AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON October 17, 2001
REGISTRATION N0. 333-___________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
EURONET WORLDWIDE, INC.
------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Governing Instruments)
DELAWARE 74-2806888
-------------------------- -----------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
4601 COLLEGE BOULEVARD
LEAWOOD, KANSAS 66211
913-327-4200
-------------------------------------------------
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
DANIEL R. HENRY
CHIEF OPERATING OFFICER
4601 COLLEGE BOULEVARD
LEAWOOD, KANSAS 66211
913-327-4200
--------------------------------------------------
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
EURONET WORLDWIDE, INC.
401(k) PLAN
---------------------------------------------------
(Full Title of the Plan)
COPIES OF ALL COMMUNICATIONS T0:
----------------------------------------------------
MICHAEL E. KARNEY
FRIDAY, ELDREDGE & CLARK
2000 REGIONS CENTER
400 W. CAPITOL AVENUE
LITTLE ROCK, ARKANSAS 72201-3493
501-376-2011
CALCULATION OF REGISTRATION FEE
============================================================================
PROPOSED
PROPOSED MAXIMUM
TITLE OF MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO AMOUNT TO BE OFFERING PRICE OFFERING REGISTRATION
BE REGISTERED(1) REGISTERED(1)(2) PER SHARE(3) PRICE FEE(4)
----------------------------------------------------------------------------
Common Stock,
par value $.02
per share 1,000,000 shares $ 13.37 $ 13,370,000 $ 3,342.50
===========================================================================
(1) To the extent to which interests in the Plan constitute
separate securities, this Registration Statement shall be
deemed to register an indeterminate amount of such interests
in the Plan in accordance with Rule 416(c). This
Registration Statement also covers any additional shares of
the Registrant's Common Stock that may hereafter become
issuable as a result of the adjustment provisions of the
Plan or of the Common Stock in accordance with Rule 416(a).
(2) The shares of Common Stock offered hereby are offered
pursuant to the Euronet Worldwide, Inc. 401(k) Plan.
(3) Pursuant to Rule 457(c) under the Securities Act of 1933, as
amended, the proposed maximum offering price per share is
the average of the high and low price per share of the
Common Stock on October 10, 2001.
(4) Pursuant to Rule 457(h)(2), no registration fee is required
with respect to the interests in the Plan.
-2-
PART I
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
The documents containing the information specified in Part I
of Form S-8 will be sent or given to participants in the 401(k)
Plan of Euronet Worldwide, Inc. and its subsidiaries (the
"Company"), as specified by Rule 428(b)(1) promulgated by the
Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended (the "Securities Act").
Such documents are not being filed with the Commission, but
constitute (along with the documents incorporated by reference
into the Registration Statement pursuant to Item 3 of Part II
hereof) a prospectus that meets the requirements of Section 10
(a) of the Securities Act. The documents incorporated by
reference into the Registration Statement pursuant to Item 3 of
Part II hereof will be available to participants in the Plan,
without charge, upon written or oral request. Any such request
should be directed to Daniel R. Henry, Chief Operating Officer,
Euronet Worldwide, Inc., 4601 College Boulevard, Leawood, Kansas
66211, telephone 913-327-4200.
-3-
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
(Not Required in Prospectus)
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents, which have been filed by Euronet
Worldwide, Inc. (the "Registrant") with the Commission pursuant
to the Securities Act or the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), are incorporated herein by
reference:
(a) The Registrant's Annual Report on Form 10-K for
the year ended December 31, 2000 (File No.
0-22167), and any amendments thereto.
(b) (i) The Registrant's Quarterly Report on Form 10-
Q for the period ended March 31, 2001 (File
No. 0-22167), and any amendments thereto.
(ii) The Registrant's Quarterly Report on Form 10-Q
for the period ended June 30, 2001 (File No.
0-22167), and any amendments thereto.
(iii) The Registrant's Proxy Statement on Schedule
14A for the Annual Meeting of Stockholders
held on May 24, 2001 (File No. 0-22167), and
any amendments thereto.
(c) The description of the Registrant's Common Stock
contained in the Registrant's Registration
Statement on Form 8-A filed with the Commission on
February 21, 1997 and any amendment or report
filed with the Commission for the purpose of
updating such description.
In addition, all documents filed by the Registrant with the
Commission pursuant to Section 13(a), 13(c), 14 or 15 (d) of the
Exchange Act after the date of this Registration Statement and
prior to the termination of the offering shall be deemed to be
incorporated by reference into this Registration Statement and to
be a part hereof from the date of the filing of such document
with the Commission. Any statement contained in a document
incorporated by reference herein shall be deemed to be modified
or superseded for purposes of the Registration Statement to the
extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part
of the Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable. The class of securities to be offered is
registered under Section 12 of the Exchange Act.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law, as
amended, provides that a corporation shall have the power to
indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or
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proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was a
director, officer, employee or agent of the corporation or is or
was serving at is request in such capacity in another corporation
or business association, against expenses (including attorneys
fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with such action,
suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests
of the corporation, and with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was
unlawful.
Section 102(b)(7) of the Delaware General Corporation Law,
as amended, permits a corporation to provide in its certificate
of incorporation that a director of the corporation shall not be
personally liable to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director s duty of
loyalty to the corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174
of the Delaware General Corporation Law, or (iv) for any
transaction from which the director derived an improper personal
benefit.
Articles EIGHTH and NINTH of the Registrant's certificate of
incorporation provide for the elimination of personal liability
of a director for breach of fiduciary duty as permitted by
Section 102(b)(7) of the Delaware General Corporation Law.
Article VII of the Registrant's by-laws, as amended,
provides that the Registrant shall indemnify directors and
officers to the fullest extent permitted by the Delaware General
Corporation Law.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The exhibits filed as part of this Registration Statement
are as follows:
EXHIBIT
NUMBER DESCRIPTION
------- --------------------
4.1 Articles of Incorporation of Euronet
Worldwide, Inc., (Incorporated by reference
to Exhibit 3.1 of the Registrant's Form S-1
Registration Statement filed with the
Commission on December 18, 1996 (File No.
333-18121)).
4.2 Bylaws of Euronet Worldwide, Inc.
(Incorporated by reference to Exhibit 3.2 of
the Company's Registration Statement on Form
S-1 dated December 18, 1996 (File No. 333-
18121)).
4.3 Form of Certificate of Common Stock of the
Registrant (Incorporated by reference to
Exhibit 4.1 of the Registrant's Form S-1
Registration Statement filed with the
Commission on December 18, 1996 (File No.
333-18121)).
-5-
4.4* Euronet Services, Inc. 401(k) Plan.
4.5* Amendment No. 1 to the Euronet Services, Inc.
401(K) Plan
4.6* Euornet Services, Inc. Salary Deferral Plan
and Trust Agreement Adoption Agreement
4.7* Amendment No. 2 to the Euronet Services, Inc.
401(K) Plan
4.8* Amendment No. 3 to the Euronet Services, Inc.
401(K) Plan
5.1* Opinion of Friday, Eldredge & Clark, LLP.
23.1* Consent of Friday, Eldredge & Clark,
LLP.
23.2* Consent of KPMG Polska Sp. z o.o.
24.1* Powers of Attorney (included as part of the
signature page hereto).
------------------
*Filed herewith.
ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
A. (1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this Registration
Statement to include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
B. The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act,
each filing of the Registrant's annual report pursuant to Section
13 (a) or Section 15 (d) of the Exchange Act (and where
applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
C. Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in
the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act, and is,
therefore unenforceable in the event that a claim for
indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred by a director, officer or
controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of
whether such indemnification by it is against public policy and
as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
-6-
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933,
as amended, the Registrant certifies that it has reasonable
grounds to believe that it meets all of the requirements for
filing on Form S-8 and has duly caused this Registration
Statement on Form S-8 to be signed on its behalf by the
undersigned, thereunto duly approved, in the City of Leawood,
State of Kansas, on the 17th day of October, 2001.
EURONET WORLDWIDE, INC.
By: Daniel R. Henry
----------------------------
Daniel R. Henry
Chief Operating Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below hereby constitutes and appoints Michael
J. Brown and Daniel R. Henry his true and lawful
attorneys-in-fact, each acting alone, with full powers of
substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities to sign any or all
amendments, including any post-effective amendments, to this
Registration Statement, and to file the same, with exhibits
thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-
in-fact and agents full power and authority to do and perform
each and every act and thing requisite and necessary to be done
in and about the premises, as fully to all intents and purposes
as he might or could do in person, and hereby ratifying and
confirming all that said attorneys-in-fact or their substitutes,
each acting alone, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement on Form S-8 has been signed by the
following persons in their capacities and on the dates indicated.
SIGNATURE TITLE
--------- -----
Michael J. Brown
-------------------------- Chief Executive Officer and President
Michael J. Brown (Principal Executive Officer)
Daniel R. Henry
-------------------------- Director and Chief Operating Officer
Daniel R. Henry
Steven J. Buckley
-------------------------- Director
Steven J. Buckley
Eriberto R. Scocimara
-------------------------- Director
Eriberto R. Scocimara
Thomas A. McDonnell
-------------------------- Director
Thomas A. McDonnell
Jeanine Strandjord
-------------------------- Director
Jeanine Strandjord
Kendall Coyne
-------------------------- Chief Finacial Officer
Kendall Coyne (Principal Financial and Accouning
Officer)
-7-
EXHIBIT INDEX
-------------
EXHIBIT
NUMBER DESCRIPTION
------- -----------
4.1 Articles of Incorporation of Euronet
Worldwide, Inc., (Incorporated by reference
to Exhibit 3.1 of the Registrant's Form S-1
Registration Statement filed with the
Commission on December 18, 1996 (File No.
333-18121)).
4.2 Bylaws of Euronet Worldwide, Inc.
(Incorporated by reference to Exhibit 3.2 of
the Company's Registration Statement on Form
S-1 dated December 18, 1996 (File No. 333-
18121)).
4.3 Form of Certificate of Common Stock of the
Registrant (Incorporated by reference to
Exhibit 4.1 of the Registrant's Form S-1
Registration Statement filed with the
Commission on December 18, 1996 (File No.
333-18121)).
4.4* Euronet Services, Inc. 401(k) Plan.
4.5* Amendment No. 1 to the Euronet Services, Inc.
401(K) Plan
4.6* Euornet Services, Inc. Salary Deferral Plan
and Trust Agreement Adoption Agreement
4.7* Amendment No. 2 to the Euronet Services, Inc.
401(K) Plan
4.8* Amendment No. 3 to the Euronet Services, Inc.
401(K) Plan
5.1* Opinion of Friday, Eldredge & Clark, LLP.
23.1* Consent of Friday, Eldredge & Clark,
LLP.
23.2* Consent of KPMG Polska Sp. z o.o.
24.1* Powers of Attorney (included as part of the
signature page hereto).
-----------------
*Filed herewith.
-8-
Exhibit 4.4
PLAN AND TRUST AGREEMENT
FRIDAY, ELDREDGE & CLARK
VOLUME SUBMITTER
DEFINED CONTRIBUTION PLAN AND TRUST
----------------------------
TABLE OF CONTENTS
I. DEFINITIONS . . . . . . . . . . . . . . . . . . . . 1
II. ELIGIBILITY AND PARTICIPATION . . . . . . . . . . . . 10
III. CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . 11
IV. RETIREMENT BENEFITS . . . . . . . . . . . . . . . . . 23
V. DEATH BENEFITS . . . . . . . . . . . . . . . . . . . 24
VI. TERMINATION OF SERVICE . . . . . . . . . . . . . . . 25
VII. DISTRIBUTION OF BENEFITS AND CLAIMS FOR BENEFITS . . 27
VIII. LIMITATIONS ON ALLOCATIONS . . . . . . . . . . . . . 43
IX. SPECIAL TOP HEAVY RULES . . . . . . . . . . . . . . 50
X. PLAN LOANS . . . . . . . . . . . . . . . . . . . . . 52
XI. PORTABILITY OF BENEFITS . . . . . . . . . . . . . . . 55
XII. INVESTMENT IN INSURANCE CONTRACT . . . . . . . . . . 56
XIII. ADMINISTRATION OF EMPLOYER'S PLAN . . . . . . . . . . 57
XIV. CREATION OF TRUST AND TRUSTEE RESPONSIBILITIES . . . . 60
XV. TRUST FUND VALUATION . . . . . . . . . . . . . . . . 66
XVI. GENERAL PROVISIONS RELATING TO EMPLOYER'S PLAN . . . 67
XVII. GENERAL PROVISIONS RELATING TO THE PROTOTYPE
VARIABLE PLAN AND TRUST AGREEMENT . . . . . . . . . . 71
ARTICLE I. DEFINITIONS
As used in this Plan and Trust Agreement, the following terms
shall have the meaning hereinafter set forth, unless a different
meaning is plainly required by the context:
1.1 "Adoption Agreement" shall mean the supplement to this
agreement under which the Employer selects various options relating
to the basic provisions of the Plan. For purposes of this Plan, an
Employer shall be entitled to delete the options that do not apply
to it and may make up to three (3) revisions and/or modifications
to the Adoption Agreement itself as long as such changes do not
discriminate in favor of Highly Compensated Employees and such
revisions are approved by the appropriate Key District of the
Internal Revenue Service where the Plan is ultimately submitted for
a favorable determination letter. A copy of the Adoption Agreement
is attached and made a part of this Plan and Trust.
1.2 "Account" shall mean the separate accounts created and
maintained for a Participant under the Employer's Plan. Separate
Accounts shall be established for Employer Contributions, Elective
Deferrals, Matching Contributions and Qualified Non-elective
Contributions.
1.3 "Age" shall mean the Employee's age at his last birthday.
1.4 "Beneficiary" shall mean any individual(s) or legal entity
designated to receive any death benefit arising under the Plan and
Trust upon the death of a Participant or, in the absence of such
designation, by the terms of the Plan contained hereinafter.
1.5 "Code" shall mean the Internal Revenue Code of 1986, as
amended.
1.6 "Compensation" means compensation as that term is defined
in Section 8.5(b) which is the amount which is reportable in the
"Wages, Tips and Other Compensation" Box on the Employee's Form W-
2. For any self-employed individual covered under the Plan,
compensation will mean Earned Income. Compensation shall include
only that compensation which is actually paid to the Employee
during the Plan Year. Compensation shall also include any amount
which is contributed by the Employer pursuant to a Salary Reduction
Agreement and which is not includible in the gross income of the
employee under Code 125, 402(e)(3), 402(h) or 403(b).
For years beginning after December 31, 1988, the annual
compensation of each Participant taken into account under the Plan
for any Plan Year shall not exceed $200,000. This limitation shall
be adjusted by the Secretary at the same time and in the same
manner as under Code 415(d), except that the dollar increase in
effect on January 1 of any calendar year is effective for years
beginning in such calendar year and the first adjustment to the
$200,000 limitation is effected on January 1, 1990. If a Plan
determines compensation on a period of time that contains fewer
than 12 calendar months, then the annual compensation limit is an
(C) 2001 FRIDAY, ELDREDGE & CLARK
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amount equal to the annual compensation limit for the calendar year
in which the compensation period begins multiplied by the ratio
obtained by dividing the number of full months in the period by 12.
In determining the compensation of a Participant for purposes of
this limitation, the rules of Code 414(q)(6) shall apply, except
in applying such rules, the term "family" shall include only the
spouse of the Participant and any lineal descendants of the
Participant who have not attained age 19 before the close of the
year. If, as a result of the application of such rules the
adjusted $200,000 limitation is exceeded, then (except for purposes
of determining the portion of compensation up to the integration
level if this Plan provides for permitted disparity), the
limitation shall be prorated among the affected individuals in
proportion to each such individual's compensation as determined
under this Section prior to the application of this limitation. If
compensation for any prior Plan Year is taken into account in
determining an Employee's allocations or benefits for the current
year, the compensation for such prior year is subject to the
applicable annual compensation limit in effect for that prior year.
For this purpose, for years beginning before January 1, 1990, the
applicable annual compensation limit is $200,000.
In addition to other applicable limitations set forth in the
plan, and notwithstanding any other provision of the plan to the
contrary, for plan years beginning on or after January 1, 1994, the
annual compensation of each employee taken into account under the
plan shall not exceed the OBRA '93 annual compensation limit. The
OBRA '93 annual compensation limit is $150,000, as adjusted by the
Commissioner for increases in the cost of living in accordance with
section 401(a)(17)(B) of the Internal Revenue Code. The cost-of-
living adjustment in effect for a calendar year applies to any
period, not exceeding 12 months, over which compensation is
determined (determination period) beginning in such calendar year.
If a determination period consists of fewer than 12 months, the
OBRA '93 annual compensation limit will be multiplied by a
fraction, the numerator of which is the number of months in the
determination period, and the denominator of which is 12.
For plan years beginning on or after January 1, 1994, any
reference in this plan to the limitation under section 401(a)(17)
of the Code shall mean the OBRA '93 annual compensation limit set
forth in this provision. If compensation for any prior
determination period is taken into account in determining an
employee's benefits accruing in the current plan year, the
compensation for that prior determination period is subject to the
OBRA '93 annual compensation limit in effect for that prior
determination period. For this purpose, for determination periods
beginning before the first day of the first plan year beginning on
or after January 1, 1994, the OBRA '93 annual compensation limit is
$150,000.
1.7 "Distributee" means an Employee or former Employee. In
addition, the Employee's or former Employee's surviving spouse and
the Employee's or former Employee's spouse or former spouse who is
an alternate payee under a qualified domestic relations order, as
defined in Code 414(p), are distributees with regard to the
(C) 2001 FRIDAY, ELDREDGE & CLARK
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interest of the Employee or former Employee unless such interest
has been appropriately waived by the spouse or former spouse.
1.8 "Earned Income" means the net earnings from self-employment
in the trade or business with respect to which the Plan is
established, for which personal services of the individual are a
material income-producing factor. Net earnings will be determined
without regard to items not included in gross income and the
deductions allocable to such items. Net earnings are reduced by
contributions by the Employer to a qualified plan to the extent
deductible under Section 404 of the Code. Net earnings shall be
determined with regard to the deduction allowed to the Employer by
Code 164(f) for taxable years beginning after December 31, 1989.
1.9 "Effective Date" means the date set out in the Adoption
Agreement on which an Employer's Plan became originally effective,
or as amended.
1.10 "Eligible Retirement Plan" means an individual
retirement plan which is either an individual retirement account
described in Code 408(a) or an individual retirement annuity
(other than an endowment contract) described in Code 408(b) or a
qualified plan described in Code 401(a) or an annuity plan
described in Code 403(a). However, in the case of an eligible
rollover distribution to the surviving spouse, an eligible
retirement plan means either an individual retirement account or
individual retirement annuity.
1.11 "Eligible Rollover Distribution" means any distribution
of all or any portion of the balance to the credit of an employee
in a qualified plan except for:
(a) Any distribution that is one of a series of
substantially equal periodic payments made (not less
frequently than annually) over the life or the life
expectancy of the Employee (or the joint lives of the
Employee and the Employee's designated beneficiary) or a
specific period of ten years or more;
(b) Any distribution to the extent the distribution is
required under Code 401(a)(9) relating to the minimum
distribution requirements;
(c) The portion of any distribution that is not includible
in gross income (determined without regard to the exclusion
for net unrealized appreciation described in Code
402(e)(4)); or
(d) Any distribution to a beneficiary who is someone other
than the spouse of the Participant and/or Employee; or
(e) Any other amounts, including certain corrective
payments and deemed distributions, as specified under the
applicable regulations issued under Code 402.
(C) 2001 FRIDAY, ELDREDGE & CLARK
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1.12 "Employee" means any person who is characterized as a
common law employee of the Employer under Arkansas law and any
Self-Employed Individual.
The term Employee shall include any employee of a member
corporation of a controlled group of corporations (within the
meaning of Code 414(b)) or of an affiliated service group (within
the meaning of Code 414(m)) of which the Employer is a member, or
of a member of an incorporated or unincorporated employer under
common control with the Employer (within the meaning of Code
414(c)) and any other entity required to be aggregated with the
Employer pursuant to Code 414(o) and the regulations thereunder.
The term Employee shall also include any leased employee deemed to
be an employee of any employer described in the previous sentence
as provided in Code 414(n) or (o).
1.13 "Employer" means any Employer or Self-Employed
Individual which adopts this plan by the execution of an Adoption
Agreement. Employer shall also mean any Related Employer to the
Employer, if the name of the Related Employer is entered on
Paragraph 1.1 of the Adoption Agreement and the Related Employer
adopts the Employer's Plan by executing an additional signature
page to the Adoption Agreement.
1.14 "Employer Contribution Account" means the Account to
which the Trustee shall credit Employer contributions and
forfeitures (other than Elective Deferrals, Matching Contributions
and Qualified Non-elective Contributions), if any, made on behalf
of such Participant and the earnings thereon. The Matching
Contribution Account shall be treated as a part of the Employer
Contribution Account if Matching Contributions are subject to the
vesting schedule as provided in Paragraph 3.7(c) of the Adoption
Agreement.
1.15 "Employer's Plan" means the Plan as stated and
established in the Adoption Agreement of a particular Employer.
Any reference to the Adoption Agreement shall be deemed a reference
to Employer's Plan.
1.16 "Entry Date" shall mean the dates designated in the
Adoption Agreement upon which an eligible Employee may enter the
Plan.
1.17 "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
1.18 "Highly Compensated Employee" shall mean and include
highly compensated active employees and highly compensated former
employees. A highly compensated active employee includes any
Employee who performs service for the Employer during the
determination year and who, during the look-back year:
(a) received compensation from the Employer in excess of
$75,000 (as adjusted pursuant to Code 415(d));
(C) 2001 FRIDAY, ELDREDGE & CLARK
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(b) received compensation from the Employer in excess of
$50,000 (as adjusted pursuant to Code 415(d)) and was a
member of the top-paid group for such year; or
(c) was an officer of the Employer and received
compensation during such year that is greater than 50
percent of the dollar limitation then in effect under Code
415(b)(1)(A).
The term Highly Compensated Employee also includes: (1)
Employees who are both described in the preceding sentence if the
term "determination year" is substituted for the term "look-back
year" and the Employee is one of the 100 employees who received the
most compensation from the Employer during the determination year;
and (2) employees who are 5 percent owners at any time during the
look-back year or determination year.
If no officer has satisfied the compensation requirement of (c)
above during either a determination year or look-back year, the
highest paid officer for such year shall be treated as a Highly
Compensated Employee.
For this purpose, the determination year shall be the Plan Year.
The look-back year shall be the twelve month period immediately
preceding the determination year.
A highly compensated former employee includes any Employee who
separated from service (or was deemed to have separated) prior to
the determination year, performs no service for the Employer during
the determination year, and was a highly compensated active
employee for either the separation year or any determination year
ending on or after the Employee's 55th birthday.
If an Employee is, during a determination year or look-back
year, a family member of either a 5 percent owner who is an active
or former employee or a Highly Compensated Employee who is one of
the 10 most highly compensated employees ranked on the basis of
compensation paid by the Employer during such year, then the family
member and the 5 percent owner or top-ten highly compensated
employee shall be aggregated and shall be treated as a single
Employee receiving compensation and plan contributions or benefits
equal to the sum of such compensation and contributions or benefits
of the family member and 5 percent owner or top-ten highly
compensated employee. For purposes of this paragraph, the term
family member includes the spouse, lineal ascendants and
descendants of the Employee or former Employee and the spouses of
such lineal ascendants and descendants.
The determination of who is a Highly Compensated Employee,
including the determinations of the number and identity of
Employees in the top-paid group, the top 100 Employees, the number
of Employees treated as officers and the compensation that is
considered, will be made in accordance with Code 414(q) and the
regulations thereunder.
1.19 "Hour of Service" shall mean:
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(a) Each hour for which an employee is paid, or entitled to
payment, for the performance of duties for the Employer. These
hours shall be credited to the employee for the computation period
or periods in which the duties are performed; and
(b) Each hour for which an employee is paid, or entitled to
payment, by the Employer on account of a period of time during
which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation, holiday,
illness, incapacity (including disability) layoff, jury duty,
military duty or leave of absence. No more than 501 hours of
service shall be credited under this paragraph for any single
continuous period (whether or not such period occurs in a single
computation period). Hours under this paragraph shall be
calculated and credited pursuant to section 2530.200b-2 of the
Department of Labor Regulations which are incorporated herein by
this reference; and
(c) Each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to by the
Employer. The same hours of service shall not be credited both
under paragraph (a) or paragraph (b), as the case may be, and under
this paragraph (c). These hours shall 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.
(d) For all purposes of this Plan, all hours of service
will be credited with other members of an affiliated service group
(as defined in Code 414(m)), a controlled group of corporations
(as defined in Code 414(b)), or a group of trades, or businesses
(whether or not incorporated) under common control (as defined in
Code 414(c)) of which the Employer is a member, and any other
entity required to be aggregated with the Employer pursuant to Code
414(o) and the regulations thereunder. Hours of Service will also
be credited for any individual considered an employee for purposes
of this Plan under Code 414(n) or Code 414(o) and the regulations
thereunder.
(e) Solely for purposes of determining whether a One-Year
Break in Service, as defined in Section 1.24, for participation and
vesting purposes has occurred in a computation period, an
individual who is absent from work for maternity or paternity
reasons shall receive credit for hours of service which would
otherwise have been credited to such individual but for such
absence, or in any case in which such hours cannot be determined,
eight hours of service per day of such absence. For purposes of
this paragraph, an absence from work for maternity or paternity
reasons means an absence (1) by reason of the pregnancy of the
individual, (2) by reason of a birth of a child of the individual,
(3) by reason of the placement of a child with the individual in
connection with the adoption of such child by such individual, or
(4) for purposes of caring for such child for a period beginning
immediately following such birth or placement. The hours of service
credited under this paragraph shall be credited (1) in the
computation period in which the absence begins if the crediting is
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necessary to prevent a break in service in that period, or (2) in
all other cases, in the following computation period.
1.20 "Joint and Survivor Annuity" shall mean an annuity for
the life of the Participant with a survivor annuity for the life of
the Participant's spouse which is not less than one-half, nor
greater than, the amount of the annuity payable during the joint
lives of the Participant and the Participant's spouse. The joint
and survivor annuity will be the amount of benefit which can be
purchased with the Participant's Account Balance.
1.21 "Leased Employee" means any person (other than an
employee of the recipient) who pursuant to an agreement between the
recipient and any other person ("leasing organization") has
performed services for the recipient (or for the recipient and
related persons determined in accordance with Code 414(n)(6)) on a
substantially full time basis for a period of at least one year,
and such services are of a type historically performed by employees
in the business field of 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.
A leased employee shall not be considered an employee of the
recipient if: (i) such employee is covered by a money purchase
pension plan providing: (a) a nonintegrated employer contribution
rate of at least 10 percent of compensation, as defined in Code
415(c)(3), but including amounts contributed pursuant to a salary
reduction agreement which are excludable from the employee's gross
income under Code 125, 402(e)(3), 402(h)(1)(B) or 403(b), (2)
immediate participation, and (3) full and immediate vesting; and
(b) leased employees do not constitute more than 20 percent of the
recipient's nonhighly compensated workforce.
1.22 "Maximum Integration Rate" is equal to the lesser of:
(a) 5.7% if the Integration Level specified in the Adoption
Agreement is equal to the Taxable Wage Base (the maximum amount of
earnings considered wages under Code 3121(a)(1) as of the
beginning of the Plan Year), or
(b) the applicable percentage determined as follows:
(1) If the Integration Level specified in the Adoption
Agreement is less than the greater of:
(i) $10,000 or
(ii) 20% of the Taxable Wage Base,
then 5.7%.
