Attached files
Innovative
Logistics Techniques, Inc. 401(k) Plan and Trust
Summary
Plan Description
TABLE OF
CONTENTS
INTRODUCTION
TO YOUR PLAN
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ARTICLE
I
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PARTICIPATION
IN THE PLAN
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Am
I eligible to participate in the Plan?
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1
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When
am I eligible to participate in the Plan?
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2
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When
is my entry date?
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2
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What
happens if I'm a participant, terminate employment, and then I'm
rehired?
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2
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ARTICLE
II
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CONTRIBUTIONS
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What
kind of plan is this?
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2
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Do
I have to contribute money to the Plan in order to
participate?
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3
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How
much may I contribute to the Plan?
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3
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How
often can I modify the amount I contribute?
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4
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Will
the Employer contribute to the Plan?
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4
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What
is the Employer matching contribution?
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4
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What
is the Employer profit sharing contribution?
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5
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How
will the Employer profit sharing contribution be allocated to my
account?
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5
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What
is the QNEC and how is it allocated?
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5
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What
compensation is used to determine my Plan benefits?
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6
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Is
there a limit on the amount of compensation that can be
considered?
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6
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Are
there limits on how much can be contributed to my account each
year?
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6
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May
I roll over payments from other retirement plans or lRAs?
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6
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How
is the money in the Plan invested?
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7
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ARTICLE
III
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RETIREMENT
BENEFITS
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What
benefits will I receive at normal retirement?
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7
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What
happens if I leave the Employer's workforce before I
retire?
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8
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What
is my vested interest in my account?
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8
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ARTICLE
IV
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DISABILITY
BENEFITS
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How
is disability defined?
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8
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What
happens if I become disabled?
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8
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ARTICLE
V
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FORM
OF BENEFIT PAYMENT
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How
will my benefits be paid?
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9
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May
I delay the receipt of benefits?
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9
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ARTICLE
VI
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DEATH
BENEFITS
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What
happens if I die while working for the Employer?
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9
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Who
is the beneficiary of my death benefit?
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9
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How
will the death benefit be paid to my beneficiary?
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10
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When
must payments be made to my beneficiary?
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10
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What
happens if I'm a participant, terminate employment, and die before
receiving all my
benefits?
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11
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ARTICLE
VII
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IN-SERVICE
DISTRIBUTIONS
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Can
I withdraw money from my account while working?
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11
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Can
I withdraw money from my account in the event of financial
hardship?
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12
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ARTICLE
VIII
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TAX
TREATMENT OF DISTRIBUTIONS
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What
are my tax consequences when I receive a distribution from the
Plan?
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13
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Can
I reduce or defer tax on my distribution?
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13
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ARTICLE
IX
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HOURS
OF SERVICE
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What
is an Hour of Service?
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14
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How
are Hours of Service credited?
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14
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ARTICLE
X
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LOANS
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May
I borrow money from the Plan?
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14
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ARTICLE
XI
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YOUR
PLAN'S TOP-HEAVY RULES
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What
is a top-heavy plan?
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14
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What
happens if the Plan becomes top-heavy?
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15
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ARTICLE
XII
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PROTECTED
BENEFITS AND CLAIMS PROCEDURES
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Is
my benefit protected?
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15
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Are
there any exceptions to the general rule?
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15
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Can
the Plan be amended?
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15
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What
happens if the Plan is discontinued or terminated?
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16
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How
do I submit a claim for Plan benefits?
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16
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What
if my benefits are denied?
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16
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What
is the Claims Review Procedure?
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17
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What
are my rights as a Plan participant?
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20
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What
can I do if I have questions or my rights are violated?
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21
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ARTICLE
XIII
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GENERAL
INFORMATION ABOUT THE PLAN
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General
Plan Information
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21
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Employer
Information
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22
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Administrator
Information
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22
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Trustee
Information
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22
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Innovative
Logistics Techniques, Inc. 401(k) Plan and Trust
Summary
Plan Description
INTRODUCTION
TO YOUR PLAN
Innovative
Logistics Techniques, Inc. 401(k) Plan and Trust ("Plan") has been adopted to
provide you with the opportunity to save for retirement on a tax-deferred basis.
This Summary Plan Description ("SPD") contains valuable information regarding
when you may become eligible to participate in the Plan, your Plan benefits,
your distribution options, and many other features of the Plan. You should take
the time to read this SPD to get a better understanding of your rights and
obligations in the Plan.
We have
attempted to answer most of the questions you may have regarding your benefits
in the Plan. If this SPD does not answer all of your questions, please contact
the Administrator (or other Plan representative).The Administrator has the
complete power, in its sole discretion, to determine all questions arising in
connection with the administration, interpretation, and application of the Plan
(and any related documents and underlying policies). Any such determination by
the Administrator shall be conclusive and binding upon all persons. The name and
address of the Administrator can be found in the Article of this SPD entitled
"General Information About The Plan".
This SPD
describes the Plan's benefits and obligations as contained in the legal Plan
document, which governs the operation of the Plan. The Plan document is written
in much more technical and precise language. If the non-technical language under
this SPD and the technical, legal language of the Plan document conflict, the
Plan document always governs. If you wish to receive a copy of the legal Plan
document, please contact the Administrator.
This SPD
describes the current provisions of the Plan, which are designed to comply with
applicable legal requirements. The Plan is subject to federal laws, such as the
Employee Retirement Income Security Act ("ERISA"), the Internal Revenue Code,
and other federal and state laws that may affect your rights. The provisions of
the Plan are subject to revision due to changes in laws or due to pronouncements
by the Internal Revenue Service ("IRS ") or Department of Labor ("DOL"). We may
also amend this Plan. If the provisions under this SPD change as a result of
changes to the Plan, we will notify you.
ARTICLE
I
PARTICIPATION
IN THE PLAN
Am
I eligible to participate in the Plan?
Provided
you are not an Excluded Employee, you are eligible to participate in the Plan
once you satisfy the Plan's eligibility conditions described in the next
question. Then, you may elect to have your compensation reduced by a specific
percentage or dollar amount, and have that amount contributed to the Plan as a
salary deferral. You may also be entitled to contributions from
us.
1
If you
are a member of a class of employees identified below, you are an Excluded
Employee for purposes of the Plan. The Excluded Employees are:
·
with
respect to salary deferrals, matching contributions, and profit sharing
contributions, casual labor as defined as those hired for a period not to exceed
90 days as either full or part time employees.
When
am I eligible to participate in the Plan?
Provided
you are not an Excluded Employee, you will be eligible to participate in the
Plan on your date of hire.
You will
actually enter the Plan once you reach the entry date as described in the next
question.
When
is my entry date?
Provided
you are not an Excluded Employee, you may begin participating in the Plan once
you have satisfied the above eligibility requirements and reached your entry
date. The following describes the specific entry date that applies in the
Plan.
For
salary deferrals, matching contributions, and profit sharing contributions, your
entry date is the first day of the month coinciding with or next following the
date you meet the eligibility requirements described above.
Special
rules may apply if you terminate employment and are then rehired. If you have
questions about the timing of your Plan participation, please contact the
Administrator.
What
happens if I'm a participant, terminate employment, and then I'm
rehired?
If you
are no longer a participant because you terminated employment and you are
rehired, you will continue to participate in the Plan in the same manner as if
your termination had not occurred.
ARTICLE
II
CONTRIBUTIONS
What
kind of plan is this?
