SERVICE ISSUES MODEL AMENDMENTS AND PROCEDURES FOR AMENDING MASTER AND PROTOTYPE PLANS THAT ADD A CODA TO AN APPROVED PROFIT SHARING PLAN.

Notice 87-33

PURPOSE

This notice provides model amendments that master or prototype plan sponsors may adopt to conform with those provisions of the Tax Reform Act of 1985 that relate to plan qualification under section 401(a) of the Code and that are effective for plan years beginning before January 1, 1989. The Service is issuing these model amendments in accordance with section 1140(b) of the Tax Reform Act of 1986 (TRA), Pub. L. 99-514. The amendments contained herein are issued for use by master or prototype plan sponsors only.

BACKGROUND

Many provisions of TRA affecting the tax-qualified status of pension and profit sharing plans are effective for plan years beginning before January 1, 1989. For example, employee contributions and matching employer contributions are subject to new discrimination tests; maximum contributions and benefits under qualified plans are restricted; and the maximum interest rate that may be used to determine the present value and amount of plan benefits under a defined benefit plan is altered.

Section 1140(a) of TRA provides that a pension plan shall not be treated as failing to provide definitely determinable benefits or contributions, or to be operated in accordance with the provisions of the plan, merely because any amendments required to be made to the plan by subtitles A or C of title XI of the Act are not made prior to the first plan year beginning on or after January 1, 1986, if: 1) during the period after such amendment takes effect and before such first plan year, the plan is operated in accordance with the requirements of such an amendment, including an amendment prescribed by the Secretary of the Treasury and adopted by the plan, and 2) such plan amendment applies retroactively to the period after such amendment takes effect and before such plan year.

Notwithstanding the delay allowed in section 1140(a) of TRA for amendment, many plans may want to amend to simplify operational compliance or because amendment is necessary to make use of the optional provisions. To simplify such amendment, section 1140(b) of TRA required the Service to publish model amendments. This notice contains such amendments for master and prototype plan sponsors.

The Service has previously issued model amendments for plan sponsors in Notice 87-2, 1987-2 I.R.B. 17. The model amendments contained in Notice 87-2 are not appropriate for use by sponsors of master and prototype plans. This notice provides the model amendments that may be used by sponsors of master or prototype plans. The Service will be issuing in the future a separate model amendment to be used for section 401(k) plans. That amendment will be designed to be used in conjunction with this model amendment if the sponsor so desires.

TITLE I OF ERISA

Section 404(a)(1)(D) of the Employee Retirement Income Security Act of 1974 (ERISA), Pub. L. 93-406 requires that a fiduciary operate a plan in accordance with the documents and instruments governing the plan insofar as such documents and instrument are consistent with the provisions of Title I of the Act.

The Department of Labor has indicated that a plan which complies with the requirements of section 1140 of TRA need not be amended before the applicable date specified in that section in order to satisfy the requirement of Title I of ERISA that a plan be established or maintained pursuant to a written instrument in order to comply with the requirement that plan fiduciaries discharge their duties to the plan in accordance with the documents and instruments governing the plan. The Department of Labor also notes, however, that operation of a plan in accordance with the requirements of ERISA and the Internal Revenue Code as amended by the TRA would in many cases affect the rights of participants and beneficiaries to benefits under the plan. Accordingly, regardless of whether formal amendments to the plan have been delayed pursuant to section 1140 of TRA, operation of a plan in accordance with the new requirements may require the distribution of a summary of changes in the information required to be included in a summary plan description in order to ensure compliance with the statutory requirement that summary plan descriptions be sufficiently accurate and comprehensive to reasonably apprise participants and beneficiaries of their rights and obligations under the plan. In these circumstances, summaries of changes in the summary plan description information must be provided to plan participants, as required by ERISA and the applicable regulations.

TYPES OF MODEL AMENDMENT

This notice provides two model amendments that master or prototype plan sponsors may adopt. Model Amendment I is designed for use by defined benefit plans. Model Amendment II is designed for use by defined contribution plans, including target benefit plans. These model amendments are appropriate only for use by sponsors of master or prototype plans and employers who have adopted such plans.

SCOPE OF AMENDMENTS

Both model amendments contain those provisions necessary for the plan adopting it to comply with all tax qualification requirements of the Tax Reform Act of 1986 (with the exception of technical corrections) that are effective for plan years beginning before January 1, 1989.

Section 5.01 of Rev. Proc. 84-23, 1984-1 C.B. 457, requires every master or prototype plan to include a provision allowing the plan sponsor to adopt amendments reflecting changes in the Internal Revenue Code or regulations on a group basis. That portion of each model amendment containing those required provisions described in the preceding paragraph is designed to be adopted as an amendment to the sponsor's basic plan document, as defined in section 4.04 of Rev. Proc. 84-23, which the sponsor may adopt on a group basis.

Both model amendments contain provisions relating to the nondiscrimination tests in section 401(m) of the Code. If the sponsor's defined benefit basic plan document forms a part of any plan which may permit employee contributions which are accounted for separately, the sponsor must include section VII of Model Amendment I in its amendment to the basic plan document. In the case of a defined contribution basic plan document, section V of Model Amendment II must be included in the sponsor's amendment to the basic plan document if any plan which uses the basic plan document may permit employee contributions (other than qualified voluntary employee contributions) or may allocate matching contributions to participants' accounts. Likewise, section VIII of Model Amendment I or section VI of Model Amendment II, which contain provisions relating to the elimination of qualified voluntary employee contributions, must be adopted if any plan utilizing the basic plan document may permit qualified voluntary employee contributions. Of course, sponsors of basic plan documents which are not required to adopt one or both of the applicable model amendment sections described in this paragraph may nonetheless adopt such section(s) without adverse consequence because these sections do not operate to permit or require employee contributions or matching contributions not otherwise permitted or required under the terms of an employer's plan.

In addition, both of the model amendments contain optional provisions which plan sponsors may make available for adoption by adopting employers. These include, in the case of Model Amendment I, a provision allowing the employer to replace the PBGC immediate annuity rate with the limits under section 1139 of TRA. If a plan contains an interest rate to determine the amount or present value of benefits in addition to, or other than, the PBGC immediate annuity interest rate, such other interest rate may not be replaced by the section 1139 limits. This section of the model amendment merely operates to convert the PBGC immediate annuity interest rate to the section 1139 limits. See Notice 87-20, 1987-6 I.R.B. 17. In the case of Model Amendment II, the options include a provision permitting a profit sharing plan to accept contributions without regard to the existence of current or accumulated earnings and profits, and a provision allowing the reallocation of forfeitures to participants' accounts in a money purchase pension plan, other than a target benefit plan.

A plan sponsor that wishes to make any of the optional provisions available for adoption by its adopting employers should include the appropriate optional provision(s) in its amendment to the basic plan document. The employer may elect to adopt such optional provision(s) by executing the corresponding section of the model adoption agreement amendment which has been provided for this purpose. The model adoption agreement amendment contains all options which may be made available to employers. Master or prototype plan sponsors that do not wish to make all options available should delete the appropriate options from the model adoption agreement amendment before furnishing it to adopting employers.

