☒
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
(State or other jurisdiction of incorporation or organization)
|
|
11-3297463
(I.R.S. employer identification number)
|
209 Havemeyer Street, Brooklyn, NY
(
Address of principal executive offices)
|
|
11211
(Zip Code)
|
Page
|
|
PART I
|
|
PART II
|
|
PART III
|
|
PART IV
|
|
|
·
|
the timing and occurrence or non-occurrence of events may be subject to circumstances beyond the Company's control;
|
·
|
there may be increases in competitive pressure among financial institutions or from non-financial institutions;
|
·
|
the net interest margin is subject to material short-term fluctuation based upon market rates;
|
·
|
changes in deposit flows, loan demand or real estate values may adversely affect the business of The Dime Savings Bank of Williamsburgh (the "Bank");
|
·
|
changes in accounting principles, policies or guidelines may cause the Company's financial condition to be perceived differently;
|
·
|
changes in corporate and/or individual income tax laws may adversely affect the Company's business or financial condition;
|
·
|
general economic conditions, either nationally or locally in some or all areas in which the Company conducts business, or conditions in the securities markets or the banking industry, may be less favorable than the Company currently anticipates;
|
·
|
legislation or regulatory changes may adversely affect the Company's business;
|
·
|
technological changes may be more difficult or expensive than the Company anticipates;
|
·
|
success or consummation of new business initiatives may be more difficult or expensive than the Company anticipates;
|
·
|
litigation or other matters before regulatory agencies, whether currently existing or commencing in the future, may delay the occurrence or non-occurrence of events longer than the Company anticipates; and
|
·
|
Other risks, as enumerated in the section entitled "Risk Factors."
|
At December 31,
|
||||||||||||||||||||||||||||||||||||||||
2014
|
Percent of Total
|
2013
|
Percent of Total
|
2012
|
Percent of Total
|
2011
|
Percent of Total
|
2010
|
Percent of Total
|
|||||||||||||||||||||||||||||||
Dollars in Thousands
|
||||||||||||||||||||||||||||||||||||||||
Real Estate loans:
|
||||||||||||||||||||||||||||||||||||||||
Multifamily residential
|
$
|
3,292,753
|
80.05
|
%
|
$
|
2,917,380
|
78.97
|
%
|
$
|
2,671,533
|
76.30
|
%
|
$
|
2,599,850
|
75.13
|
%
|
$
|
2,500,265
|
72.09
|
%
|
||||||||||||||||||||
Commercial real estate
|
745,463
|
18.12
|
700,606
|
18.96
|
735,224
|
21.00
|
751,586
|
21.72
|
833,168
|
24.02
|
||||||||||||||||||||||||||||||
One- to four-family, including condominium and
cooperative apartment
|
73,500
|
1.79
|
73,956
|
2.00
|
91,876
|
2.62
|
100,712
|
2.91
|
117,268
|
3.38
|
||||||||||||||||||||||||||||||
Construction and land acquisition
|
-
|
-
|
268
|
0.01
|
476
|
0.01
|
5,827
|
0.17
|
15,238
|
0.44
|
||||||||||||||||||||||||||||||
Total real estate loans
|
4,111,716
|
99.96
|
3,692,210
|
99.94
|
3,499,109
|
99.93
|
3,457,975
|
99.93
|
3,465,939
|
99.93
|
||||||||||||||||||||||||||||||
Consumer loans:
|
||||||||||||||||||||||||||||||||||||||||
Depositor loans
|
677
|
0.01
|
763
|
0.02
|
712
|
0.02
|
483
|
0.01
|
530
|
0.02
|
||||||||||||||||||||||||||||||
Consumer installment and other
|
1,152
|
0.03
|
1,376
|
0.04
|
1,711
|
0.05
|
1,966
|
0.06
|
2,010
|
0.05
|
||||||||||||||||||||||||||||||
Total consumer loans
|
1,829
|
0.04
|
2,139
|
0.06
|
2,423
|
0.07
|
2,449
|
0.07
|
2,540
|
0.07
|
||||||||||||||||||||||||||||||
Gross loans
|
4,113,545
|
100.00
|
%
|
3,694,349
|
100.00
|
%
|
3,501,532
|
100.00
|
%
|
3,460,424
|
100.00
|
%
|
3,468,479
|
100.00
|
%
|
|||||||||||||||||||||||||
Net unearned costs
|
5,695
|
5,170
|
4,836
|
3,463
|
5,013
|
|||||||||||||||||||||||||||||||||||
Allowance for loan losses
|
(18,493
|
)
|
(20,153
|
)
|
(20,550
|
)
|
(20,254
|
)
|
(19,166
|
)
|
||||||||||||||||||||||||||||||
Loans, net
|
$
|
4,100,747
|
$
|
3,679,366
|
$
|
3,485,818
|
$
|
3,443,633
|
$
|
3,454,326
|
||||||||||||||||||||||||||||||
Loans serviced for others:
|
||||||||||||||||||||||||||||||||||||||||
One- to four-family including condominium and
cooperative apartment
|
$
|
5,215
|
$
|
6,746
|
$
|
8,786
|
$
|
10,841
|
$
|
12,559
|
||||||||||||||||||||||||||||||
Multifamily residential
|
19,038
|
240,517
|
353,034
|
475,673
|
583,751
|
|||||||||||||||||||||||||||||||||||
Total loans serviced for others
|
$
|
24,253
|
$
|
247,263
|
$
|
361,820
|
$
|
486,514
|
$
|
596,310
|
For the Year Ended December 31,
|
||||||||||||||||||||
2014
|
2013
|
2012
|
2011
|
2010
|
||||||||||||||||
Dollars in Thousands
|
||||||||||||||||||||
Gross loans:
|
||||||||||||||||||||
At beginning of period
|
$
|
3,694,349
|
$
|
3,501,532
|
$
|
3,460,424
|
$
|
3,468,479
|
$
|
3,391,658
|
||||||||||
Real estate loans originated:
|
||||||||||||||||||||
Multifamily residential
|
748,067
|
872,421
|
942,326
|
563,696
|
467,160
|
|||||||||||||||
Commercial real estate
|
191,944
|
187,202
|
142,418
|
98,607
|
58,687
|
|||||||||||||||
One- to four-family, including condominium and cooperative apartment (1)
|
2,302
|
5,896
|
12,184
|
7,094
|
7,431
|
|||||||||||||||
Equity lines of credit on multifamily residential or
commercial properties
|
4,657
|
7,578
|
2,764
|
7,685
|
6,540
|
|||||||||||||||
Construction and land acquisition
|
-
|
-
|
-
|
1,712
|
1,901
|
|||||||||||||||
Total mortgage loans originated
|
946,970
|
1,073,097
|
1,099,692
|
678,794
|
541,719
|
|||||||||||||||
Other loans originated
|
1,263
|
1,354
|
1,414
|
1,552
|
1,756
|
|||||||||||||||
Total loans originated
|
948,223
|
1,074,451
|
1,101,106
|
680,346
|
543,475
|
|||||||||||||||
Loans purchased (2)
|
225,604
|
52,031
|
30,425
|
54,364
|
45,096
|
|||||||||||||||
Less:
|
||||||||||||||||||||
Principal repayments (including satisfactions and refinances)
|
737,776
|
923,110
|
1,020,525
|
698,928
|
427,307
|
|||||||||||||||
Loans sold (3)
|
16,865
|
8,087
|
67,593
|
38,320
|
75,221
|
|||||||||||||||
Write down of principal balance for expected loss
|
-
|
1,685
|
2,305
|
5,517
|
8,902
|
|||||||||||||||
Loans transferred to other real estate owned
|
-
|
783
|
-
|
-
|
320
|
|||||||||||||||
Gross loans at end of period
|
$
|
4,113,545
|
$
|
3,694,349
|
$
|
3,501,532
|
$
|
3,460,424
|
$
|
3,468,479
|
Real Estate Loans
|
Consumer Loans
|
Total
|
|
(Dollars in Thousands)
|
|||
Amount due to Mature or Reprice During the Year Ending:
|
|||
December 31, 2015
|
$155,336
|
$1,829
|
$157,165
|
December 31, 2016
|
296,788
|
-
|
296,788
|
December 31, 2017
|
605,557
|
-
|
605,557
|
December 31, 2018
|
576,434
|
-
|
576,434
|
December 31, 2019
|
888,462
|
-
|
888,462
|
Sub-total (within 5 years)
|
2,522,577
|
1,829
|
2,524,406
|
December 31, 2020 and beyond
|
1,589,139
|
-
|
1,589,139
|
TOTAL
|
$4,111,716
|
$1,829
|
$4,113,545
|
Due after December 31, 2015
|
|||
Fixed
|
Adjustable
|
Total
|
|
(Dollars in Thousands)
|
|||
Real estate loans
|
$1,088,005
|
$2,868,375
|
$3,956,380
|
Consumer loans
|
-
|
-
|
-
|
Total loans
|
$1,088,005
|
$2,868,375
|
$3,956,380
|
(Dollars in Thousands)
|
|
Non-accrual loans
|
$6,198
|
Non-accrual one- to four-family and consumer loans deemed homogeneous loans
|
(1,314)
|
Troubled Debt Restructurings ("TDRs") retained on accrual status
|
15,100
|
Impaired loans
|
$19,984
|
·
|
For economic or legal reasons related to the debtor's financial difficulties, a concession has been granted that would not have otherwise been considered
|
·
|
A reduction of interest rate has been made for the remaining term of the loan to a rate lower than the current market rate for new debt with similar risk
|
·
|
The maturity date of the loan has been extended with a stated interest rate lower than the current market rate for new debt with similar risk
|
·
|
The outstanding principal amount and/or accrued interest have been reduced
|
As of December 31, 2014
|
As of December 31, 2013
|
||||
No. of Loans
|
Balance
|
No. of Loans
|
Balance
|
||
(Dollars in Thousands)
|
|||||
Outstanding principal balance at period end
|
11
|
$19,817
|
12
|
$24,327
|
|
TDRs on accrual status at period end
|
9
|
15,100
|
10
|
18,620
|
|
TDRs on non-accrual status at period end
|
2
|
4,717
|
2
|
5,707
|
For the Year Ended
December 31, 2014
|
For the Year Ended
December 31, 2013
|
||||||
Number of Loans
|
Pre-Modification
Outstanding Recorded Investment
|
Post-Modification Outstanding Recorded Investment
|
Number of Loans
|
Pre-Modification
Outstanding Recorded Investment
|
Post-Modification Outstanding Recorded Investment
|
||
Loan modifications during the period
that met the definition of a TDR:
|
|||||||
Commercial mixed use real estate
|
1
|
$4,400
|
$4,400
|
-
|
-
|
-
|
|
Commercial real estate
|
1
|
3,500
|
3,500
|
-
|
-
|
-
|
|
TOTAL
|
2
|
$7,900
|
$7,900
|
-
|
-
|
-
|
At December 31,
|
||||||||||||||||||||
2014
|
2013
|
2012
|
2011
|
2010
|
||||||||||||||||
Non-accrual Loans and Non-Performing Assets
|
(Dollars in Thousands)
|
|||||||||||||||||||
One- to four-family residential including condominium and
cooperative apartment
|
$
|
1,310
|
$
|
1,242
|
$
|
938
|
$
|
2,205
|
$
|
223
|
||||||||||
Multifamily residential and residential mixed use real estate
|
167
|
1,197
|
507
|
7,069
|
5,010
|
|||||||||||||||
Commercial real estate and commercial mixed use real estate
|
4,717
|
10,107
|
7,435
|
16,674
|
11,992
|
|||||||||||||||
Consumer
|
4
|
3
|
8
|
4
|
17
|
|||||||||||||||
Sub-total
|
6,198
|
12,549
|
8,888
|
25,952
|
17,242
|
|||||||||||||||
Non-accrual loans held for sale
|
-
|
-
|
560
|
3,022
|
2,926
|
|||||||||||||||
Total non-accrual loans
|
6,198
|
12,549
|
9,448
|
28,974
|
20,168
|
|||||||||||||||
Non-performing pooled trust preferred securities ("TRUPS")
|
904
|
898
|
892
|
1,012
|
564
|
|||||||||||||||
OREO
|
18
|
18
|
-
|
-
|
-
|
|||||||||||||||
Total non-performing assets
|
7,120
|
13,465
|
10,340
|
29,986
|
20,732
|
|||||||||||||||
Ratios:
|
||||||||||||||||||||
Total non-accrual loans to total loans
|
0.15
|
%
|
0.34
|
%
|
0.25
|
%
|
0.84
|
%
|
0.58
|
%
|
||||||||||
Total non-performing assets to total assets
|
0.16
|
0.33
|
0.26
|
0.75
|
0.51
|
|||||||||||||||
TDRs and Impaired Loans
|
||||||||||||||||||||
TDRs
|
$
|
19,817
|
$
|
24,327
|
$
|
51,123
|
$
|
48,753
|
$
|
22,558
|
||||||||||
Impaired loans (1)
|
19,983
|
30,189
|
53,144
|
73,406
|
44,097
|
At or for the Year Ended December 31,
|
|||||
2014
|
2013
|
2012
|
2011
|
2010
|
|
(Dollars in Thousands)
|
|||||
Total loans outstanding at end of period
(1)
|
$4,119,240
|
$3,699,519
|
$3,506,368
|
$3,463,887
|
$3,473,492
|
Average total loans outstanding during the period
(1)
|
$3,964,520
|
$3,606,039
|
$3,402,838
|
$3,447,035
|
$3,455,659
|
Allowance for loan losses:
|
|||||
Balance at beginning of period
|
$20,153
|
$20,550
|
$20,254
|
$19,166
|
$21,505
|
Provision (credit) for loan losses
|
(1,872)
|
369
|
3,921
|
6,846
|
11,209
|
Charge-offs
|
|||||
Multifamily residential
|
(87)
|
(504)
|
(2,478)
|
(2,750)
|
(10,864)
|
Commercial real estate
|
(336)
|
(400)
|
(1,342)
|
(2,307)
|
(2,760)
|
One- to four-family including condominium and cooperative apartment
|
(46)
|
(117)
|
(777)
|
(89)
|
(257)
|
Construction
|
-
|
-
|
(3)
|
(962)
|
-
|
Consumer
|
(9)
|
(21)
|
(10)
|
(29)
|
(3)
|
Total charge-offs
|
(478)
|
(1,042)
|
(4,610)
|
(6,137)
|
(13,884)
|
Recoveries
|
690
|
276
|
903
|
212
|
64
|
Reserve for loan commitments transferred from other liabilities
|
-
|
-
|
82
|
167
|
272
|
Balance at end of period
|
$18,493
|
$20,153
|
$20,550
|
$20,254
|
$19,166
|
Allowance for loan losses to total loans at end of period total loans at end of period
|
0.45%
|
0.54%
|
0.59%
|
0.58%
|
0.55%
|
Allowance for loan losses to total non-performing loans at end of period
|
298.37
|
160.59
|
231.21
|
78.04
|
95.03
|
Allowance for loan losses to total non-performing loans and TDRs at end of period
|
71.09
|
64.66
|
42.58
|
29.08
|
58.81
|
Ratio of net charge-offs to average loans outstanding during the period
|
(0.01)
|
0.02
|
0.11
|
0.17
|
0.40
|
(1)
|
Total loans represent gross loans (including loans held for sale), net of deferred loan fees and discounts.
|
At December 31,
|
||||||||||||||||||||||||||||||||||||||||
2014
|
2013
|
2012
|
2011
|
2010
|
||||||||||||||||||||||||||||||||||||
Allocated
Amount
|
Percent
of Loans
in Each Category to Total Loans
|
Allocated
Amount
|
Percent
of Loans
in Each Category to Total Loans
|
Allocated
Amount
|
Percent
of Loans
in Each Category to Total Loans
|
Allocated
Amount
|
Percent
of Loans
in Each Category to Total Loans
|
Allocated
Amount
|
Percent
of Loans
in Each Category to Total Loans
|
|||||||||||||||||||||||||||||||
(Dollars in Thousands)
|
||||||||||||||||||||||||||||||||||||||||
Impaired loans
|
$
|
19
|
0.49
|
%
|
$
|
1,771
|
0.82
|
%
|
$
|
520
|
1.52
|
%
|
$
|
2,175
|
2.12
|
%
|
$
|
-
|
1.27
|
%
|
||||||||||||||||||||
Substandard loans not
deemed impaired
|
371
|
0.44
|
53
|
0.15
|
795
|
0.44
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||||||
Special Mention loans
|
228
|
0.81
|
185
|
0.42
|
145
|
0.54
|
800
|
0.56
|
1,880
|
1.31
|
||||||||||||||||||||||||||||||
Pass graded loans:
|
||||||||||||||||||||||||||||||||||||||||
Multifamily residential
|
13,600
|
79.38
|
13,743
|
78.49
|
14,118
|
75.99
|
14,057
|
74.67
|
13,797
|
71.35
|
||||||||||||||||||||||||||||||
Commercial real estate
|
4,156
|
17.15
|
4,189
|
17.81
|
4,750
|
19.08
|
2,893
|
19.67
|
2,945
|
22.53
|
||||||||||||||||||||||||||||||
One-to four- family
including
condominium and
cooperative apartment
|
95
|
1.68
|
188
|
1.75
|
195
|
2.36
|
303
|
2.82
|
404
|
3.32
|
||||||||||||||||||||||||||||||
Construction and
land acquisition
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
0.09
|
106
|
0.14
|
||||||||||||||||||||||||||||||
Consumer
|
24
|
0.05
|
24
|
0.06
|
27
|
0.07
|
26
|
0.07
|
34
|
0.08
|
||||||||||||||||||||||||||||||
Total
|
$
|
18,493
|
100.00
|
%
|
$
|
20,153
|
100.00
|
%
|
$
|
20,550
|
100.00
|
%
|
$
|
20,254
|
100.00
|
%
|
$
|
19,166
|
100.00
|
%
|
At or for the Year Ended December 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
(Dollars in Thousands)
|
||||||||||||
Outstanding balance of multifamily loans serviced for FNMA at period end
|
$
|
-
|
$
|
208,375
|
$
|
256,731
|
||||||
Total First Loss Position at end of period
|
-
|
15,428
|
15,428
|
|||||||||
Reserve Liability on the First Loss Position
|
||||||||||||
Balance at beginning of period
|
$
|
1,040
|
$
|
1,383
|
$
|
2,993
|
||||||
Credit to reduce the liability for the First Loss Position(1)
|
(1,040
|
)
|
(305
|
)
|
(1,286
|
)
|
||||||
Charge-offs and other net reductions in balance
|
-
|
(38
|
)
|
(324
|
)
|
|||||||
Balance at period end
|
$
|
-
|
$
|
1,040
|
$
|
1,383
|
(1)
|
Amount recognized as a portion of mortgage banking income during the period.
|
For the Year Ended December 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Dollars in Thousands
|
||||||||||||
Amortized cost at beginning of period
|
$
|
29,962
|
$
|
47,448
|
$
|
89,149
|
||||||
Purchases, net
|
875
|
-
|
1,318
|
|||||||||
Principal repayments
|
(5,863
|
)
|
(17,372
|
)
|
(42,822
|
)
|
||||||
Premium amortization, net
|
(28
|
)
|
(114
|
)
|
(197
|
)
|
||||||
Amortized cost at end of period
|
$
|
24,946
|
$
|
29,962
|
$
|
47,448
|
At December 31,
|
||||||||||||||||||||||||
2014
|
2013
|
2012
|
||||||||||||||||||||||
Amortized/ Historical Cost (1)
|
Fair Value
|
Amortized/ Historical Cost (1)
|
Fair Value
|
Amortized/ Historical Cost (1)
|
Fair Value
|
|||||||||||||||||||
MBS
|
Dollars in Thousands
|
|||||||||||||||||||||||
Available-for-Sale:
|
||||||||||||||||||||||||
FHLMC pass through certificates
|
$
|
17,080
|
$
|
18,145
|
$
|
20,686
|
$
|
21,766
|
$
|
32,218
|
$
|
33,063
|
||||||||||||
FNMA pass through certificates
|
5,763
|
6,125
|
7,168
|
7,619
|
10,233
|
10,899
|
||||||||||||||||||
GNMA pass through certificates
|
1,311
|
1,337
|
553
|
574
|
691
|
716
|
||||||||||||||||||
Private issuer MBS
|
449
|
455
|
662
|
680
|
962
|
955
|
||||||||||||||||||
Agency issued CMOs
|
-
|
-
|
319
|
321
|
2,436
|
2,462
|
||||||||||||||||||
Private issuer CMOs
|
343
|
347
|
574
|
583
|
908
|
926
|
||||||||||||||||||
Total MBS available-for-sale
|
24,946
|
26,409
|
29,962
|
31,543
|
47,448
|
49,021
|
||||||||||||||||||
INVESTMENT SECURITIES
|
||||||||||||||||||||||||
TRUPS Held-to-Maturity
|
5,367
|
6,263
|
5,341
|
5,163
|
7,828
|
6,267
|
||||||||||||||||||
Total investment securities held-to-maturity
|
5,367
|
6,263
|
5,341
|
5,163
|
7,828
|
6,267
|
||||||||||||||||||
Available-for-Sale:
|
||||||||||||||||||||||||
Federal agency obligations
|
70
|
70
|
15,070
|
15,091
|
29,820
|
29,945
|
||||||||||||||||||
Mutual funds
|
3,860
|
3,736
|
2,760
|
3,558
|
2,556
|
3,005
|
||||||||||||||||||
Total investment securities Available-for-Sale
|
3,930
|
3,806
|
17,830
|
18,649
|
32,376
|
32,950
|
||||||||||||||||||
Trading:
|
||||||||||||||||||||||||
Mutual funds
|
8,640
|
8,559
|
6,385
|
6,822
|
4,743
|
4,874
|
||||||||||||||||||
Total trading securities
|
8,640
|
8,559
|
6,385
|
6,822
|
4,743
|
4,874
|
||||||||||||||||||
TOTAL INVESTMENT SECURITIES AND MBS
|
$
|
42,883
|
$
|
45,037
|
$
|
59,518
|
$
|
62,177
|
$
|
92,395
|
$
|
93,112
|
(1)
|
Amount is net of cumulative credit related OTTI totaling $9.0 million on TRUPS held-to-maturity at December 31, 2014, $9.0 million on TRUPS held-to-maturity and $106,000 on mutual funds available-for-sale at December 31, 2013, and $9.0 million on TRUPS held-to-maturity and $348,000 on mutual funds available-for-sale at December 31, 2012.
|
Amortized Cost
|
Fair Value
|
Weighted
Average Tax Equivalent Yield
|
|
(Dollars in Thousands)
|
|||
MBS:
|
|||
Due within 1 year
|
$-
|
$-
|
-%
|
Due after 1 year but within 5 years
|
3,104
|
3,250
|
4.72
|
Due after 5 years but within 10 years
|
4,549
|
4,861
|
4.95
|
Due after ten years
|
17,293
|
18,298
|
2.67
|
Total
|
24,946
|
26,409
|
3.34
|
Federal Agency obligations:
|
|||
Due within 1 year
|
-
|
-
|
-
|
Due after 1 year but within 5 years
|
70
|
70
|
7.90
|
Due after 5 years but within 10 years
|
-
|
|
-
|
Due after ten years
|
-
|
-
|
-
|
Total
|
70
|
70
|
7.90
|
Total:
|
|||
Due within 1 year
|
-
|
-
|
-
|
Due after 1 year but within 5 years
|
3,174
|
3,320
|
4.79
|
Due after 5 years but within 10 years
|
4,549
|
4,861
|
4.95
|
Due after ten years
|
17,293
|
18,298
|
2.67
|
Total
|
$25,016
|
$26,479
|
3.35%
|
Year Ended December 31,
|
|||
DEPOSIT ACTIVITY
|
2014
|
2013
|
2012
|
(Dollars in Thousands)
|
|||
Deposits
|
$4,052,651
|
$4,204,263
|
$3,955,317
|
Withdrawals
|
3,919,596
|
4,196,473
|
3,841,368
|
Deposits greater than Withdrawals
|
$133,055
|
$7,790
|
$113,949
|
Interest credited
|
19,591
|
19,927
|
21,779
|
Total increase in deposits
|
$152,646
|
$27,717
|
$135,728
|
Maturity Date
|
Amount
|
Weighted Average Rate
|
(Dollars in Thousands)
|
||
Within three months
|
$45,752
|
1.59%
|
After three but within six months
|
53,223
|
1.29
|
After six but within twelve months
|
147,505
|
1.10
|
After 12 months
|
210,261
|
1.87
|
Total
|
$456,741
|
1.53%
|
At December 31, 2014
|
At December 31, 2013
|
At December 31, 2012
|
|||||||||
Amount
|
Percent
of Total Deposits
|
Weighted Average Rate
|
Amount
|
Percent of Total Deposits
|
Weighted Average Rate
|
Amount
|
Percent of Total Deposits
|
Weighted Average Rate
|
|||
(Dollars in Thousands)
|
|||||||||||
Savings accounts
|
$372,753
|
14.0%
|
0.05%
|
$376,900
|
15.0%
|
0.05%
|
$371,792
|
15.0%
|
0.15%
|
||
CDs
|
926,318
|
34.8
|
1.43
|
828,409
|
33.0
|
1.55
|
891,975
|
36.0
|
1.68
|
||
Money market accounts
|
1,094,698
|
41.2
|
0.61
|
1,040,079
|
41.5
|
0.50
|
961,359
|
38.8
|
0.57
|
||
Interest bearing checking accounts
|
78,430
|
2.9
|
0.08
|
87,301
|
3.5
|
0.08
|
95,159
|
3.8
|
0.16
|
||
Non-interest bearing checking accounts
|
187,593
|
7.1
|
-
|
174,457
|
7.0
|
-
|
159,144
|
6.4
|
-
|
||
Totals
|
$2,659,792
|
100.0%
|
0.76%
|
$2,507,146
|
100.0%
|
0.73%
|
$2,479,429
|
100.0%
|
0.86%
|
Period to Maturity at December 31, 2014
|
||||||||
Interest Rate Range
|
One Year or Less
|
Over One Year to Three Years
|
Over Three Years to Five Years
|
Over Five Years
|
Total at
December 31,
2014
|
Total at
December 31,
2013
|
Total at
December 31,
2012
|
|
(Dollars in Thousands)
|
||||||||
1.00% and below
|
$298,522
|
$47,433
|
$-
|
$-
|
$345,955
|
$407,927
|
$414,089
|
|
1.01% to 2.00%
|
131,447
|
79,680
|
88,682
|
11,184
|
310,993
|
142,030
|
146,168
|
|
2.01% to 3.00%
|
25,222
|
72,070
|
103,745
|
178
|
201,215
|
123,923
|
131,691
|
|
3.01% to 4.00%
|
49,728
|
1,375
|
17,032
|
-
|
68,135
|
154,529
|
163,158
|
|
4.01% and above
|
20
|
-
|
-
|
-
|
20
|
-
|
36,869
|
|
Total
|
$504,939
|
$200,558
|
$209,459
|
$11,362
|
|
$926,318
|
$828,409
|
$891,975
|
At or for the Year Ended December 31,
|
|||
2014
|
2013
|
2012
|
|
(Dollars in Thousands)
|
|||
Balance outstanding at end of period
|
$1,173,725
|
$910,000
|
$842,500
|
Average interest cost at end of period
|
1.74%
|
2.35%
|
2.68%
|
Weighted average balance outstanding during the period
|
$1,039,203
|
$761,491
|
$826,176
|
Average interest cost during the period
|
2.28%
|
2.89%
|
2.96%
|
Maximum balance outstanding at month end during period
|
$1,173,725
|
$910,000
|
$939,775
|
Subsidiary
|
Year/ State of Incorporation
|
Primary Business Activities
|
Direct Subsidiaries of the Holding Company:
|
||
842 Manhattan Avenue Corp.
|
1995/ New York
|
Currently in the process of dissolution.
|
Dime Community Capital Trust I
|
2004/ Delaware
|
Statutory Trust (1)
|
Direct Subsidiaries of the Bank:
|
||
Boulevard Funding Corp.
|
1981 / New York
|
Management and ownership of real estate
|
Dime Insurance Agency Inc. (
f/k/a
Havemeyer Investments, Inc.)
|
1997 / New York
|
Sale of non-FDIC insured investment products
|
DSBW Preferred Funding Corp.
|
1998 / Delaware
|
Real Estate Investment Trust investing in multifamily residential and commercial real estate loans
|
DSBW Residential Preferred Funding Corp.
|
1998 / Delaware
|
Real Estate Investment Trust investing in one- to four-family real estate loans
|
Dime Reinvestment Corporation
|
2004 / Delaware
|
Community Development Entity. Currently inactive.
|
195 Havemeyer Corp.
|
2008 / New York
|
Management and ownership of real estate. Currently inactive.
|
·
|
the TRUP CDO was established, and the interest was issued, before May 19, 2010;
|
·
|
the banking entity reasonably believes that the offering proceeds received by the TRUP CDO were invested primarily in qualifying TRUP CDO collateral, as defined; and
|
·
|
the banking entity's interest in the TRUP CDO was acquired on or before December 10, 2013, the date the agencies issued final rules implementing the Volcker Rule.
|
Bank
|
Consolidated Company
|
Basel III Minimum Requirement
|
Basel III Minimum Requirement Plus 2.5% Buffer(1)
|
||
Common equity Tier 1 capital to risk weighted assets
|
12.33%
|
12.44%
|
4.5%
|
7.0%
|
|
Tier 1 capital to risk weighted assets
|
12.33
|
14.51
|
6.0
|
8.5
|
|
Total Capital to risk weighted assets
|
12.89
|
15.07
|
8.0
|
10.5
|
|
Tier 1 Capital to average assets (Leverage ratio)
|
9.64
|
11.20
|
4.0
|
n/a
|
Actual
|
For Capital
Adequacy Purposes
|
To Be Categorized as "Well Capitalized"
|
||||||
As of December 31, 2014
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||
(Dollars in Thousands)
|
||||||||
Tangible capital
|
$406,910
|
9.20%
|
$176,998
|
4.0%
|
$221,247
|
5.00%
|
||
Leverage capital
|
406,910
|
9.20
|
176,998
|
4.0
|
221,247
|
5.00
|
||
Tier I risk-based capital (to risk
weighted assets)
|
406,910
|
12.33
|
131,994
|
4.0
|
197,991
|
6.00
|
||
Total risk-based capital (to risk
weighted assets)
|
425,428
|
12.89
|
263,988
|
8.0
|
329,985
|
10.00
|
Twelve Months Ended
December 31, 2014
|
Twelve Months Ended
December 31, 2013
|
||||||
Quarter Ended
|
Dividends
Declared
|
High
Sales
Price
|
Low
Sales
Price
|
Dividends
Declared
|
High
Sales
Price
|
Low
Sales
Price
|
|
March 31
st
|
$0.14
|
$18.23
|
$15.43
|
$0.14
|
$14.94
|
$13.33
|
|
June 30
th
|
0.14
|
17.53
|
14.77
|
0.14
|
15.63
|
13.79
|
|
September 30
th
|
0.14
|
16.22
|
14.23
|
0.14
|
17.92
|
15.31
|
|
December 31
st
|
0.14
|
16.63
|
14.02
|
0.14
|
17.43
|
15.90
|
Period
|
Total Number
of Shares Purchased
|
Average
Price Paid Per Share
|
Total Number of
Shares Purchased as Part of Publicly Announced Programs (1)
|
Maximum Number of Shares that May Yet be Purchased Under the Programs (1)
|
|||
October 2014
|
-
|
-
|
-
|
1,124,549
|
|||
November 2014
|
-
|
-
|
-
|
1,124,549
|
|||
December 2014
|
-
|
-
|
-
|
1,124,549
|
Period Ending December 31,
|
||||||
Index
|
2009
|
2010
|
2011
|
2012
|
2013
|
2014
|
Dime Community Bancshares, Inc.
|
100.00
|
129.65
|
116.61
|
133.80
|
169.11
|
168.66
|
NASDAQ Composite
|
100.00
|
118.15
|
117.22
|
138.02
|
193.47
|
222.16
|
SNL Thrift
|
100.00
|
104.49
|
87.90
|
106.91
|
137.20
|
147.56
|
At or for the Year Ended December 31,
|
|||||
2014
|
2013
|
2012
|
2011
|
2010
|
|
Selected Financial Condition Data:
|
|||||
Total assets
|
$4,497,107
|
$4,028,190
|
$3,905,399
|
$4,021,180
|
$4,040,295
|
Loans and loans held for sale (net of deferred costs or fees
and the allowance for loan losses)
|
4,100,747
|
3,679,366
|
3,485,818
|
3,443,633
|
3,454,326
|
MBS
|
26,409
|
31,543
|
49,021
|
93,877
|
144,518
|
Investment securities (including FHLBNY capital stock)
|
76,139
|
78,863
|
88,762
|
232,642
|
145,491
|
Federal funds sold and other short-term investments
|
250
|
-
|
-
|
951
|
4,536
|
Goodwill
|
55,638
|
55,638
|
55,638
|
55,638
|
55,638
|
Deposits
|
2,659,792
|
2,507,146
|
2,479,429
|
2,343,701
|
2,350,581
|
Borrowings
|
1,244,405
|
980,680
|
913,180
|
1,205,455
|
1,256,205
|
Stockholders' equity
|
459,725
|
435,506
|
391,574
|
361,034
|
328,734
|
Selected Operating Data:
|
|||||
Interest income
|
$172,952
|
$175,456
|
$195,954
|
$209,216
|
$214,794
|
Interest expense
|
48,416
|
46,969
|
86,112
|
69,714
|
79,413
|
Net interest income
|
124,536
|
128,487
|
109,842
|
139,502
|
135,381
|
Provision (credit) for loan losses
|
(1,872)
|
369
|
3,921
|
6,846
|
11,209
|
Net interest income after provision for loan losses
|
126,408
|
128,118
|
105,921
|
132,656
|
124,172
|
Non-interest income
|
9,038
|
7,463
|
23,849
|
7,929
|
8,055
|
Non-interest expense
|
61,076
|
62,692
|
62,572
|
61,688
|
61,977
|
Income before income tax
|
74,370
|
72,889
|
67,198
|
78,897
|
70,250
|
Income tax expense
|
30,124
|
29,341
|
26,890
|
31,588
|
28,861
|
Net income
|
$44,246
|
$43,548
|
$40,308
|
$47,309
|
$41,389
|
At or for the Year Ended December 31,
|
|||||
2014
|
2013
|
2012
|
2011
|
2010
|
|
SELECTED FINANCIAL RATIOS AND OTHER DATA (1):
|
|||||
Return on average assets
|
1.03%
|
1.09%
|
1.02%
|
1.16%
|
1.01%
|
Return on average stockholders' equity
|
9.83
|
10.58
|
10.73
|
13.65
|
13.15
|
Stockholders' equity to total assets at end of period
|
10.22
|
10.81
|
10.03
|
8.98
|
8.14
|
Loans to deposits at end of period
|
154.87
|
147.56
|
141.42
|
147.80
|
147.77
|
Loans to interest-earning assets at end of period
|
94.68
|
96.74
|
94.41
|
91.36
|
92.18
|
Net interest spread (2)
|
2.84
|
3.19
|
2.58
|
3.38
|
3.34
|
Net interest margin (3)
|
3.03
|
3.39
|
2.92
|
3.60
|
3.53
|
Average interest-earning assets to average interest-bearing liabilities
|
115.98
|
116.49
|
114.83
|
112.07
|
109.32
|
Non-interest expense to average assets
|
1.42
|
1.57
|
1.59
|
1.51
|
1.52
|
Efficiency ratio (4)
|
46.28
|
46.23
|
52.58
|
41.64
|
42.74
|
Effective tax rate
|
40.51
|
40.25
|
40.02
|
40.04
|
41.08
|
Dividend payout ratio
|
45.53
|
45.53
|
47.86
|
30.00
|
45.16
|
Per Share Data:
|
|||||
Diluted earnings per share
|
$1.23
|
$1.23
|
$1.17
|
$1.40
|
$1.24
|
Cash dividends paid per share
|
0.56
|
0.56
|
0.56
|
0.56
|
0.56
|
Book value per share (5)
|
12.47
|
11.86
|
10.96
|
10.28
|
9.50
|
Asset Quality Ratios and Other Data(1):
|
|||||
Net charge-offs (recoveries)
|
$(212)
|
$766
|
$3,707
|
$5,925
|
$13,821
|
Total non-performing loans (6)
|
6,198
|
12,549
|
8,888
|
28,973
|
20,168
|
OREO
|
18
|
18
|
-
|
-
|
-
|
Non-performing TRUPS
|
904
|
898
|
892
|
1,012
|
564
|
Total non-performing assets
|
7,120
|
13,465
|
9,780
|
29,985
|
20,732
|
Non-performing loans to total loans
|
0.15%
|
0.34%
|
0.25%
|
0.84%
|
0.58%
|
Non-performing assets to total assets
|
0.16
|
0.33
|
0.25
|
0.75
|
0.51
|
Allowance for Loan Losses to:
|
|||||
Non-performing loans
|
298.37%
|
160.59%
|
231.21%
|
78.04%
|
95.03%
|
Total loans (7)
|
0.45
|
0.54
|
0.59
|
0.58
|
0.55
|
Regulatory Capital Ratios:
(Bank only) (1)
|
|||||
Tangible capital
|
9.20%
|
9.52%
|
9.98%
|
9.11%
|
8.23%
|
Leverage Capital
|
9.20
|
9.52
|
9.98
|
9.11
|
8.23
|
Total risk-based capital
|
12.89
|
13.36
|
13.72
|
12.24
|
11.95
|
Earnings to Fixed Charges Ratios (8) (9):
|
|||||
Including interest on deposits
|
2.50x
|
2.51x
|
1.77x
|
2.12x
|
1.87x
|
Excluding interest on deposits
|
3.49
|
3.58
|
2.95
|
2.78
|
3.24
|
Full Service Branches
|
25
|
25
|
26
|
26
|
25
|
Payments Due By Period
|
||||||
Contractual Obligations
|
Less than One Year
|
One Year to Three Years
|
Over Three Years to Five Years
|
Over Five Years
|
Total
|
|
(Dollars in thousands)
|
||||||
CDs
|
$504,939
|
$200,558
|
$209,459
|
$11,362
|
$926,318
|
|
Weighted average interest rate of CDs
|
1.10%
|
1.55%
|
2.11%
|
1.71%
|
1.43%
|
|
Borrowings
|
$569,500
|
$453,075
|
$113,350
|
$37,800
|
$1,173,725
|
|
Weighted average interest rate of borrowings
|
1.48%
|
2.04%
|
1.68%
|
2.46%
|
1.74%
|
|
Operating lease obligations
|
$3,092
|
$6,361
|
$6,191
|
$15,069
|
$30,713
|
Less than One Year
|
One Year to Three Years
|
Over Three Years to Five Years
|
Over Five Years
|
Total
|
||
(Dollars in thousands)
|
||||||
Credit Commitments:
|
||||||
Available lines of credit
|
$37,616
|
$-
|
$-
|
$-
|
$37,616
|
|
Other loan commitments
|
122,092
|
-
|
-
|
-
|
122,092
|
|
Total Off-Balance Sheet Arrangements
|
$159,708
|
$-
|
$-
|
$-
|
$159,708
|
For the Year Ended December 31,
|
|||||||||||
2014
|
2013
|
2012
|
|||||||||
(Dollars in Thousands)
|
|||||||||||
Average
|
Average
|
Average
|
|||||||||
Average
|
Yield/
|
Average
|
Yield/
|
Average
|
Yield/
|
||||||
Balance
|
Interest
|
Cost
|
Balance
|
Interest
|
Cost
|
Balance
|
Interest
|
Cost
|
|||
Assets:
|
|||||||||||
Interest-earning assets:
|
|||||||||||
Real estate loans (1)
|
$3,962,566
|
$169,208
|
4.27%
|
$3,603,841
|
$171,594
|
4.76%
|
$3,400,847
|
$189,149
|
5.56%
|
||
Other loans
|
1,954
|
105
|
5.37
|
2,198
|
101
|
4.60
|
1,991
|
104
|
5.22
|
||
Investment securities
|
19,220
|
560
|
2.91
|
32,520
|
503
|
1.55
|
103,936
|
1,263
|
1.22
|
||
MBS
|
27,658
|
914
|
3.30
|
37,999
|
1,413
|
3.72
|
81,897
|
3,025
|
3.69
|
||
Federal funds sold and other short-term investments
|
92,609
|
2,165
|
2.34
|
110,630
|
1,845
|
1.67
|
173,336
|
2,413
|
1.39
|
||
Total interest-earning assets
|
4,104,007
|
$172,952
|
4.21%
|
3,787,188
|
$175,456
|
4.63%
|
3,762,007
|
$195,954
|
5.21%
|
||
Non-interest earning assets
|
190,627
|
196,122
|
185,036
|
||||||||
Total assets
|
$4,294,634
|
$3,983,310
|
$3,947,043
|
||||||||
Liabilities and Stockholders' Equity:
|
|||||||||||
Interest-bearing liabilities:
|
|||||||||||
Interest bearing checking accounts
|
$79,455
|
$222
|
0.28%
|
$90,871
|
$236
|
0.26%
|
$93,596
|
$237
|
0.25%
|
||
Money Market accounts
|
1,113,104
|
6,265
|
0.56
|
1,082,104
|
5,652
|
0.52
|
840,098
|
4,622
|
0.55
|
||
Savings accounts
|
377,930
|
188
|
0.05
|
378,391
|
260
|
0.07
|
364,271
|
580
|
0.16
|
||
CDs
|
858,526
|
12,916
|
1.50
|
867,664
|
13,779
|
1.59
|
947,803
|
16,340
|
1.72
|
||
Borrowed Funds (2)
|
1,109,532
|
28,825
|
2.60
|
832,149
|
27,042
|
3.25
|
1,030,287
|
64,333
|
6.24
|
||
Total interest-bearing liabilities
|
3,538,547
|
$48,416
|
1.37%
|
3,251,179
|
$46,969
|
1.44%
|
3,276,055
|
$86,112
|
2.63%
|
||
Non-interest bearing checking accounts
|
177,163
|
170,455
|
151,818
|
||||||||
Other non-interest-bearing liabilities
|
129,034
|
149,913
|
143,659
|
||||||||
Total liabilities
|
3,844,744
|
3,571,547
|
3,571,532
|
||||||||
Stockholders' equity
|
449,890
|
411,763
|
375,511
|
||||||||
Total liabilities and stockholders' equity
|
$4,294,634
|
$3,983,310
|
$3,947,043
|
||||||||
Net interest spread (3)
|
2.84%
|
3.19%
|
2.58%
|
||||||||
Net interest income/ net interest margin (4)
|
$124,536
|
3.03%
|
$128,487
|
3.39%
|
$109,842
|
2.92%
|
|||||
Net interest-earning assets
|
$565,460
|
$536,009
|
$485,952
|
||||||||
Ratio of interest-earning assets
to interest-bearing liabilities
|
115.98%
|
116.49%
|
114.83%
|
Year Ended December 31, 2014
Compared to
Year Ended December 31, 2013
Increase/ (Decrease) Due to
|
Year Ended December 31, 2013
Compared to
Year Ended December 31, 2012
Increase/ (Decrease) Due to
|
Year Ended December 31, 2012
Compared to
Year Ended December 31, 2011
Increase/ (Decrease) Due to
|
|||||||||
Volume
|
Rate
|
Total
|
Volume
|
Rate
|
Total
|
Volume
|
Rate
|
Total
|
|||
Interest-earning assets:
|
(Dollars in Thousands)
|
||||||||||
Real Estate Loans
|
$16,177
|
$(18,563)
|
$(2,386)
|
$10,471
|
$(28,026)
|
$(17,555)
|
$(2,617)
|
$(8,268)
|
$(10,885)
|
||
Other loans
|
(12)
|
16
|
4
|
10
|
(13)
|
(3)
|
66
|
(59)
|
7
|
||
Investment securities
|
(362)
|
(137)
|
(499)
|
(986)
|
226
|
(760)
|
(1,226)
|
(792)
|
(2,018)
|
||
MBS
|
(296)
|
353
|
57
|
(1,629)
|
17
|
(1,612)
|
(523)
|
385
|
(138)
|
||
Federal funds sold and
other short-term investments
|
(361)
|
681
|
320
|
(963)
|
395
|
(568)
|
143
|
(371)
|
(228)
|
||
Total
|
$15,146
|
$(17,650)
|
$(2,504)
|
$6,903
|
$(27,401)
|
$(20,498)
|
$(4,157)
|
$(9,105)
|
$(13,262)
|
||
Interest-bearing liabilities:
|
|||||||||||
Interest bearing checking accounts
|
$(31)
|
$17
|
$(14)
|
$(9)
|
$8
|
$(1)
|
$(3)
|
$(81)
|
$(84)
|
||
Money market accounts
|
171
|
442
|
613
|
1,307
|
(277)
|
1,030
|
518
|
(944)
|
(426)
|
||
Savings accounts
|
2
|
(74)
|
(72)
|
15
|
(335)
|
(320)
|
34
|
(185)
|
(151)
|
||
CDs
|
(113)
|
(750)
|
(863)
|
(1,355)
|
(1,206)
|
(2,561)
|
(1,887)
|
(1,804)
|
(3,691)
|
||
Borrowed funds
|
8,103
|
(6,320)
|
1,783
|
(9,428)
|
(27,863)
|
(37,291)
|
(8,880)
|
29,630
|
20,750
|
||
Total
|
$8,132
|
$(6,685)
|
$1,447
|
$(9,470)
|
$(29,673)
|
$(39,143)
|
$(10,218)
|
$26,616
|
$16,398
|
||
Net change in net interest income
|
$7,014
|
$(10,965)
|
$(3,951)
|
$16,373
|
$2,272
|
$18,645
|
$6,061
|
$(35,721)
|
$(29,660)
|
·
|
During the period January 1, 2009 through December 31, 2014, FOMC monetary policies resulted in the maintenance of the overnight federal funds rate in a range of 0.0% to 0.25%, helping deposit and borrowing costs remain at historically low levels.
|
·
|
Increased marketplace competition and refinancing activity on real estate loans resulted in both an ongoing reduction in the average yield on real estate loans and uneven recognition of prepayment fee income.
|
At December 31, 2014
|
At December 31, 2013
|
||||||
EVE
|
Dollar
Change
|
Percentage
Change
|
EVE
|
Dollar
Change
|
Percentage
Change
|
||
(Dollars in Thousands)
|
|||||||
Rate Shock Scenario
|
|||||||
+ 200 Basis Points
|
$498,138
|
$(49,201)
|
-9.0%
|
$445,618
|
$(56,896)
|
-11.3%
|
|
Pre-Shock Scenario
|
547,339
|
-
|
-
|
502,514
|
-
|
-
|
Instantaneous Change in Interest rate of:
|
Percentage Change in Net Interest Income
|
|
+ 200 Basis Points
|
(11.9)%
|
|
+ 100 Basis Points
|
(6.5)
|
|
-100 Basis Points
|
5.0
|
Name
|
Title
|
/s/ VINCENT F. PALAGIANO
Vincent F. Palagiano
|
Chairman of the Board and Chief Executive Officer
(Principal Executive Officer)
|
/s/ MICHAEL P. DEVINE
Michael P. Devine
|
Vice Chairman and President and Director
|
/s/ KENNETH J. MAHON
Kenneth J. Mahon
|
Senior Executive Vice President and Chief Operating Officer and Director
|
/s/ MICHAEL PUCELLA
Michael Pucella
|
Executive Vice President and Chief Accounting Officer
(Principal Financial Officer)
|
/s/ ANTHONY BERGAMO
Anthony Bergamo
|
Director
|
/s/ GEORGE L. CLARK, JR.
George L. Clark, Jr.
