1) Required Aggregation Group: In determining a Required Aggregation Group
hereunder, each plan of the Employer in which a Key Employee is a
participant in the Plan Year containing the Determination Date or any of the
four preceding Plan Years, and each other plan of the Employer which enables
any plan in which a Key Employee participates to meet the requirements of
Code Sections 401(a)(4) or 410, will be required to be aggregated. Such
group shall be known as a Required Aggregation Group.
In the case of a Required Aggregation Group, each plan in the group will be
considered a Top Heavy Plan if the Required Aggregation Group is a Top Heavy
Group. No plan in the Required Aggregation Group will be considered a Top
Heavy Plan if the Required Aggregation Group is not a Top Heavy Group.
(2) Permissive Aggregation Group: The Employer may also include any other
plan not required to be included in the Required Aggregation Group, provided
the resulting group, taken as a whole, would continue to satisfy the
provisions of Code Sections 401(a)(4) and 410. Such group shall be known as
a Permissive Aggregation Group.
In the case of a Permissive Aggregation Group, only a plan that is part of
the Required Aggregation Group will be considered a Top Heavy Plan if the
Permissive Aggregation Group is a Top Heavy Group. No plan in the Permissive
Aggregation Group will be considered a Top Heavy Plan if the Permissive
Aggregation Group is not a Top Heavy Group.
(3) Only those plans of the Employer in which the Determination Dates fall
within the same calendar year shall be aggregated in order to determine
whether such plans are Top Heavy Plans.
72
(4) An Aggregation Group shall include any terminated plan of the Employer
if it was maintained within the last five (5) years ending on the
Determination Date.
(d) Determination Date means (a) the last day of the preceding Plan Year, or
(b) in the case of the first Plan Year, the last day of such Plan Year.
(e) Present Value of Accrued Benefit: In the case of a defined benefit plan,
the Present Value of Accrued Benefit for a Participant other than a Key Employee,
shall be as determined using the single accrual method used for all plans of the
Employer and Affiliated Employers, or if no such single method exists, using a
method which results in benefits accruing not more rapidly than the slowest accrual
rate permitted under Code Section 411(b)(1)(C). The determination of the Present
Value of Accrued Benefit shall 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 Section 416 and the Regulations thereunder for the first
and second plan years of a defined benefit plan.
(f) Top Heavy Group means an Aggregation Group in which, as of the
Determination Date, the sum of:
(1) the Present Value of Accrued Benefits of Key Employees under all defined
benefit plans included in the group, and
(2) the Aggregate Accounts of Key Employees under all defined contribution
plans included in the group,
exceeds sixty percent (60%) of a similar sum determined for all Participants.
ARTICLE IX
MISCELLANEOUS
MISCELLANEOUS
9.1 PARTICIPANTS RIGHTS
This Plan shall not be deemed to constitute a contract between the Employer and any
Participant or to be a consideration or an inducement for the employment of any Participant or
Employee. Nothing contained in this Plan shall be deemed to give any Participant or Employee the
right to be retained in the service of the Employer or to interfere with the right of the Employer
to discharge any Participant or Employee at any time regardless of the effect which such discharge
shall have upon the Employee as a Participant of this Plan.
9.2 ALIENATION
(a) Subject to the exceptions provided below, and as otherwise permitted by the
Code and the Act, no benefit which shall be payable out of the Trust Fund to any
person (including a Participant or the Participants Beneficiary) shall be subject
in any manner to anticipation, alienation, sale, transfer,
73
assignment, pledge, encumbrance, or charge, and any attempt to anticipate,
alienate, sell, transfer, assign, pledge, encumber, or charge the same shall be
void; and no such benefit shall in any manner be liable for, or subject to, the
debts, contracts, liabilities, engagements, or torts of any such person, nor shall
it be subject to attachment or legal process for or against such person, and the
same shall not be recognized by the Trustee, except to such extent as may be
required by law.
(b) Subsection (a) shall not apply to a qualified domestic relations order
defined in Code Section 414(p), and those other domestic relations orders permitted
to be so treated by the Administrator under the provisions of the Retirement Equity
Act of 1984. The Administrator shall establish a written procedure to determine the
qualified status of domestic relations orders and to administer distributions under
such qualified orders. Further, to the extent provided under a qualified domestic
relations order, a former spouse of a Participant shall be treated as the spouse or
surviving spouse for all purposes under the Plan.