In addition to the required and optional provisions described above, both model amendments include a sponsor option designed to eliminate voluntary employee contributions as of the first plan year beginning after December 31, 1987. The Service is currently considering whether it will require sponsors to eliminate voluntary employee contributions from master or prototype plans (other than section 401(k) plans) in the future. Therefore, sponsors of plans that permit voluntary employee contributions are encouraged to adopt this sponsor option as part of the model amendment. The sponsor may adopt this option on a group basis.

The model amendments do not address and have no effect on provisions of TRA that do not affect a plan's tax qualified status.

EFFECTIVE DATES

Generally, the required provisions of the model amendments are effective as of the first day of the first plan year beginning after December 31, 1986. Sponsors may not modify this date regardless of when the model amendment is adopted. The effective date of any optional defined contribution provision which the plan sponsor chooses to make available for adoption by employers may be no earlier than the first day of the plan year in which the employer adopts such optional provision. The effective dates of section IX of Model Amendment I, which includes an employer option to replace the PBGC immediate annuity interest rate with the section 1139 limits, are described in section IX of Model Amendment I and cannot be modified by the employer. The sponsor option to eliminate voluntary employee contributions has as its effective date the first day of the first plan year beginning after December 31, 1987. Sponsors are cautioned that the plan must operate in accordance with the terms of the model amendment for the entire period for which the amendment is effective. Therefore, sponsors who adopt this provision may modify it solely to provide for a later effective date. (The language which may be modified appears in brackets in the model amendments.)

OPINION LETTERS

Until further notice, the National Office of the Internal Revenue Service will not issue an opinion letter with respect to whether a master or prototype plan (including a plan which utilizes one of the model amendments contained herein) complies with the provisions of TRA. Until such further notice, opinion letters issued with respect to a master or prototype plan will contain a caveat that the plan has not been reviewed for the provisions of TRA. As provided in Notice 86-13, 1986-46 I.R.B. 17, the Service will, however, review plans for compliance with the retroactively effective technical corrections to the Tax Reform Act of 1984 and the Retirement Equity Act of 1984 that are contained in TRA. Therefore, sponsors of plans which receive option letters issued after the enactment of TRA may rely on the Service's approval of the plan's language with respect to these provisions.

Plan sponsors and employers that adopt model amendments, including optional provisions, may be required to adopt additional plan amendments when final regulations are issued concerning items affected by the model amendments.

RELIANCE

An adopting employer of a master or prototype plan for which the appropriate model amendment has been adopted may continue to rely on determination and opinion letters previously issued with respect to the plan, provided that the model amendment is properly adopted as described under "Adoption Procedures" below and provided that the employer does not receive notice from the Service within 120 days after the date of adoption of the amendments pursuant to section 15.01 of Rev. Proc. 80-30, 1980-1 C.B. 685. Of course, an adopting employer may not rely upon a model amendment to cure previous disqualifying defects such as failure to timely amend the plan to conform to the requirements of the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), Pub. L. 97-248, the Tax Reform Act of 1984 (DEFRA), Pub. L. 98-369, or the Retirement Equity Act of 1984 (REA), Pub. L. 98-397.

In addition, the model amendment for defined benefit plans does not protect benefits in excess of the new limits imposed by TRA that were accrued prior to the first plan year beginning after December 31, 1986 under plans established after May 5, 1986, or as a result of changes in the terms and conditions of a plan after May 5, 1986. Further guidance for plans that have accrued such nonprotected benefits is provided in Notice 87-21, 1987-6 I.R.B. 20.

ADOPTION PROCEDURES

In order to rely on opinion and determination letters previously issued with respect to the plan the following four requirements must be met:

1. All sections of the model amendment required for the type of plan being amended and all sections relating to options made available to employers must be adopted by the master or prototype plan sponsor no later than the last day of the first plan year beginning after December 31, 1988. In addition, any optional provision which an adopting employer wishes to elect must be adopted by the employer by the same date. An employer's adoption of any optional provision contained in the Model Adoption Agreement Amendments may be made in any manner that is valid under state law, that clearly specifies the date of adoption of the amendment, and that otherwise conforms with any requirements relating to the adoption of such amendments contained in the employer's plan.

2. All required provisions of the model amendments must be adopted on an identical, word-for-word basis. Basic plan document language contained in the model amendments relating to any optional provisions which the sponsor chooses to make available for adoption by adopting employers must also be adopted on a word-for-word identical basis. Likewise, any adoption agreement amendment that is executed by an employer must be word-for-word identical to the model adoption agreement amendment provided herein except that options may be deleted, and the employer must include an effective date no earlier than the first day of the plan year in which the employer adopts the provision. Finally, the sponsor option to eliminate voluntary employee contributions, if adopted, must be adopted word- for-word except that the effective date can be changed as previously noted. Other model language provided by the Service relating to limitations on contributions and benefits or other topics in subsequent notices may not be substituted for language in the model amendments unless specifically permitted in such other notices.

3. The plan sponsor must provide copies of the amendment to the employer in accordance with section 9.07 of Rev. Proc. 84-23. The employer must provide notice of the amendment in accordance with sections 7 and 8 of Rev. Proc. 80-30 (regardless of whether this is a standardized or non-standardized plan).

4. The plan must be operated in accordance with the terms of the model amendment that it incorporates for the entire period for which the amendment is effective.

                          MODEL AMENDMENT I

1.1. PURPOSE. The purpose of this amendment is to amend the plan to comply with those provisions of the Tax Reform Act of 1986 that are effective prior to the first Plan Year beginning after December 31, 1988. Nothing contained in this amendment shall permit or require Employee Contributions under the plan unless such Employee Contributions have been authorized by the employer under the other provisions of the plan or under other amendments thereto.

1.2. EFFECTIVE DATE. Except as otherwise provided, this amendment shall be effective as of the first day of the first Plan Year beginning after December 31, 1986.

SECTION II: DEFINITIONS (Required)

For purposes of this amendment only, the following definitions shall apply:

2.1. "Adjustment Factor" shall mean the cost of living adjustment factor prescribed by the Secretary of the Treasury under section 415(d) of the Code for years beginning after December 31, 1987, applied to such items and in such manner as the Secretary shall prescribe.

2.2. "Adoption Agreement Amendment" shall mean that portion of this amendment in which the employer makes any elections permitted under the amendment.

2.3. "Affiliated Employer" shall mean any corporation which is a member of a controlled group of corporations (as defined in section 414(b) of the Code) which includes the employer; any trade or business (whether or not incorporated) which is under common control (as defined in section 414(c) of the Code) with the employer; any organization (whether or not incorporated) which is a member of an affiliated service group (as defined in section 414(m) of the Code) which includes the employer; and any other entity required to be aggregated with the employer pursuant to regulations under section 414(o) of the Code.

2.4. "Code" shall mean the Internal Revenue Code of 1986 and amendments thereto.

2.5. "Compensation" shall mean, for purposes of section VII of this amendment, compensation paid by the Employer to the Participant during the Plan Year which is required to be reported as wages on the Participant's Form W-2 or which, in the case of a self-employed individual, constitutes payment for services rendered includible in the self-employed individual's gross income and, if the provisions of the plan other than this amendment so provide, shall also include compensation which is not currently includible in the Participant's gross income by reason of the application of sections 125, 402(a)(8), 402(h)(1)(B), or 403(b) of the Code.