This Plan
is a type of qualified retirement plan commonly referred to as a 401(k) plan. As
a participant in the Plan, you may elect to reduce your compensation by a
specific percentage or dollar amount and have that amount contributed to the
Plan on a pre-tax basis as a salary deferral. You generally are not taxed on
your salary deferrals until you withdraw those amounts from the Plan. In
addition, we will make additional contributions to the Plan on your behalf. This
Article describes the types of contributions that may be made to the Plan and
how these monies will be allocated to your account to provide for your
retirement benefit.
2
Do
I have to contribute money to the Plan in order to participate?
No, you
are not required to contribute any money in order to participate in our Plan.
However, you will receive additional amounts if you do contribute.
How
much may I contribute to the Plan?
Effective
as of October 1, 2003, you may elect to defer up to 80% of your compensation for
the Plan Year instead of receiving that amount in cash. The amount you elect to
defer, and any earnings on that amount, will not be subject to income tax until
it is actually distributed to you. However, the amount you defer is counted as
compensation for Social Security taxes.
The
Administrator will allocate the amount you elect to defer to an account
maintained on your behalf. You will always be 100% vested in this account. This
means that you will always be entitled to all amounts that you defer. This money
will, however, be affected by any investment gains or losses. If there is an
investment gain, the balance in your account will increase. If there is an
investment loss, the balance in your account will decrease.
Your
total deferrals in any taxable year may not exceed a dollar limit that is set by
law. The limit is $12,000 (for 2003), $13,000 (for 2004), $14,000 (for 2005),
and $15,000 (for 2006). This limit may be increased after 2006 for
cost-of-living changes. The Plan Administrator will inform you each year of the
maximum amount that you may contribute as salary deferrals.
You
should also be aware that the annual dollar limit is an aggregate limit that
applies to all deferrals you may make under this Plan or other cash or deferred
arrangements (including tax-sheltered 403(b) annuity contracts, simplified
employee pensions, or other 401(k) plans in which you may be participating).
Generally, if your total deferrals under all cash or deferred arrangements for a
calendar year exceed the annual dollar limit, the excess must be included in
your income for the year. For this reason, it is desirable to request in writing
that these excess deferrals be returned to you. If you fail to request such a
return, you may be taxed a second time when the excess deferral is ultimately
distributed from the Plan.
If your
deferrals for a year exceed the limit described above, you must decide which
plan or arrangement you would like to have return the excess. If you decide that
the excess should be distributed from this Plan, you must communicate this in
writing to the Administrator no later than the March 1st following the close of
the calendar year in which such excess deferrals were made. However, if the
entire dollar limit is exceeded in this Plan or any other plan we maintain, then
you will be deemed to have notified the Administrator of the excess. The
Administrator will then return the excess deferral and any earnings to you by
April 15th.
If you
are age 50 or older, you may elect to defer additional amounts (called "catch-up
contributions") to the Plan. The additional amounts may be deferred regardless
of any other limitations on the amount that you may defer to the Plan as
described above. The maximum catch-up contribution that you can make in 2003 is
$2,000. The amount is increased by $1,000 in each year after 2002 up to 2006,
when the maximum is $5,000. After 2006, the maximum may increase for
cost-of-living adjustments. The Employer matching contribution formula will
apply to these “catch-up contributions”.
3
Distributions
from amounts attributable to your salary deferrals before you terminate
employment are permitted in the following circumstances:
·
upon your
attainment of age 59 1/2. (See the question "Can I withdraw money from my
account while working?" for more information on in-service withdrawals of your
salary deferrals.)
· if you
incur a proven financial hardship. (See the question "Can I withdraw money from
my account in the event of financial hardship?" for more information on hardship
withdrawals of your salary deferrals.)
In the
event you receive a hardship distribution from your salary deferrals to this
Plan, you will not be allowed to make additional salary deferrals for a period
of six (6) months after you receive the distribution.
In
addition, if you are a highly compensated employee (generally owners or
individuals receiving wages in excess of certain amounts established by law), a
distribution from amounts attributable to your salary deferrals of certain
excess contributions may be required to comply with the law. The Administrator
will notify you when a distribution is required.
How
often can I modify the amount I contribute?
The
amount you elect to defer will be deducted from your pay in accordance with a
procedure established by the Administrator. The procedure will require that you
enter into a written salary deferral agreement when you are hired. You may elect
to defer a portion of your salary as of your entry date. Such election will
become effective as soon as is administratively feasible after that date. Your
election will remain in effect until you modify or terminate it. You may modify
your election as of the date(s) indicated in the salary deferral agreement. The
modification will become effective as soon as is administratively feasible after
that date. You are also permitted to revoke your election as of the date(s)
indicated in the salary deferral agreement.
Will
the Employer contribute to the Plan?
Each
year, in addition to your salary deferrals, we may contribute to the Plan the
following:
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matching
contributions (including qualified matching contributions
(QMACs)).
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profit
sharing contributions.
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qualified
nonelective contributions (QNECs).
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What
is the Employer matching contribution?
The
matching contribution is a fixed amount equal to 50% of your salary deferrals
that do not exceed 5% of your compensation.
The
Administrator will compute the matching contribution made to the Plan on your
behalf each payroll period.
4
In
addition to the above, we may make a QMAC equal to a fixed percentage of your
salary deferrals. In making this contribution, we may limit the amount of your
deferrals taken into consideration. You will share in this QMAC if you make
salary deferrals during the applicable period. You will be automatically 100%
vested in any QMACs we may make.
What
is the Employer profit sharing contribution?
Our
profit sharing contribution is discretionary, with the amount being determined
by us each year.
The
Administrator will allocate to your account the profit sharing contribution made
to the Plan on your behalf at the end of the Plan Year.
How
will the Employer profit sharing contribution be allocated to my
account?
Any
profit sharing contribution will be "allocated" or divided among participants
eligible to share in the contribution for the Plan Year.
In order
to share in any profit sharing contribution, you must satisfy the following
conditions:
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You
must be actively employed on the last day of the Plan
Year.
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You
must have completed at least 1000 Hours of Service during the Plan
Year.
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The
discretionary profit sharing contribution will be allocated to your account in
the same proportion that your compensation plus your compensation in excess of
the integration level (also called "excess compensation") bears to the total
compensation plus "excess compensation" of all eligible participants. For these
purposes, the integration level is 100% of the Social Security Taxable Wage
Base. The maximum amount that can be allocated to you in this first step varies
and is dependent upon the integration level. If you have any questions about the
maximum that can be allocated in this first step, you should consult your
Administrator.
If after
the first step of the allocation process there still remains a portion of the
contribution which has not yet been allocated, then the remainder will be
allocated to you in the same proportion that your compensation bears to the
total compensation of all participants.
For any
short Plan Year, the integration level illustrated above must be
prorated.
What
is the QNEC and how is it allocated?
We may
make a qualified nonelective contribution (QNEC) to the Plan if necessary. If we
choose to make this contribution, it will be allocated in the proportion that
your compensation (if you are eligible) bears to the total compensation of all
eligible employees. For purposes of making this QNEC, compensation is
compensation as described in the following question.
5
You will
share in any QNEC made by us only if you are a non-highly compensated employee
and you meet the requirements listed in the question "How will the Employer
profit sharing contribution be allocated to my account?".
What
compensation is used to determine my Plan benefits?