(2) If the Integration Level specified in the Adoption
Agreement is greater than the greater of:
(i) $10,000 or
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(ii) 20% of the Taxable Wage Base, but less
than 80% of the Taxable Wage Base,
then 4.3%.
(3) If the Integration Level specified in the Adoption
Agreement is greater than 80% of the Taxable Wage
Base, but less than the Taxable Wage Base, then
5.4%.
1.23 "Normal Retirement Age" shall mean the attainment of
the age or length of service requirement, whichever is later,
specified in the Adoption Agreement. If the Employer enforces a
mandatory retirement age, the Normal Retirement Age is the lesser
of that mandatory age or the age specified in the Adoption
Agreement.
1.24 "One-Year Break in Service" means a 12-consecutive
month period (computation period) during which the Participant has
not completed more than five hundred (500) Hours of Service.
1.25 "Owner Employee" means an individual who is a sole
proprietor, or who is a partner owning more than ten percent (10%)
of either the capital or profits interest of the partnership.
1.26 "Participant" means an Employee who is not excluded
from participation pursuant to Paragraph 1.2 of the Adoption
Agreement and has satisfied the Eligibility requirements specified
in Article II of the Adoption Agreement. An Employee of a Related
Employer shall not be eligible to become a Participant unless the
Related Employer is entered in Paragraph 1.1 of the Adoption
Agreement and the Related Employer adopts the Employer's Plan.
1.27 "Plan Year" shall coincide with the twelve (12)
consecutive month period as indicated in the Adoption Agreement.
1.28 "Related Employers" shall mean any member corporation
of a controlled group of corporations (within the meaning of Code
414(b)) or of an affiliated service group (within the meaning of
Code 414(m)) of which the Employer is a member, or of a member of
an incorporated or unincorporated employer under common control
with the Employer (within the meaning of Code 414(c)) and any
other entity required to be aggregated with the Employer pursuant
to Code 414(o) and the regulations thereunder.
1.29 "Self-Employed Individual" means an individual who has
Earned Income for the taxable year from the trade or business for
which the Plan is established; also, an individual who would have
had Earned Income but for the fact that the trade or business had
no net profits for the taxable year.
1.30 "Shared Employee" shall mean an individual who during
the Plan Year, (a) performs services as an Employee for the
Employer and for one or more other sharing employers at one or more
shared business premises of such employing persons or one or more
common locations, and (b) performs services for the Employer at
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such shared premises or locations which, when aggregated with
services performed by other Shared Employees of the same type
equals or exceeds 1,000 Hours of Service.
1.31 "Shareholder-Employee" means any employee or officer of
an electing small business (Subchapter S) corporation which adopts
this Plan who owns (or is considered as owning within the meaning
of Code 318(a)(1)) on any day during the taxable year of the
Employer, more than five percent (5%) of the outstanding stock of
the Employer. Hours of Service for a Shared Employee shall be
determined based on the Hours of Service completed with the
Employer and all other employers sharing the Shared Employee.
1.32 "Sponsor" of this Volume Submitter Defined Contribution
Plan means FRIDAY, ELDREDGE & CLARK.
1.33 "Trust Fund" means a fund established and held by the
Trustee to which contributions shall be deposited, the earnings
thereon shall be accumulated, and from which plan benefits and
other distributions provided by the Plan shall be made.
1.34 "Trustee" means the person, people or corporation
holding legal title to the assets of the Trust pursuant to the
terms of this Agreement and who is appointed and designated by the
Employer in the Adoption Agreement.
1.35 "Year of Service for Eligibility" means a
12-consecutive month period (computation period) during which an
Employee has not less than the number of Hours of Service with the
Employer required pursuant to Paragraph 2.4 of the Adoption
Agreement.
1.36 "Year of Service for Vesting" means a 12-consecutive
month period (computation period) during which an Employee has not
less than the number of Hours of Service with the Employer required
pursuant to Paragraph 5.3 of the Adoption Agreement.
ARTICLE II. ELIGIBILITY AND PARTICIPATION
2.1 Eligibility on Re-employment of a Former Participant. A
former Participant whose employment is terminated and who is
thereafter rehired by the Employer shall be eligible to become a
Participant immediately upon reemployment. If an Employee
satisfies the age and service requirements, but is not employed on
an Entry Date, the Employee will become a Participant immediately
upon reemployment.
2.2 Eligibility on Re-employment of a Former Employee Only. In
the case of an Employer who has elected to provide 100% vesting
after not more than two (2) Years of Service, if any Employee has a
One-Year Break in Service before satisfying the eligibility
requirements of the Employer's Plan, service before such break will
not be taken into account upon the reemployment of such Employee.
Notwithstanding the foregoing, in the case of a former Participant
who did not have any nonforfeitable right to his Employer
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Contribution Account, Years of Service for Eligibility before a
period of consecutive One-Year Breaks in Service will not be taken
into account in computing Years of Service for Eligibility upon
reemployment if the number of One-Year Breaks in Service in such
period equals or exceeds the greater of 5 or the aggregate number
of Years of Service for Eligibility. Such aggregate number of
Years of Service for Eligibility will not include any Years of
Service for Eligibility disregarded under the preceding sentence by
reason of prior One-Year Breaks in Service.
2.3 Eligibility Computation Period. For purposes of
determining Years of Service for Eligibility and One-Year Breaks in
Service for purposes of eligibility (initial participation or
re-entry under the Plan), the eligibility computation period is the
12-consecutive month period beginning on the date the Employee
first performs an Hour of Service for the Employer. The succeeding
12-consecutive-month periods shall commence with the first Plan
Year which commences immediately prior to the first anniversary of
the date the Employee first performs an Hour of Service for the
Employer, regardless of whether the Employee is entitled to be
credited with 1,000 Hours of Service during the initial eligibility
computation period. An Employee who is credited with 1,000 Hours
of Service in both the initial eligibility computation period and
the first Plan Year which commences immediately prior to the first
anniversary of the date the Employee first performs an Hour of
Service for the Employer will be credited with two Years of Service
for Eligibility.
ARTICLE III. CONTRIBUTIONS
3.1 Timing of Contributions. A payment of an Employer
Contribution made after the close of an Employer's taxable year
shall be considered to be on account of the Employer's preceding
taxable year if either (a) the Employer designates the payment in
writing to the Plan Administrator or Trustee as a payment of the
contribution on account of the Employer's preceding taxable year,
or (b) the Employer claims such payment as a deduction on its tax
return for such preceding taxable year. Any such designation or
claim by the Employer shall be irrevocable.
3.2 Nondeductible Employee Contributions. This Plan shall not
accept Nondeductible Employee Contributions for Plan Years
beginning after the Plan Year in which this plan document is
adopted by the Employer. Employee contributions for Plan Years
beginning after December 31, 1986, will be so limited so as to meet
the nondiscrimination test of Code 401(m). A separate
Nondeductible Employee Contribution Account will be maintained by
the Trustee for the nondeductible employee contributions of each
Participant. The Trustee will have the same investment and
accounting responsibility with regard to the Nondeductible Employee
Contribution Account as it does with regard to the Employer
Contribution Account. Participants shall have a nonforfeitable
right to the amount in their Nondeductible Employee Contribution
Account. Subject to Section 7.1, relating to the Joint and
Survivor Annuity requirements, if applicable, a Participant shall,
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upon written notice to the Trustee, be entitled to withdraw at any
time the lesser of the dollar amount of his aggregate nondeductible
employee contributions or the current value attributable to such
contributions. No forfeitures will occur solely as a result of a
Participant's withdrawal of nondeductible employee contributions.
Any earnings and gains on nondeductible employee contributions
cannot be withdrawn or distributed until the Participant's
termination of service, death, disability or retirement. A
Participant who is vested only in his Employee Contribution Account
shall also be treated as a vested Participant.
3.3 Deductible Employee Contributions. This Plan shall not
accept Deductible Employee Contributions for a taxable year
beginning after December 31, 1986. Contributions made prior to
that date will be maintained by the Trustee in a separate
Deductible Employee Contribution Account for the deductible
employee contributions of each Participant. The Trustee will have
the same investment and accounting responsibility with regard to
the Deductible Employee Contribution Account as it does with regard
to the Employer Contribution Account. No part of the Deductible
Employee Contribution Account may be used to purchase life
insurance. Participants shall have a nonforfeitable right to the
amount in their Deductible Employee Contribution Account. Subject
to Section 7.1, relating to the Joint and Survivor Annuity
requirements, if applicable, a Participant may by written notice to
the Trustee be entitled to withdraw at any time any part of the
Deductible Contribution Account.
3.4 Elective Deferrals. This Section shall apply if the
Employer has elected to establish a Cash or Deferred Arrangement
("CODA") pursuant to the Adoption Agreement.
(a) Election of Elective Deferrals.
(1) Definition of Elective Deferrals. Elective
Deferrals shall mean any Employer contributions made to the Plan at
the election of the Participant, in lieu of cash compensation, and
shall include contributions made pursuant to a salary reduction
agreement or other deferral mechanism. With respect to any taxable
year, a Participant's Elective Deferral is the sum of all Employer
contributions made on behalf of such Participant pursuant to an
election to defer under any qualified CODA as described in Code
401(k), any simplified employee pension cash or deferred
arrangement as described in Code 402(h)(l)(B), any eligible
deferred compensation plan under Code 457, any plan as described
under Code 501(c)(18), and any Employer contributions made on the
behalf of a Participant for the purchase of an annuity contract
under Code 403(b) pursuant to a salary reduction agreement.
(2) Elective Deferral Account. The Participant's
accrued benefit derived from Elective Deferrals is nonforfeitable.
A separate Account for Elective Deferrals will be maintained for
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each Participant. The Account will be credited with the applicable
contributions and earnings thereon.
(3) Maximum Amount of Elective Deferrals. A
Participant's Elective Deferrals are subject to any limitations
imposed in Paragraph 3.6 of the Adoption Agreement and any further
limitations under the Plan. No Participant shall be permitted to
have Elective Deferrals made under this Plan, or any other
qualified plan maintained by the Employer, during any taxable year,
in excess of the dollar limitation contained in Code 402(g) in
effect at the beginning of such taxable year.
(4) Distribution of Excess Elective Deferrals. Excess
Elective Deferrals shall mean those Elective Deferrals that are
includible in a Participant's gross income under Code 402(g) to
the extent such Participant's Elective Deferrals for a taxable year
exceed the dollar limitation under such Code Section. Excess
Elective Deferrals shall be treated as annual additions under the
Plan. Excess Elective Deferrals to be distributed for a taxable
year will be reduced by Excess Contributions previously distributed
for the Plan Year beginning in such taxable year. Notwithstanding
any other provision of the Plan, Excess Elective Deferrals, plus
any income and minus any loss allocable thereto pursuant to the
Plan, shall be distributed no later than April 15 to any
Participant to whose account Excess Elective Deferrals were
assigned for the preceding year and who claims Excess Elective
Deferrals for such taxable year. A Participant may assign to, and
claim from, this Plan any Excess Elective Deferrals made during a
taxable year of the Participant by notifying the Plan Administrator
on or before April 15th of the following taxable year of the amount
of the Excess Elective Deferrals to be assigned to, and claimed
from, this Plan. Excess Elective Deferrals shall be adjusted for
any income or loss up to the date of distribution.
(b) Special Nondiscrimination Test for Elective Deferrals.
The Actual Deferral Percentage ("ADP") for Participants who are
Highly Compensated Employees for each Plan Year and the ADP for
Participants who are not Highly Compensated Employees ("Non-highly
Compensated Employees") for the same Plan Year must satisfy one of
the following tests:
(1) The ADP for Participants who are Highly
Compensated Employees for the Plan Year shall not exceed the ADP
for Participants who are Non-highly Compensated Employees for the
same Plan year multiplied by 1.25; or
(2) The ADP for Participants who are Highly
Compensated Employees for the Plan Year shall not exceed the ADP of
Participants who are Non-highly Compensated Employees for the same
Plan Year multiplied by 2.0, provided that the ADP for Participants
who are Highly Compensated Employees does not exceed the ADP for
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participants who are Non-highly Compensated Employees by more than
two (2) percentage points.
(c) Rules Applicable to Special Nondiscrimination Test for
Elective Deferrals.
(1) The ADP for each of the two specified groups of
Participants for a Plan year means the average of the ratios
(calculated separately for each Participant in such group) of:
(i) the amount of Employer contributions actually
paid over to the trust on behalf of such
Participant for the Plan Year to
(ii) the Participant's Compensation for such
Plan Year (whether or not the Employee
was a Participant for the entire Plan
Year).
Employer contributions on behalf of any Participant shall include:
(i) any Elective Deferrals made pursuant to the
Participant's deferral election, including
Excess Elective Deferrals of Highly
Compensated Employees, but excluding Elective
Deferrals that are taken into account in the
Contribution Percentage test (provided the ADP
test is satisfied both with and without
exclusion of these Elective Deferrals); and
(ii) the amount of Qualified Non-elective
Contributions and Qualified Matching
Contributions under this Plan, or any
other plan maintained by the Employer as
provided by regulations under the Code,
that are needed to meet the ADP test set
forth in subsection (b) above.
For purposes of computing Actual Deferrals Percentages, an Employee
who would be a Participant but for the failure to make Elective
Deferrals shall be treated as a Participant on whose behalf no
Elective Deferrals are made. Compensation shall be limited to that
amount received by the Participant during the period the
Participant is eligible to make Elective Deferral Contributions.
Elective Deferrals will be taken into account for purposes of
determining the ADP of a Participant only if they relate to
Compensation that either would have been received by the
Participant in the Plan Year (but for the deferral election) or was
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attributable to services performed during the Plan Year and would
have been received by the Participant within 2 1/2 months after the
close of the Plan Year (but for the deferral election).
(2) The ADP for any Participant who is a Highly
Compensated Employee for the Plan Year and who is eligible to have
Elective Deferrals (and Qualified Non-elective Contributions or
Qualified Matching Contributions, or both, if treated as Elective
Deferrals for purposes of the ADP test) allocated to his or her
accounts under two or more arrangements described in Code 401(k),
that are maintained by the Employer, shall be determined as if such
Elective Deferrals (and, if applicable, such Qualified Non-elective
Contributions or Qualified Matching Contributions, or both) were
made under a single arrangement. If a Highly Compensated Employee
participates in two or more cash or deferred arrangements that have
different Plan Years, all cash or deferred arrangements ending with
or within the same calendar year shall be treated as a single
arrangement.
(3) In the event that this Plan satisfies the
requirements of Code 401(k), 401(a)(4), or 410(b) only if
aggregated with one or more other plans, or if one or more other
plans satisfy the requirements of such sections of the Code only if
aggregated with this Plan, then this section shall be applied by
determining the ADP of employees as if all such plans were a single
plan. For Plan Years beginning after December 31, 1989, plans may
be aggregated in order to satisfy Code 401(k) of the Code only if
they have the same Plan Year.
(4) For purposes of determining the ADP of a
Participant who is a 5-percent owner or one of the ten most highly-
paid Highly Compensated Employees, the Elective Deferrals (and
Qualified Non-elective Contributions or Qualified Matching
Contributions, or both, if treated as Elective Deferrals for
purposes of the ADP test) and Compensation of such Participant
shall include the Elective Deferrals (and, if applicable, Qualified
Non-elective Contributions and Qualified Matching Contributions, or
both) and Compensation for the Plan Year of Family Members (as
defined in Code 414(q)(6)). Family Members, with respect to such
Highly Compensated Employees, shall be disregarded as separate
employees in determining the ADP both for Participants who are Non-
highly Compensated Employees and for Participants who are Highly
Compensated Employees.
(5) For purposes of determining the ADP test, Elective
Deferrals, Qualified Non-elective Contributions and Qualified
Matching Contributions must be made before the last day of the
twelve-month period immediately following the Plan Year to which
the contributions relate and the allocation of such contributions
must not be contingent on participation or performance of services
after the allocation date.
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(6) The Employer shall maintain records sufficient to
demonstrate satisfaction of the ADP test and the amount of
Qualified Non-elective Contributions or Qualified Matching
Contributions, or both, used in such test.
(7) The determination and treatment of the ADP amounts
of any Participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
(d) Distribution of Excess Contributions.
(1) Excess Contributions. Excess Contributions shall
mean, with respect to any Plan year, the excess of:
(i) The aggregate amount of Employer contributions
actually taken into account in computing the
ADP of Highly Compensated Employees for such
Plan Year, over
(ii) The maximum amount of such contributions
permitted by the ADP test (determined by
reducing contributions made on behalf of
Highly Compensated Employees in order of
the ADPs, beginning with the highest of
such percentages).
(2) Time for Distribution of Excess Contributions.
Notwithstanding any other provision of this Plan, Excess
Contributions, plus any income and minus any loss allocable thereto
pursuant to the Plan, shall be distributed no later than the last
day of each Plan Year to Participants to whose Accounts such Excess
Contributions were allocated for the preceding Plan Year. If such
excess amounts are distributed more than 2 1/2 months after the
last day of the Plan Year in which such excess amounts arose, a ten
(10) percent excise tax will be imposed on the Employer maintaining
the Plan with respect to such amounts. Such distributions shall be
made to Highly Compensated Employees on the basis of the respective
portions of the Excess Contributions attributable to each of such
Employees. Excess Contributions shall be allocated to Participants
who are subject to the family member aggregation rules of Code
414(q)(6) in the manner prescribed by the regulations. Excess
Contributions shall be treated as annual additions under the Plan.
(4) Accounting for Excess Contributions. Excess
Contributions shall be distributed from the Participant's Elective
Deferrals Account and Qualified Matching Contribution Account (if
applicable) in proportion to the Participant's Elective Deferrals
and Qualified Matching Contributions (to the extent used in the ADP
test) for the Plan Year. Excess Contributions shall be distributed
(C) 2001 FRIDAY, ELDREDGE & CLARK
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from the Participant's Qualified Non-elective Contribution Account
only to the extent that such Excess contributions exceed the
balance in the Participant's Elective Deferral Account and
Qualified Matching Contribution Account. The amount of Excess
Contributions to be distributed shall be reduced by Excess Elective
Deferrals previously distributed for the taxable year ending in the
same Plan Year.
3.5 Matching Contributions.
This Section shall apply if the Employer has elected to make Matching
Contributions pursuant to the Adoption Agreement.
(a) Matching of Elective Deferrals.
(1) Definition of Matching Contribution. A Matching
Contribution shall mean an Employer contribution made to this or
any other defined contribution plan on behalf of a Participant on
account of the Participant's Elective Deferrals. In no event shall
Matching Contributions be permitted under this Plan which match
Nondeductible Employee Contributions.
(2) Matching Contribution Account. A separate Account
for Matching Contributions will be maintained for each Participant.
The Account will be credited with the applicable contributions and
earnings thereon.
(3) Vesting and Forfeitures of Matching Contributions.
Matching Contributions shall be vested in accordance with Paragraph
3.7(c) of the Adoption Agreement. In any event, Matching
Contributions shall be 100% vested at Normal Retirement Age, upon
complete or partial termination of the Profit Sharing Plan, or upon
the complete discontinuance of Employer contributions. Forfeitures
of Matching Contributions, other than Excess Aggregate
Contributions, shall be made in accordance with Section 6.4.
(b) Special Nondiscrimination Test for Matching
Contributions. The Average Contribution Percentage ("ACP") for
Participants who are Highly Compensated Employees for each Plan
year and the ACP for Participants who are Non-highly Compensated
Employees for the same Plan Year must satisfy one of the following
tests:
(1) The ACP for Participants who are Highly
Compensated Employees for the Plan Year shall not exceed the ACP
for Participants who are Non-highly Compensated Employees for the
same Plan Year multiplied by 1.25; or
(2) The ACP for Participants who are Highly
Compensated Employees for the Plan Year shall not exceed the ACP
for Participants who are Non-highly Compensated Employees for the
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same Plan Year multiplied by two (2), provided that the ACP for
Participants who are Highly Compensated Employees does not exceed
the ACP for Participants who are Non-highly Compensated Employees
by more than two (2) percentage points.
(c) Rules Applicable to Special Nondiscrimination Test for
Matching Contributions.
(1) ACP shall mean the average of the "Contribution
Percentages" of the "Eligible Participants" in a group. Eligible
Participant shall mean any Employee who is eligible to make an
Elective Deferral (if the Employer takes such contributions into
account in the calculation of the Contribution Percentage), or to
receive a Matching Contribution (including forfeitures) or a
Qualified Matching Contribution. Contribution Percentage shall
mean the ratio (expressed as a percentage) of the Participant's
"Contribution Percentage Amounts" to the Participant's Compensation
for the Plan Year (whether or not the Employee was a participant
for the entire Plan Year). Contribution Percentage Amounts shall
mean the sum of the Matching Contributions and Qualified Matching
Contributions (to the extent not taken into account for purposes of
the ADP test) made under the Plan on behalf of the Participant for
the Plan Year and shall also include forfeitures of Excess
Aggregate Contributions or Matching Contributions allocated to the
Participant's Account which shall be taken into account in the Year
in which such forfeiture is allocated.
(2) The Employer shall include Qualified Non-elective
Contributions in the Contribution Percentage Amounts to the extent
not taken into account for purposes of the ADP test. The Employer
also may elect to use Elective Deferrals in the Contribution
Percentage Amounts so long as the ADP test is met before the
Elective Deferrals are used in the ACP test and continues to be met
following the exclusion of those Elective Deferrals that are used
to meet the ACP test.
(3) The Contribution Percentage of any Participant who
is a Highly Compensated Employee and who is eligible to have
Contribution Percentage Amounts allocated to his or her account
under two or more plans described in Code 401(a), or arrangements
described in Code 401(k) that are maintained by the Employer,
shall be determined as if the total of such Contribution Percentage
Amounts was made under each Plan. If a Highly Compensated Employee
participates in two or more cash or deferred arrangements that have
different plan years, all cash or deferred arrangements ending with
or within the same calendar year shall be treated as a single
arrangement.
(4) In the event that this Plan satisfies the
requirements of Code 401(m), 401(a)(4) or 410(b) only if
aggregated with one or more other plans, or if one or more other
(C) 2001 FRIDAY, ELDREDGE & CLARK
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plans satisfy the requirements of such sections of the Code only if
aggregated with this Plan, then this section shall be applied by
determining the Contribution Percentage of employees as if all such
plans were a single plan. For plan years beginning after December
31, 1989, plans may be aggregated in order to satisfy Code 401(m)
only if they have the same Plan Year.
(5) For purposes of determining the Contribution
percentage of a Participant who is a five-percent owner or one of
the ten most highly-paid Highly Compensated Employees, the
Contribution Percentage Amounts and Compensation of such
Participant shall include the Contribution Percentage Amounts and
Compensation for the Plan Year of Family Members as defined in Code
414(q)(6)). Family Members, with respect to Highly Compensated
Employees, shall be disregarded as separate employees in
determining the Contribution Percentage both for Participants who
are Non-highly Compensated Employees and for Participants who are
Highly Compensated Employees.
(6) Matching Contributions and Qualified Non-elective
Contributions will be considered made for a Plan Year if made no
later than the end of the twelve-month period beginning on the day
after the close of the Plan Year.
(7) The Employer shall maintain records sufficient to
demonstrate satisfaction of the ACP test and the amount of
Qualified Non-elective Contributions or Qualified Matching
Contributions, or both, used in such test.
(8) The determination and treatment of the
Contribution Percentage of any Participant shall satisfy such other
requirements as may be prescribed by the Secretary of the Treasury.
(d) Special Multiple Use Discrimination Test for Elective
Deferral and Matching Contributions. If one or more Highly
Compensated Employees participate in both a CODA and a plan subject
to the ACP test maintained by the Employer and the sum of the ADP
and ACP of those Highly Compensated Employees subject to either or
both tests exceeds the "Aggregate Limit", then the ACP of those
Highly Compensated Employees who also participate in a CODA will be
reduced (beginning with such Highly Compensated Employee whose ACP
is the highest) so that the limit is not exceeded. The amount by
which each Highly Compensated Employee's Contribution Percentage
Amounts is reduced shall be treated as an Excess Aggregate
Contribution. The ADP and ACP of the Highly Compensated Employees
are determined after any corrections required to meet the ADP and
ACP tests. Multiple use does not occur if either the ADP or ACP of
the Highly compensated Employees does not exceed 1.25 multiplied by
the ADP and ACP of the Non-highly Compensated Employees. The
Aggregate Limit shall mean the sum of:
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(1) 125 percent of the greater of the ADP of the Non-
highly Compensated Employees for the Plan Year or the ACP of Non-
highly Compensated Employees under the Plan subject to Code 401(m)
for the Plan Year beginning with or within the Plan Year of the
CODA and
(2) the lesser of 200% or two plus the lesser of such
ADP or ACP.
The word "lesser" is substituted for "greater" in (1) above, and
"greater" is substituted for "lesser" after "two plus the" in (2)
if it would result in a larger Aggregate Limit.
(e) Distribution of Excess Aggregate Contributions.
(1) Excess Aggregate Contributions. Excess Aggregate
Contributions shall mean, with respect to any Plan Year, the excess
of:
(i) The aggregate Contribution Percentage Amounts
taken into account in computing the numerator of the Contribution
percentage actually made on behalf of Highly Compensated Employees
for such Plan Year, over
(ii) The maximum Contribution Percentage
Amounts permitted by the ACP test (determined by reducing
contributions made on behalf of Highly Compensated Employees in
order of their Compensation Percentages beginning with the highest
of such percentages). Such determination shall be made after first
determining Excess Elective Deferrals pursuant to Section 3.4(a)(4)
and then determining Excess Contributions pursuant to Section
3.4(d).
(2) Time for Distribution of Excess Aggregate
Contributions. Notwithstanding any other provision of this Plan,
Excess Aggregate Contributions, plus any income and minus any loss
allocable thereto pursuant to the Plan, shall be forfeited, if
forfeitable, or if not forfeitable, distributed no later than the
last day of each Plan Year to Participants to whose Account such
Excess Aggregate Contributions were allocated for the preceding
Plan Year. Excess Aggregate Contributions shall be allocated to
Participants who are subject to the family member aggregation rules
of Code 414(q)(6) in the manner prescribed by the regulations. If
such Excess Aggregate Contributions are distributed more than 2 1/2
months after the last day of the Plan Year in which such excess
amounts arose, a ten (10) percent excise tax will be imposed on the
Employer maintaining the Plan with respect to those amounts.
Excess Aggregate Contributions shall be treated as an annual
additions under the Plan.
(3) Forfeitures of Excess Aggregate Contributions.
Forfeitures of Excess Aggregate Contributions may either be
reallocated to the Accounts of Non-highly Compensated Employees or
applied to reduce Employer contributions, as elected by the
Employer in Paragraph 3.7(d) of the Adoption Agreement.
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(4) Accounting for Excess Aggregate Contributions.
Excess Aggregate Contributions shall be forfeited, if forfeitable
or distributed on a pro-rata basis from the Participant's Matching
Contribution Account and Qualified Matching Contribution Account
(and, if applicable, the Participant's Qualified Non-elective
Contribution Account or Elective Deferral Account, or both).