2.6. "Current Accrued Benefit" shall mean a Participant's accrued benefit under the plan, determined as if the Participant had separated from service as of the close of the last Limitation Year beginning before January 1, 1987, when expressed as an annual benefit within the meaning of section 415(b)(2) of the Code. In determining the amount of a Participant's Current Accrued Benefit, the following shall be disregarded:

(i) any change in the terms and conditions of the plan after May 5, 1986; and

(ii) any cost of living adjustment occurring after May 5, 1986.

2.7. "Defined Benefit Dollar Limitation" shall mean the limitation set forth in section 415(b)(1) of the Code.

2.8. "Defined Contribution Dollar Limitation" shall mean $30,000 or, if greater, one-fourth of the Defined Benefit Dollar Limitation in effect for the Limitation Year.

2.9. "Employee" shall mean employees of the Employer and shall include leased employees within the meaning of section 414(n)(2) of the Code. Notwithstanding the foregoing, if such leased employees constitute less than twenty percent of the Employer's nonhighly compensated workforce within the meaning of section 414(n)(5)(C)(ii) of the Code, the term "Employee" shall not include those leased employees covered by a plan described in section 414(n)(5) of the Code unless otherwise provided by the terms of this plan other than this amendment.

2.10. "Employee Contributions" shall mean contributions made to the plan by a Participant during the Plan Year.

2.11. "Employer" shall mean the entity that establishes or maintains the plan, any "Affiliated Employer" and any successor of such establishing employer.

2.12. "Family Member" shall mean an individual described in section 414(q)(6)(B) of the Code.

2.13. "Limitation Year" shall mean the limitation year specified in the plan, or, if none is specified, the calendar year.

2.14. "Highly Compensated Employee" shall mean an employee described in section 414(q) of the Code.

2.15. "Nonhighly Compensated Employee" shall mean an Employee of the Employer who is neither a Highly Compensated Employee nor a Family Member.

2.16. "Participant" shall mean any Employee of the Employer who has met the eligibility and participation requirements of the plan.

2.17. "Social Security Retirement Age" shall mean the age used as the retirement age for the Participant under section 216(l) of the Social Security Act, except that such section shall be applied without regard to the age increase factor, and as if the early retirement age under section 216(l)(2) of such act were 62.

2.18. "Plan Year" shall mean the plan year otherwise specified in the plan.

SECTION III: PROVISIONS RELATING TO LEASED EMPLOYEES (Required)

3.1. SAFE-HARBOR. Notwithstanding any other provisions of the plan, for purposes of determining the number or identity of Highly Compensated Employees or for purposes of the pension requirements of section 414(n)(3) of the Code, the employees of the Employer shall include individuals defined as Employees in section 2.9 of this amendment.

3.2. PARTICIPATION AND ACCRUAL. A leased employee within the meaning of section 414(n)(2) of the Code shall become a Participant in, and accrue benefits under, the plan based on service as a leased employee only as provided in provisions of the plan other than this section III.

3.3. EFFECTIVE DATE. This section III shall be effective for services performed after December 31, 1986.

SECTION IV: LIMITATIONS ON CONTRIBUTIONS AND BENEFITS (Required)

4.1 ADJUSTMENT TO DEFINED BENEFIT DOLLAR LIMITATION FOR EARLY OR DEFERRED RETIREMENT.

4.1(a). ADJUSTMENT FOR EARLY RETIREMENT. If a retirement benefit of a Participant commences before the Participant's Social Security Retirement Age, the Defined Benefit Dollar Limitation shall be adjusted so that it is the actuarial equivalent of an annual benefit of $90,000, multiplied by the Adjustment Factor, as prescribed by the Secretary of the Treasury, beginning at the Social Security Retirement Age. The adjustment provided in the preceding sentence shall be made in such manner as the Secretary of the Treasury may prescribe which is consistent with the reduction for old-age insurance benefits commencing before the Social Security Retirement Age under the Social Security Act.

4.1(b). ADJUSTMENT FOR DEFERRED RETIREMENT. If the retirement benefit of a Participant commences after the Participant's Social Security Retirement Age, the Defined Benefit Dollar Limitation shall be adjusted so that it is the actuarial equivalent of an annual benefit of $90,000 beginning at the Social Security Retirement Age, multiplied by the Adjustment Factor as provided by the Secretary of the Treasury, based on the lesser of the interest rate assumption under the plan or on an assumption of five percent (5%) per year.

4.2. ADJUSTMENT OF LIMITATION FOR YEARS OF SERVICE OR PARTICIPATION.

4.2(a). DEFINED BENEFIT DOLLAR LIMITATION. If a Participant has completed less than ten years of participation, the Participant's accrued benefit shall not exceed the Defined Benefit Dollar Limitation, as adjusted by section 4.1 above, multiplied by a fraction, the numerator of which is the Participant's number of years (or part thereof) of participation of the plan, and the denominator of which is ten.

4.2(b). OTHER DEFINED BENEFIT LIMITATIONS. If a Participant has completed less than ten years of service with the Employer, the limitations described in sections 415(b)(1)(B) and 415(b)(4) of the Code shall be adjusted by multiplying such amounts by a fraction, the numerator of which is the Participant's number of years of service (or part thereof), and the denominator of which is ten.

4.2(c). LIMITATIONS ON REDUCTIONS. In no event shall sections 4.2(a) and (b) reduce the limitations provided under sections 415(b)(1) and (4) of the Code to an amount less than one-tenth of the applicable limitation (as determined without regard to this section 4.2).

4.2(d). APPLICATION TO CHANGES IN BENEFIT STRUCTURE. To the extent provided by the Secretary of the Treasury, this section 4.2 shall be applied separately with respect to each change in the benefit structure of the plan.

4.3 PRESERVATION OF CURRENT ACCRUED BENEFIT UNDER DEFINED BENEFIT PLAN.

4.3(a). IN GENERAL. This section 4.3 shall apply to defined benefit plans that were in existence on May 6, 1986, and that met the applicable requirements of section 415 of the Code as in effect for all Limitation Years.

4.3(b). PROTECTION OF CURRENT ACCRUED BENEFIT. If the Current Accrued Benefit of an individual who is a Participant as of the first day of the Limitation Year beginning on or after January 1, 1987, exceeds the benefit limitations under section 415(b) of the Code (as modified by sections 4.1 and 4.2 of this amendment), then, for purposes of Code Section 415(b) and (e), the Defined Benefit Dollar Limitation with respect to such individual shall be equal to such Current Accrued Benefit.

4.4 REVISED CONTRIBUTION LIMITATIONS UNDER DEFINED CONTRIBUTION PLAN.

4.4(a). DEFINITION OF ANNUAL ADDITIONS. For purposes of the plan, "Annual Addition" shall mean the amount allocated to a Participant's account during the Limitation Year that constitutes:

(i) Employer contributions or Employee Contributions, including excess contributions as defined in section 401(k)(8)(B) of the Code, excess aggregate contributions as defined in section 401(m)(6)(B), and excess deferrals as described in section 402(g), regardless of whether such amounts are distributed or forfeited;

(ii) Forfeitures; and

(iii) Amounts described in sections 415(l)(1) and 419A(d)(2) of the Code.