For
purposes of the Plan, compensation has a special meaning. Compensation is
defined as your total compensation paid to you and that is subject to income tax
withholding. That is, all of your compensation paid to you by us during the Plan
Year, including any salary deferrals you make to this Plan, to a Section 125
cafeteria plan, or to a Section 457 plan, and for qualified transportation
fringes.
If you
are a self-employed individual, your compensation will be equal to your earned
income.
For Plan
purposes, your compensation will be recognized for the entire Plan Year, even if
you are not a participant for the entire Plan Year.
Is
there a limit on the amount of compensation that can be considered?
The Plan,
by law, cannot recognize annual compensation in excess of $200,000. This amount
may be adjusted after 2003 for cost-of-living increases.
Are
there limits on how much can be contributed to my account each
year?
Generally,
the law imposes a maximum limit on the amount of contributions you may receive
in the Plan. This limit applies to all contributions we make on your behalf, all
contributions you make to the Plan, and any other amounts allocated to any of
your accounts during the Plan Year (such as forfeitures), excluding earnings.
This total cannot exceed the lesser of $40,000 or 100% of your annual
compensation. The dollar limit may be adjusted after 2003 for cost-of-living
increases.
May
I "roll over" payments from other retirement plans or lRAs?
At the
discretion of the Administrator, you may be permitted to deposit into the Plan
distributions you have received from other plans and certain IRAs. Such a
deposit is called a "rollover" and may result in tax savings to you. You may ask
your prior plan administrator or trustee to directly transfer (a "direct
rollover") to this Plan all or a portion of any amount that you are entitled to
receive as a distribution from a prior plan. Alternatively, if you received a
distribution from a prior plan, you may elect to deposit any amount eligible for
rollover within 60 days of your receipt of the distribution. You should consult
your tax advisor to determine if a rollover is permitted and in your best
interest.
Your
rollover will be placed in a separate account called a "rollover account." You
will always be 100% vested in your rollover account. This means that you will
always be entitled to all of your rollover contributions. Rollover contributions
will be affected by any investment gains or losses.
6
You may
withdraw the amounts in your “rollover account” at any time.
How
is the money in the Plan invested?
You will
be able to direct the investment of the following accounts that are held for you
in the Plan: all accounts. We have established participant direction procedures
setting forth investment choices available to you, the frequency with which you
can change your investment choices, and instructions on how you can obtain other
important information on directed investments available from the Administrator.
You should request a copy of these procedures from the Administrator. You need
to follow these procedures when you direct investments. You should review the
information in these procedures carefully before you give investment directions.
In addition, the procedures indicate how you can obtain other important
information available from the Administrator on directed
investments.
The Plan
is intended to comply with Section 404(c) of ERISA with respect to those
accounts for which you are permitted to direct investments. If the Plan complies
with this Section, then the fiduciaries of the Plan, including the Employer, the
Trustee, and the Administrator, will be relieved of any legal liability for any
losses that are the direct and necessary result of the investment directions
that you give. The procedures discussed above must be followed in giving
investment directions. If you fail to do so, then your investment directions
need not be followed. You are not required to direct investments. If you choose
not to direct investments, then the Administrator is responsible for investing
your accounts in a prudent manner.
When you
direct investments, your accounts are segregated for purposes of determining the
earnings or losses on these investments. Your account does not share in the
investment performance for other participants who have directed their own
investments.
You
should remember that the amount of your benefits in the Plan will depend in part
upon your choice of investments. Gains as well as losses can occur. There are no
guarantees of performance. The Employer, the Administrator, and the Trustee will
not provide investment advice or guarantee the performance of any investment you
choose.
ARTICLE
III
RETIREMENT
BENEFITS
What
benefits will I receive at normal retirement?
You will
be entitled to all of your account balances at your Normal Retirement Age.
However, the actual payment of your benefits may generally not begin until your
actual retirement. In such event, a distribution will be made, at your election,
as soon as is administratively feasible. If you continue working after your
Normal Retirement Age, you may generally defer receipt of your benefits until
your Late Retirement Date.
You will
attain your Normal Retirement Age when you attain age 65. Your Late Retirement
Date is the date you choose to retire after first having reached your Normal
Retirement Age.
7
What
happens if l leave the Employer's workforce before I retire?
This Plan
is designed to encourage you to stay with us until retirement. However, if you
terminate your employment with us before your retirement date and the value of
your vested benefit (excluding, for distributions amounts attributable to
rollovers) is $5,000 or less, a distribution will be made to you in a lump sum
within a reasonable time after you terminate employment. (See the question in
Article V "How will my benefits be paid?" for a further explanation of how
benefits are paid from the Plan.)
If you
terminate your employment with us before your retirement date and the value of
your vested benefit (excluding, for distributions amounts attributable to
rollovers) is more than $5,000, a distribution will be made to you within a
reasonable time after you terminate employment. In this case, however, you must
consent to the distribution.
What
is my vested interest in my account?
You are
always 100% vested in (meaning you are entitled to all of the amounts in) your
account attributable to your salary deferrals, as well as in the
following:
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your
own rollover contributions.
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profit
sharing contributions.
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QNEC
contributions.
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QMAC
contributions.
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matching
contributions.
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Thus, you
are always 100% vested in all of the amounts in your account.
ARTICLE
IV
DISABILITY
BENEFITS
How
is disability defined?
In the
Plan, disability is defined as your inability to engage in any substantial
gainful activity by reason of a medically determinable physical or mental
impairment that can be expected to result in death or that has lasted (or can be
expected to last) for a continuous period of not less than 12 months. Your
disability will be determined by a licensed physician chosen by the
Administrator.
What
happens if I become disabled?
If you
become disabled while a participant, you will be entitled to your vested account
balance. Payment of your disability benefits will be made to you as soon as is
administratively feasible
after you retire due to a disability. (See the question entitled "How will my
benefits be paid?" for more information.)
8
ARTICLE
V
FORM
OF BENEFIT PAYMENT
How
will my benefits be paid?
If your
vested benefit in the Plan (excluding, for distributions amounts attributable to
rollovers) does not exceed $5,000, then your benefit must be distributed to you
in a single lump-sum payment as soon as is administratively feasible following
the event that entitles you to a distribution. If your vested benefit in the
Plan (excluding, for distributions amounts attributable to rollovers) exceeds
$5,000, then you must consent to the distribution before it may be made. You may
elect to receive a distribution under one of the following methods:
·
a
single lump-sum payment of your entire account balance.
·
a
single-sum payment of a portion of your account balance.
·
monthly,
quarterly, semi-annual, or annual installments over a period of not more than
your assumed life expectancy (or your and your beneficiary's assumed life
expectancies).
May
I delay the receipt of benefits?
Yes, you
may delay the receipt of benefits, unless a distribution is required to be made,
as explained earlier, because your vested benefit in the Plan (excluding, for
distributions amounts attributable to rollovers) does not exceed $5,000.
However, in addition to the benefit payment mentioned above, there are rules
that require that certain minimum distributions be made from the Plan. If you
are a more than 5% owner of the Employer, distributions are required to begin
not later than the April 1st following the end of the year in which you reach
age 70 1/2. If you are not a more than 5% owner of the Employer, distributions
are required to begin not later than the April 1st following the later of the
end of the year in which you reach age 70 1/2 or retire. You should see the
Administrator if you feel you may be affected by these rules.
ARTICLE
VI
DEATH
BENEFITS
What
happens if I die while working for the Employer?