3.6 Qualified Non-elective Contributions. This Section shall
apply if the Employer has elected to make Qualified Non-elective
Contributions pursuant to the Adoption Agreement. In addition, in
lieu of distributing Excess Contributions as provided in Section
3.4(d), or Excess Aggregate Contributions as provided in Section
3.5(e), and to the extent elected by the Employer in the Adoption
Agreement, the Employer may make Qualified Non-elective
Contributions on behalf of Non-highly Compensated Employees that
are sufficient to satisfy either the Actual Deferral Percentage
test or the Average Contribution Percentage test, or both, pursuant
to regulations under the Code.
(a) Definition of Qualified Non-elective Contributions.
Qualified Non-elective Contributions shall mean contributions
(other than Matching or qualified Matching Contributions) made by
the Employer and allocated to Participants' Accounts that the
Participants may not elect to receive in cash until distributed
from the Plan; that are nonforfeitable when made; and that are
distributable only in accordance with the distribution provisions
that are applicable to Elective Deferrals and Qualified Matching
Contributions.
(b) Qualified Non-elective Contribution Account. The
Participant's accrued benefit derived from Qualified Non-elective
Contributions is nonforfeitable. A separate Account for Qualified
Non-elective Contributions and Qualified Matching Contributions
will be maintained for each Participant. The Account will be
credited with the applicable contributions and earnings thereon.
3.7 Qualified Matching Contributions. This Section shall apply
if the Employer has elected to make Qualified Matching
Contributions pursuant to the Adoption Agreement. In addition, in
lieu of distributing Excess Contributions as provided in Section
3.4(d), or Excess Aggregate Contributions as provided in Section
3.5(e), and to the extent elected by the Employer in the Adoption
Agreement, the Employer may make Qualified Matching Contributions
on behalf of Non-highly Compensated Employees that are sufficient
to satisfy either the Actual Deferral Percentage test or the
Average Contribution Percentage test, or both, pursuant to
regulations under the Code.
(a) Definition of Qualified Matching Contributions.
Qualified Matching Contributions shall mean Matching Contributions
which are nonforfeitable when made; and that are distributable only
in accordance with the distribution provisions that are applicable
to Elective Deferrals.
(b) Qualified Matching Contribution Account. The
Participant's accrued benefit derived from Qualified Matching
(C) 2001 FRIDAY, ELDREDGE & CLARK
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Contributions is nonforfeitable. Qualified Matching Contributions
shall be held in the same separate Account maintained for each
Participant for Qualified Non-elective Contributions. The Account
will be credited with the applicable contributions and earnings
thereon.
3.8 Distribution Restrictions on Elective Deferrals, Qualified
Non-elective Contributions, and Qualified Matching Contributions.
(a) Distribution Restrictions. Elective Deferrals,
Qualified Non-elective Contributions, and Qualified Matching
Contributions, and income allocable to each are not distributable
to a Participant or his or her beneficiary or beneficiaries, in
accordance with such Participant's or beneficiary or beneficiaries
election, earlier than upon termination from employment, death, or
disability. Such amounts may also be distributed, subject to the
spousal and Participant consent requirements (if applicable)
contained in Code 401(a)(11) and 417, upon:
(1) Termination of the Plan without the establishment
of another defined contribution plan.
(2) The disposition by a corporation to an unrelated
corporation of substantially all of the assets (within the meaning
of Code 409(d)(2)) used in a trade or business of such corporation
if such corporation continues to maintain this plan after the
disposition, but only with respect to employees who continue
employment with the corporation acquiring such assets.
(3) The disposition by a corporation to an unrelated
entity of such corporation's interest in a subsidiary (within the
meaning of Code 409(d)(3)) if such corporation continues to
maintain this Plan, but only with respect to employees who continue
employment with such subsidiary.
(4) If elected in Paragraph 3.10 of the Adoption
Agreement, the attainment of age 59 1/2 in the case of a Profit-
Sharing plan.
(5) If elected in Paragraph 3.10 of the Adoption
Agreement, the hardship of the Participant as described in (b)
below.
(b) Hardship. In the event of Hardship on the part of a
Participant, the Participant may submit in writing the facts and
circumstances describing the hardship to a Hardship Committee which
shall be appointed by the Plan Administrator. For purposes of this
Paragraph, a distribution will be on account of hardship if the
distribution is necessary in light of immediate and heavy financial
needs of the Participant, where such Participant lacks other
available resources. The Hardship Committee shall review the claim
and determine if such claim meets the following objective
standards:
(1) The following are the only financial needs
considered immediate and heavy: deductible medical expenses
(C) 2001 FRIDAY, ELDREDGE & CLARK
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(within the meaning of Code 213(d)) of the Participant, the
Participant's spouse, children, or dependents; the purchase
(excluding mortgage payments) of a principal residence for the
employee; payment of tuition for the next quarter or semester of
post-secondary education for the Participant, the Participant's
spouse, children or dependents; or the need to prevent the eviction
of the Participant from, or a foreclosure on the mortgage of, the
Participant's principal residence.
(2) A distribution will be considered as necessary to
satisfy an immediate and heavy financial need of the Participant
only if:
(i) The Participant has obtained all
distributions, other than hardship
distributions, and all nontaxable loans
under all plans maintained by the
Employer;
(ii) All plans maintained by the Employer
provide that the Participant's
Elective Deferrals (and Nondeductible
Employee Contributions) will be
suspended for twelve months after the
receipt of the hardship
distributions;
(iii) The distribution is not in excess of
the amount of an immediate and heavy
financial need; and
(iv) All plans maintained by the Employer
provide that the Participant may not
make Elective Deferrals for the
Participant's taxable year
immediately following the taxable
year of the hardship distribution in
excess of the applicable limit under
Code 402(g) for such taxable year
less the amount of such Participant's
Elective Deferrals for the taxable
year of the hardship distribution.
ARTICLE IV. RETIREMENT BENEFITS
4.1 Retirement Benefits. A Participant shall be 100% vested
upon attaining Normal Retirement Age in the value of his Employer
Contribution Account plus the total balance of the Participant's
other Accounts, if any, valued on the last day of the last Plan
Year for which the Participant shall share in Employer
contributions (as provided in Paragraph 4.2 of the Adoption
Agreement).
4.2 Deferred Retirement. Employees who defer their actual
retirement past the attainment of Normal Retirement Age shall have
(C) 2001 FRIDAY, ELDREDGE & CLARK
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their benefits held until their actual Retirement Date (subject to
an earlier commencement required by Section 7.2) and they shall
share in Employer contributions and forfeitures, if any, with
respect to service past the attainment of Normal Retirement Age.
ARTICLE V. DEATH BENEFITS
5.1 Death Benefit Prior to Receiving Retirement Benefits. If a
Participant dies before receiving any Retirement Benefits, his
participation in the allocation of the Employer's contribution and
of forfeitures will end as of the last day of the Plan Year
designated in Paragraph 4.2 of the Adoption Agreement. The Death
Benefit shall be 100%, regardless of the deceased Participant's
number of Years of Service for Vesting, of the value of the
deceased Participant's Employer Contribution Account plus the total
balance of the Participant's other Accounts, if any, valued as of
the Valuation Date on or immediately preceding the date of
distribution to the Participant's Beneficiary, plus the amount of
the proceeds from insurance coverage on the Participant's life
received by the Trustee, if any, and less any partial distributions
made on or after such Valuation Date.
5.2 Death Benefit After Normal Retirement Date. If a
Participant dies after commencement of Retirement Benefits, his
death benefit shall be equal to the remaining balance of his
Employer Contribution Account plus the total balance of the
Participant's other Accounts, if any, which has not been
distributed to him prior to his death, valued as of the Valuation
Date on or immediately preceding the date of distribution to the
Participant's Beneficiary, plus the amount of the proceeds from
insurance coverage on the Participant's life received by the
Trustee, if any, and less any partial distributions made on or
after such Valuation Date.
5.3 Payment of Death Benefits. On the death of the
Participant, the Death Benefits shall be paid to the Participant's
Surviving Spouse (as defined in Section 7.1). Notwithstanding the
foregoing, if there is no Surviving Spouse, or, if a Surviving
Spouse has made a Qualified Election (as defined in Section 7.1) to
waive a Qualified Preretirement Survivor Annuity, or, if the
Surviving Spouse has consented in a manner conforming to a
Qualified Election and this is a Profit Sharing Plan which is not
required to offer a Qualified Preretirement Survivor Annuity (as
provided in Section 7.1), then the Death Benefit shall be paid to
the Participant's Designated Beneficiary. If a payment would
otherwise be made to a Designated Beneficiary, but the Designated
Beneficiary failed to survive the Participant, any Death Benefit
shall be payable to the executors or administrators of the estate
of the deceased Participant.
5.4 Proof of Death. The Plan Administrator may require such
proper proof of death and such evidence of the right of any person
to receive payment of the death benefit as the Plan Administrator
may deem desirable.
(C) 2001 FRIDAY, ELDREDGE & CLARK
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ARTICLE VI. TERMINATION OF SERVICE
6.1 Benefits Upon Termination of Service. If a Participant's
employment ends for any reason other than his Death, Disability or
prior to attainment of Normal Retirement Age, his participation in
the allocation of the Employer's contribution and of forfeitures
will end as of the last day of the Plan Year designated in
Paragraph 4.1 of the Adoption Agreement. The Participant's benefit
will be a percentage of the balance of his Employer Contribution
Account plus the total balance of the Participant's other Accounts,
if any, valued as of the Valuation Date on or immediately preceding
the date of distribution, less any partial distributions made on or
after such Valuation Date. That portion of a Participant's
Employer Contribution Account to which he is not entitled on
termination of service shall be forfeited and reallocated as
provided in Section 6.4 below. The percentage of the balance of a
Participant's Employer Contribution Account to which he shall be
entitled shall be determined by reference to the Vesting Schedule
set forth in Paragraph 5.1, or if the Plan is a Top Heavy Plan
Paragraph 5.2, of the Adoption Agreement.
6.2 Termination of Service Due to Disability. If the
employment of any Participant shall be terminated because of
Disability, his participation in the allocation of the Employer's
contribution and of forfeitures will end as of the last day of the
Plan Year designated in Paragraph 4.2 of the Adoption Agreement.
The Participant shall become 100% vested, regardless of his number
of Years of Service for Vesting, in the value of his Employer
Contribution Account plus the total balance of the Participant's
other Accounts, if any, valued as of the Valuation Date on or
immediately preceding the date of distribution, less any partial
distributions made on or after such Valuation Date. Disability
shall mean inability to engage in any substantial gainful activity
by reason of any medically determinable physical or mental
impairment that can be expected to result in death or which can be
expected to last for a continuous period of not less than twelve
(12) months. Disability shall be determined by a physician
selected by the Plan Administrator mutually acceptable to the Plan
Administrator and the Plan Participant.
6.3 Distribution of Participant Benefits on Termination of
Service. Except as otherwise provided herein, any Account to
which a Participant is entitled because of his termination of
service shall commence as provided in Paragraph 6.1 of the Adoption
Agreement.
6.4 Forfeitures Upon Distribution to Less than 100% Vested
Terminated Participants. If a Participant terminates employment
when the Participant is less than one hundred percent (100%) vested
in the Participant's Employer Contribution Account, the nonvested
portion shall be forfeited as follows:
(a) If the Participant receives a distribution of the
entire vested portion of the Participant's Employer Contribution
Account and the balance of the Participant's Accounts are not
greater than $3,500, or if more than $3,500 and the Participant
(C) 2001 FRIDAY, ELDREDGE & CLARK
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voluntarily and in writing elects to receive the distribution, then
the entire nonvested portion shall be treated as a forfeiture. If
a Participant terminates without being vested in any portion of his
Accounts he is deemed to receive an immediate distribution of zero
dollars and therefore an immediate forfeiture of the entire
Employer Contribution Account balance shall occur.
(b) If the balance of the Participant's Accounts exceeds
$3,500 and the Participant elects to have distributed less than the
entire vested portion of the Employer Contribution Account, the
part of the nonvested portion that will be treated as a forfeiture
is the total nonvested portion multiplied by a fraction, the
numerator of which is the amount of the distribution from the
Employer Contribution Account and the denominator of which is the
total value of the vested Employer Contribution Account balance. A
separate account will be established for the Participant's
remaining Employer Contribution Account balance as of the time of
the distribution and at any relevant time the Participant's
nonforfeitable portion of the separate account will be equal to an
amount ("X") determined by the formula: X=P(AB+(RxD))-(RxD). For
purposes of applying the formula: P is the nonforfeitable
percentage at the relevant time, AB is the special account balance
at the relevant time, D is the amount of the distribution, and R is
the ratio of the special account balance at the relevant time to
the account balance after the distribution.
(c) If a Participant receives a distribution pursuant to
(a) or (b) above and resumes employment covered under this Plan,
the Employee's former Employer Contribution Account balance will be
restored to the amount on the date of distribution, unadjusted by
subsequent gains or losses of the Plan, if the Employee repays to
the Plan the full amount of the distribution attributable to the
Employer Contribution Account before the earlier of 5 years after
the first date of which the Participant is subsequently re-employed
by the Employer, or the date the Participant incurs 5 consecutive
One-Year Breaks in Service following the date of the distribution.
If a Participant is deemed to receive a distribution of zero
dollars pursuant to (a) above, and the Participant resumes
employment covered under this Plan before the date the Participant
incurs 5 consecutive One-Year Breaks in Service, upon the
reemployment of such Participant, the Employer Contribution Account
balance of the Participant will be restored to the amount on the
date of such deemed distribution, unadjusted by subsequent gains or
losses of the Plan.
(d) The nonvested portion of a terminated Participant's
Employer Contribution Account which is not forfeited pursuant to
(a) or (b) above, if any, shall be treated as a forfeiture when
such Participant incurs five (5) consecutive One-Year Breaks in
Service.
(e) A restoration of a Employer Contribution Account
balance shall come first from current forfeitures and secondly from
Employer contributions. In the event current forfeitures are not
sufficient to restore the Employer Contribution Account of an
reemployed Participant, then the Employer will contribute
(C) 2001 FRIDAY, ELDREDGE & CLARK
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sufficient amounts to fully restore the previously forfeited
Account Balance. The restoration shall occur no later than the end
of the Plan Year following the Plan Year in which the repayment
occurs.
(f) A terminating Participant's Employer Contribution
Account shall be valued as of the last Valuation Date coinciding
with or immediately preceding the date of distribution.
(g) Forfeitures shall be reallocated pursuant to Section
6.5.
(h) For purposes of this Section 6.4, the computation
period for One Year Breaks in Service shall be the Plan Year as
defined in the Adoption Agreement.
(i) For purposes of determining whether the Participant's
Accounts exceed $3,500, all Accounts (including Nondeductible
Employee Contribution Accounts) shall be taken into account except
for an Account for accumulated deductible employee contributions
within the meaning of Code 72(o)(5)(B) made for Plan Years
beginning prior to January 1, 1989.
6.5 Accounting for Forfeitures. Amounts treated as a
forfeiture under Section 6.4 will first be used to restore previous
forfeitures of rehired Participants pursuant to the rules set forth
in Section 6.4(e). Except for forfeitures from a Participant's
Matching Contribution Account, the amounts treated as forfeitures
under Section 6.4 which are in excess of the amount necessary to
restore accrued benefits shall, for a Profit Sharing Plan, be added
to the Employer's contribution for the Plan Year in which the
forfeiture occurs and allocated in the same manner as Employer
contributions, or, for a Pension Plan, be used to reduce the
Employer's contribution for Plan Year in which the forfeiture
occurs. The amounts treated as forfeitures under Section 6.4 which
are from a Participant's Matching Contribution Account and which
are in excess of the amount necessary to restore accrued benefits
shall be used as set forth in Paragraph 3.7(e) of the Adoption
Agreement. Forfeitures arising hereunder will, for a Profit
Sharing Plan, be allocated only for the benefit of the Employees of
the Employer who adopted this Plan, or, for a Pension Plan, only be
used to reduce the contribution of the Employer who adopted this
Plan.
ARTICLE VII. DISTRIBUTION OF BENEFITS AND CLAIMS FOR BENEFITS
7.1 Joint and Survivor Annuity Requirements. Except as
provided with respect to certain Profit Sharing Plans and Voluntary
Deductible Contribution Accounts in Section 7.1(e), the provisions
of this Section 7.1 shall apply to any Participant who is credited
with at least one Hour of Service with the Employer on or after
August 23, 1984, and such other Participants as provided in Section
7.1(f).
(C) 2001 FRIDAY, ELDREDGE & CLARK
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(a) Qualified Joint and Survivor Annuity. Unless an
optional form of benefit is selected pursuant to a Qualified
Election within the 90-day period ending on the date benefit
payments would commence, a married Participant's Vested Account
Balance will be paid in the form of a Qualified Joint and Survivor
Annuity and an unmarried Participant's vested Account Balance will
be paid in the form of a life annuity. The Participant may elect
to have such annuity distributed upon attainment of the earliest
retirement age under the Plan.
(b) Qualified Preretirement Survivor Annuity. Unless an
optional form of benefit has been selected within the Election
Period pursuant to a Qualified Election, if a Participant dies
before the Annuity Starting Date then the Participant's Vested
Account Balance shall be applied toward the purchase of an annuity
for the life of the Surviving Spouse, unless the Surviving Spouse
elects an optional form of distribution as set forth in Paragraph
6.2 of the Adoption Agreement. The Surviving Spouse may elect to
have such annuity distributed within a reasonable period after the
Participant's death.
(c) Definitions. For purposes of Section 7.1, the
following definitions shall apply:
(1) Annuity Starting Date. The first day of the first
period for which an amount is paid as an annuity or any other form.
(2) Election Period. The period which begins on the
first day of the Plan Year in which the Participant attains age
thirty-five (35) and ends on the date of the Participant's death.
If a Participant separates from service prior to the first day of
the Plan Year in which age thirty-five (35) is attained, with
respect to the Account Balance as of the date of separation, the
Election Period shall begin on the date of separation. A
Participant who will not yet attain age 35 as of the end of any
current Plan Year may make a special qualified election to waive
the Qualified Preretirement Survivor Annuity for the period
beginning on the date of such election and ending on the first day
of the Plan Year in which the Participant will attain age 35. Such
election shall not be valid unless the Participant receives a
written explanation of the Qualified Preretirement Survivor Annuity
in such terms as are comparable to the explanation required under
Section 7.1(d). Qualified Preretirement Survivor Annuity coverage
will be automatically reinstated as of the first day of the Plan
Year in which the Participant attains age 35. Any new waiver on or
after such date shall be subject to the full requirements of this
Section 7.1.
(3) Earliest Retirement Age. The earliest date on
which, under the Plan, the Participant could elect to receive
retirement benefits.
(4) Qualified Election. A waiver of a Qualified Joint
and Survivor Annuity or a Qualified Preretirement Survivor Annuity.
Any waiver of a Qualified Joint and Survivor Annuity or a Qualified
Preretirement Survivor Annuity shall not be effective unless:
(C) 2001 FRIDAY, ELDREDGE & CLARK
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(i) the Participant's Spouse consents in writing
to the election;
(ii) the election designates a specific
beneficiary, including any class of
beneficiaries or any contingent
beneficiaries, which may not be changed
without spousal consent (or the Spouse
expressly permits designations by the
Participant without any further spousal
consent);
(iii) the Spouse's consent acknowledges the
effect of the election; and
(iv) the Spouse's consent is witnessed by a
plan representative or notary public.
Additionally, a Participant's waiver of the Qualified Joint and
Survivor Annuity shall not be effective unless the election
designates a form of benefit payment which may not be changed
without spousal consent (or the Spouse expressly permits
designations by the Participant without any further spousal
consent). If it is established to the satisfaction of a plan
representative that there is no Spouse or that the Spouse cannot be
located, a waiver will be deemed a Qualified Election.
Any consent by a Spouse obtained under this provision (or
establishment that the consent of a Spouse may not be obtained)
shall be effective only with respect to such Spouse. A consent
that permits designations by the Participant without any
requirement of further consent by such Spouse must acknowledge that
the Spouse has the right to limit consent to a specific
beneficiary, and a specific form of benefit where applicable, and
that the Spouse voluntarily elects to relinquish either or both of
such rights. A revocation of a prior waiver may be made by a
Participant without the consent of a Spouse at any time before the
commencement of benefits. The number of revocations shall not be
limited. No consent obtained under this provision shall be valid
unless the Participant has received notice as provided in Section
7.1(d) below.
(5) Qualified Joint and Survivor Annuity. An
immediate annuity for the life of the Participant with a survivor
annuity for the life of the Participant's Spouse which is fifty
percent (50%) of the amount of the annuity which is payable during
the joint lives of the Participant and the Participant's Spouse and
which is the amount of benefit which can be purchased with the
Participant's Vested Account Balance.
(6) Spouse (Surviving Spouse): 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 414(p).
(C) 2001 FRIDAY, ELDREDGE & CLARK
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(7) Vested Account Balance. The aggregate value of
the Participant's vested Account Balances derived from Employer and
employee contributions (including rollovers), whether vested before
or upon death, including the proceeds of insurance contracts, if
any, on the Participant's life. The provisions of this Section 7.1
shall apply to a Participant who is vested in amounts attributable
to Employer contributions, employee contributions (or both) at the
time of death or distribution.
(d) Notice Requirements.
(1) Qualified Joint and Survivor Annuity. In the case
of a Qualified Joint and Survivor Annuity, the Plan Administrator
shall no less than 30 days and no more than 90 days prior to the
Annuity Starting Date provide each Participant a written
explanation of:
(i) the terms and conditions of a Qualified Joint
and Survivor Annuity;
(ii) the Participant's right to make and the
effect of an election to waive the
Qualified Joint and Survivor Annuity form
of benefit;
(iii) the rights of a Participant's Spouse; and
(iv) the right to make, and the effect of, a
revocation of a previous election to
waive the Qualified Joint and Survivor
Annuity.
(2) Qualified Preretirement Survivor Annuity. In the
case of a Qualified Preretirement Survivor Annuity, the Plan
Administrator shall provide each Participant within the applicable
period for such Participant a written explanation of the Qualified
Preretirement Survivor Annuity in such terms and in such manner as
would be comparable to the explanation provided for meeting the
requirements of Section 7.1(d)(1) applicable to a Qualified Joint
and Survivor Annuity. The applicable period for a Participant is
whichever of the following periods ends last:
(i) the period beginning with the first day of the
Plan Year in which the Participant attains age
32 and ending with the close of the Plan Year
preceding the Plan Year in which the
Participant attains age 35;
(ii) a reasonable period ending after the
individual becomes a Participant;
(iii) a reasonable period ending after Section
7.1(d)(3) below ceases to apply to the
Participant;
(C) 2001 FRIDAY, ELDREDGE & CLARK
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(iv) a reasonable period ending after this
Section 7.1 first applies to the
Participant.
Notwithstanding the foregoing, notice must be provided within a
reasonable period ending after separation from service in the case
of a Participant who separates from service before attaining age
35.
For purposes of applying the preceding paragraph, a reasonable
period ending after the enumerated events described in (ii), (iii)
and (iv) is the end of the two-year period beginning one year prior
to the date the applicable event occurs, and ending one year after
that date. In the case of a Participant who separates from service
before the Plan Year in which age 35 is attained, notice shall be
provided within the two-year period beginning one year prior to
separation and ending one year after separation. If such a
Participant thereafter returns to employment with the Employer, the
applicable period for such Participant shall be redetermined.
(3) Fully Subsidized Benefit. Notwithstanding the
other requirements of this Section 7.1(d), the respective notices
prescribed by this section need not be given to a Participant if
(1) the plan "fully subsidizes" the costs of a qualified joint and
survivor annuity or qualified preretirement survivor annuity, and
(2) the plan does not allow the Participant to waive the qualified
joint and survivor annuity or qualified preretirement survivor
annuity and does not allow a married Participant to designate a
nonspouse beneficiary. For purposes of this Section 7.1(d)(3), a
plan fully subsidizes the costs of a benefit if no increase in
cost, or decrease in benefits to the Participant may result from
the Participant's failure to elect another benefit.
(e) Cash-Outs. The Plan Administrator shall direct the
Trustee to immediately distribute the Participant's Vested Account
Balance without the consent of the Participant and the Spouse of
the Participant if the value does not exceed $3,500. If the
Participant's Vested Account Balance exceeds $3,500 or if the
payment of a Qualified Joint and Survivor Annuity or Qualified
Preretirement Survivor Annuity has commenced the Plan Administrator
may direct the Trustee to immediately distribute the Participant's
Vested Account Balance if the Participant and the Spouse of the
Participant (or where the Participant has died the Surviving
Spouse) consent in writing to the distribution.
(f) Safe Harbor Rules.
(1) This Section 7.1(f) shall apply to a Participant
in a Profit Sharing Plan, and to any distribution, made on or after
the first day of the first Plan Year beginning after December 31,
1988, from or under a separate Account attributable solely to
accumulated deductible employee contributions, as defined in Code
72(o)(5)(B), and maintained on behalf of a Participant in a Money
Purchase Pension Plan, (including a Target Benefit Plan) if the
following conditions are satisfied:
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(i) the Participant does not or cannot elect
payments in the form of a life annuity, and
(ii) on the death of a Participant, the
Participant's Vested Account Balance will
be paid to the Participant's Surviving
Spouse, but if there is no Surviving
Spouse, or if the Surviving Spouse has
consented in a manner conforming to a
qualified election, then to the
Participant's designated beneficiary.
The Surviving Spouse may elect to have distribution of the vested
Account Balance commence within the 90-day period following the
date of the Participant's death. The Account Balance shall be
adjusted for gains or losses occurring after the Participant's
death in accordance with the provisions of the plan governing the
adjustment of Account Balances for other types of distributions.
This Section 7.1(f) shall not be operative with respect to a
Participant in a Profit Sharing Plan if the plan is a direct or
indirect transferee of a defined benefit plan, money purchase plan,
a target benefit plan, stock bonus, or profit sharing plan which is
subject to the survivor annuity requirements of Code 401(a)(11)
and 417. If this Section 7.1(f) is operative, then the provisions
of this Section 7.1, other than this subsection, shall be
inoperative. Notwithstanding the foregoing, if a separate Account
is provided for such transferee benefits and the balance of the
Participant's Accounts would otherwise meet the requirements of
this subsection, the provisions of Section 7.1, other than this
subsection, shall be operative only with respect to the separate
Account for the transferee benefit.
(2) The Participant may waive the spousal death
benefit described in this Section 7.1(f) at any time provided that
no such waiver shall be effective unless it satisfies the
conditions of 7.1(c)(4) relating to a Qualified Election (other
than the notification requirement referred to therein) that would
apply to the Participant's waiver of the qualified preretirement
survivor annuity.
(3) For purposes of this Section 7.1(f), Vested
Account Balance shall mean, in the case of a money purchase pension
plan or a target benefit plan, the Participant's separate Account
Balance attributable solely to accumulated deductible employee
contributions within the meaning of Code 72(o)(5)(B). In the case
of a Profit Sharing Plan, Vested Account Balance shall have the
same meaning as provided in Section 7.1(c)(7).
(g) Transitional Rules.
(1) Any living Participant not receiving benefits on
August 23, 1984, who would otherwise not receive the benefits
prescribed by the previous paragraphs of this Section 7.1 must be
given the opportunity to elect to have such prior sections apply if
such Participant is credited with at least one hour of service
under this Plan or a predecessor plan in a Plan Year beginning on
(C) 2001 FRIDAY, ELDREDGE & CLARK
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or after January 1, 1976, and such Participant had at least 10
years of vesting service when he or she separated from service.