|
Director
|
/s/ STEVEN D. COHN
Steven D. Cohn
|
Director
|
/s/ PATRICK E. CURTIN
Patrick E. Curtin
|
Director
|
/s/ ROBERT C. GOLDEN
Robert C. Golden
|
Director
|
/s/ KATHLEEN M. NELSON
Kathleen M. Nelson
|
Director
|
/s/ JOSEPH J. PERRY
Joseph J. Perry
|
Director
|
/s/ OMER S.J. WILLIAMS
Omer S.J. Williams
|
Director
|
Page
|
|
Report of Independent Registered Public Accounting Firm
|
F-68
|
Consolidated Statements of Financial Condition at December 31, 2014 and 2013
|
F-69
|
Consolidated Statements of Operations and Comprehensive Income for the years ended
December 31, 2014, 2013 and 2012
|
F-70
|
Consolidated Statements of Changes in Stockholders' Equity December 31, 2014, 2013 and 2012
|
F-71
|
Consolidated Statements of Cash Flows for the years ended December 31, 2014, 2013 and 2012
|
F-72
|
Notes to Consolidated Financial Statements
|
F73-F118
|
December 31,
2014
|
December 31,
2013
|
|||||||
ASSETS:
|
||||||||
Cash and due from banks
|
$
|
78,187
|
$
|
45,777
|
||||
Federal funds sold and other short-term investments
|
250
|
-
|
||||||
Total cash and cash equivalents
|
78,437
|
45,777
|
||||||
Investment securities held-to-maturity (estimated fair value of $6,315, and $5,163 at December 31,
2014 and December 31, 2013, respectively) (Fully unencumbered)
|
5,367
|
5,341
|
||||||
Investment securities available-for-sale, at fair value (Fully unencumbered)
|
3,806
|
18,649
|
||||||
Mortgage-backed securities ("MBS") available-for-sale, at fair value (Fully unencumbered)
|
26,409
|
31,543
|
||||||
Trading securities
|
8,559
|
6,822
|
||||||
Loans:
|
||||||||
Real estate, net
|
4,117,411
|
3,697,380
|
||||||
Consumer loans
|
1,829
|
2,139
|
||||||
Less allowance for loan losses
|
(18,493
|
)
|
(20,153
|
)
|
||||
Total loans, net
|
4,100,747
|
3,679,366
|
||||||
Premises and fixed assets, net
|
25,065
|
26,077
|
||||||
Premises held for sale
|
-
|
3,624
|
||||||
Federal Home Loan Bank of New York ("FHLBNY") capital stock
|
58,407
|
48,051
|
||||||
Other real estate owned ("OREO")
|
18
|
18
|
||||||
Bank Owned Life Insurance ("BOLI")
|
82,614
|
55,871
|
||||||
Goodwill
|
55,638
|
55,638
|
||||||
Other assets
|
52,040
|
51,413
|
||||||
Total Assets
|
$
|
4,497,107
|
$
|
4,028,190
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Liabilities:
|
||||||||
Due to depositors:
|
||||||||
Interest bearing deposits
|
$
|
2,472,199
|
$
|
2,332,689
|
||||
Non-interest bearing deposits
|
187,593
|
174,457
|
||||||
Total deposits
|
2,659,792
|
2,507,146
|
||||||
Escrow and other deposits
|
91,921
|
69,404
|
||||||
FHLBNY advances
|
1,173,725
|
910,000
|
||||||
Trust Preferred securities payable
|
70,680
|
70,680
|
||||||
Other liabilities
|
41,264
|
35,454
|
||||||
Total Liabilities
|
$
|
4,037,382
|
$
|
3,592,684
|
||||
Commitments and Contingencies
|
||||||||
Stockholders' Equity:
|
||||||||
Preferred stock ($0.01 par, 9,000,000 shares authorized, none issued or outstanding at December 31, 2014 and December 31, 2013)
|
-
|
-
|
||||||
Common stock ($0.01 par, 125,000,000 shares authorized, 52,871,443 shares and 52,854,483 shares issued at
December 31, 2014 and December 31, 2013, respectively, and 36,855,019 shares and 36,712,951 shares
outstanding at December 31, 2014 and December 31, 2013, respectively)
|
529
|
528
|
||||||
Additional paid-in capital
|
254,358
|
252,253
|
||||||
Retained earnings
|
427,126
|
402,986
|
||||||
Accumulated other comprehensive loss, net of deferred taxes
|
(8,547
|
)
|
(4,759
|
)
|
||||
Unallocated common stock of Employee Stock Ownership Plan ("ESOP")
|
(2,545
|
)
|
(2,776
|
)
|
||||
Unearned Restricted Stock Award common stock
|
(3,066
|
)
|
(3,193
|
)
|
||||
Common stock held by Benefit Maintenance Plan ("BMP")
|
(9,164
|
)
|
(9,013
|
)
|
||||
Treasury stock, at cost (16,016,424 shares and 16,141,532 shares at December 31, 2014 and December 31, 2013, respectively)
|
(198,966
|
)
|
(200,520
|
)
|
||||
Total Stockholders' Equity
|
$
|
459,725
|
$
|
435,506
|
||||
Total Liabilities And Stockholders' Equity
|
$
|
4,497,107
|
$
|
4,028,190
|
Year Ended December 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Interest income:
|
||||||||||||
Loans secured by real estate
|
$
|
169,208
|
$
|
171,594
|
$
|
189,149
|
||||||
Other loans
|
105
|
101
|
104
|
|||||||||
MBS
|
914
|
1,413
|
3,025
|
|||||||||
Investment securities
|
560
|
503
|
1,263
|
|||||||||
Federal funds sold and other short-term investments
|
2,165
|
1,845
|
2,413
|
|||||||||
Total interest income
|
172,952
|
175,456
|
195,954
|
|||||||||
Interest expense:
|
||||||||||||
Deposits and escrow
|
19,591
|
19,927
|
21,779
|
|||||||||
Borrowed funds
|
28,825
|
27,042
|
64,333
|
|||||||||
Total interest expense
|
48,416
|
46,969
|
86,112
|
|||||||||
Net interest income
|
124,536
|
128,487
|
109,842
|
|||||||||
Provision (credit) for loan losses
|
(1,872
|
)
|
369
|
3,921
|
||||||||
Net interest income after provision for loan losses
|
126,408
|
128,118
|
105,921
|
|||||||||
Non-interest income:
|
||||||||||||
Total other than temporary impairment ("OTTI") losses
|
-
|
-
|
(187
|
)
|
||||||||
Less: Non-credit portion of OTTI recorded in other comprehensive income (before taxes)
|
-
|
-
|
6
|
|||||||||
Net OTTI recognized in earnings
|
-
|
-
|
(181
|
)
|
||||||||
Service charges and other fees
|
3,191
|
3,459
|
3,445
|
|||||||||
Mortgage banking income
|
1,225
|
473
|
1,768
|
|||||||||
Net gain on securities (1)
|
952
|
375
|
1,135
|
|||||||||
Net (loss) gain on the disposal of other assets
|
649
|
(21
|
)
|
13,726
|
||||||||
Income from BOLI
|
1,743
|
1,672
|
1,689
|
|||||||||
Other
|
1,278
|
1,505
|
2,267
|
|||||||||
Total non-interest income
|
9,038
|
7,463
|
23,849
|
|||||||||
Non-interest expense:
|
||||||||||||
Salaries and employee benefits
|
32,462
|
34,336
|
33,805
|
|||||||||
Stock benefit plan compensation expense
|
3,817
|
3,957
|
3,842
|
|||||||||
Occupancy and equipment
|
10,177
|
10,451
|
10,052
|
|||||||||
Data processing costs
|
3,595
|
3,565
|
3,026
|
|||||||||
Advertising and marketing
|
1,922
|
1,109
|
1,554
|
|||||||||
Federal deposit insurance premiums
|
2,151
|
1,951
|
2,057
|
|||||||||
Provision for losses on OREO
|
-
|
180
|
-
|
|||||||||
Other
|
6,952
|
7,143
|
8,236
|
|||||||||
Total non-interest expense
|
61,076
|
62,692
|
62,572
|
|||||||||
Income before income taxes
|
74,370
|
72,889
|
67,198
|
|||||||||
Income tax expense
|
30,124
|
29,341
|
26,890
|
|||||||||
Net income
|
$
|
44,246
|
$
|
43,548
|
$
|
40,308
|
||||||
Earnings per Share:
|
||||||||||||
Basic
|
$
|
1.23
|
$
|
1.24
|
$
|
1.18
|
||||||
Diluted
|
$
|
1.23
|
$
|
1.23
|
$
|
1.17
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
|||
Net Income
|
$44,246
|
$43,548
|
$40,308
|
Amortization and reversal of net unrealized loss on securities transferred from available-for-sale to held-to-maturity,
net of tax of $(29), $(122) and $(91) during the years ended December 31, 2014, 2013 and 2012, respectively
|
36
|
149
|
111
|
Non-credit component of OTTI charge recognized during the period, net of tax benefit of $3 during the year ended
December 31, 2012
|
-
|
-
|
(3)
|
Reduction in non-credit component of OTTI, net of taxes of $(16), $(16) and $(137) during the years ended December 31, 2014,
2013 and 2012, respectively
|
16
|
16
|
165
|
Reclassification adjustment for securities sold during the period, net of tax benefit of $450, $50 and $461 during the years ended
December 31, 2014, 2013 and 2012, respectively (reclassified from net gain on securities)
|
(547)
|
(60)
|
(561)
|
Net unrealized securities gain (loss) arising during the period, net of deferred tax (expense) benefit of $29, $(162) and $1,102
during the years ended December 31, 2014, 2013 and 2012, respectively
|
(36)
|
201
|
(1,339)
|
Change in pension and other postretirement obligations, net of deferred tax (expense) benefit of $2,685, $(3,765) and $(1,395)
during the years ended December 31, 2014, 2013 and 2012, respectively
|
(3,257)
|
4,575
|
1,696
|
Total other comprehensive income (loss), net of tax
|
(3,788)
|
4,881
|
69
|
Comprehensive Income
|
$40,458
|
$48,429
|
$40,377
|
Year Ended December 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Common Stock:
|
||||||||||||
Balance at beginning of period
|
$
|
528
|
$
|
520
|
$
|
516
|
||||||
Shares issued in exercise of options (16,960 shares, 833,334 shares and 455,051 shares during the years
ended December 31, 2014, 2013, and 2012, respectively)
|
1
|
8
|
4
|
|||||||||
Balance at end of period
|
529
|
528
|
520
|
|||||||||
Additional Paid-in Capital:
|
||||||||||||
Balance at beginning of period
|
252,253
|
239,041
|
231,521
|
|||||||||
Stock options exercised
|
277
|
11,220
|
5,604
|
|||||||||
Excess tax benefit of stock benefit plans
|
71
|
292
|
389
|
|||||||||
Amortization of excess fair value over cost – ESOP stock and stock option expense
|
1,111
|
1,176
|
1,168
|
|||||||||
Release from treasury stock for equity awards, net of return of shares to treasury for forfeited shares
(125,108 shares,165,348 shares and 150,173 shares during the years ended December 31, 2014, 2013, and
2012, respectively)
|
646
|
524
|
359
|
|||||||||
Balance at end of period
|
254,358
|
252,253
|
239,041
|
|||||||||
Retained Earnings:
|
||||||||||||
Balance at beginning of period
|
402,986
|
379,166
|
358,079
|
|||||||||
Net income for the period
|
44,246
|
43,548
|
40,308
|
|||||||||
Cash dividends declared and paid
|
(20,106
|
)
|
(19,728
|
)
|
(19,221
|
)
|
||||||
Balance at end of period
|
427,126
|
402,986
|
379,166
|
|||||||||
Accumulated Other Comprehensive Loss, Net of Deferred Taxes:
|
||||||||||||
Balance at beginning of period
|
(4,759
|
)
|
(9,640
|
)
|
(9,709
|
)
|
||||||
Other comprehensive income (loss) recognized during the period, net of tax
|
(3,788
|
)
|
4,881
|
69
|
||||||||
Balance at end of period
|
(8,547
|
)
|
(4,759
|
)
|
(9,640
|
)
|
||||||
Unallocated Common Stock of ESOP:
|
||||||||||||
Balance at beginning of period
|
(2,776
|
)
|
(3,007
|
)
|
(3,239
|
)
|
||||||
Amortization of earned portion of ESOP stock
|
231
|
231
|
232
|
|||||||||
Balance at end of period
|
(2,545
|
)
|
(2,776
|
)
|
(3,007
|
)
|
||||||
Unearned Restricted Stock Award Common Stock:
|
||||||||||||
Balance at beginning of period
|
(3,193
|
)
|
(3,122
|
)
|
(3,037
|
)
|
||||||
Amortization of earned portion of restricted stock awards
|
1,976
|
2,011
|
1,842
|
|||||||||
Release from treasury stock for award shares, net of return of shares to treasury for forfeited shares
|
(1,849
|
)
|
(2,082
|
)
|
(1,927
|
)
|
||||||
Balance at end of period
|
(3,066
|
)
|
(3,193
|
)
|
(3,122
|
)
|
||||||
Common Stock Held by BMP:
|
||||||||||||
Balance at beginning of period
|
(9,013
|
)
|
(8,800
|
)
|
(8,655
|
)
|
||||||
Release from treasury stock for award shares
|
(151
|
)
|
(213
|
)
|
(145
|
)
|
||||||
Balance at end of period
|
(9,164
|
)
|
(9,013
|
)
|
(8,800
|
)
|
||||||
Treasury Stock, at cost:
|
||||||||||||
Balance at beginning of period
|
(200,520
|
)
|
(202,584
|
)
|
(204,442
|
)
|
||||||
Release from treasury stock for equity awards, net of return of shares to treasury for forfeited shares
|
1,554
|
2,064
|
1,858
|
|||||||||
Balance at end of period
|
(198,966
|
)
|
(200,520
|
)
|
(202,584
|
)
|
||||||
TOTAL STOCKHOLDERS' EQUITY AT THE END OF PERIOD
|
$
|
459,725
|
$
|
435,506
|
$
|
391,574
|
Year Ended December 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
Net Income
|
$
|
44,246
|
$
|
43,548
|
$
|
40,308
|
||||||
Adjustments to reconcile net income to net cash provided by operating activities
|
||||||||||||
Net gain on the sales of investment securities and MBS available-for-sale
|
(997
|
)
|
(110
|
)
|
(1,022
|
)
|
||||||
Net gain recognized on trading securities
|
(13
|
)
|
(265
|
)
|
(113
|
)
|
||||||
Net gain on sale of loans held for sale
|
(27
|
)
|
(13
|
)
|
(68
|
)
|
||||||
Net (loss) gain on the disposal of other assets
|
(649
|
)
|
21
|
(13,726
|
)
|
|||||||
Loss on debt extinguishment
|
-
|
-
|
28,772
|
|||||||||
Net depreciation, amortization and accretion
|
2,641
|
2,834
|
2,880
|
|||||||||
Stock plan compensation expense (excluding ESOP)
|
2,087
|
2,205
|
2,164
|
|||||||||
ESOP compensation expense
|
1,230
|
1,213
|
1,078
|
|||||||||
Provision (credit) for loan losses
|
(1,872
|
)
|
369
|
3,921
|
||||||||
Provision for losses on OREO
|
-
|
180
|
-
|
|||||||||
Credit to reduce the liability for loans sold with recourse
|
(1,040
|
)
|
(305
|
)
|
(1,286
|
)
|
||||||
Net OTTI recognized in earnings
|
-
|
-
|
181
|
|||||||||
Increase in cash surrender value of BOLI
|
(1,743
|
)
|
(1,672
|
)
|
(1,689
|
)
|
||||||
Deferred income tax expense (credit)
|
771
|
(940
|
)
|
(2,068
|
)
|
|||||||
Excess tax benefit of stock benefit plans
|
(71
|
)
|
(292
|
)
|
(389
|
)
|
||||||
Changes in assets and liabilities:
|
||||||||||||
Originations of loans held for sale during the period
|
-
|
(1,621
|
)
|
(32,665
|
)
|
|||||||
Proceeds from sales of loans held for sale
|
-
|
2,194
|
36,755
|
|||||||||
(Increase) Decrease in other assets
|
(2,873
|
)
|
8,168
|
6,009
|
||||||||
Increase in other liabilities
|
5,573
|
5,637
|
3,663
|
|||||||||
Net cash provided by Operating Activities
|
47,263
|
61,151
|
72,705
|
|||||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||
Proceeds from maturities of investment securities held-to-maturity
|
88
|
949
|
983
|
|||||||||
Proceeds from maturities and calls of investment securities available-for-sale
|
15,000
|
14,750
|
200,320
|
|||||||||
Proceeds from sales of investment securities available-for-sale
|
3,780
|
366
|
22,415
|
|||||||||
Proceeds from sales of MBS available-for-sale
|
-
|
-
|
21,949
|
|||||||||
Proceeds from sales of trading securities
|
7,115
|
131
|
171
|
|||||||||
Purchases of investment securities available-for-sale
|
(3,884
|
)
|
(458
|
)
|
(80,153
|
)
|
||||||
Purchases of MBS available-for-sale
|
(875
|
)
|
-
|
(23,186
|
)
|
|||||||
Acquisition of trading securities
|
(8,839
|
)
|
(1,814
|
)
|
(3,158
|
)
|
||||||
Principal collected on MBS available-for-sale
|
5,863
|
17,372
|
42,822
|
|||||||||
Purchase of BOLI
|
(25,000
|
)
|
-
|
-
|
||||||||
Purchases of loans
|
(225,604
|
)
|
(52,031
|
)
|
(30,425
|
)
|
||||||
Proceeds from sale of portfolio loans
|
16,892
|
5,893
|
30,906
|
|||||||||
Net increase in loans
|
(210,770
|
)
|
(149,122
|
)
|
(50,609
|
)
|
||||||
Proceeds from the sale of OREO and real estate property owned
|
-
|
564
|
-
|
|||||||||
Proceeds from the sale of fixed assets
|
4,273
|
-
|
17,477
|
|||||||||
Purchases of fixed assets
|
(1,618
|
)
|
(1,963
|
)
|
(4,422
|
)
|
||||||
(Purchase) Redemption of FHLBNY capital stock
|
(10,356
|
)
|
(3,040
|
)
|
4,478
|
|||||||
Net cash provided by (used in) Investing Activities
|
(433,935
|
)
|
(168,403
|
)
|
149,568
|
|||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
Increase in due to depositors
|
152,646
|
27,717
|
135,728
|
|||||||||
Increase (Decrease) in escrow and other deposits
|
22,517
|
(13,349
|
)
|
10,941
|
||||||||
Repayments of FHLBNY advances
|
(1,224,500
|
)
|
(218,500
|
)
|
(172,275
|
)
|
||||||
Proceeds from FHLBNY advances
|
1,488,225
|
286,000
|
75,000
|
|||||||||
Repayments of
securities sold under agreements to repurchase ("REPOS"
)
|
-
|
-
|
(195,000
|
)
|
||||||||
Prepayment penalty on debt
|
-
|
-
|
(28,772
|
)
|
||||||||
Proceeds from exercise of stock options
|
278
|
11,228
|
5,608
|
|||||||||
Excess tax benefit of stock benefit plans
|
71
|
292
|
389
|
|||||||||
Equity award distribution
|
201
|
293
|
145
|
|||||||||
Cash dividends paid to stockholders
|
(20,106
|
)
|
(19,728
|
)
|
(19,221
|
)
|
||||||
Net cash (used in) provided by Financing Activities
|
419,332
|
73,953
|
(187,457
|
)
|
||||||||
INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS
|
32,660
|
(33,299
|
)
|
34,816
|
||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
|
45,777
|
79,076
|
44,260
|
|||||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD
|
$
|
78,437
|
$
|
45,777
|
$
|
79,076
|
||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
|
||||||||||||
Cash paid for income taxes
|
$
|
29,035
|
$
|
29,858
|
$
|
26,913
|
||||||
Cash paid for interest
|
48,329
|
47,155
|
87,281
|
|||||||||
Loans transferred to OREO
|
-
|
783
|
-
|
|||||||||
Loans transferred to held for sale
|
16,865
|
7,514
|
65,131
|
|||||||||
Amortization of unrealized loss on securities transferred from available-for-sale to held-to-maturity
|
65
|
271
|
202
|
|||||||||
Net increase (decrease) in non-credit component of OTTI
|
(32
|
)
|
(32
|
)
|
296
|
Buildings
|
2.22% to 2.50% per year
|
|
Leasehold improvements
|
Lesser of the useful life of the asset or the remaining non-cancelable terms of the related leases
|
|
Furniture, fixtures and equipment
|
10% per year
|
Year Ended December 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Numerator:
|
||||||||||||
Net Income per the Consolidated Statements of Operations
|
$
|
44,246
|
$
|
43,548
|
$
|
40,308
|
||||||
Less: Dividends paid on earnings allocated to participating securities
|
(168
|
)
|
(180
|
)
|
(184
|
)
|
||||||
Income attributable to common stock
|
$
|
44,078
|
$
|
43,368
|
$
|
40,124
|
||||||
Weighted average common shares outstanding, including participating securities
|
36,174,962
|
35,507,765
|
34,623,287
|
|||||||||
Less: weighted average participating securities
|
(301,785
|
)
|
(320,566
|
)
|
(327,326
|
)
|
||||||
Weighted average common shares outstanding
|
35,873,177
|
35,187,199
|
34,295,961
|
|||||||||
Basic EPS
|
$
|
1.23
|
$
|
1.24
|
$
|
1.18
|
||||||
Income attributable to common stock
|
$
|
44,078
|
$
|
43,368
|
$
|
40,124
|
||||||
Weighted average common shares outstanding
|
35,873,177
|
35,187,199
|
34,295,961
|
|||||||||
Weighted average common equivalent shares outstanding
|
75,339
|
119,073
|
68,492
|
|||||||||
Weighted average common and equivalent shares outstanding
|
35,948,516
|
35,306,272
|
34,364,453
|
|||||||||
Diluted EPS
|
$
|
1.23
|
$
|
1.23
|
$
|
1.17
|
Pre-tax
Amount
|
Tax Expense (Benefit)
|
After tax
Amount
|
|||
Year Ended December 31, 2014
|
|||||
Securities held-to-maturity and transferred securities
|
|||||
Change in non-credit component of OTTI
|
$32
|
$16
|
$16
|
||
Change in unrealized loss on securities transferred to held to maturity
|
65
|
29
|
36
|
||
Total securities held-to-maturity and transferred securities
|
97
|
45
|
52
|
||
Securities available-for-sale
|
|||||
Reclassification adjustment for net gains included in net gain on securities
|
(997)
|
(450)
|
(547)
|
||
Change in net unrealized gain during the period
|
(65)
|
(29)
|
(36)
|
||
Total securities available-for-sale
|
(1,062)
|
(479)
|
(583)
|
||
Defined benefit plans:
|
|||||
Reclassification adjustment for expense included in salaries and employee benefits expense
|
1,044
|
468
|
576
|
||
Change in the net actuarial gain or loss
|
(6,986)
|
(3,153)
|
(3,833)
|
||
Total defined benefit plans
|
(5,942)
|
(2,685)
|
(3,257)
|
||
Total other comprehensive income
|
$(6,907)
|
$(3,119)
|
$(3,788)
|
||
Year Ended December 31, 2013
|
|||||
Securities held-to-maturity and transferred securities:
|
|||||
Change in non-credit component of OTTI
|
$32
|
$16
|
$16
|
||
Change in unrealized loss on securities transferred to held to maturity
|
271
|
122
|
149
|
||
Total securities held-to-maturity and transferred securities
|
303
|
138
|
165
|
||
Securities available-for-sale:
|
|||||
Reclassification adjustment for net gains included in net gain on securities
|
(110)
|
(50)
|
(60)
|
||
Change in net unrealized gain during the period
|
363
|
162
|
201
|
||
Total securities available-for-sale
|
253
|
112
|
141
|
||
Defined benefit plans:
|
|||||
Reclassification adjustment for expense included in in salaries and employee benefits expense
|
2,396
|
1,082
|
1,314
|
||
Change in the net actuarial gain or loss
|
5,944
|
2,683
|
3,261
|
||
Total defined benefit plans
|
8,340
|
3,765
|
4,575
|
||
Total other comprehensive income
|
$8,896
|
$4,015
|
$4,881
|
||
Year Ended December 31, 2012
|
|||||
Securities held-to-maturity and transferred securities:
|
|||||
Change in non-credit component of OTTI
|
$296
|
$134
|
$162
|
||
Change in unrealized loss on securities transferred to held to maturity
|
202
|
91
|
111
|
||
Total securities held-to-maturity and transferred securities
|
498
|
225
|
273
|
||
Securities available-for-sale:
|
|||||
Reclassification adjustment for net gains included in net gain on securities
|
(1,022)
|
(461)
|
(561)
|
||
Change in net unrealized gain during the period
|
(2,441)
|
(1,102)
|
(1,339)
|
||
Total securities available-for-sale
|
(3,463)
|
(1,563)
|
(1,900)
|
||
Defined benefit plans:
|
|||||
Reclassification adjustment for expense included in salaries and employee benefits expense
|
2,166
|
978
|
1,188
|
||
Change in the net actuarial gain or loss
|
925
|
417
|
508
|
||
Total defined benefit plans
|
3,091
|
1,395
|
1,696
|
||
Total other comprehensive income
|
$126
|
$57
|
$69
|
Securities Held-to-Maturity and Transferred Securities
|
Securities Available-for-Sale
|
Defined Benefit Plans
|
Total Accumulated Other Comprehensive Income (Loss)
|
|||||||||||||
Balance as of January 1, 2014
|
$
|
(878
|
)
|
$
|
1,319
|
$
|
(5,200
|
)
|
$
|
(4,759
|
)
|
|||||
Other comprehensive income (loss) before reclassifications
|
52
|
(36
|
)
|
(3,833
|
)
|
(3,817
|
)
|
|||||||||
Amounts reclassified from accumulated other
comprehensive income (loss)
|
-
|
(547
|
)
|
576
|
29
|
|||||||||||
Net other comprehensive income (loss) during the period
|
52
|
(583
|
)
|
(3,257
|
)
|
(3,788
|
)
|
|||||||||
Balance as of December 31, 2014
|
$
|
(826
|
)
|
$
|
736
|
$
|
(8,457
|
)
|
$
|
(8,547
|
)
|
|||||
Balance as of January 1, 2013
|
$
|
(1,043
|
)
|
$
|
1,178
|
$
|
(9,775
|
)
|
$
|
(9,640
|
)
|
|||||
Other comprehensive income before reclassifications
|
165
|
201
|
3,261
|
3,627
|
||||||||||||
Amounts reclassified from accumulated other
comprehensive income (loss)
|
-
|
(60
|
)
|
1,314
|
1,254
|
|||||||||||
Net other comprehensive income during the period
|
165
|
141
|
4,575
|
4,881
|
||||||||||||
Balance as of December 31, 2013
|
$
|
(878
|
)
|
$
|
1,319
|
$
|
(5,200
|
)
|
$
|
(4,759
|
)
|
Purchase
Amortized/ Historical Cost
|
Recorded Amortized/
Historical Cost
(1)
|
Unrealized
Gains
|
Unrealized Losses
|
Fair
Value
|
||||||||||||||||
Investment securities held-to-maturity:
|
||||||||||||||||||||
Pooled bank trust preferred securities ("TRUPS")
|
$
|
15,815
|
$
|
5,367
|
$
|
1,119
|
$
|
(171
|
)
|
$
|
6,315
|
|||||||||
Available-for-sale securities:
|
||||||||||||||||||||
Investment securities
|
||||||||||||||||||||
Registered Mutual Funds
|
3,860
|
3,860
|
-
|
(124
|
)
|
3,736
|
||||||||||||||
Agency notes
|
70
|
70
|
-
|
-
|
70
|
|||||||||||||||
MBS
|
||||||||||||||||||||
Pass-through MBS issued by Government Sponsored Entities ("GSEs")
|
24,154
|
24,154
|
1,453
|
-
|
25,607
|
|||||||||||||||
Private issuer pass through MBS
|
449
|
449
|
6
|
-
|
455
|
|||||||||||||||
Private issuer collateralized mortgage obligations ("CMOs")
|
343
|
343
|
4
|
-
|
347
|
Purchase
Amortized/ Historical Cost
|
Recorded Amortized/
Historical Cost
(1)
|
Unrealized
Gains
|
Unrealized Losses
|
Fair
Value
|
||||||||||||||||
Investment securities held-to-maturity:
|
||||||||||||||||||||
TRUPS
|
$
|
15,885
|
$
|
5,341
|
$
|
118
|
$
|
(296
|
)
|
$
|
5,163
|
|||||||||
Available-for-sale securities:
|
||||||||||||||||||||
Investment securities
|
||||||||||||||||||||
Registered Mutual Funds
|
2,866
|
2,760
|
815
|
(17
|
)
|
3,558
|
||||||||||||||
Agency notes
|
15,070
|
15,070
|
21
|
-
|
15,091
|
|||||||||||||||
MBS
|
||||||||||||||||||||
Pass-through MBS issued by GSEs
|
28,407
|
28,407
|
1,552
|
-
|
29,959
|
|||||||||||||||
CMOs issued by GSEs
|
319
|
319
|
2
|
-
|
321
|
|||||||||||||||
Private issuer pass through MBS
|
662
|
662
|
18
|
-
|
680
|
|||||||||||||||
Private issuer CMOs
|
574
|
574
|
9
|
-
|
583
|
Amortized Cost
|
Estimated Fair Value
|
|
Due after one year through three years
|
$70
|
$70
|
TOTAL
|
$70
|
$70
|
For the Year Ended December 31,
|
||
2014
|
2013
|
|
Cumulative balance at the beginning of the period
|
$997
|
$1,268
|
Amortization
|
(65)
|
(271)
|
Cumulative balance at end of the period
|
$932
|
$997
|
At or for the Year Ended December 31, 2014
|
|||
Credit Related OTTI Recognized in Earnings
|
Non-Credit OTTI Recognized in Accumulated Other Comprehensive Loss
|
Total OTTI Charge
|
|
Cumulative pre-tax balance at the beginning of the period
|
$8,945
|
$601
|
$9,546
|
Amortization of previously recognized OTTI
|
-
|
(32)
|
(32)
|
Cumulative pre-tax balance at end of the period
|
$8,945
|
$569
|
$9,514
|
At or for the Year Ended
December 31, 2013
|
At or for the Year Ended
December 31, 2012
|
||||||
Credit Related
OTTI Recognized
in Earnings
|
Non-Credit OTTI Recognized in Accumulated Other Comprehensive Loss
|
Total
OTTI Charge
|
Credit Related OTTI Recognized in Earnings
|
Non-Credit OTTI Recognized in Accumulated Other Comprehensive Loss
|
Total OTTI Charge
|
||
Cumulative pre-tax balance at the beginning of
the period
|
$8,945
|
$634
|
$9,579
|
$8,974
|
$930
|
$9,904
|
|
OTTI recognized during the period
|
-
|
-
|
-
|
181
|
6
|
187
|
|
Reductions and transfers to credit-related OTTI
|
-
|
-
|
-
|
-
|
(181)
|
(181)
|
|
Amortization of previously recognized OTTI
|
-
|
(33)
|
(33)
|
(210)
|
(121)
|
(331)
|
|
Cumulative pre-tax balance at end of the period
|
$8,945
|
$601
|
$9,546
|
$8,945
|
$634
|
$9,579
|
At or For the Year Ended December 31,
|
|||
2014
|
2013
|
2012
|
|
Cumulative balance at the beginning of the period
|
$106
|
$348
|
$1,425
|
Reduction of OTTI for securities sold during the period
|
(106)
|
(242)
|
(1,077)
|
Cumulative balance at end of the period
|
$-
|
$106
|
$348
|
·
|
Based upon an internal review of the collateral backing the TRUPS portfolio, which accounted for current and prospective deferrals, the securities could reasonably be expected to continue making all contractual payments
|
·
|
The Company does not intend to sell these securities prior to full recovery of their impairment
|
·
|
There were no cash or working capital requirements nor contractual or regulatory obligations that would compel the Company to sell these securities prior to their forecasted recovery or maturity
|
·
|
The securities have a pool of underlying issuers comprised primarily of banks
|
·
|
None of the securities have exposure to real estate investment trust issued debt (which has experienced high default rates)
|
·
|
The securities feature either a mandatory auction or a de-leveraging mechanism that could result in principal repayments to the Bank prior to the stated maturity of the security
|
·
|
The securities are adequately collateralized
|
Less than 12
Months Consecutive
Unrealized Losses
|
12 Months or More
Consecutive
Unrealized Losses
|
Total
|
||||
Fair Value
|
Gross Unrecognized/
Unrealized Losses
|
Fair Value
|
Gross Unrecognized/
Unrealized Losses
|
Fair Value
|
Gross Unrecognized/
Unrealized Losses
|
|
Held-to-Maturity Securities:
|
||||||
TRUPS
|
$-
|
$-
|
$5,163
|
$1,775
|
$5,163
|
$1,775
|
Available-for-Sale Securities:
|
||||||
Registered Mutual Funds
|
536
|
17
|
-
|
-
|
536
|
17
|
Balance at December 31, 2014
|
||||||
Grade
|
One- to Four-Family
Residential, Including Condominium and
Cooperative Apartment
|
Multifamily
Residential and Residential
Mixed Use
|
Commercial
Mixed Use Real Estate
|
Commercial Real Estate
|
Construction
|
Total Real Estate Loans
|
Not Graded(1)
|
$9,091
|
$-
|
$-
|
$-
|
$-
|
$9,091
|
Pass
|
60,764
|
3,271,430
|
317,718
|
391,227
|
-
|
4,041,139
|
Special Mention
|
1,370
|
20,738
|
4,944
|
6,431
|
-
|
33,483
|
Substandard
|
2,275
|
6,280
|
6,005
|
19,138
|
-
|
33,698
|
Doubtful
|
-
|
-
|
-
|
-
|
-
|
-
|
Total
|
$73,500
|
$3,298,448
|
$328,667
|
$416,796
|
$-
|
$4,117,411
|
Balance at December 31, 2013
|
||||||
Grade
|
One- to Four-Family
Residential, Including Condominium and
Cooperative Apartment
|
Multifamily
Residential and Residential
Mixed Use
|
Commercial
Mixed Use Real Estate
|
Commercial Real Estate
|
Construction
|
Total Real Estate Loans
|
Not Graded(1)
|
$11,370
|
$-
|
$-
|
$-
|
$-
|
$11,370
|
Pass
|
53,472
|
2,900,979
|
364,808
|
299,122
|
-
|
3,618,381
|
Special Mention
|
6,651
|
17,938
|
5,203
|
4,420
|
-
|
34,212
|
Substandard
|
2,463
|
3,633
|
4,579
|
21,154
|
268
|
32,097
|
Doubtful
|
-
|
-
|
1,320
|
-
|
-
|
1,320
|
Total
|
$73,956
|
$2,922,550
|
$375,910
|
$324,696
|
$268
|
$3,697,380
|
Grade
|
Balance at December 31, 2014
|
Balance at December 31, 2013
|
Performing
|
$1,825
|
$2,136
|
Non-accrual
|
4
|
3
|
Total
|
$1,829
|
$2,139
|
At December 31, 2014
|
|||||||
30 to 59 Days Past Due
|
60 to 89 Days Past Due
|
Loans 90 Days or More Past Due and Still Accruing Interest
|
Non-accrual
(1)
|
Total Past Due
|
Current
|
Total Loans
|
|
Real Estate:
|
|
|
|
|
|
|
|
One- to four-family residential, including
condominium and cooperative apartment
|
$240
|
$-
|
$-
|
$1,310
|
$1,550
|
$71,950
|
$73,500
|
Multifamily residential and residential mixed use
|
1,187
|
-
|
2,922
|
167
|
4,276
|
3,294,172
|
3,298,448
|
Commercial mixed use real estate
|
-
|
-
|
411
|
-
|
411
|
328,256
|
328,667
|
Commercial real estate
|
-
|
-
|
-
|
4,717
|
4,717
|
412,079
|
416,796
|
Construction
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Total real estate
|
$1,427
|
$-
|
$3,333
|
$6,194
|
$10,954
|
$4,106,457
|
$4,117,411
|
Consumer
|
$2
|
$-
|
$-
|
$4
|
$6
|
$1,823
|
$1,829
|
At December 31, 2013
|
|||||||
30 to 59 Days Past Due
|
60 to 89 Days Past Due
|
Loans 90 Days or More Past Due and Still Accruing Interest
|
Non-accrual
(1)
|
Total Past Due
|
Current
|
Total Loans
|
|
Real Estate:
|
|
|
|
|
|
|
|
One- to four-family residential, including
condominium and cooperative apartment
|
$143
|
$302
|
$-
|
$1,242
|
$1,687
|
$72,269
|
$73,956
|
Multifamily residential and residential mixed use
|
744
|
-
|
1,031
|
1,197
|
2,972
|
2,919,578
|
2,922,550
|
Commercial mixed use real estate
|
-
|
-
|
-
|
4,400
|
4,400
|
371,510
|
375,910
|
Commercial real estate
|
404
|
-
|
-
|
5,707
|
6,111
|
318,585
|
324,696
|
Construction
|
-
|
-
|
-
|
-
|
-
|
268
|
268
|
Total real estate
|
$1,291
|
$302
|
$1,031
|
$12,546
|
$15,170
|
$3,682,210
|
$3,697,380
|
Consumer
|
$6
|
$4
|
$-
|
$3
|
$13
|
$2,126
|
$2,139
|
As of December 31, 2014
|
As of December 31, 2013
|
||||
No. of Loans
|
Balance
|
No. of Loans
|
Balance
|
||
One- to four-family residential, including condominium and cooperative apartment
|
2
|
$605
|
3
|
$934
|
|
Multifamily residential and residential mixed use
|
4
|
1,105
|
4
|
1,148
|
|
Commercial mixed use real estate
|
1
|
4,400
|
-
|
-
|
|
Commercial real estate
|
4
|
13,707
|
5
|
22,245
|
|
Total real estate
|
11
|
$19,817
|
12
|
$24,327
|
As of December 31, 2014
|
As of December 31, 2013
|
||||
No. of Loans
|
Balance
|
No. of Loans
|
Balance
|
||
Outstanding principal balance at period end
|
11
|
$19,817
|
12
|
$24,327
|
|
TDRs on accrual status at period end
|
9
|
15,100
|
10
|
18,620
|
|
TDRs on non-accrual status at period end
|
2
|
4,717
|
2
|
5,707
|
For the Year Ended
December 31, 2014
|
For the Year Ended
December 31, 2013
|
||||||
Number of Loans
|
Pre-Modification
Outstanding Recorded Investment
|
Post-Modification Outstanding Recorded Investment
|
Number of Loans
|
Pre-Modification
Outstanding Recorded Investment
|
Post-Modification Outstanding Recorded Investment
|
||
Loan modifications during the period
that met the definition of a TDR:
|
|||||||
Commercial mixed use real estate
|
1
|
$4,400
|
$4,400
|
-
|
-
|
-
|
|
Commercial real estate
|
1
|
3,500
|
3,500
|
-
|
-
|
-
|
|
TOTAL
|
2
|
$7,900
|
$7,900
|
-
|
-
|
-
|
(i)
|
Charge-off experience (including peer charge-off experience)
|
(ii)
|
Economic conditions
|
(iii)
|
Underwriting standards or experience
|
(iv)
|
Loan concentrations
|
(v)
|
Regulatory climate
|
(vi)
|
Nature and volume of the portfolio
|
(vii)
|
Changes in the quality and scope of the loan review function
|
At or for the Year Ended December 31, 2014
|
|||||||
|
Real Estate Loans
|
Consumer Loans
|
|||||
|
One- to Four Family Residential,
Including Condominium and
Cooperative
Apartment
|
Multifamily Residential and Residential Mixed Use
|
Commercial
Mixed Use Real Estate
|
Commercial Real Estate
|
Construction
|
Total Real Estate
|
|
Beginning balance
|
$236
|
$13,840
|
$3,003
|
$3,047
|
$3
|
$20,129
|
$24
|
Provision (credit) for loan losses
|
(164)
|
(76)
|
(1,710)
|
72
|
(3)
|
(1,881)
|
9
|
Charge-offs
|
(46)
|
(87)
|
(30)
|
(306)
|
-
|
(469)
|
(9)
|
Recoveries
|
124
|
175
|
381
|
10
|
-
|
690
|
-
|
Ending balance
|
$150
|
$13,852
|
$1,644
|
$2,823
|
$-
|
$18,469
|
$24
|
Ending balance – loans individually
evaluated for impairment
|
$605
|
$1,272
|
$4,400
|
$13,707
|
$-
|
$19,984
|
$-
|
Ending balance – loans collectively
evaluated for impairment
|
72,895
|
3,297,176
|
324,267
|
403,089
|
-
|
4,097,427
|
1,829
|
Allowance balance associated with loans
individually evaluated for impairment
|
-
|
-
|
-
|
19
|
-
|
19
|
-
|
Allowance balance associated with loans
collectively evaluated for impairment
|
150
|
13,852
|
1,644
|
2,804
|
-
|
18,450
|
24
|
At or for the Year Ended December 31, 2013
|
|||||||
|
Real Estate Loans
|
Consumer Loans
|
|||||
|
One- to Four Family Residential,
Including Condominium and
Cooperative
Apartment
|
Multifamily Residential and Residential Mixed Use
|
Commercial
Mixed Use Real Estate
|
Commercial Real Estate
|
Construction
|
Total Real Estate
|
|
Beginning balance
|
$344
|
$14,299
|
$2,474
|
$3,382
|
$24
|
$20,523
|
$27
|
Provision (credit) for loan losses
|
(187)
|
10
|
891
|
(342)
|
(21)
|
351
|
18
|
Charge-offs
|
(117)
|
(504)
|
(391)
|
(9)
|
-
|
(1,021)
|
(21)
|
Recoveries
|
196
|
35
|
29
|
16
|
-
|
276
|
-
|
Ending balance
|
$236
|
$13,840
|
$3,003
|
$3,047
|
$3
|
$20,129
|
$24
|
Ending balance – loans individually
evaluated for impairment
|
$1,199
|
$2,345
|
$4,400
|
$22,245
|
$-
|
$30,189
|
$-
|
Ending balance – loans collectively
evaluated for impairment
|
72,757
|
2,920,205
|
371,510
|
302,451
|
268
|
3,667,191
|
2,139
|
Allowance balance associated with loans
individually evaluated for impairment
|
-
|
-
|
1,320
|
451
|
-
|
1,771
|
-
|
Allowance balance associated with loans
collectively evaluated for impairment
|
236
|
13,840
|
1,683
|
2,596
|
3
|
18,358
|
24
|
At or for the Year Ended December 31, 2012
|
|||||||
|
Real Estate Loans
|
Consumer Loans
|
|||||
|
One- to Four Family Residential,
Including Condominium and
Cooperative
Apartment
|
Multifamily Residential and Residential Mixed Use
|
Commercial Mixed Use
Real Estate
|
Commercial Real Estate
|
Construction
|
Total Real Estate
|
|
Beginning balance
|
$480
|
$14,313
|
$1,528
|
$3,783
|
$124
|
$20,228
|
$26
|
Provision (credit) for loan losses
|
624
|
1,583
|
1,744
|
56
|
(97)
|
3,910
|
11
|
Charge-offs
|
(777)
|
(2,478)
|
(821)
|
(521)
|
(3)
|
(4,600)
|
(10)
|
Recoveries
|
17
|
829
|
18
|
39
|
-
|
903
|
-
|
Transfer from reserve for loan commitments
|
-
|
52
|
5
|
25
|
-
|
82
|
-
|
Ending balance
|
$344
|
$14,299
|
$2,474
|
$3,382
|
$24
|
$20,523
|
$27
|
Ending balance – loans individually
evaluated for impairment
|
$1,291
|
$2,460
|
$1,900
|
$47,493
|
$-
|
$53,144
|
$-
|
Ending balance – loans collectively
evaluated for impairment
|
90,585
|
2,673,909
|
338,233
|
347,038
|
476
|
3,450,241
|
2,423
|
Allowance balance associated with loans
individually evaluated for impairment
|
7
|
-
|
-
|
513
|
-
|
520
|
-
|
Allowance balance associated with loans
collectively evaluated for impairment
|
337
|
14,299
|
2,474
|
2,869
|
24
|
20,003
|
27
|
At December 31, 2014
|
For the Year Ended
December 31, 2014
|
|||||
Unpaid Principal Balance at Period End
|
Recorded Investment
at Period End(1)
|
Reserve Balance Allocated within the Allowance for Loan Losses at Period End
|
Average Recorded Investment(1)
|
Interest
Income Recognized
|
||
One- to Four Family Residential, Including
Condominium and Cooperative Apartment
|
||||||
With no allocated reserve
|
$646
|
$605
|
$-
|
$747
|
$58
|
|
With an allocated reserve
|
-
|
-
|
-
|
41
|
-
|
|
Multifamily Residential and Residential Mixed Use
|
||||||
With no allocated reserve
|
1,272
|
1,272
|
-
|
2,147
|
87
|
|
With an allocated reserve
|
-
|
-
|
-
|
-
|
-
|
|
Commercial Mixed Use Real Estate
|
|
|||||
With no allocated reserve
|
4,425
|
4,400
|
-
|
2,640
|
237
|
|
With an allocated reserve
|
-
|
-
|
-
|
1,760
|
-
|
|
Commercial Real Estate
|
|
|||||
With no allocated reserve
|
10,306
|
8,207
|
-
|
7,470
|
148
|
|
With an allocated reserve
|
5,500
|
5,500
|
19
|
9,317
|
495
|
|
Construction
|
|
|||||
With no allocated reserve
|
-
|
-
|
-
|
-
|
-
|
|
With an allocated reserve
|
-
|
-
|
-
|
-
|
-
|
|
Total
|
|
|||||
With no allocated reserve
|
$16,649
|
$14,484
|
$-
|
$13,004
|
$530
|
|
With an allocated reserve
|
$5,500
|
$5,500
|
$19
|
$11,118
|
$495
|
(1)
|
The recorded investment excludes accrued interest receivable and loan origination fees, net, due to immateriality.
|
At or for the Year Ended December 31,
|
|||
2014
|
2013
|
2012
|
|
Outstanding balance of multifamily loans serviced for FNMA at period end
|
$-
|
$208,375
|
$256,731
|
Total First Loss Position at end of period
|
-
|
15,428
|
15,428
|
Reserve Liability on the First Loss Position
|
|||
Balance at beginning of period
|
$1,040
|
$1,383
|
$2,993
|
Credit for losses on problem loans
(1)
|
(1,040)
|
(305)
|
(1,286)
|
Charge-offs and other net reductions in balance
|
-
|
(38)
|
(324)
|
Balance at period end
|
$-
|
$1,040
|
$1,383
|
Year Ended December 31,
|
|||
2014
|
2013
|
2012
|
|
Gain on the sale of loans originated for sale
|
$27
|
$13
|
$68
|
Credit to reduce the liability for the First Loss Position
|
1,040
|
305
|
1,286
|
Mortgage banking fees
|
158
|
155
|
414
|
Net mortgage banking income
|
$1,225
|
$473
|
$1,768
|
At December 31,
2014
|
At December 31,
2013
|
|
Land
|
$7,067
|
$7,067
|
Buildings
|
19,952
|
19,445
|
Leasehold improvements
|
12,045
|
11,665
|
Furniture, fixtures and equipment
|
14,080
|
13,366
|
Premises and fixed assets, gross
|
$53,144
|
$51,543
|
Less: accumulated depreciation and amortization
|
(28,079)
|
(25,466)
|
Premises and fixed assets, net
|
$25,065
|
$26,077
|
Premises held for sale(1)
|
-
|
3,624
|
(1)
|
At December 31, 2013, the Company had a pending contract of sale on a real estate premises with a net book value of $3,624. This sale was completed during the year ended December 31, 2014, and the net proceeds from the sale exceeded the current book value.
|
At December 31, 2014
|
At December 31, 2013
|
|||
Effective Cost
|
Liability
|
Effective Cost
|
Liability
|
|
Savings accounts
|
0.05%
|
$372,753
|
0.05%
|
$376,900
|
Certificates of deposit ("CDs")
|
1.43
|
926,318
|
1.55
|
828,409
|
Money market accounts
|
0.61
|
1,094,698
|
0.50
|
1,040,079
|
Interest bearing checking accounts
|
0.08
|
78,430
|
0.08
|
87,301
|
Non-interest bearing checking accounts
|
-
|
187,593
|
-
|
174,457
|
TOTAL
|
0.76%
|
$2,659,792
|
0.73%
|
$2,507,146
|
At or for the Year Ended December 31,
|
|||
2014
|
2013
|
2012
|
|
Balance outstanding at end of period
|
$-
|
$-
|
$-
|
Average interest cost at end of period
|
-%
|
-%
|
-%
|
Average balance outstanding during the period
|
$-
|
$-
|
$132,910
|
Average interest cost during the period
|
-%
|
-%
|
26.24%(a)
|
Estimated fair value of underlying collateral
|
$-
|
$-
|
$-
|
Maximum balance outstanding at month end during the year
|
$-
|
$-
|
$195,000
|
Year Ending December 31,
|
Maturing
Balance
|
Weighted Average Interest Rate
|
||||||
2015
|
$
|
569,500
|
1.48
|
%
|
||||
2016
|
151,000
|
2.03
|
||||||
2017
|
302,075
|
2.04
|
||||||
2018
|
77,100
|
1.63
|
||||||
2019
|
36,250
|
1.80
|
||||||
After 2019
|
37,800
|
2.46
|
||||||
TOTAL
|
$
|
1,173,725
|
1.74
|
%
|
Year Ended December 31,
|
Year Ended December 31,
|
Year Ended December 31,
|
||||||||||||||||||||||||||||||||||
2014
|
2013
|
2012
|
||||||||||||||||||||||||||||||||||
Federal
|
State
and City
|
Total
|
Federal
|
State
and City
|
Total
|
Federal
|
State
and City
|
Total
|
||||||||||||||||||||||||||||
Current
|
$
|
21,232
|
$
|
8,121
|
$
|
29,353
|
$
|
22,475
|
$
|
7,806
|
$
|
30,281
|
$
|
21,607
|
$
|
7,351
|
$
|
28,958
|
||||||||||||||||||
Deferred
|
540
|
231
|
771
|
362
|
(1,302
|
)
|
(940
|
)
|
(1,395
|
)
|
(673
|
)
|
(2,068
|
)
|
||||||||||||||||||||||
TOTAL
|
$
|
21,772
|
$
|
8,352
|
$
|
30,124
|
$
|
22,837
|
$
|
6,504
|
$
|
29,341
|
$
|
20,212
|
$
|
6,678
|
$
|
26,890
|
Year Ended December 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Tax at Federal statutory rate
|
$
|
26,029
|
$
|
25,511
|
$
|
23,519
|
||||||
State and local taxes, net of federal income tax benefit
|
5,466
|
4,228
|
4,341
|
|||||||||
Benefit plan differences
|
(156
|
)
|
(445
|
)
|
(114
|
)
|
||||||
Adjustments for prior period returns and tax items
|
(164
|
)
|
422
|
63
|
||||||||
Investment in BOLI
|
(610
|
)
|
(585
|
)
|
(591
|
)
|
||||||
Other, net
|
(441
|
)
|
210
|
(328
|
)
|
|||||||
TOTAL
|
$
|
30,124
|
$
|
29,341
|
$
|
26,890
|
||||||
Effective tax rate
|
40.51
|
%
|
40.25
|
%
|
40.02
|
%
|
At December 31,
|
||||||||
Deferred tax assets:
|
2014
|
2013
|
||||||
Allowance for loan losses
|
$
|
8,261
|
$
|
9,518
|
||||
Employee benefit plans
|
19,487
|
15,478
|
||||||
Credit component of OTTI
|
4,023
|
4,088
|
||||||
Tax effect of other components of income on investment securities and MBS
|
109
|
-
|
||||||
Other
|
1,515
|
2,435
|
||||||
Total deferred tax assets
|
33,395
|
31,519
|
||||||
Deferred tax liabilities:
|
||||||||
Tax effect of other components of income on investment securities and MBS
|
-
|
559
|
||||||
Difference in book and tax carrying value of fixed assets
|
983
|
986
|
||||||
Other
|
16
|
109
|
||||||
Total deferred tax liabilities
|
999
|
1,654
|
||||||
Net deferred tax asset (recorded in other assets)
|
$
|
32,396
|
$
|
29,865
|
Year Ended December 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Interest cost
|
$
|
1,003
|
$
|
877
|
$
|
921
|
||||||
Expected return on plan assets
|
(1,774
|
)
|
(1,518
|
)
|
(1,451
|
)
|
||||||
Amortization of unrealized loss
|
948
|
1,803
|
1,792
|
|||||||||
Net periodic cost
|
$
|
177
|
$
|
1,162
|
$
|
1,262
|
At December 31,
|
||||||||
2014
|
2013
|
|||||||
Accumulated benefit obligation at end of period
|
$
|
27,635
|
$
|
22,751
|
||||
Reconciliation of Projected benefit obligation:
|
||||||||
Projected benefit obligation at beginning of period
|
$
|
22,751
|
$
|
24,640
|
||||
Interest cost
|
1,003
|
877
|
||||||
Actuarial (gain) loss
|
5,166
|
(1,541
|
)
|
|||||
Benefit payments
|
(1,183
|
)
|
(1,099
|
)
|
||||
Settlements
|
(102
|
)
|
(126
|
)
|
||||
Projected benefit obligation at end of period
|
27,635
|
22,751
|
||||||
Plan assets at fair value (investments in trust funds managed by trustee)
|
||||||||
Balance at beginning of period
|
24,402
|
20,958
|
||||||
Return on plan assets
|
1,327
|
4,156
|
||||||
Contributions
|
13
|
513
|
||||||
Benefit payments
|
(1,183
|
)
|
(1,099
|
)
|
||||
Settlements
|
(102
|
)
|
(126
|
)
|
||||
Balance at end of period
|
24,457
|
24,402
|
||||||
Funded status at end of year
|
$
|
(3,178
|
)
|
$
|
1,651
|
At December 31,
|
||
2014
|
2013
|
|
Balance at beginning of period
|
$(8,798)
|
$(14,780)
|
Amortization of unrealized loss
|
948
|
1,803
|
Gain (loss) recognized during the year
|
(5,613)
|
4,179
|
Balance at the end of the period
|
$(13,463)
|
$(8,798)
|
Period end component of accumulated other comprehensive loss (net of tax)
|
7,384
|
4,826
|
At or for the Year Ended December 31,
|
|||
2014
|
2013
|
2012
|
|
Discount rate used for net periodic cost
|
4.56%
|
3.67%
|
4.15%
|
Discount rate used to determine benefit obligation at period end
|
3.72
|
4.56
|
3.67
|
Expected long-term return on plan assets used for net periodic cost
|
7.50
|
7.50
|
7.50
|
Expected long-term return on plan assets used to determine benefit obligation at period end
|
7.00
|
7.50
|
7.50
|
At December 31,
|
||
2014
|
2013
|
|
Asset Category
|
||
Equity securities
|
66%
|
71%
|
Debt securities (bond mutual funds)
|
32
|
29
|
Cash equivalents
|
2
|
-
|
Total
|
100%
|
100%
|
Fair Value Measurements Using
|
|||||
Description
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
Significant Other Observable Inputs (Level 2)
|
Significant Unobservable Inputs
(Level 3)
|
Total
|
|
Mutual Funds (all registered and publicly traded):
|
|||||
Domestic Large Cap
|
$2,920
|
-
|
-
|
$2,920
|
|
Domestic Mid Cap
|
1,417
|
-
|
-
|
1,417
|
|
Domestic Small Cap
|
499
|
-
|
-
|
499
|
|
International Equity
|
3,076
|
-
|
-
|
3,076
|
|
Fixed Income
|
7,786
|
-
|
-
|
7,786
|
|
Cash equivalents
|
687
|
-
|
-
|
687
|
|
Common collective investment funds:
|
|||||
Domestic Large Cap
|
-
|
5,012
|
-
|
5,012
|
|
Domestic Mid Cap
|
-
|
679
|
-
|
679
|
|
Domestic Small Cap
|
-
|
1,483
|
-
|
1,483
|
|
International Equity
|
-
|
898
|
-
|
898
|
|
Total Plan Assets
|
$24,457
|
Fair Value Measurements Using
|
|||||
Description
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
Significant Other Observable Inputs (Level 2)
|
Significant Unobservable Inputs
(Level 3)
|
Total
|
|
Mutual Funds (all registered and publicly traded) :
|
|||||
Domestic Large Cap
|
$6,621
|
-
|
-
|
$6,621
|
|
Domestic Small Cap
|
3,455
|
-
|
-
|
3,455
|
|
International Equity
|
2,790
|
-
|
-
|
2,790
|
|
Fixed Income
|
4,747
|
-
|
-
|
4,747
|
|
Common collective investment funds:
|
|||||
Domestic Large Cap
|
-
|
4,435
|
-
|
4,435
|
|
Fixed Income
|
-
|
2,354
|
-
|
2,354
|
|
Total Plan Assets
|
$24,402
|
Year Ending December 31,
|
||
2015
|
$1,616
|
|
2016
|
1,639
|
|
2017
|
1,625
|
|
2018
|
1,616
|
|
2019
|
1,613
|
|
2020 to 2024
|
7,858
|
Year Ended December 31,
|
|||
2014
|
2013
|
2012
|
|
Interest cost
|
$347
|
$281
|
$304
|
Amortization of unrealized loss
|
98
|
545
|
372
|
Net periodic cost
|
$445
|
$826
|
$676
|
At December 31,
|
||||||||
2014
|
2013
|
|||||||
Accumulated benefit obligation at end of period
|
$
|
11,077
|
$
|
8,645
|
||||
Reconciliation of projected benefit obligation:
|
||||||||
Projected benefit obligation at beginning of period
|
$
|
8,645
|
$
|
8,958
|
||||
Interest cost
|
347
|
281
|
||||||
Benefit payments
|
(181
|
)
|
(181
|
)
|
||||
Actuarial (gain) loss
|
2,266
|
(413
|
)
|
|||||
Projected benefit obligation at end of period
|
11,077
|
8,645
|
||||||
Plan assets at fair value:
|
||||||||
Balance at beginning of period
|
-
|
-
|
||||||
Contributions
|
181
|
181
|
||||||
Benefit payments
|
(181
|
)
|
(181
|
)
|
||||
Balance at end of period
|
-
|
-
|
||||||
Funded status at the end of the year:
|
$
|
(11,077
|
)
|
$
|
(8,645
|
)
|
At December 31,
|
||
2014
|
2013
|
|
Balance at beginning of period
|
$(1,081)
|
$(2,039)
|
Adjustment for change in actuarial calculation
|
-
|
-
|
Amortization of unrealized loss
|
98
|
545
|
Gain (loss) recognized during the year
|
(2,267)
|
413
|
Balance at the end of the period
|
$(3,250)
|
$(1,081)
|
Period end component of accumulated other comprehensive loss (net of tax)
|
1,782
|
593
|
At or For the Year
Ended December 31,
|
|||
2014
|
2013
|
2012
|
|
Discount rate used for net periodic cost – BMP
|
4.00%
|
3.09%
|
3.77%
|
Discount rate used for net periodic cost – Director Retirement Plan
|
4.22
|
3.30
|
3.84
|
Discount rate used to determine BMP benefit obligation at period end
|
3.39
|
4.00
|
3.09
|
Discount rate used to determine Director Retirement Plan benefit obligation at period end
|
3.49
|
4.22
|
3.30
|
Year Ending December 31,
|
||
2015
|
$792
|
|
2016
|
831
|
|
2017
|
819
|
|
2018
|
807
|
|
2019
|
792
|
|
2020 to 2024
|
3,870
|
Year Ended December 31,
|
|||
2014
|
2013
|
2012
|
|
Service cost
|
$41
|
$60
|
$83
|
Interest cost
|
232
|
227
|
236
|
Amortization of unrealized loss
|
-
|
48
|
2
|
Net periodic cost
|
$273
|
$335
|
$321
|
At or for the Year
Ended December 31,
|
|||
2014
|
2013
|
2012
|
|
Discount rate used for net periodic cost
|
4.72%
|
3.72%
|
4.28%
|
Rate of increase in compensation levels used for net periodic cost
|
3.50
|
3.50
|
3.50
|
Discount rate used to determine benefit obligation at period end
|
3.80
|
4.72
|
3.72
|
Rate of increase in compensation levels used to determine benefit obligation at period end
|
3.50
|
3.50
|
3.50
|
At December 31,
|
At December 31,
|
|
2014
|
2013
|
|
Accumulated benefit obligation at end of period
|
$4,284
|
$4,998
|
Reconciliation of projected benefit obligation:
|
||
Projected benefit obligation at beginning of period
|
$4,998
|
$6,191
|
Service cost
|
41
|
60
|
Interest cost
|
232
|
227
|
Actuarial gain (loss)
|
309
|
(1,352)
|
Benefit payments
|
(95)
|
(128)
|
Plan amendments
|
(1,201)
|
-
|
Projected benefit obligation at end of period
|
4,284
|
4,998
|
Plan assets at fair value:
|
||
Balance at beginning of period
|
-
|
-
|
Contributions
|
95
|
128
|
Benefit payments
|
(95)
|
(128)
|
Balance at end of period
|
-
|
-
|
Funded status:
|
||
Deficiency of plan assets over projected benefit obligation
|
(4,284)
|
(4,998)
|
Unrecognized loss from experience different from that assumed
|
N/A
|
N/A
|
Unrecognized net past service liability
|
N/A
|
N/A
|
Accrued expense included in other liabilities
|
$(4,284)
|
$(4,998)
|
At December 31,
|
||
2014
|
2013
|
|
Balance at beginning of period
|
$400
|
$(1,000)
|
Amortization of unrealized loss
|
-
|
48
|
Gain (loss) recognized during the year
|
(309)
|
1,352
|
Plan amendments
|
1,201
|
-
|
Balance at the end of the period
|
$1,292
|
$400
|
Period end component of accumulated other comprehensive loss (net of tax)
|
(709)
|
(219)
|
Year Ending December 31,
|
||
2015
|
$145
|
|
2016
|
155
|
|
2017
|
161
|
|
2018
|
168
|
|
2019
|
171
|
|
2020 to 2024
|
893
|
Year Ended December 31, 2012
|
|
Estimated fair value on date of grant
|
$4.09
|
Pricing methodology utilized
|
Black- Scholes
|
Expected life (in years)
|
6.53
|
Interest rate
|
1.21%
|
Volatility
|
45.17
|
Dividend yield
|
4.04
|
At or for the Year Ended December 31,
|
|||
2014
|
2013
|
2012
|
|
Options outstanding – beginning of period
|
1,615,771
|
2,456,137
|
2,893,760
|
Options granted
|
-
|
-
|
24,440
|
Weighted average exercise price of grants
|
$-
|
$-
|
$13.86
|
Options exercised
|
16,960
|
833,334
|
455,051
|
Weighted average exercise price of exercised options
|
$16.45
|
$13.47
|
$12.32
|
Options that expired prior to being exercised
|
618,895
|
7,032
|
7,012
|
Weighted average exercise price of forfeited options
|
$19.90
|
$16.93
|
$19.90
|
Options outstanding - end of period(1)
|
979,916
|
1,615,771
|
2,456,137
|
Weighted average exercise price of outstanding
options - end of period
|
$14.74
|
$16.74
|
$15.63
|
Remaining options available for grant
|
925,626
|
1,043,074
|
249,230
|
Vested options at end of period
|
960,641
|
1,563,493
|
2,317,799
|
Weighted average exercise price of vested
options – end of period
|
$14.73
|
$16.80
|
$15.78
|
Cash received for option exercise cost
|
278
|
11,228
|
5,608
|
Income tax benefit recognized
|
30
|
531
|
319
|
Compensation expense recognized
|
110
|
194
|
309
|
Remaining unrecognized compensation expense
|
31
|
141
|
335
|
Weighted average remaining years for which
compensation expense is to be recognized
|
0.3
|
1.2
|
1.8
|
Intrinsic value of options exercised during the period
|
$6
|
$2,569
|
$871
|
Intrinsic value of outstanding options at period end
|
1,690
|
2,243
|
722
|
Intrinsic value of vested options at period end
|
1,674
|
2,129
|
531
|
Outstanding Options
|
Vested Options
|
|||||
Exercise Prices
|
Amount
|
Weighted Average Contractual Years Remaining
|
Amount
|
Weighted Average Contractual Years Remaining
|
||
$8.34
|
24,582
|
4.3
|
24,582
|
4.3
|
||
$12.75
|
39,589
|
5.3
|
39,589
|
5.3
|
||
$13.74
|
370,062
|
2.3
|
370,062
|
2.3
|
||
$13.86
|
17,108
|
7.3
|
17,108
|
7.3
|
||
$15.10
|
257,579
|
0.4
|
257,579
|
0.4
|
||
$15.46
|
85,183
|
6.3
|
65,908
|
6.3
|
||
$16.45
|
59,360
|
0.1
|
59,360
|
0.1
|
||
$16.73
|
46,453
|
3.6
|
46,453
|
3.6
|
||
$18.18
|
80,000
|
3.4
|
80,000
|
3.4
|
||
Total
|
979,916
|
2.4
|
960,641
|
2.3
|
At or for the Year Ended December 31,
|
|||
2014
|
2013
|
2012
|
|
Unvested allocated shares – beginning of period
|
318,314
|
328,003
|
324,454
|
Shares granted
|
121,333
|
145,925
|
141,289
|
Shares vested
|
141,361
|
155,614
|
135,369
|
Shares forfeited
|
8,626
|
-
|
2,371
|
Unvested allocated shares – end of period
|
289,660
|
318,314
|
328,003
|
Unallocated shares – end of period
|
-
|
-
|
-
|
Compensation recorded to expense
|
$1,976
|
$2,011
|
$1,842
|
Income tax benefit recognized
|
41
|
104
|
70
|
Fair value of shares vested during the period
|
$2,266
|
$1,944
|
$1,834
|
Weighted average remaining years for which compensation expense is to be recognized
|
1.2
|
1.2
|
1.3
|
Lease Year Ending December 31,
|
Amount
|
2015
|
$3,092
|
2016
|
3,155
|
2017
|
3,206
|
2018
|
3,097
|
2019
|
3,094
|
Thereafter
|
15,069
|
Total
|
$30,713
|
Assets Measured at Fair Value on a Recurring Basis at December 31, 2013
|
|||||||||
Fair Value Measurements Using
|
|||||||||
Description
|
Total
|
Level 1 Inputs
|
Level 2 Inputs
|
Level 3 Inputs
|
Gains (Losses) for
the Year Ended
December 31, 2013
|
||||
Trading Securities (Registered Mutual Funds)
|
|||||||||
Domestic Equity Mutual Funds
|
$1,311
|
$1,311
|
$-
|
$-
|
$290
|
||||
International Equity Mutual Funds
|
164
|
164
|
-
|
-
|
23
|
||||
Fixed Income Mutual Funds
|
5,347
|
5,347
|
-
|
-
|
(48)
|
||||
Investment securities available-for-sale:
|
-
|
||||||||
Agency notes
|
15,091
|
-
|
15,091
|
-
|
-
|
||||
Registered Mutual Funds:
|
|||||||||
Domestic Equity Mutual Funds
|
2,016
|
2,016
|
-
|
-
|
-
|
||||
International Equity Mutual Funds
|
427
|
427
|
-
|
-
|
-
|
||||
Fixed Income Mutual Funds
|
1,115
|
1,115
|
-
|
-
|
-
|
||||
Pass-through MBS issued by GSEs
|
29,959
|
-
|
29,959
|
-
|
-
|
||||
CMOs issued by GSEs
|
321
|
-
|
321
|
-
|
-
|
||||
Private issuer pass through MBS
|
680
|
-
|
680
|
-
|
-
|
||||
Private issuer CMOs
|
583
|
-
|
583
|
-
|
-
|
Fair Value Derived
|
Valuation Technique Utilized
|
Significant Unobservable Input(s)
|
Minimum Value
|
Maximum Value
|
Weighted Average Value
|
$4,400
|
Income approach only
|
Capitalization rate
|
N/A(1)
|
N/A(1)
|
7.5%
|
Fair Value Derived
|
Valuation Technique Utilized
|
Significant Unobservable Input(s)
|
Minimum Value
|
Maximum Value
|
Weighted Average Value
|
$4,607
|
Income approach only
|
Capitalization rate
|
N/A(1)
|
N/A(1)
|
7.5%
|
Reduction for planned expedited disposal
|
N/A(1)
|
N/A(1)
|
0.4%
|
||
802
|
Blended income and sales comparison approaches
|
Reduction to the sales comparison value to reconcile differences between comparable sales
|
0.0%
|
15.0%
|
5.0%
|
Capitalization rate (income approach component)
|
7.8%
|
8.5%
|
8.3%
|
||
Reduction for planned expedited disposal
|
20.0%
|
30.0%
|
26.0%
|
||
5,500
|
Previously negotiated note sales
|
Discount to unpaid principal balance from likely realizable value of a note sale based upon comparable note sale experience
|
N/A(1)
|
N/A(1)
|
17.0%
|
(1)
|
Only one loan in population.