If you
die while you are still employed by us, your vested account balance will be used
to provide your beneficiary with a death benefit.
Who
is the beneficiary of my death benefit?
If you
are married at the time of your death, your spouse will be the beneficiary of
100% of the death benefit unless an election is made to change the beneficiary.
IF YOU WISH TO DESIGNATE A BENEFICIARY OTHER THAN YOUR SPOUSE, YOUR SPOUSE MUST
IRREVOCABLY CONSENT TO WAIVE ANY RIGHT TO THE DEATH BENEFIT. YOUR SPOUSE'S
CONSENT MUST BE IN WRITING, BE WITNESSED BY A NOTARY OR A PLAN REPRESENTATIVE,
AND ACKNOWLEDGE THE SPECIFIC NON-SPOUSE BENEFICIARY.
9
If you
are married, you have named someone other than your spouse to be your
beneficiary as described in the preceding paragraph, and you wish to again
change your beneficiary designation, your spouse must again consent to the
change, unless you are changing your designation to name your spouse as your
beneficiary. In addition, you may elect a beneficiary other than your spouse
without your spouse's consent if your spouse cannot be located.
If you
are not married, you may designate your beneficiary on a form to be supplied to
you by the Administrator.
In the
event no valid designation of beneficiary exists, or if the beneficiary is not
alive at the time of your death, the death benefit will be paid in the following
order of priority to:
(a)
Your surviving spouse;
(b)
Your surviving children, in equal shares; or
(c)
Your estate.
How
will the death benefit be paid to my beneficiary?
The death
benefit will be paid to your beneficiary in one of the following methods as
elected by the beneficiary (unless you elected one of the following forms of
distribution for the death benefit prior to your death):
·
a
single lump-sum payment of your entire account balance.
·
a
single-sum payment of a portion of your account balance.
·
monthly,
quarterly, semi-annual, or annual installments over a period of not more than
your beneficiary's assumed life expectancy.
When
must payments be made to my beneficiary?
If your
designated beneficiary is a person (rather than an estate or most trusts) then
minimum distributions of your death benefit must generally begin no later than
the end of the plan year after your death, and must be paid over a period not
extending beyond the longer of your or your beneficiary's life expectancy. If
your spouse is the beneficiary, the start of payments may be delayed until the
year in which you would have attained age 70 1/2. If your death occurs after
distributions have begun and there is no designated beneficiary, minimum
distributions of your death benefit must generally begin no later than the end
of the plan year after your death, and must be paid over a period not extending
beyond your remaining life expectancy. If, however, your death occurs before
distributions have begun and there is no designated beneficiary, minimum
distribution of your entire death benefit must generally be made within five
years after your date of death. If your death occurs before distributions have
begun, the preceding
payment rules may be subject to additional plan provisions specifying payment
under either the life expectancy or the 5-year method in certain
circumstances.
10
The rules
governing distributions are complex and it is important to contact the Plan
Administrator regarding any family status changes.
Since
your spouse has certain rights in the death benefit, you should immediately
report any change in your marital status to the Administrator.
What
happens if I'm a participant, terminate employment, and die before receiving all
my benefits?
If you
terminate employment with us and subsequently die, your beneficiary will be
entitled to the vested percentage of your remaining account balance at the time
of your death.
ARTICLE
VII
IN-SERVICE
DISTRIBUTIONS
Can
I withdraw money from my account while working?
Generally,
you may receive a distribution from the Plan prior to your termination of
employment if you satisfy certain conditions. These conditions are described
below. However, this distribution is not in addition to your other benefits and
will therefore reduce the value of the benefits you will receive when you
retire. Any in-service distribution is made at your election and will be made in
accordance with the forms of distribution in the Plan.
Also, the
law restricts any pre-retirement distribution from certain accounts maintained
for you in the Plan before you reach age 59 1/2. These accounts are generally
the ones set up to receive your salary deferrals and other Employer
contributions used to satisfy special Plan rules.
You may
request an in-service distribution as follows:
· With
respect to your salary deferrals, QMACs and QNECs, if any, in the following
instances:
|
|
·
|
once
you attain age 59 1/2.
|
·
With
respect to your matching contributions, in the following
instance(s):
|
|
·
|
once
you attain age 59 1/2.
|
·
With
respect to your profit sharing contributions, in the following
instance(s):
|
|
·
|
once
you attain age 59 1/2.
|
·
With
respect to rollovers from other plans, at any time and for any
reason.
·
With
respect to certain amounts that were transferred to this Plan from another plan
of the Employer, at any time and for any reason, if
applicable.
11
Can
I withdraw money from my account in the event of financial
hardship?
Yes, if
you satisfy certain conditions. This hardship distribution is not in addition to
your other benefits and will therefore reduce the value of the benefits you will
receive at retirement.
You may
request a hardship withdrawal from the following amounts:
|
|
·
|
Your
salary deferrals.
|
|
|
·
|
Your
matching contributions.
|
|
|
·
|
Your
profit sharing contributions.
|
|
|
·
|
Certain
amounts that were transferred to this Plan from another plan of the
Employer, if applicable.
|
A
hardship withdrawal may be made to satisfy certain immediate and heavy financial
needs that you have. A hardship distribution may only be made for payment of the
following:
·
Expenses
for medical care (described in Section 213(d) of the Internal Revenue Code)
previously incurred by you or your dependent or necessary for you or your
dependent to obtain medical care.
·
Costs
directly related to the purchase of your principal residence (excluding mortgage
payments).
·
Tuition,
related educational fees, and room and board expenses for the next twelve (12)
months of post-secondary education for yourself, your spouse or
dependent.
·
Amounts
necessary to prevent your eviction from your principal residence or foreclosure
on the mortgage of your principal residence.
If you
have any of the above expenses, a hardship distribution can only be made if you
certify and agree that all of the following conditions are
satisfied:
·
The
distribution is not in excess of the amount of your immediate and heavy
financial need. The amount of your 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.
·
You
have obtained all distributions, other than hardship distributions, and all
nontaxable (at the time of the loan) loans currently available under all plans
maintained by your Employer.
·
That your
salary deferrals will be suspended for at least six (6) months after your
receipt of the hardship distribution.
12
In
addition to these rules, there are restrictions placed on hardship distributions
that are made from your salary deferrals. Any hardship distribution from these
amounts will be limited, as of the date of distribution, to the balance of your
salary deferral account as of the end of the last Plan Year ending before July
1, 1989, plus your total salary deferrals after such date, reduced by the amount
of any previous distributions made to you from your salary deferral account. Ask
the Administrator if you need further details.
ARTICLE
VIII
TAX
TREATMENT OF DISTRIBUTIONS
What
are my tax consequences when I receive a distribution from the
Plan?
Generally,
you must include any Plan distribution in your taxable income in the year in
which you receive the distribution. The tax treatment may also depend on your
age when you receive the distribution. Certain distributions made to you when
you are under age 59 1/2 could be subject to an additional 10% tax.
Can
I reduce or defer tax on my distribution?
You may
reduce, or defer entirely, the tax due on your distribution through use of one
of the following methods:
(a) The rollover of all
or a portion of the distribution to an Individual Retirement Account or Annuity
(IRA) or another qualified employer plan. This will result in no tax being due
until you begin withdrawing funds from the IRA or other qualified employer plan.