(2) Any living Participant not receiving benefits on
August 23, 1984, who was credited with at least one hour of service
under this Plan or a predecessor plan on or after September 2,
1974, and who is not otherwise credited with any service in a Plan
Year beginning on or after January 1, 1976, must be given the
opportunity to have his or her benefits paid in accordance with
Section 7.1(g)(4).
(3) The respective opportunities to elect (as
described in (1) and (2) above of this Section 7.1(g)) must be
afforded to the appropriate Participants during the period
commencing on August 23, 1984, and ending on the date benefits
would otherwise commence to said Participants.
(4) Any Participant who has elected pursuant to (2)
above of this Section 7.1(g) and any Participant who does not elect
under (1) above of this Section 7.1(g) or who meets the
requirements of (1) except that such Participant does not have at
least ten (10) years of vesting service when he or she separates
from service, shall have his or her benefits distributed in
accordance with all of the following requirements if benefits would
have been payable in the form of a life annuity:
(i) Automatic joint and survivor annuity. If
benefits in the form of a life annuity become
payable to a married Participant who begins to
receive payments under the Plan on or after
normal retirement age; or dies on or after
normal retirement age while still working for
the Employer; or begins to receive payments on
or after the qualified early retirement age;
or separates from services on or after
attaining normal retirement age (or the
qualified early retirement age) and after
satisfying the eligibility requirements for
the payment of benefits under the Plan and
thereafter dies before beginning to receive
such benefits; then such benefits will be
received under this Plan in the form of a
Qualified Joint and Survivor Annuity, unless
the Participant has elected otherwise during
the Election Period. The Election Period must
begin at least six (6) months before the
Participant attains Qualified Early Retirement
Age and end not more than ninety (90) days
before commencement of benefits. Any election
hereunder will be in writing and may be
changed by the Participant at any time.
(ii) Election of early survivor annuity. A
Participant who is employed after
attaining the Qualified Early Retirement
Age will be given the opportunity to
(C) 2001 FRIDAY, ELDREDGE & CLARK
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elect, during the election period, to
have a survivor annuity payable on death.
If the Participant elects the survivor
annuity, payments under such annuity must
not be less than the payments which would
have been made to the spouse under the
Qualified Joint and Survivor Annuity if
the Participant had retired on the day
before his or her death. Any election
under this provision will be in writing
and may be changed by the Participant at
any time. The election period begins on
the later of (a) the 90th day before the
Participant attains the Qualified Early
Retirement Age, or (b) the date on which
participation begins, and ends on the
date the Participant terminates
employment.
(iii) For purposes of this Section 7.1(g)
Qualified Early Retirement Age is the
latest of the earliest date, under the
Plan, on which the Participant may elect
to receive retirement benefits, the first
day of the 120th month beginning before
the Participant reaches Normal Retirement
Age, or the date the Participant begins
participation. Also, Qualified Joint and
Survivor Annuity is an annuity for the
life of the Participant with a survivor
annuity for the life of the spouse as
described in Section 7.1(c)(5).
7.2 Distribution Requirements.
(a) General Rules. Subject to Section 7.1, relating to
Joint and Survivor Annuity Requirements, the requirements of this
Section 7.2 shall apply to any distribution of a Participant's
Account Balance and will take precedence over any inconsistent
provisions of this plan. Unless otherwise specified, the
provisions of this article apply to calendar years beginning after
December 31, 1984. All distributions required under this Section
7.2 shall be determined and made in accordance with the proposed
regulations under Code 401(a)(9), including the minimum
distribution incidental benefit requirement of 1.401(a)(9)-2 of
the proposed regulations.
(b) Limits on Distribution Periods. As of the first
distribution calendar year, distributions, shall be made over one
of the periods set forth in Paragraph 6.2 of the Adoption Agreement
subject to the limitations of this Section 7.2.
(c) Determination of Amount to be Distributed each Year.
If the Participant's Account Balance is to be distributed in other
than a single sum, the following minimum distribution rules shall
apply on or after the required beginning date:
(C) 2001 FRIDAY, ELDREDGE & CLARK
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(1) Individual Account.
(i) If a Participant's Account Balance is to be
distributed over (1) a period not extending
beyond the life expectancy of the Participant
or the joint life and last survivor expectancy
of the Participant and the Participant's
designated beneficiary or (2) a period not
extending beyond the life expectancy of the
designated beneficiary, the amount required to
be distributed for each calendar year,
beginning with distributions for the first
distribution calendar year, must at least
equal the quotient obtained by dividing the
Participant's benefit by the applicable life
expectancy.
(ii) For calendar years beginning before
January 1, 1989, if the Participant's
spouse is not the designated beneficiary,
the method of distribution selected must
assure that at least 50% of the present
value for the amount available for
distribution is paid within the life
expectancy of the Participant.
(iii) For calendar years beginning after
December 31, 1988, the amount to be
distributed each year, beginning with
distributions for the first distribution
calendar year shall not be less than the
quotient obtained by dividing the
Participant's benefit by the lesser of
(1) the applicable life expectancy or (2)
if the Participant's spouse is not the
designated beneficiary, the applicable
divisor determined from the table set
forth in Q&A-4 of 1.401(a)(9)-2 of the
proposed regulations. Distributions
after the death of the Participant shall
be distributed using the applicable life
expectancy in Section 7.2(c)(1) above as
the relevant divisor without regard to
Proposed Regulations 1.401(a)(9)-2.
(iv) The minimum distribution required for the
Participant's first distribution calendar
year must be made on or before the
Participant's required beginning date.
The minimum distribution for other
calendar years, including the minimum
distribution for the distribution
calendar year in which the employee's
required beginning date occurs, must be
made on or before December 31 of that
distribution calendar year.
(C) 2001 FRIDAY, ELDREDGE & CLARK
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(2) Annuity. If the Participant's benefit is
distributed in the form of an annuity purchased from an insurance
company, distributions thereunder shall be made in accordance with
the requirements of Code 401(a)(9) and the proposed regulations
thereunder.
(d) Commencement of Benefits to Participant. If the value
of a Participant's vested Account Balance exceeds (or at the time
of any prior distribution exceeded) $3,500, and the Account Balance
is immediately distributable, the Participant and the Participant's
spouse (or where either the Participant or the spouse has died, the
survivor) must consent to any distribution of such Account Balance.
The consent of the Participant and the Participant's spouse shall
be obtained in writing within the 90-day period ending on the
Annuity Starting Date. The Annuity Starting Date is the first day
of the first period for which an amount is paid as an annuity or
any other form. The Plan Administrator shall notify the
Participant and the Participant's spouse of the right to defer any
distribution until the Participant's Account Balance is no longer
immediately distributable. Such notification shall include a
general description of the material features, and an explanation of
the relative values, of, the optional forms of benefit available
pursuant to Paragraph 6.2 of the Adoption Agreement in a manner
that would satisfy the notice requirements of Code 417(a)(3), and
shall be provided no less than 30 days and no more than 90 days
prior to the Annuity Starting Date.
Notwithstanding the foregoing, only the Participant need consent
to the commencement of a distribution in the form of a qualified
joint and survivor annuity while the Account Balance is immediately
distributable. (Furthermore, if payment in the form of a Qualified
Joint and Survivor Annuity is not required with respect to the
Participant pursuant to Section 7.1 of the plan, only the
Participant need consent to the distribution of an Account Balance
that is immediately distributable.) Neither the consent of the
Participant nor the Participant's spouse shall be required to the
extent that a distribution is required to satisfy Code 401(a)(9)
or 415. In addition, upon termination of this plan if the plan
does not offer an annuity option (purchased from a commercial
provider), the Participant's Account Balance may, without the
Participant's consent, be distributed to the Participant or
transferred to another defined contribution plan (other than an
Employee Stock Ownership Plan as defined in Code 4975(e)(7))
within the same controlled group. However, if any entity within
the same controlled group as the Employer maintains another defined
contribution plan (other than an Employee Stock Ownership Plan as
defined in Code 4975(e)(7)) then the Participant's Account Balance
will be transferred, without the Participant's consent, to the
other plan if the Participant does not consent to an immediate
distribution.
An Account Balance is immediately distributable if any part of
the Account Balance could be distributed to the Participant (or
Surviving Spouse) before the Participant attains or would have
attained if not deceased) the later of Normal Retirement Age or age
62.
(C) 2001 FRIDAY, ELDREDGE & CLARK
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For purposes of determining the applicability of the foregoing
consent requirements to distributions made before the first day of
the first Plan Year beginning after December 31, 1988, the
Participant's vested Account Balance shall not include amounts
attributable to accumulated deductible employee contributions
within the meaning of Code 72(o)(5)(B).
Unless otherwise selected by the Participant in writing, payment
of benefits must begin no later than sixty (60) days after the
close of the Plan Year (a) in which the Participant attains the
earlier of age 65 or Normal Retirement Age or (b) in which occurs
the tenth (10th) anniversary of his participation in the Plan, or
(c) in which the Participant terminates his service with the
Employer, whichever occurs the latest. If the amount of the
payment required to commence on the date determined under the Plan
cannot be ascertained by such date, a payment retroactive to such
date may be made no later than sixty (60) days after the earliest
date on which the amount of such payment can be ascertained under
the Plan. If the Participant elects to defer the payment of his
benefit after his termination of service, the election shall be in
writing, signed by the Participant, and shall describe the benefit
and the date on which the payment of such benefit shall commence.
Notwithstanding the foregoing, the failure of a Participant and the
Participant's spouse to consent to a distribution while a benefit
is immediately distributable shall be deemed to be an election to
defer commencement of payment of any benefit sufficient to satisfy
this paragraph.
Notwithstanding the foregoing to the contrary, the entire
interest of a Participant must be distributed or begin to be
distributed no later than the Participant's Required Beginning
Date.
(e) Death Distribution Provisions.
(1) Distribution Beginning Before Death. If the
Participant dies after distribution of his or her interest has
begun, the remaining portion of such interest will continue to be
distributed at least as rapidly as under the method of distribution
being used prior to the Participant's death.
(2) Distribution Beginning After Death. If the
Participant dies before distribution of his or her interest begins,
distribution of the Participant's entire interest shall be
completed by December 31 of the calendar year containing the fifth
anniversary of the Participant's death except to the extent that an
election is made to receive distributions in accordance with (i) or
(ii) below:
(i) if any portion of the Participant's interest
is payable to a designated beneficiary,
distributions may be made over the life or
over a period certain not greater than the
life expectancy of the designated beneficiary
commencing on or before December 31 of the
(C) 2001 FRIDAY, ELDREDGE & CLARK
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calendar year immediately following the
calendar year in which the Participant died;
(ii) if the designated beneficiary is the
Participant's Surviving Spouse, the date
distributions are required to begin in
accordance with (a) above shall not be
earlier than the later of 1) December 31
of the calendar year in which the
Participant died and 2) December 31 of
the calendar year in which the
Participant would have attained age 70
1/2.
If the Participant has not made an election pursuant to this
Section 7.2(e)(2) by the time of his or her death, the
Participant's designated beneficiary must elect the method of
distribution no later than the earlier of 1) December 31 of the
calendar year in which distributions would be required to begin
under this section, or 2) December 31 of the calendar year which
contains the fifth anniversary of the date of death of the
Participant. If the Participant has no designated beneficiary, or
if the designated beneficiary does not elect a method of
distribution, distribution of the Participant's entire interest
must be completed by December 31 of the calendar year containing
the fifth anniversary of the Participant's death.
(3) Deemed Participant. If the Surviving Spouse dies
after the Participant, but before payments to such spouse begins,
the provisions of Section 7.2(e)(2), with the exception of (ii)
therein, shall be applied as if the Surviving Spouse were the
Participant.
(4) Distribution to Child. For purposes of this
Section 7.2(e), 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.
(5) Date Distribution Begins. For the purposes of
this Section 7.2(e), distribution of a Participant's interest is
considered to begin on the Participant's required beginning date
(or, if Section 7.2(e)(3) above is applicable, the date
distribution is required to begin the Surviving Spouse pursuant to
Section 7.2(e)(2) above. If distribution in the form of an annuity
irrevocably commences to the Participant before the Required
Beginning Date, the date distribution is considered to begin is the
date distribution actually commences.
(f) Definitions. For purposes of Section 7.2, the
following definitions shall apply:
(1) Account Balance. The aggregate value of the
Participant's Account Balances derived from Employer and employee
contributions (including rollovers), including the proceeds of
insurance contracts, if any, on the Participant's life. The value
(C) 2001 FRIDAY, ELDREDGE & CLARK
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of the Account Balance shall be determined 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 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. If any portion of the minimum
distribution for the first distribution calendar year is made in
the second distribution calendar year on or before the required
beginning date, the amount of the minimum distribution made in the
second distribution calendar year shall be treated as if it had
been made in the immediately preceding distribution calendar year.
(2) Applicable Life Expectancy. The life expectancy
(or joint and last survivor expectancy) calculated using the
attained age of the Participant (or designated beneficiary) as of
the Participant's (or designated beneficiary's) birthday in the
applicable calendar year reduced by one for each calendar year
which has elapsed since the date life expectancy was first
calculated. If life expectancy is being recalculated, the
applicable life expectancy shall be the life expectancy as so
recalculated. The applicable calendar year shall be the first
distribution calendar year, and if life expectancy is being
recalculated such succeeding calendar year.
(3) Designated Beneficiary. The individual who is
designated as the beneficiary under the plan in accordance with
401(a)(9) and the proposed regulations thereunder.
(4) Distribution Calendar Year. A calendar year for
which a minimum distribution is required. For distributions
beginning before the Participant's death, the first distribution
calendar year is the calendar year immediately preceding the
calendar year which contains the Participant's required beginning
date. For distributions beginning after the Participant's death,
the first distribution calendar year is the calendar year in which
distributions are required to begin in this Section 7.2(e).
(5) Life Expectancy. Life expectancy and joint and
last survivor expectancy are computed by use of the expected return
multiples in Tables V and VI of 1.72-9 of the income tax
regulations. Unless otherwise elected by the Participant (or
spouse, in the case of distributions described in Section
7.2(e)(2)(ii) above) by the time distributions are required to
begin, life expectancies shall be recalculated annually. Such
election shall be irrevocable as to the Participant (or spouse) and
shall apply to all subsequent years. The life expectancy of a
nonspouse beneficiary may not be recalculated.
(6) Required Beginning Date.
(i) General rules. The Required Beginning Date of
a Participant is the first day of April of the
calendar year following the calendar year in
which the Participant attains age 70 1/2.
(C) 2001 FRIDAY, ELDREDGE & CLARK
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(ii) Transitional rules. The Required
Beginning Date of a Participant who
attains age 70 1/2 before January 1,
1988, shall be determined below:
1) Non-5-percent owners. The Required
Beginning Date of a Participant who is
not a 5-percent owner is the first day of
April of the calendar year following the
calendar year in which the later of
retirement or attainment of age 70 1/2
occurs.
2) 5-percent owners. The required beginning
date of a Participant who is a 5-percent
owner during any year beginning after
December 31, 1979, is the first day of
April following the later of a) the
calendar year in which the Participant
attains age 70 1/2, or b) the earlier of
the calendar year with or within which
ends the Plan Year in which the
Participant becomes a 5-percent owner, or
the calendar year in which the
Participant retires.
The Required Beginning Date of a Participant
who is not a 5-percent owner who attains age
70 1/2 during 1988 and who has not retired as
of January 1, 1989, is April 1, 1990.
(iii) 5-percent owner. A Participant is
treated as a 5-percent owner for purposes
of this section if such Participant is a
5-percent owner as defined in Code
416(i) (determined in accordance with
Code 416 but without regard to whether
the plan is top-heavy) at any time during
the Plan Year ending with or within the
calendar year in which such owner attains
age 66 1/2 or any subsequent Plan Year.
(iv) Once distributions have begun to a 5-
percent owner under this Section, they
must continue to be distributed, even if
the Participant ceases to be a 5-percent
owner in a subsequent year.
(g) Transitional Rule.
(1) Notwithstanding the other requirements of this
Section and subject to the requirements of Section 7.1, relating to
Joint and Survivor Annuity Requirements, distribution on behalf of
any employee, including a 5-percent owner, may be made in
accordance with all of the following requirements (regardless of
when such distribution commences):
(C) 2001 FRIDAY, ELDREDGE & CLARK
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(i) The distribution by the trust is one which
would not have disqualified such trust under
401(a)(9) of the Internal Revenue Code as in
effect prior to amendment by the Deficit
Reduction Act of 1984.
(ii) The distribution is in accordance with a
method of distribution designated by the
employee whose interest in the trust is
being distributed or, if the employee is
deceased, by a beneficiary of such
employee.
(iii) Such designation was in writing, was
signed by the employee or the
beneficiary, and was made before January
1, 1984.
(iv) The employee had accrued a benefit under
the plan as of December 31, 1983.
(v) The method of distribution designated by the
employee or the beneficiary specifies the time
at which distribution will commence, the
period over which distributions will be made,
and in the case of any distribution upon the
employee's death, the beneficiaries of the
employee listed in order of priority.
(2) A distribution upon death will not be covered by
this transitional rule unless the information in the designation
contains the required information described above with respect to
the distributions to be made upon the death of the Employee.
(3) For any distribution which commences before
January 1, 1984, but continues after December 31, 1983, the
employee, or the beneficiary, to whom such distribution is being
made, will be presumed to have designated the method of
distribution under which the distribution is being made if the
method of distribution was specified in writing and the
distribution satisfies the requirements in subsections 7.2(g)(1).
(4) If a designation is revoked any subsequent
distribution must satisfy the requirements of Code 401(a)(9) and
the proposed regulations thereunder. If a designation is revoked
subsequent to the date distributions are required to begin, the
trust must distribute by the end of the calendar year following the
calendar year in which the revocation occurs the total amount not
yet distributed which would have been required to have been
distributed to satisfy Code 401(a)(9) and the proposed regulations
thereunder, but for the TEFRA 242(b)(2) election. For calendar
years beginning after December 31, 1988, such distributions must
meet the minimum distributions incidental benefit requirements in
1.401(a)(9)-2 of the proposed regulations. Any changes in the
designation will be considered to be a revocation of the
designation. However, the mere substitution or addition of another
(C) 2001 FRIDAY, ELDREDGE & CLARK
-41-
beneficiary (one not named in the designation) under the
designation, so long as such substitution or addition does not
alter the period over which distributions are to be made under the
designation, directly or indirectly (for example, by altering the
relevant measuring life). In the case in which an amount is
transferred or rolled over from one plan to another plan, the rules
in Q&A J-2 and Q&A J-3 shall apply.
7.3 Early Distribution to Participants. Generally, any
distribution to a Participant prior to age fifty-nine and one-half
(59-1/2), except in case of death or disability, will result in an
additional income tax equal to ten percent (10%) of the amount of
the distribution which is includible in his income and which is
attributable to Employer contributions. However, such additional
income tax shall generally not apply to any distribution made (1)
after a Participant separates from service as part of a series of
substantially equal periodic payments made not less frequently than
annually and for the life or life expectancy of the Participant or
joint lives or life expectancies of the Participant and his
designated Beneficiary, (2) to a Participant who separates from
service after attainment of age 55, (3) to the extent such
distributions do not exceed the amount allowable to the Participant
as a deduction under Code 213 for amounts paid during the taxable
year for medical care, or (4) to an alternate payee pursuant to a
Qualified Domestic Relations Order as described in Section 16.7.
7.4 Filing Claims. Claims for benefits under the Employer's
Plan shall be filed on forms supplied by the Plan Administrator.
Written notice of the disposition of a claim shall be furnished
the claimant within thirty (30) days after the application therefor
is filed. In the event the claim is denied, the reasons the denial
shall be specifically set forth in writing, 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.
7.5 Appeal Procedure. Any Employee, former Employee, or
beneficiary of either, who has been denied a benefit shall be
entitled, upon request to the Plan Administrator to appeal the
denial of his claim. If the claimant wishes further consideration
of his position, he may obtain a form from the Plan Administrator
on which to request a hearing. Such form, together with a written
statement of the claimant's position, shall be filed with the Plan
Administrator no later than ninety (90) days after receipt of the
written notification of disallowance provided for in Section 7.4
above. The appeal shall be heard by an ad hoc Retirement Committee
comprised of three (3) members appointed by the Plan Administrator.
The Retirement Committee shall schedule an opportunity for a full
and fair hearing of the issue within the next thirty (30) days.
Its decision following such hearing shall be made within thirty
(30) days and shall be communicated in writing to the claimant.
7.6 Distribution for Minor Beneficiary. In the event a
distribution is to be made to a minor, then the Plan Administrator
may in its discretion make such distribution to the legal guardian
or, if none, to a parent of such beneficiary with whom the
beneficiary maintains his residence. Such a payment to the legal
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guardian or parent of a minor beneficiary shall fully discharge the
Trustee, the Employer, and the Plan from further liability or
account thereof.
7.7 Lost Beneficiary. In the event a benefit is payable under
the Plan to a Participant or beneficiary thereof who cannot be
located, the Plan Administrator may either have the Trustee set
aside the amount of such benefit in a separate Account or declare
that such benefit is forfeited. In the event such benefit is
forfeited, such benefit will be reinstated if a claim is made by
the Participant or beneficiary thereof.
7.8 Tax Withholding. Unless the individual affirmatively
elects otherwise, the Plan Administrator (or its designatee) shall,
as to distributions made prior to January 1, 1993, withhold federal
income taxes from Plan distributions. An individual may elect not
to have taxes withheld from a distribution that is made prior to
January 1, 1993 or as to distributions made on or after January 1,
1993 that does not qualify as an Eligible Rollover Distribution.
With respect to distributions made on or after January 1, 1993 that
qualify as an Eligible Rollover Distribution and meet the
requirements of Code 402, unless a Distributee properly elects to
have the amount transferred directly to an Eligible Retirement
Plan, the Plan Administrator (or his designatee) shall
automatically withhold federal income taxes from the amount at a
rate of twenty (20) percent. Within a reasonable period of time
prior to making the distribution, the Administrative Committee (or
its designatee) shall provide the individual with information
regarding income tax withholding, forms to withhold income taxes
(or to elect not to have income taxes withheld from the
distribution as to distributions made prior to January 1, 1993 or
as to distributions that do not qualify as an Eligible Rollover
Distribution), information with respect to distributions made on or
after January 1, 1993 concerning what constitutes an Eligible
Rollover Distribution and the manner in which the automatic twenty
percent (20%) withholding tax can be avoided, and any other
information that is required to be given to an individual by the
Plan Administrator to comply with Code 402(f).
ARTICLE VIII. LIMITATION ON ALLOCATIONS
8.1 Sole Plan of Employer.
(a) If the Participant does not participate in, and has
never participated in another qualified plan or a welfare benefit
fund, as defined in Code 419(e), maintained by the Employer, or an
individual medical account, as defined in Code 415(l)(2),
maintained by the Employer, which provides an Annual Addition as
defined in Section 8.5, the amount of Annual Additions which may be
credited to the Participant's Accounts for any Limitation Year will
not exceed the lesser of the Maximum Permissible Amount or any
other limitation contained in this plan. If the Employer
contribution that would otherwise be contributed or allocated to
the Participant's Accounts would cause the Annual Additions for the
Limitation Year to exceed the Maximum Permissible Amount, the
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amount contributed or allocated will be reduced so that the Annual
Additions for the Limitation Year will equal the Maximum
Permissible Amount.
(b) Prior to determining the Participant's actual
Compensation for the Limitation Year, the Employer may determine
the Maximum Permissible Amount for a Participant on the basis of a
reasonable estimation of the Participant's Compensation for the
Limitation year, uniformly determined for all Participants
similarly situated.
(c) As soon as is administratively feasible after the end
of the Limitation Year, the Maximum Permissible Amount for the
Limitation Year will be determined on the basis of the
Participant's actual Compensation for the Limitation Year.
(d) If pursuant to Section 8.1(c) or as a result of the
allocation of forfeitures, there is an Excess Amount the excess
will be disposed of as follows:
(1) Any nondeductible voluntary employee
contributions, to the extent they would reduce the Excess Amount,
will be returned to the Participant;
(2) If after the application of (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 in the
Participant's Accounts will be used to reduce Employer
contributions (including any allocation of forfeitures) for such
Participant in the next Limitation Year, and each succeeding
Limitation Year if necessary.
(3) If after the application of (1) 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 suspense account. The suspense account will be
applied to reduce future Employer contributions (including
allocation of any forfeitures) for all remaining Participants in
the next Limitation Year, and each succeeding Limitation Year if
necessary;
(4) If a suspense account is in existence at any time
during the Limitation Year pursuant to this section, it will not
participate in the allocation of the trust's investment gains and
losses. If a suspense is in existence at any time during a
particular Limitation Year, all amounts in the suspense account
must be allocated and reallocated to Participant' Accounts before
any Employer or any Employee contributions may be made to the Plan
for that Limitation Year. Excess Amounts may not be distributed to
Participants or former Participants.
8.2 Coverage by a Master or Prototype Plan.
(a) This Section 8.2 applies if, in addition to this Plan,
the Participant is covered under a qualified Master or Prototype
defined contribution plan maintained by the Employer, a welfare
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benefit fund, as defined in Code 419(e) maintained by the
Employer, or an individual medical account, as defined in Code
415(l)(2), maintained by the Employer, which provides an Annual
Addition as defined in Section 8.5, during any Limitation Year.
The Annual Additions which may be credited to a Participant's
Accounts under this Plan for any such Limitation Year will not
exceed the Maximum Permissible Amount reduced by the Annual
Additions credited to a Participant's account under the other plans
and welfare benefit funds for the same Limitation Year. If the
Annual Additions with respect to the Participant under other
defined contribution plans and welfare benefit funds maintained by
the Employer are less than the Maximum Permissible Amount and the
Employer contribution that would otherwise be contributed or
allocated to the Participant's Accounts under this Plan would cause
the Annual Additions for the Limitation Year to exceed this
limitation, the amount contributed or allocated will be reduced so
that the Annual Additions under all such plans and funds for the
Limitation Year will equal the Maximum Permissible Amount. If the
Annual Additions with respect to the Participant under such other
defined contribution plans and welfare benefit funds in the
aggregate are equal to or greater than the Maximum Permissible
Amount, no amount will be contributed or allocated to the
Participant's Accounts under this Plan for the Limitation Year.
(b) Prior to determining the Participant's actual
Compensation for the Limitation Year, the Employer may determine
the Maximum Permissible Amount for a Participant in the manner
described in Section 8.1(b).
(c) As soon as is administratively feasible after the end
of the Limitation Year, the Maximum Permissible Amount for the
Limitation Year will be determined on the basis of the
Participant's actual Compensation for the Limitation Year.
(d) If, pursuant to Section 8.2(c) or as a result of the
allocation of forfeitures, a Participant's Annual Additions under
this Plan and such other plans would result in an Excess Amount for
a Limitation Year, the Excess Amount will be deemed to consist of
the Annual Additions last allocated, except that annual additions
attributable to a welfare benefit fund or individual medical
account will be deemed to have been allocated first regardless of
the actual allocation date.
(e) If an Excess Amount was allocated to a Participant on
an allocation date of this Plan which coincides with an allocation
date of another plan, the Excess Amount attributed to this Plan
will be the product of,
(1) the total Excess Amount allocated as of such date,
times
(2) the ratio of (i) the Annual Additions allocated to
the Participant for the Limitation year as of such date under this
Plan to (ii) the total Annual Additions allocated to the
Participant for the Limitation Year as of such date under this and
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all the other qualified Master or Prototype defined contribution
plans.