4.4(b). MAXIMUM ANNUAL ADDITION. The maximum Annual Addition that may be contributed or allocated to a Participant's account under the plan for any Limitation Year shall not exceed the lesser of:

(i) the Defined Contribution Dollar Limitation, or

(ii) 25 percent of the Participant's compensation, within the meaning of section 415(c)(3) of the Code for the Limitation Year.

4.4(c). SPECIAL RULES. The compensation limitation referred to in section 4.4(b)(ii) shall not apply to:

(i) Any contribution for medical benefits (within the meaning of section 419A(f)(2) of the Code) after separation from service which is otherwise treated as an Annual Addition, or

(ii) Any amount otherwise treated as an Annual Addition under section 415(l)(1) of the Code.

4.4(d). DEFINITIONS. For purposes of section 4.4, "Defined Contribution Dollar Limitation" shall mean $30,000, or, if greater, one-fourth of the defined benefit dollar limitation set forth in section 415(b)(1) of the Code as in effect for the Limitation Year.

4.5. SPECIAL RULES FOR PLANS SUBJECT TO OVERALL LIMITATIONS UNDER CODE SECTION 415(e).

4.5(a). RECOMPUTATION NOT REQUIRED. The Annual Addition for any Limitation Year beginning before January 1, 1987 shall not be recomputed to treat all Employee Contributions as an Annual Addition.

4.5(b). ADJUSTMENT OF DEFINED CONTRIBUTION PLAN FRACTION. If the plan satisfied the applicable requirements of section 415 of the Code as in effect for all Limitation Years beginning before January 1, 1987, an amount shall be subtracted from the numerator of the defined contribution plan fraction (not exceeding such numerator) as prescribed by the Secretary of the Treasury so that the sum of the defined benefit plan fraction and defined contribution plan fraction computed under section 415(e)(1) of the Code (as revised by this section IV) does not exceed 1.0 for such Limitation Year.

4.6. SPECIAL RULES. The provisions of this section IV shall be modified as provided in:

(i) Section 415(b)(2)(F) of the Code for plans maintained by organizations (other than governmental units) exempt from tax under Subtitle A of the Code, and qualified merchant marine plans; and

(ii) Section 415(b)(9) of the Code for plan Participants who are commercial airline pilots.

4.7. EFFECTIVE DATE OF SECTION IV PROVISIONS. The provisions of this section IV shall be effective for Limitation Years beginning after December 31, 1986.

4.8. For purposes of this section IV, Affiliated Employer shall also include those employers described in section 415(h) of the Code.

SECTION V: CALCULATION OF PRESENT VALUE FOR CASH-OUT OF BENEFITS AND FOR DETERMINING AMOUNT OF BENEFITS (Required)

5.1. IN GENERAL. This section V shall apply to all distributions from the plan and from annuity contracts purchased to provide plan benefits other than distributions described in Section 1.417-1T(e)(3) of the Income Tax Regulations issued under the Retirement Equity Act.

5.2. DETERMINATION OF PRESENT VALUE.

5.2(a). For purposes of determining whether the present value of (i) a Participant's vested accrued benefit; (ii) a qualified joint and survivor annuity within the meaning of Section 417(b) of the Code; or (iii) a qualified preretirement survivor annuity within the meaning of Section 417(c)(1) of the Code exceeds $3500, the present value of such benefits or annuities shall be calculated by using an interest rate no greater than the Applicable Interest Rate.

5.2(b). In no event shall the present value of any such benefit or annuity determined under this section 5.2 be less than the greater of:

(i) the present value of such benefits or annuities determined under the plan's provisions for determining the present value of accrued benefits or annuities other than sections V and IX of this amendment; or

(ii) the present value of such benefits or annuities determined using the Applicable Interest Rate.

5.3. DETERMINATION OF AMOUNT OF BENEFITS.

5.3(a). For purposes of determining the amount of a Participant's accrued benefit, the interest rate used shall not exceed:

(i) the Applicable Interest Rate if the present value of the benefit (using such rate or rates) is not in excess of $25,000; or

(ii) 120 percent of the Applicable Interest Rate if the present value of the benefit exceeds $25,000 (as determined under clause (i)). In no event shall the present value determined under this clause (ii) be less than $25,000.

5.3(b). In no event shall the amount of the benefit or annuity determined under this section 5.3 be less than the greater of:

(i) the amount of such benefit determined under the plan's provisions for determining the amount of benefits other than sections V and IX of this amendment; or

(ii) the amount of such benefit determined using the Applicable Interest Rate if the value determined in section 5.3(a) is less than $25,000 or 120 percent of the Applicable Interest Rate if the value determined in section 5.3(a) is not less than $25,000.

5.4. COORDINATION WITH LIMITATIONS ON CONTRIBUTIONS AND BENEFITS. In no event shall the amount of annuity determined under this section V exceed the maximum benefit permitted under Section 415 of the Code.

5.5. APPLICABLE INTEREST RATE.

5.5(a). For purposes of this section V, "Applicable Interest Rate" shall mean the interest rate or rates which would be used as of the date distribution commences by the Pension Benefit Guaranty Corporation for purposes of determining the present value of that Participant's benefits under the plan if the plan had terminated on the date distribution commences with insufficient assets to provide benefits guaranteed by the Pension Benefit Guaranty Corporation on that date.

5.5(b). Notwithstanding the foregoing, if the provisions of the plan other than section 5.5 so provide, the Applicable Interest Rate shall be determined as of the first day of the Plan Year in which a distribution occurs rather than as of the date distribution commences.

5.6. EFFECTIVE DATES.

5.6(a). IN GENERAL. This section V shall apply to distributions in Plan Years beginning after December 31, 1984, other than distributions under annuity contracts distributed to or owned by a Participant prior to September 17, 1985 unless additional contributions are made under the plan by the Employer with respect to such contracts.

5.6(b). SPECIAL RULE FOR DISTRIBUTIONS PRIOR TO 1987. Notwithstanding the foregoing, this section V shall not apply to any distributions in Plan Years beginning after December 31, 1984, and before January 1, 1987, if such distributions were made in accordance with the requirements of the Income Tax Regulations issued under the Retirement Equity Act of 1984.

SECTION VI: DETERMINATION OF TOP HEAVY STATUS (Required)

6.1. Solely for the purpose of determining if the plan, or any other plan included in a required aggregation group of which this plan is a part, is top-heavy (within the meaning of section 416(g) of the Code) the accrued benefit in a defined benefit plan of an employee other than a key employee (within the meaning of section 416(i)(1) of the Code) shall be determined under (a) the method, if any, that uniformly applies for accrual purposes under all plans maintained by the Employer, or (b) if there is no such method, as if such benefit accrued not more rapidly than the slowest accrual rate permitted under the fractional accrual rate of section 411(b)(1)(C) of the Code.