The rollover of the distribution, however, MUST be made within strict time
frames (normally, within 60 days after you receive your distribution). Under
certain circumstances all or a portion of a distribution (such as a hardship
distribution) may not qualify for this rollover treatment. In addition, most
distributions will be subject to mandatory federal income tax withholding at a
rate of 20%. This will reduce the amount you actually receive. For this reason,
if you wish to roll over all or a portion of your distribution amount, the
direct transfer option described in paragraph (b) below would be the better
choice.
(b) For most
distributions, you may request that a direct transfer (sometimes referred to as
a direct rollover) of all or a portion of a distribution be made to either an
Individual Retirement Account or Annuity (IRA) or another qualified employer
plan willing to accept the transfer. A direct transfer will result in no tax
being due until you withdraw funds from the IRA or other qualified employer
plan. Like the rollover, under certain circumstances all or a portion of the
amount to be distributed may not qualify for this direct transfer. If you elect
to actually receive the distribution rather than request a direct transfer, then
in most cases 20% of the distribution amount will be withheld for federal income
tax purposes.
WHENEVER
YOU RECEIVE A DISTRIBUTION, THE ADMINISTRATOR WILL DELIVER TO YOU A MORE
DETAILED EXPLANATION OF THESE OPTIONS. HOWEVER, THE RULES THAT DETERMINE WHETHER
YOU QUALIFY FOR FAVORABLE TAX TREATMENT ARE VERY COMPLEX. YOU SHOULD CONSULT
WITH QUALIFIED TAX COUNSEL BEFORE MAKING A CHOICE.
13
ARTICLE
IX
HOURS
OF SERVICE
What
is an Hour of Service?
You will
be credited with an Hour of Service for:
(a) each
hour for which you are directly or indirectly compensated by your Employer for
the performance of duties during the Plan Year;
(b) each
hour for which you are directly or indirectly compensated by us for reasons
other than the performance of duties (such as vacation, holidays, sickness,
disability, lay-off, military duty, jury duty, or leave of absence during the
Plan Year); and
(c) each
hour for back pay awarded or agreed to by the Employer.
You will
not be credited for the same Hours of Service both under (a) or (b), as the case
may be, and under (c).
How
are Hours of Service credited?
You will
be credited with your actual Hours of Service.
ARTICLE
X
LOANS
May
I borrow money from the Plan?
Yes. You
may request a participant loan in a manner provided by the Administrator. Your
ability to obtain a participant loan depends on several factors. The
Administrator will determine whether you satisfy these factors. Contact your
Plan Administrator if you wish to receive a copy of your Plan's Loan
Program.
ARTICLE
XI
YOUR
PLAN'S TOP-HEAVY RULES
What
is a "top-heavy" plan?
A
retirement plan that primarily benefits "key employees" is called a "top-heavy
plan". Key employees are certain owners or officers of our organization. A plan
is generally a "top-heavy plan" when more than 60% of the plan assets are in the
accounts of key employees.
Each
year, the Administrator is responsible for determining whether this Plan is a
"top-heavy plan".
14
What
happens if the Plan becomes top-heavy?
If the
Plan becomes top-heavy in any Plan Year, then employees will be entitled to
certain "top-heavy minimum benefits", and other special rules will apply. Among
these top-heavy rules are the following:
·
We
may be required to make a contribution to your account in order to provide you
with at least “top-heavy minimum benefits”.
·
If
you are a participant in more than one plan, you may not be entitled to
"top-heavy minimum benefits" under both plans.
ARTICLE
XII
PROTECTED
BENEFITS AND CLAIMS PROCEDURES
Is
my benefit protected?
As a
general rule, your interest in your account, including your “vested interest,”
may not be alienated. This means that your interest may not be sold, used as
collateral for a loan (other than for a Plan loan), given away, or otherwise
transferred. In addition, your creditors may not attach, garnish, or otherwise
interfere with your account.
Are
there any exceptions to the general rule?
There are
two exceptions to this general rule. The Administrator must honor a "qualified
domestic relations order". A "qualified domestic relations order" is defined as
a decree or order issued by a court that obligates you to pay child support or
alimony, or otherwise allocates a portion of your assets in the Plan to your
spouse, former spouse, child, or other dependent. If a qualified domestic
relations order is received by the Administrator, all or a portion of your
benefits may be used to satisfy the obligation. The Administrator will determine
the validity of any domestic relations order received. You and your
beneficiaries can obtain, without charge, a copy of the QUALIFIED DOMESTIC
RELATIONS ORDER PROCEDURE from the Administrator.
The
second exception applies if you are involved with the Plan's administration. If
you are found liable for any action that adversely affects the Plan, the
Administrator can offset your benefits by the amount that you are ordered or
required by a court to pay the Plan. All or a portion of your benefits may be
used to satisfy any such obligation to the Plan.
Can
the Plan be amended?
Yes. We
have the right to amend the Plan at any time. In no event, however, will any
amendment authorize or permit any part of the Plan assets to be used for
purposes other than the exclusive benefit of participants or their
beneficiaries. Additionally, no amendment will cause any reduction in the amount
credited to your account.
15
What
happens if the Plan is discontinued or terminated?
Although
we intend to maintain the Plan indefinitely, we reserve the right to terminate
the Plan at any time. Upon termination, no further contributions will be made to
the Plan and all amounts credited to your accounts will become 100% vested, if
not already 100% vested. We will direct the distribution of your accounts in a
manner permitted by the Plan as soon as practical. (See the question entitled
"How will my benefits be paid?" for more information.) You will be notified if
the Plan is terminated.
How
do I submit a claim for Plan benefits?
Benefits
will be paid to you and your beneficiaries without the necessity of formal
claims. However, if you think an error has been made in determining your
benefits, then you or your beneficiaries may make a request for any Plan
benefits to which you believe you are entitled. Any such request should be in
writing and should be made to the Administrator.
If the
Administrator determines the claim is valid, then you will receive a statement
describing the amount of benefit, the method or methods of payment, the timing
of distributions, and other information relevant to the payment of the
benefit.
What
if my benefits are denied?
Your
request for Plan benefits will be considered a claim for Plan benefits, and it
will be subject to a full and fair review. If your claim is wholly or partially
denied, the Administrator will provide you with a written or electronic
notification of the Plan's adverse determination. This written or electronic
notification must be provided to you within a reasonable period of time, but not
later than 90 days after the receipt of your claim by the Administrator, unless
the Administrator determines that special circumstances require an extension of
time for processing your claim. If the Administrator determines that an
extension of time for processing is required, written notice of the extension
will be furnished to you prior to the termination of the initial 90-day period.
In no event will such extension exceed a period of 90 days from the end of such
initial period. The extension notice will indicate the special circumstances
requiring an extension of time and the date by which the Plan expects to render
the benefit determination.
In the
case of a claim for disability benefits, if disability is determined by a
physician chosen by the Administrator (rather than relying upon a determination
of disability for Social Security purposes), then instead of the above, the
Administrator will provide you with written or electronic notification of the
Plan's adverse benefit determination within a reasonable period of time, but not
later than 45 days after receipt of the claim by the Plan. This period may be
extended by the Plan for up to 30 days, provided that the Administrator both
determines that such an extension is necessary due to matters beyond the control
of the Plan and notifies you, prior to the expiration of the initial 45-day
period, of the circumstances requiring the extension of time and the date by
which the Plan expects to render a decision. If, prior to the end of the first
30-day extension period the Administrator determines that, due to matters beyond
the control of the Plan, a decision cannot be rendered within that extension
period, the period for making the determination may be extended for up to an
additional 30 days, provided that the Administrator notifies you, prior to the
expiration of the first 30-day extension period, of the circumstances requiring
the extension and the date as of which the Plan expects to render a decision. In
the case of any such extension, the notice of extension will specifically
explain the standards on which entitlement
to a benefit is based, the unresolved issues that prevent a decision on the
claim, and the additional information needed to resolve those issues, and you
will be afforded at least 45 days within which to provide the specified
information.