(c) Subsection (a) shall not apply to an offset to a Participants accrued
benefit against an amount that the Participant is ordered or required to pay the
Plan with respect to a judgment, order, or decree issued, or a settlement entered
into, on or after August 5, 1997, in accordance with Code Sections 401(a)(13)(C) and
(D). In a case in which the survivor annuity requirements of Code Section 401(a)(11)
apply with respect to distributions from the Plan to the Participant, if the
Participant has a spouse at the time at which the offset is to be made:
(1) either such spouse has consented in writing to such offset and such
consent is witnessed by a notary public or representative of the Plan (or it
is established to the satisfaction of a Plan representative that such
consent may not be obtained by reason of circumstances described in Code
Section 417(a)(2)(B)), or an election to waive the right of the spouse to
either a qualified joint and survivor annuity or a qualified pre-retirement
survivor annuity is in effect in accordance with the requirements of Code
Section 417(a),
(2) such spouse is ordered or required in such judgment, order, decree or
settlement to pay an amount to the Plan in connection with a violation of
fiduciary duties, or
(3) in such judgment, order, decree or settlement, such spouse retains the
right to receive the survivor annuity under a qualified joint and survivor
annuity provided pursuant to Code Section 401(a)(11)(A)(i) and under a
qualified pre-retirement survivor annuity provided pursuant to Code
Section 401(a)(11)(A)(ii).
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9.3 CONSTRUCTION OF PLAN
This Plan shall be construed and enforced according to the Code, the Act and the laws of the
State of Arizona, other than its laws respecting choice of law, to the extent not pre-empted by the
Act.
9.4 GENDER AND NUMBER
Wherever any words are used herein in the masculine, feminine or neuter gender, they shall be
construed as though they were also used in another gender in all cases where they would so apply,
and whenever any words are used herein in the singular or plural form, they shall be construed as
though they were also used in the other form in all cases where they would so apply.
9.5 LEGAL ACTION
In the event any claim, suit, or proceeding is brought regarding the Trust and/or Plan
established hereunder to which the Trustee, the Employer or the Administrator may be a party, and
such claim, suit, or proceeding is resolved in favor of the Trustee, the Employer or the
Administrator, they shall be entitled to be reimbursed from the Trust Fund for any and all costs,
attorneys fees, and other expenses pertaining thereto incurred by them for which they shall have
become liable.
9.6 PROHIBITION AGAINST DIVERSION OF FUNDS
(a) Except as provided below and otherwise specifically permitted by law, it
shall be impossible by operation of the Plan or of the Trust, by termination of
either, by power of revocation or amendment, by the happening of any contingency, by
collateral arrangement or by any other means, for any part of the corpus or income
of any Trust Fund maintained pursuant to the Plan or any funds contributed thereto
to be used for, or diverted to, purposes other than the exclusive benefit of
Participants, Former Participants, or their Beneficiaries.
(b) In the event the Employer shall make an excessive contribution under a
mistake of fact pursuant to Act Section 403(c)(2)(A), the Employer may demand
repayment of such excessive contribution at any time within one (1) year following
the time of payment and the Trustees shall return such amount to the Employer within
the one (1) year period. Earnings of the Plan attributable to the contributions may
not be returned to the Employer but any losses attributable thereto must reduce the
amount so returned.
(c) Except for Sections 3.5, 3.6, and 4.1(e), any contribution by the Employer
to the Trust Fund is conditioned upon the deductibility of the contribution by the
Employer under the Code and, to the extent any such deduction is disallowed, the
Employer may, within one (1) year following the final determination of the
disallowance, whether by agreement with the Internal Revenue Service or by final
decision of a competent jurisdiction, demand repayment of such disallowed
contribution and the Trustee shall return such contribution within one (1) year
following the disallowance. Earnings of the Plan
75
attributable to the contribution may not be returned to the Employer, but any
losses attributable thereto must reduce the amount so returned.
9.7 EMPLOYERS AND TRUSTEES PROTECTIVE CLAUSE
The Employer, Administrator and Trustee, and their successors, shall not be responsible for
the validity of any Contract issued hereunder or for the failure on the part of the insurer to make
payments provided by any such Contract, or for the action of any person which may delay payment or
render a Contract null and void or unenforceable in whole or in part.
9.8 INSURERS PROTECTIVE CLAUSE
Except as otherwise agreed upon in writing between the Employer and the insurer, an insurer
which issues any Contracts hereunder shall not have any responsibility for the validity of this
Plan or for the tax or legal aspects of this Plan. The insurer shall be protected and held harmless
in acting in accordance with any written direction of the Trustee, and shall have no duty to see to
the application of any funds paid to the Trustee, nor be required to question any actions directed
by the Trustee. Regardless of any provision of this Plan, the insurer shall not be required to take
or permit any action or allow any benefit or privilege contrary to the terms of any Contract which
it issues hereunder, or the rules of the insurer.