SECTION VII: LIMITATIONS ON EMPLOYEE CONTRIBUTIONS (Required if the basic plan document forms a part of any plan which permits Employee Contributions that are accounted for separately (as though they were actually allocated to a separate account) other than Qualified Voluntary Employee Contributions)

7.1. APPLICABILITY OF THIS SECTION. This section VII shall apply to the plan only if such plan permits Employee Contributions or allocates Matching Contributions to Participants' accounts in Plan Years beginning after December 31, 1986.

7.2. CONTRIBUTION PERCENTAGE.

7.2(a). The Average Contribution Percentage for Eligible Participants who are Highly Compensated Employees for the Plan Year shall not exceed the Average Contribution Percentage for Eligible Participants who are Nonhighly Compensated Employees for the Plan Year multiplied by 1.25; or

7.2(b). The Average Contribution Percentage for Eligible Participants who are Highly Compensated Employees for the Plan Year shall not exceed the Average Contribution Percentage for Eligible Participants who are Nonhighly Compensated Employees for the Plan Year multiplied by 2, provided that the Average Contribution Percentage for Eligible Participants who are Highly Compensated Employees does not exceed the Average Contribution Percentage for Eligible Participants who are Nonhighly Compensated Employees by more than two (2) percentage points or such lesser amounts as the Secretary of the Treasury shall prescribe to prevent the multiple use of this alternative limitation with respect to any Highly Compensated Employee.

7.3. DEFINITIONS. For purposes of this section VII, the following definitions shall apply;

7.3(a). "Average Contribution Percentage" shall mean the average (expressed as a percentage) of the Contribution Percentages of the Eligible Participants in a group.

7.3(b). "Contribution Percentage" shall mean the ratio (expressed as a percentage) of the sum of the Employee Contributions under the plan on behalf of the Eligible Participant for the Plan Year to the Eligible Participant's Compensation for the Plan Year.

7.3(c). "Eligible Participant" shall mean any employee who is authorized under the terms of the plan to have Employee Contributions allocated to his account for the Plan Year.

7.4. SPECIAL RULES.

7.4(a). For purposes of this section VII, the Contribution Percentage for any Eligible Participant who is a Highly compensated Employee for the Plan Year and who is eligible to make Employee Contributions, or to have matching contributions within the meaning of section 401(m)(4)(A) of the Code allocated to his account under two or more plans described in section 401(a) of the Code or arrangements described in section 401(k) of the Code that are maintained by the Employer shall be determined as if the total of such Employee Contributions and matching contributions was made under each plan.

7.4(b). In the event that this plan satisfies the requirements of section 410(b) of the Code only if aggregated with one or more other plans, or if one or more other plans satisfy the requirements of section 410(b) of the Code only if aggregated with this plan, then this section VII shall be applied by determining the Contribution Percentages of Eligible Participants as if all such plans were a single plan.

7.4(c). For purposes of determining the Contribution Percentage of an Eligible Participant who is a Highly Compensated Employee, the Employee Contributions and matching contributions (within the meaning of section 401(m)(4)(A) of the Code) of such Eligible Participant shall include the Employee contributions and matching contributions (within the meaning of section 401(m)(4)(A) of the Code) of Family Members. Family Members with respect to Highly Compensated Employees shall be disregarded as separate employees in determining the Contribution Percentage both for Eligible Participants who are Nonhighly Compensated Employees and for Eligible Participants who are Highly Compensated Employees.

7.4(d). The determination and treatment of the Contribution Percentage of any Eligible Participant shall satisfy such other requirements as may be prescribed by the Secretary of the Treasury.

7.5. DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS.

7.5(a). IN GENERAL. Excess Aggregate Contributions plus any income and minus any loss allocable thereto shall be distributed no later than the last day of each Plan Year beginning after December 31, 1987, to Participants to whose accounts Employee Contributions were allocated for the preceding Plan Year. ¹ Excess Aggregate Contributions shall be treated as Annual Additions under section 4.4(a) of this amendment.

7.5(b). EXCESS AGGREGATE CONTRIBUTION. For purposes of this amendment, "Excess Aggregate Contributions" shall mean the amount described in section 401(m)(6)(B) of the Code.

7.5(c). DETERMINATION OF INCOME OR LOSS. The Excess Aggregate Contributions to be distributed to the Participant shall be adjusted for income or loss. The income or loss allocable to Excess Aggregate Contributions shall be determined by multiplying the income or loss allocable to the Participant's Employee Contributions for the Plan Year by a fraction, the numerator of which is the Excess Aggregate Contributions on behalf of the Participant for the preceding Plan Year and the denominator of which is the sum of the Participant's account balances attributable to Employee Contributions on the last day of the preceding Plan Year.

SECTION VIII: QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTIONS NOT PERMITTED (Required if the basic plan forms a part of any plan which may permit Qualified Voluntary Employee Contributions)

8.1. The plan shall accept no Employee Contributions designated by the Participant as deductible employee contributions (within the meaning of section 72(o)(5)(A) of the Code) for a taxable year of the Participant beginning after December 31, 1986.

SECTION IX: REPLACEMENT OF IMMEDIATE ANNUITY RATE WITH THE SECTION 1139 LIMITS (Optional -- For plans that use PBGC Immediate Annuity Rate to Determine Amount and Present Value of Benefits)

9.1. This provision shall apply only if the employer so elects in the Adoption Agreement Amendment.

9.2. REPLACEMENT OF IMMEDIATE ANNUITY RATE. If the provisions of the plan, other than this section IX, contained language that was adopted on or before October 22, 1986 providing that the present value and amount of benefits under sections 5.2 and 5.3 of this amendment are determined with reference to the immediate annuity rates used by the Pension Benefit Guaranty Corporation, the rate used for such purposes shall instead be the Applicable Interest Rate as defined in section 5.5 of this amendment or 120 percent of that rate if the present value of the benefit exceeds $25,000 (determined using the Applicable Interest Rate). The use of 1230 percent of such rate shall not reduce the present value or amount of benefits below $25,000.

9.3. EFFECTIVE DATE. This section IX shall apply to distributions in Plan Years beginning after December 31, 1986, and shall also apply to any distributions in Plan Years beginning after December 31, 1984 and before January 1, 1987 other than:

(a) Distributions under annuity contracts distributed to or owned by a Participant prior to September 17, 1985 unless additional contributions are made under the plan by the Employer with respect to such contracts; or

(b) Distributions made in accordance with the requirements of the Income Tax Regulations issued under the Retirement Equity Act of 1984.

SECTION X: ELIMINATION OF VOLUNTARY EMPLOYEE CONTRIBUTIONS (OTHER THAN QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTIONS) (Optional)

10.1. The plan shall accept no Voluntary Employee Contributions for any plan year beginning after [December 31, 1987]. For this purpose, "Voluntary Employee Contributions" means amounts contributed to the plan by an employee which are not required as a condition of employment, as a condition of participation in the plan or as a condition of obtaining benefits (or additional benefits) under the plan attributable to employer contributions.

