Resolution No. 02-02.~,
RESOLUTION NO: 02-02
A RESOLUTION OF THE CITY OF ATLANTIC BEACH, FLORIDA,
AMENDING THE CITY'S ICMA 401 MONEY PURCHASE PLAN TO
PERMIT LOANS
WHEREAS, the City of Atlantic Beach (Employer) has a City Manager rendering valuable
services; and
WHEREAS, the employer has established a money purchase plan (the "Plan") for the City
Manager which serves the interest of the Employer by enabling it to provide reasonable
retirement security for the City Manager, by providing increased flexibility in its personnel
management system, and by assisting in the attraction and retention of competent personnel;
and
WHEREAS, the employer has determined that permitting the City Manager to take loans
from the Plan will serve these objectives;
NOW THEREFORE BE IT RESOLVED that the Plan is hereby amended to permit
loans in accordance with the Loan Guidelines adopted by the Employer.
This Resolution shall take effect upon its final passage and adoption.
PASSED AND ADOPTED on this ~/~ day of ~~-~°'-~-~-~~~ 2002.
Approved as to form and correctness:
~'
f
/,~~ an C. J ~n n, Esquire
J City At ey
Attested:
_~,
Maureen King, CMC
City Clerk
4 0 1 Loan Guideline s
401 PLAN LOAN GUIDELINES
ICMA-RC Account #: 109494
Name ofEmployer: City of Atlantic Beach
I. PURPOSE
The purpose of these guidelines is to establish the terms and conditions under which the Employer will
grant loans to participants. This is the only official Loan Program Document of the above. named Plan.
II. ELIGIBILITY
Loans are available to all active employees. Loans will not be granted to participants who have an existing.
loan in default.
Loans are available from the following sources: [select, one or both]
^ Employer Contribution Account (vested balances only)
^ Participant Contribution Accounts (pre- and post-tax, if applicable, including Employee
Mandatory, Employee Voluntary, Employer Rollover, and Portable Benefits Accounts, but
excluding the Deductible Employee Contribution/Qualified Voluntary Employee Contribu-
lion Account)
Loans. will be pro-rated among all the funds in which the participant is invested at the time the loan is
made.
Loans are available for the following purposes: [select one]
^ All purposes
^ Loans shall only be granted in the event of a participant's hardship or for the purpose of
enabling a participant to meet certain specified financial situations. The Employer shall deter-
mine, based on all relevant facts and circumstances, that the .amount of the loan is not in
excess of the amount required to relieve the financial need. For this purpose, financial need
shall include; but shall not be limited to: unreimbursed medical expenses of the participant or
the participant's immediate family, establishing or substantially rehabilitating the principal.
residence of the participant, or paying for a college education (including. graduate studies) fora
the participant or his/her dependents.
111. FREQUENCY OF LOANS [select one]
^ Participants may receive one loan per calendar year. Moreover, participants may have only
one outstanding loan at a time.
^ .Participants may receive one loan per calendar year. Moreover, no participant may have more-
than five (5) loans outstanding at one time.
I C M A RETIREMENT C O R P O R A T I O N
IV. LOAN AMOUNT
The minimum loan amount is $1,000.
The maximum amount of all loans to the participant .from the Plan and all .other plans sponsored by the
Employer that are qualified employer plans under Section 72(p) (4) of the .Code is the lesser of:
(1) $50,000, reduced by the excess {if any) of:
a. The highest. outstanding balance of loans during the one-year period ending on the
day before the date a loan is to be made, over
b. The outstanding balance of loans on the date the loan is to be made; or
(2) 1/2 of the participant's vested account balance.*
If a participant has any loans outstanding at the time a new loan is requested, the new loan will be limited
to the maximum amount calculated above reduced by the total of the outstanding loans.
A loan cannot be issued. for more than the above amount. The participant's requested loan amount is
subject to downward adjustment without notice due to changes in account balance between the time of
.,,,,, application and the time the loan is made.
* The Code & Plan document say "greater of $10,000 or 1/2 of vested account balance".
V. LENGTH OF LOAN
A loan must be repaid in substantially equal installments of principal and interest, at least monthly, over a
period that does not exceed five {5) years.
Loans for a principal residence must be repaid in substantially equal installments of principal and interest,
at least monthly, over no more than 30 [state number of years] years (maxi-
mum 30 years).
VI. LOAN REPAYMENT PROCESS
Loans for active employees must be repaid through payroll deduction. Repayment will begin as soon as
practicable on a date determined by the Employer's payroll cycle.
Loans outstanding for former employees who are allowed under. Section X to maintain their loans or
.loans outstanding for employees on a leave of absence must be repaid on the same schedule as if payroll
deductions. were still being made unless they reamortize their loans and establish a new repayment sched-
ule which provides that substantially equal payments are made at least monthly over the remaining period.
of the loan. All repayments must be made through the Employer.
Loan payments, .including loan payments from former employees, are allocated to the same investment
options designated on the 401 Enrollment Form or according to the most current .401 Change Form which
4 0 1 Loan G u i d e l i n e s
,,., specifies contribution allocations.
The participant may pay off all or a portion of the principal interest early without penalty or additional
fee. Extra payments are applied forward to both principal and interest as specified in the original repay-
ment schedule, unless the additional payment is for the balance due.
VII. LOAN INTEREST RATE
The rate of interest for loans of five (5) years or less will be based on prime plus 0.5%.
The rate of interest for loans for a principal residence will bebased on the FHA rate...