(f) Any Excess Amount attributed to this Plan will be
disposed in the manner described in Section 8.1(d).
8.3 Coverage by Other Defined Contribution Plan. If the
Participant is covered under another defined contribution plan
maintained by the Employer which is not a Master or Prototype plan,
Annual Additions which may be credited to the Participant's
Accounts under this Plan for any Limitation Year will be limited in
accordance with Section 8.2 as though the other plan were a Master
or Prototype plan unless the Employer provides other limitations in
Paragraph 8.1 of the Adoption Agreement.
8.4 Coverage by a Defined Benefit Plan. If the Employer
maintains, or at any time maintained, a qualified defined benefit
plan covering any Participant in this Plan, the sum of the
Participant's Defined Benefit Plan Fraction and Defined
Contribution Plan Fraction will not exceed 1.0 in any Limitation
Year. The Annual Additions which may be credited to the
Participant's Accounts under this Plan for any Limitation Year will
be limited in accordance with Paragraph 8.1 of the Adoption
Agreement.
8.5 Definitions. For purposes of this Article VIII., the
following definitions shall apply:
(a) Annual Additions. The sum of the following amounts
credited to a Participant's Accounts for the Limitation Year:
(1) Employer Contributions,
(2) Employee Contributions,
(3) Forfeitures, and
(4) amounts allocated, after March 31, 1984, to an
Individual Medical Benefit Account, as defined in Code 415(l)(2),
which is part of a pension or annuity plan maintained by the
Employer are treated as Annual Additions to a defined contribution
plan. Also 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
419A(d)(3), under a welfare benefit fund, as defined in Code
419(e), maintained by the Employer are treated as Annual Additions
to a defined contribution plan.
For this purpose, any Excess Amount applied under Section 8.1(d) or
8.2(f) in the Limitation Year to reduce Employer contributions will
be considered Annual Additions for such Limitation Year.
(b) Compensation. Wages as defined in Code 3401(a) and
all other payments of compensation to an Employee by the Employer
(in the course of the Employer's trade or business) for which the
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Employer is required to furnish the Employee a written statement
under Code 6041(d), 6051(a)(3) and 6052. Compensation must be
determined without regard to any rules under Code 3401(a) that
limit the remuneration included in wages based on the nature or
location of the employment or the services performed (such as the
exception for agricultural labor in Code 3401(a)(2)).
For any Self-Employed Individual Compensation will mean Earned
Income.
For Limitation Years beginning after December 31, 1991, for
purposes of applying the limitations of this Article VIII,
Compensation for a Limitation Year is the Compensation actually
paid or made available during such Limitation Year.
Notwithstanding the preceding sentence, Compensation for a
Participant in a defined contribution plan who is permanently and
totally disabled (as defined in Code 22(e)(3)) is the Compensation
such Participant would have received for the Limitation Year if the
Participant was paid at the rate of Compensation paid immediately
before becoming permanently and totally disabled; such imputed
compensation for the disabled Participant may be taken into account
only if the Participant is not a highly compensated employee (as
defined in Code 414(q)) and contributions made on behalf of such
Participant are nonforfeitable when made.
(c) Defined Benefit Fraction. A fraction, the numerator of
which is the sum of a Participant's projected annual benefits under
all the defined benefit plans (whether or not terminated)
maintained by the Employer and the denominator of which is the
lesser of 125 percent of the dollar limitation determined for the
Limitation Year under Code 415(b) and (d) or 140 percent of the of
the Participant's Highest Average Compensation, including any
adjustments under Code 415(b). For purposes of computing the
projected benefit, it shall be assumed that the Participant's
compensation and other actuarial assumptions for all future
Limitation years will be equal to those for the year in question.
Notwithstanding the above if the Participant was a Participant
as of the first day of the first Limitation Year beginning after
December 31, 1986, in one or more defined benefit plans maintained
by the Employer which were in existence on May 6, 1986, the
denominator of this fraction will not be less than 125 percent of
the sum of the annual benefits under such plans which the
Participant had accrued as of the close of the last limitation year
beginning before January 1, 1987, disregarding any changes in the
terms and conditions of the plan after May 5, 1986. The preceding
sentence applies only if the defined benefit plans individually and
in the aggregate satisfied the requirements of Code 415 as in
effect for all Limitation Years beginning before January 1, 1987.
Any reference to 125 percent above shall be replaced with 100
percent subject to the override provisions of Paragraph 8.1(b)(2)
of the Adoption Agreement.
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(d) Defined Contribution Dollar Limitation. $30,000 or if
greater, one-fourth of the defined benefit dollar limitation set
forth in Code 415(b)(1) as in effect for the Limitation Year.
(e) Defined Contribution Fraction. A fraction, the
numerator of which is the sum of the Annual Additions credited to
the Participant's Accounts under all defined contribution plans
(whether or not terminated) maintained by the Employer for the
current and all prior Limitation years (including the Annual
Additions attributable to the Participant's nondeductible employee
contributions to all defined benefit plans, whether or not
terminated, maintained by the Employer, and the Annual Additions
attributable to all welfare benefit funds, as defined in Code
419(e), and individual medical accounts, as defined in Code
415(l)(2), maintained by the Employer), and the denominator of
which is the sum of the maximum aggregate amounts for the current
and all prior Limitation Years of service with the Employer
(regardless of whether a defined contribution plan was maintained
by the Employer). The maximum aggregate amount in any Limitation
Year is the lesser of 125 percent of the dollar limitation
determined under Code 415(b) and (d) in effect under Code
415(c)(1)(A) or 35 percent of the Participant's Compensation for
each such Limitation Year.
If the Employee was a Participant as of the end of the first day
of the first Limitation Year beginning after December 31, 1986, in
one or more defined contribution plans maintained by the Employer
which were in existence on May 6, 1986, the numerator of this
fraction will be adjusted if the sum of this fraction and the
Defined Benefit Fraction would otherwise exceed 1.0 under the terms
of this plan. Under the adjustment, an amount equal to the product
of (1) the excess of the sum of the fractions over 1.0 times (2)
the denominator of this fraction, will be permanently subtracted
from the numerator of this fraction. The adjustment is calculated
using the fractions as they would be computed as of the end of the
last Limitation Year beginning before January 1, 1987, and
disregarding any changes in the terms and conditions of the plan
made after May 5, 1986, but using the Code 415 limitation
applicable to the first Limitation Year beginning on or after
January 1, 1987. The Annual Addition for any Limitation Year
beginning before January 1, 1987, shall not be recomputed to treat
all employee contributions as Annual Additions.
Any reference to 125 percent above shall be replaced with 100
percent subject to the override provisions of Paragraph 8.1(b)(2)
of the Adoption Agreement.
(f) Employer. For purposes of this Article, Employer shall
mean the Employer that adopts this Plan, and all members of a
controlled group of corporations (as defined in Code 414(b) as
modified by Code 415(h)), all commonly controlled trades or
businesses (as defined in Code 414(c) as modified by Code 415(h))
or affiliated service groups (as defined in Code 414(m)) of which
the adopting Employer is a part, and any other entity required to
be aggregated with the Employer pursuant to regulations under Code
414(o).
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(g) Excess Amount. The excess of the Participant's Annual
Additions for the Limitation Year over the Maximum Permissible
Amount.
(h) Highest Average Compensation. The average compensation
for the three consecutive years of service with the employer that
produces the highest average. A year of service with the Employer
is the 12-consecutive month period elected by the Employer as the
Plan Year.
(i) Limitation Year. The 12-consecutive-month period
elected by the Employer as the Plan Year. All qualified plans
maintained by the Employer must use the same Limitation Year. If
the Limitation Year is amended to a different 12-consecutive month
period, the new Limitation Year must begin on a date within the
Limitation Year in which the amendment is made.
(j) Master or Prototype Plan. A plan the form of which is
the subject of a favorable notification or opinion letter from the
Internal Revenue Service.
(k) Maximum Permissible Amount. The maximum Annual
Addition that may be contributed or allocated to a Participant's
Accounts under the Plan for any Limitation Year shall not exceed
the lesser of:
(1) the defined contribution dollar limitation, or
(2) 25 percent of the Participant's Compensation for
the Limitation Year.
The compensation limit referred to in (2) above shall not apply
to any contribution for medical benefits (within the meaning of
Code 401(h) or Code 419A(f)(2) which is otherwise treated as an
Annual Addition under by Code 415(l)(1) or Code 419A(d)(2).
If a short Limitation year is created because of an amendment
changing the Limitation Year to a different 12-consecutive-month
period, the Maximum Permissible amount will not exceed the defined
contribution dollar limitation multiplied by the following
fraction:
Number of Months in the Short Limitation Year
12
(l) Projected Annual Benefit. The annual retirement
benefit (adjusted to an actuarially equivalent straight life
annuity if such benefit is expressed in a form other than a
straight life annuity or qualified joint and survivor annuity) to
which the Participant would be entitled under the terms of the Plan
assuming:
(1) The Participant will continue employment until
Normal Retirement Age under the Plan (or current age, if later),
and
(2) The Participant's Compensation for the current
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Limitation Year and all other relevant factors used to determine
benefits under the Plan will remain constant for all future
Limitation Years.
ARTICLE IX. SPECIAL TOP HEAVY RULES
9.1 Top Heavy Requirements. For any Plan Year beginning after
December 31, 1983, the Employer's Plan shall be Top Heavy if any of
the following conditions exists:
(a) If the Top Heavy Ratio for this plan exceeds 60% and
this Plan is not part of any Required Aggregation Group or
Permissive Aggregation Group of plans.
(b) If the Employer's Plan is a part of a Required
Aggregation Group of plans but not part of a Permissive Aggregation
Group and the Top Heavy Ratio for the group of plans exceeds 60%.
(c) If the Employer's Plan is a part of a Required
Aggregation Group and part of a Permissive Aggregation Group of
plans and the Top-Heavy Ratio for the Permissive Aggregation Group
exceeds 60%
9.2 Definitions. For purposes of this Article IX., the
following definitions shall apply:
(a) Key Employee. Any Employee or former Employee (and the
beneficiaries of such employee) who at any time during the Plan
Year containing the Determination Date or any of the four (4)
preceding Plan Years was:
(1) an officer of the Employer if such individual's
Annual Compensation exceeds 50 percent of the dollar limitation
under Code 415(b)(1)(A),
(2) one of the ten Employees owning (or considered an
owner indirectly under Code 318) at least a 1/2% ownership
interest and the largest interests in the Employer if such
individual's Compensation exceeds 100 percent of such dollar
limitation in effect under Code 415(c)(1)(A) for such Plan Year
(if two (2) Employees have the same interest in the Employer, the
Employee having the greater Annual Compensation shall be treated as
having the larger interest),
(3) a 5-percent owner of the Employer,
(4) or a 1-percent owner of the Employer who has an
Annual Compensation of more than $150,000.
For this purpose, "Annual compensation" means compensation as
defined in Code 415(c)(3), but including amounts contributed by
the Employer pursuant to a salary reduction agreement which are
excludible from the Employee's gross income under Code 125,
402(e)(3), 402(h) or 403(b). The determination of who is a Key
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Employee will be made in accordance with Code 416(i)(1) and the
regulations thereunder.
(b) Non-Key Employee. Any Employee or former Employee who
is not a Key Employee.
(c) Top Heavy Ratio.
(1) If the Employer maintains one or more defined
contribution plans (including any Simplified Employee Pension Plan)
and the Employer has not maintained any defined benefit plan which
during the 5-year period ending on the determination date(s) has or
has had accrued benefits, the Top Heavy Ratio for this Plan alone
or for the required or permissive aggregation group as appropriate,
is a fraction, the numerator of which is the sum of the Account
Balances of all Key Employees as of the Determination Date(s)
(including any part of any Account Balance distributed in the
5-year period ending on the Determination Date(s)), and the
denominator of which is the sum of all Account Balances (including
any part of any Account Balance distributed in the 5-year period
ending on the Determination Date(s)) both computed in accordance
with Code 416 and the regulations thereunder. Both the numerator
and denominator of the Top Heavy Ratio are increased to reflect any
contribution not actually made as of the Determination Date but
which is required to be taken into account on that date under Code
416 and the regulations thereunder.
(2) If the Employer maintains one or more defined
contribution plans (including any Simplified Employee Pension Plan)
and the Employer maintains or has maintained one or more defined
benefit plans which during the 5-year period ending on the
Determination Date(s) has or has had any accrued benefits, the
top-heavy ratio for any required or permissive aggregation group as
appropriate is a fraction, the numerator of which is the sum of
Account Balances under the aggregated defined contribution plan or
plans for all key employees, determined in accordance with (a)
above, and the present value of accrued benefits under the
aggregated defined benefit plan or plans for all key employees as
of the Determination Date(s), and the denominator of which is the
sum of the Account Balances under the aggregated defined
contribution plan or plans for all Participants, determined in
accordance with (1) above, and the present value of accrued
benefits under the defined benefit plan or plans for all
Participants as of the Determination Date(s), all determined in
accordance with Code 416 and the regulations thereunder. The
accrued benefits under a defined benefit plan in both the numerator
and denominator of the top-heavy ratio are increased for any
distribution of an accrued benefit made in the five-year period
ending on the determination date.
(3) For purposes of (1) and (2) above the value of
Account Balances and the present value of accrued benefits will be
determined as of the most recent valuation date that falls within
or ends with the 12-month period ending on the Determination Date,
except as provided in Code 416 and the regulations thereunder for
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the first and second Plan Years of a defined benefit plan. The
Account Balances and accrued benefits of a Participant (i) who is
not a Key Employee but who was a Key Employee in a prior year, or
(ii) who has not performed services with any Employer maintaining
the Plan at any time during the 5-year period ending on the
Determination Date will be disregarded. The calculation of the top
heavy ratio, and the extent to which distributions, rollovers and
transfers are taken into account will be made in accordance with
Code 416 and the regulations thereunder. Deductible employee
contributions will not be taken into account for purposes of
computing the top heavy ratio. When aggregating plans the value of
Account Balances and accrued benefits will be calculated with
reference to the Determination Dates that fall within the same
calendar year.
The accrued benefit of a Participant other than a Key Employee
shall be determined under (i) the method, if any, that uniformly
applies for accrual purposes under all Plans maintained by the
Employer, or (ii) if there is no such method, as if such benefit
accrued not more rapidly than the slowest accrual rate permitted
under the fractional accrual rate of Code 411(b)(1)(C).
(d) Permissive Aggregation Group. The required aggregation
group of plans plus any other plan or plans of the Employer which,
when considered as a group with the required aggregation group,
would continue to satisfy the requirements of Code 401(a)(4) and
410.
(e) Required Aggregation Group.
(1) Each qualified plan of the Employer in which at
least one Key Employee participates or participated at any time
during the determination period (regardless of whether the plan has
terminated), and
(2) Any other qualified plan of the Employer which
enables a plan described in (1) to meet the
requirements of Code 401(a)(4) or 410.
(f) Determination Date. For any Plan Year subsequent to
the first Plan Year, the last day of the preceding Plan Year. For
the first Plan Year of the Plan, the last day of that year.
(g) Valuation Date. The Valuation Date shall be the same
day as the Determination Date.
(h) Present Value. Present Value shall be based only on
the interest and mortality rates specified in Paragraph 8.2 of the
Adoption Agreement.
ARTICLE X. PLAN LOANS
10.1 Participant Loan Program. If the Employer has
designated in the Adoption Agreement that loans to Participants
shall be permitted, the Plan Administrator may direct the Trustee
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to make a loan or loans to a Participant or Beneficiary subject to
the following Participant Loan Program (this Participant Loan
Program is effective for loans made to Participants after
October 18, 1989; all other loans made under the Plan shall
continue under their existing terms until they are repaid or
renewed, whichever occurs first):
(a) Authorization. The Plan Administrator is authorized by
the Trustee to administer the Loan Program, and to prescribe such
forms and regulations as it considers necessary or appropriate to
carry out the objectives of this Participant Loan Program
according to its express terms.
(b) Conditions and Limitations.
(1) Eligibility. All Participants, former
Participants and Beneficiaries who have a vested Account Balance
may apply for loans. Loans shall be made available to all
Participants and Beneficiaries on a reasonably equivalent basis.
Loans shall not be made available to Highly Compensated Employees
in an amount greater than the amount made available to other
Employees. No loans will be made to any Shareholder-Employee or
Owner Employee.
(2) Maximum Principal Amount. No loan(s) shall be
granted to any Participant or Beneficiary which when added to the
outstanding balance of all other loans exceeds in the aggregate the
lesser of (a) $50,000, reduced by the excess (if any) of the
highest outstanding balance of loans during the one-year period
ending on the day before the date the loan is made, over the
outstanding balance of loans from the Plan on the date the loan is
made, or (b) fifty percent (50%) of the vested Account Balance of
the Participant determined immediately after the loan is made. For
the purpose of the above limitation, all loans from all plans of
the Employer and other members of a group of Employers described in
Code 414(b), 414(c), 414(m) and (o) are aggregated. An
assignment or pledge of any portion of the Participant's interest
in the Plan and a loan, pledge or assignment with respect to any
insurance contract purchased under the Plan, will be treated as a
loan under this Section.
(3) Minimum Principal Amount. The Plan Administrator
may set a minimum required principal amount for all loans up to
$1,000.
(4) Duration. Any loan shall by its terms require
that repayment (principal and interest) be amortized in level
payments, not less frequently than quarterly, over a period not
extending beyond five (5) years from the date of the loan, unless
such loan is used to acquire a dwelling unit which within a
reasonable time (determined at the time the loan is made) will be
used as the Participant's principal residence.
(5) Promissory Note. Each loan shall be evidenced by
the borrower's promissory note in a form satisfactory to the Plan
Administrator.
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(6) Interest Rate. The interest rate charged on each
loan shall be the rate(s) obtained by the Plan Administrator from
persons in the business of lending money for loans which would be
made under similar terms and conditions within a reasonable period
of time prior to such loan. The interest rate shall remain fixed
throughout the duration of the loan, unless otherwise specified in
the promissory note. Loans granted at different times or having
different durations or repayment methods may bear different
interest rates.
(7) Security. Each loan shall be secured by the
assignment of not more than fifty percent (50%) of the borrower's
vested Account Balance. Unless the Employer's Plan is a Profit
Sharing Plan which is exempt from the survivor annuity requirements
pursuant to Section 7.1(f), a Participant must obtain the consent
of his or her spouse, if any, to use of the Account Balance as
security for the loan. Spousal consent shall be obtained no
earlier than the beginning of the 90-day period that ends on the
date on which the loan is to be so secured. The consent must be in
writing, must acknowledge the effect of the loan, and must be
witnessed by a Plan representative or notary public. Such consent
shall thereafter be binding with respect to the consenting spouse
or any subsequent spouse with respect to that loan. A new consent
shall be required if the Account Balance is used for renegotiation,
extension, renewal, or other revision of the loan. If a valid
spousal consent has been obtained in accordance with this
paragraph, then, notwithstanding any other provision of this Plan,
the portion of the Participant's vested Account Balance used as a
security interest held by the Plan by reason of a loan outstanding
to the Participant shall be taken into account for purposes of
determining the amount of the Account Balance payable at the time
of death or distribution, but only if the reduction is used as
repayment of the loan. If less than 100% of the Participant's
vested Account Balance (determined without regard to the preceding
sentence) is payable to the Surviving Spouse, then the Account
Balance shall be adjusted by first reducing the vested Account
Balance by the amount of the security used as repayment of the
loan, and then determining the benefit payable to the Surviving
Spouse.
(8) Default. The Plan Administrator shall promptly
notify the Trustee of any default in repayment of a loan. The
Trustee shall foreclose on the security for a loan in default at
the later of:
(i) the date of the default or
(ii) the first date on which the borrower may
receive a distribution from his Accounts
under the terms of the Plan.
At the discretion of the Trustee, foreclosure may consist of the
cancellation of the borrower's Account Balance by the unpaid
principal amount of the defaulted loan; or the distribution to the
borrower of his promissory note. The Plan Administrator and the
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Trustee may take these steps without any advance notice to the
borrower.
(9) Application. A Participant, former Participant or
Beneficiary may apply for a loan by completing and returning to the
Plan Administrator a loan application in a form satisfactory to the
Plan Administrator. A prospective borrower's loan application
shall be reviewed by the Plan Administrator, and may be approved
only to the extent that the loan requested complies with the
requirements of this Participant Loan Program. To the extent that
a loan application is denied, the Plan administrator will inform
the applicant of the reason(s) for the denial, with specific
reference to the requirements of the Participant Loan Program upon
which the denial is based.
(10) Delegation. The Plan Administrator may
delegate to the Trustee any of the Plan Administrator's rights,
powers or responsibilities under this Loan Program.
(11) Plan Accounting. If the loan is treated as a
directed investment, the distribution of the proceeds of a loan
shall be charged solely against the Account of the borrower, and
all repayments of principal and interest shall be credited solely
to the borrower's Account. The unpaid principal balance of a loan
shall be reflected as a receivable for the borrower's Account. The
borrower must pay the administrative expenses incurred by the
Trustee and the Plan Administrator in connection with a loan, and
any such expenses not paid directly by the borrower may be charged
against his Account.
ARTICLE XI. PORTABILITY OF BENEFITS
11.1 Portability of Benefits Permitted. It shall be the
policy of the Employer's Plan to permit the transfer of benefits to
and from the Trust upon the following conditions.
11.2 Transfer of Benefits to the Trust. An individual may
rollover or direct that his benefits from an Eligible Retirement
Plan be transferred directly to the Trust maintained under the
Plan. The Trustee shall immediately credit any rolled over or
transferred benefit directly to a separate account for the
individual. The individual shall always be 100% vested in this
rolled over or transferred amount which shall be referred to as a
"Rollover Account" under the Plan. The Rollover Account shall be
held, invested and administered in accordance with the terms and
conditions of this Plan and Trust Agreement in the same manner as
Employer Contributions.
11.3 Transfer of Benefits from the Trust. A Distributee may
elect, at the time and in the manner prescribed by the Plan
Administrator, to have any portion of an Eligible Rollover
Distribution paid directly to an Eligible Retirement Plan specified
by the Distributee in a direct rollover. The direct rollover to an
Eligible Retirement Plan shall be accomplished by any reasonable
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means of delivery to such plan, including the delivery of a check
to the plan, provided that the payee line of the check is made out
in a manner that will insure that the check is negotiable solely by
the trustee of the recipient plan. The Trustee may request and
receive a release or statement from the Distributee and/or the
Trustee of the transferee plan prior to making any transfer under
this Section that the recipient Eligible Retirement Plan is
qualified and is intended to meet the applicable requirements of
the Code and that it will accept such transfer. For transfers on
or after January 1, 1993, if such sum is not directly transferred
to an Eligible Retirement Plan then such transfer shall be subject
to the tax withholding rules set forth in Paragraph 7.8. The Plan
Administrator is not required to recognize a terminated Employee's
election to directly rollover an amount if the Eligible Rollover
Distributions for the year are reasonably expected to total less
than $200.
11.4 Restrictions upon Portability. Plan benefits shall not
be immediately transferred pursuant to this Section if (a) the
transfer would require the sale of any assets of the Trust at a
loss to the detriment of other Plan Participants, (b) the transfer
involved the liquidation of an illiquid investment, or (c) the
immediate transfer would be to the detriment of other Plan
Participants.
ARTICLE XII. INVESTMENT IN INSURANCE CONTRACTS
12.1 Investment in Contracts. The Trustee, as directed by
the Employer, may invest in insurance or endowment contracts for
one or more Participants. If so directed, the Trustee shall
procure on the life of a Participant, or, for a Participant,
subject to the rules of the insurer, life insurance, annuity, or
endowment contract, of an appropriate type with level annual
premium payments from any life insurance company authorized to do
business in the State of Arkansas, which shall be selected by the
Employer. In the event of any conflict between the terms of this
Plan and the terms of any insurance contracts hereunder, the Plan
provisions shall control.
12.2 Maximum Premium Amount. No more than one-quarter (25%)
of the aggregate Employer contributions, plus forfeitures, if any,
allocated to any Participant will be used to pay the premiums on
term life insurance contracts, universal life insurance contracts,
and all other life insurance contracts which are not ordinary life.
If ordinary life insurance contracts are purchased, less than
one-half (1/2) of the aggregate Employer contributions plus
forfeitures, if any, allocated to any Participant may be used to
pay the premiums attributable to them. For purposes of these
incidental insurance provisions, ordinary life insurance contracts
are contracts with both nondecreasing death benefits and
nonincreasing premiums. If a combination of ordinary and term or
universal life is selected, the sum of one-half (1/2) of the
ordinary life premiums and all other life insurance premiums shall
not exceed one-fourth (1/4) of the aggregate contributions plus
forfeitures, if any, allocated to any Participant.
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12.3 Ownership of Policies. The Trustee shall apply for and
be the owner of any contracts purchased hereunder. Such ownership
shall include the right to exercise all rights and privileges of
ownership in accordance with the terms of the contract. The
Trustee shall have no responsibility to pay any premiums in excess
of the funds which are available for that purpose. No insurer
which issues any contract under this Plan shall be deemed a party
to the Plan or Trust for any purpose. Any such insurer shall be
fully protected and shall incur no liability for taking or
permitting any action in accordance with the written direction of
the Trustee.
12.4 Accounting for Insurance Contracts. Payments to the
insurer with respect to any life insurance, annuity, or endowment
contract for a Participant shall constitute an investment of the
funds credited to the Participant's Account. However, insurance
contracts held in a Participant's Account shall not be included in
the Trust Fund valuation under Section 15.2. Dividends or credits
will be allocated directly to the Participant's Account for whose
benefit the contract is held. Insurance premiums paid on any
insurance issued on the life of a Participant shall be charged
against that Participant's Account.
12.5 Distribution of Contract. Subject to Section 7.1,
relating to Joint and Survivor Annuity Requirements, the contracts
on a Participant's life will be converted to cash or an annuity or
distributed to the Participant upon commencement of benefits. Any
annuity contract distributed herefrom must be nontransferable. The
terms of any annuity contract purchased and distributed by the Plan
to a Participant or spouse shall comply with the requirements of
this Plan.
12.6 Contract Proceeds. All insurance contracts shall
provide that proceeds will be payable to the Trustee, however the
Trustee shall be required to pay over all proceeds of the contract
to the Participant's Designated Beneficiary in accordance with
Article V. A Participant's spouse will be the Designated
Beneficiary of the proceeds in all circumstances unless a qualified
election has been made in accordance with Section 7.1, relating to
Joint and Survivor Annuity Requirements, if applicable. Under no
circumstances shall the Trust Fund retain any part of the proceeds.
ARTICLE XIII. ADMINISTRATION OF EMPLOYER'S PLAN
13.1 Plan Administrator. The Employer shall by resolution
designate itself, an individual or a committee as a Plan
Administrator who shall be the Named Fiduciary as required by the
ERISA. The Plan Administrator shall be charged with the Employer's
management of the Plan operations and its administration. The Plan
Administrator shall serve at the will of the Employer, but may
resign by delivering his written resignation as Plan Administrator
to the Employer. Successor Plan Administrators shall be appointed
by resolution of the Board of Directors, if a corporation, the
Managing Partner(s), if a partnership, or by the Owner-Employee, if
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a sole proprietorship. Immediately following any appointment the
Employer shall provide the Trustee the name and signature of the
Plan Administrator. The Trustee may conclusively assume that the
Plan Administrator will continue to act in that capacity until the
Trustee has been notified in writing by the Employer.