|
Fair Value at December 31, 2014 Using
|
||||||
At December 31, 2014
|
Carrying
Amount
|
Level 1
Inputs
|
Level 2
Inputs
|
Level 3
Inputs
|
Total
|
|
Assets:
|
||||||
Cash and due from banks
|
$78,187
|
$78,187
|
$-
|
$-
|
$78,187
|
|
Investment securities held to maturity (TRUPS)
|
5,367
|
-
|
-
|
6,315
|
6,315
|
|
Loans, net (excluding impaired loans carried at fair value)
|
4,096,347
|
-
|
-
|
4,188,137
|
4,188,137
|
|
Accrued interest receivable
|
12,664
|
-
|
104
|
12,558
|
12,664
|
|
MSR
|
351
|
-
|
351
|
-
|
351
|
|
FHLBNY capital stock
|
58,407
|
N/A
|
N/A
|
N/A
|
N/A
|
|
Liabilities:
|
||||||
Savings, money market and checking accounts
|
1,733,474
|
1,733,474
|
-
|
-
|
1,733,474
|
|
CDs
|
926,318
|
-
|
934,324
|
-
|
934,324
|
|
Escrow and other deposits
|
91,921
|
91,921
|
-
|
-
|
91,921
|
|
FHLBNY Advances
|
1,173,725
|
-
|
1,186,069
|
-
|
1,186,069
|
|
Trust Preferred securities payable
|
70,680
|
-
|
70,680
|
-
|
70,680
|
|
Accrued interest payable
|
2,729
|
-
|
2,729
|
-
|
2,729
|
Fair Value at December 31, 2013 Using
|
||||||
At December 31, 2013
|
Carrying
Amount
|
Level 1
Inputs
|
Level 2
Inputs
|
Level 3
Inputs
|
Total
|
|
Assets:
|
||||||
Cash and due from banks
|
$45,777
|
$45,777
|
$-
|
$-
|
$45,777
|
|
Investment securities held to maturity (TRUPS)
|
5,341
|
-
|
-
|
5,163
|
5,163
|
|
Loans, net (excluding impaired loans carried at fair value)
|
3,668,457
|
-
|
-
|
3,707,695
|
3,707,695
|
|
Loans held for sale
|
3,624
|
-
|
4,400
|
-
|
4,400
|
|
Accrued interest receivable
|
12,066
|
-
|
178
|
11,888
|
12,066
|
|
MSR
|
628
|
-
|
1,006
|
-
|
1,006
|
|
FHLBNY capital stock
|
48,051
|
N/A
|
N/A
|
N/A
|
N/A
|
|
Liabilities:
|
||||||
Savings, money market and checking accounts
|
1,678,737
|
1,678,737
|
-
|
-
|
1,678,737
|
|
CDs
|
828,409
|
-
|
839,059
|
-
|
839,059
|
|
Escrow and other deposits
|
69,404
|
69,404
|
-
|
-
|
69,404
|
|
FHLBNY Advances
|
910,000
|
-
|
934,336
|
-
|
934,336
|
|
Trust Preferred securities payable
|
70,680
|
-
|
70,680
|
-
|
70,680
|
|
Accrued interest payable
|
2,642
|
-
|
2,642
|
-
|
2,642
|
Actual
|
For Capital
Adequacy Purposes
|
To Be Categorized as "Well Capitalized"
|
||||||
As of December 31, 2014
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||
Tangible capital
|
$406,910
|
9.20%
|
$176,998
|
4.0%
|
$221,247
|
5.00%
|
||
Leverage capital
|
406,910
|
9.20
|
176,998
|
4.0
|
221,247
|
5.00
|
||
Tier I risk-based capital (to risk weighted assets)
|
406,910
|
12.33
|
131,994
|
4.0
|
197,991
|
6.00
|
||
Total risk-based capital (to risk weighted assets)
|
425,428
|
12.89
|
263,988
|
8.0
|
329,985
|
10.00
|
Actual
|
For Capital
Adequacy Purposes
|
To Be Categorized as "Well Capitalized"
|
||||||
As of December 31, 2013
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||
Tangible capital
|
$376,717
|
9.52%
|
$158,298
|
4.0%
|
$197,872
|
5.00%
|
||
Leverage capital
|
376,717
|
9.52
|
158,298
|
4.0
|
197,872
|
5.00
|
||
Tier I risk-based capital (to risk weighted assets)
|
376,717
|
12.64
|
119,169
|
4.0
|
178,753
|
6.00
|
||
Total risk-based capital (to risk weighted assets)
|
397,935
|
13.36
|
238,338
|
8.0
|
297,922
|
10.00
|
At December 31, 2014
|
At December 31, 2013
|
||||||
Tangible Capital
|
Leverage Capital
|
Total Risk-Based Capital
|
Tangible Capital
|
Leverage Capital
|
Total
Risk-Based Capital
|
||
Stockholders' equity
|
$454,095
|
$454,095
|
$454,095
|
$427,209
|
$427,209
|
$427,209
|
|
Non-allowable assets:
|
|||||||
MSR
|
(35)
|
(35)
|
(35)
|
(63)
|
(63)
|
(63)
|
|
Accumulated other comprehensive loss
|
8,488
|
8,488
|
8,488
|
5,209
|
5,209
|
5,209
|
|
Goodwill
|
(55,638)
|
(55,638)
|
(55,638)
|
(55,638)
|
(55,638)
|
(55,638)
|
|
Tier 1 risk-based capital
|
406,910
|
406,910
|
406,910
|
376,717
|
376,717
|
376,717
|
|
General regulatory valuation allowance
|
-
|
-
|
18,518
|
-
|
-
|
21,218
|
|
Total (Tier 2) risk based capital
|
406,910
|
406,910
|
425,428
|
376,717
|
376,717
|
397,935
|
|
Minimum capital requirement
|
176,998
|
176,998
|
263,988
|
158,298
|
158,298
|
238,338
|
|
Regulatory capital excess
|
$229,912
|
$229,912
|
$161,440
|
$218,419
|
$218,419
|
$159,597
|
For the three months ended
|
||||
March 31,
2014
|
June 30,
2014
|
September 30, 2014
|
December 31, 2014
|
|
Net interest income
|
$30,255
|
$30,594
|
$31,959
|
$31,728
|
Provision (credit) for loan losses
|
281
|
(1,130)
|
(501)
|
(522)
|
Net interest income after provision for loan losses
|
29,974
|
31,724
|
32,460
|
32,250
|
Non-interest income
|
3,060
|
1,565
|
1,817
|
2,596
|
Non-interest expense
|
15,823
|
15,298
|
14,724
|
15,231
|
Income before income taxes
|
17,211
|
17,991
|
19,553
|
19,615
|
Income tax expense
|
7,177
|
7,531
|
7,788
|
7,628
|
Net income
|
$10,034
|
$10,460
|
$11,765
|
$11,987
|
EPS (1):
|
||||
Basic
|
$0.28
|
$0.29
|
$0.33
|
$0.33
|
Diluted
|
$0.28
|
$0.29
|
$0.33
|
$0.33
|
For the three months ended
|
||||
March 31,
2013
|
June 30,
2013
|
September 30, 2013
|
December 31, 2013
|
|
Net interest income
|
$32,314
|
$33,752
|
$31,653
|
$30,767
|
Provision (credit) for loan losses
|
157
|
28
|
240
|
(56)
|
Net interest income after provision for loan losses
|
32,157
|
33,724
|
31,413
|
30,823
|
Non-interest income
|
1,898
|
1,721
|
2,008
|
1,837
|
Non-interest expense
|
16,309
|
15,347
|
15,575
|
15,461
|
Income before income taxes
|
17,746
|
20,098
|
17,846
|
17,199
|
Income tax expense
|
7,176
|
8,059
|
7,215
|
6,891
|
Net income
|
$10,570
|
$12,039
|
$10,631
|
$10,308
|
EPS (1):
|
||||
Basic
|
$0.30
|
$0.34
|
$0.30
|
$0.29
|
Diluted
|
$0.30
|
$0.34
|
$0.30
|
$0.29
|
At December 31,
|
At December 31,
|
|
2014
|
2013
|
|
ASSETS:
|
||
Cash and due from banks
|
$58,112
|
$61,665
|
Investment securities available-for-sale
|
3,736
|
3,558
|
Trading securities
|
8,559
|
6,822
|
MBS available-for-sale
|
496
|
573
|
ESOP loan to subsidiary
|
3,222
|
3,401
|
Investment in subsidiaries
|
454,095
|
427,083
|
Other assets
|
3,798
|
3,435
|
Total assets
|
$532,018
|
$506,537
|
LIABILITIES AND STOCKHOLDERS' EQUITY:
|
||
Trust Preferred securities payable
|
$70,680
|
$70,680
|
Other liabilities
|
1,613
|
351
|
Stockholders' equity
|
459,725
|
435,506
|
Total liabilities and stockholders' equity
|
$532,018
|
$506,537
|
Year Ended December 31,
|
|||
2014
|
2013
|
2012
|
|
Net interest loss
|
$(4,748)
|
$(4,851)
|
$(4,830)
|
Dividends received from Bank
|
18,050
|
54,500
|
20,000
|
Non-interest income
|
1,376
|
812
|
1,493
|
Non-interest expense
|
(643)
|
(636)
|
(635)
|
Income before income taxes and equity in
undistributed earnings of direct subsidiaries
|
14,035
|
49,825
|
16,028
|
Income tax credit
|
1,803
|
2,183
|
1,823
|
Income before equity in undistributed earnings
of direct subsidiaries
|
15,838
|
52,008
|
17,851
|
Equity in (over-distributed) undistributed earnings of subsidiaries
|
28,408
|
(8,460)
|
22,457
|
Net income
|
$44,246
|
$43,548
|
$40,308
|
Year Ended December 31,
|
|||
2014
|
2013
|
2012
|
|
Cash flows from Operating Activities:
|
|||
Net income
|
$44,246
|
$43,548
|
$40,308
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|||
Equity in over-distributed (undistributed) earnings of direct subsidiaries
|
(28,408)
|
8,460
|
(22,457)
|
Net gain on the sale of investment securities available for sale
|
(997)
|
(110)
|
(941)
|
Net (gain) loss on trading securities
|
45
|
(265)
|
(103)
|
Decrease (Increase) in other assets
|
(489)
|
355
|
1,866
|
(Decrease) Increase in other liabilities
|
1,680
|
(595)
|
(149)
|
Net cash provided by operating activities
|
16,077
|
51,393
|
18,524
|
Cash flows from Investing Activities:
|
|||
Proceeds from sale of investment securities available-for-sale
|
3,780
|
366
|
2,418
|
Proceeds from the sale of trading securities
|
7,056
|
131
|
-
|
Purchases of investment securities available-for-sale
|
(3,884)
|
(458)
|
(403)
|
Reimbursement from subsidiary for purchases of investment securities available-for-sale
|
1,620
|
642
|
2,917
|
Net purchases of trading securities
|
(8,839)
|
(202)
|
(2,997)
|
Principal collected on MBS available-for-sale
|
72
|
138
|
72
|
Principal repayments on ESOP loan
|
179
|
166
|
154
|
Net cash (used in) provided by investing activities
|
(16)
|
783
|
2,161
|
Cash flows from Financing Activities:
|
|||
Common stock issued for exercise of stock options
|
278
|
11,228
|
5,608
|
Equity award distribution
|
202
|
293
|
145
|
Cash dividends paid to stockholders
|
(20,094)
|
(19,716)
|
(19,208)
|
Net cash used in financing activities
|
(19,614)
|
(8,195)
|
(13,455)
|
Net increase (decrease) in cash and due from banks
|
(3,553)
|
43,981
|
7,230
|
Cash and due from banks, beginning of period
|
61,665
|
17,684
|
10,454
|
Cash and due from banks, end of period
|
$58,112
|
$61,665
|
$17,684
|
3(i)
|
Amended and Restated Certificate of Incorporation of Dime Community Bancshares, Inc. (1)
|
|
3(ii)
|
Amended and Restated Bylaws of Dime Community Bancshares, Inc.
|
|
4.1
|
Amended and Restated Certificate of Incorporation of Dime Community Bancshares, Inc. [See Exhibit 3(i) hereto]
|
|
4.2
|
Amended and Restated Bylaws of Dime Community Bancshares, Inc. [See Exhibit 3(ii) hereto]
|
|
4.3
|
Draft Stock Certificate of Dime Community Bancshares, Inc. (2)
|
|
4.4
|
Second Amended and Restated Declaration of Trust, dated as of July 29, 2004, by and among Wilmington Trust Company, as Delaware Trustee, Wilmington Trust Company as Institutional Trustee, Dime Community Bancshares, Inc., as Sponsor, the Administrators of Dime Community Capital Trust I and the holders from time to time of undivided beneficial interests in the assets of Dime Community Capital Trust I (5)
|
|
4.5
|
Indenture, dated as of March 19, 2004, between Dime Community Bancshares, Inc. and Wilmington Trust Company, as trustee (5)
|
|
4.6
|
Series B Guarantee Agreement, dated as of July 29, 2004, executed and delivered by Dime Community Bancshares, Inc., as Guarantor and Wilmington Trust Company, as Guarantee Trustee, for the benefit of the holders from time to time of the Series B Capital Securities of Dime Community Capital Trust I (5)
|
|
10.1
|
Amended and Restated Employment Agreement between The Dime Savings Bank of Williamsburgh and Vincent F. Palagiano (12)
|
|
10.2
|
Amended and Restated Employment Agreement between The Dime Savings Bank of Williamsburgh and Michael P. Devine (12)
|
|
10.3
|
Amended and Restated Employment Agreement between The Dime Savings Bank of Williamsburgh and Kenneth J. Mahon (12)
|
|
10.4
|
Employment Agreement between Dime Community Bancshares, Inc. and Vincent F. Palagiano (12)
|
|
10.5
|
Employment Agreement between Dime Community Bancshares, Inc. and Michael P. Devine (12)
|
|
10.6
|
Employment Agreement between Dime Community Bancshares, Inc. and Kenneth J. Mahon (12)
|
|
10.7
|
Form of Employee Retention Agreement by and among The Dime Savings Bank of Williamsburgh, Dime Community Bancorp, Inc. and certain officers (14)
|
|
10.8
|
The Benefit Maintenance Plan of Dime Community Bancorp, Inc. (11)
|
|
10.9
|
Severance Pay Plan of The Dime Savings Bank of Williamsburgh (9)
|
|
10.10
|
Retirement Plan for Board Members of Dime Community Bancorp, Inc. (9)
|
|
10.12
|
Recognition and Retention Plan for Outside Directors, Officers and Employees of Dime Community Bancorp, Inc., as amended by amendments number 1 and 2 (3)
|
|
10.13
|
Form of stock option agreement for Outside Directors under Dime Community Bancshares, Inc. 1996 and 2001 Stock Option Plans for Outside Directors, Officers and Employees and the 2004 Stock Incentive Plan. (3)
|
|
10.14
|
Form of stock option agreement for officers and employees under Dime Community Bancshares, Inc. 1996 and 2001 Stock Option Plans for Outside Directors, Officers and Employees and the 2004 Stock Incentive Plan (3)
|
|
10.20
|
Dime Community Bancshares, Inc. 2001 Stock Option Plan for Outside Directors, Officers and Employees (13)
|
|
10.21
|
Dime Community Bancshares, Inc. 2004 Stock Incentive Plan for Outside Directors, Officers and Employees (8)
|
|
10.22
|
Waiver executed by Vincent F. Palagiano (7)
|
|
10.23
|
Waiver executed by Michael P. Devine (7)
|
|
10.24
|
Waiver executed by Kenneth J. Mahon (7)
|
|
10.25
|
Form of restricted stock award notice for officers and employees under the 2004 Stock Incentive Plan (6)
|
|
10.27
|
Form of restricted stock award notice for outside directors under the 2004 Stock Incentive Plan (6)
|
|
10.28
|
Employee Retention Agreement between The Dime Savings Bank of Williamsburgh, Dime Community Bancshares, Inc. and Daniel Harris (9)
|
|
10.29
|
Dime Community Bancshares, Inc. Annual Incentive Plan (9)
|
|
10.30
|
Adoption Agreement for Pentegra Services, Inc. Volume Submitter 401 (k) Profit Sharing Plan
|
|
10.31
|
Employee Stock Ownership Plan of Dime Community Bancshares, Inc. and Certain Affiliates (9)
|
|
10.32
|
Amendment to the Benefit Maintenance Plan (15)
|
|
10.33
|
Amendments One, Two and Three to the Employee Stock Ownership Plan of Dime Community Bancshares, Inc. and Certain Affiliates (16)
|
|
10.34 |
Dime Community Bancshares, Inc. 2013 Equity And Incentive Plan (17)
|
|
10.35 | Form of restricted stock award notice for officers and employees under the 2013 Equity and Incentive Plan (18) | |
10.36 |
Form of restricted stock award notice for outside directors under the 2013 Equity and Incentive Plan (18)
|
|
10.37 | The Dime Savings Bank of Williamsburgh 401(K) Savings Plan | |
10.38 |
Amendment Number Four to the Employee Stock Ownership Plan of Dime Community Bancshares, Inc. and Certain Affiliates (16)
|
12.1 |
Computation of ratio of earnings to fixed charges
|
|
31(i).1
|
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a)
|
|
31(i).2
|
Certification of Principal Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a)
|
|
32.1
|
Certification of Chief Executive Officer Pursuant to 18 U.S.C. 1350
|
|
32.2
|
Certification of Principal Financial Officer Pursuant to 18 U.S.C. 1350
|
|
101**
|
Pursuant to Rule 405 of Regulation S-T, the following financial information from the Company's Quarterly Report on Form 10-Q for the period ended December 31, 2014 is formatted in XBRL (Extensible Business Reporting Language) interactive data files: (i) the Consolidated Balance Sheets as of December 31, 2014 and December 31, 2013, (ii) the Consolidated Statements of Income for each of the years ended December 31, 2014, 2013 and 2012, (iii) the Consolidated Statements of Comprehensive Income for each of the years ended December 31, 2014, 2013 and 2012, (iv) the Consolidated Statements of Changes in Stockholders' Equity for each of the years ended December 31, 2014, 2013 and 2012, (v) the Consolidated Statements of Cash Flows for each of the years ended December 31, 2014, 2013 and 2012, and (vi) the Notes to Consolidated Financial Statements.
|
**
|
Furnished, not filed, herewith.
|
(1)
|
Incorporated by reference to the registrant's Transition Report on Form 10-K for the transition period ended December 31, 2002 filed on March 28, 2003.
|
(2)
|
Incorporated by reference to the registrant's Annual Report on Form 10-K for the fiscal year ended June 30, 1998 filed on September 28, 1998.
|
(3)
|
Incorporated by reference to the registrant's Annual Report on Form 10-K for the fiscal year ended June 30, 1997 filed on September 26, 1997, and the Current Reports on Form 8-K filed on March 22, 2004 and March 29, 2005.
|
(4)
|
Incorporated by reference to the registrant's Annual Report on Form 10-K for the fiscal year ended June 30, 2000 filed on September 28, 2000.
|
(5)
|
Incorporated by reference to Exhibits to the registrant's Registration Statement No. 333-117743 on Form S-4 filed on July 29, 2004.
|
(6)
|
Incorporated by reference to the registrant's Current Report on Form 8-K filed on March 22, 2005.
|
(7)
|
Incorporated by reference to the registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2005 filed on May 10, 2005.
|
(8)
|
Incorporated by reference to the registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2008 filed on August 8, 2008.
|
(9)
|
Incorporated by reference to the registrant's Annual Report on Form 10-K for the year ended December 31, 2008 filed on March 16, 2009.
|
(10)
|
Incorporated by reference to the registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2010 filed on May 10, 2010
|
(11)
|
Incorporated by reference to the registrant's Current Report on Form 8-K filed on April 4, 2011.
|
(12)
|
Incorporated by reference to the registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2011 filed on May 10, 2011
|
(13)
|
Incorporated by reference to the registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2011 filed on August 9, 2011
|
(14)
|
Incorporated by reference to the registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2012 filed on May 9, 2012
|
(15)
|
Incorporated by reference to the registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2012 filed on November 13, 2012
|
(16) |
Incorporated by reference to the registrant's Annual Report on Form 10-K for the year ended December 31, 2012 filed on March 15, 2013
|
(17) |
Incorporated by reference to the registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 filed on August 9, 2013
|
(18) |
Incorporated by reference to the registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 filed on August 5, 2014.
|
(19) |
Incorporated by reference to the registrant's Current Report on Form 8-K filed on October 23, 2014.
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter In the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonable likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter In the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonable likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
(1)
|
The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
(1)
|
The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
1.1
|
"Account"
means any separate notational account established and maintained by the Administrator for each Participant under the Plan. To the extent applicable, a Participant may have any (or all) of the following notational Accounts:
|
(a)
|
"Combined Account" means the account representing the Participant's total interest under the Plan resulting from (1) the Employer's contributions in the case of a Profit Sharing Plan or Money Purchase Plan, and (2) the Employer Nonelective Contributions in the case of a 401(k) Profit Sharing Plan. In addition, Forfeitures are part of the Combined Account to the extent they are reallocated. Separate accountings shall be maintained with respect to that portion of a Participant's Account attributable to Employer contributions made pursuant to Section 12.1(a)(2) and to Employer contributions made pursuant to Section 12.1(a)(3).
|
(b)
|
"Elective Deferral Account" means the account established hereunder to which Elective Deferrals (including a separate accounting for Catch-Up Contributions) are allocated. Amounts in the Participant's Elective Deferral Account are nonforfeitable when made and are subject to the distribution restrictions of Section 12.2(e). The Elective Deferral Account may consist of the
|
(1)
|
"Pre-Tax Elective Deferral Account" means the portion of the Elective Deferral Account attributable to Pre-Tax Elective Deferrals (i.e., Elective Deferrals that are not subject to federal income tax at the time of their deferral to the Plan).
|
(2)
|
"Roth Elective Deferral Account" means the portion of the Elective Deferral Account attributable to Roth Elective Deferrals (i.e., that are subject to federal income tax at the time of their deferral to the Plan) which does not include amounts attributable to "in-Plan Roth rollover contributions" (as defined in Section 12.11). No contributions other than Roth Elective Deferrals and properly attributable earnings will be credited to each Participant's Roth Elective Deferral Account.
|
(c)
|
"In-Plan Roth Rollover Account" means the account attributable to a distribution from the Plan that is directly rolled over within this Plan, as described in Section 12.11. The amount thus contributed retains the characteristics of the source Account from which the amount of the "in-Plan Roth rollover contribution" (as defined in Section 12.11) was distributed (except for the tax treatment of such amount when distributed out of the Plan).
|
(d)
|
"Qualified Automatic Contribution Safe Harbor Account" means the account established hereunder to which Qualified Automatic Contribution "ADP test safe harbor contributions" are allocated. Amounts in the Qualified Automatic Contribution Safe Harbor Account are subject to the distribution restrictions of Section 12.2(e).
|
(e)
|
"Qualified Matching Contribution Account" means the account established hereunder to which Qualified Matching Contributions are allocated. Amounts in the Qualified Matching Contribution Account are nonforfeitable when made and are subject to the distribution restrictions of Section 12.2(e).
|
(f)
|
"Qualified Nonelective Contribution Account" means the account established hereunder to which Qualified Nonelective Contributions are allocated. Amounts in the Qualified Nonelective Contribution Account are nonforfeitable when made and are subject to the distribution restrictions of Section 12.2(e).
|
(g)
|
"Qualified Voluntary Employee Contribution Account" means the account established hereunder to which a Participant's tax- deductible qualified voluntary Employee contributions made pursuant to Section 4.9 are allocated.
|
(h)
|
"Rollover Account" means the account established hereunder to which amounts transferred from a qualified plan (including this Plan) or individual retirement account in accordance with Section 4.6 are allocated.
|
(i)
|
"Transfer Account" means the account established hereunder to which amounts transferred to this Plan from a direct plan-to-plan transfer in accordance with Section 4.7 are allocated.
|
(j)
|
"Voluntary Contribution Account" means the account established hereunder to which after-tax voluntary Employee contributions made pursuant to Section 4.8 are allocated. Amounts recharacterized as after-tax voluntary Employee contributions pursuant to Section 12.5 shall remain subject to the limitations of Section 12.2. Therefore, a separate accounting shall be maintained with respect to that portion of the Voluntary Contribution Account attributable to after-tax voluntary Employee contributions made pursuant to Section 4.8.
|
1.2
|
"ACP"
means the "Actual Contribution Percentage" determined pursuant to Section 12.6(d).
|
1.3
|
"Act"
means the Employee Retirement Income Security Act of 1974, as it may be amended from time to time.
|
1.4
|
"ADP"
means the "Actual Deferral Percentage" determined pursuant to Section 12.4(d).
|
1.5
|
"Administrator"
means the Employer unless another person or entity has been designated by the Employer pursuant to Section 2.2 to administer the Plan on behalf of the Employer. "Administrator" also includes any Qualified Termination Administrator (QTA) that has assumed the responsibilities of the Administrator in accordance with guidelines set forth by the Department of Labor.
|
1.6
|
"Adoption
Agreement"
means the separate agreement which is executed by the Employer and sets forth the elective provisions of this Plan and Trust as specified by the Employer.
|
1.7
|
"Affiliated
Employer"
means any corporation which is a member of a controlled group of corporations (as defined in Code §414(b)) which includes the Employer; any trade or business (whether or not incorporated) which is under common control (as defined in Code
|
1.8
|
"Affirmative
Election"
means a Salary Deferral Agreement submitted by a Participant to the Administrator in accordance with Section 12.2 that provides instructions to defer a specific amount of Compensation (including an affirmative election to defer no amount) as an Elective Deferral to the Plan. A Participant's Affirmative Election is generally effective as of the first payroll period which follows the payroll period in which the Participant made the Affirmative Election. However, a Participant may make an Affirmative Election which is effective: (a) for the first payroll period in which he or she becomes a Participant if the Participant makes an Affirmative Election within a reasonable period following the Participant's becoming eligible to make Elective Deferrals and before the Compensation to which the Election applies becomes currently available; or (b) for the first payroll period following the effective date of the Automat ic Contribution Arrangement if the Participant makes an Affirmative Election not later than the Automatic Contribution Arrangement's effective date.
|
1.9
|
"Alternate
Payee"
means an alternate payee pursuant to a qualified domestic relations order that meets the requirements of Code §414(p).
|
1.10
|
"Anniversary
Date"
means the last day of the Plan Year.
|
1.11
|
"Annuity
Starting
Date"
means, with respect to any Participant, the first day of the first period for which an amount is paid as an annuity, or, in the case of a benefit not payable in the form of an annuity, the first day on which all events have occurred which entitles the Participant to such benefit.
|
1.12
|
"Automatic
Contribution
Arrangement"
means the Automatic Deferral provisions described by Section 12.2 and, if applicable, Section 12.9.
|
1.13
|
"Automatic
Deferral"
means the amount (if any) that a Participant is deemed to defer in accordance with an Automatic Contribution Arrangement. The effective date of an Employee's Automatic Deferral will be as soon as practicable after the Employee is subject to Automatic Deferrals described by Section 12.2(b) or 12.9, consistent with (a) applicable law, and (b) the objective of affording the Employee a reasonable period of time after receipt of the notice to make an Affirmative Election (and, if applicable, an investment election). All Automatic Deferrals constitute Elective Deferrals.
|
1.14
|
"Beneficiary"
means the person (or entity) to whom all or a portion of a deceased Participant's interest in the Plan is payable, subject to the restrictions of Sections 6.2 and 6.6.
|
1.15
|
"Catch-Up
Contribution"
means an Elective Deferral made to the Plan by a Catch-Up Eligible Participant that, during any taxable year of such Participant, exceeds one of the following:
|
(a)
|
a statutory dollar limit on Elective Deferrals or "annual additions" as provided in Code §401(a)(30), 402(h), 403(b), 408, 415(c), or 457(b)(2) (without regard to Code §457(b)(3)), as applicable; or
|
(b)
|
any Plan limit on Elective Deferrals other than a limit described in (a) above; or the limit imposed by the ADP test under Code
|
1.16
|
"Catch-Up
Eligible
Participant"
means a Participant who:
|
(a)
|
is eligible to make Elective Deferrals to the Plan pursuant to Section 12.2; and
|
(b)
|
will attain age 50 or older by the end of such taxable year.
|
1.17
|
"Code"
means the Internal Revenue Code of 1986, as it may be amended from time to time.
|
1.18
|
"Compensation"
means, with respect to any Participant, the amount determined in accordance with the following provisions, except as otherwise provided in the Adoption Agreement.
|
(a)
|
Base
definition.
One of the following, as elected in the Adoption Agreement:
|
(1)
|
Information required to be reported under Code §§6041, 6051 and 6052 (Wages, tips and other compensation as reported on Form W-2). Compensation means wages, within the meaning of Code §3401(a), and all other payments of compensation to an Employee by the Employer (in the course of the Employer's trade or business) for which the 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)).
|
(2)
|
Code §3401(a) Wages. Compensation means an Employee's wages within the meaning of Code §3401(a) for the purposes of income tax withholding at the source but determined without regard to any rules that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Code
|
(3)
|
415 safe harbor compensation. Compensation means wages, salaries, for Plan Years beginning after December 31, 2008, Military Differential Pay, and fees for professional services and other amounts received (without regard to whether or not an amount is paid in cash) for personal services actually rendered in the course of employment with the Employer maintaining the Plan to the extent that the amounts are includible in gross income (including, but not limited to, commissions paid salespersons, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips, bonuses, fringe benefits, and reimbursements, or other expense allowances under a nonaccountable plan (as described in Regulation §1.62-2(c))), and excluding the following:
|
(i)
|
Employer contributions to a plan of deferred compensation which are not includible in the Employee's gross income for the taxable year in which contributed, or Employer contributions under a simplified employee pension plan to the extent such contributions are excludable from the Employee's gross income, or any distributions from a plan of deferred compensation;
|
(ii)
|
Amounts realized from the exercise of a nonqualified stock option, or when restricted stock (or property) held by the Employee either becomes freely transferable or is no longer subject to a substantial risk of forfeiture;
|
(iii)
|
Amounts realized from the sale, exchange or other disposition of stock acquired under a qualified stock option; and
|
(iv)
|
Other amounts which receive special tax benefits, or contributions made by the Employer (whether or not under a salary deferral agreement) towards the purchase of an annuity contract described in Code §403(b) (whether or not the contributions are actually excludable from the gross income of the Employee).
|
(b)
|
Earned
Income
for
Self-Employed
Individual.
Notwithstanding the foregoing, Compensation for any Self-Employed Individual shall be equal to Earned Income. Furthermore, the contributions on behalf of any "owner-Employee" shall be made only with respect to the Earned Income for such "owner-Employee" which is derived from the trade or business with respect to which such Plan is established. For this purpose, an "owner-Employee" means a sole proprietor who owns the entire interest in the Employer or a partner (or member in the case of a limited liability company treated as a partnership or sole proprietorship for federal income tax purposes) who owns more than ten percent (10%) of either the capital interest or the profits interest in the Employer and who receives income for personal services from the Employer.
|
(c)
|
Paid
during
"determination
period."
Compensation shall include only that Compensation which is actually paid to the Participant during the "determination period." Except as otherwise provided in this Plan, the "determination period" is the period elected by the Employer in the Adoption Agreement. If the Employer makes no election, the "determination period" shall be the Plan Year.
|
(d)
|
Inclusion
of
deferrals.
Notwithstanding the above, unless otherwise elected in the Adoption Agreement, Compensation shall include all of the following types of elective contributions and all of the following types of deferred compensation:
|
(1)
|
Elective contributions that are made by the Employer on behalf of a Participant that are not includible in gross income under Code §§125, 402(e)(3), 402(h)(1)(B), 402(k), 403(b), and 132(f)(4). However, regardless of any election in the Adoption
|
(2)
|
Compensation deferred under an eligible deferred compensation plan within the meaning of Code §457(b).
|
(3)
|
Employee contributions (under governmental plans) described in Code §414(h)(2) that are picked up by the employing unit and thus are treated as Employer contributions.
|
(e)
|
Post-severance
compensation
–
Code
§415
Regulations.
The Administrator shall adjust Compensation, for Plan Years beginning on or after July 1, 2007 (or such other date as the Employer specifies in the Compensation Section of the Adoption Agreement), for amounts that would otherwise be included in the definition of Compensation but are paid by the later of 2 1/2 months after a Participant's severance from employment with the Employer or the end of the Plan Year that includes the date of the Participant's severance from employment with the Employer, in accordance with the following, as elected in the Compensation Section of the Adoption Agreement. The preceding time period, however, does not apply with respect to payments described in Subsections (4) and (5) below. Any other payment of compensation paid after severance of employment that is not described in the following types of compensation is not considered Compensation, even if payment is made within the time period specified above.
|
(1)
|
Regular
pay.
Compensation shall include regular pay after severance of employment (to the extent otherwise included in the definition of Compensation) if:
|
(i)
|
The payment is regular compensation for services during the Participant's regular working hours, or compensation for services outside the Participant's regular working hours (such as overtime or shift differential), commissions, bonuses, or other similar payments; and
|
(ii)
|
The payment would have been paid to the Participant prior to a severance from employment if the Participant had continued in employment with the Employer.
|
(2)
|
Leave
cash-outs.
Compensation shall include leave cash-outs if those amounts would have been included in the definition of Compensation if they were paid prior to the Participant's severance from employment with the Employer, and the amounts are for unused accrued bona fide sick, vacation, or other leave, but only if the Participant would have been able to use the leave if employment had continued.
|
(3)
|
Deferred
compensation.
Compensation shall include deferred compensation if those amounts would have been included in the definition of Compensation if they were paid prior to the Participant's severance from employment with the Employer, and the amounts are received pursuant to a nonqualified unfunded deferred compensation plan, but only if the payment would have been paid if the Participant had continued in employment with the Employer and only to the extent the payment is includible in the Participant's gross income.
|
(4)
|
Military
Differential
Pay.
Compensation shall include payments to an individual who does not currently perform services for the Employer by reason of qualified military service (as that term is used in Code §414(u)(1)) to the extent those payments do not exceed the amounts the individual would have received if the individual had continued to perform services for the Employer rather than entering qualified military service.
|
(5)
|
Disability
pay.
Compensation shall include compensation paid to a Participant who is permanently and totally disabled, as defined in Code §22(e)(3), provided, as elected by the Employer in the Compensation Section of the Adoption Agreement, salary continuation applies to all Participants who are permanently and totally disabled for a fixed or determinable period, or the Participant was not a Highly Compensated Employee immediately before becoming disabled.
|
(f)
|
Dollar
limitation.
Compensation in excess of $200,000 shall be disregarded for all purposes other than for purposes of Elective Deferrals. Such amount shall be adjusted by the Commissioner for increases in the cost-of-living in accordance with Code
|
(g)
|
Noneligible
Employee.
If, in the Adoption Agreement, the Employer elects to exclude a class of Employees from the Plan, then Compensation for any Employee who becomes eligible or ceases to be eligible to participate during a "determination period" shall only include Compensation while the Employee is an Eligible Employee. In addition, with respect to the determination of any matching contributions, the Plan will disregard Elective Deferrals made while the Participant is not eligible for the matching contribution component of the Plan.
|
(h)
|
Amendment.
If, in connection with the adoption of any amendment, the definition of Compensation has been modified, then, except as otherwise provided herein, for Plan Years prior to the Plan Year which includes the adoption date of such amendment, Compensation means compensation determined pursuant to the terms of the Plan then in effect.
|
1.19
|
"Contract"
or
"Policy"
means any life insurance policy, retirement income policy, or annuity contract (group or individual) issued by the Insurer. In the event of any conflict between the terms of this Plan and the terms of any contract purchased hereunder , the Plan provisions shall control.
|
1.20
|
"Custodian"
means a person or entity that has custody of all or any portion of the Plan assets.
|
1.21
|
"Directed
Trustee"
means a Trustee who, with respect to the investment of Plan assets, is subject to the direction of the Administrator, the Employer, a properly appointed Investment Manager, a named Fiduciary, or Plan Participant. To the extent the Trustee is a Directed Trustee, the Trustee does not have any discretionary authority with respect to the investment of Plan assets. In addition, the Trustee is not responsible for the propriety of any directed investment made pursuant to this Section and shall not be required to consult or advise the Employer regarding the investment quality of any directed investment held under the Plan.
|
1.22
|
"Discretionary
Trustee"
means a Trustee who has the authority and discretion to invest, manage or control any portion of the Plan assets.
|
1.23
|
"Early
Retirement
Date"
means the date specified in the Adoption Agreement on which a Participant has satisfied the requirements specified in the Adoption Agreement (Early Retirement Age). If elected in the Adoption Agreement, a Participant shall become fully Vested upon satisfying such requirements if the Participant is still employed at the Early Retirement Age.
|
1.24
|
"Earned
Income"
means the net earnings from self-employment in the trade or business with respect to which the Plan is established, for which the 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 made by the Employer to a qualified plan to the extent deductible under Code §404. In addition, net earnings shall be determined with regard to the deduction allowed to the taxpayer by Code §164(f).
|
1.25
|
"Effective
Date"
means the date this Plan, including any restatement or amendment of this Plan, is effective
.
Where
the
Plan
is
restated
or
amended,
a
reference
to
Effective
Date
is
the
effective
date
of
the
restatement
or
amendment,
except
where
the
context
indicates
a
reference
to
an
earlier
Effective
Date.
If
any
provision
of
this
Plan
is
retroactively
effective,
then
provisions
of
this
Plan
generally
control.
However,
if
a
provision
of
this
Plan
is
different
from
the
provision
of
the
Employer's
prior
plan
document
and,
after
the
retroactive
Effective
Date
of
this
Plan,
the
Employer
operated
in
compliance
with
the
provisions
of
the
prior
plan,
then
the
provision
of
such
prior
plan
is
incorporated
into
this
Plan
for
purposes
of
determining
whether
the
Employer
operated
the
Plan
in
compliance
with
its
terms,
provided
operation
in
compliance
with
the
terms
of
the
prior
plan
do
not
violate
any
qualification
requirements
under
the
Code,
Regulations,
or
other
IRS
guidance.
|
1.26
|
"Elective
Deferrals"
means the Employer's contributions to the Plan that are made pursuant to a Participant's salary deferral election in accordance with Section 12.2. Elective Deferrals shall be subject to the requirements of Sections 12.2(d) and 12.2(e) and shall, except as
|
1.27
|
"Eligible
Automatic
Contribution
Arrangement"
(EACA)
means an Automatic Contribution Arrangement that is intended to comply as such for purposes of Code §414(w) and that therefore complies with the Automatic Deferral provisions described in the EACA provisions set forth in Section 12.2(b).
|
1.28
|
"Eligible
Employee"
means any Eligible Employee as elected in the Adoption Agreement and as provided herein. With respect to a volume submitter or non-standardized Adoption Agreement, an individual shall not be an Eligible Employee if such individual is not reported on the payroll records of the Employer as a common law employee. In particular, it is expressly intended that indivi duals not treated as common law employees by the Employer on its payroll records and out-sourced workers, are not Eligible Employees and are excluded from Plan participation even if a court or administrative agency determines that such individuals are common law employees and not independent contractors. However, the two preceding sentences shall not apply to partners or other Self-Employed Individuals unless the Employer treats them as independent contractors. Furthermore, with respect to a volume submitter or non-standardized Adoption Agreement, Employees of an Affiliated Employer will not be treated as Eligible Employees prior to the date the Affiliated Employer adopts the Plan as a Participating Employer.
|
1.29
|
"Employee"
means any person who is employed by the Employer. The term "Employee" shall also include any person who is an employee of an Affiliated Employer and any Leased Employee deemed to be an Employee as provided in Code §414(n) or (o).
|
1.30
|
"Employer"
means the entity specified in the Adoption Agreement, any successor which shall maintain this Plan and any predecessor which has maintained this Plan. In addition, unless the context means otherwise, the term "Employer" shall include any Participating Employer which shall adopt this Plan.
|
1.31
|
"Excess
Aggregate
Contributions"
means, with respect to any Plan Year, the excess of:
|
(a)
|
The aggregate "contribution percentage amounts" (as defined in Section 12.6) actually made on behalf of Highly Compensated Participants for such Plan Year and taken into account in computing the numerator of the ACP, over
|
(b)
|
The maximum "contribution percentage amounts" permitted by the ACP test in Section 12.6 (determined by hypothetically reducing contributions made on behalf of Highly Compensated Participants in order of their "contribution percentages" beginning with the highest of such percentages).
|
1.32
|
"Excess
Compensation"
means, with respect to a Plan that is integrated with Social Security (permitted disparity), a Participant's Compensation which is in excess of the integration level elected in the Adoption Agreement. However, if Compensation is based on less than a twelve (12) month "determination period," Excess Compensation shall be determined by reducing the integration level by a fraction, the numerator of which is the number of full months in the short period and the denominator of which is twelve (12). A "determination period" is not less than twelve (12) months solely because a Participant's Compensation does not include Compensation paid during a "determination period" while the Participant was not a Participant in this component of the Plan.
|
1.33
|
"Excess
Contributions"
means, with respect to any Plan Year, the excess of:
|
(a)
|
The aggregate amount of Employer contributions actually made on behalf of Highly Compensated Participants for such Plan Year and taken into account in computing the numerator of the ADP, over
|
(b)
|
The maximum amount of such contributions permitted by the ADP test in Section 12.4 (determined by hypothetically reducing contributions made on behalf of Highly Compensated Participants in order of the actual deferral ratios, beginning with the highest of such ratios).
|
1.34
|
"Excess
Deferrals"
means, with respect to any taxable year of a Participant, either (a) those elective deferrals within the meaning of Code §§402(g) or 402A that are made during the Participant's taxable year and exceed the dollar limitation under Code §402(g) (including, if applicable, the dollar limitation on Catch-Up Contributions defined in Code §414(v)) for such year; or (b) are made during a calendar year and exceed the dollar limitation under Code §§402(g) and 402A (including, if applicable, the dollar limitation on Catch-Up Contributions defined in Code §414(v)) for the Participant's taxable year beginning in such calendar year, counting only Elective Deferrals made under this Plan and any other plan, contract or arrangement maintained by the Employer.
|
1.35
|
"Fiduciary"
means any person who (a) exercises any discretionary authority or discretionary control respecting management of the Plan or exercises any authority or control respecting management or disposition of its assets, (b) renders investment advice for a fee or other compensation, direct or indirect, with respect to any monies or other property of the Plan or has any authority or responsibility to do so, or (c) has any discretionary authority or discretionary responsibility in the administration of the Plan.
|
1.36
|
"Fiscal
Year"
means the Employer's accounting year.
|
1.37
|
"Forfeiture"
means that portion of a Participant's Account that is not Vested and is disposed of in accordance with the provisions of the Plan. Unless otherwise elected in the Adoption Agreement, Forfeitures occur pursuant to (a) below.
|
(a)
|
A Forfeiture will occur on the earlier of:
|
(1)
|
The last day of the Plan Year in which a Participant incurs five (5) consecutive 1-Year Breaks in Service, or
|
(2)
|
The distribution of the entire Vested portion of the Participant's Account of a Participant who has severed employment with the Employer. For purposes of this provision, if the Participant has a Vested benefit of zero, then such Participant shall be deemed to have received a distribution of such Vested benefit as of the year in which the severance of employment occurs. For this purpose, a Participant's Vested benefit shall not include: (i) the Participant's Qualified Voluntary Employee Contribution Account, and (ii) the Participant's Rollover Account.
|
(b)
|
If elected in the Adoption Agreement, a Forfeiture will occur as of the last day of the Plan Year in which a Participant incurs five (5) consecutive 1-Year Breaks in Service.
|
1.38
|
"Former
Employee"
means an individual who has severed employment with the Employer or an Affiliated Employer.
|
1.39
|
"414(s)
Compensation"
means Compensation as defined in Section 1.18. However, the Employer may operationally elect to use any other definition of compensation for 414(s) Compensation provided such definition satisfies the nondiscrimination requirements of Code
|
1.40
|
"415
Compensation"
means, with respect to any Participant, such Participant's (a) Wages, tips and other compensation on Form W-2, (b) Code §3401(a) wages or (c) 415 safe harbor compensation as elected in the Adoption Agreement for purposes of Compensation (and as defined in Subsections 1.18(a)(1)-(3) respectively). 415 Compensation shall be based on the full Limitation Year regardless of when participation in the Plan commences. Furthermore, regardless of any election made in the Adoption Agreement, 415 Compensation shall include any elective deferral (as defined in Code §§402(e)(3), 402(k) and 402(h)(1)(B)) and any amount which is contributed or deferred by the Employer at the election of the Participant and which is not includible in the gross income of the Participant by reason of Code §§125, 457, and 132(f)(4). In addition, for years beginning after December 31, 2008 Military Differential Pay is treated as 415 Compensation.
|
(a)
|
Deemed
125
compensation.
If elected in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections), amounts under Code §125 shall be deemed to include any amounts not available to a Participant in cash in lieu of group health coverage because the Participant is unable to certify that he or she has other health coverage. An amount will be treated as an amount under Code §125 pursuant to the preceding sentence only if the Employer does not request or collect information regarding the Participant's other health coverage as part of the enrollment process for the health plan.
|
(b)
|
Post-severance
compensation.
The Administrator shall adjust 415 Compensation, for Limitation Years beginning on or after July 1, 2007, or such earlier date as the Employer specifies in the Compensation Section of the Adoption Agreement, for amounts that would otherwise be included in the definition of 415 Compensation but are paid by the later of 2 1/2 months after a Participant's severance from employment with the Employer or the end of the Limitation Year that includes the date of the Participant's severance from employment with the Employer, in accordance with the following, as elected in the Compensation Section of the Adoption Agreement. The preceding time period, however, does not apply with respect to payments described in Subsections (4) and (5) bel ow. Any other payment of compensation paid after severance of employment that is not described in the following types of compensation is not considered 415 Compensation, even if payment is made within the time period specified above.
|
(1)
|
Regular
pay.
415 Compensation shall include regular pay after severance of employment (to the extent otherwise included in the definition of 415 Compensation) if:
|
(i)
|
The payment is regular compensation for services during the Participant's regular working hours, or compensation for services outside the Participant's regular working hours (such as overtime or shift differential), commissions, bonuses, or other similar payments; and
|
(ii)
|
The payment would have been paid to the Participant prior to a severance from employment if the Participant had continued in employment with the Employer.
|
(2)
|
Leave
cash-outs.
415 Compensation shall include leave cash-outs if those amounts would have been included in the definition of 415 Compensation if they were paid prior to the Participant's severance from employment with the Employer, and the amounts are for unused accrued bona fide sick, vacation, or other leave, but only if the Participant would have been able to use the leave if employment had continued.
|
(3)
|
Deferred
compensation.
415 Compensation shall include deferred compensation if those amounts would have been included in the definition of 415 Compensation if they were paid prior to the Participant's severance from employment with the Employer, and the amounts are received pursuant to a nonqualified unfunded deferred compensation plan, but only if the payment would have been paid if the Participant had continued in employment with the Employer and only to the extent the payment is includible in the Participant's gross income.
|
(4)
|
Military
Differential
Pay.
415 Compensation shall include payments to an individual who does not currently perform services for the Employer by reason of qualified military service (as that term is used in Code §414(u)(1)) to the extent those payments do not exceed the amounts the individual would have received if the individual had continued to perform services for the Employer rather than entering qualified military service.
|
(5)
|
Disability
pay.
415 Compensation shall include compensation paid to a Participant who is permanently and totally disabled, as defined in Code §22(e)(3), provided, as elected by the Employer in the Compensation Section of the Adoption Agreement, salary continuation applies to all Participants who are permanently and totally disabled for a fixed or determinable period, or the Participant was not a Highly Compensated Employee immediately before becoming disabled.
|
(c)
|
Administrative
delay
("the
first
few
weeks")
rule.
415 Compensation for a Limitation Year shall generally not include amounts earned but not paid during the Limitation Year solely because of the timing of pay periods and pay dates. However, if elected in the Compensation Section of the Adoption Agreement, 415 Compensation for a Limitation Year shall include amounts earned but not paid during the Limitation Year solely because of the timing of pay periods and pay dates, provided the amounts are paid during the first few weeks of the next Limitation Year, the amounts are included on a uniform and consistent basis with respect to all similarly situated Participants, and no Compensation is included in more than one Limitation Year.
|
(d)
|
Inclusion
of
certain
nonqualified
deferred
compensation
amounts.
If this is a PPA restatement and prior to the restatement 414(s) Compensation included all items includible in compensation under Regulation §1.415(c)-2(b) (Regulation §1.415-2(d)(2) under the Regulations in effect for Limitation Years beginning prior to July 1, 2007), then 415 Compensation for Limitation Years prior to the adoption of this restatement shall include amounts that are includible in the gross income of a Participant under the rules of Code
|
(e)
|
Back
pay.
Back pay, within the meaning of Regulations §1.415(c)-2(g)(8), shall be treated as Compensation for the Limitation Year to which the back pay relates to the extent the back pay represents wages and compensation that would otherwise be included under this definition.
|
(f)
|
Dollar
limitation.
415 Compensation will be limited to the same dollar limitations set forth in Section 1.18(f) adjusted in such manner as permitted under Code §415(d).
|
(g)
|
Amendment.