16
The
Administrator's written or electronic notification of any adverse benefit
determination must contain the following information:
(a)
The specific reason or reasons for the adverse determination;
(b)
Reference to specific Plan provisions on which the determination is
based.
(c)
A description of any additional material or information necessary for you to
perfect the claim and an explanation of why such material or information is
necessary.
(d)
Appropriate information as to the steps to be taken if you or your beneficiary
want to submit your claim for review.
(e)
In the case of disability benefits where the disability is determined by a
physician chosen by the Administrator:
(i)
If an internal rule, guideline, protocol, or other similar criterion was relied
upon in making the adverse determination, either the specific rule, guideline,
protocol, or other similar criterion; or a statement that such rule, guideline,
protocol, or other similar criterion was relied upon in making the adverse
determination and that a copy of the rule, guideline, protocol, or other similar
criterion will be provided to you free of charge upon request.
(ii)
If the adverse benefit determination is based on a medical necessity or
experimental treatment or similar exclusion or limit, either an explanation of
the specific or clinical judgment for the determination, applying the terms of
the Plan to your medical circumstances, or a statement that such explanation
will be provided to you free of charge upon request.
If your
claim has been denied or deemed denied, and you want to submit your claim for
review, you must follow the Claims Review Procedure below.
What
is the Claims Review Procedure?
Upon the
denial of your claim for benefits, you may file your claim for review, in
writing, with the Administrator.
(a) YOU
MUST FILE THE CLAIM FOR REVIEW NO LATER THAN 60 DAYS AFTER YOU HAVE RECEIVED
WRITTEN NOTIFICATION OF THE DENIAL OF YOUR CLAIM FOR BENEFITS, OR IF NO WRITTEN
DENIAL OF YOUR CLAIM WAS PROVIDED, NO LATER THAN 60 DAYS AFTER THE DEEMED DENIAL
OF YOUR CLAIM.
17
HOWEVER,
IF YOUR CLAIM IS FOR DISABILITY BENEFITS AND DISABILITY IS DETERMINED BY A
PHYSICIAN CHOSEN BY THE ADMINISTRATOR,
THEN INSTEAD OF THE ABOVE, YOU MUST FILE THE CLAIM FOR REVIEW NO LATER THAN 180
DAYS FOLLOWING RECEIPT OF NOTIFICATION OF AN ADVERSE BENEFIT
DETERMINATION.
(b) You
may submit written comments, documents, records, and other information relating
to your claim for benefits.
(c) You
may review all pertinent documents relating to the denial of your claim and
submit any issues and comments, in writing, to the Administrator.
(d) You
will be provided, upon request and free of charge, reasonable access to, and
copies of, all documents, records, and other information relevant to your claim
for benefits.
(e) Your
claim for review must be given a full and fair review. This review will take
into account all comments, documents, records, and other information submitted
by you relating to your claim, without regard to whether such information was
submitted or considered in the initial benefit determination.
In
addition to the Claims Review Procedure above, if your claim is for disability
benefits and disability is determined by a physician chosen by the
Administrator, then the Claims Review Procedure provides that:
|
(a)
|
Your
claim will be reviewed without deference to the initial adverse benefit
determination and the review will be conducted by an appropriate named
fiduciary of the Plan who is neither the individual who made the adverse
benefit determination that is the subject of the appeal, nor the
subordinate of such individual.
|
|
(b)
|
In
deciding an appeal of any adverse benefit determination that is based in
whole or part on medical judgment, the appropriate named fiduciary will
consult with a health care professional who has appropriate training and
experience in the field of medicine involved in the medical
judgment.
|
|
(c)
|
Any
medical or vocational experts whose advice was obtained on behalf of the
Plan in connection with your adverse benefit determination will be
identified, without regard to whether the advice was relied upon in making
the benefit determination.
|
|
(d)
|
The
health care professional engaged for purposes of a consultation under (b)
above will be an individual who is neither an individual who was consulted
in connection with the adverse benefit determination that is the subject
of the appeal, nor the subordinate of any such
individual.
|
18
The
Administrator will provide you with written or electronic notification of the
Plan's benefit determination on review. The Administrator must provide you with
notification of this denial within 60 days after the Administrator's receipt of
your written claim for review, unless the Administrator determines that special
circumstances require an extension of time for processing your claim. If the
Administrator determines that an extension of time for processing is required,
written notice of the extension will be furnished to you prior to the
termination of the initial 60-day period. In no event will such extension exceed
a period of 60 days from the end of the initial period. The extension notice
will indicate the special circumstances requiring an extension of time and the
date by which the Plan expects to render the determination on review. However,
if the claim relates to disability benefits and disability is determined by a
physician chosen by the Administrator, then 45 days will apply instead of 60
days in the preceding sentences. In the case of an adverse benefit
determination, the notification will set forth:
|
(a)
|
The
specific reason or reasons for the adverse
determination.
|
|
(b)
|
Reference
to the specific Plan provisions on which the benefit determination is
based.
|
|
(c)
|
A
statement that you are entitled to receive, upon request and free of
charge, reasonable access to, and copies of, all documents, records, and
other information relevant to your claim for
benefits.
|
|
(d)
|
In
the case of disability benefits where disability is determined by a
physician chosen by the
Administrator:
|
|
(i)
|
If
an internal rule, guideline, protocol, or other similar criterion was
relied upon in making the adverse determination, either the specific rule,
guideline, protocol, or other similar criterion; or a statement that such
rule, guideline, protocol, or other similar criterion was relied upon in
making the adverse determination and that a copy of the rule, guideline,
protocol, or other similar criterion will be provided to you free of
charge upon request.
|
|
(ii)
|
If
the adverse benefit determination is based on a medical necessity or
experimental treatment or similar exclusion or limit, either an
explanation of the specific or clinical judgment for the determination,
applying the terms of the Plan to your medical circumstances, or a
statement that such explanation will be provided to you free of charge
upon request.
|
If you
have a claim for benefits that is denied or ignored, in whole or in part, you
may file suit in a state or federal court. However, in order to do so, you must
file the suit no later than 180 days after the Administrator makes a final
determination to deny your claim.
19
What
are my rights as a Plan participant?