13.2 Duties of Plan Administrator. The Plan Administrator
shall administer the Plan in accordance with its terms and shall
have all powers necessary to carry out the provisions of the Plan.
The Plan Administrator shall interpret the Plan and shall determine
all questions arising in the administration, interpretation, and
application of the Plan. The Plan Administrator shall adopt such
rules and regulations as it deems necessary or advisable to
administer the Plan. In performing its duties, the Plan
Administrator shall act solely in the interest of the Participants
of the Plan and their Beneficiaries and for the exclusive purpose
of providing benefits to Participants and their Beneficiaries and
with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent man acting in a like
capacity and familiar with such matters would use in the conduct of
an enterprise of a like character and with like aims.
13.3 Directions to Trustee. The Plan Administrator shall
notify the Trustee in writing of any action the Plan Administrator
desires the Trustee to take, and the Trustee shall be entitled to
rely upon such writing until such time as the Plan Administrator
shall file a written revocation of such direction with the Trustee.
The Plan Administrator may employ such actuaries, accountants,
counsel, specialists and other persons as it deems necessary or
desirable in connection with the administration of the Plan; and if
he relies in good faith upon opinions furnished him by any
professional or specialist, the Employer shall indemnify him for
any and all claims, loss, damages, expense and liability arising
from any resulting action or failure to act.
13.4 Information and Records. The Plan Administrator may
establish a manual of operations and procedures, and shall keep a
record of its actions as well as all books of account, records, or
other data necessary for the administration of the Plan. The Plan
Administrator shall notify the Trustee and the Employer of any
action taken and, when required, shall notify any other interested
person or persons.
13.5 Expenses of Plan Administrator. The Plan Administrator
shall serve without compensation for its services as Plan
Administrator, but all expenses of the Plan Administrator will be
paid by the Employer. Such expenses shall include all those
incident to the Plan Administrator's functions, including, but not
limited to, fees of actuaries, accountants, counsel, investment
advisors, and other specialists.
13.6 Fiduciary Responsibility. The Plan Administrator shall
not be liable or responsible for the acts of commission or omission
of another fiduciary unless (a) the Plan Administrator knowingly
participated or knowingly attempted to conceal the act or omission
of another fiduciary and the Plan Administrator knew the act or
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omission was a breach of fiduciary responsibility by the other
fiduciary; or (b) the Plan Administrator has knowledge of a breach
by the other fiduciary and shall not make reasonable efforts to
remedy the breach; or (c) the Plan Administrator's breach of its
own fiduciary responsibility permitted the other fiduciary to
commit a breach. From the assets of the trust, the Trustee may
indemnify the Plan Administrator against any and all claims,
losses, damages, expenses and liabilities arising from any act of
commission or omission if the act is determined not to be a breach
of fiduciary responsibility by the Plan Administrator. The
indemnification shall include attorney's fees and all other costs
and expenses reasonably incurred by the Plan Administrator in
defense of any action brought against him arising from such act of
commission or omission.
13.7 Reporting and Disclosure Duties of Plan Administrator.
The Plan Administrator shall furnish the Participant and the
Beneficiaries a copy of the summary plan description within 90
days after the individual becomes a Participant in the Plan or (in
the case of a Beneficiary) within 90 days after he first receives
benefits from the Plan. The Plan Administrator shall furnish to the
Secretary of Labor any modification of, or changes to, the Plan
within sixty (60) days after the modification or change is
adopted; the same information shall be furnished to the Participant
or Beneficiaries within two hundred ten (210) days after the Plan
Year within which the modification or change was adopted. Every
five (5) years the Plan Administrator shall furnish to the Secretary
of Labor, the Participant and the Beneficiaries an updated
summary plan description. If no amendments were made to the
Plan, the Plan Administrator shall not be required to furnish
the updated summary plan description to the Participant and the
Beneficiaries every five (5) years, but shall be required to
furnish the updated summary plan description to the Participant
and the Beneficiaries at least every (10) years. The Plan
Administrator shall file such other reports (except for those
reports referred to in Section 14.11) with the Departments of
Labor and Treasury as may be required by statute or regulations.
13.8 Delegation of Reporting Responsibilities. The Plan
Administrator may delegate in writing to the Trustee such Plan
management, reporting and disclosure responsibilities as may be
agreed upon by the Plan Administrator and the Trustee and in the
same manner, revoke any such delegation of responsibility;
provided, however, that the Plan Administrator shall remain
primarily responsible for its administrative duties and no
delegation shall be made which is contrary to the requirements of
federal law or regulation.
13.9 Establishment of Funding Policy. The Plan
Administrator shall establish and supervise a funding policy and a
method for carrying out that policy; the policy shall be consistent
with the needs and objectives of the Plan and the requirements of
Title I of ERISA. This funding policy shall be communicated to the
Trustee.
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13.10 Employer as Plan Administrator. In the event the
Employer is designated as Plan Administrator, the Employer through
its officers shall appoint an agent to act for and on behalf of the
Employer in performing the duties and responsibilities imposed upon
the Plan Administrator. In such a case, any notice to the Plan
Administrator will be deemed effective if delivered in person or by
certified mail to the President or Secretary of the Employer.
ARTICLE XIV. CREATION OF TRUST AND TRUSTEE RESPONSIBILITIES
14.1 Establishment and Acceptance of Trust. The Trustee
shall receive any contributions paid to it in cash, or other
property approved by the Plan Administrator for acceptance by the
Trustee. All contributions so received together with the income
therefrom shall be held, managed, and administered in the Trust
Fund pursuant to the terms of this Agreement and may not be
diverted to or used for other than the exclusive benefit of the
Participants or their beneficiaries. The Trustee hereby accepts
the Trust created hereunder and agrees to perform the duties under
this Agreement on its part to be performed.
14.2 Selection of Trustee. The Trustee or Trustees shall be
selected by the Employer and may be removed by the Employer at any
time upon written notice to the Trustee. The Trustee shall have
the right to resign at any time by giving written notice to the
Employer. The Trustee may be removed upon ten (10) days written
notice from the Employer. Immediately after the removal or
resignation of the Trustee, the Employer shall appoint a successor
Trustee, who shall qualify by delivering a written acceptance to
the Employer and to the resigning Trustee. The resigning Trustee
shall forthwith file with the Employer and with the Plan
Administrator a written account of its acts from the date of its
last previous annual account to the date of its removal or
resignation; and the retiring Trustee shall assign, transfer and
pay over to the successor Trustee the assets constituting the Trust
Fund. The resigning Trustee may have its account settled by a
court of competent jurisdiction.
14.3 Powers of the Trustee. The Trustee is, and shall be
authorized and empowered in its discretion, but not by way of
limitation, to:
(a) invest and reinvest the principal and the income of the
Trust Fund and keep the Trust Fund invested, without distinction
between principal and income, in bonds, insurance policies,
mortgages, debentures, preferred or common stocks, stock options,
puts, calls, mutual funds, a common trust fund maintained by a
fiduciary which is a bank or an insurance company, and real estate
or personal property. The Trustee may invest assets of the Trust
Fund in the stock or other security, or any evidence of
indebtedness of the Trustee or an affiliate of the Trustee if such
transaction is not a prohibited transaction under Code 4975. If
the Plan is a Profit Sharing Plan, the Trustee may acquire and hold
up to 100% of the assets of the Plan in qualifying employer
securities as defined in Section 407(d)(5) of ERISA. The Trustee
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may deposit the Plan's assets in an interest bearing account in a
financial institution supervised by the United States, or a state,
if the financial institution is a fiduciary of the Plan;
(b) sell, exchange, convey, transfer, or dispose of, and to
grant options with respect to, any asset held in the Trust Fund.
Any sale may be made by the Trustee by private contract or by
public auction, and for cash or upon credit, as the Trustee shall
be bound to supervise the application of the proceeds of any
transaction or to inquire into the validity, expediency or
propriety of the transaction;
(c) retain, manage, operate, repair, improve, mortgage or
lease for any period, any real or personal property held by the
Trustee, and to purchase and carry insurance in such amount and
against such hazards as the Trustee may deem advisable;
(d) vote in person or by general or limited proxy with
respect to any bonds, stocks or other securities held by the
Trustee; to exercise any options applicable to any bonds, stocks,
or other securities; to exercise any rights, to subscribe for
additional bonds, stocks or other securities, and to make any and
all necessary payments therefor; to join in, or to dissent from or
oppose, the reorganization, recapitalization, consolidation,
liquidation, sale or merger of corporations or properties in which
the Trustee may be interested, as Trustee, upon the terms and
conditions as he may deem prudent;
(e) accept and hold any securities or other property
received by the Trustee, whether or not the Trustee would be
authorized to invest in such securities;
(f) make, execute, acknowledge and deliver any and all
documents of transfer and conveyance and any and all other
instruments that may be necessary or appropriate to carry out the
powers herein granted;
(g) settle, compromise, or submit to arbitration any claim,
debts or damages due or owing to or from the Trust Fund, to
commence or defend suits or legal or administrative proceedings,
and to represent the Trust Fund in all suits and legal and
administrative proceedings;
(h) employ suitable agents and counsel, and to pay their
reasonable expenses and compensation which will be charged against
the Trust Fund or the assets held in the Participating Trusts only
to the extent hereinafter provided;
(i) keep such portion of the Trust Fund in cash or cash
balances as the Trustee may from time to time deems to be in the
best interests of the Trust Fund, it being understood that the
Trustee shall not be required to pay any interest on any such cash
balances;
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(j) keep such records and make such returns and reports as
may be required by Trustee of qualified employee pension benefit
plans under the Code and regulations issued thereunder;
(k) borrow or raise money for the purposes of the trust
from others to the extent and upon such terms and conditions as the
Trustee may deem desirable or proper; and for any sum so borrowed
to issue its promissory note, as Trustee, and to secure the
repayment thereof by pledging all or any part of the Trust Fund,
except for segregated accounts or Elective Deferral Accounts; and
no person lending money to the Trustee shall be bound to supervise
the application of the money borrowed, or to inquire into the
validity, expediency or propriety of any borrowing;
(l) cause any investments to be registered in, or
transferred into, its name as Trustee, or the name of the Trustee's
nominee or nominees, or to retain the investment in unregistered
form or in a form permitting transfer by delivery only; however,
the books and records of the Trustee shall at all times show that
all investments are part of the Trust Fund;
(m) require indemnity from Employer, to the Trustee's
satisfaction, before taking any action with respect to which the
Trustee may have reasonable ground for requesting such
indemnification;
(n) invest in insurance contracts as authorized in ARTICLE
XII;
(o) to lend money to Plan Participants as set forth in
ARTICLE X, if Participant loans are permitted in the Adoption
Agreement;
(p) invest the Trust Fund's assets with any other trust
which is qualified pursuant to Code 401(a) on the condition that
income and capital shall be divided proportionately between the
trusts;
(q) generally, do all such acts and execute and deliver all
such instruments as in the judgment of the Trustee may be necessary
or desirable to carry out any powers conferred upon it, without the
order of any court, and without having to post bond or make any
inventories, returns or reports of its doings to any court;
(r) perform all acts, whether or not expressly described or
referred to above, which the Trustee may deem necessary, proper or
desirable for the protection or enhancement of the Trust Fund; and
(s) in addition to the foregoing, the Trustee shall have
all the powers authorized by Arkansas Acts of 1961, No. 153,
Section 3 (the same being Ark. Code Ann. 28-69-116) which Act is,
by this reference thereto, incorporated herein and made a part
hereof as if fully set out.
14.4 Prudent Investments. In making all investments deemed
necessary and worthwhile, the Trustee shall exercise that judgment,
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ordinary care and diligence under the circumstances then
prevailing, which men of prudence, discretion, and intelligence
familiar with such matters exercise in a like situation and shall
diversify such investments so as to minimize the risk of large
losses.
14.5 Establishment of Employer Investment Committee. At the
discretion of the Employer, if the Employer elects in the Adoption
Agreement or subsequently by a written notice delivered to the
Trustee, the Employer may establish an Investment Committee which
shall assume the responsibility, and be liable for, the making of
prudent investments. Investments directed by the Investment
Committee shall not be in conflict with the "prohibited
transactions" provisions of the Code. As directed by the
Investment Committee, the Trustee shall purchase such securities or
other property, including any property authorized under Section
14.3 above, or shall sell such securities, or other property, held
as part of the trust fund, as may be specified in any such
direction received in writing from the Investment Committee. The
Trustee shall have no obligations whatsoever to seek, or request,
any direction from the Investment Committee nor shall the Trustee
have any power or authority to dispose of any such securities, or
property, acquired pursuant to such direction unless directed by
the Investment Committee. The Trustee shall, subject to the
limitations herein set forth, be under a duty to comply with any
directions when given, but shall have no responsibility whatsoever
in connection with any purchase, retention, sale or other acts set
forth in the directions from the Investment Committee, other than
in compliance with such directions, except as follows:
(a) The Trustee shall not knowingly participate in or
knowingly undertake to conceal an act or omission of any other
fiduciary to the Plan with the knowledge that such act or omission
of another fiduciary is a breach of this Plan and Trust or of any
provision of applicable law.
(b) The Trustee shall not conduct itself, in the discharge
of its specific responsibilities hereunder, in a manner that would
enable another fiduciary to commit a breach of this Plan and Trust
or of any provision of applicable law.
(c) If the Trustee has knowledge of a breach by another
fiduciary to the Plan, the Trustee shall make reasonable efforts,
under the circumstances, to remedy the breach.
(d) The Trustee shall not follow the directions of the
Investment Committee if the Trustee knows or, from the facts of
which it is aware, should know, that the directions are not made in
accordance with the terms of the Plan, or are contrary to
provisions of applicable law.
It is the intention of this provision that the Investment
Committee shall be the named plan fiduciary with respect to plan
investments and that the Trustee shall be relieved from liability
for following the proper instructions of the Investment Committee
as provided in Section 405(b)(3)(B) of Title I of ERISA.
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14.6 Participant Investment Direction. If the Employer
elects to permit Participant direction of an Account in the
Adoption Agreement, a Participant may give the Trustee written
notice that he elects to direct the investment and reinvestment of
such Account. The Trustee shall not be required to accept such
direction if it will create an undue administrative burden. Assets
thus purchased shall be held by the Trustee as a separate
investment account to which all earnings and losses of that account
shall be attributed. Moreover, such assets shall be subject to all
of the other provisions of this Plan, except that such assets shall
be excluded from the Trust Fund for allocation of annual earnings
or losses and all sales, administrative and other fees incurred in
the purchase or sale of any such assets shall be charged
exclusively against such assets. The Trustee or any other person
shall not be under any duty to question any direction from the
Participant or to review any securities or other property or to
make any suggestion to the Participant. If a Participant directs
the Trustee to invest in collectibles (within the meaning of Code
408(n)(2)), such an investment will be treated as an immediate
distribution to the Participant.
14.7 Payments from the Fund. The Trustee shall from time to
time, on the written directions of the Plan Administrator, make
payments out of the Trust Fund to such persons, in such manner, in
such amounts, and for such purposes as may be specified in the
written directions of the Plan Administrator, and upon any such
payment being made, the amount thereof shall no longer constitute a
part of the Trust Fund. Each such written direction shall be
accompanied by a certificate of the Plan Administrator that the
payment is in accordance with the Plan. The Trustee shall not be
responsible in any way for the application of such payments or for
the adequacy of the Trust Fund to meet and discharge any and all
liabilities under the Plan.
14.8 Scope of Responsibilities. The duties and
responsibilities of the Trustee shall be according to the
provisions of this Plan and ERISA and, except as provided by
statute, no other or further duties or responsibilities shall be
imposed or implied by the Employer without the written consent of
the Trustee. The Trustee shall discharge its duties solely in the
interest of the Participants and beneficiaries and for the
exclusive purpose of providing benefits to Participants and their
beneficiaries and defraying reasonable expenses of administering
the Plan.
14.9 Records of Trustee. The investment records shall be
open at all reasonable times to inspection by the Employer, Plan
Administrator, Participants or their beneficiaries.
14.10 Settlement of Controversies. In the event any
controversy shall arise between the Trustee and any other person,
including without limitation, the Plan Administrator, the Employer
or any Participant or beneficiary under the Plan, with respect to
the interpretation of this Plan or the duties of the Trustee or any
other fiduciary, the Trustee may require that the issue be decided
by a court of competent jurisdiction, and pending such
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determination, the Trustee shall not be obligated to take any other
action in connection with the matter involved in the controversy.
The cost of any litigation to which the Trustee shall be a party in
connection with the Trust shall be considered an administrative
expense. The Trustee may compromise and adjust claims due the
Trustee upon the terms and conditions acceptable to the Plan
Administrator. The Trustee shall at no time be obligated to
institute any legal action unless it shall be indemnified to its
satisfaction for any fees, costs and expenses to be incurred in
connection with the litigation.
14.11 Annual Statement to Participants. The Trustee shall
keep full and complete records of the administration of the trust.
Within 210 days after the end of a Plan Year, the Trustee shall
furnish the Employer a summarized financial statement. The Trustee
shall also file all reports and returns with the Department of
Labor, and/or Treasury which are required by statute or regulations
to be filed by trustees of employee pension benefit plans.
14.12 Instructions to Trustee. All instructions or notices
provided to be given by the Plan Administrator to the Trustee shall
be in writing and signed by the Plan Administrator. The Trustee
shall be furnished signatures of the Plan Administrator, or its
agents, who are authorized to act on its behalf and the Trustee may
rely upon such instructions to the extent permitted by law.
14.13 Trustee Compensation. The Trustee (if he is not a full
time Employee of the Employer) shall be paid a reasonable
compensation as shall be agreed upon by the Employer and the
Trustee. The Trustee, in performing its duties under this Plan,
may employ counsel, accountants and other agents as it shall deem
advisable. The Trustee may employ other fiduciaries or investment
managers only after securing the written approval of, or written
directions from, the Employer. All expenses incurred by the
Trustee in the administration of the trust, including but not
limited to, the compensation of counsel, accountants, investment
managers, the Trustee, other agents or fiduciaries, shall be
charged against the Trust Fund, to the extent not paid directly by
the Employer. All taxes that may be levied or assessed under
existing or future laws upon, or in respect to, the trust, its
assets or the income therefrom shall be a charge upon the Trust
Fund, to the extent not paid directly by the Employer.
14.14 Liability for Acts of Other Fiduciaries. The Trustee
shall not be liable for the acts or omissions of another fiduciary
unless (a) the Trustee knowingly participates in, or knowingly
attempts to conceal the act or omission of, another fiduciary and
the Trustee knows the act or omission is a breach of a fiduciary
responsibility by the other fiduciary; or (b) the Trustee has
knowledge of a breach by the other fiduciary and shall not make
reasonable efforts to remedy the breach; or (c) the Trustee's
breach of its own fiduciary responsibility permits the other
fiduciary to commit a breach. Except as set forth in the preceding
sentence, a Trustee shall not be liable for the acts or omissions
of an investment manager appointed pursuant to Section 14.13.
(C) 2001 FRIDAY, ELDREDGE & CLARK
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14.15 Allocation of Fiduciary Responsibility. If there shall
be more than one Trustee, the Trustees shall jointly manage and
control the assets of the Plan unless the Employer shall allocate
in writing specific responsibilities, obligations and duties among
the Trustees. The Employer may allocate fiduciary
responsibilities, other than the Trustee's responsibilities, to
other fiduciaries. If the Employer shall make such an allocation,
then the specified Trustee or fiduciary shall be responsible for
the duties allocated to that Trustee or fiduciary and the other
Trustees or fiduciaries shall not be liable for any breach of
fiduciary responsibility for the duties allocated to other Trustees
or fiduciaries, except as set forth in Section 14.14. If the
Employer shall not allocate specific responsibilities, obligations
or duties to a Trustee, then any act may be performed by any
Trustee and such act shall have the same force and effect as if the
act had been performed by all of the Trustees. Any person,
corporation or other entity may deal with any of the Trustees and
may accept the signature of any Trustee in the same manner and with
the same force and effect as if the individual were the sole
Trustee.
ARTICLE XV. TRUST FUND VALUATION
15.1 Revaluation on each Valuation Date. The Trustee shall
have the responsibility and duty of determining the fair market
value of the assets in the Trust on the last day of each Plan Year
and on any other interim date during the Plan Year as required by
the Plan Administrator or as determined reasonably necessary by the
Trustee (the "Valuation Date"). In determining whether an interim
valuation date shall occur, the Trustee and/or Plan Administrator
shall consider whether large fluctuations in fair market value
occurring since the last valuation date would precipitate an unfair
burden or windfall to the remaining Plan Participants. The size of
the proposed distributions and the cost of the revaluation shall be
considered.
15.2 Valuation Date Adjustments. All Accounts, except any
portion of an Account which is Participant Directed pursuant to
Section 14.6, shall be adjusted as of the Valuation Date to reflect
the effect of income received and accrued, realized and unrealized
profits and losses, expenses and all other transactions for the
period beginning on the day after the previous Valuation Date and
ending on the Valuation Date (the "Valuation Period"). The amount
of the credit of each Account (excluding therefrom the value of all
insurance contracts, which are accounted for under Section 12.4) as
of the last day of each Valuation Date shall be adjusted by the
following credits and debits in the following order:
(a) any contributions or forfeitures allocated during the
Valuation Period shall be deducted from each Account, except only
one-half of the Elective Deferrals allocated during the Valuation
Period shall be deducted.
(b) in the case of a person for whom payments have been
made there shall be debited the total amount of the payments made
(C) 2001 FRIDAY, ELDREDGE & CLARK
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from the Account during the Valuation Period since the last
Valuation Date.
(c) as to each Account there shall be credited or debited
that portion of the Net Income or Net Loss of the Trust Fund during
the Valuation Period which the balance of the Account as adjusted
by Section 15.2 (a) and (b), bears to the total balance of all
Accounts also adjusted according to Section 15.2 (a) and (b).
(d) there shall be added back to the Account the
contributions and forfeitures which were deducted under Section
15.2(a).
15.3 Determination of Net Income or Net Loss. The Net
Income or Net Loss of the trust shall be ascertained by the
Trustee, and shall be the profits and income received and accrued
less the losses and expenses incurred and paid from the trust plus
any net increase or minus any net decrease in the value of the
assets of the trust not actually realized and received or incurred
and paid from the trust.
ARTICLE XVI. GENERAL PROVISIONS RELATING TO EMPLOYER'S PLAN
16.1 Amendment of Employer's Plan. The Employer may:
(a) change the choice of options in the Adoption Agreement,
(b) add overriding language in the Adoption Agreement when
such language is necessary to satisfy Code 415 or 416 because of
the required aggregation of multiple plans,
(c) add certain model amendments published by the Internal
Revenue Service provided that such amendments are not counted as
one of the substantive three amendments that can be made to the
plan, and
(d) make up to three (3) revisions that actually delete or
modify the language of the Adoption Agreement provided that such
revisions do not discriminate in favor of Highly Compensated
Employees and are ultimately approved by the Key District of the
Internal Revenue Service where the Plan is submitted for a
favorable determination letter.
The Employer may retroactively amend the Adoption Agreement to
satisfy the requirements of the Code. Furthermore, the Employer
may make up to three revisions to the Adoption Agreement in order
to allow the Plan to fit its specific needs. No amendment to the
Plan shall be effective to the extent it discriminates in favor of
Highly Compensated Employees, has the effect of decreasing a
Participants Account Balance, eliminates an optional form of
distribution or makes it possible prior to the satisfaction of all
liabilities with respect to the Participant and their beneficiaries
for any of the trust property ever to revert to the Employer.
Notwithstanding the preceding sentence, a Participant's Account
Balance may be reduced to the extent permitted under Code
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412(c)(8). For purposes of this paragraph, a Plan amendment which
has the effect of decreasing a Participant's Account Balance or
eliminating an optional form of benefit, with respect to benefits
attributable to service before the amendment shall be treated as
reducing an accrued benefit. Furthermore, if the vesting schedule
of a plan is amended, in the case of an Employee who is a
Participant as of the later of the date of such amendment is
adopted or the date it becomes effective, the nonforfeitable
percentage (determined as of such date) of such Employee's right to
his Employer-derived accrued benefit will not be less than his
percentage computed under the Plan without regard to such
amendment.
If the Employer's Plan vesting schedule is amended, or the
Employer's Plan is amended in any way that directly or indirectly
affects the computation of the Participant's nonforfeitable
percentage or if the Plan is deemed amended by an automatic change
to or from a Top Heavy vesting schedule, each Participant with at
least 3 Years of Service with the Employer may elect, within a
reasonable period after the adoption of the amendment or change, to
have the nonforfeitable percentage computed under the Plan without
regard to such amendment or change. For Participants who do not
have at least 1 Hour of Service in any Plan Year beginning after
December 31,1988, the preceding sentence shall be applied by
substituting "5 Years of Service" for "3 Years of Service" where
such language appears.
The period during which the election may be made shall commence
with the date the amendment is adopted or deemed to be made and
shall end on the latest of:
(a) 60 days after the amendment is adopted;
(b) 60 days after the amendment becomes effective; or
(c) 60 days after the Participant is issued written notice
of the amendment by the Employer or Plan Administrator.
16.2 Procedure For Amendment. Amendments shall be presented
to and adopted in the form of a resolution by the Board of
Directors, if a corporation, the Managing Partner(s), if a
partnership, or by the Owner-Employee, if a sole proprietorship.
The executed amendment shall be delivered to the Trustee. All
amendments shall be communicated to the Employees in writing within
ninety (90) days of their adoption.
16.3 Termination of Employer's Plan. The creation of this
trust is in no sense a guarantee on the part of Employer that it
will be continued, nor that any Participant hereunder shall be
retained in employment, and any Participant shall be subject to
discharge exactly as if this trust had never been established.
16.4 Nonforfeiture Provisions. It is hereby expressly
provided that upon termination or partial termination of the Plan,
or for a Profit Sharing Plan upon the complete discontinuance of
contributions to the Employer's Plan, the rights of all
(C) 2001 FRIDAY, ELDREDGE & CLARK
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Participants to the amounts credited to his Employer Contribution
Account shall be 100% nonforfeitable.
16.5 Distribution of Benefits on Termination of Plan. In
the event of a complete discontinuance of contributions to the
Employer's Plan or in the event of a termination of the Employer's
Plan, the Employer shall determine whether distributions from the
trust to Participants shall be made currently or deferred until
benefits would otherwise be payable under the Employer's Plan as if
it had not been terminated. Distributions shall be subject to the
limitations applicable under Section 3.8 and the applicable consent
requirements hereunder, if any.
16.6 Spendthrift Provision. Except for any claim the
Trustee may have against the Participant as security for a loan
made pursuant to ARTICLE X, no Employee participating in the
Employer's Plan shall have the power, to anticipate, alienate,
assign, hypothecate or transfer any benefits provided hereunder and
likewise no beneficiary of any Employee participating in the
Employer's Plan shall ever have the right to anticipate, alienate,
assign, hypothecate or transfer any Benefits provided under such
Plan. No benefits shall be subject to any debts or liabilities of
such Participant or beneficiary, except for loans to the
Participant by the Trustee. The preceding shall also apply to the
creation, assignment, or recognition of a right to any benefit
payable with respect to a Participant pursuant to a domestic
relations order, unless such order is determined to be a Qualified
Domestic Relations Order, as provided in Section 16.7, or any
domestic relations order entered before January 1, 1985.