9.9 RECEIPT AND RELEASE FOR PAYMENTS
Any payment to any Participant, the Participants legal representative, Beneficiary, or to any
guardian or committee appointed for such Participant or Beneficiary in accordance with the
provisions of the Plan, shall, to the extent thereof, be in full satisfaction of all claims
hereunder against the Trustee and the Employer, 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 shall be determined by the Trustee or
Employer.
9.10 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of the Plan is permitted or required to do or perform
any act or matter or thing, it shall be done and performed by a person duly authorized by its
legally constituted authority.
9.11 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
The named Fiduciaries of this Plan are (1) the Employer, (2) the Administrator, (3) the
Trustee and (4) any Investment Manager appointed hereunder. The named Fiduciaries shall have only
those specific powers, duties, responsibilities, and obligations as are specifically given them
under the Plan including, but not limited to, any agreement allocating or delegating their
responsibilities, the terms of which are incorporated herein by reference. In general, the Employer
shall have the sole responsibility for making the contributions provided for under Section 4.1; and
shall have the authority to appoint and remove the Trustee and the Administrator; to formulate the
Plans funding policy and method; and to amend or terminate, in whole or in part, the Plan. The
Administrator shall have the sole responsibility for the administration of the Plan, including, but
not limited to, the items specified in Article II of the
76
Plan, as the same may be allocated or delegated thereunder. The Administrator shall act as the
named Fiduciary responsible for communicating with the Participant according to the Participant
Direction Procedures. The Trustee shall have the sole responsibility of management of the assets
held under the Trust, except to the extent directed pursuant to Article II or with respect to those
assets, the management of which has been assigned to an Investment Manager, who shall be solely
responsible for the management of the assets assigned to it, all as specifically provided in the
Plan. Each named Fiduciary warrants that any directions given, information furnished, or action
taken by it shall be in accordance with the provisions of the Plan, authorizing or providing for
such direction, information or action. Furthermore, each named Fiduciary may rely upon any such
direction, information or action of another named Fiduciary as being proper under the Plan, and is
not required under the Plan to inquire into the propriety of any such direction, information or
action. It is intended under the Plan that each named Fiduciary shall be responsible for the proper
exercise of its own powers, duties, responsibilities and obligations under the Plan as specified or
allocated herein. No named Fiduciary shall guarantee the Trust Fund in any manner against
investment loss or depreciation in asset value. Any person or group may serve in more than one
Fiduciary capacity.
9.12 HEADINGS
The headings and subheadings of this Plan have been inserted for convenience of reference and
are to be ignored in any construction of the provisions hereof.
9.13 APPROVAL BY INTERNAL REVENUE SERVICE
Notwithstanding anything herein to the contrary, if, pursuant to an application for
qualification filed by or on behalf of the Plan by the time prescribed by law for filing the
Employers return for the taxable year in which the Plan is adopted, or such later date that the
Secretary of the Treasury may prescribe, the Commissioner of Internal Revenue Service or the
Commissioners delegate should determine that the Plan does not initially qualify as a tax-exempt
plan under Code Sections 401 and 501, and such determination is not contested, or if contested, is
finally upheld, then if the Plan is a new plan, it shall be void ab initio and all amounts
contributed to the Plan by the Employer, less expenses paid, shall be returned within one (1) year
and the Plan shall terminate, and the Trustee shall be discharged from all further obligations. If
the disqualification relates to an amended plan, then the Plan shall operate as if it had not been
amended.
9.14 UNIFORMITY
All provisions of this Plan shall be interpreted and applied in a uniform, nondiscriminatory
manner. In the event of any conflict between the terms of this Plan and any Contract purchased
hereunder, the Plan provisions shall control.
ARTICLE X
PARTICIPATING EMPLOYERS
PARTICIPATING EMPLOYERS
10.1 ADOPTION BY OTHER EMPLOYERS
Notwithstanding anything herein to the contrary, any other corporation or entity which is an
Affiliated Employer or otherwise is a subsidiary or an affiliate of the Employer or
77
Swift may adopt this Plan and all of the provisions hereof, and participate herein and be
known as a Participating Employer, by a properly executed document evidencing said intent and will
of such Participating Employer.
10.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS
(a) Each such Participating Employer shall be required to use the same Trustee
as provided in this Plan.
(b) The Trustee may, but shall not be required to, commingle, hold and invest
as one Trust Fund all contributions made by Participating Employers, as well as all
increments thereof.
(c) Any expenses of the Plan which are to be paid by the Employer or borne by
the Trust Fund shall be paid by each Participating Employer in the same proportion
that the total amount standing to the credit of all Participants employed by such
Employer bears to the total standing to the credit of all Participants.
10.3 DESIGNATION OF AGENT
Each Participating Employer shall be deemed to be a party to this Plan; provided, however,
that with respect to all of its relations with the Trustee and Administrator for the purpose of
this Plan, each Participating Employer shall be deemed to have designated irrevocably the Employer
as its agent. Unless the context of the Plan clearly indicates the contrary, the word Employer
shall be deemed to include each Participating Employer as related to its adoption of the Plan.