As a
participant in the Plan you are entitled to certain rights and protections under
ERISA. ERISA provides that all Plan participants are entitled to:
|
(a)
|
Examine,
without charge, at the Administrator's office and at other specified
locations, all documents governing the Plan, including insurance contracts
and collective bargaining agreements; and a copy of the latest annual
report (Form 5500 Series) filed by the Plan with the U.S. Department of
Labor and available at the Public Disclosure Room of the Employee Benefits
Security Administration.
|
|
(b)
|
Obtain,
upon written request to the Administrator, copies of documents governing
the operation of the Plan, including insurance contracts and collective
bargaining agreements, and copies of the latest annual report (Form 5500
Series) and an updated SPD. The Administrator may make a reasonable charge
for copies.
|
|
(c)
|
Receive
a summary of the Plan's annual financial report. The Administrator is
required by law to furnish each participant with a copy of this summary
annual report.
|
|
(d)
|
Obtain
a statement telling you whether you have a right to receive a pension at
Normal Retirement Age and, if so, what your benefits would be at Normal
Retirement Age if you stop working under the Plan now. If you do not have
a right to a pension benefit, the statement will tell you how many years
you have to work to earn a right to a pension. THIS STATEMENT MUST BE
REQUESTED IN WRITING AND IS NOT REQUIRED TO BE GIVEN MORE THAN ONCE EVERY
TWELVE (12) MONTHS. The Plan must provide this statement free of
charge.
|
In
addition to creating rights for Plan participants, ERISA imposes duties upon the
people who are responsible for the operation of the Plan. The people who operate
your Plan, called "fiduciaries" of the Plan, have a duty to do so prudently and
in the interest of you and other Plan participants and beneficiaries. No one,
including your Employer or any other person, may fire you or otherwise
discriminate against you in any way to prevent you from obtaining a pension
benefit or exercising your rights under ERISA.
If your
claim for a pension benefit is denied or ignored, in whole or in part, you have
a right to know why this was done, to obtain copies of documents relating to the
decision without charge, and to appeal any denial, all within certain time
schedules.
Under
ERISA, there are steps you can take to enforce the above rights. For instance,
if you request a copy of Plan documents or the latest annual report from the
Plan and do not receive them within 30 days, you may file suit in a federal
court. In such a case, the court may require the Administrator to provide the
materials and pay you up to $110.00 a day until you receive the materials,
unless the materials were not sent because of reasons beyond the control of the
Administrator.
If you
have a claim for benefits that is denied or ignored, in whole or in part, you
may file suit in a state or federal court. In addition, if you disagree with the
Plan's decision or lack thereof concerning
the qualified status of a domestic relations order or a medical child support
order, you may file suit in federal court.
20
If it
should happen that the Plan's fiduciaries misuse the Plan's money, or if you are
discriminated against for asserting your rights, you may seek assistance from
the U.S. Department of Labor, or you may file suit in a federal court. The court
will decide who should pay court costs and legal fees. If you are successful,
the court may order the person you have sued to pay these costs and fees. If you
lose, the court may order you to pay these costs and fees if, for example, it
finds your claim is frivolous.
What
can I do if I have questions or my rights are violated?
If you
have any questions about the Plan, you should contact the Administrator. If you
have any questions about this statement, or about your rights under ERISA, or if
you need assistance in obtaining documents from the Administrator, you should
contact the nearest office of the Employee Benefits Security Administration,
U.S. Department of Labor, listed in the telephone directory or the Division of
Technical Assistance and Inquiries, Employee Benefits Security Administration,
U.S. Department of Labor, 200 Constitution Avenue, N.W., Washington, D.C. 20210.
You may also obtain certain publications about your rights and responsibilities
under ERISA by calling the publications hotline of the Employee Benefits
Security Administration.
ARTICLE
XIII
GENERAL
INFORMATION ABOUT THE PLAN
There is
certain general information which you may need to know about the Plan. This
information has been summarized for you in this Article.
General
Plan Information
The full
name of the Plan is Innovative Logistics Techniques, Inc. 401(k) Plan and
Trust.
We have
assigned Plan Number 001 to your Plan.
This Plan
was originally effective on October 1, 1989. The amended and restated provisions
of the Plan become effective on January 1, 1997. However, this restatement was
made to conform the Plan to new tax laws and some provisions may be
retroactively effective.
Valuations
of the Plan are generally made every business day. The Anniversary Date of the
Plan is the last day of the Plan Year.
The
Plan's records are maintained on a twelve-month period of time. This is known as
the Plan Year. The Plan Year begins on January 1 and ends on December
31.
The Plan
and Trust will be governed by the laws of Pennsylvania to the extent not
governed by federal law.
21
Benefits
provided by the Plan are NOT insured by the Pension Benefit Guaranty Corporation
(PBGC) under Title IV of the Employee Retirement Income Security Act of 1974
because the insurance provisions under ERISA are not applicable to this type of
plan.
Employer
Information
Your
Employer's name, address, telephone number, and identification number
are:
Innovative
Logistics Techniques, Inc.
2010
Corporate
Ridge, 9th Floor
McLean,
Virginia 22102-7838
(703)
506-1555
54-1502670
Service
of legal process may be made upon your Employer. Service of legal process may
also be made upon the Trustee or Administrator.
Administrator
Information
The
Plan's Administrator is responsible for the day-to-day administration and
operation of the Plan. For example, the Administrator maintains the Plan
records, including your account information, provides you with the forms you
need to complete for Plan participation and directs the payment of your account
at the appropriate time. The Administrator will also allow you to review the
formal Plan document and certain other materials related to the Plan. If you
have any questions about the Plan and your participation, you should contact the
Administrator. The Administrator may designate another person or persons to
perform some duties of the Administrator.
The name,
address and telephone number of the Plan's Administrator is:
Innovative
Logistics Techniques, Inc.
2010
Corporate
Ridge, 9th Floor
McLean,
Virginia 22102-7838
(703)506-1555
Trustee
Information
All money
that is contributed to the Plan is held in a trust fund. The Trustee is
responsible for the safekeeping of the trust fund. The trust fund established by
the Plan's Trustee will be the funding medium used for the accumulation of
assets from which benefits will be distributed.
The name,
address, and telephone number of the Plan's Trustee is:
Prudential
Trust Company
30
Scranton Office Park
Scranton,
Pennsylvania 18507-1789
800-848-4015
22
LOAN
PROGRAM
INNOVATIVE LOGISTICS TECHNIQUES, INC.
401(K) PLAN AND TRUST (the "Plan") permits loans to be made to Employees
and their beneficiaries. However, before any loan is made, the Plan requires
that a written loan program be established which sets forth the rules and
guidelines for making Employee loans. This document shall serve as the required
written loan program. In addition, the Plan Administrator may use this document
to serve as, or supplement, any required notice of the loan program to Employees
and their beneficiaries. All references to Employees in this loan program shall
include Employees and their Beneficiaries or alternate payees with respect to
the Plan who are "parties in interest" as defined by ERISA Section
3(14).
The Plan
Administrator is authorized to administer the Employee loan program. All
applications for loans shall be made by an Employee to the Plan Administrator on
forms that the Plan Administrator will make available for such
purpose.
1.
LOAN APPLICATION. Any Employee may apply for a loan from the Plan. An Employee
must apply for each loan with an application that specifies the amount of the
loan desired, the requested duration for the loan, and the source of security
for the loan.
The Plan
Administrator will consider all loan applications within a reasonable time after
the Employee makes formal application. The Employee will be required to provide
any supporting information deemed necessary by the Plan Administrator. This may
include a financial statement, tax returns, and such other financial information
that the Plan Administrator may consider necessary and appropriate to determine
whether a loan should be granted.
The Plan
Administrator will determine whether an Employee qualifies for a loan, applying
such criteria as a commercial lender of funds would apply in like circumstances
with respect to the Employee. Such criteria shall include, but need not be
limited to, the creditworthiness of the Employee and his or her general ability
to repay the loan, the period of time such Employee has been employed by the
Employer, whether adequate security has been provided for the loan, and whether
the Employee agrees, as a condition for receiving the loan, to make repayments
through direct, after-tax payroll deduction.