SECTION XI: SPECIAL RULES FOR PAIRED DEFINED BENEFIT PLANS (Required if the basic plan document forms a part of any plan which is designed to be "paired", as described in section 4.08 of Rev. Proc. 84-23, with one or more defined contribution plans)

11.1. APPLICABILITY OF THIS SECTION. This section XI shall apply to the plan only if such plan is a "paired plan" within the meaning of section 4.08 of Rev. Proc. 84-23.

11.2. ADJUSTED MAXIMUM PERMISSIBLE AMOUNT. Notwithstanding any other provision to the contrary, no Participant shall accrue an annual benefit (as defined in section 415(b)(2) of the Code) in excess of the adjusted maximum permissible amount. For purposes of this provision, the adjusted maximum permissible amount is the lesser of the maximum permissible amount (as described in section 415(b)(1) of the Code) or the 415(e) aggregated limitation. For purposes of this section, the section 415(e) aggregated limitation is the product of (a) one minus the defined contribution function; and (b) the lesser of 125% of the adjusted dollar limitation, or 140% of the Participant's highest average compensation.

11.3. ADJUSTED DOLLAR LIMITATION FOR EARLY OR DEFERRED RETIREMENT. The adjusted dollar limitation is $90,000, multiplied by the Adjustment Factor, as prescribed by the Secretary of the Treasury, payable in the form of a life annuity commencing at the Social Security Retirement Age. If the annual benefit commences before the Social Security Retirement Age, the adjusted dollar limitation may not exceed the actuarial equivalent of the $90,000 annual benefit, multiplied by the Adjustment Factor, as prescribed by the Secretary of the Treasury, beginning at the Social Security Retirement Age. The adjustment provided in the preceding sentence shall be made in such manner as the Secretary of the Treasury may prescribe which is consistent with the reduction for old-age insurance benefits commencing before the Social Security Retirement Age. If the annual benefit commences after the Social Security Retirement Age, the adjusted dollar limitation shall be the actuarial equivalent of an annual benefit of $90,000 beginning at the Social Security Retirement Age, multiplied by the Adjustment Factor as provided by the Secretary of the Treasury, based on the lesser of the interest rate assumption under the plan or an assumption of five percent (5%) per year.

11.4. ADJUSTMENT OF LIMITATION FOR YEARS OF SERVICE OR PARTICIPATION.

11.4(a). DEFINED BENEFIT DOLLAR LIMITATION. If a Participant has completed less than ten years of participation, the adjusted dollar limitation described in section 11.3 shall be further adjusted by multiplying it by a fraction, the numerator of which is the Participant's number of years (or part thereof) of participation in the plan, and the denominator of which is ten.

11.4(b). OTHER DEFINED BENEFIT LIMITATIONS. If a Participant has completed less than ten years of service with the Employer, the Participant's highest average compensation shall be adjusted by multiplying such amounts by a fraction, the numerator of which is the Participant's number of years of service (or part thereof), and the denominator of which is ten.

11.4(c). LIMITATIONS ON REDUCTIONS. In no event shall sections 11.4(a) and (b) reduce the adjusted dollar limitation or the Participant's highest average compensation to an amount less than one-tenth of the otherwise applicable limitation (as determined without regard to this section 11.4).

11.4(d). APPLICATION TO CHANGES IN BENEFIT STRUCTURE. To the extent provided by the Secretary of the Treasury, this section 11.4 shall be applied separately with respect to each change in the benefit structure of the plan.

11.5. PRESERVATION OF CURRENT ACCRUED BENEFIT. Notwithstanding the above, if the Participant was a Participant (as of the first day of the first Limitation Year beginning on or after January 1, 1987) in a defined benefit plan which was in the existence on May 6, 1986, and which met the applicable requirements of section 415 of the Code as in effect for all Limitation Years, then the adjusted maximum permissible amount shall not be less than the Participant's Current Accrued Benefit.

11.6. For purposes of this section XI, Affiliated Employer shall also include those employers described in section 415(h) of the Code.

11.7. EFFECTIVE DATE OF SECTION XI PROVISIONS. The provisions of this section XI shall be effective for Limitation Years beginning after December 31, 1986.

MODEL I ADOPTION AGREEMENT AMENDMENT

REPLACEMENT OF IMMEDIATE ANNUITY RATE. (check the option below if you wish it to apply to your plan)

____ The employer elects to have section IX, Replacement of Immediate Annuity Rate with the Section 1139 Limits, apply to this plan.

____________________ Date

                         MODEL AMENDMENT II

1.1. PURPOSE. The purpose of this amendment is to amend the plan to comply with those provisions of the Tax Reform Act of 1986 that are effective prior to the first year beginning after December 31, 1988. Nothing contained in this amendment shall permit or require Matching Employer Contributions or Employee Contributions under the plan unless such Matching Employer Contributions or Employee Contributions have been authorized by the employer under other provisions of the plan or under other amendments thereto.

1.2. EFFECTIVE DATE. Except as otherwise provided, this amendment shall be effective as of the first day of the first Plan Year beginning after December 31, 1986.

SECTION II: DEFINITIONS (Required)

For purposes of this amendment only, the following definitions shall apply:

2.1. "Adoption Agreement Amendment" shall mean that portion of this amendment in which the employer makes any elections permitted under the amendment.

2.2. "Affiliated Employer" shall mean any corporation which is a member of a controlled group of corporations (as defined in section 414(b) of the Code) which includes the employer; any trade or business (whether or not incorporated) which is under common control (as defined in section 414(c) of the Code) with the employer; any organization (whether or not incorporated) which is a member of an affiliated service group (as defined in section 414(m) of the Code) which includes the employer; and any other entity required to be aggregated with the employer pursuant to regulations under section 414(o) of the Code.

2.3. "Code" shall mean the Internal Revenue Code of 1986 and amendments thereto.

2.4. "Compensation" shall mean, for purposes of section V of this amendment, compensation paid by the Employer to the Participant during the Plan Year which is required to be reported as wages on the Participant's Form W-2 or which, in the case of a self-employed individual, constitutes payment for services rendered includible in the self-employed individual's gross income and, if the provisions of the plan other than this amendment so provide, shall also include compensation which is not currently includible in the Participant's gross income by reason of the application of sections 125, 402(a)(8), 402(h)(1)(B), or 403(b) of the Code.

2.5. "Employee" shall mean employees of the Employer and shall include leased employees within the meaning of section 414(n)(2) of the Code. Notwithstanding the foregoing, if such leased employees constitute less than twenty percent of the Employer's nonhighly compensated workforce within the meaning of section 414(n)(5)(C)(ii) of the Code, the term "Employee" shall not include those leased employees covered by a plan described in section 414(n)(5) of the Code unless otherwise provided by the terms of this plan other than this amendment.

2.6. "Employee Contributions" shall mean contributions made to the plan by a Participant during the Plan Year.

2.7. "Employer" shall mean the entity that establishes or maintains the plan, any "Affiliated Employer" and any successor of such establishing employer.

2.8. "Family Member" shall mean an individual described in section 414(q)(6)(B) of the Code.

2.9. "Highly Compensated Employee" shall mean an employee described in section 414(q) of the Code.

2.10. "Matching Contribution" shall mean any contribution to the plan made by the Employer for the Plan Year and allocated to a Participant's account by reason of the Participant's Employee Contributions or elective deferrals.