10.4 EMPLOYEE TRANSFERS
In the event an Employee is transferred between Participating Employers, accumulated service
and eligibility shall be carried with the Employee involved. No such transfer shall effect a
termination of employment hereunder, and the Participating Employer to which the Employee is
transferred shall thereupon become obligated hereunder with respect to such Employee in the same
manner as was the Participating Employer from whom the Employee was transferred.
10.5 PARTICIPATING EMPLOYER CONTRIBUTION AND FORFEITURES
Any contribution or Forfeiture subject to allocation during each Plan Year shall be allocated
only among those Participants of the Employer or Participating Employers making the contribution or
by which the forfeiting Participant was employed. However, if the contribution is made, or the
forfeiting Participant was employed, by an Affiliated Employer, in which event such contribution or
Forfeiture shall be allocated among all Participants of all Participating Employers who are
Affiliated Employers in accordance with the provisions of this Plan. On the basis of the
information furnished by the Administrator, the Trustee may keep separate books and records
concerning the affairs of each Participating Employer hereunder and as to the accounts and credits
of the Employees of each Participating Employer. The Trustee may, but need not, register Contracts
so as to evidence that a particular Participating Employer is the interested Employer hereunder,
but in the event of an Employee transfer from one Participating
78
Employer to another, the employing Participating Employer shall immediately notify the Trustee
thereof.
10.6 AMENDMENT
Amendment of this Plan by the Employer at any time when there shall be a Participating
Employer hereunder shall only be by the written action of each and every Participating Employer.
10.7 DISCONTINUANCE OF PARTICIPATION
Any Participating Employer shall be permitted to discontinue or revoke its participation in
the Plan at any time. At the time of any such discontinuance or revocation, satisfactory evidence
thereof and of any applicable conditions imposed shall be delivered to the Trustee. The Trustee
shall thereafter transfer, deliver and assign Contracts and other Trust Fund assets allocable to
the Participants of such Participating Employer to such new trustee as shall have been designated
by such Participating Employer, in the event that it has established a separate qualified
retirement plan for its employees provided, however, that no such transfer shall be made if the
result is the elimination or reduction of any Section 411(d)(6) protected benefits as described
in Section 7.1(c). If no successor is designated, the Trustee shall retain such assets for the
Employees of said Participating Employer pursuant to the provisions of the Trust. In no such event
shall any part of the corpus or income of the Trust Fund as it relates to such Participating
Employer be used for or diverted for purposes other than for the exclusive benefit of the Employees
of such Participating Employer.
10.8 ADMINISTRATORS AUTHORITY
The Administrator shall have authority to make any and all necessary rules or regulations,
binding upon all Participating Employers and all Participants, to effectuate the purpose of this
Article.
IN WITNESS WHEREOF, this Plan has been executed the day and year first above written.
EMPLOYER: SWIFT TRANSPORTATION CO., INC. |
||||
By | /s/ Jerry Moyes | |||
Jerry Moyes, President | ||||
79
SWIFT TRANSPORTATION CO., INC. RETIREMENT PLAN
FIRST AMENDMENT
TO COMPLY WITH
EGTRRA AND REVENUE PROCEDURE 2002-29
FIRST AMENDMENT
TO COMPLY WITH
EGTRRA AND REVENUE PROCEDURE 2002-29
THIS
AMENDMENT, hereby adopted this
6th day of April, 2007,
by Transportation Co., Inc., an Arizona corporation (herein referred to as the Employer).
ARTICLE I
PREAMBLE
PREAMBLE
1.1 Adoption and effective date of amendment. This amendment of the Plan is adopted to
reflect certain provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001
(EGTRRA) and the model amendment of Revenue Procedure 2002-29. This amendment is
intended as good faith compliance with the requirements of EGTRRA and the model amendment
of Revenue Procedure 2002-29 and is to be construed in accordance with EGTRRA and the
model amendment of Revenue Procedure 2002-29 and guidance issued thereunder. Except as
otherwise provided, this amendment shall be effective as of the first day of the first Plan Year
beginning after December 31, 2001.
1.2 Supersession of inconsistent provisions. This amendment shall supersede the provisions
of the Plan to the extent those provisions are inconsistent with the provisions of this amendment.
ARTICLE II
LIMITATIONS ON CONTRIBUTIONS
LIMITATIONS ON CONTRIBUTIONS
2.1 Effective date. This Article shall be effective for limitation years beginning after
December 31, 2001.