Except as otherwise provided herein, if, in connection with the adoption of any amendment, the definition of 415 Compensation has been modified, then for Plan Years prior to the Plan Year which includes the adoption date of such amendment, 415 Compensation means compensation determined pursuant to the terms of the Plan then in effect.
|
1.41
|
"Highly
Compensated
Employee"
means an Employee described in Code §414(q) and the Regulations thereunder, and generally means any Employee who:
|
(a)
|
was a "five percent (5%) owner" as defined in Section 1.47(b) at any time during the "determination year" or the "look-back year"; or
|
(b)
|
for the "look-back year" had 415 Compensation from the Employer in excess of $80,000 and, if elected in the Adoption Agreement, was in the Top-Paid Group for the "look-back year." The $80,000 amount is adjusted at the same time and in the same manner as under Code §415(d). In applying this rule, the Employer may adopt any rounding or tie-breaking rules it desires, so long as such rules are reasonable, nondiscriminatory, and uniformly and consistently applied.
|
1.42
|
"Highly
Compensated
Participant"
means any Highly Compensated Employee who is eligible to participate in the component of the Plan being tested.
|
1.43
|
"Hour
of
Service"
means (a) each hour for which an Employee is directly or indirectly compensated or entitled to Compensation by the Employer for the performance of duties during the applicable computation period (these hours will be credited to the Employee for the computation period in which the duties are performed); (b) each hour for which an Employee is directly or indirectly compensa ted or entitled to Compensation by the Employer (irrespective of whether the employment relationship has terminated) for reasons other than performance of duties (such as vacation, holidays, sickness, incapacity (including disability), jury duty, lay-off, military duty or leave of absence) during the applicable computation period (these hours will be calculated and credited pursuant to Department of Labor Regulation
|
1.44
|
"Insurer"
means any legal reserve insurance company which has issued or shall issue one or more Contracts or Policies under the Plan.
|
1.45
|
"Investment
Manager"
means a Fiduciary as described in Act §3(38).
|
1.46
|
"Joint
and
Survivor
Annuity"
means an immediate annuity for the life of a Participant with a survivor annuity for the life of the Participant's Spouse which is not less than fifty percent (50%), nor more than one hundred percent (100%) of the amount of the annuity payable during the joint lives of the Participant and the Participant's Spouse which can be purchased with the Participant's Vested interest in the Plan reduced by any outstanding loan balances pursuant to Section 7.6.
|
1.47
|
"Key
Employee"
means an Employee as defined in Code §416(i) and the Regulations thereunder. Generally, for purposes of determining top-heavy status, any Employee or Former Employee (including any deceased Employee as well as each of the Employee's or Former Employee's Beneficiaries) is considered a Key Employee if the Employee or Former Employee, at any time during the Plan Year that contains the "determination date," has been included in one of the following categories:
|
(a)
|
an officer of the Employer (as that term is defined within the meaning of the Regulations under Code §416) having annual 415 Compensation greater than $130,000 (as adjusted under Code §416(i)(1));
|
(b)
|
a "five percent (5%) owner" of the Employer. "Five percent (5%) owner" means any person who owns (or is considered as owning within the meaning of Code §318) more than five percent (5%) of the value of the outstanding stock of the Employer or stock possessing more than five percent (5%) of the total combined voting power of all stock of the Employer or, in the case of an unincorporated business, any person who owns more than five percent (5%) of the capital or profits interest in the Employer; and
|
(c)
|
a "one percent (1%) owner" of the Employer having annual 415 Compensation from the Employer of more than $150,000. "One percent (1%) owner" means any person who owns (or is considered as owning within the meaning of Code §318) more than one percent (1%) of the value of the outstanding stock of the Employer or stock possessing more than one percent (1%) of the total combined voting power of all stock of the Employer or, in the case of an unincorporated business, any person who owns more than one percent (1%) of the capital or profits interest in the Employer.
|
1.48
|
"Late
Retirement
Date"
means the date of, or the first day of the month or the Anniversary Date coinciding with or next following, whichever corresponds to the election in the Adoption Agreement for the Normal Retirement Date, a Participant's actual retirement after having reached the Normal Retirement Date.
|
1.49
|
"Leased
Employee"
means any person (other than an Employee of the recipient Employer) who, pursuant to an agreement between the recipient Employer and any other person or entity ("leasing organization"), has performed services for the recipient (or for the recipient and related persons determined in accordance with Code §414(n)(6)) on a substantially full time basis for a period of at least one year (unless otherwise elected in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections)), and such services are performed under primary direction or control by the recipient Employer. Contributions or benefits provided a Leased Employee by the leasing organization which are attributable to services performed for the recipient Employer shall be treated as provided by the recipient Employer. Furthermore, Compensation for a Leased Employee shall only include compensation from the leasing organization that is attributable to services performed for the recipient Employer.
|
1.50
|
"Limitation
Year"
means the "determination period" used to determine Compensation. However, the Employer may elect a different Limitation Year in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections). All qualified plans maintained by the Employer must use the same Limitation Year. Furthermore, unless there is a change to a new Limitation Year, the Limitation Year will be a twelve (12) consecutive month period. In the case of an initial Limitation Year, the Limitation Year will be the twelve (12) consecutive month period ending on the last day of the period specified in the Adoption Agreement. If the Limitation Year is amended to a different twelve (12) consecutive month period, the new "Limitation Year" must begin on a date within the "Limitation Year" in which the amendment is made. For Limitation Years beginning on and after July 1, 2007, the Limitation Year may only be cha nged by a Plan amendment. Furthermore, if the Plan is terminated effective as of a date other than the last day of the Plan's Limitation Year, then the Plan is treated as if the Plan had been amended to change its Limitation Year.
|
1.51
|
"Military
Differential
Pay"
means, for any Plan or Limitation Year beginning after June 30, 2007, any differential wage payments made to an individual that represents an amount which, when added to the individual's military pay, approximates the amount of compensation that was paid to the individual while working for the Employer. Notwithstanding the preceding sentence, for Compensation "determination periods" beginning after December 31, 2008, an individual receiving a differential wage payment, as defined by
|
1.52
|
"Nonelective
Contribution"
means the Employer's contributions to the Plan other than Elective Deferrals, any Qualified Nonelective Contributions and any Qualified Matching Contributions. Employer matching contributions which are not Qualified Matching Contributions shall be considered a Nonelective Contribution for purposes of the Plan.
|
1.53
|
"Nonhighly
Compensated
Employee/Participant"
means any Employee/Participant who is not a Highly Compensated Employee. However, if pursuant to Sections 12.4 or 12.6 the prior year testing method is used to calculate the ADP or the ACP, a Nonhighly Compensated Employee/Participant shall be determined using the definition of Highly Compensated Employee in effect for the preceding Plan Year.
|
1.54
|
"Non-Key
Employee"
means any Employee or Former Employee (and such Employee's or Former Employee's Beneficiaries) who is not a Key Employee.
|
1.55
|
"Normal
Retirement
Age"
means the age elected in the Adoption Agreement at which time a Participant's Account shall be nonforfeitable (if the Participant is employed by the Employer on or after that date). For money purchase pension plans, if the Employer enforces a mandatory retirement age, then the Normal Retirement Age is the lesser of that mandatory age or the age specified in the Adoption Agreement. Furthermore, effective for Plan Years beginning after the adoption of this Plan, the Employer may not dee m the Social Security retirement age (as defined in Code §415(b)(8)) as the Normal Retirement Age for purposes of nondiscrimination testing under Code §401(a)(4).
|
1.56
|
"Normal
Retirement
Date"
means the date elected in the Adoption Agreement.
|
1.57
|
"1-Year
Break
in
Service"
means, if the Hour of Service method is used, the applicable computation period that is used to determine a Year of Service during which an Employee or Former Employee has not completed more than 500 Hours of Service. However, if the Employer selected, in the Service Crediting Method Section of the Adoption Agreement, to define a Year of Service as less than 1,000 Hours of Service, then the 500 Hours of Service in this definition of 1-Year Break in Service shall be proportionately reduced. Further, solely for the purpose of determining whether an Employee has incurred a 1-Year Break in Service, Hours of Service shall be recognized for "authorized leaves of absence" and "maternity and paternity leaves of absence." For this purpose, Hours of Service shall be credited for the computation period in which the absence from work begins, only if credit therefore is necessary to prevent the Employee from incurring a 1-Year Break in Service, or, in any other case, in the immediately following computation period. The Hours of Service credited for a "maternity or paternity leave of absence" shall be those which would normally have been credited but for such absence, or, in any case in which the Administrator is unable to determine such hours normally credited, eight (8) Hours of Service per day. The total Hours of Service required to be credited for a "maternity or paternity leave of absence" shall not exceed the number of Hours of Service needed to prevent the Employee from incurring a 1-Year Break in Service.
|
1.58
|
"Participant"
means any Employee or Former Employee who has satisfied the requirements of Sections 3.1 and 3.2 and entered the Plan and is eligible to accrue benefits under the Plan. In addition, the term "Participant" also includes any individual who was a Participant (as defined in the preceding sentence) and who must continue to be taken into account under a particular provision of the Plan (e.g., because the individual has an Account balance in the Plan).
|
1.59
|
"Participant
Directed
Account"
means that portion of a Participant's interest in the Plan with respect to which the Participant has directed the investment in accordance with the Participant Direction Procedures.
|
1.60
|
"Participant
Direction
Procedures"
means such instructions, guidelines or policies, the terms of which are incorporated herein, as shall be established pursuant to Section 4.10 and observed by the Administrator and applied and provided to Participants who have Participant Directed Accounts.
|
1.61
|
"Participating
Employer"
means an Employer which, with the consent of the "lead Employer" adopts the Plan pursuant to Section
|
(a)
|
A number of years equal to the number of Years of Service credited to the Employee before the computation period during which the amendment occurs; and
|
(b)
|
The greater of (1) the Periods of Service that would be credited to the Employee under the elapsed time method for service during the entire computation period in which the transfer occurs or (2) the service taken into account under the Hour of Service method as of the date of the amendment.
|
1.64
|
"Plan"
means this instrument hereinafter referred to as Pentegra Services, Inc. Defined Contribution Volume Submitter Plan and Trust (Basic Plan Document #07 and the Adoption Agreement) as adopted by the Employer, including all amendments thereto and any appendix which is specifically permitted pursuant to the terms of the Plan.
|
1.65
|
"Plan
Year"
means the Plan's accounting year as specified in the Adoption Agreement. Unless there is a Short Plan Year, the Plan Year will be a twelve-consecutive month period.
|
1.66
|
"Pre-Retirement
Survivor
Annuity"
means an immediate annuity for the life of a Participant's Spouse, the payments under which must be equal to the benefit which can be provided with the percentage, as specified in the Adoption Agreement, of the Participant's Vested interest in the Plan as of the date of death. If no election is made in the Adoption Agreement, the percentage shall be equal to fifty percent (50%). Furthermore, if less than one hundred percent (100%) of the Participant's Vested interest in the Plan is used to provi de the
|
1.67
|
"Pre-Tax
Elective
Deferrals"
means a Participant's Elective Deferrals that are not includible in the Participant's gross income at the time deferred.
|
1.68
|
"Qualified
Automatic
Contribution
Arrangement"
(QACA)
means an automatic contribution arrangement which meets the requirements of Section 12.9.
|
1.69
|
"Qualified
Matching
Contribution"
(QMAC)
means any Employer matching contributions that are made pursuant to
|
1.70
|
"Qualified
Nonelective
Contribution"
(QNEC)
means the Employer's contributions to the Plan that are made pursuant to Sections 12.1(a)(4), 12.5 and 12.7 or pursuant to any other Plan provision which provides for such contributions.
|
1.71
|
"Regulation"
means the Income Tax Regulations as promulgated by the Secretary of the Treasury or a delegate of the Secretary of the Treasury, and as amended from time to time.
|
1.72
|
"Retirement
Date"
means the date as of which a Participant retires for reasons other than Total and Permanent Disability, regardless of whether such retirement occurs on a Participant's Normal Retirement Date, Early Retirement Date or Late Retirement Date (see
|
1.73
|
"Roth
Elective
Deferrals"
means a Participant's Elective Deferrals that are includible in the Participant's gross income at the time deferred and have been irrevocably designated as Roth Elective Deferrals at the time of the deferral. Roth Elective Deferrals shall be subject to the requirements of Sections 12.2(d) and 12.2(e) and shall, except as otherwise provided herein, be required to satisfy the nondiscrimination requirements of Regulation §1.401(k)-1(b), the provisions of which are incorporated herein by reference. A Participant's Roth Elective Deferrals will be maintained in a separate account containing only the Participant's Roth Elective Deferrals and gains and losses attributable to those Roth Elective Deferrals. In addition, the Administrator shall, to the extent necessary for proper reporting, separately account for any "in-Plan Roth rollover contributions" (as defined in Section 12.11) that are transferred to a Participant's Roth
|
1.74
|
"Salary
Deferral
Agreement"
means an agreement between a Participant and the Employer, whereby the Participant elects to reduce Compensation by a specific dollar amount or percentage and the Employer agrees to contribute such amount into the 401(k) Plan. A Salary Deferral Agreement may require that an election be stated in specific percentage increments (not greater than one percent (1%) increments) or in specific dollar amount increments (not greater than dollar increments that could exceed one percent (1%) of Compensation).
|
1.75
|
"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, and, 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. A Self-Employed Individual shall be treated as an Employee.
|
1.76
|
"Short
Plan
Year"
means, if specified in the Adoption Agreement or as the result of an amendment, a Plan Year of less than a twelve (12) month period. If there is a Short Plan Year, the following rules shall apply in the administration of this Plan. In determining whether an Employee has completed a Year of Service (or Period of Service if the elapsed time method is used) for benefit accrual
|
1.77
|
"Spouse"
means a spouse as determined under federal tax law. In addition, with respect to benefits or rights not mandated by law (e.g., Section 6.2(e)(1) with respect to death benefits in excess of the Pre-Retirement Survivor Annuity), Spouse also includes a spouse as elected in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections). The Employer may also elect, in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections), to require that a Participant be married for at least one (1) year before the Participant is treated as married (and having a Spouse) for all purposes of the Plan other than for purposes of determining eligible hardship distribution expenses.
|
1.78
|
"Taxable
Wage
Base"
means, with respect to any Plan Year, the contribution and benefit base under Section 230 of the Social Security Act at the beginning of such Plan Year.
|
1.79
|
"Terminated
Participant"
means a person who has been a Participant, but whose employment has been terminated with the Employer (including an Affiliated Employer) or applicable Participating Employer, other than by death, Total and Permanent Disability or retirement.
|
1.80
|
"Top-Heavy
Plan"
means a plan described in Section 9.2(a).
|
1.81
|
"Top-Heavy
Plan
Year"
means a Plan Year during which the Plan is a Top-Heavy Plan.
|
1.82
|
"Top-Paid
Group"
shall be determined pursuant to Code §414(q) and the Regulations thereunder and generally means the top twenty percent (20%) of Employees who performed services for the Employer during the applicable year, ranked according to the amount of 415 Compensation received from the Employer during such year. All Affiliated Employers shall be taken into account as a single employer, and Leased Employees shall be treated as Employees if required pursuant to Code §414(n) or (o). Employees who are nonresident aliens who received no earned income (within the meaning of Code §911(d)(2)) from the Employer constituting United States source income within the meaning of Code §861(a)(3) shall not be treated as Employees. Furthermore, for the purpose of determining the number of Employees in any year, the following additional Employees may also be excluded, however, such Employees shall still be considered for the purpose of identifying the particular Employees in the Top-Paid Group:
|
(a)
|
Employees with less than six (6) months of service;
|
(b)
|
Employees who normally work less than 17 1/2 hours per week;
|
(c)
|
Employees who normally work less than six (6) months during a year; and
|
(d)
|
Employees who have not yet attained age twenty-one (21).
|
1.83
|
"Total
and
Permanent
Disability"
means, unless otherwise specified in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections), the 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 has lasted or can be expected to last for a continuous period of not less than twelve (12) months. The disability of a Participant shall be determined by a licensed physician. However, if the condition constitutes total disability under the federal Social Security Acts, the Administrator may rely upon such determination that the Participant is Totally and Permanently Disabled for the purposes of this Plan. The determination shall be applied uniformly to all Participants.
|
1.84
|
"Trustee"
means any person or entity that is named in the Adoption Agreement or has otherwise agreed to serve as Trustee, or any successors thereto. In addition, unless the context means, or the Plan provides, otherwise, the term "Trustee" shall mean the Insurer if the Plan is fully insured.
|
1.85
|
"Trust
Fund"
means, if the Plan is funded with a trust, the assets of the Plan and Trust as the same shall exist from time to time.
|
1.86
|
"Valuation
Date"
means the date or dates specified in the Adoption Agreement. Regardless of any election to the contrary, for purposes of the determination and allocation of earnings and losses, the Valuation Date shall include the Anniversary Date and may include any other date or dates deemed necessary or appropriate by the Administrator for the valuation of Participants' Accounts during the Plan Year, which may include any day that the Trustee (or Insurer), any transfer agent appointed by the Trustee (or Insurer) or the Employer, or any stock exchange used by such agent, are open for business.
|
1.87
|
"Vested"
means the nonforfeitable portion of any Account maintained on behalf of a Participant.
|
1.88
|
"Year
of
Service"
means the computation period of twelve (12) consecutive months, herein set forth, and during which an Employee has completed at least 1,000 Hours of Service (unless a lower number of Hours of Service is specified in the Adoption Agreement).
|
(a)
|
The number of Years of Service equal to the number of 1-year Periods of Service credited to the Employee as of the date of the amendment; and
|
(b)
|
In the computation period which includes the date of the amendment, a number of Hours of Service (using the Hours of Service equivalency method, if any, elected in the Adoption Agreement) to any fractional part of a year credited to the Employee under this Section as of the date of the amendment.
|
2.1
|
POWERS AND RESPONSIBILITIES OF THE EMPLOYER
|
(a)
|
Appointment
of
Trustee
(or
Insurer)
and
Administrator.
In addition to the general powers and responsibilities otherwise provided for in this Plan, the Employer shall be empowered to appoint and remove one or more Trustees (or Insurers) and Administrators from time to time as it deems necessary for the proper administration of the Plan to ensure that the Plan is being operated for the exclusive benefit of the Participants and their Beneficiaries in accordance with the terms of the Plan, the Code, and the Act. The Employer may appoint counsel, specialists, advisers, agents (including any nonfiduciary agent) and other persons as the Employer deems necessary or desirable in connection with the exercise of its fiduciary duties under this Plan. The Employer may compensate such agents or advisers from the assets of the Plan as fiduciary expenses (but not including any business (settlor) expenses of the Employer), to the extent not paid by the Employer.
|
(b)
|
Funding
policy
and
method.
The Employer shall establish a "funding policy and method," i.e., it shall determine whether the Plan has a short run need for liquidity (e.g., to pay benefits) or whether liquidity is a long run goal and investment growth (and stability of same) is a more current need, or shall appoint a qualified person to do so. If the Trustee (or Insurer) has discretionary authority, the Employer or its delegate shall communicate such needs and goals to the Trustee (or Insurer), who shall coordinate such Plan needs with its investment policy. The communication of such a "funding policy and method" shall not, however, constitute a directive to the Trustee (or Insurer) as to the investment of the Trust Funds. Such "funding policy and method" shall be consistent with the objectives of this Plan and with the requirements of Title I of the Act.
|
(c)
|
Appointment
of
Investment
Manager.
The Employer may appoint, at its option, one or more Investment Managers, investment advisers, or other agents to provide investment direction to the Trustee (or Insurer) with respect to any or all of the Plan assets. Such appointment shall be given by the Employer in writing in a form acceptable to the Trustee (or Insurer) and shall specifically identify the Plan assets with respect to which the Investment Manager or other agent shall have the authority to direct the investment.
|
(d)
|
Review
of
fiduciary
performance.
The Employer shall periodically review the performance of any Fiduciary or other person to whom duties have been delegated or allocated by it under the provisions of this Plan or pursuant to procedures established hereunder. This requirement may be satisfied by formal periodic review by the Employer or by a qualified person specifically designated by the Employer, through day-to-day conduct and evaluation, or through other appropriate ways.
|
2.2
|
DESIGNATION OF ADMINISTRATIVE AUTHORITY
|
2.3
|
ALLOCATION AND DELEGATION OF RESPONSIBILITIES
|
2.4
|
POWERS AND DUTIES OF THE ADMINISTRATOR
|
(a)
|
the discretion to determine all questions relating to the eligibility of an Employee to participate or remain a Participant hereu nder and to receive benefits under the Plan;
|
(b)
|
the authority to review and settle all claims against the Plan, including claims where the settlement amount cannot be calculated or is not calculated in accordance with the Plan's benefit formula. This authority specifically permits the Administrator to settle disputed claims for benefits and any other disputed claims made against the Plan;
|
(c)
|
to compute, certify, and direct the Trustee (or Insurer) with respect to the amount and the kind of benefits to which any Participant shall be entitled hereunder;
|
(d)
|
to authorize and direct the Trustee (or Insurer) with respect to all discretionary or otherwise directed disbursements from the Trust Fund;
|
(e)
|
to maintain all necessary records for the administration of the Plan;
|
(f)
|
to interpret the provisions of the Plan and to make and publish such rules for regulation of the Plan that are consistent with the terms hereof;
|
(g)
|
to determine the size and type of any Contract to be purchased from any Insurer, and to designate the Insurer from which such Contract shall be purchased;
|
(h)
|
to compute and certify to the Employer and to the Trustee (or Insurer) from time to time the sums of money necessary or desirable to be contributed to the Plan;
|
(i)
|
to consult with the Employer and the Trustee (or Insurer) regarding the short and long-term liquidity needs of the Plan in order that the Trustee (or Insurer) can exercise any investment discretion (if the Trustee (or Insurer) has such discretion), in a manner designed to accomplish specific objectives;
|
(j)
|
to prepare and implement a procedure for notifying Participants and Beneficiaries of their rights to elect Joint and Survivor Annuities and Pre-Retirement Survivor Annuities if required by the Plan, Code and Regulations thereunder;
|
(k)
|
to assist Participants regarding their rights, benefits, or elections available under the Plan;
|
(l)
|
to act as the named Fiduciary responsible for communicating with Participants as needed to maintain Plan compliance with Act
|
(m)
|
to determine the validity of, and take appropriate action with respect to, any "qualified domestic relations order" received by it.
|
2.5
|
RECORDS AND REPORTS
|
2.6
|
APPOINTMENT OF ADVISERS
|
2.7
|
INFORMATION FROM EMPLOYER
|
2.8
|
PAYMENT OF EXPENSES
|
2.9
|
MAJORITY ACTIONS
|
2.10
|
CLAIMS PROCEDURES
|
(a)
|
Initial
Claim.
Claims for benefits under the Plan may be filed in writing with the Administrator. Written or electronic notice of the disposition of a claim shall be furnished to the claimant within ninety (90) days (45 days if the claim involves disability benefits and disability is not based on the Social Security Acts) after the application is filed, or such period as is required by applica ble law or Department of Labor regulation. Any electronic notification shall comply with the standards imposed by Department of Labor Regulation §2520.104b-1(c)(1)(i), (iii) and (iv) or any subsequent guidance. In the event the claim is denied, the reasons for the denial shall be specifically set forth in the notice in language calculated to be understood by the claimant, pertinent provisions of the Plan shall be cited, and, where appropriate, an explanation as to how the claimant can perfect the claim will be provided. In addition, the claimant shall be furnished with an explanation of the Plan's claims review procedure.
|
(b)
|
Claims
review.
Any Employee, Former Employee, or Beneficiary of either, who has been denied a benefit by a decision of the Administrator pursuant to Section 2.10 shall be entitled to request the Administrator to give further consideration to the claim by filing with the Administrator a written request. Such request, together with a written statement of the reasons why the claimant believes such claim should be allowed, shall be filed with the Administrator no later than sixty (60) days after receipt of the written notification provided for in Section 2.10. A final decision as to the allowance of the claim shall be made by the Administrator within sixty (60) days (45 days if the claim involves disability benefits and disability is not based on the Social Security Acts) of receipt of the appeal (unless there has been an extension of sixty (60) days (45 days if the claim involves disability benefits and disability is not based on the Social Security Acts) due to special circumstances, provided the delay and the special circumstances occasioning it are communicated to the claimant within the sixty (60) day period (45 days if the claim involves disability benefits and disability is not based on the Social Security Acts)). Such communication shall be written in a manner calculated to be understood by the claimant and shall include specific reasons for the decision and specific references to the pertinent Plan provisions on which the decision is based. The communication may be written or electronic (provided the electronic communication complies with the standards imposed by Department of Labor Regulation §2520.104b-1(c)(1)(i), (iii) and (iv) or any subsequent guidance). Notwithstanding the preceding, to the extent any of the time periods specified in this Section are amended by law or Department of Labor regulation, then the time frames specified herein shall automatically be changed in accordance with such law or regulation.
|
(c)
|
Civil
action.
If the Administrator, pursuant to the claims review procedure, makes a final written determination denying a Participant's or Beneficiary's benefit claim, then in order to preserve the claim, the Participant or Beneficiary must file a civil action under Act Section 502(a) with respect to the denied claim not later than one hundred eighty (180) days following the date of the Administrator's final determination.
|
(d)
|
Deadline
to
file
claim.
To be considered timely under the Plan's claims procedures, a claim must be filed under Sections 2.10(a) or (b) above within one year after the claimant knew or reasonably should have known of the principal facts upon which the claim is based. Knowledge of all facts that the Participant knew or reasonably should have known shall be imputed to the claimant for the purpose of applying this deadline.
|
(e)
|
Exhaustion
of
administrative
remedies.
The exhaustion of the claims procedures is mandatory for resolving every claim and dispute arising under this Plan. As to such claims and disputes: (1) no claimant shall be permitted to commence any legal action to recover Plan benefits or to enforce or clarify rights under the Plan under Act §502 or §510 or under any other provision of law, whether or not statutory, until the claims procedures set forth in Subsections (a) and (b) above have been exhausted in their entirety; and (2) in any such legal action all explicit and all implicit determinations by the Administrator (including, but not limited to, determinations as to whether the claim, or a request for a review of a denied claim, was timely filed) shall be afforded the maximum deference permitted by law.
|
(f)
|
Deadline
to
file
action.
No legal action to recover Plan benefits or to enforce or clarify rights under the Plan under Act §502 or
|
(g)
|
Plan
Administrator
discretion;
court
review.
The Administrator and all persons determining or reviewing claims have full discretion to determine benefit claims under the Plan. Any interpretation, determination or other action of such persons shal l be subject to review only if it is arbitrary or capricious or otherwise an abuse of discretion. Any review of a final decision or action of the persons reviewing a claim shall be based only on such evidence presented to or considered by such persons at the time they ma de the decision that is the subject of review.
|
3.1
|
CONDITIONS OF ELIGIBILITY
|
3.2
|
EFFECTIVE DATE OF PARTICIPATION
|
(a)
|
General
rule.
An Eligible Employee who has satisfied the conditions of eligibility pursuant to Section 3.1 shall become a Participant effective as of the date elected in the Adoption Agreement. Regardless of any election in the Adoption Agreement to the contrary, an Eligible Employee who has satisfied the maximum age (21) and service requirements (one (1) Year (or Period) of Service (or, with respect to contributions other than Elective Deferrals, more than one (1) year if full and immediate vesting)) and who is otherwise entitled to participate, will become a Participant no later than the earlier of (1) six (6) months after such requirements are satisfied, or (2) the first day of the first Plan Year after such requirements are satisfied, unless the Employee separates from service before such participation date.
|
(b)
|
Rehired
Employee.
If an Eligible Employee is not employed on the date determined pursuant to (a) above, but is reemployed before a 1-Year Break in Service has occurred, then such Eligible Employee shall become a Participant on the date of reemployment or, if later, the date that the Employee would have otherwise entered the Plan had the Employee not terminated employment. If such Employee incurs a 1-Year Break in Service, then eligibility will be determined under the 1-Year Break in Service rules set forth in Section 3.5.
|
(c)
|
Recognition
of
predecessor
service.
Unless specifically provided otherwise in the Adoption Agreement, an Eligible Employee who satisfies the Plan's eligibility requirement conditions by reason of recognition of service with a predecessor employer will become a Participant as of the day the Plan credits service with a predecessor employer or, if later, the date the Employee would have otherwise entered the Plan had the service with the predecessor employer been service with the Employer.
|
(d)
|
Noneligible
to
eligible
class.
If an Employee, who has satisfied the Plan's eligibility requirements and would otherwise have become a Participant, shall go from a classification of a noneligible Employee to an Eligible Employee, such Employee shall become a Participant on the date such Employee becomes an Eligible Employee or, if later, the date that the Employee would have otherwise entered the Plan had the Employee always been an Eligible Employee.
|
(e)
|
Eligible
to
noneligible
class.
If an Employee, who has satisfied the Plan's eligibility requirements and would otherwise become a Participant, shall go from a classification of an Eligible Employee to a noneligible class of Employees, such Employee shall become a Participant in the Plan on the date such Employee again becomes an Eligible Employee, or, if later, the date that the Employee would
|
3.3
|
DETERMINATION OF ELIGIBILITY
|
3.4
|
TERMINATION OF ELIGIBILITY
|
3.5
|
REHIRED EMPLOYEES AND 1-YEAR BREAKS IN SERVICE
|
(a)
|
Rehired
Participant/immediate
re-entry.
If any Former Employee who had been a Participant is reemployed by the Employer, then the Employee shall become a Participant as of the reemployment date, unless the Employee is not an Eligible Employee, the Employee does not satisfy the eligibility conditions taking into account prior service to the extent such prior service is not disregarded pursuant to Section 3.5(d) or (e) below. If such prior service is disregarded, then the rehired Eligible Employee shall be treated as a new hire.
|
(b)
|
Rehired
Eligible
Employee
who
satisfied
eligibility.
If any Eligible Employee had satisfied the Plan's eligibility requirements but, due to a severance of employment, did not become a Participant, then such Eligible Employee shall become a Participant as of the later of (1) the entry date on which he or she would have entered the Plan had there been no severance of employment, or (2) the date of his or her re-employment. Notwithstanding the preceding, if the rehired Eligible Employee's prior service is disregarded pursuant to Section 3.5(d) or (e) below, then the rehired Eligible Employee shall be treated as a new hire.
|
(c)
|
Rehired
Eligible
Employee
who
had
not
satisfied
eligibility.
If any Eligible Employee who had not satisfied the Plan's eligibility requirements is rehired after severance from employment, then such Eligible Employee shall become a Participant in the Plan in accordance with the eligibility requirements set forth in the Adoption Agreement and the Plan. However, in applying any shift in an eligibility computation period, the Eligible Employee is not treated as a new hire unless prior service is disregarded in accordance with Section 3.5(d) or (e) below.
|
(d)
|
Reemployed
after
five
(5)
1-Year
Breaks
in
Service
("rule
of
parity"
provisions).
If any Employee is reemployed after five
|
(5)
|
1-Year Breaks in Service has occurred, Years of Service (or Periods of Service if the elapsed time method is being used) shall include Years of Service (or Periods of Service if the elapsed time method is being used) prior to the five (5) 1-Year Breaks in Service subject to the rules set forth below. The Employer may elect in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections) to make the provisions of this paragraph inapplicable for purposes of eligibility and/or vesting.
|
(1)
|
In the case of a Former Employee who under the Plan does not have a nonforfeitable right to any interest in the Plan resulting from Employer contributions, Years of Service (or Periods of Service) before a period of 1-Year Breaks in Service will not be taken into account if the number of consecutive 1-Year Breaks in Service equals or exceeds the greater of (i) five (5) or (ii) the aggregate number of pre-break Years of Service (or Periods of Service). Such aggregate number of Years of Service (or Periods of Service) will not include any Years of Service (or Periods of Service) disregarded under the preceding sentence by reason of prior 1-Year Breaks in Service;
|
(2)
|
A Former Employee who has not had Years of Service (or Periods of Service) before a 1-Year Break in Service disregarded pursuant to (1) above, shall participate in the Plan as of the date of reemployment, or if later, as of the date the Former Employee would otherwise enter the Plan pursuant to Sections 3.1 and 3.2 taking into account all service not disregarded.
|
(1)
|
Completion
of
one
Year
of
Service.
If a Participant completes one Year of Service following a 1-Year Break in Service, the Plan restores the Participant's pre-break service retroactively to the first day of the eligibility computation period in which the Participant first completes one Year of Service following the 1-Year Break in Service.
|
(2)
|
Eligibility
computation
period.
The Administrator measures the initial eligibility computation period under this Subsection from the date the Participant first receives credit for an Hour of Service following the 1-Year Break in Service. The Administrator measures any subsequent eligibility computation periods, if necessary, in a manner consistent with the eligibility computation periods, using the re-employment commencement date in determining the anniversary of the date of hire, if applicable.
|
(3)
|
Application
to
Employee
who
did
not
enter.
The Administrator also will apply the one-year hold-out rule, if applicable, to an Employee who satisfies the Plan's eligibility conditions, but who incurs a separation from service and a 1-Year Break in Service prior to becoming a Participant.
|
(4)
|
No
restoration
under
two
(2)
1-Year
Breaks
in
Service
rule.
The Administrator in applying this Subsection does not restore any service disregarded under the two (2) 1-Year Breaks in Service rule in Section 1.88.
|
(5)
|
No
application
to
Elective
Deferrals.
The Administrator will not apply the provisions of this Subsection with respect to eligibility to make Elective Deferrals under the Plan.
|
(6)
|
USERRA.
An Employee who has completed qualified military service and who the Employer has rehired under the Uniformed Services Employment and Reemployment Rights Act of 1994, as amended (USERRA), does not incur a 1-Year Break in Service under the Plan by reason of the period of such qualified military service.
|
(f)
|
Vesting
after
five
(5)
1-Year
Breaks
in
Service.
If a Participant incurs five (5) consecutive 1-Year Breaks in Service, the Vested portion of such Participant's Account attributable to pre-break service shall not be increased as a result of post-break service. In such case, separate accounts will be maintained as follows:
|
(1)
|
one account for nonforfeitable benefits attributable to pre-break service; and
|
(2)
|
one account representing the Participant's Employer-derived Account balance in the Plan attributable to post-break service.
|
(g)
|
Buyback
provisions.
If any Former Employee who had been a Participant is reemployed by the Employer before five (5) consecutive 1-Year Breaks in Service, and such Participant had received a distribution of the entire Vested interest prior to reemployment, then the forfeited account shall be reinstated only if the Participant repays the full amount which had been distributed (including amounts from Accounts that were fully Vested such as the Elective Deferral Account). The Employer, may, however, on a uniform and nondiscriminatory basis, only require the Participant to repay amounts that relate to the Account that was not fully Vested. Such repayment must be made before the earlier of five (5) years after the first date on which the Participant is subsequently reemployed by the Employer or the close of the first period of five (5) consecutive 1-Year Breaks in Service commencing after the distribution. If a distribution occurs for any reason other than a severance of employment, the time for repayment may not end earlier than five (5) years after the date of distribution. If the Participant repays the distribution with after-tax amounts, such amounts are not after-tax voluntary Employee contributions subject to the ACP Test set forth in Section 12.6.
|
(h)
|
Waiver
of
allocation
or
contribution
conditions.
If the Employer elects in the Adoption Agreement to waive allocations or contributions due to retirement (early or normal retirement), then a Participant shall only be entitled to one such waiver. Accordingly, if a Participant retires and allocation or contribution conditions are waived, then the Plan will not waive the allocation or contribution conditions if the Participant is rehired and then retires again.
|
3.6
|
ELECTION NOT TO PARTICIPATE
|
(a)
|
Prototype
plans.
If this is a prototype plan, then an Employee is not permitted to elect not to participate in the Plan. Notwithstanding the preceding, in case of a non-standardized Adoption Agreement, any irrevocable elections not to participate in any component of this Plan shall remain in effect provided such elections were made prior to the date of the adoption of this restatement.
|
(b)
|
Volume
submitter
plan.
If this is a volume submitter plan, then an Employee may, subject to the approval of the Employer, elect voluntarily not to participate in any component of the Plan before the Employee first becomes eligible to participate in any
|
4.1
|
FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION
|
(a)
|
For a Money Purchase Plan:
|
(1)
|
The Employer will make contributions on the following basis. On behalf of each Participant eligible to share in allocations, for each year of such Participant's participation in this Plan, the Employer will contribute the amount elected in the Adoption Agreement. All contributions by the Employer will be made in cash. In the event a funding waiver is obtained, this Plan shall be deemed to be an individually designed plan.
|
(2)
|
Notwithstanding the foregoing, with respect to an Employer which is not a tax-exempt entity, the Employer's contribution for any Fiscal Year shall not exceed the maximum amount allowable as a deduction to the Employer under the provisions of Code §404. However, to the extent necessary to provide the top-heavy minimum allocations, the Employer shall make a contribution even if it exceeds the amount that is deductible under Code §404.
|
(b)
|
For a Profit Sharing Plan:
|
(1)
|
For each Plan Year, the Employer may (or will in the case of a "prevailing wage contribution" as set forth in the Profit Sharing Formula Section of the Adoption Agreement) contribute to the Plan such amount as elected by the Employer in the Adoption Agreement. In addition, the Employer may make a discretionary "gateway contribution" pursuant to Section 4.3(b)(4).
|
(2)
|
Additionally, the Employer will contribute to the Plan the amount necessary, if any, to provide the top-heavy minimum allocations even if it exceeds current or accumulated net profit or the amount that is deductible under Code §404.
|
(3)
|
Subject to the consent of the Trustee (or Insurer), the Employer may make its contribution to the Plan in the form of unencumbered property instead of cash, provided the contribution of property is not a prohibited transaction. The decision to make a contribution of property is subject to the general fiduciary rules under the Act.
|
(c)
|
Frozen
Plans.
The Employer may designate that the Plan is a frozen Plan at the Contribution Types Section of the Adoption Agreement. As a frozen Plan, the Employer will not make any Employer contributions with respect to Compensation earned after the date the Plan is frozen, and if the Plan is a 401(k) Plan, no Participant will be permitted to make Elective Deferrals to the Plan for any period following such date. In addition, once a Plan is frozen, no additional Employees shall become Participants.
|
(d)
|
Union
Employees.
Regardless of any provision in this Plan to the contrary, Employees whose employment is governed by a collective bargaining agreement between the Employer and "employee representatives" under which retirement benefits were the subject of good faith bargaining shall be eligible to participate in this Plan to the extent of employment covered by such agreement provided the agreement provides for coverage in the Plan. The benefits, including but not limited to, contributions, allocations and vesting, under this Plan shall be those set forth in the collective bargaining agreement, which is hereby incorporated by reference and attached as an addendum to the Adoption Agreement. 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. The provisions of this Subsection only apply if no more than two percent (2%) of the Employees covered pursuant to the agreement are professionals as defined in Regulation §1.410(b)-9. If a Participant performs services both as a collectively bargained Employee and
|
4.2
|
TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION
|
4.3
|
ALLOCATION OF CONTRIBUTIONS, FORFEITURES AND EARNINGS
|
(a)
|
Separate
accounting.
The Administrator shall establish and maintain an Account in the name of each Participant to which the Administrator shall credit as of each Anniversary Date, or other Valuation Date, all amounts allocated to each such Participant as set forth herein.
|
(b)
|
Allocation
of
contributions.
The Employer shall provide the Administrator with all information required by the Administrator to make a proper allocation of the Employer's contribution, if any, for each Plan Year. Within a reasonable period of time after the date of receipt by the Administrator of such information, the Administrator shall allocate any contributions as follows:
|
(1)
|
Money
Purchase
allocation.
For a Money Purchase Plan (other than a Money Purchase Plan which is integrated by allocation):
|
(i)
|
The Employer's contribution shall be allocated to each Participant's Account in the manner set forth in Section 4.1 herein and as specified in the Adoption Agreement.
|
(ii)
|
Notwithstanding the preceding provisions, a Participant shall only be eligible to share in the allocations of the Employer's contribution for the year if the Participant is an Eligible Employee at any time during the year and the condition s set forth in the Adoption Agreement and Section 3.5(h) are satisfied, unless a top-heavy contribution is required pursuant to Section 4.3(f). If no election is made in the Adoption Agreement, then a Participant shall be eligible to share in the allocation of the Employer's contribution for the year if the Participant completes more than five hundred (500) Hours of Service (or three (3) consecutive calendar months if the elapsed time method is chosen in the Adoption Agreement) during the Plan Year or is employed on the last day of the Plan Year. Furthermore, with respect to a volume submitter or
|
(2)
|
Permitted
disparity
allocation.
For an integrated Profit Sharing Plan or 401(k) Profit Sharing Plan allocation or a Money Purchase Plan which is integrated by allocation:
|
(i)
|
Subject to the "overall permitted disparity limits," the Employer's contribution shall be allocated to each Participant's Account in a dollar amount equal to 5.7% of the sum of each Participant's Compensation plus Excess Compensation. If the Employer does not contribute such amount for all Participants, each Participant will be allocated a share of the contribution in the same proportion that each such Participant's Compensation plus Excess Compensation for the Plan Year bears to the total Compensation plus the total Excess Compensation of all Participants for that year. However, in the case of any Participant who has exceeded the "cumulative permitted disparity limit," the allocation set forth in this paragraph shall be based on such Participant's Compensation rather than Compensation plus Excess Compensation.
|
(ii)
|
The balance of the Employer's contribution over the amount allocated above, if any, shall be allocated to each Participant's Account in the same proportion that each such Participant's Compensation for the Plan Year bears to the total Compensation of all Participants for such year.
|
(iii)
|
Notwithstanding the preceding provisions, a Participant shall only be eligible to share in the allocations of the Employer's contribution for the year if the Participant is an Eligible Employee at any time during the year and the condition s set forth in the Adoption Agreement and Section 3.5(h) are satisfied, unless a top-heavy contribution is required pursuant to Section 4.3(f). If no election is made in the Adoption Agreement, then a Participant shall be eligible to share in the allocation of the Employer's contribution for the year if the Participant completes more than five hundred (500) Hours of
|
(iv)
|
The following "overall permitted disparity limits" (which consist of the "annual overall permitted disparity limit" and the "cumulative permitted disparity limit") apply to the allocations set forth above.
|
(A)
|
"Annual overall permitted disparity limit." Notwithstanding the preceding paragraphs, if in any Plan Year this Plan "benefits" any Participant who "benefits" under another qualified plan or simplified employee pension, as defined in Code §408(k), maintained by the Employer that either provides for or imputes permitted disparity (integrates), then such plans will be considered to be one plan and will be considered to comply with the permitted disparity rules if the extent of the permitted disparity of all such plans does not exceed 100%. For purposes of the preceding sentence, the extent of the permitted disparity of a plan is the ratio, expressed as a percentage, which the actual benefits, benefit rate, offset rate, or employer contribution rate, whatever is applicable under the Plan, bears to the limitation under Code
|
(B)
|
"Cumulative permitted disparity limit." With respect to a Participant who "benefits" or "has benefited" under a defined benefit or target benefit plan of the Employer, the "cumulative permitted disparity limit" for the Participant is thirty-five (35) total cumulative permitted disparity years. Total cumulative permitted disparity years means the number of years credited to the Participant for allocation or accrual purposes under the Plan, any other qualified plan or simplified employee pension plan (whether or not terminated) ever maintained by the Employer, while such plan either provides for or imputes permitted disparity. For purposes of determining the Participant's "cumulative permitted disparity limit," all years ending in the same calendar year are treated as the same year. If the Participant has not "benefited" under a defined benefit or target benefit plan which neither provides for nor imputes permitted disparity for any year beginning on or after January 1, 1994, then such Participant has no cumulative disparity limit.
|
(3)
|
Other
profit
sharing
allocations.
For a Profit Sharing Plan or 401(k) Profit Sharing Plan with a non-integrated allocation formula, a uniform points allocation formula, a "prevailing wage contribution" allocation formula, an "age-weighted method" allocation formula, or a "grouping method" allocation formula as elected in the Employer Profit Sharing Contribution Section of the Adoption Agreement:
|
(i)
|
The Employer's contribution shall be allocated to each Participant's Account in accordance with the allocation method below that corresponds to the elections in the Adoption Agreement. The Employer shall provide the Administrator with all information required by the Administrator to make a proper allocation of the Employer's contribution for each Plan Year. Within a reasonable period of time after the date of receipt by the Administrator of such information, the allocation shall be made in accordance with the provisions below. The "gateway contribution" for plans with a cross-tested allocation formula shall be made in accordance with the provisions of Subsection (4) below.
|
(ii)
|
If the Employer's contribution is fixed, the Employer shall allocate the contribution in a set percentage to each Participant. If the Employer elects to contribute a uniform dollar amount for each Participant, the pro rata allocation shall allocate that uniform dollar amount to each Participant.
|
(iii)
|
If the Employer's contribution is discretionary and non-integrated, the contribution shall be allocated either in the same ratio as each Participant's Compensation bears to the total of such Compensation of all Participants, in the same dollar amount to all Participants (per capita), or in the same dollar amount per Hour of Service completed by each Participant.
|
(iv)
|
If the Employer's Contribution is allocated under a uniform points allocation formula, the allocation for each Participant shall be determined based on the Participant's total points for the Plan Year, as determined under the Adoption Agreement. A Participant's allocation of the Employer Contribution is determined by multiplying the Employer Contribution by a fraction, the numerator of which is the Participant's total points for the Plan Year and the denominator of which is the sum of the points for all Participants for the Plan Year. A Participant shall receive points for each year(s) of age and/or each Year(s) of Service. In addition, a Participant also may receive points based on his or her Compensation.
|
(v)
|
If the Employer's contribution is a "prevailing wage contribution", it shall be allocated to each Participant who performs services subject to the Service Contract Act, Davis-Bacon Act or similar federal, state, or municipal prevailing wage statutes. The "prevailing wage contribution" will be an amount equal to the balance of the prevailing wage defined bona fide fringe benefit amount based on the Participant's employment classification as designated on the prevailing wage determination appropriate for that classification. Notwithstanding anything in the Plan to the contrary, the "prevailing wage contribution" shall be fully Vested. Furthermore, the "prevailing wage contribution" shall not be subject to any age, service or employment condition requirements set forth in the Adoption Agreement and the Employer shall make such contribution to the Plan as frequently as is required under applicable law.
|
(vi)
|
If the Employer's contribution is allocated according to a "grouping method," the Employer may contribute to the Plan on behalf of each of the classifications of Participants set forth in the Adoption Agreement such amount as shall be determined by the Employer. The Employer shall provide the Administrator, if other than the Employer, with written notification of the amount of the contribution to be allocated to each classification on or before the due date of the Employer's tax return for the year of allocation, through written instructions from the Employer to the Administrator. The Employer may elect to specify any number of classifications and a classification may consist of any number of Participants.
|
(vii)
|
If the Employer's contribution is allocated according to an "age-weighting method," the Employer's contribution for the Plan Year shall be allocated to each Participant's Account in the same proportion that each such Participant's total points with respect to such year, bear to the total points awarded to all Participants with respect to such year. The conditional allocation provided for in the preceding sentence shall become the final allocation for the year only if it is not a Top-Heavy Plan Year; or if the minimum allocation required for Top-Heavy Plan Years is provided to all Employees eligible to receive such minimum allocation. If any such Employee does not receive the top-heavy minimum allocation, then in lieu of the conditional allocation, the Employer's contribution shall instead be allocated first to the affected Employees in an amount equal to their conditional allocation plus any additional amount necessary to provide the top-heavy minimum allocation.
|
(A)
|
Multiply the Participant's Compensation for the Plan Year by 1%.
|
(B)
|
Multiply the product for each Participant as determined in (a) above by the product of:
|
1.
|
the factor in Table I in Exhibit A to the Adoption Agreement, such factor to be determined by reference to the Participant's Normal Retirement Age, and
|
2.
|
the factor in Table II of Exhibit A to the Adoption Agreement, such factor to be determined by reference to the number of years remaining from the Participant's attained age as of the allocation date to his or her Normal Retirement Age.
|
3.
|
The resulting number shall be the number of points allocated to the Participant.
|
(viii)
|
Notwithstanding the preceding provisions, a Participant shall only be eligible to share in the allocations of the Employer's contribution for the year if the Participant is an Eligible Employee at any time during the year and the conditions set forth in the Adoption Agreement and Section 3.5(h) are satisfied, unless a top-heavy contribution is required pursuant to Section 4.3(f). If no election is made in the Adoption Agreement, then a Participant shall be eligible to share in the allocation of the Employer's contribution for the year if the Participant completes more than five hundred (500) Hours of Service (or three (3) consecutive calendar months if the elapsed time method is chosen in the Adoption Agreement) during the Plan Year or is employed on the last day of the Plan Year.
|
(4)
|
Gateway
contribution.
The Employer may make an additional discretionary Employer contribution ("gateway contribution") as set forth below (i.e., the minimum allocation gateway requirement described in Regulation
|
(i)
|
Any "gateway contribution" made pursuant to this Subsection for a Plan Year will be allocated to each Nonhighly Compensated Participant who receives an allocation of other "Employer contributions," for such Plan Year. The "gateway contribution" will be allocated without regard to any allocation conditions otherwise applicable to "Employer contributions" under the Plan. However, Participants who the Administrator disaggregates pursuant to Regulation §1.410(b)-7(c)(3) because they have not satisfied the greatest minimum age and service conditions permissible under Code §410(a) shall not
|
(ii)
|
The "gateway contribution" will be allocated pro rata on the basis of Compensation (as defined in (iii) or (iv) below, whichever is applicable) of each eligible Participant (as described in Subsection (i) above) but in no event will an allocation of the "gateway contribution" exceed the lesser of: (A) five percent (5%) of Compensation or (B) one-third (1/3) of the highest allocation rate for any Highly Compensated Participant for the Plan Year. Any allocation under the prior sentence will be reduced by the amount of any other "Employer contributions," excluding any Qualified Nonelective Contributions that are used to satisfy the ADP test set forth in Section 12.4 or the ACP test set forth in Section 12.6, allocated for the same Plan Year to such Participant, provided that if an eligible Participant is receiving only a Qualified Nonelective Contribution and such contribution amount equals or exceeds the "gateway contribution," then the contribution satisfies the "gateway contribution" requirement as to that Participant.
|
(iii)
|
For allocation purposes under the 5% "gateway contribution" under (A) of Subsection (ii) above, Compensation means 415 Compensation except that it shall be determined for the Plan Year (rather than the Limitation Year) and shall exclude 415 Compensation paid while an Employee is not a Participant in the Plan.
|
(iv)
|
For purposes of the 1/3 "gateway contribution" alternative under (B) of Subsection (ii) above, the Administrator will
|
(c)
|
Gains
or
losses.
Except as otherwise elected in the Adoption Agreement or as provided in Section 4.10 with respect to Participant Directed Accounts, as of each Valuation Date, before allocation of any Employer contributions and Forfeitures, any earnings or losses (net appreciation or net depreciation) of the Trust Fund (exclusive of assets segregated for distribution) shall be allocated in the same proportion that each Participant's nonsegregated accounts bear to the total of all Participants' nonsegregated accounts as of such date. Unless otherwise specified in the Adoption Agreement, the nonsegregated account will be reduced by any distributions made prior to the Valuation Date.
|
(d)
|
Contracts.
Participants' Accounts shall be debited for any insurance or annuity premiums paid, if any, and credited with any dividends or interest received on Contracts.
|
(e)
|
Forfeitures.
Forfeitures must be disposed of no later than the last day of the Plan Year following the Plan Year in which the Forfeiture occurs. The Employer must direct the Administrator to use Forfeitures to reinstate previously forfeited Account balances of Participants, if any, in accordance with Section 3.5(g), to satisfy any contribution that may be required pursuant to Section 6.10, or, to pay any Plan expenses. With respect to a Money Purchase Plan, any remaining Forfeitures will be disposed of in accordance with the elections in the Adoption Agreement. With respect to all other plans, the Employer must direct the Administrator to use any remaining Forfeitures in accordance with any combination of the following methods, including a different method based on the source of such Forfeitures. Forfeitures may be:
|
(1)
|
Added to any Employer discretionary contribution (e.g., matching or profit sharing) and allocated in the same manner;
|
(2)
|
Used to reduce any Employer contribution (e.g., matching or profit sharing);
|
(3)
|
Added to any Employer matching contribution and allocated as an additional matching contribution; or
|
(4)
|
Allocated to all Participants in the same proportion that each Participant's Compensation for the Plan Year bears to the Compensation of all Participants for such year.
|
(f)
|
Minimum
allocations
required
for
Top-Heavy
Plan
Years.
Notwithstanding the foregoing, for any Top-Heavy Plan Year, the sum of the Employer's contributions and Forfeitures allocated to the Participant's Combined Account of each Non-Key Employee or each Participant, if elected in the Adoption Agreement, shall be equal to at least three percent (3%) of such Employee's 415 Compensation for the Plan Year or the calendar year ending within the Plan Year (reduced by contributions and Forfeitures, if any, allocated to each such Employee in any defined contribution plan included with this Plan in a "required aggregation group" (as defined in Section 9.2(f)). However, if (1) the sum of the Employer's contributions and Forfeitures allocated to the Participant's Combined Account of each Key Employee for such Top-Heavy Plan Year is less than three percent (3%) of each Key Employee's 415 Compensation and (2) this Plan is not required to be included in a "required aggregation group" (as defined in Section 9.2(f)) to enable a defined benefit plan to meet the requirements of Code §401(a)(4) or 410, the sum of the Employer's contributions and Forfeitures allocated to the Participant's Combined Account of each Employee entitled to the top-heavy minimum contribution shall be equal to the largest percentage allocated to the Participant's Combined Account of any Key Employee. The minimum allocation required (to the extent required to be nonforfeitable under Code §416(b)) may not be forfeited under Code §411(a)(3)(B) or 411(a)(3)(D).
|
(1)
|
An amount equal to three percent (3%) multiplied by each Participant's Compensation for the Plan Year shall be allocated to each Participant's Account. If the Employer does not contribute such amount for all Participants, the amount shall be allocated to each Participant's Account in the same proportion that such Participant's total Compensation for the Plan Year bears to the total Compensation of all Participants for such year. Notwithstanding any contrary allocation conditions set forth in this Plan, Participants who are entitled to receive the top-heavy minimum allocation set forth in this Section shall be eligible to share in this first tier allocation.
|
(2)
|
The balance of the Employer's contribution over the amount allocated under subparagraph (1) hereof shall be allocated to each Participant's Account in a dollar amount equal to three percent (3%) multiplied by a Participant's Excess Compensation. If the Employer does not contribute such amount for all Participants, each Participant will be allocated a share of the contribution in the same proportion that such Participant's Excess Compensation bears to the total Excess Compensation of all Participants for that year. For purposes of this paragraph, in the case of any Participant who has exceeded the "cumulative permitted disparity limit" described in Section 4.3(b)(2), such Participant's total Compensation will be taken into account.
|
(3)
|
The balance of the Employer's contribution over the amount allocated under subparagraph (2) hereof shall be allocated to each Participant's Account in a dollar amount equal to 2.7% multiplied by the sum of each Participant's total Compensation plus Excess Compensation. If the Employer does not contribute such amount for all Participants, each Participant will be allocated a share of the contribution in the same proportion that such Participant's total Compensation plus Excess Compensation for the Plan Year bears to the total Compensation plus Excess Compensation of all Participants for that year. For purposes of this paragraph, in the case of any Participant who has exceeded the "cumulative permitted disparity limit" described in
|
(g)
|
Top-heavy
contribution
allocation.
For purposes of the minimum allocations set forth above, the percentage allocated to the Participant's Combined Account of any Key Employee shall be equal to the ratio of the sum of the Employer's contributions and Forfeitures allocated on behalf of such Key Employee divided by the 415 Compensation for such Key Employee.
|
(h)
|
Participants
eligible
for
top-heavy
allocation.
Notwithstanding anything in this Plan to the contrary, for any Top-Heavy Plan Year, the minimum allocations set forth in this Section shall only be allocated to the Participant's Combined Account of all Non-Key Employees, and Key Employees if elected in the Adoption Agreement, who are Participants and who are employed by the Employer on the last day of the Plan Year (unless otherwise elected in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections)), including Employees who have (1) failed to complete a Year of Service; (2) declined to make mandatory contributions (if required) or, in the case of a cash or deferred arrangement, Elective Deferrals to the Plan; or (3) Compensation less than a stated amount. In addition, pursuant to Code §416(i)(4), Participants whose employment is governed by a collective bargaining agreement between the Employer and employee representatives under which retirement benefits were the subject of good faith bargaining shall not be eligible to receive the top-heavy minimum allocations unless otherwise provided in the collective bargaining agreement.
|
(i)
|
Top-heavy
allocation
if
DB
and
DC
plans
maintained.
Notwithstanding anything herein to the contrary, in any Plan Year in which the Employer maintains both this Plan and a non-frozen defined benefit pension plan included in a "required aggregation group" (as defined in Section 9.2(f)) which is top-heavy, the Employer will not be required (unless otherwise elected in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections)) to provide Employees with both the full separate minimum defined benefit plan benefit and the full separate defined contribution plan top-heavy minimum allocations. In such case, the top-heavy minimum benefits will be provided as elected in the Adoption Agreement and, if applicable, as follows:
|
(1)
|
If the 5% defined contribution minimum is elected in the Adoption Agreement:
|
(i)
|
The requirements of Section 9.1 will apply except that each Employee who accrues a benefit in the Profit Sharing Plan or Money Purchase Plan and who accrues a benefit in the Defined Benefit Plan will receive a minimum allocation of five percent (5%) of such Participant's 415 Compensation from the "applicable defined contribution plan(s)."
|
(ii)
|
For each Employee who is a participant only in the Defined Benefit Plan, the Employer will provide a minimum non-integrated benefit equal to two percent (2%) of such participant's highest five (5) consecutive year average 415 Compensation for each Year of Service while a participant in such plan, in which the Plan is top-heavy, not to exceed ten (10) such years.
|
(iii)
|
For each Employee who is a Participant only in this defined contribution plan, the Employer will provide a minimum allocation equal to three percent (3%) of such Participant's 415 Compensation.
|
(2)
|
If the 2% defined benefit minimum is elected in the Adoption Agreement, then for each Employee who is a participant only in the defined benefit plan, the Employer will provide a minimum non-integrated benefit equal to two percent (2%) of such participant's highest five (5) consecutive year average of 415 Compensation for each Year of Service while a participant in the plan, in which the plan is top-heavy, not to exceed ten (10) such years.
|
(j)
|
Matching
contributions
used
to
satisfy
top-heavy
contribution.