2.
LOAN LIMITATIONS. The Plan Administrator will not approve any loan to an
Employee in an amount that exceeds 50% of his or her nonforfeitable account
balance. The maximum aggregate dollar amount of loans outstanding to any
Employee may not exceed $50,000, reduced by the excess of the Employee's highest
outstanding Employee loan balance during the 12-month period ending on the date
of the loan over the Employee's current outstanding Employee loan balance on the
date of the loan.
·
No loan in an amount less than $1,000 will be granted to any
Employee.
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·
An Employee can only have two loans currently outstanding from the Plan.
However, an Employee may renegotiate a loan without violating the two
outstanding loan requirement provided such renegotiated loan is a new
loan.
·
All loans made pursuant to this program will be considered a directed investment
from the account(s) of the Employee maintained under the Plan. As such, all
payments of principal and interest made by the Employee will be credited only to
the account(s) of such Employee. The Plan also will charge that portion of the
Employee's account balances with expenses directly related to the origination,
maintenance, and collection of the note.
·
Loans may be made from all accounts.
3.
EVIDENCE AND TERMS OF LOAN. The Plan Administrator will document every loan in
the form of a promissory note signed by the Employee for the face amount of the
loan, together with a rate of interest disclosed on the promissory
note.
Any loan
granted or renewed under this program will bear a reasonable rate of interest.
Therefore, in establishing the rate of interest, the Plan Administrator will use
a reasonable and prudent method.
The loan
must provide at least quarterly payments under a level amortization schedule. If
the Employee is currently employed by the Employer, the Plan Administrator will
require the Employee receiving a loan from the Plan to enter into a payroll
deduction agreement to repay the loan. If the Employee is not currently employed
by the Employer, the Plan Administrator may require additional collateral for
the loan.
The Plan
Administrator will fix the term for repayment of any loan; however, in no
instance may the term of repayment be greater than five years, unless the loan
qualifies as a home loan. A "home loan" is a loan used to acquire a dwelling
unit that, within a reasonable time, the Employee will use as a principal
residence.
Unless
the Employee is a "party in interest" on the day after his or her termination of
employment with the Employer, a loan, if not otherwise due and payable, is due
and payable on the date the Employee terminates employment with the
Employer.
A loan,
if not otherwise due and payable, is due and payable on termination of the Plan,
notwithstanding any contrary provision in the promissory note. Nothing in this
loan policy restricts the Employer's right to terminate the Plan at any
time.
Employees
should note the law treats the amount of any loan (other than a "home loan") not
repaid five years after the date of the loan as a taxable distribution on the
last day of the five-year period or, if sooner, at the time the loan is in
default. If an Employee extends a non-home loan having a five-year or less
repayment term beyond five years, the balance of the loan at the time of the
extension is a taxable distribution to the Employee.
4.
SECURITY FOR LOAN. The Plan will require that the Employee provide adequate
security before a loan is granted. For this purpose, the Plan will consider an
Employee's interest under the Plan to be adequate security. However, in no event
will more than
50% of an Employee's vested interest in the Plan (determined immediately after
origination of the loan) be used as security for the loan. Generally, it will be
the policy of the Plan not to make loans that require security other than the
Employee's vested interest in the Plan. However, if additional security is
necessary to adequately secure the loan, then the Plan Administrator will
require that such security be provided before the loan will be
granted.
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5.
FORM OF PLEDGE. The pledge and assignment of an Employee's account balances will
be in the form prescribed by the Plan Administrator.
6. MILITARY
SERVICE. If an Employee separates from service (or takes a leave of absence)
from the Employer because of service in the military and does not receive a
distribution of his or her account balances, the Plan shall suspend loan
repayments until the Employee's completion of military service or until the
Employee's fifth anniversary of commencement of military service, if earlier.
The Employer will provide the Employee with a written explanation of the effect
of the Employee's military service upon his or her Plan loan.
7.
DEFAULT. The Plan Administrator will treat a loan in default if:
· any
scheduled payment remains unpaid beyond the 45 days after each due date (no
later than the last day of the calendar quarter following the calendar quarter
in which the Employee missed the scheduled payment); or
·
the
Employee makes or furnishes any false representation or statement to the
Plan.
The
Employee will have the opportunity to repay the loan, resume current status of
the loan by paying any missed payment plus interest, or, if distribution is
available under the Plan, request distribution of the note. If the loan remains
in default, the Plan Administrator will offset the Employee's vested account
balances by the outstanding balance of the loan to the extent permitted by law.
The Plan Administrator will treat the note as repaid to the extent of any
permissible offset. Pending final disposition of the note, the Employee remains
obligated for any unpaid principal and accrued interest.
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401(k)
Plan Catch-up Contributions
2008
Plan Year
As a
provision of the Economic Growth and Tax Relief Reconciliation Act of 2001
(EGTRRA), participants age 50 and older may be eligible to make an additional
“catch-up” deferral contribution to their 401(k) account. To be eligible for
this catch-up contribution you must be age 50 or older by December 31 of the
current Plan Year (calendar year) and you must exceed the statutory limit on
your regular 401(k) contributions.
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·
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IRS
stautory contribution limit for 2008:
$15,500.
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If you
reach the statutory limit, the additional contributions you make to the Plan,
not to exceed $5,000 for Plan Year 2008, will be considered catch-up
contributions. The determination of these contributions as catch-up
contributions cannot be made until after the end of the Plan Year. If you do not
exceed the statutory limit, the amount you have designated as catch-up deferrals
will be considered regular 401(k) deferrals. There is no employer match on the
catch-up contributions; however, you will continue to receive matching
contributions on your regular 401(k) deferrals.
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·
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Catch-up
contributions limit for 2008:
$5,000
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To join
or change contribution amounts, go to www.prudential/online/retirement.com
or call Participant Services at 1-800-562-8838 weekdays between 8 a.m. and 9
p.m. ET.
SUMMARY
OF MATERIAL MODIFICATION(S)
To all
Participants, Beneficiaries, and Alternate Payees under the Innovative Logistics
Techniques, Inc. 401(k) Plan and Trust. (the "Plan").
This
notice, called a "Summary of Material Modification(s)", advises you of a
change(s) in the information presented in your Summary Plan Description
(sometimes called an "SPD" or a "descriptive booklet") with respect to the Plan.
Please do three things, (1) Read the notice, and, if you have any questions,
contact the Plan Administrator. (2) Keep this notice with your Summary Plan
Description. (3) Mark the section of your Summary Plan Description that has been
changed, so that when you look at that section you will be reminded that the
change(s) described in this notice has occurred.
The change described below is effective
as of October 1, 2007:
In the
Summary Plan Description, please replace the answer to the question What
Protected Benefits have been preserved for Participants of this Plan? with the
following:
The WGA,
Inc. 401(k) Plan was frozen for purposes of participation as of September 30,
1998. The Company wished to terminate the plan effective August 1,
2007 and distribute the accounts under the WGA plan of all participants who have
terminated employment. The dollars remaining under the prior plan are sitting in
a company forfeiture account in the WGA plan, as a result of a plan correction
done years ago. The employer exhausted all efforts in trying to locate these
participants, so the dollars were transferred to the company forfeiture account.
The dollars from the WGA plan forfeiture account will be wired to Prudential and
invested in the forfeiture account of the INNOLOG plan. The employer will be
responsible for tracking who the dollars are attributable to in the event the
participants come back to claim their money.