2.2
Maximum annual addition. Except to the extent permitted under
Article IX of this
amendment and Code Section 414(v), the annual addition that may be contributed or allocated
to a Participants account under the Plan for any limitation year shall not exceed the lesser of:
(a) $40,000, as adjusted for increases in the cost-of-living under Code
Section 415(d), or
(b) one-hundred percent (100%) of the Participants 415 Compensation for
the limitation year.
The 415 Compensation limit referred to in (b) shall not apply to any contribution for
medical benefits after separation from service (within the meaning of Code Section 401(h) or Code
Section 419A(f)(2)) which is otherwise treated as an annual addition.
ARTICLE III
INCREASE IN COMPENSATION LIMIT
INCREASE IN COMPENSATION LIMIT
The annual Compensation of each Participant taken into account in determining allocations for
any Plan Year beginning after December 31, 2001, shall not exceed $200,000, as adjusted for
cost-of-living increases in accordance with Code Section 401(a)(17)(B).
ARTICLE
IV
MODIFICATION OF TOP-HEAVY RULES
MODIFICATION OF TOP-HEAVY RULES
4.1 Effective date. This Article shall apply for purposes of determining whether the Plan is a
Top Heavy plan under Code Section 416(g) for Plan Years beginning after December 31, 2001,
and whether the Plan satisfies the minimum benefits requirements of Code Section 416(c) for
such years. This Article amends Article VIII of the Plan.
4.2 Determination of top-heavy status.
(a) Key employee. Key employee means any Employee or former Employee
(including any deceased Employee) who at any time during the Plan Year that includes
the determination date was an officer of the Employer having 415 Compensation
greater than $130,000 (as adjusted under Code Section 416(i)(l) for Plan Years
beginning after December 31, 2002), a 5-percent owner of the Employer, or a 1-percent
owner of the Employer having 415 Compensation of more than $150,000. The
determination of who is a key employee will be made in accordance with Code
Section 416(i)(l) and the applicable regulations and other guidance of general
applicability issued thereunder.
(b) Determination of present values and amounts. This section (b) shall apply
for purposes of determining the present values of accrued benefits and the amounts of
account balances of Employees as of the determination date.
(1) Distributions during year ending on the determination date. The present
values of accrued benefits and the amounts of account balances of an Employee
as of the determination date shall be increased by the distributions made with
respect to the Employee under the Plan and any plan aggregated with the Plan
under Code Section 416(g)(2) during the 1-year period ending on the
determination date. The preceding sentence shall also apply to distributions under
a terminated plan which, had it not been terminated, would have been aggregated
with the Plan under Code Section 416(g)(2)(A)(i). In the case of a distribution
made for a reason other than separation from service, death, or disability, this
provision shall be applied by substituting 5-year period for 1-year period.
(2) Employees not performing services during year ending on the
determination date. The accrued benefits and accounts of any individual who has
not performed services for the Employer during the 1-year period ending on the
determination date shall not be taken into account.
2
4.3 Minimum benefits. Employer matching contributions shall be taken into account
for purposes of satisfying the minimum contribution requirements of Code Section 416(c)(2) and the
Plan. The preceding sentence shall apply with respect to matching contributions under the Plan or,
if the Plan provides that the minimum contribution requirement shall be met in another plan, such
other plan. Employer matching contributions that are used to satisfy the minimum contribution
requirements shall be treated as matching contributions for purposes of the actual contribution
percentage test and other requirements of Code Section 401(m).
ARTICLE V
DIRECT ROLLOVERS OF PLAN DISTRIBUTIONS
DIRECT ROLLOVERS OF PLAN DISTRIBUTIONS
5.1 Effective date. This Article shall apply to distributions made after December 31, 2001.
5.2 Modification of definition of eligible retirement plan. For purposes of the direct rollover
provisions in Section 6.13 p.64 of the Plan, an eligible retirement plan shall also mean an annuity
contract described in Code Section 403(b) and an eligible plan under Code Section 457(b) which
is maintained by a state, political subdivision of a state, or any agency or instrumentality of a
state or political subdivision of a state and which agrees to separately account for amounts
transferred into such plan from this Plan. The definition of eligible retirement plan shall also
apply in the case of a distribution to a surviving spouse, or to a spouse or former spouse who is
the alternate payee under a qualified domestic relation order, as defined in Code Section 414(p).
5.3 Modification of definition of eligible rollover distribution to exclude hardship
distributions. For purposes of the direct rollover provisions in Section 6.13 p.64 of the Plan, any
amount that is distributed on account of hardship shall not be an eligible rollover distribution
and the distributee may not elect to have any portion of such a distribution paid directly to an
eligible retirement plan.
ARTICLE VI
ROLLOVERS FROM OTHER PLANS
ROLLOVERS FROM OTHER PLANS
The Administrator, operationally and on a nondiscriminatory basis, may limit the source
of rollover contributions that may be accepted by this Plan.