Unless otherwise specified in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections), Employer matching contributions shall be taken into account for purposes of satisfying the minimum contribution requirements of Code §416(c)(2) and the Plan. The preceding sentence shall apply with respect to matching contributions under the Plan or, if the Plan provides that the minimum contribution requirement shal l be met in another plan, such other plan. Employer matching contributions that are used to satisfy the minimum contribution requirements shall be treated as matching contributions for purposes of the ACP test and other requirements of Code §401(m).
|
(k)
|
Contributions
under
other
plans.
The Employer may provide, in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections), that the minimum benefit requirement shall be met in another plan (including another pl an that consists solely of a cash or deferred arrangement which meets the requirements of Code §401(k)(12) and matching contributions with respect to which the requirements of Code §401(m)(11) apply). The Employer must specify the name of the other plan, the minimum benefit that will be provided under such other plan, and the Employees who will receive the minimum benefit under such other plan.
|
(l)
|
Delay
in
processing
transactions.
Notwithstanding anything in this Section to the contrary, all information necessary to properly reflect a given transaction may not be available until after the date specified herein for processing such transaction, in which case the transaction will be reflected when such information is received and processed. Subject to express limits that may be imposed under the
|
4.4
|
MAXIMUM ANNUAL ADDITIONS
|
(a)
|
Calculation of "annual additions."
|
(1)
|
If a Participant does not participate in, and has never participated in another qualified plan maintained by the "employer," or a welfare benefit fund (as defined in Code §419(e)) maintained by the "employer," or an individual medical benefit account (as defined in Code §415(l)(2)) maintained by the "employer," or a simplified employee pension (as defined in Code §408(k)) maintained by the "employer" which provides "annual additions," the amount of "annual additions" which may be credited to the Participant's Accounts for any Limitation Year shall 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 amount contributed or allocated will be reduced so that the "annual additions" for the Limitation Year will equal the
|
(2)
|
Prior to determining the Participant's actual 415 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 415 Compensation for the Limitation Year, uniformly determined for all Participants similarly situated.
|
(3)
|
As soon as is administratively feasible after the end of the Limitation Year the "maximum permissible amount" for such Limitation Year shall be determined on the basis of the Participant's actual 415 Compensation for such Limitation Year.
|
(b)
|
"Annual additions" if a Participant is in more than one plan.
|
(1)
|
Except as provided in Subsection (c) below, this Subsection applies if, in addition to this Plan, a Participant is covered under another "employer" maintained qualified defined contribution plan, welfare benefit fund (as defined in Code §419(e)), individual medical benefit account (as defined in Code §415(l)(2)), or simplified employee pension (as defined in Code §408(k)), which provides "annual additions," during any Limitation Year. The "annual additions" which may be credited to a Participant's Accounts under this Plan for any such Limitation Year shall not exceed the "maximum permissible amount" reduced by the "annual additions" credited to a Participant's accounts under the other plans and welfare benefit funds, individual medical benefit accounts, and simplified employee pensions 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 welfare benefit funds for the Limitation Year will equal the "maximum permissible amount," and any amount in excess of the "maximum permissible amount" which would have been allocated to such Participant may be allocated to other Participants. If the "annual additions" with respect to the Participant under such other defined contribution plans, welfare benefit funds, individual medical benefit accounts and simplified employee pensions in the aggregate are equal to or greater than the "maximum permissible amount," no amount will
|
(2)
|
Prior to determining the Participant's actual 415 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 415 Compensation for the Limitation Year, uniformly determined for all Participants similarly situated.
|
(3)
|
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 415 Compensation for the Limitation Year.
|
(4)
|
If, pursuant to Section 4.4(b)(2), 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 simplified employee pension will be deemed to have been allocated first, followed by "annual additions" to a welfare benefit fund or individual medical benefit account, and then by "annual additions" to a plan subject to Code §412, regardless of the actual allocation date.
|
(5)
|
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:
|
(i)
|
the total "excess amount" allocated as of such date, times
|
(ii)
|
the ratio of (A) the "annual additions" allocated to the Participant for the Limitation Year as of such date under this Plan to (B) the total "annual additions" allocated to the Participant for the Limitation Year as of such date under this and all the other qualified defined contribution plans.
|
(c)
|
Coverage
under
another
plan.
If the Participant is covered under another qualified defined contribution plan maintained by the "employer," "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 4.4(b), unless the "employer" provides other limitations in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections).
|
(d)
|
Time
when
"annual
additions"
credited.
An "annual addition" is credited to the Account of a Participant for a particular Limitation Year if it as allocated to the Participant's Account under the Plan as of any date within that Limitation Year. However, an amount is not deemed allocated as of any date within a Limitation Year if such allocation is dependent upon participation in the Plan as of any date subsequent to such date.
|
(e)
|
Definitions.
For purposes of this Section, the following terms shall be defined as follows:
|
(1)
|
"Annual
additions"
means the sum credited to a Participant's accounts for any Limitation Year of (a) "employer" contributions, (b) Employee contributions (except as provided below), (c) Forfeitures, (d) amounts allocated 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,"
|
(e)
|
amounts derived from contributions paid or accrued 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" and (f) allocations under a simplified employee pension. Except, however, the Compensation percentage limitation referred to in paragraph (e)(6)(ii) below shall not apply to: (1) any contribution for medical benefits (within the meaning of Code §419A(f)(2)) after separation from service which is otherwise treated as an "annual addition," or (2) any amount otherwise treated as an "annual addition" under Code §415(l)(1).
|
(i)
|
Restorative
payments.
"Annual additions" for purposes of Code §415 and this Section shall not include restorative payments. A restorative payment is a payment made to restore losses to a Plan resulting from actions by a Fiduciary for which there is reasonable risk of liability for breach of a fiduciary duty under the Act or under other applicable federal or state law, where Participants who are similarly situated are treated similarly with respect to the payments. Generally, payments are restorative payments only if the payments are made in order to restore some or all of the Plan's losses due to an action (or a failure to act) that creates a reasonable risk of liability for such a breach of fiduciary duty (other than a breach of fiduciary duty arising from failure to remit contributions to the Plan). This includes payments to a plan made pursuant to a Department of Labor order, the Department of Labor's Voluntary Fiduciary Correction Program, or a court-approved settlement, to restore losses to a qualified defined contribution plan on account of the breach of fiduciary duty (other than a breach of fiduciary duty arising from failure to remit contributions to the Plan). Payments made to the Plan to make up for losses due merely to market fluctuations and other payments that are not made on account of a reasonable risk of liability for breach of a fiduciary duty under the Act are not restorative payments and generally constitute contributions that are considered "annual additions."
|
(ii)
|
Other
amounts.
"Annual additions" for purposes of Code §415 and this Section shall not include: (A) The direct transfer of a benefit or employee contributions from a qualified plan to this Plan; (B) Rollover contributions (as described in Code §§401(a)(31), 402(c)(1), 403(a)(4), 403(b)(8), 408(d)(3), and 457(e)(16)); (C) Repayments of loans made to a Participant from the Plan; and (D) Repayments of amounts described in Code §411(a)(7)(B) (in accordance with
|
(2)
|
"Defined
contribution
dollar
limitation"
means $40,000 as adjusted under Code §415(d).
|
(3)
|
"Employer"
means, for purposes of this Section, the Employer that adopts this Plan and all Affiliated Employers, except that for purposes of this Section, the determination of whether an entity is an Affiliated Employer shall be made by applying Code §415(h).
|
(4)
|
"Excess
amount"
means the excess of the Participant's "annual additions" for the Limitation Year over the "maximum permissible amount."
|
(5)
|
"Master
or
prototype
plan"
means a plan the form of which is the subject of a favorable opinion letter from the Internal Revenue Service.
|
(6)
|
"Maximum
permissible
amount"
means, except to the extent permitted under this Plan and Code §414(v), the maximum "annual addition" that may be contributed or allocated to a Participant's Accounts under the Plan for any Limitation Year, which shall not exceed the lesser of:
|
(i)
|
the "defined contribution dollar limitation," or
|
(ii)
|
one hundred percent (100%) of the Participant's 415 Compensation for the Limitation Year.
|
(f)
|
Special rules.
|
(1)
|
Aggregation
of
plans.
For purposes of applying the limitations of Code §415, all defined contribution plans (without regard to whether a plan has been terminated) ever maintained by the "employer" (or a "predecessor employer") under which the Participant receives "annual additions" are treated as one defined contribution plan. For purposes of this Section:
|
(i)
|
A former "employer" is a "predecessor employer" with respect to a participant in a plan maintained by an "employer" if the "employer" maintains a plan under which the participant had accrued a benefit while performing services for the former "employer," but only if that benefit is provided under the plan maintained by the "employer." For this purpose, the "formerly affiliated plan" rules in Regulation §1.415(f)-1(b)(2) apply as if the "employer" and "predecessor employer" constituted a single employer under the rules described in Regulation §1.415(a)-1(f)(1) and (2) immediately prior to the "cessation of affiliation" (and as if they constituted two, unrelated employers under the rules described in Regulation §1.415(a)-1(f)(1) and (2) immediately after the "cessation of affiliation") and "cessation of affiliation" was the event that gives rise to the "predecessor employer" relationship, such as a transfer of benefits or plan sponsorship.
|
(ii)
|
With respect to an "employer" of a Participant, a former entity that antedates the "employer" is a "predecessor employer" with respect to the Participant if, under the facts and circumstances, the "employer" constitutes a continuation of all or a portion of the trade or business of the former entity.
|
(2)
|
Break-up
of
an
affiliated
employer
or
an
affiliated
service
group.
For purposes of aggregating plans for Code §415, a "formerly affiliated plan" of an "employer" is taken into account for purposes of applying the Code §415 limitations to the "employer," but the "formerly affiliated plan" is treated as if it had terminated immediately prior to the "cessation of affiliation." For purposes of this paragraph, a "formerly affiliated plan" of an "employer" is a plan that, immediately prior to the "cessation of affiliation," was actually maintained by one or more of the entities that constitute the "employer" (as determined under the employer affiliation rules described in Regulation §1.415(a)-1(f)(1) and (2)), and immediately after the "cessation of affiliation," is not actually maintained by any of the entities that constitute the "employer" (as determined under the employer affiliation rules described in Regulation §1.415(a)-1(f)(1) and (2)). For purposes of this paragraph, a "cessation of affiliation" means the event that causes an entity to no longer be aggregated with one or more other entities as a single "employer" under the employer affiliation rules described in Regulation §1.415(a)-1(f)(1) and (2) (such as the sale of a subsidiary outside a controlled group), or that causes a plan to not actually be maintained by any of the entities that constitute the "employer" under the employer affiliation rules of Regulation §1.415(a)-1(f)(1) and (2) (such as a transfer of plan sponsorship outside of a controlled group).
|
(3)
|
Mid-year
aggregation.
Two or more defined contribution plans that are not required to be aggregated pursuant to Code
|
4.5
|
ADJUSTMENT FOR EXCESS ANNUAL ADDITIONS
|
4.6
|
ROLLOVERS
|
(a)
|
Acceptance
of
"rollovers"
into
the
Plan.
If elected in the Adoption Agreement and with the consent of the Administrator (such consent must be exercised in a nondiscriminatory manner and applied uniformly to all Participants), the Plan may accept a "rollover," provided the "rollover" will not jeopardize the tax-exempt status of the Plan or create adverse tax consequences for the Employer. The amounts rolled over shall be separately accounted for in a "Participant's Rollover Account." Furthermore, any Roth Elective Deferrals that are accepted as "rollovers" in this Plan on or after January 1, 2006 shall be separately accounted for. A Participant's Rollover Account shall be fully Vested at all times and shall not be subject to Forfeiture for any reason. For purposes of this Section, the term Participant shall include any Eligible Employee who is not yet a Participant, if, pursuant to the Adoption Agreement, "rollovers" are permitted to be accepted from Eligible Employees. In addition, for purposes of this Section the term Participant shall also include Former Employees if the Employer and Administrator consent to accept "rollovers" of distributions made to Former Employees from any plan of the Employer.
|
(b)
|
Treatment
of
"rollovers"
under
the
Plan.
Amounts in a Participant's Rollover Account shall be held by the Trustee (or Insurer) pursuant to the provisions of this Plan and may not be withdrawn by, or distributed to the Participant, in whole or in part, except as elected in the Adoption Agreement and Subsection (c) below. The Trustee (or Insurer) shall have no duty or responsibility to inquire as to the propriety of the amount, value or type of assets transferred, nor to conduct any due diligence with respect to such assets; provided, however, that such assets are otherwise eligible to be held by the Trustee (or Insurer) under the terms of this Plan.
|
(c)
|
Distribution
of
"rollovers."
At such time as the conditions set forth in the Adoption Agreement have been satisfied, the Administrator, at the election of the Participant, shall direct the distribution of up to the entire amount credited to the Rollover Account maintained on behalf of such Participant. Any distribution of amounts held in a Participant's Rollover Account shall be made in a manner which is consistent with and satisfies the provisions of Sections 6.5 and 6.6, including, but not limited to, all notice and consent requirements of Code §§411(a)(11) and 417 and the Regulations thereunder. Furthermore, unless otherwise elected in the Adoption Agreement, such amounts shall be considered to be part of a Participant's benefit in determining whether an involunt ary cash-out of benefits may be made without Participant consent.
|
(d)
|
"Rollovers"
maintained
in
a
separate
account.
The Administrator may direct that "rollovers" made after a Valuation Date be segregated into a separate account for each Participant until such time as the allocations pursuant to this Plan have been made, at which time they may remain segregated, invested as part of the general Trust Fund or, if elected in the Adoption Agreement, directed by the Participant.
|
(e)
|
Limits
on
accepting
"rollovers."
Prior to accepting any "rollovers" to which this Section applies, the Administrator may require the Employee to establish (by providing opinion of counsel or otherwise) that the amounts to be rolled over to this Plan meet the requirements of this Section. The Employer may instruct the Administrator, operationally and on a nondiscriminatory basis, to limit the source of "rollover" contributions that may be accepted by the Plan.
|
(f)
|
Definitions.
For purposes of this Section, the following definitions shall apply:
|
(1)
|
A "rollover" means: (i) amounts transferred to this Plan directly from another "eligible retirement plan;" (ii) distributions received by an Employee from other "eligible retirement plans" which are eligible for tax-free rollover to an "eligible retirement plan" and which are transferred by the Employee to this Plan within sixty (60) days following receipt thereof; and (iii) any other amounts which are eligible to be rolled over to this Plan pursuant to the Code or any other federally enacted legislation.
|
(2)
|
An "eligible retirement plan" means an individual retirement account described in Code §408(a), an individual retirement annuity described in Code §408(b) (other than an endowment contract), a qualified trust (an employees' trust described in Code
|
4.7
|
PLAN-TO-PLAN TRANSFERS FROM QUALIFIED PLANS
|
(a)
|
Transfers
into
this
Plan.
With the consent of the Administrator, amounts may be transferred (within the meaning of
|
(b)
|
Accounting
of
transfers.
Amounts in a Participant's Transfer Account shall be held by the Trustee (or Insurer) pursuant to the provisions of this Plan and may not be withdrawn by, or distributed to the Participant, in whole or in part, except as elected in the Adoption Agreement and Subsection (d) below, provided the restrictions of Subsection (c) below and Section 6.16 are satisfied. The Trustee (or Insurer) shall have no duty or responsibility to inquire as to the propriety of the amount, value or type of assets transferred, nor to conduct any due diligence with respect to such assets; provided, however, that such assets are otherwise eligible to be held by the Trustee (or Insurer) under the terms of this Plan. Notwithstanding anything in this Section to the contrary, transferred amounts are not required to be separately accounted for and may be combined with the corresponding Account maintained in this Plan provided all rights, benefits and features and other attributes are identical with respect to each account, or are identical after the combination and such combination does not result in the impermissible elimination of any Code §411(d)(6) protected benefits.
|
(c)
|
Restrictions
on
Elective
Deferrals.
Except as permitted by Regulations (including Regulation §1.411(d)-4), amounts attributable to elective contributions (as defined in Regulation §1.401(k)-6), including amounts treated as elective contributions, which are transferred from another qualified plan in a plan-to-plan transfer (other than a direct rollover) shall be subject to the distribution limitations provided for in the Code §401(k) Regulations.
|
(d)
|
Distribution
of
plan-to-plan
transfer
amounts.
At Normal Retirement Date, or such other date when the Participant or the Participant's Beneficiary shall be entitled to receive benefits, the Participant's Transfer Account shall be used to provide additional benefits to the Participant or the Participant's Beneficiary. Any distribution of amounts held in a Participant's Transfer Account shall be made in a manner which is consistent with and satisfies the provisions of Sections 6.5 and 6.6, including, but not limited to, all notice and consent requirements of Code §§411(a)(11) and 417 and the Regulations thereunder. Furthermore, such amounts shall be considered to be part of a Participant's benefit in determining whether an involuntary cash-out of benefits may be made without Participant consent.
|
(e)
|
Segregation.
The Administrator may direct that Employee transfers made after a Valuation Date be segregated into a separate account for each Participant until such time as the allocations pursuant to this Plan have been made, at which time they may remain segregated, invested as part of the general Trust Fund or, if elected in the Adoption Agreement, directed by the Participant.
|
(f)
|
Protected
benefits.
Notwithstanding anything herein to the contrary, a transfer directly to this Plan from another qualified plan (or a transaction having the effect of such a transfer) shall not result in the elimination or reduction of any "Section 411(d)(6) protected benefit" (as described in Section 8.1(e)) that may not be eliminated or reduced pursuant to Regulation §1.411(d)-4.
|
4.8
|
AFTER-TAX VOLUNTARY EMPLOYEE CONTRIBUTIONS
|
(a)
|
Not
permitted
in
Money
Purchase
or
Profit
Sharing
Plan.
Except as provided in Section 4.8(b) below, this Plan will not accept after-tax voluntary Employee contributions. If this is an amendment to a Plan that had previously allowed after-tax voluntary Employee contributions, then this Plan will not accept after-tax voluntary Employee contributions for Plan Years beginning after the Plan Year in which this Plan is adopted by the Employer.
|
(b)
|
After-tax
voluntary
Employee
contributions
allowed
in
401(k)
Plans.
For 401(k) Plans, if elected in the Adoption Agreement, each Participant who is eligible to make Elective Deferrals may, in accordance with nondiscriminatory procedures established by the Administrator, elect to make after-tax voluntary Employee contributions to this Plan. Such contributions must generally be paid to the Trustee (or Insurer) within a reasonable period of time after being received by the Employer. An after-tax voluntary Employee contribution is any contribution (other than Roth Elective Deferrals) made to the Plan by or on behalf of a Participant that is included in the Participant's gross income in the year in which made and that is separately accounted for under the Plan.
|
(c)
|
Full
vesting.
The balance in each Participant's Voluntary Contribution Account shall be fully Vested at all times and shall not be subject to Forfeiture for any reason.
|
(d)
|
Distribution
at
any
time.
A Participant may elect at any time to withdraw after-tax voluntary Employee contributions from such Participant's Voluntary Contribution Account and the actual earnings thereon in a manner which is consistent with and satisfies the provisions of Section 6.5, including, but not limited to, all notice and consent requirements of Code §§411(a)(11) and 417 and the Regulations thereunder. If the Administrator maintains sub-accounts with respect to after-tax voluntary Employee contributions (and earnings thereon) which were made on or before a specified date, a Participant shall be permitted to designate which sub-account shall be the source for the withdrawal. Forfeitures of Employer contributions shall not occur solely as a result of an Employee's withdrawal of after-tax voluntary Employee contributions.
|
(e)
|
Used
to
provide
benefits.
At Normal Retirement Date, or such other date when the Participant or the Participant's Beneficiary is entitled to receive benefits, the Participant's Voluntary Contribution Account shall be used to provide additional benefits to the Participant or the Participant's Beneficiary.
|
(f)
|
Prior
mandatory
contributions.
To the extent a Participant has previously made mandatory Employee contributions under prior provisions of this Plan, such contributions will be treated as after-tax voluntary Employee contributions, except that the provisions of Subsection (d) above permitting a distribution at any time shall not apply to mandatory Employee contributions.
|
4.9
|
QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTIONS
|
(a)
|
Maintenance
of
existing
QVEC
Accounts.
If this is an amendment to a Plan that previously permitted deductible voluntary Employee contributions, then each Participant who made "qualified voluntary Employee contributions" within the meaning of Code
|
(b)
|
Distribution
from
QVEC
Account.
A Participant may, upon written request delivered to the Administrator, make withdrawals from such Participant's Qualified Voluntary Employee Contribution Account. Any distribution shall be made in a manner which is consistent with and satisfies the provisions of Section 6.5, including, but not limited to, all notice and consent requirements of Code
|
(c)
|
Used
to
provide
benefits.
At Normal Retirement Date, or such other date when the Participant or the Participant's Beneficiary is entitled to receive benefits, the Qualified Voluntary Employee Contribution Account shall be used to provide additional benefits to the Participant or the Participant's Beneficiary.
|
4.10
|
PARTICIPANT DIRECTED INVESTMENTS
|
(a)
|
Directed
investment
options
allowed.
If elected in the Adoption Agreement, all Participants may direct the Trustee (or Insurer) as to the investment of all or a portion of their individual Account balances as set forth in the Adoption Agreement and within limits set by the Employer. Participants may direct the Trustee (or Insurer), in writing (or in such other form which is acceptable to the Trustee (or Insurer)), to invest their accounts in specific assets, specific funds or other investments permitted under the Plan and the Participant Direction Procedures. That portion of the Account of any Participant that is subject to investment direction of such Participant will be considered a Participant Directed Account.
|
(b)
|
Establishment
of
Participant
Direction
Procedures.
The Administrator will establish Participant Direction Procedures, to be applied in a uniform and nondiscriminatory manner, setting forth the permissible investment options under this Section, how often changes between investments may be made, and any other limitations and provisions that the Administrator may impose on a Participant's right to direct investments.
|
(c)
|
Administrative
discretion.
The Administrator may, in its discretion, include or exclude by amendment or other action from the Participant Direction Procedures such instructions, guidelines or policies as it deems necessary or appropriate to ensure proper administration of the Plan, and may interpret the same accordingly.
|
(d)
|
Allocation
of
gains
or
losses.
As of each Valuation Date, all Participant Directed Accounts shall be charged or credited with the net earnings, gains, losses and expenses as well as any appreciation or depreciation in the market value using publicly listed fair market values when available or appropriate as follows:
|
(1)
|
to the extent the assets in a Participant Directed Account are accounted for as pooled assets or investments, the allocation of earnings, gains and losses of each Participant's Account shall be based upon the total amount of funds so invested in a manner proportionate to the Participant's share of such pooled investment; and
|
(2)
|
to the extent the assets in a Participant Directed Account are accounted for as segregated assets, the allocation of earnings, gains on and losses from such assets shall be made on a separate and distinct basis.
|
(e)
|
Plan
will
follow
investment
directions.
Investment directions will be processed as soon as administratively practicable after proper investment directions are received from the Participant. No guarantee is made by the Plan, Employer, Administrator or Trustee (or Insurer) that investment directions will be processed on a daily basis, and no guarantee is made in any respect regarding the processing time of an investment direction. Notwithstanding any other provision of the Plan, the Employer, Administrator or Discretionary Trustee (or Insurer) reserves the right to not value an investment option on any given Valuation Date for any reason deemed appropriate by the Employer, Administrator or Discretionary Trustee (or Insurer). Furthermore, the processing of any investment transaction may be delayed for any legitimate business reason (including, but not limited to, failure of systems or computer programs, failure of the means of the transmission of data, the failure of a service provider to timely receive values or pri ces, and correction for errors or omissions or the errors or omissions of any service provider) or force majeure. The processing date of a transaction will be binding for all purposes of the Plan and considered the applicable Valuation Date for an investment transaction.
|
(f)
|
Other
documents
required
by
directed
investments.
Any information regarding investments available under the Plan, to the extent not required to be described in the Participant Direction Procedures, may be provided to Participants in one or more documents (or in any other form, including, but not limited to, electronic media) which are separate from the Participant Direction Procedures and are not thereby incorporated by reference into this Plan.
|
4.11
|
INTEGRATION IN MORE THAN ONE PLAN
|
4.12
|
QUALIFIED MILITARY SERVICE
|
(a)
|
USERRA.
Notwithstanding any provisions of this Plan to the contrary, contributions, benefits and service credit with respect to qualified military service will be provided in accordance with Code §414(u). Furthermore, loan repayments may be suspended under this Plan as permitted under Code §414(u)(4).
|
(b)
|
Benefit
accrual.
If the Employer elects in the Adoption Agreement to apply this Subsection, then effective as of the date specified in the Adoption Agreement but no earlier than the first day of the 2007 Plan Year, for benefit accrual purposes, the Plan treats an individual who becomes Totally and Permanently disabled or dies while performing "qualified military service" (as defined in Code §414(u)) with respect to the Employer as if the individual had resumed employment in accordance with the individual's reemployment rights under Uniformed Services Employment and Reemployment Rights Act of 1994, as amended (USERRA), on the day preceding Total and Permanent Disability and terminated employment on the actual date of Total and Permanent Disability.
|
4.13
|
TRANSFER OF ASSETS FROM TERMINATED EMPLOYER DEFINED BENEFIT PENSION PLAN
|
(a)
|
Transferred
DB
Assets.
The Employer may transfer an amount to this Plan from the Employer's terminated defined benefit plan in accordance with Code §4980(d)(2)(B). The amounts transferred into this Plan shall be held in a "transferred assets suspension account." Amounts released from the "transferred assets suspension account" pursuant to the provisions of this Section shall be allocated in the same manner and to the same Participants that Employer Nonelective Contributions are allocated, as described in Section 4.3. If the Plan does not provide for Nonelective Contributions, then the amounts released from the "transferred assets suspension account" pursuant to the provisions of this Section shall be allocated to each Participant eligible to share in allocations in the same ratio as such Participant's Compensation bears to the total Compensation of all Participants eligible to share in allocations.
|
Years Since Transfer
0
|
Percentage of Suspense Account
14.2857%
|
1
|
16.6667%
|
2
|
20.0000%
|
3
|
25.0000%
|
4
|
33.3333%
|
5
|
50.0000%
|
6
|
100.0000%
|
(b)
|
Earnings.
The amount in the "transferred suspension account" shall be credited with earnings and losses as of each Valuation Date in accordance with Section 4.3, except that Participants may not direct the investment of amounts in the "transferred suspension account." Amounts released from the account prior to the last day of a Plan Year shall not share in such earnings or losses.
|
(c)
|
Annual
additions.
Notwithstanding anything in the Plan to the contrary, amounts in the "transferred suspension account" shall not be treated as "annual additions" pursuant to Section 4.4 until such amounts are released and allocated to Participants.
|
(d)
|
Plan
termination.
If upon the termination of the Plan any amount credited to the "transferred suspension account" remains unallocated, then such amount shall be allocated as provided above to the Accounts of Participants as of such date of Plan termination, but limited as to each Participant to avoid allocating exceeding the limitations of Code §415 as set forth in Section 4.4. Any amount that cannot be allocated to a Participant under the preceding sentence shall be reallocated to remaining Participants, but only to the extent that no Participant receives an amount that exceeds the limitations of Code §415 as set forth in Section 4.4. The reallocation process will continue until all amounts in the "transferred suspension account" have been reallocated. If all Participants have received the maximum "annual addition" permitted pursuant to Section 4.4, then any remaining amounts shall revert to the Employer.
|
6.1
|
DETERMINATION OF BENEFITS UPON RETIREMENT
|
6.2
|
DETERMINATION OF BENEFITS UPON DEATH
|
(a)
|
100%
vesting
on
death.
Upon the death of a Participant before the Participant's Retirement Date or other severance of employment, all amounts credited to such Participant's Combined Account shall, if elected in the Adoption Agreement, become fully Vested. The Administrator shall direct, in accordance with the provisions of Sections 6.6 and 6.7, the distribution of the deceased Participant's Vested accounts to the Participant's Beneficiary.
|
(b)
|
Distribution
upon
death.
Upon the death of a Participant, the Administrator shall direct, in accordance with the provisions of Sections 6.6 and 6.7, the distribution of any remaining Vested amounts credited to the accounts of such deceased Participant to such Participant's Beneficiary.
|
(c)
|
Determination
of
death
benefit
by
Administrator.
The Administrator may require such proper proof of death and such evidence of the right of any person to receive payment of the value of the account of a deceased Participant as the Administrator may deem desirable. The Administrator's determination of death and of the right of any person to receive payment shall be conclus ive.
|
(d)
|
Beneficiary
designation.
Unless otherwise elected in the manner prescribed in Section 6.6, the Beneficiary of the Pre-Retirement Survivor Annuity shall be the Participant's surviving Spouse. Except, however, the Participant may designate a Beneficiary ot her than the Spouse for the Pre-Retirement Survivor Annuity if:
|
(1)
|
the Participant and the Participant's Spouse have validly waived the Pre-Retirement Survivor Annuity in the manner prescribed in Section 6.6, and the Spouse has waived the right to be the Participant's Beneficiary,
|
(2)
|
the Participant is legally separated or has been abandoned (within the meaning of local law) and the Participant has a court order to such effect (and there is no "qualified domestic relations order" as defined in Code §414(p) which provides otherwise),
|
(3)
|
the Participant has no Spouse, or
|
(4)
|
the Spouse cannot be located.
|
(e)
|
Beneficiary
if
no
Beneficiary
elected
by
Participant.
A Participant may, at any time, designate a Beneficiary for death benefits, if any, payable under the Plan that are in excess of the Pre-Retirement Survivor Annuity without the waiver or consent of the Participant's Spouse. In the event no valid designation of Beneficiary exists, or if the Beneficiary with respect to a portion of a Participant's death benefit is not alive at the time of the Participant's death and no contingent Beneficiary has been designated, then such portion of the death benefit will be paid in the following order of priority, unless the Employer specifies a different order of priority in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections), to:
|
(1)
|
The Participant's surviving Spouse;
|
(2)
|
The Participant's issue, per stirpes;
|
(3)
|
The Participant's surviving parents, in equal shares; or
|
(4)
|
The Participant's estate.
|
(f)
|
Divorce
revokes
spousal
Beneficiary
designation.
Notwithstanding anything in this Section to the contrary, unless otherwise elected in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections), if a Participant has designated the Spouse as a Beneficiary, then a divorce decree that relates to such Spouse shall revoke the Participant's designation of the Spouse as a Beneficiary unless the decree or a "qualified domestic relations order" (within the meaning of Code §414(p)) provides otherwise or a subsequent Beneficiary designation is made.
|
(g)
|
Simultaneous
death
of
Participant
and
Beneficiary.
If a Participant and his or her Beneficiary should die simultaneously, or under circumstances that render it difficult or impossible to determine who predeceased the other, then unless the Participant's Beneficiary designation otherwise specifies, the Administrator will presume conclusively that the Beneficiary predeceased the Participant.
|
(h)
|
Slayer
statute.
The Administrator may apply slayer statutes, or similar rules which prohibit inheritance by a person who murders someone from whom he or she stands to inherit, under applicable state laws without regard to federal pre-emption of such state laws.
|
(i)
|
Insured
death
benefit.
If the Plan provides an insured death benefit and a Participant dies before any insurance coverage to which the Participant is entitled under the Plan is effected, the death benefit from such insurance coverage shall be limited to the premium which was or otherwise would have been used for such purpose.
|
(j)
|
Plan
terms
control.
In the event of any conflict between the terms of this Plan and the terms of any Contract issued hereunder, the Plan provisions shall control.
|
6.3
|
DETERMINATION OF BENEFITS IN EVENT OF DISABILITY
|
6.4
|
DETERMINATION OF BENEFITS UPON TERMINATION
|
(a)
|
Payment
on
severance
of
employment.
If a Participant's employment with the Employer and any Affiliated Employer is severed for any reason other than death, Total and Permanent Disability, or attainment of the Participant's Retirement Date, then such Participant shall be entitled to such benefits as are provided herein.
|
(b)
|
Vesting
schedule.
The Vested portion of any Participant's Account shall be a percentage of such Participant's Account determined on the basis of the Participant's number of Years of Service (or Periods of Service if the elapsed time method is elected) according to the vesting schedule specified in the Adoption Agreement. However, a Participant's entire interest in the Plan shall be non-forfeitable upon the Participant's Normal Retirement Age (if the Participant is employed by the Employer on or after such date).
|
(c)
|
EGTRRA
matching
vesting
schedule.
If the Employer maintained a vesting schedule for matching contributions that did not comply with Code §411(a)(2) as in effect prior to the enactment of the Economic Growth and Tax Relief Reconciliation Act of 2001, then the matching contribution vesting schedule selected in the Adoption Agreement shall apply to Participants who complete an Hour of Service in a Plan Year beginning after December 31, 2001, unless a provision was adopted to have the vesting schedule apply to all Participants. However, if specified in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections), the matching contribution vesting schedule set forth in the Adoption Agreement shall only apply to the portion of the Participant's Account attributable to matching contributions made after December 31, 2001 and matching contributions made pri or to the first day of the first Plan Year beginning after December 31, 2001 will vest in accordance with the vesting schedule then in effect.
|
(d)
|
PPA
Employer
Nonelective
profit
sharing
vesting
schedule.
For Plan Years beginning after December 31, 2006, if the Employer maintained a vesting schedule for Employer Nonelective profit sharing contributions that did not comply with Code
|
(e)
|
Top-heavy
vesting
schedule.
For any Top-Heavy Plan Year, the minimum top-heavy vesting schedule elected by the Employer in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections) will automatically apply to the Plan. The minimum top-heavy vesting schedule applies to all benefits within the meaning of Code §411(a)(7) except those attributable to Employee contributions, including benefits accrued before the effective date of Code §416 and benefits accrued before the Plan became top-heavy. Further, no decrease in a Participant's Vested percentage shall occur in the event the Plan's status as top-heavy changes for any Plan Year. However, this Subsection does not apply to the Account balances of any Employee who does not have an Hour of Service after the Plan has initially become top-heavy and the Vested percentage of such Employee's Participant's Account shall be determined without regard to this Section 6.4(e). Furthermore, pursuant to Code §416(i)(4), Participants whose employment is governed by a collective bargaining agreement between the Employer and employee representatives under which retirement benefits were the subject of good faith bargaining will not be subject to this Subsection unless otherwise provided in the collective bargaining agreement.
|
(f)
|
100%
vesting
on
partial
or
full Plan
termination.
Upon the complete discontinuance of the Employer's contributions to the Plan (if this is a profit sharing plan) or upon any full or partial termination of the Plan, all amounts then credited to the Account of any affected Participant shall become 100% Vested and shall not thereafter be subject to Forfeiture.
|
(g)
|
No
reduction
in
Vested
percentage
due
to
change
in
vesting
schedule.
If this is an amended or restated Plan, then notwithstanding the vesting schedule specified in the Adoption Agreement, the Vested percentage of a Participant's Account shall not be less than the Vested percentage attained as of the later of the Effective Date or adoption date of this amendment and restatement. The computation of a Participant's nonforfeitable percentage of such Participant's interest in the Plan shall not be reduced as the result of any direct or indirect amendment to this Article, or due to changes in the Plan's status as a Top-Heavy Plan. Furthermore, if the Plan's vesting schedule is amended (including a change in the calculation of Years of Service or Periods or Service), then the amended schedule will only apply to those Participants who complete an Hour of Service after the effective date of the amendment.
|
(h)
|
Continuation
of
old
schedule
if
3
Years
of
Service.
If the Plan's vesting schedule is amended, or if the 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 a top-heavy vesting schedule, then each Participant with at least three (3) Years of Service (or Periods of Service if the elapsed time method is elected) as of the expiration date of the election period may elect to have such Participant's nonforfeitable percentage computed under the Plan without regard to such amendment or change. If a Participant fails to make such election, then such Participant shall be subject to the new vesting schedule. The Participant's election period shall commence on the adoption date of the amendment, or deemed adoption date, and shall end sixty (60) days after the latest of:
|
(1)
|
the adoption date, or deemed adoption date, of the amendment,
|
(2)
|
the effective date of the amendment, or
|
(3)
|
the date the Participant receives written notice of the amendment from the Employer or Administrator.
|
(i)
|
Excludable
service
for
vesting.
In determining Years of Service or Periods of Service for purposes of vesting under the Plan, Years of Service or Periods of Service shall be excluded as elected in the Adoption Agreement. For this purpose, a predecessor plan is described in Regulation §1.411(a)-5(b)(3).
|
6.5
|
DISTRIBUTION OF BENEFITS
|
(a)
|
Qualified Joint and Survivor Annuity.
|
(1)
|
Unless otherwise elected as provided below, a Participant who is married on the Annuity Starting Date and who does not die before the Annuity Starting Date shall receive the value of all Plan benefits in the form of a Joint and Survivor Annuity. The Joint and Survivor Annuity is an annuity that commences immediately and shall be equal in value to a single life annuity. Such joint and survivor benefits following the Participant's death shall continue to the Spouse during the Spouse's lifetime at a rate equal to either fifty percent (50%), seventy-five percent (75%) (or, sixty-six and two-thirds percent (66 2/3%) if the Insurer used to provide the annuity does not offer a joint and seventy-five percent (75%) survivor annuity), or one hundred percent (100%) of the rate at which such benefits were payable to the Participant. Unless otherwise elected in the Adoption Agreement, a joint and fifty percent (50%) survivor annuity shall be considered the designated qualified Joint and Survivor Annuity and the normal form of payment for the purposes of this Plan. However, the Participant may, without spousal consent, elect an alternative Joint and Survivor Annuity, which alternative shall be equal in value to the designated qualified Joint and Survivor Annuity. An unmarr ied Participant shall receive the value of such Participant's benefit in the form of a life annuity. Such unmarried Participant, however, may elect to waive the life annuity. The election must comply with the provisions of this Section as if it were an election to waive the Joint and Survivor Annuity by a married Participant, but without fulfilling the spousal consent requirement. The Participant may elect to have any annuity provided for in this Section distributed upon the attainment of the "earliest retirement age" under the Plan. The "earliest retirement age" is the earliest date on which, under the Plan, the Participant could elect to receive retirement benefits.
|
(2)
|
Any election to waive the Joint and Survivor Annuity must be made by the Participant in writing (or in such other form as permitted by the IRS) during the election period and be consented to in writing (or in such other form as permitted by the IRS) by the Participant's Spouse. If the Spouse is legally incompetent to give consent, the Spouse's legal guardian, even if such guardian is the Participant, may give consent. Such election shall designate a Beneficiary (or a form of benefits) that may not be cha nged without spousal consent (unless the consent of the Spouse expressly permits designations by the Participant without the requirement of further consent by the Spouse). Such Spouse's consent shall be irrevocable and must acknowledge the effect of such election and be witnessed by a Plan representative or a notary public. Such consent shall not be required if it is established to the satisfaction of the Administrator that the required consent cannot be obtained because there is no Spouse, the Spouse cannot be located, or other circumstances that may be prescribed by Regulations. The election made by the Participant and consented to by such Participant's Spouse may be revoked by the Participant in writing (or in such other form as permitted by the IRS) without the consent of the Spouse at any time during the election period. A revocation of a prior election shall cause the Participant's benefits to be distributed as a Joint and Survivor Annuity. The number of revocations shall not be limited. Any new election must comply with the requirements of this paragraph. A former Spouse's waiver shall not be binding on a new Spouse.
|
(3)
|
The election period to waive the Joint and Survivor Annuity shall be the one-hundred eighty (180) (ninety (90) for Plan Years beginning before January 1, 2007) day period ending on the Annuity Starting Date.
|
(4)
|
For purposes of this Section and Section 6.6, Spouse or surviving Spouse means the Spouse or surviving Spouse of the Participant, provided that a former Spouse will be treated as the Spouse or surviving Spouse and a current Spouse will not be treated as the Spouse or surviving Spouse to the extent provided under a "qualified domestic relations order" as described in Code
|
(5)
|
With regard to the election, except as otherwise provided herein, the Administrator shall, in accordance with Regulation
|
(i)
|
the terms and conditions of the qualified Joint and Survivor Annuity, and, effective for Plan Years beginning on or after January 1, 2007, the "qualified optional survivor annuity" that is payable in lieu of the qualified Joint and Survivor Annuit y,
|
(ii)
|
the Participant's right to make and the effect of an election to waive the Joint and Survivor Annuity,
|
(iii)
|
the right of the Participant's Spouse to consent to any election to waive the Joint and Survivor Annuity, and
|
(iv)
|
the right of the Participant to revoke such election, and the effect of such revocation.
|
(6)
|
Any distribution provided for in this Section may commence less than thirty (30) days after the notice required by Code
|
(i)
|
the Administrator clearly informs the Participant that the Participant has a right to a period of thirty (30) days after receiving the notice to consider whether to waive the Joint and Survivor Annuity and to elect (with spousal consent) a form of distribution other than a Joint and Survivor Annuity;
|
(ii)
|
the Participant is permitted to revoke any affirmative distribution election at least until the Annuity Starting Date or, if later, at any time prior to the expiration of the seven (7) day period that begins the day after the explanation of the Joint and Survivor Annuity is provided to the Participant;
|
(iii)
|
the Annuity Starting Date is after the time that the explanation of the Joint and Survivor Annuity is provided to the Participant. However, the Annuity Starting Date may be before the date that any affirmative distribution election is made by the Participant and before the date that the distribution is permitted to commence under (iv) below; and
|
(iv)
|
distribution in accordance with the affirmative distribution election does not commence before the expiration of the seven (7) day period that begins the day after the explanation of the Joint and Survivor Annuity is provided to the Participant.
|
(b)
|
Alternative
forms
of
distributions.
In the event a married Participant duly elects pursuant to paragraph (a)(2) above not to receive the benefit in the form of a Joint and Survivor Annuity, or if such Participant is not married, in the form of a life annuity, the Administrator, pursuant to the election of the Participant, shall direct the distribution to a Participant or Beneficiary any amount to which the Participant or Beneficiary is entitled under the Plan in one or more of the following methods which are permitted pursuant to the Adoption Agreement.
|
(1)
|
One lump-sum payment in cash or in property, provided that if a distribution of property is permitted, it shall be limited to property that is specifically allocated and identifiable with respect to such Participant.
|
(2)
|
Partial withdrawals.
|
(3)
|
Payments over a period certain in monthly, quarterly, semi-annual, or annual cash installments. The period over which such payment is to be made shall not extend beyond the earlier of the Participant's life expectancy (or the joint life expectancy of the Participant and the Participant's designated Beneficiary). Once payments have begun, a Participant may elect to accelerate the payments (reduce the term and increase payments).
|
(4)
|
Purchase of or providing an annuity. However, such annuity may not be in any form that will provide for payments over a period extending beyond the life of the Participant (or the lives of the Participant and the Participant's designated Beneficiary) or the life expectancy of the Participant (or the life expectancy of the Participant and the Participant's designated Beneficiary).
|
(c)
|
Consent
to
distributions.
Benefits may not be paid without the Participant's and the Participant's Spouse's consent if the present value of the Participant's Joint and Survivor Annuity derived from Employer and Employee contributions exceeds $5,000 and the benefit is "immediately distributable." However, spousal consent is not required if the distribution will be made in the form of a qualified Joint and Survivor Annuity and the benefit is "immediately distributable." A benefit is "immediately distributable" if any part
|
(d)
|
Obtaining
consent.
The following rules will apply with respect to the consent requirements set forth in Subsection (c):
|
(1)
|
No consent shall be valid unless the Participant has received a general description of the material features and an explanation of the relative values of the optional forms of benefit available under the Plan that would satisfy the notice requirements of Code §417;
|
(2)
|
The Participant must be informed of the right, if any, to defer receipt of the distribution, and for Plan Years beginning on or after January 1, 2007 a description of the consequences of failing to defer any distribution. If a Participant fails to consent, it shall be deemed an election to defer the commencement of payment of any benefit. However, any election to defer the receipt of benefits shall not apply with respect to distributions that are required under Section 6.8;
|
(3)
|
Notice of the rights specified under this paragraph shall be provided no less than thirty (30) days and no more than
|
(4)
|
Written (or such other form as permitted by the IRS) consent of the Participant to the distribution must not be made before the Participant receives the notice and must not be made more than one-hundred eighty (180) (ninety (90) for Plan Years beginning before January 1, 2007) days before the Annuity Starting Date; and
|
(5)
|
No consent shall be valid if a significant detriment is imposed under the Plan on any Participant who does not consent to the distribution.
|
(e)
|
Required
minimum
distributions
(Code
§401(a)(9)).
Notwithstanding any provision in the Plan to the contrary, the distribution of a Participant's benefits, whether under the Plan or through the purchase of an annuity Contract, shall be made in accordance with the requirements of Section 6.8.
|
(f)
|
Annuity
Contracts.
All annuity Contracts under this Plan shall be non-transferable when distributed. Furthermore, the terms of any annuity Contract purchased and distributed to a Participant or Spouse shall comply with all of the requirements of this Plan.
|
(g)
|
TEFRA
242(b)(2)
election.
The provisions of this Section shall not apply to distributions made in accordance with Plan Section 6.8(a)(4).
|
(h)
|
Distribution
from
partially
Vested
Account.
If a distribution is made to a Participant who has not severed employment and who is not fully Vested in the Participant's Account, and the Participant may increase the Vested percentage in such Account, then at any relevant time the Participant's Vested portion of the Account will be equal to an amount ("X") determined by the formula:
|
(i)
|
Transition rules.
|
(1)
|
Any living Participant not receiving benefits on August 23, 1984, who would otherwise not receive the benefits prescribed by the previous Subsections of this Section must be given the opportunity to elect to have such prior Subsections 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 or after January 1, 1976, and such Participant had at least ten (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
|
(3)
|
The respective opportunities to elect (as described in Subsections (1) and (2) above) 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 Subsection (2) above and any Participant who does not elect under Subsection
|
(1)
|
or who meets the requirements of Subsection (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)
|
If benefits in the form of a life annuity become payable to a married Participant who:
|
(A)
|
begins to receive payments under the Plan on or after Normal Retirement Age; or
|
(B)
|
dies on or after Normal Retirement Age while still working for the Employer; or
|
(C)
|
begins to receive payments on or after the "qualified early retirement age"; or
|
(D)
|
separates from service 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;
|
(ii)
|
A Participant who is employed after attaining the "qualified early retirement age" will be given the opportunity to 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 begi ns, and ends on the date the Participant terminates employment.
|
(iii)
|
For purposes of this Subsection, the "qualified early retirement age" means the latest of: (A) the earliest date, under the Plan, on which the Participant may elect to receive retirement benefits, (B) the first day of the 120th month beginning before the Participant reaches Normal Retirement Age, or (C) the date the Participant begins participation.
|
(j)
|
Qualified optional survivor annuity
|
(1)
|
Right
to
elect
"qualified
optional
survivor
annuity."
Notwithstanding the preceding, effective with respect to Plan Years beginning after December 31, 2007 and prior to the date this Plan is adopted, the Plan satisfied the "qualified optional survivor annuity" provisions set forth in this Subsection. A Participant who elected to waive the qualified Joint and Survivor Annuity form of benefit was entitled to elect the "qualified optional survivor annuity" at any time during the applicable election period. Furthermore, the written explanation of the Joint and Survivor Annuity explains the terms and conditions of the "qualified optional survivor annuity."
|
(2)
|
Definition of "qualified optional survivor annuity."
|
(i)
|
General.
For purposes of this Article, the term "qualified optional survivor annuity" means an annuity:
|
(A)
|
For the life of the Participant with a survivor annuity for the life of the Participant's Spouse which is equal to the "applicable percentage" of the amount of the annuity which is payable during the joint lives of the Participant and the Participant's Spouse, and
|
(B)
|
Which is the actuarial equivalent of a single annuity for the life of the Participant.
|
(ii)
|
Applicable
percentage.
For purposes of this Subsection, the "applicable percentage" is based on the survivor annuity percentage (i.e., the percentage which the survivor annuity under the Plan's qualified Joint and Survivor Annuity bears to the
|
6.6
|
DISTRIBUTION OF BENEFITS UPON DEATH
|
(a)
|
Qualified
Pre-Retirement
Survivor
Annuity
(QPSA).
Unless otherwise elected as provided below, a Vested Participant who dies before the Annuity Starting Date and who has a surviving Spouse shall have the Pre-Retirement Survivor Annuity paid to the surviving Spouse. The Participant's Spouse may direct that payment of the Pre-Retirement Survivor Annuity commence within a reasonable period after the Participant's death. If the Spouse does not so direct, payment of such benefit will commence at t he time the Participant would have attained the later of Normal Retirement Age or age 62. However, the Spouse may elect a later commencement date. Any distribution to the Participant's Spouse shall be subject to the rules specified in Section 6.8.
|
(b)
|
Election
to
waive
QPSA.
Any election to waive the Pre-Retirement Survivor Annuity before the Participant's death must be made by the Participant in writing (or in such other form as permitted by the IRS) during the election period and shall requi re the Spouse's irrevocable consent in the same manner provided for in Section 6.5(a)(2). Further, the Spouse's consent must acknowledge the specific non-Spouse Beneficiary. Notwithstanding the foregoing, the non-Spouse Beneficiary need not be acknowledged, provided the consent of the Spouse acknowledges that the Spouse has the right to limit consent only to a specific Beneficiary and that the Spouse voluntarily elects to relinquish such right.
|
(c)
|
Time
to
waive
QPSA.
The election period to waive the Pre-Retirement Survivor Annuity shall begin on the first day of the Plan Year in which the Participant attains age 35 and end on the date of the Participant's death. An earlier waiver (with spousal consent) may be made provided a written (or such other form as permitted by the IRS) explanation of the Pre-Retirement Survivor Annuity is given to the Participant and such waiver becomes invalid at the beginning of the Plan Year in which the Participant turns age 35. In the event a Participant separates from service prior to the beginning of the election period, the election period shall begin on the date of such separation from service.
|
(d)
|
QPSA
notice.
With regard to the election, the Administrator shall provide each Participant within the applicable election period, with respect to such Participant (and consistent with Regulations), a written (or such other form as permitted by the IRS) explanation of the Pre-Retirement Survivor Annuity containing comparable information to that required pursuant to Section 6.5(a)(5). For the purposes of this paragraph, the term "applicable period" means, with respect to a Participant, whichever of the following periods ends last:
|
(1)
|
The period beginning with the first day of the Plan Year in which the Participant attains age 32 and ending with the close of the Plan Year preceding the Plan Year in which the Participant attains age 35;
|
(2)
|
A reasonable period after the individual becomes a Participant;
|
(3)
|
A reasonable period ending after the Plan no longer fully subsidizes the cost of the Pre-Retirement Survivor Annuity with respect to the Participant; or
|
(4)
|
A reasonable period ending after Code §401(a)(11) applies to the Participant.
|
(e)
|
Pre-REA.
The Pre-Retirement Survivor Annuity provided for in this Section shall apply only to Participants who are credited with an Hour of Service on or after August 23, 1984. Participants who are not credited with an Hour of Service on or after
|
(f)
|
Consent.
If the value of the Pre-Retirement Survivor Annuity derived from Employer and Employee contributions does not exceed $5,000, the Administrator shall direct the distribution of such amount to the Participant's Spouse in a single lump-sum as soon as practicable. No distribution may be made under the preceding sentence after the Annuity Starting Date unless the Spouse consents in writing (or in such other form as permitted by the IRS). If the value exceeds $5,000, an immediate distribution of the entire amount may be made to the surviving Spouse, provided such surviving Spouse consents in writing (or in such other form as permitted by the IRS) to such distribution. Any consent required under this paragraph must be obtained not more than one-hundred eighty (180) days (ninety (90) days for Plan Years beginning before January 1, 2007) before commencement of the distribution and shall be made in a manner consistent with Section 6.5(a)(2).
|
(g)
|
Alternative
forms
of
distribution.
Death benefits may be paid to a Participant's Beneficiary in one of the following optional forms of benefits subject to the rules specified in Section 6.8 and the elections made in the Adoption Agreement. Such optional forms of distributions may be elected by the Participant in the event there is an election to waive the Pre-Retirement Survivor Annuity, and for any death benefits in excess of the Pre-Retirement Survivor Annuity. However, if no optional form of distribution was elected by the Participant prior to death, then the Participant's Beneficiary may elect the form of distribution.
|
(1)
|
One lump-sum payment in cash or in property that is allocated to the Accounts of the Participant at the time of the distribution.
|
(2)
|
Partial withdrawals.
|
(3)
|
Payment in monthly, quarterly, semi-annual, or annual cash installments over a period to be determined by the Participant or the Participant's Beneficiary. In order to provide such installment payments, the Administrator may (A) segregate the aggregate amount thereof in a separate, federally insured savings account, certificate of deposit in a bank or savings and loan association, money market certificate or other liquid short-term security or (B) purchase a nontransferable annuity Contract for a term certain (with no life contingencies) providing for such payment. After periodic installments commence, the Beneficiary shall have the right to reduce the period over which such periodic installments shall be made, and the cash amount of such periodic installments shall be adjusted accordingly.
|
(4)
|
In the form of an annuity over the life expectancy of the Beneficiary.
|
(5)
|
If death benefits in excess of the Pre-Retirement Survivor Annuity are to be paid to the surviving Spouse, such benefits may be paid pursuant to (1), (2) or (3) above, or used to purchase an annuity so as to increase the payments made pursuant to the
|
(h)
|
Required
minimum
distributions
(Code
§401(a)(9)).
Notwithstanding any provision in the Plan to the contrary, distributions upon the death of a Participant shall comply with the requirements of Section 6.8.
|
(i)
|
Payment
to
a
child.
For purposes of this Section, any amount paid to a child of the Participant will be treated as if it had been paid to the surviving Spouse if the amount becomes payable to the surviving Spouse when the child reaches the age of majority.
|
(j)
|
Voluntary
Contribution
Account.
In the event that less than one hundred percent (100%) of a Participant's interest in the Plan is distributed to such Participant's Spouse, the portion of the distribution attributable to the Participant's Voluntary Contribution Account shall be in the same proportion that the Participant's Voluntary Contribution Account bears to the Participant's total interest in the Plan.
|
(k)
|
TEFRA
242(b)(2)
election.
The provisions of this Section shall not apply to distributions made in accordance with Section 6.8(a)(4).
|
6.7
|
TIME OF DISTRIBUTION
|
6.8
|
REQUIRED MINIMUM DISTRIBUTIONS
|
(a)
|
General rules
|
(1)
|
Effective
Date.
Subject to the Joint and Survivor Annuity requirements set forth in Plan Section 6.5, the requirements of this Section shall apply to any distribution of a Participant's interest in the Plan and will take precedence over any inconsistent provisions of this Plan.
|
(2)
|
Requirements
of
Treasury
Regulations
incorporated.
All distributions required under this Section will be determined and made in accordance with the Regulations under Code §401(a)(9) and the minimum distribution incidental benefit requirement of Code §401(a)(9)(G).
|
(3)
|
Limits
on
distribution
periods.