2.11. "Nonhighly Compensated Employee" shall mean an Employee of the Employer who is neither a Highly Compensated Employee nor a Family Member.

2.12. "Participant" shall mean any Employee of the Employer who has met the eligibility and participation requirements of the plan.

2.13. "Plan Year" shall mean the plan year otherwise specified in the plan.

SECTION III: PROVISIONS RELATING TO LEASED EMPLOYEES (Required)

3.1. SAFE-HARBOR. Notwithstanding any other provisions of the plan, for purposes of determining the number or identity of Highly Compensated Employees or for purposes of the pension requirements of section 414(n)(3) of the Code, the employees of the Employer shall include individuals defined as Employees in section 2.5 of this amendment.

3.2. PARTICIPATION AND ACCRUAL. A leased employee within the meaning of section 414(n)(2) of the Code shall become a Participant in, and accrue benefits under, the plan based on service as a leased employee only as provided in provisions of the plan other than this section III.

3.3. EFFECTIVE DATE. This section III shall be effective for services performed after December 31, 1986.

SECTION IV: LIMITATIONS ON CONTRIBUTIONS AND BENEFITS (Required)

4.1. REVISED CONTRIBUTION LIMITATIONS UNDER DEFINED CONTRIBUTION PLAN.

4.1(a). DEFINITION OF ANNUAL ADDITIONS. For purposes of the plan, "Annual Addition" shall mean the amount allocated to a Participant's account during the Limitation Year that constitutes:

(i) Employer contributions or Employee Contributions, including excess contributions as defined in section 401(k)(8)(B) of the Code, excess aggregate contributions as defined in section 401(m)(6)(B), and excess deferrals as described in section 402(g), regardless of whether such amounts are distributed or forfeited;

(ii) Forfeitures; and

(iii) Amounts described in sections 415(l)(1) and 419A(d)(2)

4.1(b). MAXIMUM ANNUAL ADDITION. The maximum Annual Addition that may be contributed or allocated to a Participant's account under the plan for any Limitation Year shall not exceed the lesser of:

(i) the Defined Contribution Dollar Limitation, or

(ii) 25 percent of the Participant's compensation, within the meaning of section 415(c)(3) of the Code for the Limitation year.

4.1(c). SPECIAL RULES. The compensation limitation referred to in section 4.1(b)(ii) shall not apply to:

(i) Any contribution for medical benefits (within the meaning of section 419A(f)(2) of the Code) after separation from service which is otherwise treated as an Annual Addition, or

(ii) Any amount otherwise treated as an Annual Addition under section 415(l)(1) of the Code.

4.1(d). DEFINITIONS. For purposes of section 4.1, "Defined Contribution Dollar Limitation" shall mean $30,000 or, if greater, one-fourth of the defined benefit dollar limitation set forth in section 415(b)(1) of the Code as in effect for the Limitation Year.

4.2. SPECIAL RULES FOR PLANS SUBJECT TO OVERALL LIMITATIONS UNDER CODE SECTION 415(e).

4.2(a). RECOMPUTATION NOT REQUIRED. The Annual Addition for any Limitation Year beginning before January 1, 1987 shall not be recomputed to treat all Employee Contributions as an Annual Addition.

4.2(b). ADJUSTMENT OF DEFINED CONTRIBUTION PLAN FRACTION. If the plan satisfied the applicable requirements of section 415 of the Code as in effect for all Limitation Years beginning before January 1, 1987, an amount shall be subtracted from the numerator of the defined contribution plan fraction (not exceeding such numerator) as prescribed by the Secretary of the Treasury so that the sum of the defined benefit plan fraction and defined contribution plan fraction computed under section 415(e)(1) of the Code (as revised by this section IV) does not exceed 1.0 for such Limitation Year.

4.3. LIMITATION YEAR. For purposes of this section IV, "Limitation year" shall mean the limitation year specified in the plan, or if none is specified, the calendar year.

4.4. EFFECTIVE DATE OF SECTION IV PROVISIONS. The provisions of this section IV shall be effective for Limitation Years beginning after December 31, 1986.

4.5. For purposes of this section IV, Affiliated Employer shall also include those employers described in section 415(h) of the Code.

SECTION V: LIMITATIONS ON EMPLOYEE CONTRIBUTIONS (Required if the basic plan document forms a part of any plan which permits Employee Contributions, other than Qualified Voluntary Employee Contributions, or allocates Matching Contributions to Participants' accounts.

5.1. APPLICABILITY OF THIS SECTION. This section V shall apply to the plan only if such plan permits Employee Contributions or allocates Matching Contributions to Participants' accounts in Plan Years beginning after December 31, 1986.

5.2. CONTRIBUTION PERCENTAGE.

5.2(a). The Average Contribution Percentage for Eligible Participants who are Highly Compensated Employees for the Plan Year shall not exceed the Average Contribution Percentage for Eligible Participants who are Nonhighly Compensated Employees for the Plan Year multiplied by 1.25; or

5.2(b). The Average Contribution Percentage for Eligible Participants who are Highly Compensated Employees for the Plan Year shall not exceed the Average Contribution Percentage for Eligible Participants who are Nonhighly Compensated Employees for the Plan Year multiplied by 2, provided that the Average Contribution Percentage for Eligible Participants who are Highly Compensated Employees does not exceed the Average Contribution Percentage for Eligible Participants who are Nonhighly Compensated Employees by more than two (2) percentage points or such lesser amount as the Secretary of the Treasury shall prescribe to prevent the multiple use of this alternative limitation with respect to any Highly Compensated Employee.

5.3. DEFINITIONS. For purposes of this section V, the following definitions shall apply:

5.3(a). "Average Contribution Percentage" shall mean the average (expressed as a percentage) of the Contribution Percentages of the Eligible Participants in a group.

5.3(b). "Contribution Percentage" shall mean the ratio (expressed as a percentage) of the sum of the Employee Contributions and Matching Contributions under the plan on behalf of the Eligible Participant for the Plan Year to the Eligible Participant's Compensation for the Plan Year.

5.3(c). "Eligible Participant" shall mean any employee who is authorized under the terms of the plan to have Employee Contributions or Matching Contributions allocated to his account for the Plan Year.

5.4. SPECIAL RULES.

5.4(a). For purposes of this section V, the Contribution Percentage for any Eligible Participant who is a Highly Compensated Employee for the Plan Year and who is eligible to make Employee Contributions, or to have Matching Contributions within the meaning of section 401(m)(4)(A) of the Code allocated to his account under two or more plans described in section 401(a) of the Code or arrangements described in section 401(k) of the Code that are maintained by the Employer shall be determined as if the total of such Employee Contributions and Matching Contributions was made under each plan.

5.4(b). In the event that this plan satisfies the requirements of section 410(b) of the Code only if aggregated with one or more other plans, or if one or more other plans satisfy the requirements of section 410(b) of the Code only if aggregated with this plan, then this section V shall be applied by determining the Contribution Percentages of Eligible Participants as if all such plans were a single plan.