ARTICLE VII
ROLLOVERS DISREGARDED IN INVOLUNTARY CASH-OUTS
ROLLOVERS DISREGARDED IN INVOLUNTARY CASH-OUTS
7.1 Applicability and effective date. This Article applies to rollover contributions and
involuntary cash-outs, and shall be effective with respect to distributions made on and after
January 1, 2007 with respect to Participants who separate from service on or after January 1,
2007.
7.2 Rollovers disregarded in determining value of account balance for involuntary
distributions. For purposes of the Sections of the Plan that provide for the involuntary
distribution of Vested accrued benefits of $5,000 or less, the value of a Participants
3
nonforfeitable account balance shall be determined without regard to that portion of the
account balance that is attributable to rollover contributions (and earnings allocable thereto)
within the meaning of Code Sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and 457(e)(16).
ARTICLE VIII
REPEAL OF MULTIPLE USE TEST
REPEAL OF MULTIPLE USE TEST
The multiple use test described in Treasury Regulation Section 1.401(m)-2 and
Section 4.7(a)(2) p.35 of the Plan shall not apply for Plan Years beginning after
December 31, 2001.
ARTICLE IX
CATCH-UP CONTRIBUTIONS
CATCH-UP CONTRIBUTIONS
9.1 Effective date. This Article shall apply to catch-up contributions made on and after
January 1, 2002.
9.2 Applicability. All Employees who are eligible to make salary reductions under this Plan
and who are projected to attain age 50 before the end of a calendar year shall be eligible to make
catch-up contributions as of the January 1st of that calendar year in accordance with, and subject
to the limitations of, Code Section 414(v). Such catch-up contributions shall not be taken into
account for purposes of the provisions of the Plan implementing the required limitations of Code
Sections 402(g) and 415. The Plan shall not be treated as failing to satisfy the provisions of the
Plan implementing the requirements of Code Section 401(k)(3),
401(k)(11), 401(k)(12), 410(b),
or 416, as applicable, by reason of the making of such catch-up contributions.
ARTICLE X
SUSPENSION PERIOD FOLLOWING HARDSHIP DISTRIBUTION
SUSPENSION PERIOD FOLLOWING HARDSHIP DISTRIBUTION
A Participant who, after December 31, 2001, receives a hardship distribution pursuant to
Regulation 1.401(k)-l(d)(2)(iv) of elective deferrals, shall be prohibited from making elective
deferrals and after-tax Employee contributions under this Plan and all other plans maintained by
the Employer for six (6) months after receipt of the hardship distribution. A Participant who
receives such a hardship distribution in calendar year 2001 shall be prohibited from making
elective deferrals and after-tax Employee contributions under this Plan and all other plans
maintained by the Employer for the period specified in the provisions of the Plan relating to
suspension of elective deferrals and after-tax Employee contributions that were in effect prior to
this amendment.
4
ARTICLE XI
MODEL AMENDMENT UNDER REVENUE PROCEDURE 2002-29
MINIMUM DISTRIBUTION REQUIREMENTS
MODEL AMENDMENT UNDER REVENUE PROCEDURE 2002-29
MINIMUM DISTRIBUTION REQUIREMENTS
11.1 General Rules.
(a) Effective Date. The provisions of this Article will apply for purposes of
determining required minimum distributions for calendar years beginning with the 2003
calendar year, as well as required minimum distributions for the 2002 distribution
calendar year that are made on or after December 31, 2002.
(b) Coordination with Minimum Distribution Requirements Previously in
Effect. If the total amount of 2002 required minimum distributions under the Plan made
to the distributee prior to the effective date of this Article equals or exceeds the
required
minimum distributions determined under this Article, 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 Article is less than the amount determined under
this Article, 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 Article.
(c) Precedence. The requirements of this Article will take precedence over
any inconsistent provisions of the Plan.
(d) Requirements of Treasury Regulations Incorporated. All distributions
required under this Article will be determined and made in accordance with the
Treasury
regulations under Code Section 401(a)(9).
11.2 Time and Manner of Distribution.
(a) Required Beginning Date. The Participants entire interest will be
distributed, or begin to be distributed, to the Participant no later than the
Participants
required beginning date.
(b) Death of Participant Before Distributions Begin. If the Participant dies
before distributions begin, the Participants entire interest will be distributed, or
begin to
be distributed, no later than as follows:
(1) If the Participants surviving spouse is the Participants sole
designated Beneficiary, then, except as provided in Section 11.2(b)(3),
distributions to the surviving spouse will begin by December 31st of the calendar
year immediately following the calendar year in which the Participant died, or by
December 31st of the calendar year in which the Participant would have attained age
70 1/2, if later.