As of the first "distribution calendar year," distributions to a Participant may only be made in accordance with the selections made in the Form of Distributions Section of the Adoption Agreement. If such distributions are not made in a single-sum, then they may only be made over one of the following periods: (i) the life of the Participant, (ii) the
|
(4)
|
TEFRA Section 242(b)(2) elections.
|
(i)
|
Notwithstanding the other provisions of this Section, other than the Spouse's right of consent afforded under the Plan, distributions may be made on behalf of any Participant, including a five percent (5%) owner, who has made a designation in accordance with Section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act (TEFRA) and in accordance with all of the following requirements (regardless of when such distribution commences):
|
(A)
|
The distribution by the Plan is one which would not have disqualified such Plan under Code §401(a)(9) as in effect prior to amendment by the Deficit Reduction Act of 1984.
|
(B)
|
The distribution is in accordance with a method of distribution designated by the Participant whose interest in the Plan is being distributed or, if the Participant is deceased, by a Beneficiary of such Participant.
|
(C)
|
Such designation was in writing, was signed by the Participant or the Beneficiary, and was made before January 1, 1984.
|
(D)
|
The Participant had accrued a benefit under the Plan as of December 31, 1983.
|
(E)
|
The method of distribution designated by the Participant 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 Participant's death, the Beneficiaries of the Participant listed in order of priority.
|
(ii)
|
A distribution upon death will not be covered by the transitional rule of this Subsection 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 Participant.
|
(iii)
|
For any distribution which commences before January 1, 1984, but continues after December 31, 1983, the Participant, 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 (i)(A) and (i)(E) of this Subsection.
|
(iv)
|
If a designation is revoked, any subsequent distribution must satisfy the requirements of Code §401(a)(9) and the Regulations thereunder. If a designation is revoked subsequent to the date distributions are required to begin, the Plan must distribute by the end of the calendar year following the calendar year in which the revocation occurs the total amount not yet distributed which would have been required to have been distributed to satisfy Code §401(a)(9) and the Regulations thereunder, but for the Section 242(b)(2) election. For calendar years beginning after December 31, 1988, such distributions must meet the minimum distribution incidental benefit requirements. Any changes in the designation will be considered to be a revocation of the designation. However, the mere substitution or addition of another Beneficiary (one not named in the designation) under the designation will not be considered to be a revocation of the designation, so long as such substitution or addition does not alter the period over which distributions are to be made under the designation, directly or indirectly (for example, by altering the relevant measuring life).
|
(v)
|
In the case in which an amount is transferred or rolled over from one plan to another plan, the rules in Regulation
|
(b)
|
Time and manner of distribution
|
(1)
|
Required
beginning
date.
The Participant's entire interest will be distributed, or begin to be distributed, to the Participant no later than the Participant's "required beginning date."
|
(2)
|
Death
of
Participant
before
distributions
begin.
If the Participant dies before distributions begin, the Participant's entire interest will be distributed, or begin to be distributed, no later than as follows as elected in the Distributions Upon Death Section of the Adoption Agreement (or if no election is made, then the Beneficiary may elect either the lifetime method or the five-year method):
|
(i)
|
Lifetime
method
(Spouse).
If the Participant's surviving Spouse is the Participant's sole "designated Beneficiary," then, except as otherwise provided herein, distributions to the surviving Spouse will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died, or by December 31 of the calendar year in which the Participant would have attained age 70 1/2, if later.
|
(ii)
|
Lifetime
method
(non-Spouse).
If the Participant's surviving Spouse is not the Participant's sole "designated Beneficiary," then, except as provided in Section 6.8(b)(3) below, distributions to the "designated Beneficiary" will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died.
|
(iii)
|
Five-year
method.
If there is no "designated Beneficiary" as of September 30 of the year following the year of the Participant's death or if otherwise elected pursuant to the Adoption Agreement with respect to a "designated Beneficiary," the Participant's entire interest will be distributed by December 31 of the calendar year containing the fifth anniversary of the Participant's death.
|
(iv)
|
Death
of
Spouse.
If the Participant's surviving Spouse is the Participant's sole "designated Beneficiary" and the surviving Spouse dies after the Participant but before distributions to the surviving Spouse begin, this Section 6.8(b)(2), other than Section 6.8(b)(2)(i), will apply as if the surviving Spouse were the Participant.
|
(c)
|
Required minimum distributions during Participant's lifetime
|
(1)
|
Amount
of
required
minimum
distribution
for
each
"distribution
calendar
year."
During the Participant's lifetime, the minimum amount that will be distributed for each "distribution calendar year" is the lesser of the following, as elected in the Form of Distributions Section of the Adoption Agreement:
|
(i)
|
the quotient obtained by dividing the "Participant's account balance" by the distribution period in the Uniform Lifetime Table set forth in Regulation §1.401(a)(9)-9, using the Participant's age as of the Participant's birthday in the "distribution calendar year"; or
|
(ii)
|
if the Participant's sole "designated Beneficiary" for the "distribution calendar year" is the Participant's Spouse, the quotient obtained by dividing the "Participant's account balance" by the number in the Joint and Last Survivor Table set forth in Regulation §1.401(a)(9)-9, using the Participant's and Spouse's attained ages as of the Participant's and Spouse's birthdays in the "distribution calendar year."
|
(2)
|
Lifetime
required
minimum
distributions
continue
through
year
of
Participant's
death.
Required minimum distributions will be determined under this Section 6.8(c) beginning with the first "distribution calendar year" and up to and including the "distribution calendar year" that includes the Participant's date of death.
|
(d)
|
Required minimum distributions after Participant's death
|
(1)
|
Death on or after date distributions begin.
|
(i)
|
Participant
survived
by
"designated
Beneficiary."
If the Participant dies on or after the date distributions begin and there is a "designated Beneficiary," the minimum amount that will be distributed for each "distribution calendar year" after the year of the Participant's death is the quotient obtained by dividing the "Participant's account balance" by the longer of the remaining "life expectancy" of the Participant or the remaining "life expectancy" of the Participant's "designated Beneficiary," determined as follows:
|
(A)
|
The Participant's remaining "life expectancy" is calculated using the age of the Participant in the year of death, reduced by one for each subsequent year.
|
(B)
|
If the Participant's surviving Spouse is the Participant's sole "designated Beneficiary," the remaining "life expectancy" of the surviving Spouse is calculated for each "distribution calendar year" after the year of the Participant's death using the surviving Spouse's age as of the Spouse's birthday in that year. For "distribution calendar years" after the year of the surviving Spouse's death, the remaining "life expectancy" of the surviving Spouse is calculated using the age of the surviving Spouse as of the Spouse's birthday in the calendar year of the Spouse's death, reduced by one for each subsequent calendar year.
|
(2)
|
Death before date distributions begin.
|
(i)
|
Participant
survived
by
"designated
Beneficiary."
Except as provided in Sections 6.8(b)(2) and 6.8(b)(3), if the Participant dies before the date distributions begin and there is a "designated Beneficiary," the minimum amount that will be distributed for each "distribution calendar year" after the year of the Participant's death is the quotient obtained by dividing the "Participant's account balance" by the remaining "life expectancy" of the Participant's "designated Beneficiary," determined as provided in Section 6.8(d)(1).
|
(ii)
|
No
"designated
Beneficiary."
If the Participant dies before the date distributions begin and there is no "designated Beneficiary" as of September 30 of the year following the year of the Participant's death, distribution of the Participant's entire interest will be completed by December 31 of the calendar year containing the fifth anniversary of the Participant's death.
|
(iii)
|
Death
of
surviving
Spouse
before
distributions
to
surviving
Spouse
are
required
to
begin.
If the Participant dies before the date distributions begin, the Participant's surviving Spouse is the Participant's sole "designated Beneficiary," and the surviving Spouse dies before distributions are required to begin to the surviving Spouse under Section 6.8(b)(2)(i), this Section 6.8(d)(2) will apply as if the surviving Spouse were the Participant.
|
(e)
|
Definitions.
For purposes of this Section, the following definitions apply:
|
(1)
|
"Designated Beneficiary" means the individual who is designated as the Beneficiary under the Plan and is the "designated Beneficiary" under Code §401(a)(9) and Regulation §1.401(a)(9)-4.
|
(2)
|
"Distribution calendar year" means 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 under Section 6.8(b). The required minimum distribution for the Participant's first "distribution calendar year" will be made on or before the Participant's "required beginning date." The required minimum distribution for other "distribution calendar years," including the required minimum distribution for the "distribution calendar year" in which the Participant's "required beginning date" occurs, will be made on or before December 31 of that "distribution calendar year."
|
(3)
|
"Life expectancy" means the life expectancy as computed by use of the Single Life Table in Regulation §1.401(a)(9)-9.
|
(4)
|
"Participant's account balance" means the Participant's account balance as of the last Valuation Date in the calendar year immediately preceding the "distribution calendar year" (valuation calendar year) increased by the amount of any contributions made and allocated or Forfeitures allocated to the account balance as of the dates in the valuation calendar year after the Valuation Date and decreased by distributions made in the valuation calendar year after the Valuation Date. For this purpose, the Administrator may exclude contributions that are allocated to the account balance as of dates in the valuation calendar year after the Valuation Date, but that are not actually made during the valuation calendar year. The account balance for the valuation calendar year includes any amounts rolled over or transferred to the Plan either in the valuation calendar year or in the "distribution calendar year" if distributed or transferred in the valuation calendar year.
|
(5)
|
"Required beginning date" means, except as otherwise elected in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections), with respect to any Participant, April 1 of the calendar year following the later of the calendar year in which the Participant attains age 70 1/2 or the calendar year in which the Participant retires, except that benefit distributions to a "5-percent owner" must commence by April 1 of the calendar year following the calendar year in which the Participant attains age 70 1/2.
|
(6)
|
"5-percent owner" means a Participant who is a 5-percent owner as defined in Code §416 at any time during the Plan Year ending with or within the calendar year in which such owner attains age 70 1/2. Once distributions have begun to a 5-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.
|
(f)
|
Waiver of 2009 required distributions
|
(1)
|
Suspension
of
RMDs
unless
otherwise
elected
by
Participant.
This paragraph does not apply if the Employer elected options a., b., or c. at the WRERA – RMD Waivers for 2009 Section of the Adoption Agreement. Notwithstanding the provisions of the Plan relating to required minimum distributions under Code §401(a)(9), a Participant or Beneficiary who would have been required to receive required minimum distributions for 2009 but for the enactment of Code §401(a)(9)(H) ("2009 RMDs"), and who would have satisfied that requirement by receiving distributions that are (i) equal to the "2009 RMDs" or (ii) one or more payments in a series of substantially equal distributions (that include the "2009 RMDs") made at least annually and expected to last for the life (or "life expectancy") of the Participant, the joint lives (or joint "life expectancy") of the Participant and the Participant's "designated Beneficiary," or for a period of at least 10 years ("Extended 2009 RMDs"), did not receive those distributions for 2009 unless the Participant or Beneficiary chooses to receive such distributions. Participants and Beneficiaries described in the preceding sentence were given the opportunity to elect to receive the distributions described in the preceding sentence.
|
(2)
|
Continuation
of
RMDs
unless
otherwise
elected
by
Participant.
This paragraph applies if the Employer elected option b. at the WRERA – RMD Waivers for 2009 Section of the Adoption Agreement. Notwithstanding the provisions of the Plan relating to required minimum distributions under Code §401(a)(9), a Participant or Beneficiary who would have been required to receive required minimum distributions for 2009 but for the enactment of Code §401(a)(9)(H) ("2009 RMDs"), and who would have satisfied that requirement by receiving distributions that are (i) equal to the "2009 RMDs" or (ii) one or more payments in a series of substantially equal distributions (that include the "2009 RMDs") made at least annually and expected to last for the life (or "life expectancy") of the Participant, the joint lives (or joint "life expectancy") of the Participant and the Participant's "designated Beneficiary," or for a period of at least 10 years ("Extended 2009 RMDs"), did not receive those distributions for 2009 unless the Participant or Beneficiary choose not to receive such distributions. Participants and Beneficiaries described in the preceding sentence were given the opportunity to elect to stop receiving the distributions described in the preceding sentence.
|
(3)
|
Direct
rollovers.
Notwithstanding the provisions of the Plan relating to required minimum distributions under Code
|
6.9
|
DISTRIBUTION FOR MINOR OR INCOMPETENT INDIVIDUAL
|
6.10
|
LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
|
6.11
|
IN-SERVICE DISTRIBUTION
|
6.12
|
ADVANCE DISTRIBUTION FOR HARDSHIP
|
(a)
|
Hardship
events.
For Profit Sharing Plans and 401(k) Plans (except to the extent Section 12.10 applies), if elected in the Adoption Agreement, the Administrator, at the election of the Participant, shall direct the distribution to any Participant in any one Plan Year up to the lesser of 100% of the Vested interest of the Accounts selected in the Adoption Agreement, valued as of the last Valuation Date or the amount necessary to satisfy the immediate and heavy financial need of the Participant. For purposes of this Section, a Participant shall include an Employee who has an Account balance in the Plan. Any distribution made pursuant to this Section shall be deemed to be made as of the first day of the Plan Year or, if later, the Valuation Date immediately preceding the date of distribution, and the Account from which the distribution is made shall be reduced accordingly. Withdrawal under this Section shall be authorized only if the distribution is for an immediate and heavy financial need. The Administrator will determine whether there is an immediate and heavy financial need based on the facts and circumstances. An immediate and heavy financial need includes, but is not limited to, a distribution for one of the following:
|
(1)
|
Expenses for (or necessary to obtain) medical care (as defined in Code §213(d));
|
(2)
|
Costs directly related to the purchase (excluding mortgage payments) of a principal residence for the Participant;
|
(3)
|
Payments for burial or funeral expenses for the Participant's deceased parent, Spouse, children or dependents (as defined in Code §152, and without regard to Code §152(d)(1)(B));
|
(4)
|
Payment of tuition, related educational fees, and room and board expenses, for up to the next twelve (12) months of post-secondary education for the Participant, the Participant's Spouse, children, or dependents (as defined in Code §152, and without regard to Code §§152(b)(1), (b)(2), and (d)(1)(B));
|
(5)
|
Payments necessary to prevent the eviction of the Participant from the Participant's principal residence or foreclosure on the mortgage on that residence; or
|
(6)
|
Expenses for the repair of damage to the Participant's principal residence that would qualify for the casualty deduction under Code §165 (determined without regard to whether the loss exceeds 10% of adjusted gross income).
|
(b)
|
Beneficiary-based
distribution.
If elected in Adoption Agreement, then effective as of the date specified in the Adoption Agreement, but no earlier than August 17, 2006, a Participant's hardship event includes an immediate and heavy financial need of the Participant's "primary Beneficiary under the Plan," that would constitute a hardship event if it occurred with respect to the Participant's Spouse or dependent as defined under Code §152 (such hardship events being limited to educational expenses, funeral expenses and certain medical expenses). For purposes of this Section, a Participant's "primary Beneficiary under the Plan" is an individual who is named as a Beneficiary under the Plan (by the Participant or pursuant to Section 6.2(d)) and has an unconditional right to all or a portion of the Participant's Account balance under the Plan upon the Participant's death.
|
(c)
|
Other
limits
and
conditions.
If elected in the Adoption Agreement, no distribution shall be made pursuant to this Section from the Participant's Account until such Account has become fully Vested. Furthermore, if a hardship distribution is permitted from more than one Account, the Administrator may determine any ordering of a Participant's hardship distribution from such Accounts.
|
(d)
|
Distribution
rules
apply.
Any distribution made pursuant to this Section shall be made in a manner which is consistent with and satisfies the provisions of Section 6.5, including, but not limited to, all notice and consent requirements of Code §§411(a)(11) and 417 and the Regulations thereunder.
|
6.13
|
SPECIAL RULE FOR CERTAIN PROFIT SHARING PLANS
|
(a)
|
The provisions of this Section apply to a Participant in a Profit Sharing Plan or 401(k) Profit Sharing Plan to the extent elected in the Adoption Agreement. However, unless otherwise permitted pursuant to Regulation §1.411(d)-4, this Section shall not apply with respect to amounts that are transferred directly or indirectly (i.e., other than by a rollover) to this Plan from a defined benefit plan, money purchase pension plan, target benefit plan, or stock bonus or profit sharing plan which is subject to the survivor annuity requirements of Code §§401(a)(11) and 417.
|
(b)
|
If an election is made to not offer life annuities as a form of distribution, then a Participant shall be prohibited from electing benefits in the form of a life annuity and the Joint and Survivor Annuity provisions of Section 6.5 shall not apply.
|
(c)
|
If an election is made to offer life annuities as a form of distribution but not as the normal form of distribution, then the Joint and Survivor Annuity provisions of Section 6.5 shall not apply if a Participant does not elect an annuity form of distribution. Furthermore, Subsection (e) shall not apply if a Participant elects an annuity form of distribution.
|
(d)
|
Notwithstanding anything in Sections 6.2 and 6.6 to the contrary, upon the death of a Participant, the automatic form of distribution will be a lump-sum rather than a Qualified Pre-Retirement Survivor Annuity. Furthermore, the Participant's Spouse will be the Beneficiary of the Participant's entire Vested interest in the Plan unless an election is made to waive the Spouse as Beneficiary. The other provisions in Section 6.2 shall be applied by treating the death benefit in this Subsection as though it is a Qualified
|
(e)
|
Except to the extent otherwise provided in this Section, the provisions of Sections 6.2 and 6.5 regarding spousal consent shall be inoperative with respect to this Plan.
|
(f)
|
If a distribution is one to which Code §§401(a)(11) and 417 do not apply, such distribution may commence less than thirty (30) days after the notice required under Regulation §1.411(a)-11(c) is given, provided that:
|
(1)
|
the Administrator clearly informs the Participant that the Participant has a right to a period of at least thirty (30) days after the notice to consider the decision of whether or not to elect a distribution (and, if applicable, a particular distribution option), and
|
(2)
|
the Participant, after receiving the notice, affirmatively elects a distribution.
|
6.14
|
QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION
|
6.15
|
DIRECT ROLLOVERS
|
(a)
|
Right
to
direct
rollover.
Notwithstanding any provision of the Plan to the contrary that would otherwise limit a "distributee's" election under this Section, a "distributee" may elect, at the time and in the manner prescribed by the Administrator, to have an "eligible rollover distribution" paid directly to an "eligible retirement plan" specified by the "distributee" in a "direct rollover." However, if less than the entire amount of the "eligible rollover distribution" is being paid directly to an "eligible retirement plan," then the Administrator may require that the amount paid directly to such plan be at least $500. Furthermore, the Administrator may apply this Section by treating a Participant's Roth Elective Deferral Account separately from the Participant's other Account s.
|
(b)
|
Definitions.
For purposes of this Section, the following definitions shall apply:
|
(1)
|
Eligible
rollover
distribution.
An "eligible rollover distribution" means any distribution described in Code §402(c)(4) and generally includes any distribution of all or any portion of the balance to the credit of the "distributee," except that an "eligible rollover distribution" does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the "distributee" or the joint lives (or joint life expectanci es) of the "distributee" and the "distributee's" "designated Beneficiary," or for a specified period of ten (10) years or more; any distribution to the extent such distribution is required under Code §401(a)(9); any hardship distribution; the portion of any other distribution(s) that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities); and any other distribution reasonably expected to total less than $200 during a year. For purposes of the $200 rule, a distribution from a designated Roth account and a distribution from other accounts under the Plan may be treated as made under separate plans. In addition, Section 6.8(f) applies with respect to distributions made in 2009.
|
(i)
|
a traditional individual retirement account or annuity described in Code §408(a) or (b) (a "traditional IRA")
|
(ii)
|
for taxable years beginning after December 31, 2006, a Roth individual account or annuity described in Code §408A (a "Roth IRA"), or
|
(iii)
|
a qualified defined contribution plan or an annuity contract described in Code §401(a) or Code §403(b), respectively, that agrees to separately account for amounts so transferred (and earnings thereon), including separately accounting for the
|
(2)
|
Eligible
retirement
plan.
An "eligible retirement plan" is a "traditional IRA," for distributions made after December 31, 2007, a "Roth IRA," a qualified trust (an employees' trust) described in Code §401(a) which is exempt from tax under Code
|
(3)
|
Distributee.
A "distributee" includes 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 the Alternate Payee, are "distributees" with regard to the interest of the Spouse or former Spouse.
|
(4)
|
Direct
rollover.
A "direct rollover" is a payment by the Plan to the "eligible retirement plan" specified by the "distributee."
|
(c)
|
Participant
notice.
A Participant entitled to an "eligible rollover distribution" must receive a written explanation of the right to a "direct rollover," the tax consequences of not making a "direct rollover," and, if applicable, any available special income tax elections. The notice must be provided within the same thirty (30) – one-hundred eighty (180) day timeframe applicable to the Participant consent notice as set forth in Section 6.5(d)(3). The "direct rollover" notice must be provided to all Participants, unless the total amount the Participant will receive as a distribution during the calendar year is expected to be less than $200.
|
(d)
|
Non-Spouse
Beneficiary
rollover
right.
For distributions after December 31, 2009, and unless otherwise elected in the Adoption Agreement, for distributions after December 31, 2006, a non-Spouse Beneficiary who is a "designated Beneficiary" under Code §401(a)(9)(E) and the Regulations thereunder, by a direct trustee-to-trustee transfer ("direct rollover"), may roll over all or any portion an "eligible rollover distribution" to an IRA the Beneficiary establishes for purposes of receiving the distribution.
|
(1)
|
Certain
requirements
not
applicable.
Any distribution made prior to January 1, 2010 is not subject to the "direct rollover" requirements of Code §401(a)(31) (including Code §401(a)(31)(B), the notice requirements of Code §402(f) or the mandatory withholding requirements of Code §3405(c)).
|
(2)
|
Trust
Beneficiary.
If the Participant's named Beneficiary is a trust, the Plan may make a direct rollover to an IRA on behalf of the trust, provided the trust satisfies the requirements to be a "designated Beneficiary."
|
6.16
|
RESTRICTIONS ON DISTRIBUTION OF ASSETS TRANSFERRED FROM A MONEY PURCHASE PLAN
|
6.17
|
CORRECTIVE DISTRIBUTIONS
|
6.18
|
QUALIFIED RESERVIST DISTRIBUTIONS AND HEART ACT
|
(a)
|
Qualified
reservist
distribution
defined.
A "qualified reservist distribution" is any distribution to an individual who is ordered or called to active duty after September 11, 2001, if: (1) the distribution is from amounts attributable to elective deferrals in a 401(k) plan; (2) the individual was (by reason of being a member of a reserve component, as defined in section 101 of title 37, United States Code) ordered or called to active duty for a period in excess of 179 days or for an indefinite period; and (3) the Plan makes the distribution during the period beginning on the date of such order or call, and ending at the close of the active duty period.
|
(b)
|
Death
benefits.
In the case of a death occurring on or after January 1, 2007, if a Participant dies while performing qualified military service (as defined in Code §414(u)), the Participant's Beneficiary is entitled to any additional benefits (other than benefit accruals (unless otherwise elected in the Adoption Agreement) relating to the period of qualified military service) provided under the Plan as if the Participant had resumed employment and then terminated employment on account of death. Moreover, the Plan will credit the Participant's qualified military service as service for vesting purposes, as though the Participant had resumed employment under Uniformed Services Employment and Reemployment Rights Act of 1994, as amended (USERRA) immediately prior to the Participant's death.
|
(c)
|
Military
Differential
Pay.
For years beginning after December 31, 2008: (1) an individual receiving Military Differential Pay is treated as an Employee of the Employer making the payment; (2) the Military Differential Pay is treated as 415 Compensation (and Compensation unless otherwise elected in the Adoption Agreement); and (3) the Plan is not treated as failing to meet the requirements of any provision described in Code §414(u)(1)(C) (or corresponding Plan provisions, including, but not limited to, Plan provisions related to the ADP or ACP test) by reason of any contribution or benefit which is based on the Military Differential Pay. The Administrator operationally may determine, for purposes of the provisions described in Code §414(u)(1)(C), whether to take into account any Elective Deferrals, and if applicable, any matching contributions, attributable to Military Differential Pay.
|
(d)
|
Deemed
Severance.
Notwithstanding Subsection (c)(1) above, if elected in the Adoption Agreement, a Participant performs service in the uniformed services (as defined in Code §414(u)(12)(B)) on active duty for a period of more than 30 days, the Participant will be deemed to have a severance from employment solely for purposes of eligibility for distribution of amounts not subject to Code
|
7.1
|
BASIC RESPONSIBILITIES OF THE TRUSTEE
|
(a)
|
Application
of
Article.
The provisions of this Article, other than Sections 7.6 and 7.15, shall not apply to this Plan if a separate trust agreement is being used. Furthermore, the provisions of this Article, other than Sections 7.5, 7.6 and 7.15, shall not apply if the Plan is fully insured. If the Employer has appointed two or more Trustees to hold Plan assets, then each Trustee shall be the Trustee only with respect to those Plan assets specifically deposited by the Employer in the Trust Fund for which such Trustee is the trustee. References in the Plan to the responsibilities, power or duties of the Trustee and any other provisions in the Plan relating to the Trustee shall be interpreted as applying to each Trustee only with respect to the assets of the Trust Fund for which such Trustee is the Trustee. Each Trustee shall have no responsibility for, or liability with respect to, any of the Plan assets other than the assets for which it serves as Trustee.
|
(b)
|
Duty
to
collect
contributions.
The Trustee is obligated to collect any amounts owed to the Trust, except as otherwise provided in Section 7.3(c), even if such amounts are owed by the Employer, unless another person or entity has been designated with such duty in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections) or other written agreement (including a designation made pursuant to Section 7.3(c)). In determining how to discharge any duty to collect contributions, the Trustee should weigh the value of the Plan assets involved, the likelihood of a successful recovery, and the expenses expected to be incurred.
|
(c)
|
Reliance
on
Administrator's
directions.
The Trustee will credit and distribute the Trust Fund as directed by the Administrator. The Trustee is not obligated to inquire as to whether any payee or distributee is entitled to any payment or whether the distribution is proper or within the terms of the Plan, or whether the manner of making any payment or distribution is proper. The Trustee is accountable only to the Administrator for any payment or distribution made by it in good faith on the order or direction of t he Administrator.
|
(d)
|
Directions
by
others.
In the event that the Trustee shall be directed by a Participant (pursuant to the Participant Direction Procedures if the Plan permits Participant directed investments), the Employer, or an Investment Manager or other agent appoi nted by the Employer with respect to the investment of any or all Plan assets, the Trustee shall have no liability with respect to the investment of such assets, but shall be responsible only to execute such investment instructions as so directed.
|
(1)
|
The Trustee shall be entitled to rely fully on the written (or other form acceptable to the Administrator and the Trustee, including but not limited to, voice recorded) instructions of a Participant (pursuant to the Participant Direction Procedures), the Employer, or any Fiduciary or nonfiduciary agent of the Employer, in the discharge of such duties, and shall not be liable for any loss or other liability resulting from such direction (or lack of direction) of the investment of any part of the Plan assets.
|
(2)
|
The Trustee may delegate the duty of executing such instructions to any nonfiduciary agent, which may be an affiliate of the Trustee or any Plan representative.
|
(3)
|
The Trustee may refuse to comply with any direction from the Participant in the event the Trustee, in its sole and absolute discretion, deems such direction improper by virtue of applicable law. The Trustee shall not be responsible or liable for any loss or expense that may result from the Trustee's refusal or failure to comply with any direction from the Participant.
|
(4)
|
Any costs and expenses related to compliance with the Participant's directions shall be borne by the Participant's Directed Account, unless paid by the Employer.
|
(5)
|
Notwithstanding anything herein above to the contrary, the Trustee shall not invest any portion of a Participant's Directed Account in "collectibles" within the meaning of Code §408(m).
|
(e)
|
Records.
The Trustee will maintain records of receipts and disbursements and furnish to the Employer and/or Administrator for each Plan Year a written annual report pursuant to Section 7.9.
|
(f)
|
Employment
of
bank
or
trust
company.
The Trustee may employ a bank or trust company pursuant to the terms of its usual and customary bank agency agreement, under which the duties of such bank or trust company shall be of a custodial, clerical and record-keeping nature.
|
(g)
|
Payment
of
expenses.
The Trustee may employ and pay from the Trust Fund reasonable compensation to agents, attorneys, accountants and other persons to advise the Trustee as in its opinion may be necessary. The Trustee may delegate to any agent , attorney, accountant or other person selected by it any non-Trustee power or duty vested in it by the Plan, and the Trustee may act or refrain from acting on the advice or opinion of any such person.
|
7.2
|
INVESTMENT POWERS AND DUTIES OF DISCRETIONARY TRUSTEE
|
(a)
|
Discretionary
authority.
This Section applies if the Employer, in the Adoption Agreement or as otherwise agreed upon by the Employer and the Trustee, designates the Trustee to administer all or a portion of the trust as a Discretionary Trustee. If so designated, then the Trustee has the discretion and authority to invest, manage, and control those Plan assets except, however, with respect to those assets which are subject to the investment direction of a Participant (if Participant directed investments are permitted), or an Investment Manager, the Administrator, or other agent appointed by the Employer. The exercise of any investment discretion hereunder shall be consistent with the "funding policy and method" determined by the Employer.
|
(b)
|
Duties.
The Trustee shall, except as otherwise provided in this Plan, invest and reinvest the Trust Fund to keep the Trust Fund invested without distinction between principal and income and in such securities or property, real or personal, wherever situated, as the Trustee shall deem advisable, including, but not limited to, common or preferred stocks, open-end or closed-end mutual funds, bonds and other evidences of indebtedness or ownership, and real estate or any interest therein. The Trustee shall at all times in making investments of the Trust Fund consider, among other factors, the short and long-term financial needs of the Plan on the basis of information furnished by the Employer. In making such investments, the Trustee shall not be restricted to securities or other property of the character expressly authorized by the applicable law for trust investments; however, the Trustee shall give due regard to any limitations imposed by the Code or the Act so that at all times this Plan may qualify as a qualified Plan and Trust. The Trustee shall discharge its duties with respect to the Plan solely in the interest of the Participants and Beneficiaries and with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person 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.
|
(c)
|
Powers.
The Trustee, in addition to all powers and authorities under common law, statutory authority, including the Act, and other provisions of this Plan, shall have the following powers and authorities to be exercised in the Trustee's sole discretion:
|
(1)
|
To purchase, or subscribe for, any securities or other property and to retain the same. In conjunction with the purchase of securities, margin accounts may be opened and maintained;
|
(2)
|
To sell, exchange, convey, transfer, grant options to purchase, or otherwise dispose of any securities or other property held by the Trustee, by private contract or at public auction. No person dealing with the Trustee shall be bound to see to the
|
(3)
|
To vote upon any stocks, bonds, or other securities; to give general or special proxies or powers of attorney with or without power of substitution; to exercise any conversion privileges, subscription rights or other options, and to make any payments incidental thereto; to oppose, or to consent to, or otherwise participate in, corporate reorganizations or other changes affecting corporate securities, and to delegate discretionary powers, and to pay any assessments or charges in connection therewith; and generally to exercise any of the powers of an owner with respect to stocks, bonds, securities, or other property;
|
(4)
|
To cause any securities or other property to be registered in the Trustee's own name, or in the name of a nominee or in a street name provided such securities or other property are held on behalf of the Plan by (i) a bank or trust company, (ii) a broker or dealer registered under the Securities Exchange Act of 1934, or a nominee of such broker or dealer, or (iii) a clearing agency as defined in Section 3(a)(23) of the Securities Exchange Act of 1934;
|
(5)
|
To invest in a common, collective, or pooled trust fund (the provisions of which are incorporated herein by reference) maintained by any Trustee (or any affiliate of such Trustee) hereunder pursuant to Revenue Ruling 81-100 (as modified by Rev. Rul. 2011-1 or any subsequent guidance), all or such part of the Trust Fund as the Trustee may deem advisable, and the part of the Trust Fund so transferred shall be subject to all the terms and provisions of the common, collective, or pooled trust fund which contemplate the commingling for investment purposes of such trust assets with trust assets of other trusts. The name of the trust fund may be specified in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections). The Trustee may withdraw from such common, collective, or pooled trust fund all or such part of the Trust Fund as the Trustee may deem advisable;
|
(6)
|
To borrow or raise money for the purposes of the Plan in such amount, and upon such terms and conditions, as the Trustee shall deem advisable; and for any sum so borrowed, to issue a promissory note as Trustee, and to secure the repayment thereof by pledging all, or any part, of the Trust Fund; and no person lending money to the Trustee shall be bound to see to the application of the money lent or to inquire into the validity, expediency, or propriety of any borrowing;
|
(7)
|
To accept and retain for such time as it may deem advisable any securities or other property received or acquired by it as Trustee hereunder, whether or not such securities or other property would normally be purchased as investments hereunder;
|
(8)
|
To 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;
|
(9)
|
To settle, compromise, or submit to arbitration (provided such arbitration does not apply to qualification issues nor to Participants or Beneficiaries) any claims, debts, or damages due or owing to or from the Plan, to commence or defend suits or legal or administrative proceedings, and to represent the Plan in all suits and legal and administrative proceedings;
|
(10)
|
To employ suitable agents and counsel and to pay their reasonable expenses and compensation, and such agents or counsel may or may not be an agent or counsel for the Employer;
|
(11)
|
To apply for and procure from the Insurer as an investment of the Trust Fund any annuity or other Contracts (on the life of any Participant, or in the case of a Profit Sharing Plan (including a 401(k) Plan), on the life of any person in whom a Participant has an insurable interest, or on the joint lives of a Participant and any person in whom the Participant has an insurable interest) as the Administrator shall deem proper; to exercise, at any time or from time to time, whatever rights and privileges may be granted under such annuity, or other Contracts; to collect, receive, and settle for the proceeds of all such annuity, or other Contracts as and when entitled to do so under the provisions thereof;
|
(12)
|
To invest funds of the Trust in time deposits or savings accounts bearing a reasonable rate of interest or in cash or cash balances without liability for interest thereon, including the specific authority to invest in any type of deposit of the Trustee (or of a financial institution related to the Trustee);
|
(13)
|
To invest in Treasury Bills and other forms of United States government obligations;
|
(14)
|
To sell, purchase and acquire put or call options if the options are traded on and purchased through a national securities exchange registered under the Securities Exchange Act of 1934, as amended, or, if the options are not traded on a national securities exchange, are guaranteed by a member firm of the New York Stock Exchange regardless of whether such options are covered;
|
(15)
|
To deposit monies in federally insured savings accounts or certificates of deposit in banks or savings and loan associations including the specific authority to make deposit into any savings accounts or certificates of deposit of the Trustee (or a financial institution related to the Trustee);
|
(16)
|
To pool all or any of the Trust Fund, from time to time, with assets belonging to any other qualified employee pension benefit trust created by the Employer or any Affiliated Employer, and to commingle such assets and make joint or common
|
7.3
|
INVESTMENT POWERS AND DUTIES OF NONDISCRETIONARY TRUSTEE
|
(a)
|
No
discretionary
powers.
This Section applies if the Employer, in the Adoption Agreement or as otherwise agreed upon by the Employer and the Trustee, designates the Trustee to administer all or a portion of the trust as a nondiscretionary Trustee. If so designated, then the Trustee shall have no discretionary authority to invest, manage, or control those Plan assets, but must act solely as a Directed Trustee of those Plan assets. A nondiscretionary Trustee, as Directed Trustee of the Plan funds it holds, is authorized and empowered, by way of limitation, with the powers, rights and duties set forth herein and in Section 7.14, each of which the nondiscretionary Trustee exercises solely as Directed Trustee in accordance with the direction of the party which has the aut hority to manage and control the investment of the Plan assets. If no directions are provided to the Trustee, the Employer will provide necessary direction. Furthermore, the Employer and the nondiscretionary Trustee may, in writing, limit the powers of the nondiscretionary Trustee to any combination of powers listed within this Section. The party which has the authority to manage and control the investment of the Plan assets shall discharge its duties with respect to the Plan solely in the interest of the Participants and Beneficiaries and with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person 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.
|
(b)
|
Powers.
The Trustee, in addition to all powers and authorities under common law, statutory authority, including the Act, and other provisions of this Plan, shall have the following powers and authorities:
|
(1)
|
To invest the assets, without distinction between principal and income, in securities or property, real or personal, wherever situated, including, but not limited to, common or preferred stocks, open-end or closed-end mutual funds, bonds and other evidences of indebtedness or ownership, and real estate or any interest therein. In making such investments, the Trustee shall not be restricted to securities or other property of the character expressly authorized by the applicable law for trust investments; however, the Trustee shall give due regard to any limitations imposed by the Code or the Act so that at all times this Plan may qualify as a qualified Plan and Trust;
|
(2)
|
To purchase, or subscribe for, any securities or other property and to retain the same. In conjunction with the purchase of securities, margin accounts may be opened and maintained;
|
(3)
|
To sell, exchange, convey, transfer, grant options to purchase, or otherwise dispose of any securities or other property held by the Trustee, by private contract or at public auction. No person dealing with the Trustee shall be bound to see to the application of the purchase money or to inquire into the validity, expediency, or propriety of any such sale or other disposition, with or without advertisement;
|
(4)
|
At the direction of the party which has the authority or discretion, to vote upon any stocks, bonds, or other securities; to give general or special proxies or powers of attorney with or without power of substitution; to exercise any conversion privileges, subscription rights or other options, and to make any payments incidental thereto; to oppose, or to consent to, or otherwise participate in, corporate reorganizations or other changes affecting corporate securities, and to delegate powers, and pay any assessments or charges in connection therewith; and generally to exercise any of the powers of an owner with respect to stocks, bonds, securities, or other property;
|
(5)
|
To cause any securities or other property to be registered in the Trustee's own name, or in the name of a nominee or in a street name provided such securities or other property are held on behalf of the Plan by (i) a bank or trust company, (ii) a broker or dealer registered under the Securities Exchange Act of 1934, or a nominee of such broker or dealer, or (iii) a clearing agency as defined in Section 3(a)(23) of the Securities Exchange Act of 1934;
|
(6)
|
To invest in a common, collective, or pooled trust fund (the provisions of which are incorporated herein by reference) maintained by any Trustee (or any affiliate of such Trustee) hereunder pursuant to Revenue Ruling 81-100 (as modified by Rev. Rul. 2011-1 or any subsequent guidance), all or such part of the Trust Fund as the party which has the authority to manage and control the investment of the assets shall deem advisable, and the part of the Trust Fund so transferred shall be subject to all the terms and provisions of the common, collective, or pooled trust fund which contemplate the commingling for investment purposes of such trust assets with trust assets of other trusts. The name of the trust fund may be specified in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections);
|
(7)
|
To borrow or raise money for the purposes of the Plan in such amount, and upon such terms and conditions, as the Trustee shall deem advisable; and for any sum so borrowed, to issue a promissory note as Trustee, and to secure the repayment thereof by pledging all, or any part, of the Trust Fund; and no person lending money to the Trustee shall be bound to see to the application of the money lent or to inquire into the validity, expediency, or propriety of any borrowing;
|
(8)
|
To 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;
|
(9)
|
To settle, compromise, or submit to arbitration (provided such arbitration does not apply to qualification issues nor to Participants or Beneficiaries) any claims, debts, or damages due or owing to or from the Plan, to commence or defend suits or legal or administrative proceedings, and to represent the Plan in all suits and legal and administrative proceedings;
|
(10)
|
To employ suitable agents and counsel and to pay their reasonable expenses and compensation, and such agent or counsel may or may not be an agent or counsel for the Employer;
|
(11)
|
To apply for and procure from the Insurer as an investment of the Trust Fund any annuity or other Contracts (on the life of any Participant, or in the case of a Profit Sharing Plan (including a 401(k) Plan), on the life of any person in whom a Participant has an insurable interest, or on the joint lives of a Participant and any person in whom the Participant has an insurable interest) as the Administrator shall deem proper; to exercise, at the direction of the person with the authority to do so, whatever rights and privileges may be granted under such annuity or other Contracts; to collect, receive, and settle for the proceeds of all such annuity or other Contracts as and when entitled to do so under the provisions thereof;
|
(12)
|
To invest funds of the Trust in time deposits or savings accounts bearing a reasonable rate of interest or in cash or cash balances without liability for interest thereon, including the specific authority to invest in any type of deposit of the Trustee (or of a financial institution related to the Trustee);
|
(13)
|
To invest in Treasury Bills and other forms of United States government obligations;
|
(14)
|
To sell, purchase and acquire put or call options if the options are traded on and purchased through a national securities exchange registered under the Securities Exchange Act of 1934, as amended, or, if the options are not traded on a national securities exchange, are guaranteed by a member firm of the New York Stock Exchange regardless of whether such options are covered;
|
(15)
|
To deposit monies in federally insured savings accounts or certificates of deposit in banks or savings and loan associations including the specific authority to make deposit into any savings accounts or certificates of deposit of the Trustee (or a financial institution related to the Trustee); and
|
(16)
|
To pool all or any of the Trust Fund, from time to time, with assets belonging to any other qualified employee pension benefit trust created by the Employer or any Affiliated Employer, and to commingle such assets and make joint or common investments and carry joint accounts on behalf of this Plan and such other trust or trusts, allocating undivided shares or interests in such investments or accounts or any pooled assets of the two or more trusts in accordance with their respective interests.
|
7.4
|
POWERS AND DUTIES OF CUSTODIAN
|
7.5
|
LIFE INSURANCE
|
(a)
|
Permitted
insurance.
The Trustee (or Insurer), in accordance with nondiscriminatory operational procedures of the Administrator, shall ratably apply for, own, and pay all premiums on Contracts on the lives of the Participants or, in the case of a Profit Sharing Plan (including a 401(k) Plan), on the life of a member of the Participant's family or on the joint lives of a Participant and a member of the Participant's family. Furthermore, if a Contract is purchased on the joint lives of the Participant and another person and such other person predeceases the Participant, then the Contract may not be maintained under this Plan. Any initial or
|
(b)
|
Contract
conversion
at
retirement.
Subject to the survivor annuity requirements of Sections 6.5 and 6.6 (if applicable), the Trustee (or Insurer) must distribute the Contracts to the Participant or convert the entire value of the Contracts at or before retirement into cash or provide for a periodic income so that no portion of such value may be used to continue life insurance protection beyond the date on which benefits commence.
|
(c)
|
Limitations
on
purchase.
Notwithstanding anything herein above to the contrary, amounts credited to a Participant's Qualified Voluntary Employee Contribution Account pursuant to Section 4.9, shall not be applied to the purchase of life insurance Contracts. Furthermore, no life insurance Contracts shall be required to be obtained on an individual's life if, for any reason (other than the nonpayment of premiums) the Insurer will not issue a Contract on such individual's life.
|
(d)
|
Proceeds
payable
to
Plan.
The Trustee (or Insurer) will be the owner of any life insurance Contract purchased under the terms of this Plan. The Contract must provide that the proceeds will be payable to the Trustee (or Insurer); however, the Trustee ( or Insurer) shall be required to pay over all proceeds of the Contract to the Participant's "designated Beneficiary" in accordance with the distribution provisions of Article VI. A Participant's Spouse will be the "designated Beneficiary" pursuant to Section 6.2, unless a qualified election has been made in accordance with Sections 6.5 and 6.6 of the Plan, if applicable. Under no circumstances shall the Trust retain any part of the proceeds that are in excess of the cash surrender value immediately prior to death. However, the Trustee (or Insurer) shall not pay the proceeds in a method that would violate the requirements of the Retirement Equity Act of 1984, as stated in Article VI of the Plan, or Code §401(a)(9) and the Regulations thereunder. In the event of any conflict between the terms of this Plan and the terms of any insurance Contract purchased hereunder, the Plan provisions shall control.
|
(e)
|
No
responsibility
for
act
of
Insurer.
The Employer, the Administrator and the Trustee shall not be responsible for the validity of the provisions under a Contract issued hereunder or for the failure or refusal by the Insurer to provide benefits under such Contract. The Employer, Administrator and the Trustee are also not responsible for any action or failure to act by the Insurer or any other person which results in the delay of a payment under the Contract or which renders the Contract invalid or unenforceable in whole or in part.
|
7.6
|
LOANS TO PARTICIPANTS
|
(a)
|
Permitted
loans.
The Trustee (or the Administrator if the Trustee is a nondiscretionary Trustee or if loans are treated as Participant directed investments) may, in the Trustee's (or, if applicable, the Administrator's) sole discretion, make loans to Participants or Beneficiaries. If loans are permitted, then the following shall apply: (1) loans shall be made available to all Participants and Beneficiaries on a reasonably equivalent basis; (2) loans shall not be made available to Highly Compensated Employees in an amount greater than the amount made available to other Participants; (3) loans shall bear a reasonable rate of interest; (4) loans shall be adequately secured; and (5) loans shall provide for periodic repayment over a reasonable period of time. Furthermore, no Participant loan shall exceed the Participant's Vested interest in the Plan. For purposes of this Section, the term Participa nt shall include any Eligible Employee who is not yet a Participant, if, pursuant to the Adoption Agreement, "rollovers" are permitted to be accepted from Eligible Employees.
|
(b)
|
Prohibited
assignment
or
pledge.
An assignment or pledge of any portion of a Participant's interest in the Plan and a loan, pledge, or assignment with respect to any insurance Contract purchased under the Plan, shall be treated as a loan under this Section.
|
(c)
|
Spousal
consent.
If the Vested interest of a Participant is used to secure any loan made pursuant to this Section, then the written (or such other form as permitted by the IRS) consent of the Participant's Spouse shall be required in a manner consistent with Section 6.5(a), provided the spousal consent requirements of such Section apply to the Plan. Such consent must be obtained within the
|
(d)
|
Loan
program.
The Administrator shall be authorized to establish a Participant loan program to provide for loans under the Plan. The loan program shall be established in accordance with Department of Labor Regulation §2550.408(b)-1(d)(2) providing for loans by the Plan to parties-in-interest under said Plan, such as Participants or Beneficiaries. In order for the Administrator to implement such loan program, a separate written document forming a part of this Plan must be adopted, which document shall specifically include, but need not be limited to, the following:
|
(1)
|
the identity of the person or positions authorized to administer the Participant loan program;
|
(2)
|
a procedure for applying for loans;
|
(3)
|
the basis on which loans will be approved or denied;
|
(4)
|
limitations, if any, on the types and amounts of loans offered;
|
(5)
|
the procedure under the program for determining a reasonable rate of interest;
|
(6)
|
the types of collateral which may secure a Participant loan; and
|
(7)
|
the events constituting default and the steps that will be taken to preserve Plan assets in the event such default.
|
(e)
|
Loan
default.
Notwithstanding anything in this Plan to the contrary, if a Participant or Beneficiary defaults on a loan made pursuant to this Section that is secured by the Participant's interest in the Plan, then a Participant's interest may be offset by the amount subject to the security to the extent there is a distributable event permitted by the Code or Regulations.
|
(f)
|
Loans
subject
to
Plan
terms.
Notwithstanding anything in this Section to the contrary, if this is an amendment and restatement of an existing Plan, any loans made prior to the date this amendment and restatement is adopted shall be subject to the terms of the Plan in effect at the time such loan was made.
|
7.7
|
ALLOCATION AND DELEGATION OF RESPONSIBILITIES
|
7.8
|
TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES
|
7.9
|
ANNUAL REPORT OF THE TRUSTEE
|
(a)
|
Annual
report.
Within a reasonable period of time after the later of the Anniversary Date or receipt of the Employer's contribution for each Plan Year, the Trustee, or its agent, shall furnish to the Employer and Administrator a written statement of account with respect to the Plan Year for which such contribution was made setting forth:
|
(1)
|
the net income, or loss, of the Trust Fund;
|
(2)
|
the gains, or losses, realized by the Trust Fund upon sales or other disposition of the assets;
|
(3)
|
the increase, or decrease, in the value of the Trust Fund;
|
(4)
|
all payments and distributions made from the Trust Fund; and
|
(5)
|
such further information as the Trustee and/or Administrator deems appropriate.
|
7.10
|
AUDIT
|
(a)
|
Duty
to
engage
accountant.
If an audit of the Plan's records shall be required by the Act and the regulations thereunder for any Plan Year, the Administrator shall engage on behalf of all Participants an independent qualified public accountant for that purpose. Such accountant shall, after an audit of the books and records of the Plan in accordance with generally accepted auditing sta ndards, within a reasonable period after the close of the Plan Year, furnish to the Administrator and the Trustee a report of the audit setting forth the accountant's opinion as to whether any statements, schedules or lists, that are required by Act §103 or the Secretary of Labor to be filed with the Plan's annual report, are presented fairly in conformity with generally accepted accounting principles applied consistently.
|
(b)
|
Payment
of
fees.
All auditing and accounting fees shall be an expense of and may, at the election of the Employer, be paid from the Trust Fund.
|
(c)
|
Information
to
be
provided
to
Administrator.
If some or all of the information necessary to enable the Administrator to comply with Act §103 is maintained by a bank, insurance company, or similar institution, regulated, supervised, and subject to periodic examination by a state or federal agency, then it shall transmit and certify the accuracy of that information to the Administrator as provided in Act §103(b) within one hundred twenty (120) days after the end of the Plan Year or such other date as may be prescribed under regulations of the Secretary of Labor.
|
7.11
|
RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE
|
(a)
|
Trustee
resignation.
Unless otherwise agreed to by both the Trustee and the Employer, a Trustee may resign at any time by delivering to the Employer, at least thirty (30) days before its effective date, a written notice of resignation.
|
(b)
|
Trustee
removal.
Unless otherwise agreed to by both the Trustee and the Employer, the Employer may remove a Trustee at any time by delivering to the Trustee, at least thirty (30) days before its effective date, a written notice of such Trustee's removal.
|
(c)
|
Appointment
of
successor.
Upon the death, resignation, incapacity, or removal of any Trustee, a successor may be appointed by the Employer; and such successor, upon accepting such appointment in writing and delivering same to the Employer, shall, without further act, become vested with all the powers and responsibilities of the predecessor as if such successor had been originally named as a Trustee herein. Until such a successor is appointed, any remaining Trustee or Trustees shall have full authority to act under the terms of the Plan.
|
(d)
|
Appointment
of
successor
prior
to
removal
of
predecessor.
The Employer may designate one or more successors prior to the death, resignation, incapacity, or removal of a Trustee. In the event a successor is so designated by the Employer and accept s such designation, the successor shall, without further act, become vested with all the powers and responsibilities of the predecessor as if such successor had been originally named as Trustee herein immediately upon the death, resignation, incapacity, or removal of the predecessor.
|
(e)
|
Trustee's
statement
upon
cessation
of
being
Trustee.
Whenever any Trustee hereunder ceases to serve as such, the Trustee shall furnish to the Employer and Administrator a written statement of account with respect to the portion of the Plan Year during which the individual or entity served as Trustee. This statement shall be either (i) included as part of the annual statement of account for the Plan Year required under Section 7.9 or (ii) set forth in a special statement. Any such special statement of account should be rendered to the Employer no later than the due date of the annual statement of account for the Plan Year. The procedures set forth in Section 7.9 for the approval by the Employer of annual statements of account shall apply to any special statement of account rendered hereunder and approval by the Employer of any such special statement in the manner provided in Section 7.9 shall have the same effect upon the statement as the Employer's approval of an annual statement of account. No successor to the Trustee shall have any duty or responsibility to investigate the acts or transactions of any predecessor who has rendered all statements of account required by Section 7.9 and this subparagraph.
|
7.12
|
TRANSFER OF INTEREST
|
7.13
|
TRUSTEE INDEMNIFICATION
|
7.14
|
EMPLOYER SECURITIES AND REAL PROPERTY
|
7.15
|
DIVESTMENT OF EMPLOYER SECURITIES
|
(a)
|
Application
of
Section.
This Section only applies to a Plan that is an "applicable defined contribution plan." Except as provided herein or in Regulations, an "applicable defined contribution plan" means a defined contribution plan that holds employer securities (within the meaning of Regulation §1.401(a)(35)-1(f)(3)) that are publicly traded (within the meaning of Regulation
|
(b)
|
Effective
date.
The provisions of Code §401(a)(35) generally apply to Plan Years beginning after December 31, 2006. However, the effective date of the provisions relating to Regulation §1.401(a)(35)-1 are applicable to Plan Years beginning on or after January 1, 2011.
|
(c)
|
Rule
applicable
to
Elective
Deferrals,
Employee
contributions
and
rollovers.
If any portion of an "applicable individual's" account attributable to Elective Deferrals, after-tax voluntary Employee contributions or rollover contributions is invested in
|
(d)
|
Rule
applicable
to
Employer
contributions.
If any portion of an "applicable individual's" account attributable to Employer contributions (other than Elective Deferrals) is invested in publicly-traded Employer securities, then, except as otherwise provided herein, the "applicable individual" may elect to direct the Plan to divest any such securities, and to reinvest an equivalent amount in other investment options which satisfy the requirements of Subsection (e) below.
|
(1)
|
Definition
of
"Applicable
individual."
For purposes of this Subsection, an "applicable individual" means: (i) a Participant who has completed at least three (3) Years of Service; (ii) an Alternate Payee who has an account under the Plan with respect to a
|
(2)
|
Definition
of
"publicly
traded
Employer
security."
For purposes of this Section, a "publicly traded Employer security" means a security which is traded on a national securities exchange that is registered under Section 6 of the Securities Exchange Act of 1935 or which is traded on a foreign national securities exchange that is officially recognized, sanctioned, or supervised by a governmental authority and the security is deemed by the securities and Exchange commission as having a "ready market" under SEC Rule 14c3-1 (17 CFR 240.15c3). In addition, if the Employer, or any member of a controlled group of corporations (as described in Regulation §1.401(a)(35)-1(f)(2)(iv)(A) which includes the Employer, has issued a class of stock which is a publicly traded employer security, and the Plan hold employer securities which are not publicly traded Employer securities, then the Plan shall be treated as holding publicly traded Employer securities.
|
(3)
|
Three-year phase-in applicable to Employer contributions. For Employer securities acquired with Employer contributions (other than Elective Deferrals) during a Plan Year beginning before January 1, 2007, the rule described in this Subsection only applies to the percentage of the Employer securities (applied separately for each class of securities) as follows:
|
Plan
Year
|
Percentage
|
2007
|
33
|
2008
|
66
|
2009
|
100
|
(e)
|
Investment
options.
For purposes of this Section, other investment options must include not less than three (3) investment options, other than Employer securities, to which the individual who the right to divest under Subsections (c) or (d) may dir ect the proceeds from the divestment of Employer securities. Each of the three (3) investment options must be diversified and have materially different risk and return characteristics. For this purpose, investment options that constitute a broad range of investment alternatives within the meaning of Department of Labor Regulation §2550.404c–1(b)(3) are treated as being diversified and having materially different risk and return characteristics.
|
(f)
|
Restrictions
or
conditions
on
investments
in
Employer
securities.
The Plan must provide reasonable divestment and reinvestment opportunities at least quarterly. Furthermore, except as permitted by Regulation §1.401(a)(35)-1(e), the Plan may not impose restrictions or conditions on the investment of Employer securities which the Plan does not impose on the investment of other Plan assets.
|
8.1
|
AMENDMENT
|
(a)
|
General
rule
on
Employer
amendment.
The Employer shall have the right at any time to amend this Plan subject to the limitations of this Section. However, any amendment that affects the rights, duties or responsibilities of the Trustee (or Insurer) or Administrator may only be made with the Trustee's (or Insurer's) or Administrator's written consent. Any such amendment shall become effective as provided therein upon its execution. The Trustee (or Insurer) shall not be required to execute any such amendment unless the amendment affects the duties of the Trustee (or Insurer) hereunder.
|
(b)
|
Permissible
amendments.
The Employer may amend the Plan to accomplish any of the following items without affecting reliance on the opinion or advisory letter: (1) change the choice of options in the Adoption Agreement, (2) add any appendix to the Adoption Agreement that is specifically permitted pursuant to the terms of the Plan (e.g., Appendix A to the Adoption Agreeme nt (Special Effective Dates and Other Permitted Elections)); (3) amend administrative trust or custodial provisions in the case of a volume submitter or non-standardized Plan and make more limited amendments in the case of a standardized Plan such as the name of the Plan, Employer, Trustee or Custodian, (4) add certain sample or model amendments published by the Internal Revenue Service or other required good-faith amendments which specifically provide that their adoption will not cause the Plan to be treated as an individually designed plan, (5) add or change provisions permitted under the Plan and/or specify or change the effective date of a provision as permitted under the Plan, (6) add a list of any "Section 411(d)(6) protected benefits" which must be preserved, (7) conform to the requirements of Act Section 402(a) (relating to named fiduciaries), Act Section 503 (relating to claims procedures), or DOL Field Assistance Bulletin 2008-01 (relating to the duty to collect delinquent contributions), (8) adjust the limitations under Code
|
(c)
|
Sponsoring
organization/volume
submitter
practitioner
amendments.