16.7 Assignments Pursuant to Divorce. Section 16.6 shall
not apply to the creation, assignment, or recognition of a right to
any plan benefit arising from a Qualified Domestic Relations Order
(as defined in Code 414(p)). A Qualified Domestic Relations Order
is any judgment, decree or order (including court approval of a
property settlement agreement) made pursuant to Arkansas (or any
other applicable state) domestic relations law which relates to the
provision of child support, alimony payments or marital property
rights to a spouse, child or other dependent of a Participant. The
Qualified Domestic Relations Order must clearly specify (a) the
name and last known mailing address, if any, of the Participant and
each alternate payee covered by the order, (b) the amount or
percentage of the Participant's benefits to be paid to the
alternate payee, or the manner in which the amount or percentage is
to be determined, (c) the number of payments or period to which
such order applies, and (d) each plan to which the order applies.
The order shall not require the Plan to increase Plan benefits or
to provide any type or form of benefit, or any option, not
otherwise provided under the Plan. Notwithstanding anything
contained in this Plan to the contrary, the alternative payee of a
segregated account created pursuant to a Qualified Domestic
Relations Order may request in writing that the Trustee make
distribution to the alternate payee at any time subsequent to the
date that the segregated account is created pursuant to the
Qualified Domestic Relations Order. The distributions to the
alternate payee shall be in a manner and form as authorized by this
(C) 2001 FRIDAY, ELDREDGE & CLARK
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Plan. If the Participant is less than 100% vested upon the
segregation of the Participant's Account, the vesting rules of
Section 6.4(b) shall apply.
16.8 Instruments in Writing Required. Any action, decision,
notice or finding required or permitted under the terms of
Employer's Plan shall be in writing and no action, decision, notice
or finding not in writing shall be binding on any party interested
therein. The Employer, the Trustee and any life insurance company
issuing any contracts hereunder, shall be entitled to rely upon the
authenticity of any instrument in writing believed in good faith by
them respectively to have been executed by the party purporting to
execute such instrument.
16.9 Continuation of Employer's Plan by Successor to an
Employer. Any successor in interest to an Employer shall have the
right, by written notice to the Sponsor, to continue Employer's
Plan and such successor in interest shall have the rights and
privileges given under the terms of this Plan to the Employer.
16.10 Discretionary Powers. All discretionary powers under
Employer's Plan will be administered in a non-discriminatory
manner, and for the exclusive benefit of the Participants and their
beneficiaries.
16.11 Reversion. Neither the corpus, any income therefrom,
or other property of Employer's Plan shall ever prior to the
satisfaction of all liabilities with respect to the Participants
and their beneficiaries, revert to the Employer, and all such
property shall be used for the exclusive benefit of the Employees
who are Participants hereunder, or their beneficiaries, except as
provided below:
(a) Any contribution made by the Employer because of a
mistake of fact may be returned to the Employer within one year of
the contribution.
(b) In the event that the Commissioner of Internal Revenue
Service determines that an Employer's Plan is not initially
qualified under the Code, any contribution made incident to that
initial qualification by the Employer must be returned to the
Employer within one year after the date the initial qualification
is denied, but only if the application for the qualification is
made by the time prescribed by law for filing the Employer's return
for the taxable year in which the Plan is adopted, or such later
date as the Secretary of the Treasury may prescribe.
(c) Any contribution made by the Employer that is
conditioned on the deductibility of the amount under Code 404 of
may be returned to the Employer, to the extent of the amount
disallowed, within one year after the disallowance of the
deduction.
16.12 Removal as a Volume Submitter Plan Due to
Disqualification. If the Employer's Plan fails to attain or retain
qualification, then such Employer's Plan will no longer participate
(C) 2001 FRIDAY, ELDREDGE & CLARK
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in this volume submitter program and such plan shall be considered
an individually designed plan.
16.13 Control of Trades or Businesses by an Owner-Employee.
If this Plan provides contributions or benefits for one or more
Owner-Employees who control both the business for which this plan
is established and one or more other trades or businesses, this
Plan and the Plan established for other trades or businesses must,
when looked at as a single Plan, satisfy Code 401(a) and (d) for
the Employees of this and all other trades or businesses.
If the Plan provides contributions or benefits for one or more
Owner-Employees who control one or more other trades or businesses,
the employees of the other trades or businesses must be included in
a Plan which satisfies Code 401(a) and (d) and which provides
contributions and benefits not less favorable than provided for
Owner-Employees under this Plan. If an individual is covered as an
Owner-Employee under the Plans of two or more trades or businesses
which are not controlled and the individual controls a trade or
business, then the contributions or benefits of the employees under
the Plan of the trades or businesses which are controlled must be
as favorable as those provided for him under the most favorable
plan of the trade or business which is not controlled.
For purposes of the preceding paragraphs, an Owner-Employee, or
two or more Owner-Employees, will be considered to control a trade
or business if the Owner-Employee, or two or more Owner-Employees
together:
(a) own the entire interest in an unincorporated trade or
business, or
(b) in the case of a partnership, own more than fifty
percent (50%) of either the capital interest or the profits
interest in the partnership.
For purposes of the preceding sentence, an Owner-Employee, or
two or more Owner-Employees shall be treated as owning any interest
in a partnership which is owned, directly or indirectly, by a
partnership which such Owner-Employee, or such two or more
Owner-Employees, are considered to control within the meaning of
the preceding sentence.
ARTICLE XVII. GENERAL PROVISIONS RELATING TO THE
VOLUME SUBMITTER PLAN AND TRUST AGREEMENT
17.1 Amendment of Plan. Except for those powers given to
each adopting Employer under Section 16.1, each adopting Employer
recognizes that the Sponsor has the sole and exclusive right to
amend any and all provisions of this Agreement, except that the
Sponsor shall not have the right to make an amendment the effect of
which would be to increase the contributions required of an
Employer as stated in this instrument nor shall any amendment be
made the result of which would permit any contributions made to an
Employer's Plan to revert to the Employer or to be used for any
(C) 2001 FRIDAY, ELDREDGE & CLARK
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purpose other than for the exclusive benefit of the Participants
and their beneficiaries. Any amendment so made by the Sponsor
shall be binding on the Employer and all Participants in the Plan.
Employer shall be promptly furnished with a copy of each amendment
made to this Plan by the Sponsor.
17.2 Merger or Transfer of Plan and Trust. Neither this
Plan and Trust nor the Employer's Plan shall be merged or
consolidated with, nor shall any assets or liabilities be
transferred to, any other plan, unless the benefits payable to each
Participant as if the Plan was terminated immediately after such
action would be equal to or greater than the benefits to which such
Participant would have been entitled as if this Plan had been
terminated immediately before such action.
17.3 Construction. This FRIDAY, ELDREDGE & CLARK VOLUME
SUBMITTER DEFINED CONTRIBUTION PLAN AND TRUST AGREEMENT has been
established with the intent that an Employer adopting these
provisions shall qualify as a defined contribution plan under Code
401. Accordingly, all terms and provisions contained herein shall
be construed, administered and enforced so as to be in compliance
with the requirements under the Code and the ERISA. Additionally,
where not preempted by federal law, an Employer Plan adopting this
FRIDAY, ELDREDGE & CLARK VOLUME SUBMITTER DEFINED CONTRIBUTION PLAN
AND TRUST AGREEMENT shall be construed, administered and enforced
in accordance with the laws of the State of Arkansas. Except where
otherwise indicated by the context, any masculine terminology used
herein also includes the feminine, and vice versa, and the
definition of any term herein in the singular shall also include
the plural, and vice versa.
17.4 Number and Counterparts. This FRIDAY, ELDREDGE & CLARK
VOLUME SUBMITTER DEFINED CONTRIBUTION PLAN AND TRUST AGREEMENT and
the Adoption Agreement may be executed in any number of
counterparts, each of which, when duly executed by the Employer,
shall be deemed to be original, but all of which shall together
constitute but one instrument which may be sufficiently evidenced
by any counterpart.
17.5 Severability. In case any provision of this Prototype
Variable Plan and Trust Agreement shall be held illegal or invalid
for any reason, said illegality or invalidity shall not affect the
remaining provisions but shall be fully severable and this FRIDAY,
ELDREDGE & CLARK VOLUME SUBMITTER DEFINED CONTRIBUTION PLAN AND
TRUST AGREEMENT shall be construed and enforced as if said illegal
or invalid provisions had never been inserted.
(C) 2001 FRIDAY, ELDREDGE & CLARK
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Exhibit 4.5
AMENDMENT NO. 1 TO THE
EURONET SERVICES INC. 401(K) PLAN
This Amendment is made this 20th day of
December, 2000, by Euronet Services Inc. (the
"Employer") to the Euronet Services Inc. 401(k) Plan (the
"Plan").
Pursuant to Article XVI of the Plan, the Employer hereby
amends and modifies Paragraphs 5.1 and 5.2 of the Adoption
Agreement, as set forth on the attached pages five (5) and six
(6), in order to provide that, effective for Participants who
terminate employment on or after December 31, 2000, the vesting
schedule will be amended as attached.
Where not inconsistent herewith, all the terms and
provisions of the Plan shall remain in full force and the
Employer hereby ratifies and confirms the Plan, as amended
herein.
EXECUTED the date first set forth above.
EURONET SERVICES INC.
By:______________________________________
Title:___________________________________
3.10 Distribution Upon Attainment of 59 and 1/2 or Hardship.
A Participant's Elective Deferrals Account shall be
distributable upon attainment of age 59 and 1/2.
A Participant's Elective Deferrals Account shall not be
distributable upon the Hardship of the Participant as
defined in Section 3.8(b).
ARTICLE IV. CONTRIBUTION FOR A PARTICIPANT WHO TERMINATES
4.1 Prior to Death, Disability or Retirement. A Participant
whose employment is terminated prior to Death, Disability
or attainment of Normal Retirement Age with at least the
Minimum Hours of Service during the Plan Year, as specified
in Paragraph 3.3, and who is not employed on the last day
of the Plan Year shall not share in Employer contributions
for such Plan Year.
4.2 Upon Death, Disability or Retirement. A Participant whose
employment is terminated upon Death, Disability, or
attainment of Normal Retirement Age during the Plan Year
without the Minimum Hours of Service during the Plan Year,
as specified in Paragraph 3.3, or who is not employed on
the last day of the Plan Year shall share in Employer
contributions for such Plan Year.
4.3 Required Allocation for Qualification. If a Participant
who is not employed on the last day of the Plan Year is
required to be credited with more than 500 Hours of
Service, and, as a result of the failure of such
Participant to receive an allocation the Employer's Plan
fails to meet the requirements of Code 410(b), then the
minimum number required (taking into account such
Participants on the basis of the highest number of Hours of
Service and then in descending order thereafter) to meet
the coverage tests under Code 410(b) of the group of
Participants who were not employed on the last day of the
Plan Year shall receive a full allocation.
ARTICLE V. VESTING
5.1 Rate. The nonforfeitable interest of each Participant in
his or her Employer Contribution Account balance prior to
the Participant's Normal Retirement Age, Death or
Disability shall be determined pursuant to the following
schedule:
Years of Service
----------------
for Vesting Vested Percentage
----------- -----------------
0-1 0%
2 0%
3 60%
4 80%
5 or more 100%
5.2 Top Heavy Rate. Notwithstanding the vesting rate in
Paragraph 5.1, for each Plan year in which the Employer's
Plan is a Top Heavy Plan (as defined in Section 9.1 of the
Plan), the following vesting schedule shall apply:
(C) 2000 FRIDAY, ELDREDGE & CLARK
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Years of Service
----------------
for Vesting Vested Percentage
----------- -----------------
0-1 0%
2 20%
3 60%
4 80%
5 or more 100%
If the vesting schedule under the Employer's Plan shifts in
or out of the above Top Heavy schedule for any Plan Year
because of the Plan's Top Heavy status, such shift is an
amendment to the vesting schedule and the election in
Section 16.1 of the Plan applies.
5.3 Years of Service for Vesting. The term "Years of Service
for Vesting" shall mean all complete or partial Plan Years
during which an Employee has not less than 1,000 Hours of
Service with the Employer, except for Years of Service prior
to age 18.
Notwithstanding the foregoing to the contrary, in the case
of a Participant who does not have any nonforfeitable right
to an accrued benefit derived from Employer contributions,
Years of Service for Vesting before any One-Year Break in
Service shall be disregarded if the number of consecutive
One-Year Breaks in Service equals or exceeds 5.
5.4 Unrelated and Predecessor Employers. Years of Service for
Vesting shall include service with the following unrelated
and predecessor employers: Euronet Services Inc. and
Arkansas Systems, Inc.
Years of Service for Vesting with a Related Employer as
defined in Section 1.28 of the Plan or with a predecessor
Employer, if the Employer maintains the Plan of the
predecessor Employer, will be treated as service with the
Employer.
5.5 Normal Retirement Age. For each Participant Normal
Retirement Age is the later of age sixty (60) or the fifth
(5th) anniversary of the Participant's commencement of
participation in the Plan.
ARTICLE VI. DISTRIBUTIONS
6.1 Benefit Payment Date. If a Participant has terminated
employment for any reason other than Death or Disability,
distributions will commence within 60 days (or as soon as
possible thereafter) after the Participant terminates his
employment and files his benefit election form.
Distributions upon Death or Disability shall commence within
60 days (or as soon as reasonably possible) after the
Participant's Death or Disability.
Distributions (except for distributions from Elective
Deferral or Qualified Non-elective Contribution Accounts)
may commence prior to termination of a Participant's
employment in the event the Participant has attained age 59-
1/2.
6.2 Optional Forms of Benefits. The form of payment (which may
be distributed in money or in property) shall be one of the
following methods as the Participant or his Beneficiary, may
determine:
(a) Single Lump Sum Payment.
(C) 2000 FRIDAY, ELDREDGE & CLARK
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Exhibit 4.6
ADOPTION AGREEMENT
FRIDAY, ELDREDGE & CLARK
VOLUME SUBMITTER
SALARY DEFERRAL PLAN AND TRUST
Euronet Services Inc. hereby adopts this Salary Deferral Plan and
Trust Agreement sponsored by FRIDAY, ELDREDGE & CLARK. This
Adoption Agreement and the Plan and Trust Agreement to the
FRIDAY, ELDREDGE & CLARK VOLUME SUBMITTER DEFINED CONTRIBUTION
PLAN AND TRUST shall constitute the Employer's Plan when the
Adoption Agreement has been completed and executed by the
Employer and accepted by the Employer's designated Trustee. For
purposes of this Plan, the Employer shall be allowed to make up
to 3 substantive revisions or modifications to this Adoption
Agreement that actually change the language set forth herein
provided that such revisions do not discriminate in favor of
Highly Compensated Employees and are ultimately approved by the
Key District of the Internal Revenue Service where the Plan is
submitted for a favorable determination letter.
ARTICLE I. IDENTIFICATION
1.1 "Employer" means Euronet Services Inc.
Employer shall also mean the following Related Employers:
Arkansas Systems, Inc.
1.2 "Eligible Employee" shall mean all Employees of the Employer
as defined in Section 1.12 of the Plan except for those
Employees in the following categories:
(a) Employees included in a unit of Employees covered by a
collective bargaining agreement between the Employer
and Employee representatives, if retirement benefits
were the subject of good faith bargaining. For this
purpose, the term "employee representatives" does not
include any organization more than half of whose
members are Employees who are owners, officers or
executives of the Employer.
(b) Employees who are nonresident aliens (within the
meaning of Section 7701(b)(1)(B) of the Code) and who
receive no earned income (within the meaning of
Section 9119(d)(2) of the Code) from the Employer
which constitutes income from sources within the
United States (within the meaning of Section 861(a)(3)
of the Code).
1.3 "Fiscal Year" means the accounting period of the Employer
which ends on December 31.
1.4 "Plan" means the Salary Deferral Plan evidenced by this
Agreement and all subsequent amendments thereto, and which
shall be titled the Euronet Services Inc. 401(k) Plan
(formerly the Arkansas Systems, Inc. 401(k) Plan).
1.5 "Trust" means the trust created by this Agreement, and known
as the Euronet Services Inc. 401(k) Trust (formerly the
Arkansas Systems, Inc. 401(k) Trust).
1.6 "Effective Date" of the original Plan means October 1, 1989
and the Effective Date of this Amendment is January 1, 2000.
(C) 2000 FRIDAY, ELDREDGE & CLARK
1.7 "Plan Administrator" means the individual, committee or the
Employer designated by the Employer pursuant to Section 13.1
of the Plan who shall be charged with the management of the
Plan operations and its administration and who shall be the
Named Fiduciary as required by the Employee Retirement Income
Security Act of 1974. The current Plan Administrator is
Euronet Services Inc.
1.8 "Trustee" means the person, people or corporation holding
legal title to the assets of the Trust pursuant to the terms
of this Agreement and who is appointed pursuant to Section
14.2. The current Trustee is Jeff Newman.
1.9 "Plan Year" means the twelve (12) consecutive month period
commencing with January 1 and ending on December 31.
ARTICLE II. ELIGIBILITY REQUIREMENTS - ENTRY DATES
Each Eligible Employee of the Employer shall participate
commencing on the following Entry Date after meeting the
following Age and Service requirements:
2.1 Age.
An Employee must have attained age twenty-one (21).
2.2 Service.
Beginning with the first hour employed, an Employee must have
been employed for six (6) months (cannot be used with more
than 12 months unless Paragraph 5.1 and 5.2 provide for 100%
vesting upon entry and Elective Deferrals are not permitted
under Paragraph 3.6). An Employee shall not be required to
complete any specified number of Hours of Service to receive
credit for any months of service.
2.3 Entry Dates. Every Eligible Employee satisfying the
eligibility requirements as of the Effective Date of this
Plan, if employed on the adoption date, shall enter the Plan
as of the Effective Date. Every other Eligible Employee
shall become a Participant on the first Entry Date after
satisfying the Age and Service requirements if employed on
such Entry Date which shall be the first day of the following
calendar quarter (January 1, April 1, July 1, October 1).
(C) 2000 FRIDAY, ELDREDGE & CLARK
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If a Participant is eligible for only part of a Plan Year,
only Compensation received subsequent to the Participant's
Entry Date shall be taken into account. In the event a
Participant is no longer a member of an eligible class of
Employees and becomes ineligible to participate but has not
incurred a One-Year Break in Service, such Employee will
participate immediately upon returning to an eligible class
of Employees. If such Participant incurs a One-Year Break in
Service, eligibility shall be determined under Section 2.2 of
the Plan. In the event an Employee who is not a member of an
eligible class becomes a member of an eligible class, such
Employee will participate immediately if such Employee has
satisfied the Age and Service requirements and would have
otherwise previously become a Participant.
2.4 Hours of Service for Year of Service for Eligibility. A Year
of Service for Eligibility shall be counted if the Employee
received credit for at least 1,000 Hours of Service during
the Eligibility Computation Period as provided in Section 2.3
of the Plan.
2.5 Unrelated and Predecessor Employers. Years of Service for
Eligibility shall include service with the following
unrelated and predecessor employers: Euronet Services Inc.
and Arkansas Systems, Inc.
Years of Service for Eligibility with a Related Employer as
defined in Section 1.28 of the Plan or with a predecessor
Employer, if the Employer maintains the Plan of the
predecessor Employer, will be treated as service with the
Employer.
2.6 Election Not to Participate. An Employee who is otherwise
eligible for the Plan may file an election with the Plan
Administrator choosing to waive participation in the Plan.
An election by a Participant who is a Partner with respect to
the Employer must be irrevocable. No election shall be
permitted if the Plan Administrator determines that such
election could cause the Employer's Plan to fail to meet the
minimum coverage requirements of Code 410(b).
ARTICLE III. EMPLOYER'S CONTRIBUTION
3.1 Amount of Contribution.
For each Plan Year, the Employer may, in its discretion, make
a contribution to the Plan.
3.2 Allocation of Contributions.
The benefits provided by this Plan are designed to be
integrated with Social Security at the Integration Level.
The Integration Level is equal to the Taxable Wage Base (the
maximum amount of earnings considered wages under Code
3121(a)(1) as of the beginning of the Plan Year).
The Employer's contribution (including forfeitures, if any)
will be allocated to each Participant's Account in two
stages. Stage One Allocation will be determined as follows:
Stage One Allocation. First, each Participant's Excess
Compensation shall be determined by subtracting an amount
equal to the Integration Level from the Participant's
Compensation. The sum of the Excess Compensation, if any,
plus the Participant's total Compensation shall then be
multiplied by 5.7% (not to exceed the Maximum Integration
Rate as defined in Section 1.22 of the Plan). The amount so
determined shall be the Stage One Allocation which shall be
credited to each respective Participant's Account. In the
event that the Employer's contribution (including
forfeitures, if any) is not sufficient to fully fund the
Stage One Allocation of all Participants, the Stage One
Allocation for each Participant will be allocated by the
Trustee to each Participant's Account in the ratio that the
sum of (a) each Participant's Excess Compensation and (b)
total Compensation bears to the sum of (a) all Participant's
Excess Compensation and (b) total Compensation of all
Participants. In the event the Plan Year is less than twelve
months, then the Integration Level shall be multiplied by a
fraction equal to the number of months in the short Plan Year
divided by twelve (12). The Integration Level shall also be
prorated, but on an individual basis, with respect to a new
Participant who participates for less than a full Plan Year.
Stage Two Allocation. If the Employer's contribution
exceeds the sum of all Stage One Allocations, the balance
(referred to in this Paragraph as the Excess Contribution),
if any, shall be credited to the Participant's Account in a
Stage Two Allocation. Stage Two Allocation shall be
determined as follows:
The Employer's Excess Contribution, if any, will be allocated
to each Participant's Account on the same basis and in the
same ratio that his Compensation bears to the total
Compensation of all Participants.
This Plan cannot be integrated with Social Security if the
Employer also adopts the FRIDAY, ELDREDGE & CLARK VOLUME
SUBMITTER MONEY PURCHASE PENSION PLAN AND TRUST.
(C) 2000 FRIDAY, ELDREDGE & CLARK
-3-
3.3 Minimum Hours of Service. A Participant must have received
credit for at least 1,000 Hours of Service during the Plan
Year to receive an allocation of Employer contributions and
forfeitures for the Plan Year.
If a Participant is required to be credited with a minimum
Hours of Service, and, as a result, the Employer's Plan fails
to meet the requirements of Code 410(b) then the minimum
number required (taking into account such Participants on the
basis of the highest number of Hours of Service and then in
descending order thereafter) to meet the coverage tests under
Code 410(b) of the group of Participants who failed to be
credited with the Minimum Hours of Service shall receive a
full allocation.
3.4 Minimum Top Heavy Allocation. Notwithstanding the allocation
in Paragraph 3.2 and the Minimum Hours of Service requirement
in Paragraph 3.3, for each Plan year in which the Employer's
Plan is a Top Heavy Plan (as defined in Section 9.1 of the
Plan), a Minimum Top Heavy Allocation of Employer
contributions and forfeitures, if any, shall be made as
follows:
(a) if the allocation of contributions and forfeitures
(including Elective Deferrals, Matching Contributions
or Qualified Matching Contributions), if any, to any
Key Employee is equal to or greater than 3% of such
Key Employee's Compensation for a Plan Year, then the
contributions and forfeitures (other than Elective
Deferrals, Matching Contributions or Qualified
Matching Contributions) allocated to all Participants
who are employed on the last day of the Plan Year,
other than Key Employees, shall amount to 3% of their
respective Compensation.
(b) except in the case where the Employer has a defined
benefit plan which designates this Plan to satisfy
Code 401, if the allocation of contributions and
forfeitures (including Elective Deferrals, Matching
Contributions or Qualified Matching Contributions), if
any, pursuant to Paragraph 3.2 to any Key Employee
does not equal or exceed 3% of such Key Employee's
Compensation for a Plan Year, then the contributions
and forfeitures (other than Elective Deferrals,
Matching Contributions or Qualified Matching
Contributions) allocated to all other Participants who
are employed on the last day of the Plan Year, other
than Key Employees, shall equal the highest percentage
allocated to any Key Employee.
(c) If the Participants, other than Key Employees, are
participating in a defined benefit plan then the
contributions and forfeitures (other than Elective
Deferrals, Matching Contributions or Qualified
Matching Contributions) allocated to all Participants
who are employed on the last day of the Plan Year,
other than Key Employees, shall amount to 5% of their
respective Compensation.
A Participant shall share in the Minimum Top Heavy Allocation
regardless of their failure to complete 1,000 Hours of
Service during the Plan Year. If a Participant enters the
Plan on an Entry Date other than the first day of the Plan
Year, for purposes of the Minimum Top Heavy Allocation the
Participant's Compensation for the entire Plan Year shall be
taken into account.
Notwithstanding the foregoing, if the Employer adopts the
FRIDAY, ELDREDGE & CLARK VOLUME SUBMITTER MONEY PURCHASE
PENSION PLAN, the Minimum Top Heavy Allocation shall be made
to that Plan.
3.5 Shared Employee Allocation. If an Employee is a Shared
Employee as defined in Section 1.30 of the Plan, the
allocation for such Employee shall be determined by
multiplying the contribution calculated under the Plan as if
the Shared Employee were employed exclusively by the Employer
and received all Compensation (including all Compensation
paid to the Shared Employee by all of the sharing employers)
from the Employer, by a fraction, the numerator of which is
the amount of Compensation paid the Shared Employee by the
Employer and the denominator of which is the amount of
Compensation paid the Shared Employee by the Employer and all
other sharing employers. The calculation of the contribution
and allocation shall be consistent with Treas. Reg.
1.414(o)-1(f).
2000 FRIDAY, ELDREDGE & CLARK
-4-
3.6 Elective Deferrals. A Participant may elect to have his or
her Compensation reduced by the following percentage or
amount per pay period, or for a specified pay period or
periods, as designated in writing to the Plan Administrator:
An amount not in excess of 22% of a Participant's
Compensation.
A Participant shall designate the amount and frequency of his
or her Elective Deferrals in the form and manner specified by
the Plan Administrator. A Participant may elect to commence
Elective Deferrals as of the first day of each calendar
quarter (January 1, April 1, July 1, October 1). A
Participant may modify the amount of Elective Deferrals as of
the first day of each calendar quarter (January 1, April 1,
July 1, October 1). An election cannot be made
retroactively.
3.7 Matching Contributions. The Employer will make Matching
Contributions to the Plan on behalf of Participants who make
Elective Deferrals.
(a) The Employer will make Matching Contributions to the
Plan on behalf of all Participants who make Elective
Deferrals of at least 4% of the Participant's
Compensation, except as provided in Paragraphs 3.3 and
4.1 of the Adoption Agreement.
(b) The Employer shall contribute and allocate to each
Participant's Matching Contribution Account an amount
equal to 50% of the Participant's Elective Deferral
made for such Plan Year. However, the Employer shall
not match Elective Deferrals in excess of 6% of the
Participant's Compensation.
(c) Matching Contributions will be subject to the vesting
schedule applicable to Employer contributions, other
than Elective Deferrals, under the Plan.
(d) Forfeitures of Excess Aggregate Contributions shall be
applied to reduce Employer contributions for the Plan
Year in which the excess arose. If the forfeitures
exceed Employer contributions or the Employer has
already contributed for such Plan Year, the excess
portion shall be allocated after all other forfeitures
under the Plan, to the Matching Contribution Account
of each Participant who is a Non-highly Compensated
Employee who makes Elective Deferrals in the ratio
which each such Participant's Compensation for the
Plan Year bears to the total Compensation of all
Participants for such Plan Year.
(e) Forfeitures from the Matching Contribution Account
upon Termination of Employment shall reduce the
Employer Matching Contribution for the Plan Year in
which the forfeiture occurred.