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(2) If the Participants surviving spouse is not the Participants sole designated
Beneficiary, then, except as provided in
Section 11.2(b)(3), distributions to the
designated Beneficiary will begin by December 31st of the calendar year
immediately following the calendar year in which the Participant died.
(3) Participants or Beneficiaries may elect on an individual basis whether the
5-year rule or the life expectancy rule in Sections 11.2(b) and 11.4(b) applies to
distributions after the death of a Participant who has a designated Beneficiary.
The election must be made no later than the earlier of September 30th of the
calendar year in which distribution would be required to begin under
Section 11.2(b), or by September 30th of the calendar year which contains the fifth
anniversary of the Participants (or, if applicable, surviving spouses) death. If neither
the Participant nor Beneficiary makes an election under this paragraph, distributions will
be made in accordance with Sections 11.2(b) and 11.4(b).
(4) 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.
(5) If there is no designated Beneficiary as of September 30th of the year
following the year of the Participants death, the Participants entire interest will
be distributed by December 31st of the calendar year containing the fifth
anniversary of the Participants death.
(6) If the Participants surviving spouse is the Participants sole designated
Beneficiary and the surviving spouse dies after the Participant but before
distributions to the surviving spouse begin, this Section 11.2(b), other than
Section 11.2(b)(l), will apply as if the surviving spouse were the Participant.
For purposes of this Section 11.2(b) and Section 11.4, unless Section 11.2(b)(6) applies,
distributions are considered to begin on the Participants required beginning date. If Section
11.2(b)(6) applies, distributions are considered to begin on the date distributions are required to
begin to the surviving spouse under Section 11.2(b)(l). If distributions under an annuity purchased
from an insurance company irrevocably commence to the Participant before the Participants required
beginning date (or to the Participants surviving spouse before the date distributions are required
to begin to the surviving spouse under Section 11.2(b)(l)), the date distributions are considered
to begin is the date distributions actually commence.
(c) Form of Distribution. Unless the Participants interest is distributed in the form of an
annuity purchased from an insurance company or in a single sum on or before the required beginning
date, as of the first distribution calendar year distributions will be made in accordance with
Sections 11.3 and 11.4 of this Article. If the Participants
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interest is distributed in the form of an annuity purchased from an insurance
company, distributions thereunder will be made in accordance with the requirements of
Code Section 401(a)(9) and the Treasury regulations.
11.3 Required Minimum Distributions During Participants Lifetime.
(a) Amount of Required Minimum Distribution For Each Distribution Calendar
Year. During the Participants lifetime, the minimum amount that will be distributed
for each distribution calendar year is the lesser of:
(1) the quotient obtained by dividing the Participants account balance by the
distribution period in the Uniform Lifetime Table set forth in
Section 1.401(a)(9)-9 of the Treasury regulations, using the Participants age as of
the Participants birthday in the distribution calendar year; or
(2) if the Participants sole designated Beneficiary for the distribution calendar
year is the Participants spouse, the quotient obtained by dividing the
Participants
account balance by the number in the Joint and Last Survivor Table set forth in
Section 1.401(a)(9)-9 of the Treasury regulations, using the Participants and
spouses attained ages as of the Participants and spouses birthdays in the
distribution calendar year.
(b) Lifetime Required Minimum Distributions Continue Through Year of
Participants Death. Required minimum distributions will be determined under this Section
11.3 beginning with the first distribution calendar year and up to and including the
distribution calendar year that includes the Participants date of death.
11.4 Required Minimum Distributions After Participants Death.
(a) Death On or After Date Distributions Begin.
(1) Participant Survived by Designated Beneficiary. If the Participant dies on
or after the date distributions begin and there is a designated Beneficiary, the
minimum amount that will be distributed for each distribution calendar year after
the year of the Participants death is the quotient obtained by dividing the
Participants account balance by the longer of the remaining life expectancy of the
Participant or the remaining life expectancy of the Participants designated
Beneficiary, determined as follows:
(i) The Participants remaining life expectancy is calculated using
the age of the Participant in the year of death, reduced by one for each
subsequent year.
(ii) If the Participants surviving spouse is the Participants sole
designated Beneficiary, the remaining life expectancy of the surviving
spouse is calculated for each distribution calendar year after the year of
the
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Participants death using the surviving spouses age as of the spouses birthday in
that year. For distribution calendar years after the year of the surviving spouses death,
the remaining life expectancy of the surviving spouse is calculated using the age of the
surviving spouse as of the spouses birthday in the calendar year of the spouses death,
reduced by one for each subsequent calendar year.
(iii) If the Participants surviving spouse is not the Participants sole
designated Beneficiary, the designated Beneficiarys remaining life expectancy is
calculated using the age of the beneficiary in the year following the year of the
Participants death, reduced by one for each subsequent year.