The Employer (and every Participating Employer) expressly delegates authority to the sponsoring organization of this prototype Plan or volume submitter practitioner, the right to amend the Plan by submitting a copy of the amendment to each Employer (and Participating Employer) who has adopted this prototype or volume submitter plan, after first having received a ruling or favorable determination from the Internal Revenue Service that the prototype or volume submitter Plan as amended qualifies under Code §401(a) (unless a ruling or determination is not required by the IRS). For purposes of this Section, the mass submitter shall be recognized as the agent of the sponsor. If the sponsor does not adopt any amendment made by the mass submitter, it will no longer be identical to, or a minor modifier of, the mass submitter plan.
|
(d)
|
Impermissible
amendments.
No amendment to the Plan shall be effective if it authorizes or permits any part of the Trust Fund (other than such part as is required to pay taxes and administration expenses) to be used for or diverted to any purpose other than for the exclusive benefit of the Participants or their Beneficiaries or estates; or causes any reduction in the amount credited to the account of any Participant; or causes or permits any portion of the Trust Fund to revert to or become property of the Employer.
|
(e)
|
Anti-cutback
restrictions.
No Plan amendment or transaction having the effect of a Plan amendment (such as a merger, plan transfer or similar transaction) shall be effective if it eliminates or reduces any "Section 411(d)(6) protected benefit" or adds or modifies conditions relating to "Section 411(d)(6) protected benefits" which results in a further restriction on such benefits (even if the amendment merely adds a restriction or condition that is permitted under the vesting rules in Code §§411(a)(3) – (11)) unless such "Section 411(d)(6) protected benefits" are preserved in operation with respect to benefits accrued as of the later of the adoption date or effective date of the amendment. Notwithstanding the preceding, "Section 411(d)(6) protected benefits" may be eliminated or reduced to the extent permitted by Code §412(d)(2) or Regulations (including Regulation §§1.411(d)-3 and 1.411(d)-4 ) or other IRS guidance. For purposes of this Subsection, a plan amendment which has the effect of decreasing a Participant's "Section 411(d)(6) protected benefits" with respect to benefits attributable to service before the amendment shall be treated as reducing a "Section 411(d)(6) protected benefit." "Section 411(d)(6) protected benefits" are benefits described in Code §411(d)(6)(A), early retirement benefits and retirement-type subsidies, and optional forms of benefit. The preceding shall not apply to a Plan amendment that eliminates or restricts the ability of a Participant to receive payment of his or her Account under a particular optional form of benefit if the amendment provides a single-sum distribution form that is otherwise identical to the optional form of benefit being eliminated or restricted. For this purpose, a single-sum distribution form is otherwise identical only if the single-sum distribution form is identical in all respects to the eliminated or restricted optional form of benefit (or would be identical except that it provides greater rights to the Participant) except with respect to the timing of payments after commencement.
|
8.2
|
TERMINATION
|
(a)
|
Termination
of
Plan.
The Employer shall have the right at any time to terminate the Plan by delivering to the Trustee (or Insurer) and Administrator written notice of such termination. Upon any full or partial termination or upon the complete discontinuance of the Employer's Contributions to the Plan (in the case of a Profit Sharing Plan), all amounts credited to the affected Participants' Combined Accounts shall become 100% Vested and shall not thereafter be subject to Forfeiture.
|
(b)
|
Distribution
of
assets.
Upon the full termination of the Plan, the Employer shall direct the distribution of the assets to Participants in a manner that is consistent with and satisfies the provisions of Section 6.5, except that no Participant or spousal consent is required. Distributions to a Participant shall be made in cash (or in property if permitted in the Adoption Agreement) or through the purchase of irrevocable nontransferable deferred commitments from the Insurer. Except as permitted by Regulations, the termination of the Plan shall not result in the reduction of "Section 411(d)(6) protected benefits" as described in Section 8.1(e). In addition, to the extent Section 6.13 (Special Rule for Certain Profit Sharing Plans) could apply to all or a portion of the assets, then, subject to Section 12.2, the Administrator will direct the distribution of assets to Participants in a lump-sum distribution. Such distribution will be made as soon as reasonable after the Plan termination, regardless of: (1) the amount of the Participant's Vested Account balance; (2) the Participant's age; and (3) whether the Participant consents to the distribution. Furthermore, to the extent a distribution is required to be made pursuant to this Section and the Participant does not consent to such distribution, then the Administrator may make a direct distribution to an individual retirement account described in Code §408(a) or an individual retirement annuity described in Code
|
(c)
|
Abandoned
plan.
If the Employer, in accordance with DOL guidance, abandons the Plan, then the Trustee (or Insurer) or other party permitted to take action as a qualified terminal administrator (QTA), may terminate the Plan in accordance with applica ble DOL and IRS regulations and other guidance.
|
8.3
|
MERGER, CONSOLIDATION OR TRANSFER OF ASSETS
|
9.1
|
TOP-HEAVY PLAN REQUIREMENTS
|
9.2
|
DETERMINATION OF TOP-HEAVY STATUS
|
(a)
|
Definition
of
Top-Heavy
Plan.
This Plan shall be a Top-Heavy Plan if any of the following conditions exists:
|
(1)
|
if the "top-heavy ratio" for this Plan exceeds sixty percent (60%) and this Plan is not part of any "required aggregation group" or "permissive aggregation group";
|
(2)
|
if this Plan is a part of a "required aggregation group" but not part of a "permissive aggregation group" and the "top-heavy ratio" for the group of plans exceeds sixty percent (60%); or
|
(3)
|
if this Plan is a part of a "required aggregation group" and part of a "permissive aggregation group" and the "top-heavy ratio" for the "permissive aggregation group" exceeds sixty percent (60%).
|
(b)
|
Top-heavy
ratio.
"Top-heavy ratio" means, with respect to a "determination date":
|
(1)
|
If the Employer maintains one or more defined contribution plans (including any simplified employee pension plan (as defined in Code §408(k))) and the Employer has not maintained any defined benefit plan which during the 5-year period ending on the "determination date" has or has had accrued benefits, the top-heavy ratio for this Plan alone or for the "required aggregation group" 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" (including any part of any Account balance distributed in the 1-year period ending on the "determination date") (5-year period ending on the "determination date" in the case of a distribution made for a reason other than severance from employment, death or Total and Permanent Disability), and the denominator of which is the sum of all Account balances (including any part of any Account balance distributed in the 1-year period ending on the "determination date") (5-year period ending on the "determination date" in the case of a distribution made for a reason other than severance from employment, death or Total and Permanent Disability), both computed in accordance with 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" has or has had any accrued benefits, the top-heavy ratio for any "required aggregation group" 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 (1) 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," 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," all determined in accordance with Code §416 and the Regulations thereunder. The accrued benefits under a defined benefit plan in both the numerator and denominator of the top-heavy ratio are increased for any distribution of an accrued benefit made in the 1-year period ending on the "determination date" (5-year period ending on the "determination date" in the case of a distribution made for a reason other than severance from employment, death or Total and Permanent Disability).
|
(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 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
|
(c)
|
Determination
date.
"Determination date" means, 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, "determination date" means the last day of that Plan Year.
|
(d)
|
Permissive
aggregation
group.
"Permissive aggregation group" means the "required aggregation group" of plans plus any other plan or plans of the Employer or any Affiliated 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)
|
Present
value.
"Present value" means the present value based only on the interest and mortality rates specified in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections).
|
(f)
|
Required
aggregation
group.
"Required aggregation group" means: (1) each qualified plan of the Employer or any Affiliated Employer in which at least one Key Employee participates or participated at any time during the Plan Year containing the "determination date" or any of the four preceding Plan Years (regardless of whether the plan has terminated), and (2) any other qualified plan of the Employer or any Affiliated Employer which enables a plan described in (l) to meet the requirements of Code
|
(g)
|
Valuation
Date.
Valuation Date means the date elected by the Employer in the Adoption Agreement as of which Account balances or accrued benefits are valued for purposes of calculating the "top-heavy ratio."
|
10.1
|
EMPLOYER ADOPTIONS
|
(a)
|
Method
of
adoption.
Any organization may become the Employer hereunder by executing the Adoption Agreement in a form satisfactory to the Trustee (or Insurer), and it shall provide such additional information as the Trustee (or Insurer) may require. The consent of the Trustee (or Insurer) to act as such shall be signified by its execution of the Adoption Agreement or a separate agreement (including, if elected in the Adoption Agreement, a separate trust agreement).
|
(b)
|
Separate
affiliation.
Except as otherwise provided in this Plan, the affiliation of the Employer and the participation of its Participants shall be separate and apart from that of any other employer and its participants hereunder.
|
10.2
|
PARTICIPANT'S RIGHTS
|
10.3
|
ALIENATION
|
(a)
|
General
rule.
Subject to the exceptions provided below and as otherwise permitted by the Code and the Act, no benefit which shall be payable to any person (including a Participant or the Participant's Beneficiary) shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or charge, and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge the same shall be void; and no such benefit shall in any manner be liable for, or subject to, the debts, contracts, liabilities, engagements, or torts of any such person, nor shall it be subject to attachment or legal process for or against such person, and the same shall not be recognized except to such extent as may be required by law.
|
(b)
|
Exception
for
loans.
Subsection (a) shall not apply to the extent a Participant or Beneficiary is indebted to the Plan by reason of a loan made pursuant to Section 7.6. At the time a distribution is to be made to or for a Participant's or Beneficiary's benefit, such portion of the amount to be distributed as shall equal such indebtedness shall be paid to the Plan, to apply against or discharge such indebtedness. Prior to making a payment, however, the Participant or Beneficiary must be given notice by the Administrator that such indebtedness is to be so paid in whole or part from the Participant's interest in the Plan. If the Participant or Beneficiary does not agree
|
(c)
|
Exception
for
QDRO.
Subsection (a) shall not apply to a "qualified domestic relations order" defined in Code §414(p), and those other domestic relations orders permitted to be so treated by the Administrator under the provisions of the Retirement Equity Act of 1984. The Administrator shall establish a written procedure to determine the qualified status of domestic relations orders and to administer distributions under such qualified orders. Further, to the extent provided under a "qualified domestic relations order," a former Spouse of a Participant shall be treated as the Spouse or surviving Spouse for all purposes under the Plan.
|
(d)
|
Exception
for
certain
debts
to
Plan.
Notwithstanding any provision of this Section to the contrary, an offset to a Participant's accrued benefit against an amount that the Participant is ordered or required to pay the Plan with respect to a judgment, order, or decree issued, or a settlement entered into, on or after August 5, 1997, shall be permitted in accordance with Code §§401(a)(13)(C) and (D).
|
10.4
|
PLAN COMMUNICATIONS, INTERPRETATION AND CONSTRUCTION
|
(a)
|
Applicable
law.
This Plan and Trust shall be construed and enforced according to the Code, the Act and the laws of the state or commonwealth in which the Employer's (or if there is a corporate Trustee, the Trustee's, or if the Plan is fully insured, the Insurer's) principal office is located (unless otherwise designated in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections)), other than its laws respecting choice of law, to the extent not pre-empted by federal law.
|
(b)
|
Administrator's
discretion/nondiscriminatory
administration.
The Administrator has total and complete discretion to interpret and construe the Plan and to determine all questions arising in the administration, interpretation and application of the Plan. Any determination the Administrator makes under the Plan is final and binding upon any affected person. The Administrator must exercise all of its Plan powers and discretion, and perform all of its duties in a uniform and nondiscriminatory manner.
|
(c)
|
Communications.
All Participant or Beneficiary notices, designations, elections, consents or waivers must be made in a form the Administrator (or, as applicable, the Trustee or Insurer) specifies or otherwise approves. Any person entitled to notice under the Plan may waive the notice or shorten the notice period unless such actions are contrary to applicable law.
|
(d)
|
Evidence.
Anyone, including the Employer, required to give data, statements or other information relevant under the terms of the Plan ("evidence") may do so by certificate, affidavit, document or other form which the person to act in reliance may conside r pertinent, reliable and genuine, and to have been signed, made or presented by the proper party or parties. The Administrator, Trustee and Insurer are protected fully in acting and relying upon any evidence described under the immediately preceding sentence.
|
(e)
|
Plan
terms
binding.
The Plan is binding upon all parties, including but not limited to, the Employer, Trustee, Insurer, Administrator, Participants and Beneficiaries.
|
(f)
|
Parties
to
litigation.
Except as otherwise provided by applicable law, a Participant or a Beneficiary is not a necessary party or required to receive notice of process in any court proceeding involving the Plan, the Trust or any Fiduciary. Any final judgment (not subject to further appeal) entered in any such proceeding will be binding upon all parties, including the Employer, the Administrator, Trustee, Insurer, Participants and Beneficiaries.
|
(g)
|
Fiduciaries
not
insurers.
The Trustee, Administrator and the Employer in no way guarantee the Plan assets from loss or depreciation. The Employer does not guarantee the payment of any money which may be or becomes due to any person from the Plan. The liability of the Employer, the Administrator and the Trustee to make any distribution from the Trust at any time and all times is limited to the then available assets of the Trust.
|
(h)
|
Construction/severability.
The Plan, the Adoption Agreement, the Trust and all other documents to which they refer, will be interpreted consistent with and to preserve tax qualification of the Plan under Code §401(a) and tax exemption of the Trust under Code §501(a) and also consistent with the Act and other applicable law. To the extent permissible under applicable law, any provision which a court (or other entity with binding authority to interpret the Plan) determines to be inconsistent with such construction and interpretation, is deemed severed and is of no force or effect, and the remaining Plan terms will remain in full force and effect.
|
(i)
|
Uniformity.
All provisions of this Plan shall be interpreted and applied in a uniform, nondiscriminatory manner.
|
(j)
|
Headings.
The headings and subheadings of this Plan have been inserted for convenience of reference and are to be ignored in any construction of the provisions hereof.
|
10.5
|
GENDER, NUMBER AND TENSE
|
10.6
|
LEGAL ACTION
|
10.7
|
PROHIBITION AGAINST DIVERSION OF FUNDS
|
(a)
|
General
rule.
Except as provided below and otherwise specifically permitted by law, it shall be impossible by operation of the Plan or of the Trust, by termination of either, by power of revocation or amendment, by the happening of any contingency, by collateral arrangement or by any other means, for any part of the corpus or income of any Trust Fund maintained pursuant to the Plan or any funds contributed thereto to be used for, or diverted to, purposes other than the exclusive benefit of Participants or their Beneficiaries.
|
(b)
|
Mistake
of
fact.
In the event the Employer shall make a contribution under a mistake of fact pursuant to Act §403(c)(2)(A), the Employer may demand repayment of such contribution at any time within one (1) year following the time of payment and the Trustee (or Insurer) shall return such amount to the Employer within the one (1) year period. Earnings of the Plan attributable to the contributions may not be returned to the Employer but any losses attributable thereto must reduce the amount so returned.
|
(c)
|
Contribution
conditioned
on
deductibility.
Except as specifically stated in the Plan, any contribution made by the Employer to the Plan (if the Employer is not tax-exempt) is conditioned upon the deductibility of the contribution by the Employer under the Code and, to the extent any such deduction is disallowed, the Employer may, within one (1) year following a final determination of the disallowance, whether by agreement with the Internal Revenue Service or by final decision of a court of competent jurisdiction, demand repayment of such disallowed contribution and the Trustee (or Insurer) shall return such contribution within one (1) year following the disallowance. Earnings of the Plan attributable to the contribution may not be returned to the Employer, but any losses attributable thereto must reduce the amount so returned.
|
10.8
|
EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE
|
10.9
|
INSURER'S PROTECTIVE CLAUSE
|
10.10
|
RECEIPT AND RELEASE FOR PAYMENTS
|
10.11
|
ACTION BY THE EMPLOYER
|
10.12
|
NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
|
10.13
|
APPROVAL BY INTERNAL REVENUE SERVICE
|
10.14
|
PAYMENT OF BENEFITS
|
10.15
|
ELECTRONIC MEDIA
|
10.16
|
PLAN CORRECTION
|
10.17
|
NONTRUSTEED PLANS
|
11.1
|
ELECTION TO BECOME A PARTICIPATING EMPLOYER
|
11.2
|
REQUIREMENTS OF PARTICIPATING EMPLOYERS
|
(a)
|
Permissible
variations
of
participation
agreement.
The participation agreement must identify the Participating Employer and the covered Employees and provide for the Participating Employer's signature. In addition, in the participation agreement, the Employer shall specify which elections, if any, the Participating Employer can modify, and any restrictions on the modifications. Any such modification shall apply only to the Employees of that Participating Employer. The Participating Employer shall make any such modification by selecting the appropriate option on its participation agreement to the Employer's Adoption Agreement. To the extent that the participation agreement does not permit modification of an election, any attempt by a Participating Employer to modi fy the election shall have no effect on the Plan and the Participating Employer is bound by the Plan terms as selected by the Employer. If a Participating Employer does not make any permissible participation agreement election modifications, then with regard to any election, the Participating Employer is bound by the Adoption Agreement terms as completed by the "lead Employer." Notwithstanding the other provisions of this Section, if a standardized Plan is being used, then the elections available to Participating Employers must be limited to the elections available to the Employer in order to ensure the Plan, by design, satisfies the minimum coverage requirements of Code §410(b) and the nondiscrimination requirements of Code §401(a)(4).
|
(b)
|
Holding
and
investing
assets.
The Trustee (or Insurer) may, but shall not be required to, commingle, hold and invest as one Trust Fund all contributions made by Participating Employers, as well as all increments thereof. However, the assets of the Plan shall, on an ongoing basis, be available to pay benefits to all Participants and Beneficiaries under the Plan without regard to the Employer or Participating Employer who contributed such assets.
|
(c)
|
Payment
of
expenses.
Unless the Employer otherwise directs, any expenses of the Plan which are to be paid by the Employer or borne by the Trust Fund shall be paid by each Participating Employer in the same proportion that the total amount standing to the credit of all Participants employed by such Employer bears to the total standing to the credit of all Participants.
|
11.3
|
DESIGNATION OF AGENT
|
11.4
|
EMPLOYEE TRANSFERS
|
11.5
|
PARTICIPATING EMPLOYER'S CONTRIBUTION AND FORFEITURES
|
11.6
|
AMENDMENT
|
11.7
|
DISCONTINUANCE OF PARTICIPATION
|
11.8
|
ADMINISTRATOR'S AUTHORITY
|
11.9
|
PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE
|
12.1
|
FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION
|
(a)
|
Permitted
contributions.
For each Plan Year, the Employer will (or may with respect to any discretionary contributions) contribute to the Plan:
|
(1)
|
The amount of the total salary deferral elections of all Participants made pursuant to Section 12.2(a), which amount shall be deemed Elective Deferrals, plus
|
(2)
|
If elected in the Adoption Agreement, a matching contribution equal to the percentage, if any, specified in the Adoption Agreement of the Elective Deferrals of each Participant eligible to share in the allocations of the matching contribution, which amount shall be deemed an Employer matching contribution or Qualified Matching Contribution as elected in the Adoption Agreement, plus
|
(3)
|
If elected in the Adoption Agreement, a discretionary amount determined each year by the Employer, which amount if any, shall be deemed an Employer Nonelective Contribution, or a "prevailing wage contribution" as set forth in the Adoption Agreement, which amount shall be an Employer Nonelective Contribution or an Elective Contribution as elected in the Adoption Agreement, plus
|
(4)
|
A Qualified Nonelective Contribution in a discretionary amount determined by the Employer.
|
(5)
|
Regardless of any provision in the Plan to the contrary, Employees whose employment is governed by a collective bargaining agreement between the Employer and "employee representatives" under which retirement benefits were the subject of good faith bargaining shall be eligible to participate in this Plan to the extent of employment covered by such agreement provided the agreement provides for coverage in the Plan. The contributions and allocations under this Plan shall be those set forth in the collective bargaining agreement, which is hereby incorporated by reference. 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. The provisions of this Subsection only apply if no more than two percent (2%) of the Employees covered pursuant to the agreement are professionals as defined in Regulation §1.410(b)-9.
|
12.2
|
PARTICIPANT'S SALARY DEFERRAL ELECTION
|
(a)
|
Salary
deferral
elections.
Each Participant may elect to defer a portion of Compensation which would have been received in the Plan Year, but for the salary deferral election, subject to the limitations of this Section and the Adoption Agreement. A salary deferral election (or modification of an earlier election) may not be made with respect to Compensation which is currently available on or before the date the Participant executed such election, or if later, the later of the date the Employer adopts this cash or deferred arrangement or the date such arrangement first became effective. Any elections made pursuant to this Section, including a modification or termination of an election, shall become effective as soon as is administratively feasible following the receipt of such election by the Administrator. Furthermore, if the Employer elects in the Adoption Agreement to apply the Automatic Contribution Arrangement provisions, then in the event a Participant fails to make an Affirmative Election, such Participant shall be deemed to have made a salary deferral election in accordance with the provisions selected in the Adoption Agreement and such other procedu res that the Administrator may establish and apply in a uniform and nondiscriminatory basis.
|
(b)
|
Eligible
Automatic
Contribution
Arrangement
(EACA).
If elected in the Adoption Agreement, the Employer maintains a Plan with Automatic Deferral provisions as an Eligible Automatic Contribution Arrangement (EACA) and the following provisions will apply:
|
(1)
|
Participants
subject
to
EACA.
The Employer in its Adoption Agreement will elect which Participants are subject to the EACA Automatic Deferral on the "EACA Effective Date" thereof which may include some or all current Participants or may be limited to those Employees who become Participants after the EACA Effective Date. The "EACA Effective Date" means the date on which the EACA goes into effect, either as to the overall Plan or as to an individual Participants as the context requires . An EACA becomes effective as to the Plan as of the date the Employer elects in the Adoption Agreement. A Participant's "EACA Effective Date" is as soon as practicable after the Participant is subject to Automatic Deferrals under the EACA, consistent with:
|
(2)
|
Uniformity.
The Automatic Deferral percentage must be a uniform percentage of Compensation. However, the Plan does not violate the uniform Automatic Deferral percentage requirement merely because the Plan applies any of the following provisions:
|
(i)
|
Years
of
participation.
The Automatic Deferral percentage varies based on the number of Plan Years the Participant has participated in the Plan while the Plan has applied EACA provisions;
|
(ii)
|
No
reduction
from
prior
percentage.
The Plan does not reduce a deferral percentage that, immediately prior to the EACA's effective date was higher (for any Participant) than the Automatic Deferral percentage;
|
(iii)
|
Applying
statutory
limits.
The Plan limits the Automatic Deferral amount so as not to exceed the limits of Code
|
(iv)
|
No
Automatic
Deferrals
during
hardship
suspension.
The Plan does not apply the Automatic Deferral during a period of suspension, under the Plan's hardship distribution provisions, of Participant's right to make Elective Deferrals to the Plan following a hardship distribution; or
|
(v)
|
Disaggregated
groups.
The Plan applies different default percentages to different groups if the groups can be disaggregated under Regulation §1.401(k)-1(b)(4).
|
(3)
|
EACA
notice.
The Administrator annually will provide a notice to each Participant covered by the EACA provisions (including, if elected in the Adoption Agreement, Participants who made an Affirmative Election) within a reasonable period of time prior to each Plan Year the Employer maintains the Plan as an EACA ("EACA Plan Year").
|
(i)
|
Deemed
reasonable
notice/new
Participant.
The Administrator is deemed to provide timely notice if the Administrator provides the EACA notice at least thirty (30) days and not more than ninety (90) days prior to the beginning of the EACA Plan Year.
|
(ii)
|
Mid-year
notice/new
Participant
or
Plan.
If: (A) an Employee becomes eligible to make Elective Deferrals in the Plan during an EACA Plan Year but after the Administrator has provided the annual EACA notice for that Plan Year; or (B) the Employer adopts mid-year a new Plan as an EACA, the Administrator must provide the EACA notice no later than the date the Employee becomes eligible to make Elective Deferrals. However, if it is not practicable for the notice to be provided on or before the date an Employee becomes a Participant, then the notice will nonetheless be treated as provided timely if it is provided as soon as practicable after that date and the Employee is permitted to elect to defer from all types of Compensation that may be deferred under the Plan earned beginning on that date.
|
(iii)
|
Content.
The EACA notice must provide comprehensive information regarding the Participants' rights and obligations under the Plan and must be written in a manner calculated to be understood by the average Participant in accordance with applicable law.
|
(4)
|
EACA
permissible
withdrawal.
If elected in the Adoption Agreement, a Participant who has Automatic Deferrals under the EACA may elect to withdraw all the Automatic Deferrals (and allocable earnings) under the provisions of this Subsection. Any distribution made pursuant to this Section will be processed in accordance with normal distribution provisions of the Plan.
|
(i)
|
Amount.
If a Participant elects a permissible withdrawal under this Subsection, then the Plan must make a distribution equal to the amount (and only the amount) of the Automatic Deferrals made under the EACA (adjusted for allocable gains and losses to the date of the distribution). The Plan may separately account for Automatic Deferrals, in which case the entire
|
(ii)
|
Fees.
Notwithstanding the above, the Administrator may reduce the permissible distribution amount by any generally applicable fees. However, the Plan may not charge a greater fee for distribution under this Section than applies to other distributions. The Administrator may adopt a policy regarding charging such fees consistent with this paragraph.
|
(iii)
|
Timing.
The Participant may make an election to withdraw the Automatic Deferrals under the EACA no later than ninety (90) days, or such shorter period as specified in the Adoption Agreement, after the date of the first Automatic Deferral under the EACA. For this purpose, the date of the first Automatic Deferral is the date that the Compensation subject to the Automatic Deferral otherwise would have been includible in the Participant's gross income. For this purpose, EACAs under the Plan are aggregated, except that the mandatory disaggregation rules of Code §410(b) apply. In addition, a Participant's withdrawal right is not restricted due to the Participant making an Affirmative Election during the ninety (90) day period (or shorter period as specified in the Adoption Agreement).
|
(iv)
|
Rehired
Employees.
For purposes of paragraph (iii) above, an Employee who for an entire Plan Year did not have contributions made pursuant to a default election under the EACA will be treated as having not had such contributions for any prior Plan Year as well.
|
(v)
|
Effective
date
of
the
withdrawal
election.
The effective date of the permissible withdrawal will be as soon as practicable, but in no event later than the earlier of (A) the pay date of the second payroll period beginning after the election is made, or (B) the first pay date that occurs at least thirty (30) days after the election is made. The election will also be deemed to be an Affirmative Election to have no Elective Deferrals made to the Plan.
|
(vi)
|
Related
matching
contributions.
The Administrator will not take any Elective Deferrals withdrawn pursuant to this Section into account in computing and allocating matching contributions. If the Employer has already allocated matching contributions to the Participant's Account with respect to Elective Deferrals being withdrawn pursuant to this Subsection (4), then such matching contributions, as adjusted for gains and losses, must be forfeited.
|
(vii)
|
Treatment
of
withdrawals.
With regard to Elective Deferrals withdrawn pursuant to this Subsection, (A) the Administrator will disregard such Elective Deferrals in the Actual Deferral Percentage Test (if applicable); (B) the Administrator will disregard such Elective Deferrals for purposes of the limitation on Elective Deferrals under Code
|
(viii)
|
Effect
of
Affirmative
Election.
A Participant's Affirmative Election continues in effect until the Participant subsequently revokes or modifies his or her Salary Deferral Agreement, or the Affirmative Election expires. A Participant who makes an Affirmative Election is not thereafter subject to the Automatic Deferral or to any scheduled increases thereto, even if the Participant later revokes the Affirmative Election or the Affirmative Election, unless the Participant is subject to the EACA. In addition, a Participant who is subject to the EACA provisions who revokes his or her Affirmative Election or whose Affirmative Election expires, will be deemed to have made an Affirmative Election to have no Elective Deferrals made to the Plan.
|
(c)
|
Catch-Up
Contributions.
If selected in the Adoption Agreement, all Employees who are eligible to make Elective Deferrals under this Plan and who have attained age 50 before the close of the taxable year shall be eligible to make Catch-Up Contributions in accordance with, and subject to the dollar limitations of, Code §414(v)(2)(B)(i) for the taxable year. The limit will be adjusted by the Secretary of the Treasury for cost-of-living increases under Code §414(v)(2)(C). Such Catch-Up Contributions shall not be taken into account for purposes of the provisions of the Plan implementing the required limitations of Code §§402(g) and 415. The Plan shall not be treated as failing to satisfy the provisions of the Plan implementing the requirements of Code §401(k)(3), 401(k)(11), 401(k)(12), 410(b), or 416, as applicable, by reason of the making of such Catch-Up Contributions (but Catch-Up Contributions made in prior years are counted in determining whether the Plan is a Top-Heavy Plan). If selected in the Adoption Agreement, Catch-Up Contributions shall not be treated as Elective Deferrals for purposes of applying any Employer matching contributions. Such option cannot be selected if the Plan elects to follow the safe harbor provisions of Section 12.8.
|
(d)
|
Full
vesting.
The balance in each Participant's Elective Deferral Account, Qualified Matching Contribution Account and Qualified Nonelective Contribution Account shall be fully Vested at all times and, except as otherwise provided herein, shall not be subject to Forfeiture for any reason.
|
(e)
|
Distribution
restrictions.
Amounts held in a Participant's Elective Deferral Account, Qualified Matching Contribution Account and Qualified Nonelective Contribution Account may only be distributable as provided in (4) below or as provided under the ot her provisions of this Plan, but in no event prior to the earlier of the following events or any other events permitted by the Code or Regulations:
|
(1)
|
the Participant's severance of employment (regardless of when the severance of employment occurred), Total and Permanent Disability, or death;
|
(2)
|
the Participant's attainment of age 59 1/2;
|
(3)
|
the proven financial hardship of the Participant, subject to the limitations of Section 12.10(d) (or, for a volume submitter plan, Section 6.12);
|
(4)
|
the termination of the Plan without the existence at the time of Plan termination of another defined contribution plan or the establishment of a successor defined contribution plan by the Employer or an Affiliated Employer within the period ending twelve months after distribution of all assets from the Plan maintained by the Employer. For this purpose, a defined contribution plan does not include an employee stock ownership plan (as defined in Code §4975(e)(7) or 409(a)), a simplified employee pension plan (as defined in Code §408(k)), a SIMPLE individual retirement account plan (as defined in Code §408(p)), a plan or contract that satisfies the requirements of Code §403(b), or a plan that is described in Code §457(b) or (f). A distribution that is made because of this paragraph (4) must be made in a lump-sum;
|
(5)
|
the Participant's call to active duty after September 11, 2001, because of the Participant's status as a member of a reserve component, for a period of at least 180 days or for an indefinite period, i.e., a "qualified reservist distribution" within the meaning of Section 6.18; or
|
(6)
|
a Participant's service in the uniformed services while on active duty for a period of at least 30 days, i.e., a "deemed distribution" within the meaning of Section 6.18.
|
(f)
|
Code
§402(g)
dollar limit.
A Participant's Elective Deferrals made under this Plan and all other plans, contracts or arrangements of the Employer maintaining this Plan during any calendar year shall not exceed the dollar limitation imposed by Code §402(g) , as in effect at the beginning of such calendar year, except to the extent permitted under Section 12.2(c) and Code §414(v), if applicable. The limit will be adjusted by the Secretary of the Treasury for cost-of-living increases under Code §402(g)(4). For this purpose, "elective deferrals" means, with respect to a calendar year, the sum of all Employer contributions made on behalf of such Participant pursuant to an election to defer under any qualified cash or deferred arrangement as described in Code §401(k), any salary reduction simplified employee pension (as defined in Code §408(k)(6)), any SIMPLE IRA plan described in Code §408(p), any eligible deferred compensation plan under Code §457, any plans 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 deferral agreement.
|
(g)
|
Excess
Deferrals.
If a Participant has Excess Deferrals for a taxable year, the Participant may, not later than March 1st following the close of such taxable year, notify the Administrator in writing of such excess and request that the Participant's Elective Deferrals under this Plan be reduced by an amount specified by the Participant. In such event, the Administrator shall direct the distribution of such excess amount (and any "income" allocable to such excess amount) to the Participant not later than the first April 15th following the close of the Participant's taxable year. Any distribution of less than the entire amount of Excess Deferrals and "income" shall be treated as a pro rata distribution of Excess Deferrals and "income." The amount distributed shall not exceed the Participant's Elective Deferrals under the Plan for the taxable year. Any distribution on or before the last day of the Participant's taxable year must satisfy each of the following conditions:
|
(1)
|
the Participant shall designate the distribution as Excess Deferrals;
|
(2)
|
the distribution must be made after the date on which the Plan received the Excess Deferrals; and
|
(3)
|
the Plan must designate the distribution as a distribution of Excess Deferrals.
|
(h)
|
Coordination
with
ADP
test.
Notwithstanding the preceding, a Participant's Excess Deferrals shall be reduced, but not below zero, by any distribution and/or recharacterization of Excess Deferrals pursuant to Section 12.5(b) for the Plan Year beginning with or within the taxable year of the Participant.
|
(i)
|
Suspension
due
to
hardship
or
deemed
severance.
In the event a Participant has received a hardship distribution pursuant to Regulation §1.401(k)-1(d)(3) from any other plan maintained by the Employer or from the Participant's Elective Deferral Account pursuant to Section 12.10, or has received a distribution on account of deemed severance on account of qualified military service from this Plan or any other plan maintained by the Employer, then such Participant shall not be permitted to elect to have Elective Deferrals contributed to the Plan for a period of six (6) months following the receipt of the distribution. Furthermore, any provisions of the Plan providing for the reduction of the dollar limitation under Code §402(g) for the Participant's taxable year following the taxable year in which the hardship distribution was made shall no longer apply. Upon the expiration of the suspension period, a Participant's prior Affirmative Election will no longer apply unless the Employer provides otherwise in the Plan's administrative procedures.
|
(j)
|
Distributable
based
on
other
terms
of
Plan.
At Normal Retirement Date, or such other date when the Participant shall be entitled to receive benefits, the fair market value of the Participant's Elective Deferral Account shall be used to provide benefits to the Participant or the Participant's Beneficiary.
|
(k)
|
Adjustment
due
to
anticipated
failure
of
ADP
test.
If during a Plan Year, it is projected that the aggregate amount of Elective Deferrals to be allocated to all Highly Compensated Participants under this Plan would cause the Plan to fail the tests set forth in Section 12.4, then the Administrator may automatically reduce the Elective Deferrals of affected Highly Compensated Participants, beginning with the Highly Compensated Participant who has the highest actual deferral ratio until it is anticipated the Plan will pass the tests or until the actual deferral ratio equals the actual deferral ratio of the Highly Compensated Participant having the next highest actual deferral ratio. This process may continue until it is anticipated that the Plan will satisfy one of the tests set forth in Section 12.4. Alternatively, the Employer may specify a maximum percentage of Compensation that may be deferred by Highly Compensated Participants (and any such limitation shall be a Plan-imposed limit for purposes of determining Catch-up Contributions).
|
(l)
|
Procedures
must
be
established.
The Employer and the Administrator shall establish procedures necessary to implement the salary deferral elections provided for herein. Such procedures may contain limits on salary deferral elections such as limiti ng elections to whole percentages of Compensation or to equal dollar amounts per pay period that an election is in effect.
|
12.3
|
ALLOCATION OF CONTRIBUTIONS AND FORFEITURES
|
(a)
|
Separate
accounting.
The Administrator shall establish and maintain an account in the name of each Participant to which the Administrator shall credit as of each Anniversary Date, or other Valuation Date, all amounts allocated to each such Participant as set forth herein.
|
(b)
|
Contributions.
The Employer shall provide the Administrator with all information required by the Administrator to make a proper allocation of Employer contributions for each Plan Year. Within a reasonable period of time after the date of receipt by the Administrator of such information, the Administrator shall allocate contributions as follows:
|
(1)
|
With respect to Elective Deferrals made pursuant to Section 12.1(a)(1), to each Participant's Elective Deferral Account in an amount equal to each such Participant's Elective Deferrals for the year.
|
(2)
|
With respect to the Employer matching contribution made pursuant to Section 12.1(a)(2), to each Participant's Account, or Participant's Qualified Matching Contribution Account, as elected in the Adoption Agreement, in accordance with
|
(3)
|
With respect to the Employer Nonelective Contribution made pursuant to Section 12.1(a)(3), to each Participant's Account in accordance with the provisions of Section 4.3(b)(2) or (3) (including the "gateway contribution" pursuant to Section 4.3(b)(4)), whichever is applicable.
|
(4)
|
With respect to the Employer Qualified Nonelective Contribution made pursuant to Section 12.1(a)(4), to each Participant's Qualified Nonelective Contribution Account in the same ratio as each Participant's Compensation bears to the total of such Compensation of all Participants.
|
(c)
|
Elective
Deferrals
not
taken
into
account
for
Non-Key
Employees.
Notwithstanding anything in the Plan to the contrary, in determining whether a Non-Key Employee has received the required minimum allocation pursuant to Section 4.3(f) such Non-Key Employee's Elective Deferrals shall not be taken into account. In addition, unless otherwise specified in Appendix A to the Adoption Agreement (Special Effective Dates and Other Permitted Elections), Employer matching contributions shall be taken into account for purposes of satisfying the minimum contribution requirements of Code §416(c)(2) and the Plan. The preceding sentence shall apply with respect to matching contributions under the Plan or, if the Plan provides that the minimum contribution requirement shal l be met in another plan, such other plan. Employer matching contributions that are used to satisfy the minimum contribution requirements shall be treated as matching contributions for purposes of the ACP test and other requirements of Code §401(m).
|
(d)
|
Elective
Deferrals
not
conditioned
on
service
during
a
year.
Notwithstanding anything herein to the contrary, Participants who terminated employment during the Plan Year shall share in the Elective Deferral contributions made by the Employer for the year of termination without regard to the Hours of Service credited.
|
(e)
|
Conditions
for
sharing
in
contributions/allocations.
Notwithstanding anything herein to the contrary (other than Sections 3.5(h), 4.3(f) and 12.3(f)), Participants shall only share in the allocations of the Employer matching contribution made pursuant to Section 12.1(a)(2), the Employer Nonelective Contributions made pursuant to Section 12.1(a)(3), the Employer Qualified Nonelective Contribution made pursuant to Section 12.1(a)(4), and Forfeitures as provided in the Adoption Agreement. If no election is made in the Adoption Agreement, then a Participant shall be eligible to share in the allocation of the Employer's contribution for the year if the Participant completes more than 500 Hours of Service (or three (3) consecutive calendar months if the elapsed time method is chosen in the Adoption Agreement) during the Plan Year or is employed on the last day of the Plan Year.
|
(f)
|
Code
§410(b)
fail-safe.
Notwithstanding anything in this Section to the contrary, if, in the volume submitter or non-standardized Adoption Agreement, the Employer elected to apply the 410(b) ratio percentage fail-safe provisions, then the provisions of Section 4.3(m) shall apply. Furthermore, if the Plan includes Employer matching contributions subject to ACP testing, then Section 4. 3(m) shall be applied separately to the Code §401(m) portion of the Plan.
|
12.4
|
ACTUAL DEFERRAL PERCENTAGE TESTS
|
(a)
|
ADP
test.
Except as otherwise provided herein, this Subsection applies if the prior year testing method is elected in the Adoption Agreement. The "Actual Deferral Percentage" (hereinafter ADP) for a Plan Year for Participants who are Highly Compensated Employees (hereinafter "HCEs") for each Plan Year and the prior year's ADP for Participants who were Nonhighly Compensated Employees (hereinafter "NHCEs") for the prior Plan Year must satisfy one of the following tests:
|
(1)
|
The ADP for a Plan Year for Participants who are "HCEs" for the Plan Year shall not exceed the prior year's ADP for Participants who were "NHCEs" for the prior Plan Year multiplied by 1.25; or
|
(2)
|
The ADP for a Plan Year for Participants who are "HCEs" for the Plan Year shall not exceed the prior year's ADP for Participants who were "NHCEs" for the prior Plan Year multiplied by 2.0, provided that the ADP for Participants who are "HCEs" does not exceed the prior year's ADP for Participants who were "NHCEs" in the prior Plan Year by more than two (2) percentage points.
|
(b)
|
Current
year
testing
method.
Notwithstanding the foregoing, if the current year testing method is elected in the Adoption Agreement, or if no election is made in the Adoption Agreement, and for any Plan Year for which the Employer has either reserved the right to make a nonelective "ADP test safe harbor contribution" pursuant to Section 12.8 or amended the Plan to make an "ADP test safe harbor contribution," the ADP tests in (a)(1) and (a)(2) above shall be applied by comparing the current Plan Year's ADP for Participants who are "HCEs" with the current Plan Year's ADP (rather than the prior Plan Year's ADP) for Participants who are "NHCEs" for the current Plan Year. Once made, the Employer can elect prior year testing for a Plan Year only if the Plan has used current year testing for each of the preceding 5 Plan Years (or if lesser, the number of Plan Years the Plan has been in existence) or if, as a result of a merger or acquisition described in Code §410(b)(6)(C)(i), the Employer maintains both a plan using prior year testing and a plan using current year testing and the change is made within the transition period described in Code §410(b)(6)(C)(ii).
|
(c)
|
Determination
of
"HCEs"
and
"NHCEs."
A Participant is an "HCE" for a particular Plan Year if the Participant meets the definition of an "HCE" in effect for that Plan Year. Similarly, a Participant is an "NHCE" for a particular Plan Year if the Participant does not meet the definition of an "HCE" in effect for that Plan Year.
|
(d)
|
Calculation
of
ADP.
For the purposes of this Section and Section 12.5, ADP means, for a specific group of Participants for a Plan Year, the average of the ratios (calculated separately for each Participant in such group) of (1) the amount of Employer contributions actually paid over to the Plan on behalf of such Participant for the Plan Year to (2) the Participant's 414(s) Compensation
|
(e)
|
Participants
taken
into
account.
For purposes of this Section and Section 12.5, a Highly Compensated Participant and a Nonhighly Compensated Participant shall include any Employee eligible to make salary deferrals pursuant to Section 12.2 for t he Plan Year. Such Participants who fail to make Elective Deferrals shall be treated for ADP purposes as Participants on whose behalf no Elective Deferrals are made. If a Participant has no 414(s) Compensation for the Plan Year, then such Participant is disregar ded for purposes of calculating the ADP test.
|
(f)
|
Contributions
taken
into
account.
For purposes of determining the ADP and the amount of Excess Contributions pursuant to Section 12.5, only Qualified Nonelective Contributions and Qualified Matching Contributions contributed to the Plan prior to the end of the twelve (12) month period immediately following the Plan Year to which the contributions relate shall be considered. A Participant's Elective Deferrals are only taken into account for purposes of determining the ADP for a Plan Year if allocated to the Participant's Elective Deferral Account as of a date within that Plan Year and are only made with respect to Compensation that would have either been received by the Participant in the Plan Year (but for the salary deferral election) or is attributable to services performed by the Participant in the Plan Year and would have been paid within two and one-half (2 1/2) months after the close of the Plan Year (but for the salary deferral election).
|
(g)
|
Targeted
contributions.
Notwithstanding the preceding, for Plan Years beginning in 2006 (or if earlier, the date the final 401(k) Regulations are effective with respect to the Plan), Qualified Nonelective Contributions cannot be taken into account in determining the ADP for a Plan Year for an "NHCE" to the extent such contributions exceed the product of that "NHCE's" 414(s) Compensation and the greater of five percent (5%) or two (2) times the Plan's "representative contribution rate." Any Qualified Nonelective Contribution taken into account under an ACP test under Regulation §1.401(m)-2(a)(6) (including the determination of the "representative contribution rate" for purposes of Regulation §1.401(m)-2(a)(6)(v)(B)), is not permitted to be taken into account for purposes of this paragraph (including the determination of the "representative contribution rate" under this Section). For purposes of this Subsection:
|
(1)
|
The Plan's "representative contribution rate" is the lowest "applicable contribution rate" of any eligible "NHCE" among a group of eligible "NHCEs" that consists of half of all eligible "NHCEs" for the Plan Year (or, if greater, the lowest "applicable contribution rate" of any eligible "NHCE" in the group of all eligible "NHCEs" for the Plan Year and who is employed by the Employer on the last day of the Plan Year), and
|
(2)
|
The "applicable contribution rate" for an eligible "NHCE" is the sum of the Qualified Matching Contributions taken into account under Subsection (d) for the eligible "NHCE" for the Plan Year and the Qualified Nonelective Contributions made for the eligible "NHCE" for the Plan Year, divided by the eligible "NHCE's" 414(s) Compensation for the same period.
|
(h)
|
Aggregation
with
other
plans.
In the event this Plan satisfies the requirements of Code §401(a)(4), 401(k), 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. If more than ten percent (10%) of the Employer's "NHCEs" are involved in a plan coverage change as defined in Regulation
|
(i)
|
ADP
if
multiple
plans.
The ADP for any Participant who is an "HCE" for the Plan Year and who is eligible to have Elective Deferrals (and Qualified Nonelective Contributions or Qualified Matching Contributions, or both, if treated as Elective Deferrals for purposes of the ADP test) allocated to such Participant's accounts under two (2) 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 Nonelective Contributions or Qualified Matching Contributions, or both) were made under a single arrangement for purposes of determining such "HCE's" actual deferral ratio. If an "HCE" participates in two or more arrangements described in Code §401(k) of the Employer that have different plan years, all Elective Deferrals made during the Plan Year under all such arrangements shall be aggregated. For Plan Years beginning before 2006 (or if earlier, the Plan Year prior to the date the final 401(k) Regulations are effective with respect to the Plan), if the plans have different Plan Years, then all such arrangements ending with or within the same calendar year shall be treated as a single arrangement. Notwithstanding the foregoing, certain plans shall be treated as separate if mandatorily disaggregated under Regulations under Code §401(k).
|
(j)
|
Disaggregation
and
otherwise
excludable
Employees.
Notwithstanding anything in this Section to the contrary, the provisions of this Section and Section 12.5 may be applied separately (or will be applied separately to the extent required by Regulations) to each "plan" within the meaning of Regulation §1.401(k)-6. Furthermore, the provisions of Code §401(k)(3)(F) may be used to exclude from consideration all Nonhighly Compensated Employees who have not satisfied the minimum age and service requirements of Code
|
(k)
|
"HCEs"
as
sole
Eligible
Employees.
If, for the applicable year for determining the ADP of the "NHCEs" for a Plan Year, there are no eligible "NHCEs," then the Plan is deemed to satisfy the ADP test for the Plan Year.
|
12.5
|
ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS
|
(a)
|
Authority
to
correct.
In the event the Plan does not satisfy one of the tests set forth in Section 12.4, the Administrator shall adjust Excess Contributions or, if the current year testing method is being used, the Employer shall make contributions pursuant to the options set forth below or any combination thereof.
|
(b)
|
Corrective
distribution
and/or
recharacterization.
On or before the close of the following Plan Year (or with respect to recharacterization as after-tax voluntary Employee contributions, on or before the fifteenth day of the third month following the end of each Plan Year), the Highly Compensated Participant allocated the largest amount of Elective Deferrals shall have a portion of such Elective Deferrals (and "income" allocable to such amounts) distributed (and/or, at the Participant's election, recharacterized as an after-tax voluntary Employee contribution pursuant to Section 4.8) until the total amount of Excess Contributions has been distributed, or until the amount of the Participant's Elective Deferrals equals the Elective Deferrals of the Highly Compensated Participant having the next largest amount of Elective Deferrals allocated. This process shall continue until the total amount of Excess Contributions has been distributed. However, in the event the Plan permits Catch-Up Contributions, then any "HCE" who is eligible to make Catch-Up Contributions pursuant to Section 12.2(c) shall have any amount that would have otherwise been distributed pursuant to this Section recharacterized as a Catch-Up Contribution (up to the maximum catch-up dollar limitation). Any distribution and/or recharacterization of Excess Contributions shall be made in the following order:
|
(1)
|
With respect to the distribution of Excess Contributions, such distribution:
|
(i)
|
shall be made first from unmatched Elective Deferrals used in the ADP and, thereafter, simultaneously from such Elective Deferrals which are matched and matching contributions which relate to such Elective Deferrals (if the matching contributions are used in the ADP). Matching contributions which are not used in the ADP but which relate to Elective Deferrals that are distributed pursuant to this Subsection shall be forfeited unless the related matching contributions are distributed as Excess Aggregate Contributions pursuant to Section 12.7;
|
(ii)
|
shall be made, as operationally determined by the Administrator, from the Participant's Pre-Tax Elective Deferral Account or the Participant's Roth Elective Deferral Account, to the extent both Pre-Tax Elective Deferrals and Roth Elective Deferrals were made for the Plan Year;
|
(iii)
|
shall be adjusted for "income"; and
|
(iv)
|
shall be designated by the Employer as a distribution of Excess Contributions (and "income").
|
(2)
|
With respect to the recharacterization of Excess Contributions as after-tax voluntary Employee contributions pursuant to (a) above, such recharacterized amounts:
|
(i)
|
shall be deemed to have occurred on the date on which the last of those Highly Compensated Participants with Excess Contributions to be recharacterized is notified of the recharacterization and the tax consequences of such recharacterization;
|
(ii)
|
shall not exceed the amount of Elective Deferrals on behalf of any Highly Compensated Participant for any Plan Year;
|
(iii)
|
shall be treated as after-tax voluntary Employee contributions for purposes of Code §401(a)(4) and Regulation
|
(iv)
|
are not permitted if the amount recharacterized plus after-tax voluntary Employee contributions actually made by such Highly Compensated Participant exceed the maximum amount of after-tax voluntary Employee contributions (determined prior to application of Section 12.6) that such Highly Compensated Participant is permitted to make under the Plan in the absence of recharacterization.
|
(3)
|
Any distribution and/or recharacterization of less than the entire amount of Excess Contributions shall be treated as a pro rata distribution and/or recharacterization of Excess Contributions and "income."
|
(4)
|
For the purpose of this Section, "income" means the income or losses allocable to Excess Contributions, which amount shall be determined and allocated, at the discretion of the Administrator, using any of the methods set forth below. The method must be used consistently for all Participants and for all corrective distributions under the Plan for the Plan Year. However, effective for Plan Years after December 31, 2007, the Administrator will not calculate and distribute "income" for the period between the end of the Plan Year in which the Excess Contribution and prior to the date of the distribution (the "gap period").
|
(i)
|
Method
of
allocating
"income."
The Administrator may use any reasonable method for computing the "income" allocable to Excess Contributions, provided that the method does not violate Code §401(a)(4), is used consistently for all Participants and for all corrective distributions under the Plan for the Plan Year, and is used by the Plan for allocating "income" to Participant's Accounts. A Plan will not fail to use a reasonable method for computing the "income" allocable to Excess Contributions merely because the "income" allocable to Excess Contributions is determined on a date that is no more than seven (7) days before the distribution.
|
(ii)
|
Alternative
method
of
allocating
Plan
Year
income.
The Administrator may allocate "income" to Excess Contributions for the Plan Year by multiplying the "income" for the Plan Year allocable to the Elective Deferrals and other amounts taken into account under this Section (including contributions made for the Plan Year), by a fraction, the numerator of which is the Excess Contributions for the Employee for the Plan Year, and the denominator of which is the sum of the:
|
(A)
|
Account balance attributable to Elective Deferrals and other contributions taken into account under this Section as of the beginning of the Plan Year, and
|
(B)
|
Any additional amount of such contributions made for the Plan Year.
|
(iii)
|
Safe
harbor
method
of
allocating
gap
period
income.
The Administrator may use the safe harbor method in this paragraph to determine "income" on Excess Contributions for the "gap period." Under this safe harbor method, "income" on Excess Contributions for the "gap period" is equal to ten percent (10%) of the "income" allocable to Excess Contributions for the Plan Year that would be determined under paragraph (ii) above, multiplied by the number of calendar months that have elapsed since the end of the Plan Year. For purposes of calculating the number of calendar months that have elapsed under the safe harbor method, a corrective distribution that is made on or before the fifteenth day of a month is treated as made on the last day of the preceding month and a distribution made after the fifteenth day of a month is treated as made on the last day of the month.
|
(iv)
|
Alternative
method
for
allocating
Plan
Year
and
gap
period
income.
The Administrator may determine the allocable gain or loss for the aggregate of the Plan Year and the "gap period" by applying the alternative method provided by paragraph (ii) above to this aggregate period. This is accomplished by substituting the "income" for the Plan Year and the "gap period" for the "income" for the Plan Year and by substituting the contributions taken into account under this Section for the Plan Year and the "gap period" for the contributions taken into account under this Section for the Plan Year in determining the fraction that is multiplied by that "income."
|
(5)
|
Excess Contributions shall be treated as Employer contributions for purposes of Code §§404 and 415 even if distributed from the Plan.
|
(1)
|
A Qualified Nonelective Contribution may be made on behalf of Nonhighly Compensated Participants in an amount sufficient to satisfy one of the tests set forth in Section 12.4. Such contribution shall be allocated in the same proportion that each Nonhighly Compensated Participant's 414(s) Compensation for the year bears to the total 414(s) Compensation of all Nonhighly Compensated Participants for such year.
|
(2)
|
A Qualified Nonelective Contribution may be made on behalf of Nonhighly Compensated Participants in an amount sufficient to satisfy one of the tests set forth in Section 12.4. Such contribution shall be allocated in the same proportion that each Nonhighly Compensated Participant's 414(s) Compensation for the year bears to the total 414(s) Compensation of all Nonhighly Compensated Participants for such year. However, for purposes of this contribution, Nonhighly Compensated Participants who are not employed at the end of the Plan Year and, if this is a standardized Plan, who have not completed more than 500 Hours of Service (or three (3) consecutive calendar months if the elapsed time method is selected in the Adoption Agreement) during such Plan Year, shall not be eligible to share in the allocation and shall be disregarded.
|
(3)
|
A Qualified Nonelective Contribution may be made on behalf of Nonhighly Compensated Participants in an amount sufficient to satisfy one of the tests set forth in Section 12.4. Such contribution shall be allocated in equal amounts (per capita).
|
(4)
|
A Qualified Nonelective Contribution may be made on behalf of Nonhighly Compensated Participants in an amount sufficient to satisfy one of the tests set forth in Section 12.4. Such contribution shall be allocated in equal amounts (per capita). However, for purposes of this contribution, Nonhighly Compensated Participants who are not employed at the end of the Plan Year and, if this is a standardized Plan, who have not completed more than 500 Hours of Service (or three (3) consecutive calendar months if the elapsed time method is selected in the Adoption Agreement) during such Plan Year, shall not be eligible to share in the allocation and shall be disregarded.
|
(5)
|
A Qualified Nonelective Contribution may be made on behalf of Nonhighly Compensated Participants in an amount sufficient to satisfy one of the tests set forth in Section 12.4. Such contribution shall be allocated to the Qualified Nonel ective Contribution Account of the Nonhighly Compensated Participant having the lowest 414(s) Compensation, until the applicable ADP test set forth in Section 12.4 is satisfied, or until such Nonhighly Compensated Participant has received the lesser of t he maximum "annual addition" pursuant to Section 4.4 or the maximum that may be taken into account in the ADP test pursuant to Section 12.4(g) (Targeted Contributions). This process shall continue until one of the tests set forth in Section 12.4 is satisfied.
|
(6)
|
A Qualified Nonelective Contribution may be made on behalf of Nonhighly Compensated Participants in an amount sufficient to satisfy one of the tests set forth in Section 12.4. Such contribution shall be allocated to the Qualified Nonelective Contribution Account of the Nonhighly Compensated Participant having the lowest 414(s) Compensation, until one of the tests set forth in Section 12.4 is satisfied, or until such Nonhighly Compensated Participant has received the lesser of the maximum "annual addition" pursuant to Section 4.4 or the maximum that may be taken into account in the ADP test pursuant to Section 12.4(g) (Targeted Contributions). This process shall continue until one of the tests set forth in Section 12.4 is satisfied. However, for purposes of this contribution, Nonhighly Compensated Participants who are not employed at the end of the Plan Year and, if this is a standardized Plan, who have not completed more than 500 Hours of Service (or three (3) consecutive calendar months if the elapsed time method is selected in the Adoption Agreement) during such Plan Year, shall not be eligible to share in the allocation and shall be disregarded.
|
(7)
|
A Qualified Matching Contribution may be made on behalf of Nonhighly Compensated Participants in an amount sufficient to satisfy one of the tests set forth in Section 12.4. Such contribution shall be allocated to the Qualified Matching Contribution Account of each Nonhighly Compensated Participant in the same proportion that each Nonhighly Compensated Participant's Elective Deferrals for the year bears to the total Elective Deferrals of all Nonhighly Compensated Participants.
|
(8)
|
A Qualified Matching Contribution may be made on behalf of Nonhighly Compensated Participants in an amount sufficient to satisfy one of the tests set forth in Section 12.4. Such contribution shall be allocated to the Qualified Matching Contribution Account of each Nonhighly Compensated Participant in the same proportion that each Nonhighly Compensated Participant's Elective Deferrals for the year bears to the total Elective Deferrals of all Nonhighly Compensated Participants. However, for purposes of this contribution, Nonhighly Compensated Participants who are not employed at the end of the Plan Year and, if this is a standardized Plan, who have not completed more than 500 Hours of Service (or three (3) consecutive calendar months if the elapsed time method is selected in the Adoption Agreement) during such Plan Year, shall not be eligible to share in the allocation and shall be disregarded.
|
12.6
|
ACTUAL CONTRIBUTION PERCENTAGE TESTS
|
(a)
|
ACP
test.