(f) Notwithstanding Sections 3.5(a)(3) and 3.7(b) of the
Plan to the contrary, Matching Contributions and
Qualified Matching contributions, if any, shall be
forfeited and disregarded in performing the
discrimination test for Matching Contributions set
forth in Section 3.5(b) if the contributions to which
they relate are Excess Elective Deferrals, Excess
Contributions, Excess Aggregate Contributions or an
Excess Amount.
(g) Notwithstanding any provision in the Plan to the
contrary, the Employer reserves the right to
discontinue or modify the Employer Matching
Contribution at any time.
3.8 Qualified Non-elective Contributions. The Employer will not
make Qualified Non-elective Contributions to the Plan.
3.9 Qualified Matching Contributions. The Employer will not make
Qualified Matching Contributions to the Plan.
3.10 Distribution Upon Attainment of 59 and 1/2 or Hardship.
A Participant's Elective Deferrals Account shall be
distributable upon attainment of age 59 and 1/2.
A Participant's Elective Deferrals Account shall not be
distributable upon the Hardship of the Participant as defined
in Section 3.8(b).
(C) 2000 FRIDAY, ELDREDGE & CLARK
-5-
ARTICLE IV. CONTRIBUTION FOR A PARTICIPANT WHO TERMINATES
4.1 Prior to Death, Disability or Retirement. A Participant
whose employment is terminated prior to Death, Disability or
attainment of Normal Retirement Age with at least the Minimum
Hours of Service during the Plan Year, as specified in
Paragraph 3.3, and who is not employed on the last day of the
Plan Year shall not share in Employer contributions for such
Plan Year.
4.2 Upon Death, Disability or Retirement. A Participant whose
employment is terminated upon Death, Disability, or
attainment of Normal Retirement Age during the Plan Year
without the Minimum Hours of Service during the Plan Year, as
specified in Paragraph 3.3, or who is not employed on the
last day of the Plan Year shall share in Employer
contributions for such Plan Year.
4.3 Required Allocation for Qualification. If a Participant who
is not employed on the last day of the Plan Year is required
to be credited with more than 500 Hours of Service, and, as a
result of the failure of such Participant to receive an
allocation the Employer's Plan fails to meet the requirements
of Code 410(b), then the minimum number required (taking
into account such Participants on the basis of the highest
number of Hours of Service and then in descending order
thereafter) to meet the coverage tests under Code 410(b) of
the group of Participants who were not employed on the last
day of the Plan Year shall receive a full allocation.
ARTICLE V. VESTING
5.1 Rate. The nonforfeitable interest of each Participant in his
or her Employer Contribution Account balance prior to the
Participant's Normal Retirement Age, Death or Disability
shall be determined pursuant to the following schedule:
Years of Service
----------------
for Vesting Vested Percentage
----------- -----------------
0-1 0%
2 0%
3 20%
4 40%
5 60%
6 80%
7 or more 100%
5.2 Top Heavy Rate. Notwithstanding the vesting rate in
Paragraph 5.1, for each Plan year in which the Employer's
Plan is a Top Heavy Plan (as defined in Section 9.1 of the
Plan), the following vesting schedule shall apply:
Years of Service
----------------
for Vesting Vested Percentage
----------- -----------------
0-1 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
If the vesting schedule under the Employer's Plan shifts in
or out of the above Top Heavy schedule for any Plan Year
because of the Plan's Top Heavy status, such shift is an
amendment to the vesting schedule and the election in Section
16.1 of the Plan applies.
(C) 2000 FRIDAY, ELDREDGE & CLARK
-6-
5.3 Years of Service for Vesting. The term "Years of Service
for Vesting" shall mean all complete or partial Plan Years
during which an Employee has not less than 1,000 Hours of
Service with the Employer, except for Years of Service
prior to age 18.
Notwithstanding the foregoing to the contrary, in the case of
a Participant who does not have any nonforfeitable right to
an accrued benefit derived from Employer contributions, Years
of Service for Vesting before any One-Year Break in Service
shall be disregarded if the number of consecutive One-Year
Breaks in Service equals or exceeds 5.
5.4 Unrelated and Predecessor Employers. Years of Service for
Vesting shall include service with the following unrelated
and predecessor employers: Euronet Services Inc. and
Arkansas Systems, Inc.
Years of Service for Vesting with a Related Employer as
defined in Section 1.28 of the Plan or with a predecessor
Employer, if the Employer maintains the Plan of the
predecessor Employer, will be treated as service with the
Employer.
5.5 Normal Retirement Age. For each Participant Normal
Retirement Age is the later of age sixty (60) or the fifth
(5th) anniversary of the Participant's commencement of
participation in the Plan.
ARTICLE VI. DISTRIBUTIONS
6.1 Benefit Payment Date. If a Participant has terminated
employment for any reason other than Death or Disability,
distributions will commence within 60 days (or as soon as
possible thereafter) after the Participant terminates his
employment and files his benefit election form.
Distributions upon Death or Disability shall commence within
60 days (or as soon as reasonably possible) after the
Participant's Death or Disability.
Distributions (except for distributions from Elective
Deferral or Qualified Non-elective Contribution Accounts) may
commence prior to termination of a Participant's employment
in the event the Participant has attained age 59-1/2.
6.2 Optional Forms of Benefits. The form of payment (which
may be distributed in money or in property) shall be one
of the following methods as the Participant or his
Beneficiary, may determine:
(a) Single Lump Sum Payment.
(b) Direct Transfer of an Eligible Rollover Distribution
as defined in Section 1.11 of the Plan to an Eligible
Retirement Plan as defined in Section 1.10 of the
Plan.
(c) Periodic Payments over a period certain not extending
beyond the life expectancy of the Participant or the
joint and last survivor expectancy of the Participant
and a designated Beneficiary.
(C) 2000 FRIDAY, ELDREDGE & CLARK
-7-
ARTICLE VII. INVESTMENTS
7.1 Assets Will be Invested at the Direction of the
Participant pursuant to Section 14.6 of the Plan.
7.2. Loans to Participants shall be permitted as a directed
investment of the Participant. Notwithstanding any other
provisions in the Plan to the contrary, the number of
participant loans outstanding in any 12-month consecutive
period shall be one (1). The minimum number of months
between loans shall be six (6). Loans shall be granted
only upon the Hardship of the Participant as defined in
Section 3.8(b), but not in excess of the amount necessary
to meet the Hardship.
ARTICLE VIII. MULTIPLE PLAN LIMITATIONS
8.1 Limitation on Allocations. If the Employer maintains or
has ever maintained another qualified plan (other than a
defined contribution plan which is a Master or Prototype
plan) in which any Participant is (or was) a participant
or could become a participant, the Employer must complete
this Paragraph. The Employer must also complete this
Paragraph if it maintains a welfare benefit fund, as
defined in Code 419(e), or an individual medical account,
as defined in Code 415(l)(2)) under which amounts are
treated as annual additions with respect to any
Participant in this Plan.
(a) If the Participant is covered under another qualified
defined contribution plan maintained by the Employer,
other than a Master or Prototype plan, Annual
Additions which may be credited to the Participant's
Account under this Plan for any Plan Year will be
limited as follows:
X In accordance with Section 8.2 of the Plan as if
- the other Plan were a Master or Prototype Plan.
_ Other method (Attach Exhibit).
(b) If the Participant is or has ever been a Participant
in a defined benefit plan maintained by the Employer:
(1) Annual Additions which may be credited to the
Participant's Account for any Plan Year will be
limited as follows:
X If the Employer's contribution that would
- otherwise be allocated to the Participant's
Account during the Limitation Year would cause the
1.0 limitation to be exceeded, the allocation
under this Plan will be reduced so that the sum of
the fractions equals 1.0. Any contributions not
allocated because of the preceding sentence will
be allocated to the remaining Participants under
the allocation formula under the Employer's Plan.
If the 1.0 limitation is exceeded because of an
Excess Amount, such Excess Amount will be reduced
in accordance with Section 8.1(d) of the Plan.
Other method (Attach Exhibit).
-
(2) The Minimum Top Heavy Allocation under Paragraph 3.4
shall be determined as follows:
(C) 2000 FRIDAY, ELDREDGE & CLARK
-8-
X No override.
-
If the Participants, other than Key Employees, are
- not participating in a defined benefit plan by
substituting 4% for 3%.
If the Participants, other than Key Employees, are
- participating in a defined benefit plan by
substituting 7 1/2% for 5%.
8.2 Top Heavy Ratio Determination. For purposes of
establishing present value to compute the Top Heavy Ratio
(as defined in Section 9.1 of the Plan) any benefit shall
be discounted only for mortality and interest based on the
following factors: Interest Rate: 7% Mortality Table:
1983 IAV
ARTICLE IX. DETERMINATION LETTER REQUIREMENT
9.1 Reliance on Opinion Letter. The adopting Employer may not
rely on the notification letter issued by the Internal
Revenue Service as evidence that this plan is qualified
under Code 401. In order to obtain reliance with respect
to plan qualification, the Employer must apply for a
determination letter from the appropriate Key District
Director of Internal Revenue Service.
This Adoption Agreement may be used only in conjunction with
the FRIDAY, ELDREDGE & CLARK VOLUME SUBMITTER DEFINED
CONTRIBUTION PLAN AND TRUST AGREEMENT - Basic Plan Document.
ARTICLE X. SPONSOR
10.1 The failure to properly fill out this Adoption Agreement
may result in disqualification of the Plan. This Plan is
sponsored by Friday, Eldredge & Clark, 2000 Regions
Center, 400 W. Capitol, Little Rock, AR, (501) 376-2011.
The Sponsor will inform the Employer of this Adoption
Agreement of any amendments made to this document or of
the discontinuance or abandonment of the plan document.
(C) 2000 FRIDAY, ELDREDGE & CLARK
-9-
EFFECTIVE DATE ADDENDUM
VOLUME SUBMITTER SALARY DEFERRAL PLAN
(Restated Plans Only)
The adopting Employer must complete this addendum only if the
amended Effective Date specified in Paragraph 1.6 of the Adoption
Agreement Section is different than the amended effective date
for at least one of the provisions listed in this addendum. For
Plan Years prior to the special amended Effective Date above, the
terms of the Employer's Plan prior to its restatement pursuant to
this Adoption Agreement will control. The Effective Dates in
this addendum may not result in the delay of a Plan provision
beyond the permissible Effective Date under any applicable law
requirements. In lieu of the amended Effective Date in Paragraph
1.6 of the Adoption Agreement, the following special effective
dates apply: (Choose whichever elections apply)
ARTICLE II. ELIGIBILITY REQUIREMENTS - ENTRY DATES.
-
Effective for Plan Years beginning after
-----------------.
ARTICLE III. EMPLOYER'S CONTRIBUTION.
(a) Paragraph 3.1 is effective for Plan Years beginning
- after
-----------------.
- (b) Paragraph 3.2 is effective for Plan Years beginning
after
-----------------.
- (c) Paragraph 3.6 is effective for Plan Years beginning
after
-----------------.
ARTICLE IV. CONTRIBUTION FOR A PARTICIPANT WHO
- TERMINATES.
Paragraph 4.3 of the Adoption Agreement is effective for
Plan Years commencing after December 31, 1989.
ARTICLE V. VESTING.
-
The vesting schedule chosen in ARTICLE V is effective for
Plan Years beginning after
---------------.
X (Specify)
-
Paragraph 1.8 is effective October 30, 2000.
--------------------------------------------------------------
--------------------------------------------------------------
(C) 2000 FRIDAY, ELDREDGE & CLARK
-10-
IN WITNESS WHEREOF, EMPLOYER AND TRUSTEE HAVE CAUSED THIS
ADOPTION AGREEMENT to be duly executed this ______ day of
_____________________, 2000.
EMPLOYER:
EURONET SERVICES INC.
By:_________________________
Title:______________________
ARKANSAS SYSTEMS, INC.
By:_________________________
Title:______________________
The undersigned hereby accepts his appointment as Trustee of the
above mentioned Plan and Trust and agrees to serve as such under
the terms of the Plan and Trust Agreement and provisions of this
Adoption Agreement.
TRUSTEE:
_____________________________
Jeff Newman
(C) 2000 FRIDAY, ELDREDGE & CLARK
-11-
Exhibit 4.7
AMENDMENT NO. 2 TO THE
EURONET SERVICES INC. 401(K) PLAN
This Amendment is made this 22nd day of May, 2001, by
Euronet Services Inc. (the "Employer") to the Euronet Services
Inc. 401(k) Plan (the "Plan').
Pursuant to Article XVI of the Plan, the Employer hereby
amends and modifies Paragraphs 1.8 and 7.1 of the Adoption
Agreement, as set forth on the attached pages two (2) and eight
(8), in order to add Dan Henry and Kendall Coyne as Trustees, and
in order to amend investment direction changes in a Participant's
Matching Contribution Account.
The Amendment to Paragraph 1.8 of the Adoption Agreement
shall be effective May 22, 2001, and the Amendment to Paragraph
7.1 of the Adoption Agreement shall be effective for the Plan
Year ending December 31, 2000.
Where not inconsistent herewith, all the terms and
provisions of the Plan shall remain in full force and the
Employer hereby ratifies and confirms the Plan, as amended
herein.
EXECUTED the date first set forth above.
EURONET SERVICES INC.
By:___________________________
We, Dan Henry and Kendall Coyne, after reviewing the Euronet
Services Inc. 401(k) Plan and Trust, do hereby accept the office
of Trustee and agree to abide by the terms and conditions of the
Plan and Trust document as such terms and conditions relate to
the responsibilities and obligations imposed upon the Trustee.
TRUSTEES:
_______________________________
Dan Henry
_______________________________
Kendall Coyne
1.7 "Plan Administrator" means the individual, committee or the
Employer designated by the Employer pursuant to Section 13.1
of the Plan who shall be charged with the management of the
Plan operations and its administration and who shall be the
Named Fiduciary as required by the Employee Retirement
Income Security Act of 1974. The current Plan Administrator
is Euronet Services Inc.
1.8 "Trustee" means the person, people or corporation holding
legal title to the assets of the Trust pursuant to the terms
of this Agreement and who is appointed pursuant to Section
14.2. The current Trustees are Jeff Newman, Dan Henry and
Kendall Coyne.
1.9 "Plan Year" means the twelve (12) consecutive month period
commencing with January 1 and ending on December 31.
ARTICLE II. ELIGIBILITY REQUIREMENTS - ENTRY DATES
Each Eligible Employee of the Employer shall participate
commencing on the following Entry Date after meeting the
following Age and Service requirements:
2.1 Age.
An Employee must have attained age twenty-one (21).
2.2 Service.
Beginning with the first hour employed, an Employee must
have been employed for six (6) months (cannot be used with
more than 12 months unless Paragraph 5.1 and 5.2 provide for
100% vesting upon entry and Elective Deferrals are not
permitted under Paragraph 3.6). An Employee shall not be
required to complete any specified number of Hours of
Service to receive credit for any months of service.
2.3 Entry Dates. Every Eligible Employee satisfying the
eligibility requirements as of the Effective Date of this
Plan, if employed on the adoption date, shall enter the Plan
as of the Effective Date. Every other Eligible Employee
shall become a Participant on the first Entry Date after
satisfying the Age and Service requirements if employed on
such Entry Date which shall be the first day of the
following calendar quarter (January 1, April 1, July 1,
October 1).
If a Participant is eligible for only part of a Plan Year,
only Compensation received subsequent to the Participant's
Entry Date shall be taken into account. In the event a
Participant is no longer a member of an eligible class of
Employees and becomes ineligible to participate but has not
incurred a One-Year Break in Service, such Employee will
participate immediately upon returning to an eligible class
of Employees. If such Participant incurs a One-Year Break
in Service, eligibility shall be determined under Section
2.2 of the Plan. In the event an Employee who is not a
member of an eligible class becomes a member of an eligible
class, such Employee will participate immediately if such
Employee has satisfied the Age and Service requirements and
would have otherwise previously become a Participant.
2.4 Hours of Service for Year of Service for Eligibility. A
Year of Service for Eligibility shall be counted if the
Employee received credit for at least 1,000 Hours of Service
during the Eligibility Computation Period as provided in
Section 2.3 of the Plan.
2.5 Unrelated and Predecessor Employers. Years of Service for
Eligibility shall include service with the following
unrelated and predecessor employers: Euronet Services Inc.
and Arkansas Systems, Inc.
(C) FRIDAY, ELDREDGE & CLARK
-2-
(b) Direct Transfer of an Eligible Rollover Distribution as
defined in Section 1.11 of the Plan to an Eligible
Retirement Plan as defined in Section 1.10 of the Plan.
(c) Periodic Payments over a period certain not extending
beyond the life expectancy of the Participant or the
joint and last survivor expectancy of the Participant
and a designated Beneficiary.
ARTICLE VII. INVESTMENTS
7.1 Assets Will be Invested at the Direction of the Participant
pursuant to Section 14.6 of the Plan in investment options
made available by the Trustee. Notwithstanding the
foregoing, commencing with the Plan Year ending December 31,
2000, Matching Contributions shall be invested exclusively
in Employer stock (common stock of Euronet Services, Inc.),
except a Participant who has attained age fifty-five(55) may
direct the Trustee to set all or a portion of the Employer
stock in the Participant's Matching Contribution Account and
direct the investment of the proceeds pursuant to Section
14.6 of the Plan.
7.2. Loans to Participants shall be permitted as a directed
investment of the Participant. Notwithstanding any other
provisions in the Plan to the contrary, the number of
participant loans outstanding in any 12-month consecutive
period shall be one (1). The minimum number of months
between loans shall be six (6). Loans shall be granted only
upon the Hardship of the Participant as defined in Section
3.8(b), but not in excess of the amount necessary to meet
the Hardship.
ARTICLE VIII. MULTIPLE PLAN LIMITATIONS
8.1 Limitation on Allocations. If the Employer maintains or has
ever maintained another qualified plan (other than a defined
contribution plan which is a Master or Prototype plan) in
which any Participant is (or was) a participant or could
become a participant, the Employer must complete this
Paragraph. The Employer must also complete this Paragraph
if it maintains a welfare benefit fund, as defined in Code
419(e), or an individual medical account, as defined in
Code 415(l)(2)) under which amounts are treated as annual
additions with respect to any Participant in this Plan.
(a) If the Participant is covered under another qualified
defined contribution plan maintained by the Employer,
other than a Master or Prototype plan, Annual Additions
which may be credited to the Participant's Account
under this Plan for any Plan Year will be limited as
follows:
X In accordance with Section 8.2 of the Plan as if
- the other Plan were a Master or Prototype Plan.
Other method (Attach Exhibit).
-
(b) If the Participant is or has ever been a Participant in
a defined benefit plan maintained by the Employer:
(1) Annual Additions which may be credited to the
Participant's Account for any Plan Year will be
limited as follows:
X If the Employer's contribution that would
- otherwise be allocated to the Participant's
Account during the Limitation Year would
cause the 1.0 limitation to be exceeded, the
allocation under this Plan will be reduced so
that the sum of the fractions equals 1.0.
Any contributions not allocated because of
the preceding sentence will be allocated to
the remaining Participants under the
allocation formula under the Employer's Plan.
If the 1.0
(C) FRIDAY, ELDREDGE & CLARK
-8-
Exhibit 4.8
AMENDMENT NO. 3 TO THE
EURONET SERVICES INC. 401(K) PLAN
This Amendment is made this 29TH day of August, 2001, by
Euronet Worldwide, Inc. (the "Employer") to the Euronet Services
Inc. 401(k) Plan (the "Plan").
Pursuant to Article XVI of the Plan, the Employer hereby
amends and modifies the Plan as follows:
1. Paragraph 1.4 is amended effective September 1, 2001,
to read as follows:
"1.4 "Plan" means the Salary Deferral Plan evidenced by this
Agreement and all subsequent amendments thereto, and which
shall be titled the Euronet Worldwide, Inc. 401(k) Plan."
2. Paragraph 3.4 is amended to read as follows:
"3.4 Minimum Top Heavy Allocation. Notwithstanding the
allocation in Paragraph 3.2 and the Minimum Hours of
Service requirement in Paragraph 3.3, for each Plan
year in which the Employer's Plan is a Top Heavy Plan
(as defined in Section 9.1 of the Plan), a Minimum Top
Heavy Allocation of Employer contributions and
forfeitures, if any, shall be made as follows:
(a) if the allocation of contributions and
forfeitures (including Elective Deferrals, Basic
Matching Contributions, Discretionary Matching
Contributions or Qualified Matching
Contributions), if any, to any Key Employee is
equal to or greater than 3% of such Key Employee's
Compensation for a Plan Year, then the
contributions and forfeitures (other than Elective
Deferrals, Basic Matching Contributions,
Discretionary Matching Contributions or Qualified
Matching Contributions) allocated to all
Participants who are employed on the last day of
the Plan Year, other than Key Employees, shall
amount to 3% of their respective Compensation.
(b) except in the case where the Employer has a
defined benefit plan which designates this Plan to
satisfy Code Section 401, if the allocation of
contributions and forfeitures (including Elective
Deferrals, Basic Matching Contributions,
Discretionary Matching Contributions or Qualified
Matching Contributions), if any, pursuant to
Paragraph 3.2 to any Key Employee does not equal
or exceed 3% of such Key Employee's Compensation
for a Plan Year, then the contributions and
forfeitures (other than Elective Deferrals, Basic
Matching Contributions, Discretionary Matching
Contributions or Qualified Matching Contributions)
allocated to all other Participants who are
employed on the last day of the Plan Year, other
than Key Employees, shall equal the highest
percentage allocated to any Key Employee.
(c) If the Participants, other than Key
Employees, are participating in a defined benefit
plan then the contributions and forfeitures (other
than Elective Deferrals, Basic Matching
Contributions, Discretionary Matching
Contributions or Qualified Matching Contributions)
allocated to all Participants who are employed on
the last day of the Plan Year, other than Key
Employees, shall amount to 5% of their respective
Compensation."
3. Paragraph 3.7 is amended by replacing the term
"Matching Contributions" with "Basic Matching Contributions."
4. Subparagraph (d) of Paragraph 3.7 is amended as follows:
(d) Forfeitures of Excess Aggregate Contributions
shall be applied to reduce Employer contributions
for the Plan Year in which the excess arose. If
the forfeitures exceed Employer contributions or
the Employer has already contributed for such Plan
Year, the excess portion shall be allocated after
all other forfeitures under the Plan, to the
Matching Contribution Account of each Participant
who is a Non-highly Compensated Employee who made
Elective Deferrals in the ratio which each such
Participant's Elective Deferrals for the Plan Year
between 4% and 6% of their Compensation bears to
the total of such Elective Deferrals for such Plan
Year.
5. Subparagraph (f) of Paragraph 3.7 is amended by
replacing the phrase "Matching Contributions and Qualified
Matching Contributions" with "Basic Matching Contributions,
Discretionary Matching Contributions and Qualified Matching
Contributions."
6. Paragraph 3.11 is added to read as follows
"3.11 Discretionary Matching Contributions. The
Employer may, in its discretion, make a Discretionary
Matching Contribution to the Plan for a Plan Year.
(a) The Discretionary Matching Contribution for a
Plan Year, if any, shall be allocated to each
Participant s Matching Contribution Account,
except as provided in Paragraphs 3.3 and 4.1 of
the Adoption Agreement, in the proportion that
their Elective Deferrals for the Plan Year between
4% and 6% of their Compensation bears to the total
of such Elective Deferrals for the Plan Year.
(b) The Discretionary Matching Contribution will
be subject to the vesting schedule applicable to
Employer contributions, other than Elective
Deferrals, under the Plan.
Where not inconsistent herewith, all the terms and
provisions of the Plan shall remain in full force and the
Employer hereby ratifies and confirms the Plan, as amended
herein.
Except as otherwise provided above, this amendment to the
Adoption Agreement shall be effective January 1, 2000.
EURONET WORLDWIDE, INC.
By:______________________
Title:___________________
Exhibit 5.1
Friday, Eldredge & Clark, LLP
2000 Regions Center
400 W. Capitol Avenue
Little Rock, Arkansas 72201
501-376-2011
Telecopy 501-376-2147
October 17, 2001
Euronet Worldwide, Inc.
4601 College Boulevard
Leawood, Kansas 66211
Ladies and Gentlemen:
We have acted as counsel to Euronet Worldwide, Inc. , a
Delaware corporation (the "Company"), with respect to the filing
by the Company with the Securities and Exchange Commission under
the Securities Act of 1933, as amended, of a Registration
Statement on Form S-8 (the "Registration Statement") covering the
issuance of up to 1,000,000 shares of the Company's shares of
Common Stock, par value $.02 per share (the "Shares").
Based on our review of the Company's organizational
documents, the option plans pursuant to which the Shares are
issuable and such other documents and records as we have deemed
necessary and appropriate, we are of the opinion that the Shares
will, when sold, be legally issued, fully paid and
non-assessable.
In connection with this opinon, we have examined and relied
upon, without further investigation, the following in connnection
with rendering the opinions expressed herein: (a) the Plan and
the form of the Agreements; (b) the Certificate of Incorporation,
and the Company's Bylaws; (c) the Registration Statement, (d)
minutes of directors' and stockholders' meetings, and (e) such
other documents, certificates, records, and oral statements of
public officials and the officers of the Company as we deemed
necessary for the purpose of rendering opinions expressed
herein.
In our examinations, we have assumed the genuineness of all
signatures, the legal capicity of all natural persons, the
authenticity, accuracy and completeness of all documents
submitted to us as originals, the conformity to original
documents of all documents submitted to us as certified,
conformed, or photostatic copies or by facsimile or electronic
mail, and the authenticity of the originals from which such
copies, facsimiles, or electronic transmissions were made.
In our examination of documents, including the Agreements,
executed by persons, legal or natural, other than the Company,
we have assumed that such persons had the power, corporate or
otherwise, to enter into and perform all obligations thereunder
and that such documents are valid and binding. We have also
assumed the conformity of all Agreements to the form reviewed of
such Agreements.
This opinion letter is limited to the specific legal issues
that it expressly addresses, and accordingly, no opinion may be
inferred or implied beyond the matters expressley stated in this
letter. We express no opinion as to the law of any jurisdiction
other than the General Corporation Law of the State of Delaware,
as amended. We are not admitted to the Delaware Bar. In
expressing our opinions set forth herein, we have reviewed and
relied upon, without further investigation, such laws as
published in generally available sources.
We consent to the filing of this opinion letter, or a
reproduction thereof, as an exhibit to the Registration
Statement. In giving such consent, however, we are not admitting
that we are within the category of persons whose consent is
required under Section 7 of the Securities Act of 1933, as
amended, or the rules or regulations promulgated by the
Securities and Exchange Commission thereunder.
This opinion letter is rendered as of the date set forth
above, and we have no continuing obligation hereunder to inform
you of any changes in the applicable law or the facts after
such date or facts of which we become aware after the date
hereof, even though such changes could affect our opinions
expressed herein.
Very truly yours,
/s/ Friday, Eldredge & Clark, LLP
FRIDAY, ELDREDGE & CLARK, LLP
EXHIBIT
23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Registration Statement of our
report dated February 9, 2001 included in Euronet Worldwide,
Inc.'s previously filed Annual Report on Form 10-K (File No. 0-
22167) for the year ended December 31, 2000 and to all references
to our Firm included in this Registration Statement.
KPMG POLSKA SP. Z O.O.
Warsaw, Poland
October 17, 2001
II-8-