5.4(c). For purposes of determining the Contribution Percentage of an Eligible Participant who is a Highly Compensated Employee, the Employee Contributions, Matching Contributions and Compensation of such Eligible Participant shall include the Employee Contributions, Matching Contributions and Compensation of Family Members. Family Members with respect to Highly Compensated Employees shall be disregarded as separate employees in determining the Contribution Percentage both for Eligible Participants who are Nonhighly Compensated Employees and for Eligible Participants who are Highly Compensated Employees.

5.4(d). The determination and treatment of the Contribution Percentage of any Eligible Participant shall satisfy such other requirements as may be prescribed by the Secretary of the Treasury.

5.5. DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS.

5.5(a). IN GENERAL. Excess Aggregate Contributions plus any income and minus any loss allocable thereto shall be forfeited, if otherwise forfeitable under the terms of this plan, or if not forfeitable, distributed no later than the last day of each Plan Year beginning after December 31, 1987, to Participants to whose accounts Employee Contributions or Matching Contributions were allocated for the preceding Plan Year. ¹ Excess Aggregate Contributions shall be treated as Annual Additions under section 4.1(a) of this amendment.

5.5(b). EXCESS AGGREGATE CONTRIBUTION. For purposes of this amendment, "Excess Aggregate Contributions" shall mean the amount described in section 401(m)(6)(B) of the Code.

5.5(c). DETERMINATION OF INCOME OR LOSS. The Excess Aggregate Contributions to be forfeited, if otherwise forfeitable under the terms of the plan, or if not forfeitable, distributed to the Participant shall be adjusted for income or loss. The income or loss allocable to Excess Aggregate Contributions shall be determined by multiplying the income or loss allocable to the Participant's Employee Contributions and Matching Contributions for the Plan Year by a fraction, the numerator of which is the Excess Aggregate Contributions on behalf of the Participant for the preceding Plan Year and the denominator of which is the sum of the Participant's account balances attributable to Employee Contributions and Matching Contributions on the last day of the preceding Plan Year.

5.5(d). ACCOUNTING FOR EXCESS AGGREGATE CONTRIBUTIONS. Excess Aggregate Contributions shall be distributed from the Participant's Employee Contribution account, and forfeited if otherwise forfeitable under the terms of the plan (or, ir not forfeitable, distributed) from the Participant's Matching Contribution account in proportion to the Participant's Employee Contributions and Matching Contributions for the Plan Year.

5.5(e). ALLOCATION OF FORFEITURES. Amounts forfeited by Highly Compensated Employees under this section V shall be:

(i) Treated as Annual Additions under section 4.1(a) of this amendment and either;

(ii) Applied to reduce employer contributions if forfeitures of Matching Contributions under the plan are applied to reduce employer contributions; or

(iii) Allocated, after all other forfeitures under the plan, and subject to section 5.4(f) of this amendment, to the same Participants and in the same manner as such other forfeitures of Matching Contributions are allocated to other Participants under the plan.

5.5(f). Notwithstanding the foregoing, no forfeitures arising under this section V shall be allocated to the account of any Highly Compensated Employee.

SECTION VI: QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTIONS NOT PERMITTED (Required if the basic plan document forms a part of any plan which may permit Qualified Voluntary Employee Contributions)

6.1. The plan shall accept no Employee Contributions designated by the Participant as deductible employee contributions (within the meaning of section 72(o)(5)(A) of the Code) for a taxable year of the Participant beginning after December 31, 1986.

SECTION VII: DETERMINATION OF TOP HEAVY STATUS (Required)

7.1. Solely for the purpose of determining if the plan, or any other plan included in a required aggregation group of which this plan is a part, is top-heavy (within the meaning of section 416(g) of the Code) the accrued benefit in a defined benefit plan of an employee other than a key employee (within the meaning of section 416(i)(1) of the Code) shall be determined under (a) the method, if any, that uniformly applies for accrual purposes under all plans maintained by the Employer, or (b) if there is no such method, as if such benefit accrued not more rapidly than the slowest accrual rate permitted under the fractional accrual rate of section 411(b)(1)(C) of the Code.

SECTION VIII: ELIMINATION OF VOLUNTARY EMPLOYEE CONTRIBUTIONS (OTHER THAN QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTIONS) (Optional)

8.1. The plan shall accept no Voluntary Employee Contributions for any plan year beginning after [December 31, 1987]. For this purpose, "Voluntary Employee Contributions" means amounts contributed to the plan by an employee which are not required as a condition of employment, as a condition of participation in the plan or as a condition of obtaining benefits (or additional benefits) under the plan attributable to employer contributions.

SECTION IX: BENEFIT FORFEITURES (For Money Purchase Pension Plans, other than Target Benefit Plans, Only -- Optional)

9.1. APPLICABILITY OF THIS SECTION. This section IX shall apply to the plan only if such plan is a money purchase pension plan, other than a target benefit plan, and the employer elects in the Adoption Agreement Amendment to have this section apply.

9.2. ALLOCATION OF FORFEITURES. Notwithstanding any other provision of the plan, forfeitures occurring in Plan Years specified in the Adoption Agreement Amendment shall be allocated to Participants entitled to an allocation of employer contributions for the Plan Year in which the forfeiture occurs in proportion to their compensation. The plan shall continue to be designed to qualify as a money purchase pension plan for purposes of sections 401(a), 402, 412 and 417 of the Code.

9.3. FORFEITURES. For purposes of this section IX, "forfeitures" shall mean those nonvested amounts allocated to Participants' accounts that, under the terms of this plan immediately prior to the adoption of this amendment, would have been applied, if forfeited, to reduce employer contributions under the plan.

SECTION X: PROFITS NOT REQUIRED (Profit-Sharing Plans Only -- Optional)

10.1. APPLICABILITY OF THIS SECTION. This section X shall apply to the plan only if such plan is a profit-sharing plan and the employer elects in the Adoption Agreement Amendment to have this section apply.

10.2. EMPLOYER CONTRIBUTIONS. Notwithstanding any other provision of the plan, employer contributions for Plan Years specified in the Adoption Agreement Amendment shall be made to the plan without regard to current or accumulated earnings and profits for the taxable year or years ending with or within such Plan Year. The plan shall continue to be designed to qualify as a profit-sharing plan for purposes of sections 401(a), 402, 412 and 417 of the Code.

MODEL II ADOPTION AGREEMENT AMENDMENT

BENEFIT FORFEITURES IN MONEY PURCHASE PLAN. (check the option below if you wish it to apply to your plan)

____ Notwithstanding any other provision of the plan, forfeitures occurring in Plan Years beginning on or after [____ fill in the first day of the Plan Year in which this Adoption Agreement Amendment is executed or a subsequent anniversary of such date] shall be allocated to those Participants entitled to an allocation of employer contributions for the Plan Year in which the forfeiture occurs.

EMPLOYER CONTRIBUTIONS IN PROFIT SHARING PLAN. (check the option below if you wish it to apply to your plan)

____ Effective for Plan Years beginning on or after [____ fill in the first day of the Plan Year in which this Adoption Agreement Amendment is executed or a subsequent anniversary of such date], notwithstanding any other provision of the plan, the employer contributions shall be made to the plan without regard to current or accumulated earnings and profits for the taxable year or years ending with or within such Plan Year.

_____________________ Date