Except as otherwise provided herein, this Subsection applies if the prior year testing method is elected in the Adoption Agreement. The "Actual Contribution Percentage" (hereinafter ACP) for Participants who are Highly Compensated Employees (hereinafter "HCEs") for each Plan Year and the prior year's ACP for Participants who were Nonhighly Compensated Employees (hereinafter "NHCEs") for the prior Plan Year must satisfy one of the following tests:
|
(1)
|
The ACP for a Plan Year for Participants who are "HCEs" for the Plan Year shall not exceed the prior year's ACP for Participants who were "NHCEs" for the prior Plan Year multiplied by 1.25; or
|
(2)
|
The ACP for a Plan Year for Participants who are "HCEs" for the Plan Year shall not exceed the prior year's ACP for Participants who were "NHCEs" for the prior Plan Year multiplied by 2.0, provided that the ACP for Participants who are "HCEs" does not exceed the prior year's ACP for Participants who were "NHCEs" in the prior Plan Year by more than two (2) percentage points.
|
(b)
|
Current
year
testing
method.
Notwithstanding the preceding, if the current year testing method is elected in the Adoption Agreement or if no election is made in the Adoption Agreement, and for any Plan Year for which the Employer has either reserved the right to make a nonelective "ADP test safe harbor contribution" pursuant to Section 12.8 or amended the Plan to make an "ADP test safe harbor contribution," the ACP tests in (a)(1) and (a)(2) above shall be applied by comparing the current Plan Year's ACP for Participants who are "HCEs" with the current Plan Year's ACP (rather than the prior Plan Year's ACP) for Participants who are "NHCEs" for the current Plan Year. Once made, the Employer can elect prior year testing for a Plan Year only if the Plan has used current year testing for each of the preceding 5 Plan Years (or if lesser, the number of Plan Years the Plan has been in existence) or if, as a result of a merger or acquisition described in Code §410(b)(6)(C)(i), the Employer maintains both a plan using prior year testing and a plan using current year testing and the change is made within the transition period described in Code §410(b)(6)(C)(ii).
|
(c)
|
Determination
of
"HCEs"
and
"NHCEs."
A Participant is an "HCE" for a particular Plan Year if the Participant meets the definition of an "HCE" in effect for that Plan Year. Similarly, a Participant is an "NHCE" for a particular Plan Year if the Participant does not meet the definition of an "HCE" in effect for that Plan Year.
|
(d)
|
Calculation
of
ACP.
For the purposes of this Section and Section 12.7, ACP for a specific group of Participants for a Plan Year means the average of the "contribution percentages" (calculated separately for each Participant in such group). For this purpose, "contribution percentage" means the ratio (expressed as a percentage) of the Participant's "contribution percentage amounts" to the Participant's 414(s) Compensation. The actual contribution ratio for each Participant and the ACP for each group, shall be calculated to the nearest one-hundredth of one percent of the Participant's 414(s) Compensation.
|
(e)
|
Amounts
included
in
ACP.
"Contribution percentage amounts" means the sum of (1) after-tax voluntary Employee contributions, (2) Employer "matching contributions" made pursuant to Section 12.1(a)(2) (including Qualified Matching Contributions to the extent such Qualified Matching Contributions are not used to satisfy the tests set forth in Section 12.4), (3) Excess Contributions recharacterized as nondeductible voluntary Employee contributions pursuant to Section 12.5, and (4) Qualified Nonelective Contributions, to the extent the Qualified Nonelective Contributions are not used to satisfy the tests set forth in Section
|
(f)
|
Participants
taken
into
account.
For purposes of this Section and Section 12.7, a Highly Compensated Participant and a Nonhighly Compensated Participant shall include any Employee eligible to have "matching contributions" made pursuant to Section 12.1(a)(2) (whether or not a salary deferral election was made or suspended pursuant to the Plan) allocated to such Participant's Account for the Plan Year or to make after-tax voluntary Employee contributions pursuant to Section 4.8 (whether or not after-tax voluntary Employee contributions are made) allocated to the Participant's Account for the Plan Year.
|
(g)
|
Allocations
taken
into
account.
For purposes of determining the ACP test, "Employee contributions" are considered to have been made in the Plan Year in which contributed to the Plan. "Matching contributions" and Qualified Nonelective Contributions will be considered made for a Plan Year if made no later than the end of the twelve (12) month period beginning on the date after the close of the Plan Year. Excess Contributions recharacterized as after-tax voluntary Employee contributions pursuant to Section 12.5(b)(2) are taken into account in the ACP for the Plan Year in which the contribution would have been received in cash if there had not been a salary deferral election. A "matching contribution" will be taken into account in the ACP for a Plan Year only if (1) it is made on
|
(h)
|
Definition
of
"matching
contribution"
and
"employee
contribution."
For purposes of this Section and Section 12.7, "matching contribution" means an Employer contribution made to the Plan, or to a contract described in Code §403(b), on behalf of a Participant on account of a nondeductible voluntary "employee contribution" made by such Participant, or on account of a Participant's elective deferrals under a plan maintained by the Employer. "Employee contribution" means any contribution (other than Roth Elective Deferrals) made to the Plan by or on behalf of a Participant that is included in the Participant's gross income in the year in which made and that is maintained under separate account to which earnings and losses are allocated.
|
(i)
|
Targeted
matching
contributions.
Notwithstanding the preceding, for Plan Years beginning in 2006 (or if earlier, the date the final 401(m) Regulations are effective with respect to the Plan), a "matching contribution" with respect to an Elective Deferral for a year is not taken into account in determining the ACP for "NHCEs" to the extent it exceeds the greatest of:
|
(1)
|
five percent (5%) of the Participant's 414(s) Compensation for the year;
|
(2)
|
the Employee's Elective Deferrals for the year; or
|
(3)
|
the product of two (2) times the Plan's "representative matching rate" and the Participant's Elective Deferrals for the year. For purposes of this Subsection, the Plan's "representative matching rate" is the lowest "matching rate" for any eligible "NHCE"
|
(j)
|
Aggregation
with
other
plans.
In the event that this Plan satisfies the requirements of Code §401(a)(4), 401(m), 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 ACP of Employees as if all such plans were a single plan. If more than ten percent (10%) of the Employer's "NHCEs" are involved in a plan coverage change as defined in Regulation
|
(k)
|
ACP
if
multiple
plans.
For the purposes of this Section, if an HCE is a Participant under two (2) or more plans (other than an employee stock ownership plan as defined in Code §4975(e)(7)) which are maintained by the Employer or an Affiliated Employer to which "matching contributions," nondeductible voluntary Employee contributions, or both, are made, all such contributions on behalf of such HCE shall be aggregated for purposes of determining such HCE's actual contribution ratio. However, if the plans have different plan years, then for purposes of Plan Years beginning prior to 2006 (or if earlier, the date the final 401(m) Regulations are effective with respect to the Plan), this paragraph shall be applied by treating all plans ending with or within the same calendar year as a single plan. Notwithstanding the foregoing, certain plans shall be treated as separate if mandatorily disaggregated under Regulations under Code §401(m).
|
(l)
|
Disaggregation
and
otherwise
excludable
Employees.
Notwithstanding anything in this Section to the contrary, the provisions of this Section and Section 12.7 may be applied separately (or will be applied separately to the extent required by Regulations) to each "plan" within the meaning of Regulation §1.401(m)-5. Furthermore, the provisions of Code §401(m)(5)(C) may be used to exclude from consideration all Nonhighly Compensated Employees who have not satisfied the minimum age and service requirements of Code
|
(m)
|
"HCEs"
as
sole
Eligible
Employees.
If, for the applicable year for determining the ACP of the "NHCEs" for a Plan Year, there are no eligible "NHCEs," then the Plan is deemed to satisfy the ACP test for the Plan Year.
|
12.7
|
ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS
|
(a)
|
Authority
to
correct.
In the event the Plan does not satisfy one of the tests set forth in Section 12.6, the Administrator shall adjust Excess Aggregate Contributions or, if the current year testing method is used, the Employer shall make contributions pursuant to the options set forth below or any combination thereof.
|
(b)
|
Corrective
distribution
or
Forfeiture.
On or before the close of the following Plan Year, the Highly Compensated Participant having the largest allocation of "contribution percentage amounts" shall have a portion of such "contribution percentage amounts" (and "income" allocable to such amounts) distributed or, if non-Vested, Forfeited (including "income" allocable to such Forfeitures) until the total amount of Excess Aggregate Contributions has been distributed, or until the amount of the Participant's "contribution percentage amounts" equals the "contribution percentage amounts" of the Highly Compensated Participant having the next largest amount of "contribution percentage amounts." This process shall continue until the total amount of Excess Aggregate Contributions has been distributed or forfeited. Any distribution and/or Forfeiture of "contribution percentage amounts" shall be made in t he following order:
|
(1)
|
Employer "matching contributions" distributed and/or forfeited pursuant to Section 12.5(b)(1);
|
(2)
|
After-tax voluntary Employee contributions including Excess Contributions recharacterized as after-tax voluntary Employee contributions pursuant to Section 12.5(b)(2);
|
(3)
|
Unmatched Elective Deferrals used in the ACP and, thereafter, simultaneously from such Elective Deferrals used in the
|
(4)
|
To the extent Elective Deferrals are distributed pursuant to the preceding paragraph, then the distribution shall be made, as operationally determined by the Administrator, from the Participant's Pre-Tax Elective Deferral Account or the Participant's Roth Elective Deferral Account, to the extent both Pre-Tax Elective Deferrals and Roth Elective Deferrals were made for the Plan Year, to the extent both Pre-Tax Elective Deferrals and Roth Elective Deferrals were made for the Plan Year; and
|
(5)
|
Remaining Employer "matching contributions."
|
(c)
|
Source
of
corrective
distribution
or
Forfeiture.
Any distribution or Forfeiture of less than the entire amount of Excess Aggregate Contributions (and "income") shall be treated as a pro rata distribution of Excess Aggregate Contributions and "income." Distribution of Excess Aggregate Contributions shall be designated by the Employer as a distribution of Excess Aggregate Contributions (and "income"). Forfeitures of Excess Aggregate Contributions shall be treated in accordance with Section 4.3. However, no such Forfeiture may be allocated to a Highly Compensated Participant whose contributions are reduced pursuant to this Section.
|
(d)
|
Determination
of
income
or
loss.
For the purpose of this Section, "income" means the income or losses allocable to Excess Aggregate Contributions, which amount shall be determined and allocated, at the discretion of the Administrator, using any of the methods set forth in Section 12.5(b)(4) with respect to the calculation of "income" for Excess Contributions (applied by substituting Excess Contributions with Excess Aggregate Contributions and by substituting amounts taken into account under the ACP test for amounts taken into account under the ADP test in Section 12.4). However, effective with respect to Plan Years beginning after December 31, 2007 the Administrator will not calculate and distribute "income" for the period between the end of the Plan Year in which the Excess Aggregate Contribution and prior to the date of the distribution (the "gap period").
|
(e)
|
Treatment
of
excess
amounts.
Excess Aggregate Contributions attributable to amounts other than nondeductible voluntary Employee contributions, including forfeited "matching contributions," shall be treated as Employer contributions for purposes of Code
|
(f)
|
Ordering
of
tests.
The determination of the amount of Excess Aggregate Contributions with respect to any Plan Year shall be made after first determining the Excess Contributions, if any, to be treated as nondeductible voluntary Employee contributions due to recharacterization for the Plan Year of any other qualified cash or deferred arrangement (as defined in Code §401(k)) maintained by the Employer that ends with or within the Plan Year or which are treated as after-tax voluntary Employee contributions due to recharacterization pursuant to Section 12.5.
|
(g)
|
Corrective
contributions.
Notwithstanding the above, if the current year testing method is being used, then within twelve (12) months after the end of the Plan Year, the Employer may make a special Qualified Nonelective Contribution or Employer matching contribution in accordance with one of the following provisions which contribution shall be allocated to the Qualified Nonelective Contribution Account or with respect to Employer "matching contributions," to the Participant's Account of each Nonhighly Compensated Participant eligible to share in the allocation in accordance with such provision. If the prior year testing method is used, then a Qualified Nonelective Contribution or an Employer "matching contribution" may not be made to correct the tests set forth in
|
(1)
|
A Qualified Nonelective Contribution may be made on behalf of Nonhighly Compensated Participants in an amount sufficient to satisfy one of the tests set forth in Section 12.6. Such contribution shall be allocated in the same proportion that each Nonhighly Compensated Participant's 414(s) Compensation for the year bears to the total 414(s) Compensation of all Nonhighly Compensated Participants for such year.
|
(2)
|
A Qualified Nonelective Contribution may be made on behalf of Nonhighly Compensated Participants in an amount sufficient to satisfy one of the tests set forth in Section 12.6. Such contribution shall be allocated in the same proportion that each Nonhighly Compensated Participant's 414(s) Compensation for the year bears to the total 414(s) Compensation of all Nonhighly Compensated Participants for such year. However, for purposes of this contribution, Nonhighly Compensated Participants who are not employed at the end of the Plan Year and, if this is a standardized Plan, who have not completed more than 500 Hours of Service (or three (3) consecutive calendar months if the elapsed time method is selected in the Adoption Agreement) during such Plan Year, shall not be eligible to share in the allocation and shall be disregarded.
|
(3)
|
A Qualified Nonelective Contribution may be made on behalf of Nonhighly Compensated Participants in an amount sufficient to satisfy one of the tests set forth in Section 12.6. Such contribution shall be allocated in equal amounts (per capita).
|
(4)
|
A Qualified Nonelective Contribution may be made on behalf of Nonhighly Compensated Participants in an amount sufficient to satisfy one of the tests set forth in Section 12.6. Such contribution shall be allocated in equal amounts (per capita). However, for purposes of this contribution, Nonhighly Compensated Participants who are not employed at the end of the Plan Year and, if this is a standardized Plan, who have not completed more than 500 Hours of Service (or three (3) consecutive calendar months if the elapsed time method is selected in the Adoption Agreement) during such Plan Year, shall not be eligible to share in the allocation and shall be disregarded.
|
(5)
|
A Qualified Nonelective Contribution may be made on behalf of Nonhighly Compensated Participants in an amount sufficient to satisfy one of the tests set forth in Section 12.6. Such contribution shall be allocated to the Qualified Nonelective Contribution Account of the Nonhighly Compensated Participant having the lowest 414(s) Compensation, until the applicable test set forth in Section 12.6 is satisfied, or until such Nonhighly Compensated Participant has received the lesser of the maximum "annual addition" pursuant to Section 4.4 or the maximum that may be taken into account in the ACP test pursuant to Section 12.6(i) (Targeted Contributions). This process shall continue until one of the tests set forth in Section 12.6 is satisfied.
|
(6)
|
A Qualified Nonelective Contribution may be made on behalf of Nonhighly Compensated Participants in an amount sufficient to satisfy one of the tests set forth in Section 12.6. Such contribution shall be allocated to the Qualified Nonelective Contribution Account of the Nonhighly Compensated Participant having the lowest 414(s) Compensation, until the applicable test set forth in Section 12.6 is satisfied, or until such Nonhighly Compensated Participant has received the lesser of the maximum "annual addition" pursuant to Section 4.4 or the maximum that may be taken into account in the ACP test pursuant to Section 12.6(i) (Targeted Contributions). This process shall continue until one of the tests set forth in Section 12.6 is satisfied. However, for purposes of this contribution, Nonhighly Compensated Employees who are not employed at the end of the Plan Year and, if this is a standardized Plan, who have not completed more than 500 Hours of Service (or three (3) consecutive calendar months if the elapsed time method is selected in the Adoption Agreement) during such Plan Year, shall not be eligible to share in the allocation and shall be disregarded.
|
(7)
|
A "matching contribution" may be made on behalf of Nonhighly Compensated Participants in an amount sufficient to satisfy one of the tests set forth in Section 12.6. Such contribution shall be allocated on behalf of each Nonhighly Compensated Participant in the same proportion that each Nonhighly Compensated Participant's Elective Deferrals for the year bears to the total Elective Deferrals of all Nonhighly Compensated Participants. The Employer shall designate, at the time the contribution is made, whether the contribution made pursuant to this provision shall be a Qualified Matching Contribution or an Employer Nonelective Contribution.
|
(8)
|
A "matching contribution" may be made on behalf of Nonhighly Compensated Participants in an amount sufficient to satisfy one of the tests set forth in Section 12.6. Such contribution shall be allocated on behalf of each Nonhighly Compensated Participant in the same proportion that each Nonhighly Compensated Participant's Elective Deferrals for the year bears to the total Elective Deferrals of all Nonhighly Compensated Participants. The Employer shall designate, at the time the contribution is made, whether the contribution made pursuant to this provision shall be a Qualified Matching Contribution or an Employer Nonelective Contribution. However, for purposes of this contribution, Nonhighly Compensated Participants who are not employed at the end of the Plan Year and, if this is a standardized Plan, who have not completed more than 500 Hours of Service (or three (3) consecutive calendar months if the elapsed time method is selected in the Adoption Agreement) during such Plan Year, shall not be eligible to share in the allocation and shall be disregarded.
|
12.8
|
401(k) ADP TEST SAFE HARBOR PROVISIONS
|
(a)
|
Election
of
"ADP
test
safe
harbor."
The provisions of this Section will apply if the Employer has elected, in the 401(k) ADP Test Safe Harbor Provisions Section of the Adoption Agreement, to use the "ADP test safe harbor" or "ACP test safe harbor." If the Employer has elected to use the "ADP test safe harbor" for a Plan Year, then the provisions relating to the ADP test described in Section 12.4 and in Code §401(k)(3) do not apply for such Plan Year to the group of Participants subject to the "ADP test safe harbor" provisions. In addition, if the Employer has also elected to use the "ACP test safe harbor" for a Plan Year, then the provisions relating to the ACP test described in Section 12.6 and in Code §401(m)(2) do not apply for such Plan Year to the group of Participants subject to the "ACP test safe harbor" provisions. Furthermore, to the extent any other provision of the Plan is inconsistent with the provisions of this Section, the provisions of this Section will govern. In accordance with Regulation §1.401(k)-1(e)(7) and Regulation §1.401(m)- 1(c)(2), it is impermissible for the Employer to use the ADP test or the ACP test for a Plan Year in which it is intended for the Plan, through its written terms, to use the "ADP test safe harbor" or "ACP test safe harbor" and the Employer fails to satisfy the requirements of such safe harbors for the Plan Year.
|
(b)
|
Definitions.
For purposes of this Section and Section 12.9, the following definitions apply:
|
(1)
|
"ACP test safe harbor" means the method described in Subsection (d) below for satisfying the ACP test of Code §401(m)(2).
|
(2)
|
"ACP test safe harbor matching contributions" means "matching contributions" described in Subsection (d)(1).
|
(3)
|
"ADP test safe harbor" means the method described in Subsection (c) for satisfying the ADP test of Code §401(k)(3).
|
(4)
|
"ADP test safe harbor contributions" means the contributions made pursuant to Subsection (c)(1) below.
|
(5)
|
"Compensation" means Compensation as defined in Section 1.18, except, for purposes of this Section, no dollar limit, other than the limit imposed by Code §401(a)(17), applies to the Compensation of a Nonhighly Compensated Employee.
|
(6)
|
"Eligible Participant" means a Participant who is eligible to make Elective Deferrals under the Plan for any part of the Plan Year (or who would be eligible to make Elective Deferrals but for a suspension due to a hardship distribution described in Section 12.10 or to statutory limitations, such as Code §§402(g) and 415) and who is not excluded as an "eligible Participant" in the 401(k) ADP Test Safe Harbor Provisions Section of the Adoption Agreement.
|
(7)
|
"Matching contributions" means contributions made by the Employer on account of an "eligible Participant's" Elective Deferrals.
|
(c)
|
Satisfying
ADP
safe
harbor.
The provisions of this Subsection apply for purposes of satisfying the "ADP test safe harbor."
|
(1)
|
The "ADP test safe harbor contribution" is the contribution, elected by the Employer in the 401(k) ADP Test Safe Harbor Provisions Section of the Adoption Agreement, to be used to satisfy the "ADP test safe harbor." However, if no contribution is elected in the Adoption Agreement, the Employer will contribute to the Plan for the Plan Year a "basic matching contribution" on behalf of each Eligible Employee. The "basic matching contribution" is equal to (i) one hundred percent (100%) of the amount of an "eligible Participant's" Elective Deferrals that do not exceed three percent (3%) of the Participant's "Compensation" for the Plan Year, plus (ii) fifty percent (50%) of the amount of the Participant's Elective Deferrals that exceed three percent (3%) of the Participant's "Compensation" but do not exceed five percent (5%) of the Participant's "Compensation." However, if the contribution is being made pursuant to a QACA as described in Section 12.9, then the "basic matching contribution" is equal to
|
(2)
|
Except as provided in Subsection (e) below, for purposes of the Plan, a "basic matching contribution" or an "enhanced matching contribution" will be treated as a Qualified Matching Contribution and a nonelective "ADP test safe harbor contribution" will be treated as a Qualified Nonelective Contribution. Accordingly, "ADP test safe harbor contributions" will be fully Vested and subject to the distribution restrictions set forth in Section 12.2(e) other than on account of a hardship (i.e., may generally not be distributed earlier than severance of employment, death, Total and Permanent Disability, an event described in Code §401(k)(10), or, in case of a profit sharing plan, the attainment of age 59 1/2.). In addition, such contributions must satisfy the "ADP test safe harbor" without regard to permitted disparity under Code §401(l). An "enhanced matching contribution" is a matching contribution that, at rate of Elective Deferrals, is at least equal to what the matching contribution would be if under the "basic matching contribution."
|
(3)
|
Notwithstanding the requirement that the Employer make the "ADP test safe harbor contribution" to this Plan, if the Employer so elects in the Adoption Agreement, the "ADP test safe harbor contribution" will be made to the defined contribution
|
(4)
|
Within a reasonable period before the beginning of the Plan Year (or, in the year an Eligible Employee becomes a Participant, within a reasonable period before the Employee becomes eligible), the Employer will provide each "eligible Participant" a comprehensive notice of the Participant's rights and obligations under the Plan, written in a manner calculated to be understood by the average Participant. The determination of whether a notice satisfies the timing requirement of this paragraph is based on all of the relevant facts and circumstances. However, the timing requirement of the notice is deemed to be satisfied if at least thirty (30) days, but not more than ninety (90) days, before the beginning of the Plan Year, the Employer will provide each "eligible Participant" a comprehensive notice of the Participant's rights and obligations under the Plan, written in a manner calculated to be understood by the average Participant. However, if an Employee becomes eligible after the 90th day before the beginning of the Plan Year and does not receive the notice for that reason, the notice must be provided no more than ninety ( 90) days before the Employee becomes eligible but not later than the date the Employee becomes eligible.
|
(5)
|
In addition to any other election periods provided under the Plan, each "eligible Participant" may make or modify a salary deferral election during the thirty (30) day period immediately following receipt of the notice described in Subsection (4) above. Furthermore, if the "ADP test safe harbor contribution" is a "matching contribution" each Eligible Employee must be permitted to elect sufficient Elective Deferrals to receive the maximum amount of "matching contributions" available to the Participant under the Plan.
|
(d)
|
Application
of
"ACP
test
safe
harbor."
The provisions of this Subsection apply if the Employer has elected to satisfy the "ACP test safe harbor."
|
(1)
|
In addition to the "ADP test safe harbor contributions," the Employer will make any "matching contributions" in accordance with elections made in the Adoption Agreement. Such additional "matching contributions" will be considered "ACP test safe harbor matching contributions." "Matching contributions" are taken into account for a Plan Year purposes of the "ACP test safe harbor" in accordance with the allocation and timing rules of Regulation §1.401(m)-2(a), which provides that a matching contribution will be taken into account for a Plan Year only if (1) it is made on account of the Participant's nondeductible voluntary "employee contributions" or elective deferrals under a plan maintained by the Employer for that Plan Year and (2) it is allocated to the Participant's account as of any date within that Plan Year, and (3) it is actually paid to the plan no later than twelve (12) months after the close of the Plan Year.
|
(2)
|
Notwithstanding any election in the Adoption Agreement to the contrary, an "eligible Participant's" Elective Deferrals in excess of six percent (6%) of "Compensation" may not be taken into account in applying "ACP test safe harbor matching contributions." In addition, any portion of an "ACP test safe harbor matching contribution" attributable to a discretionary "matching contribution" may not exceed four percent (4%) of an "eligible Participant's" "Compensation."
|
(e)
|
Application
of
ACP
test.
The Plan is required to satisfy the ACP test of Code §401(m)(2), using the current year testing method, if the Plan permits after-tax voluntary Employee contributions or if matching contributions that do not satisfy the "ACP test safe harbor" may be made to the Plan. In such event, only "ADP test safe harbor contributions" or "ACP test safe harbor contributi ons" that exceed the amount needed to satisfy the "ADP test safe harbor" or "ACP test safe harbor" (if the Employer has elected to use the "ACP test safe harbor") may be treated as Qualified Nonelective Contributions or Qualified Matching Contributions in applying the ACP test. In addition, in applying the ACP test, elective contributions may not be treated as "matching contributions" under Code
|
(f)
|
Modification
of
top-heavy
rules.
The top-heavy requirements of Code §416 and the Plan shall not apply in any Plan Year in which the Plan consists solely of a cash or deferred arrangement which meets the requirements of Code §401(k)(12) and "matching contributions" with respect to which the requirements of Code §401(m)(11) are met.
|
(g)
|
Plan
Year
requirement.
Except as provided in Regulation §1.401(k)-3(e), the Plan will fail to satisfy the requirements of Code
|
(h)
|
Discretionary
safe
harbor
nonelective
contribution.
If the Employer has elected in the Adoption Agreement to either not use the 401(k) safe harbor provisions of this Section or to utilize the "maybe" election with respect to the nonelective "ADP test safe harbor contribution," then the Employer may elect to utilize the "ADP test safe harbor" provisions for a Plan Year after the Plan Year has commenced in accordance with the provisions of this Subsection. In order to utilize this Subsection, the Employer must provide a notice in accordance with Section 12.8(c)(4) above, except that the notice must provide that the Employer may provide the nonelective "ADP test safe harbor contribution" and that a supplemental notice will be provided at least thirty (30) days prior to the last day of the Plan Year if the Employer decides to make the nonelective "ADP test safe harbor contribution". In order to implement the 401( k) safe harbor provisions of this Section for the Plan Year, the Employer must (1) amend the Adoption Agreement to provide for the nonelective "ADP test safe harbor contribution" and, (2) provide a supplemental notice to Participants indicating its intention to
|
(i)
|
Elimination
of
safe
harbor
contributions
or
matching
contributions.
The Employer may amend the Plan during a Plan Year to reduce or eliminate "ADP test safe harbor contributions" or matching contributions for such Plan Year subject to the following provisions.
|
(1)
|
An amendment may be made during a Plan Year to reduce or eliminate prospectively any or all "ADP test safe harbor contributions" provided a supplemental notice is given to all "eligible Participants" explaining the consequences and effective date of the amendment, and that such "eligible Participants" have a reasonable opportunity (including a reasonable period) to change their Elective Deferral (and if applicable, their Voluntary Employee Contribution) elections. An amendment reducing or eliminating an "ADP test safe harbor contribution" must be effective no earlier than the later of: (i) thirty (30) days after "eligible Participants" are given the supplemental notice or (ii) the date the amendment is adopted. If the Employer amends the Plan to reduce or eliminate the "ADP test safe harbor contributions," then except as provided in Code §§401(k) and 401(m) and the Regulations thereunder, the Plan is subject to the ADP test set forth in Section 12.4 and the ACP test set forth in Section 12.6 for the entire Plan Year using current year testing and the Employer must also satisfy the provisions of this Section 12.8 until the amendment becomes effective.
|
(2)
|
Notwithstanding the preceding, an amendment may be made during a Plan Year to eliminate a nonelective "ADP test safe harbor contribution" for such Plan Year only in accordance with the provisions of Regulation 1.401(k)-3(g) and, if applicable, Regulation §1.401(m)-3(h)).
|
(3)
|
If the Employer eliminates a matching contribution that is not an "ADP test safe harbor contribution," then the "ADP test safe harbor" provisions of this Section continue to apply (i.e., the provisions relating to the ADP test described in Section 12.4 and in Code §401(k)(3) do not apply for such Plan Year to the group of Participants subject to the "ADP test safe harbor" provisions).
|
12.9
|
QUALIFIED AUTOMATIC CONTRIBUTION ARRANGEMENT
|
(a)
|
Qualified
Automatic
Contribution
Arrangement
(QACA).
If elected in the Adoption Agreement, the Employer maintains a Plan with Automatic Deferral provisions as a Qualified Automatic Contribution Arrangement (QACA) and the provisions of this Section will apply. Except as otherwise provided in this Section, the Plan's "ADP test safe harbor" and "ACP test safe harbor" provisions set forth in Section 12.8 apply. The Employer will contribute on behalf of the Participants specified in the Adopt ion Agreement, "ADP test safe harbor contributions," as elected in the Adoption Agreement.
|
(b)
|
Participants
subject
to
the
QACA.
The Employer in its Adoption Agreement will elect which Participants are subject to the QACA Automatic Deferral on the "QACA Effective Date" thereof which may include some or all current Participants or may be limited to those Employees who become Participants after the "QACA Effective Date." The "QACA Effective Date" means the date on which the QACA goes into effect, either as to the overall Plan or as to an individual Participants as the context requires. A QACA becomes effective as to the Plan as of the date the Employer elects in the Adoption Agreement. A Participant's "QACA Effective Date" is as soon as practicable after the Participant is subject to Automatic Deferrals under the QACA, consistent with: (A) applicable law; and (B) the objective of affording the Participant a reasonable period of time after receipt of the QACA notice to make an Affirmative Election (and, if applicable, an investment election).
|
(c)
|
QACA
Automatic
Deferral
amount.
Except as provided in Subsection (d) below (relating to uniformity requirements), the Plan must apply to all Participants subject to the QACA, a uniform Automatic Deferral amount, as a percentage of each Participant's Compensation, which does not exceed ten percent (10%), and which is at least the following minimum amount:
|
(1)
|
Initial
period.
3% for the period that begins when the Participant first has contributions made pursuant to a default election under the QACA and ends on the last day of the following Plan Year;
|
(2)
|
Third
Plan
Year.
4% for the third Plan Year of the Participant's participation in the QACA;
|
(3)
|
Fourth
Plan
Year.
5% for the fourth Plan Year of the Participant's participation in the QACA; and
|
(4)
|
Fifth
and
later
Plan
Years.
6% for the fifth Plan Year of the Participant's participation in the QACA and for each subsequent Plan Year.
|
(d)
|
Uniformity.
The "Automatic Deferral Percentage" must be a uniform percentage of Compensation. The "Automatic Deferral Percentage" is the percentage of Automatic Deferral which the Employer elects in the Adoption Agreement (including any scheduled increase to the "Automatic Deferral Percentage"). However, the Plan does not violate the uniform "Automatic Deferral Percentage" merely because:
|
(1)
|
Years
of
participation.
The "Automatic Deferral Percentage" varies based on the number of Plan Years the Participant has participated in the Plan while the Plan has applied the QACA provisions;
|
(2)
|
No
reduction
from
prior
default
percentage.
The Plan does not reduce an "Automatic Deferral Percentage" that, immediately prior to the QACA's effective date was higher (for any Participant) than the "Automatic Deferral Percentage."
|
(3)
|
Applying
statutory
limits.
The Plan limits the Automatic Deferral amount so as not to exceed the limits of Code
|
(4)
|
No
Automatic
Deferrals
during
hardship
suspension.
The Plan does not apply the Automatic Deferral during a period of suspension, under the Plan's hardship distribution provisions, of Participant's right to make Elective Deferrals to the Plan following a hardship distribution; or
|
(5)
|
Disaggregated
groups.
The Plan applies different default percentages to different groups if the groups can be disaggregated under Regulation §1.401(k)-1(b)(4).
|
(e)
|
Safe
harbor
notice.
The Plan's safe harbor notice provisions apply as set forth in Section 12.8, except the Employer must provide the initial QACA safe harbor notice sufficiently early so that an Employee has a reasonable period after receiving the notice and before the first Automatic Deferral to make an Affirmative Election. In addition, the notice must state: (1) the Automati c Deferral amount that will apply in absence of the Employee's Affirmative Election; (2) the Employee's right to elect not to have any Automatic Deferral amount made on the Employee's behalf or to elect to make Elective Deferrals in a different amount or percentage of Compensation; and (iii) how the Plan will invest the Automatic Deferrals. However, if it is not practicable for the notice to be provided on or before the date an Employee becomes a Participant, then the notice nonetheless will be treated as provided timely if it is provided as soon as practicable after that date and the Employee is permitted to elect to defer from all types of Compensation that may be deferred under the Plan earned beginning on that date. For this purpose, the Administrator is deemed to provide timely notice if the Administrator provides the notice at least thirty (30) days and not more than ninety (90) days prior to the beginning of the QACA Plan Year.
|
(f)
|
Distributions.
A Participant's Account balance attributable to QACA "ADP test safe harbor contributions" is subject to the distribution restrictions set forth in Section 12.2(e) other than on account of a hardship (i.e., may generally not be distributed earlier than severance of employment, death, Total and Permanent Disability, an event described in Code §401(k)(10), or, in case of a profit sharing plan, the attainment of age 59 1/2).
|
(g)
|
Vesting.
A Participant's Account balance attributable to QACA "ADP test safe harbor contributions" is Vested in accordance with the vesting schedule, if any, elected in the Adoption Agreement.
|
(h)
|
Compensation.
Compensation for purposes of determining the "Automatic Deferral Percentage" has the same meaning as Compensation with regard to Elective Deferrals.
|
(i)
|
Modification
of
top-heavy
rules.
The top-heavy requirements of Code §416 and the Plan shall not apply in any Plan Year in which the Plan consists solely of a cash or deferred arrangement which meets the requirements of Code §401(k)(13) and "matchi ng contributions" with respect to which the requirements of Code §401(m)(12) is met.
|
12.10
|
ADVANCE DISTRIBUTION FOR HARDSHIP
|
(a)
|
Hardship
events.
If elected in the Adoption Agreement, the Administrator, at the election of a Participant, shall direct the Trustee (or Insurer) to distribute to the Participant in any one Plan Year up to the lesser of (1) 100% of the Accounts as selected in the Adoption Agreement valued as of the last Valuation Date or (2) the amount necessary to satisfy the immediate and heavy financial need of the Participant. For purposes of this Section, a Participant shall include an Employee who has an Account balance in the Plan. Any distribution made pursuant to this Section shall be deemed to be made as of the first day of the Plan Year or, if later, the Valuation Date immediately preceding the date of distribution, and the Account from which the distribution is made shall be reduced accordingly. Effective with respect to Plan Years beginning in 2006 (or if earlier, the date the final 401(k) Regulations are effective with respect to the Plan), withdrawal under this Section shall be authorized only if the distribution is for one of the following or any other item permitted under Regulation §1.401(k)-1(d)(3)(iii)(B) or any other federally enacted legislation:
|
(1)
|
expenses for (or necessary to obtain) medical care (as defined in Code §213(d));
|
(2)
|
costs directly related to the purchase (excluding mortgage payments) of a principal residence for the Participant;
|
(3)
|
payments for burial or funeral expenses for the Participant's deceased parent, Spouse, children or dependents (as defined in Code §152, and without regard to Code §152(d)(1)(B));
|
(4)
|
payment of tuition, related educational fees, and room and board expenses, for up to the next twelve (12) months of post-secondary education for the Participant, the Participant's Spouse, children, or dependents (as defined in Code §152, and without regard to Code §152(b)(1), (b)(2), and (d)(1)(B));
|
(5)
|
payments necessary to prevent the eviction of the Participant from the Participant's principal residence or foreclosure on the mortgage on that residence; or
|
(6)
|
expenses for the repair of damage to the Participant's principal residence that would qualify for the casualty deduction under Code §165 (determined without regard to whether the loss exceeds 10% of adjusted gross income).
|
(b)
|
Beneficiary-based
distribution.
If elected in Adoption Agreement, then effective as of the date specified in the Adoption Agreement, but no earlier than August 17, 2006, a Participant's hardship event includes an immediate and heavy financial need of the Participant's "primary Beneficiary under the Plan," that would constitute a hardship event if it occurred with respect to the Participant's Spouse or dependent as defined under Code §152 (such hardship events being limited to educational expenses, funeral expenses and certain medical expenses). For purposes of this Section, a Participant's "primary Beneficiary under the Plan" is an individual who is named as a Beneficiary under the Plan (by the Participant or pursuant to Section 6.2(d)) and has an unconditional right to all or a portion of the Participant's Account balance under the Plan upon the Participant's death.
|
(c)
|
Other
limits
and
conditions.
No distribution shall be made pursuant to this Section unless the Administrator, based upon the Participant's representation and such other facts as are known to the Administrator, determines that all of the following conditions are satisfied:
|
(1)
|
The distribution is not in excess of the amount of the immediate and heavy financial need of the Participant (including any amounts necessary to pay any federal, state, or local taxes or penalties reasonably anticipated to result from the distribution);
|
(2)
|
The Participant has obtained all distributions, other than hardship distributions, and all nontaxable loans currently available under all plans maintained by the Employer (to the extent the loan would not increase the hardship); and
|
(3)
|
The Plan, and all other plans maintained by the Employer, provide that the Participant's Elective Deferrals and nondeductible voluntary Employee contributions will be suspended, for at least six (6) months after receipt of the hardship distribution.
|
(d)
|
Limitation
on
Account
withdrawals.
Notwithstanding the above, distributions from the Participant's Elective Deferral Account, Qualified Matching Contribution Account and Qualified Nonelective Contribution Account pursuant to this Section shall be limited solely to the Participant's Elective Deferrals and any income attributable thereto credited to the Participant's Elective Deferral Account as of December 31, 1988.
|
(e)
|
Other
limits
and
conditions.
If elected in the Adoption Agreement, no distribution shall be made pursuant to this Section from the Participant's Account until such Account has become fully Vested. Furthermore, if a hardship distribution is permitted from more than one Account, the Administrator may determine any ordering of a Participant's hardship distribution from such Accounts.
|
(f)
|
Distribution
rules
apply.
Any distribution made pursuant to this Section shall be made in a manner which is consistent with and satisfies the provisions of Section 6.5, including, but not limited to, all notice and consent requirements of Code §§411(a)(11) and 417 and the Regulations thereunder.
|
12.11
|
IN-PLAN ROTH ROLLOVER CONTRIBUTIONS
|
(a)
|
Right
to
elect
In-Plan
Roth
Rollover
Contribution.
If elected in the Adoption Agreement, then effective as of the date specified in the Adoption Agreement, but no earlier than September 28, 2010, a Participant may elect to roll over a distribut ion directly to an In-Plan Roth Rollover Contribution Account in accordance with the provisions of the Plan, this Section and the elections made in the Adoption Agreement. "In-Plan Roth rollover contributions" will be subject to the Plan rules related to designated Roth accounts.
|
(b)
|
Eligibility
for
distribution
and
rollover.
A Participant must be eligible for a distribution in order to roll over a distribution to an In-Plan Roth Rollover Contribution Account in accordance with this Section. A Participant may not make an "in-Plan Roth rollover contribution" with regard to an amount which is not an "eligible rollover distribution" as defined in Section 6.15.
|
(c)
|
Form
of
rollover.
The Administrator may permit an "in-Plan Roth rollover contribution" either by converting to cash any non-cash investments prior to rolling over the Participant's distribution election amount to the In-Plan Roth Rollover Contribution
|
(d)
|
Treatment of In-Plan Roth Rollover Contributions.
|
(1)
|
Amount
of
In-Plan
Roth
Rollover
Contribution.
If specified in the Adoption Agreement, a Participant may take an
|
(2)
|
No
rollover
or
distribution
treatment.
Notwithstanding any other Plan provision, a direct In-Plan Roth Rollover Contribution is not a rollover contribution for purposes of the Plan. Accordingly, the Plan will take into account the amount s attributable to an "in-Plan Roth rollover contribution" in determining whether a Participant's Vested Account balance exceeds
|
(3)
|
Withdrawal
of
In-Plan
Roth
Rollover
Contributions.
A Participant may withdraw amounts from the Participant's In-Plan Roth Rollover Contribution Account only when the Participant is eligible for a distribution from the Plan account that is the source of the "in-Plan Roth rollover contribution." This Section does not expand (except, if elected, for distributions for withholding) or eliminate any distribution rights on amounts that a Participant elects to treat as an "in-Plan Roth rollover contribution."
|
(e)
|
Definitions and other rules.
|
(1)
|
In-Plan
Roth
Rollover
Contribution.
An "in-Plan Roth rollover contribution" means a rollover contribution to the Plan that consists of a distribution from a Participant's Plan account, other than a designated Roth account, that the Participant rolls over to the Participant's designated In-Plan Roth Rollover Contribution Account in the Plan, in accordance with Code §402(c)(4). An "in-Plan Roth rollover contribution" may occur only by a direct rollover.
|
(2)
|
Participant
includes
spousal
Beneficiary/Alternate
Payee.
For purposes of eligibility for an "in-Plan Roth rollover contribution," the Plan will treat a Participant's surviving Spouse Beneficiary or Alternate Payee Spouse or former Spouse as a Participant (unless the right to elect an "in-Plan Roth rollover contribution" is limited to Employees). A non-Spouse Beneficiary may not make an "in-Plan Roth rollover contribution."
|
(3)
|
Distribution
from
partially
Vested
account.
Distributions (i.e., the source of the "in-Plan Roth rollover contribution" amounts) are permitted only from Vested amounts allocated to a qualifying source as identified in the Adoption Agreement. If a distribution is made to a Participant who has not severed employment and who is not fully Vested in the Participant's Account from which the rollover is to be made, and the Participant may increase the Vested percentage in such account, then at any relevant time the Participant's Vested portion of the account will be determined in the manner set forth in Section 6.5(h).
|
13.1
|
SIMPLE 401(k) PROVISIONS
|
(a)
|
If elected in the Adoption Agreement, this Plan is intended to be a SIMPLE 401(k) plan which satisfies the requirements of Code
|
(b)
|
The provisions of this Article apply for a "year" only if the following conditions are met:
|
(1)
|
The Employer adopting this Plan is an "eligible employer." An "eligible employer" means, with respect to any "year," an Employer that had no more than 100 Employees who received at least $5,000 of "compensation" from the Employer for the preceding "year." In applying the preceding sentence, all employees of an Affiliated Employer and Leased Employees are taken into account.
|
(2)
|
No contributions are made, or benefits accrued for services during the "year," on behalf of any "eligible employee" under any other plan, contract, pension, or trust described in Code §219(g)(5)(A) or (B), maintained by the Employer.
|
13.2
|
DEFINITIONS
|
(a)
|
"Compensation" means, for purposes of this Article, the sum of the wages, tips, and other compensation from the Employer subject to federal income tax withholding (as described in Code §6051(a)(3)) and the Employee's salary deferral contributions made under this or any other 401(k) plan, and, if applicable, elective deferrals under a Code §408(p) SIMPLE plan, a SARSEP, or a Code
|
(b)
|
"Eligible employee" means, for purposes of this Article, any Participant who is entitled to make Elective Deferrals described in Code §402(g) under the terms of the Plan.
|
(c)
|
"Year" means the calendar year.
|
13.3
|
CONTRIBUTIONS
|
(a)
|
Salary deferral contributions
|
(1)
|
Each "eligible employee" may make a salary deferral election to have "compensation" reduced for the "year" in any amount selected by the Employee subject to the limitation in Subsection (c) below. The Employer will make a salary deferral contribution to the Plan, as an Elective Deferral, in the amount by which the Employee's "compensation" has been reduced.
|
(2)
|
The total salary deferral contribution for the "year" for any Employee cannot exceed the limitation on salary deferral contributions in effect for the "year" pursuant to Code §408(p)(2). The limit will be adjusted by the Secretary of the Treasury for cost-of living increases under Code §408(p)(2)(E). Any such adjustments will be in multiples of $500. The amount of an Employee's salary deferral contributions permitted for a "year" is increased for Employees aged 50 or over by the end of the "year" by the amount of allowable Catch-Up Contributions pursuant to Code §414(v)(2). The limit will be adjusted by the Secretary of the Treasury for cost-of-living increases under Code §414(v)(2)(C). Any such adjustments will be in multiples of
|
(b)
|
Other contributions
|
(1)
|
Matching contributions. Unless (2) below is elected, each "year" the Employer will make a matching contribution to the Plan on behalf of each Employee who makes a salary deferral election under Section 13.3(a). The amount of the matching contribution will be equal to the Employee's salary deferral contribution up to a limit of three percent (3%) of the Employee's "compensation" for the full "year."
|
(2)
|
Nonelective Contributions. For any "year," instead of a matching contribution, the Employer may elect to contribute a Nonelective Contribution of two percent (2%) of "compensation" for the full "year" for each "eligible employee" who received at least $5,000 of "compensation" from the Employer for the "year."
|
(c)
|
Limitation on Other Contributions
|
13.4
|
ELECTION AND NOTICE REQUIREMENTS
|
(a)
|
Election period
|
(1)
|
In addition to any other election periods provided under the Plan, each "eligible employee" may make or modify a salary deferral election during the 60-day period immediately preceding each January 1st.
|
(2)
|
For the "year" an Employee becomes eligible to make salary deferral contributions under this Article, the 60-day election period requirement of Subsection (a)(1) is deemed satisfied if the Employee may make or modify a salary deferral election during a 60-day period that includes either the date the Employee becomes eligible or the day before.
|
(b)
|
Notice requirements
|
(1)
|
The Employer will notify each "eligible employee" prior to the 60-day election period described in Section 13.4(a) that a salary deferral election or a modification to a prior election may be made during that period.
|
(2)
|
The notification described in (1) above will indicate whether the Employer will provide a matching contribution described in Section 13.3(b)(1) or a two percent (2%) Nonelective Contribution described in Section 13.3(b)(2) for that "year."
|
13.5
|
VESTING REQUIREMENTS
|
13.6
|
TOP-HEAVY RULES
|
13.7
|
NONDISCRIMINATION TESTS
|
14.1
|
ELECTION AND OVERRIDING EFFECT
|
14.2
|
DEFINITIONS
|
(a)
|
Employee.
"Employee" means any common law employee, Self-Employed Individual, Leased Employee or other person the Code treats as an employee of a Participating Employer for purposes of the Participating Employer's qualified plan. Either the Adoption Agreement or a participation agreement to the Adoption Agreement may designate any Employee, or class of Employees, as not eligible to participate in the Plan.
|
(b)
|
Lead
Employer.
"Lead Employer" means the signatory Employer to the Adoption Agreement execution page, and does not include any Affiliated Employer or Participating Employer. The "lead Employer" has the same meaning as the Employer for purposes of making Plan amendments and other purposes regardless of whether the "lead Employer" is also a Participating Employer under this Article XIV.
|
14.3
|
PARTICIPATING EMPLOYER ELECTIONS
|
14.4
|
HIGHLY COMPENSATED EMPLOYEE STATUS
|
14.5
|
TESTING
|
(a)
|
Separate
status.
The Administrator shall perform the tests listed below separately for each Participating Employer, with respect to the Employees of that Participating Employer. For this purpose, the Employees of a Participating Employer, and their allocations and accounts, shall be treated as though they were in separate plan. Any correction action, such as additional contributions or corrective distributions, shall only affect the Employees of the Participating Employer. The tests subject to this separate treatment are:
|
(1)
|
The ADP test in Section 12.4.
|
(2)
|
The ACP test in Section 12.6.
|
(3)
|
Nondiscrimination testing as described in Code §401(a)(4) and the applicable Regulations.
|
(4)
|
Coverage testing as described in Code §410(b) and the applicable Regulations.
|
(b)
|
Joint
status.
The Administrator shall perform the following tests for the Plan as whole, without regard to employment by a particular Participating Employer:
|
(1)
|
Applying the Code §415 limitation in Section 4.4.
|
(2)
|
Applying the Code §402(g) limitation in Section 12.2.
|
(3)
|
Applying the limit on Catch-Up Contributions in Section 12.2.
|
14.6
|
TOP HEAVY PROVISIONS
|
(a)
|
Highest
contribution
rate.
The Administrator shall determine the highest Key Employee contribution rate under Section 4.3(g) by reference to the Key Employees and their allocations in the separate plan of that Participating Employer;
|
(b)
|
Top-heavy
minimum
allocation.
The Administrator shall determine the amount of any required top-heavy minimum allocation separately for that separate plan under Section 4.3(f); and
|
(c)
|
Plan
Which
Will
Satisfy.
The Participating Employer shall make any additional contributions Section 4.3(k) requires.
|
14.7
|
COMPENSATION
|
(a)
|
Separate
determination.
For the following purposes, a Participant's Compensation shall be determined separately for each Participating Employer:
|
(1)
|
Nondiscrimination
and
coverage.
All of the separate tests listed in Section 14.5(a).
|
(2)
|
Top-heavy.
Application of the top-heavy rules in Article IX.
|
(3)
|
Allocations.
Application of allocations under Article IV.
|
(4)
|
HCE
determination.
The determination of an Employee's status as a Highly Compensated Employee.
|
(b)
|
Joint
status.
For all Plan purposes other than those described in Section 14.7(a), including but not limited to determining the Code §415 limits in Section 4.4, Compensation includes all Compensation paid by or for any Participating Employer.
|
14.8
|
SERVICE
|
14.9
|
REQUIRED MINIMUM DISTRIBUTIONS
|
14.10
|
COOPERATION AND INDEMNIFICATION
|
(a)
|
Cooperation.
Each Participating Employer agrees to timely provide all information the Administrator deems necessary to insure the Plan is operated in accordance with the requirements of the Code and the Act and will cooperate fully with the "lead Employer," the Plan, the Plan fiduciaries and other proper representatives in maintaining the qualified status of the Plan. Such coopera tion will include payment of such amounts into the Plan, to be allocated to employees of the Participating Employer, which are reasonably required to maintain the tax-qualified status of the Plan.
|
(b)
|
Indemnity.
Each Participating Employer will indemnify and hold harmless the Administrator, the "lead Employer" and its subsidiaries; officers, directors, shareholders, employees, and agents of the "lead Employer"; the Plan; the Trustees, Fiduci aries, Participants and Beneficiaries of the Plan, as well as their respective successors and assigns, against any cause of action, loss, liability, damage, cost, or expense of any nature whatsoever (including, but not limited to, attorney's fees and costs, whether or not suit is brought, as well as IRS plan disqualifications, other sanctions or compliance fees or DOL fiduciary breach sanctions and penalties) arising out of or relating to the Participating Employer's noncompliance with any of the Plan's terms or requirements; any intentional or negligent act or omission the Participating Employer commits with regard to the Plan; and any omission or provision of incorrect information with regard to the Plan which causes the Plan to fail to satisfy the requirements of a tax-qualified plan.
|
14.11
|
INVOLUNTARY TERMINATION
|
(a)
|
Notice.
The "lead Employer" shall give the "Terminated Employer" a notice of the "lead Employer's" intent to terminate the "Terminated Employer's" status as a Participating Employer of the Plan. The "lead Employer" will provide such notice not less than thirty (30) days prior to the date of termination unless the "lead Employer" determines that the interest of Plan Participants requires earlier termination.
|
(b)
|
Spin-off.
The "lead Employer" shall establish a new defined contribution plan, using the provisions of this Plan with any modifications contained in the "Terminated Employer's" participation agreement, as a guide to establish a new defined contribut ion plan (the "spin-off plan"). The "lead Employer" will direct the Trustee to transfer (in accordance with the rules of Code §414(l) and the provisions of Section 8.3) the Accounts of the Employees of the "Terminated Employer" to the "spin-off plan." The "Terminated Employer" shall be the Employer, Administrator, and sponsor of the "spin-off plan." The Trustee of the "spin-off plan" shall be the person or entity designated by the "Terminated Employer," or, in the absence of any such designation, the chief executive officer of the "Terminated Employer." If state law prohibits the "Terminated Employer" from serving as Trustee, the Trustee is the president of a corporate "Terminated Employer," the managing partner of a partnership "Terminated Employer," the managing member of a limited liability company "Terminated Employer," the sole proprietor of a proprietorship "Terminated Employer," or in the case of any other entity type, such other person with title and responsibilities similar to the foregoing. However, the "lead Employer" shall have the option to designate an appropriate financial institution as Trustee instead if necessary to protect the interest of the Participants. The "lead Employer" shall have the authority to charge the "Terminated Employer" or the Accounts of the Employees of the "Terminated Employer" a reasonable fee to pay the expenses of establishing the "spin-off plan."
|
(c)
|
Alternative.
The "Terminated Employer," in lieu of creation of the "spin-off plan" under (b) above, has the option to elect a transfer alternative in accordance with this Subsection (c).
|
(1)
|
Election.
To exercise the option described in this Subsection, the "Terminated Employer" must inform the "lead Employer" of its choice, and must supply any reasonably required documentation as soon as practical. If the "lead Employer" has not received notice of a "Terminated Employer's" exercise of this option within ten (10) days prior to the stated date of termination, the "lead Employer" can choose to disregard the exercise and proceed with the Spin-off.
|
(2)
|
Transfer.
If the "Terminated Employer" selects this option, the Administrator shall transfer (in accordance with the rules of Code §414(l) and the provisions of Section 8.3) the Accounts of the Employees of the "Terminated Employer" to a qualified plan the "Terminated Employer" maintains. To exercise this option, the "Terminated Employer" must deliver to the "lead Employer"
|
(d)
|
Participants.
The Employees of the "Terminated Employer" shall cease to be eligible to accrue additional benefits under the Plan with respect to Compensation paid by the "Terminated Employer," effective as of the date of termination. To the extent that these Employees have accrued but unpaid contributions as of the date of termination, the "Terminated Employer" shall pay such amounts to the Plan or the "spin-off plan" no later than thirty (30) days after the date of termination, unless the "Terminated Employer" effectively selects the Transfer option under Subsection (c)(2) above.
|
(e)
|
Consent.
By its signature on the participation agreement, the Terminated Employer specifically consents to the provisions of this Article and agrees to perform its responsibilities with regard to the "spin-off plan," if necessary.
|
14.12
|
VOLUNTARY TERMINATION
|
(a)
|
Notice.
The "withdrawing employer" shall inform the "lead Employer" and the Administrator of its intention to withdraw from the Plan. The Withdrawing Employer must give the notice not less than thirty (30) days prior to the effective date of its withdrawal.
|
(b)
|
Procedure.
The "withdrawing employer" and the "lead Employer" shall agree upon procedures for the orderly withdrawal of the "withdrawing employer" from the plan. Such procedures may include any of the optional spin-off or transfer options described in Section 14.11.
|
(c)
|
Costs.
The "withdrawing employer" shall bear all reasonable costs associated with withdrawal and transfer under this Section.
|
(d)
|
Participants.
The Employees of the "withdrawing employer" shall cease to be eligible to accrue additional benefits under the Plan as to Compensation paid by the "withdrawing employer," effective as of the effective date of withdrawal. To the extent that such Employees have accrued but unpaid contributions as of the effective date of withdrawal, the "withdrawing employer" shall contribute such amounts to the Plan or the "spin-off plan" promptly after the effective date of withdrawal, unless the accounts are transferred to a
|