(2) No Designated Beneficiary. If the Participant dies on or after the date distributions
begin and there is no designated Beneficiary as of September 30th of the year after the year of the
Participants death, the minimum amount that will be distributed for each distribution calendar
year after the year of the Participants death is the quotient obtained by dividing the
Participants account balance by the Participants remaining life expectancy calculated using the
age of the Participant in the year of death, reduced by one for each subsequent year.
(b) Death Before Date Distributions Begin.
(1) Participant Survived by Designated Beneficiary. Except as provided in
Section 11.4(b)(2), if the Participant dies before the date distributions begin and
there is a designated Beneficiary, the minimum amount that will be distributed for
each distribution calendar year after the year of the Participants death is the
quotient obtained by dividing the Participants account balance by the remaining
life expectancy of the Participants designated Beneficiary, determined as
provided in Section 11.4(a).
(2) Participants or Beneficiaries may elect on an individual basis whether the
5-year rule or the life expectancy rule in Sections 11.2(b) and 11.4(b) applies to
distributions after the death of a Participant who has a designated Beneficiary.
The election must be made no later than the earlier of September 30th of the
calendar year in which distribution would be required to begin under
Section 11.2(b), or by September 30th of the calendar year which contains the fifth anniversary of
the Participants (or, if applicable, surviving spouses) death. If neither the Participant nor
Beneficiary makes an election under this paragraph, distributions will be made in accordance with
Sections 11.2(b) and 11.4(b).
(3) No Designated Beneficiary. If the Participant dies before the date
distributions begin and there is no designated Beneficiary as of September 30th of
the year following the year of the Participants death, distribution of the
Participants entire interest will be completed by December 31st of the calendar
year containing the fifth anniversary of the Participants death.
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(4) Death of Surviving Spouse Before Distributions to Surviving Spouse
Are Required to Begin. If the Participant dies before the date distributions begin,
the Participants surviving spouse is the Participants sole designated Beneficiary,
and the surviving spouse dies before distributions are required to begin to the
surviving spouse under Section 11.2(b)(l), this Section 11.4(b) will apply as if the
surviving spouse were the Participant.
11.5 Definitions.
(a) Designated Beneficiary. The individual who is designated as the
Beneficiary under Section 1.7 p.2 of the Plan and is the designated Beneficiary under
Code Section 401(a)(9) and section 1.401(a)(9)-l, Q&A-4, of the Treasury regulations.
(b) Distribution calendar year. A calendar year for which a minimum
distribution is required. For distributions beginning before the Participants death,
the first
distribution calendar year is the calendar year immediately preceding the calendar year
which contains the Participants required beginning date. For distributions beginning
after
the Participants death, the first distribution calendar year is the calendar year in
which
distributions are required to begin under Section 11.2(b). The required minimum
distribution for the Participants first distribution calendar year will be made on or
before
the Participants 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 Participants required beginning date occurs,
will
be made on or before December 31st of that distribution calendar year.
(c) Life expectancy. Life expectancy as computed by use of the Single Life
Table in section 1.401(a)(9)-9 of the Treasury regulations.
(d) Participants account balance. The account balance as of the last valuation
date in the calendar year immediately preceding the distribution calendar year
(valuation
calendar year) increased by the amount of any contributions made and allocated or
forfeitures allocated to the account balance as of dates in the valuation calendar
year after
the valuation date and decreased by distributions made in the valuation calendar year
after the valuation date. The account balance for the valuation calendar year includes
any
amounts rolled over or transferred to the plan either in the valuation calendar year
or in
the distribution calendar year if distributed or transferred in the valuation calendar
year.
(e) Required beginning date. The date specified in Sections 6.5(e) p.56 and
6.6(g)p.59of the Plan.
ARTICLE XII
MANDATORY DISTRIBUTIONS
MANDATORY DISTRIBUTIONS
12.1 Effective date. This Article shall be effective with respect to distributions made on and
after March 28, 2005.
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12.2 Applicability. The provisions of the Plan that provide for mandatory distribution of
the Vested accrued benefit of a Participant without the Participants consent are hereby modified
to provide that, 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 (in accordance with
the direct rollover provisions of the Plan) or to receive the distribution directly, then the
Administrator shall pay the distribution in a direct rollover to an individual retirement plan
designated by the Administrator. The provisions of this Article do not affect the other provisions
of the Plan relating to the form or timing of a distribution nor the consent rules that are
applicable with respect to individuals other than Participants.
IN
WITNESS WHEREOF, this Amendment has been executed this 6th day of April, 2007.
EMPLOYER: SWIFT TRANSPORTATION CO., INC. |
||||
By | /s/ Jerry Moyes | |||
Jerry Moyes, President | ||||
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