Interest rates are determined on the last business day of the month preceding the month the loan is
disbursed. The interest rate is locked in at the time, a loan is .approved and remains constant throughout
the life of the loan.
The prime interest rate is determined on the last business day of each month using The Wall Street Journal
as the source. The FHA interest rate is also determined on the last business day of each month using a
national rateline service as the source.
~„~,,p, Loan interest rates for new loans may fluctuate upward or downward monthly, depending on the move-
ment of the prime and FHA interest rates.
VI11. LOAN APPLICATION PROCEDURE
All loans must be requested in writing on an application approved by the Plan Administrator. The appli-
cation must be signed by the participant. The Employer must review and approve the application.
If the participant is married at the time of application, and spousal consent is required by the Plan for the
loan, the participant's spouse must consent, in writing, to the loan and the consent must be witnessed by a
plan representative. or notary public. Such consent must be given within the ninety (90) day period before
the time the loan is made. Spousal consent, if required, must accompany the application in order for the
application to be considered complete.
The participant will be required to sign a promissory note evidencing the loan and a disclosure statement
which includes an amortization schedule prior to receiving a loan check. Loan checks will generally be
issued two business days following the receipt of a complete loan application received through 12 noon
Eastern Time. The loan check, promissory note, disclosure statement and truth-in-lending recision notice
will be sent to the Employer, who will obtain the necessary signatures and deliver the check to the
participant. All executed documents must be returned. to the Plan Administrator within 10 calendar days
from the date the check is issued.
I C M A R E T I R E M E N T C O R P O R A T I O N
,,., IX. SECURITY/COLLATERAL
That portion of a participant's vested account balance that is equal to the amount of the loan is used as
collateral for the loan. The collateral amount may not exceed 50 percent of the participant's vested
account balance at the- time the loan is taken. Only that portion of the vested account balance that corre-
sponds to the amount of the outstanding loan balance is used as collateral.
X. ACCELERATION [select one]
^ All loans are due and payable in full upon separation from service.
^ All loans are due and payable when a participant receives a distribution of all of his/her ac-
count balance after separation from service. The amount of the outstanding loan balance will
be reported as a distribution in addition to the amount of cash distributed from the plan.
^ All loans are due and payable when a participant receives a distribution of part of his/her
account balance after separation from service. The amount of the outstanding loan balance
will reported as a distribution in addition to the amount of cash distributed from the plan.
XI. REAMORTIZATION
Any outstanding loan may be reamortized. Reamortization means changing the terms of a loan, such as
length of repayment period, interest rate, and frequency of repayments. A loan may not be reamortized to
extend the length of the loan repayment period to more than five (5) years from the date the loan was
originally made, or in the case of a loan to secure a principal residence, beyond the number of years
specified by the Employer in Section V above.
A participant must request the reamortization of a loan in writing on a reamortization application accept-
able to the Plan Administrator. Spousal consent must accompany the request for reamortization when
such consent is required by the Plan. Upon processing the request, a new disclosure statement will be
sent to the Employer for endorsement by the participant and approval by the Employer. The executed
disclosure statement must be returned to the Plan Administrator within 10 calendar days from the date it
is signed. The new disclosure statement is considered an amendment to the original promissory note,
therefore a new promissory note will not be required.
A reamortization will not be considered a new loan for purposes of calculating the number of loans
outstanding or the one loan per calendar limit.
.X11. REFINANCING EXISTING LOANS
~'" If a participant has one outstanding loan, that loan may be refinanced. If a participant has more than one
outstanding loan, no .loans may be refinanced. Refinancing means concurrently repaying an existing loan
and borrowing. an additional amount through a new loan.
4 0 1 Loan Guideline s
fem. In order to refinance an existing loan, a participant must request a new loan. in writing on an application
approved by the Plan Administrator. Spousal consent must accompany the application when such consent
is required by the Plan. Such request must be made at a time when the participant is eligible to obtain: a
loan as defined by the Employer in Section III above. The amount of a new loan requested for the
purpose of refinancing is subject to the loan limits specified in Section IV above.
Because refinancing is considered a new loan, only active employees may refinance. an outstandingloan.
XIIL REDUCTION OF LOAN
If a participant dies and leaves an outstanding loan, the unpaid loan balance(s). will be repaid from the
account balance before any distributions are made to a beneficiary(ies). The unpaid loan amount is a
taxable distribution and may be subject to early withdrawal penalties. The participant's estate is respon-
Bible for taxes or penalties on the unpaid loan amount, if any. The beneficiary is responsible for taxes due
on the amount he/she receives. A Form 1099-R will be issued to both the beneficiary and the estate for
these purposes.
XIV. LOAN DEFAULT:
If a required payment of principal and interest is not made within 90 days of the date such payment is
due, the loan is considered in default. If a loan is in default, the loan will be foreclosed during the calen-
~'`"'~'~'' dar year in which the participant separates from service. However, the IRS "deems" a default to be a
distribution in the year the default occurs. Therefore, the amount of the outstanding loan at the time of
the default, will be reported to the IRS as a distribution in the year the default occurs even though the
loan may not be foreclosed at that time.-The distribution. may be subject to taxes and possibly a penalty
for early withdrawal.
If a participant has separated from service and defaults on a loan, then the loan will be foreclosed during
the calendar year in which the default occurs. The amount of the outstanding loan, will be reported to
the IRS as a distribution which may be subject to taxes and possibly a penalty for early withdrawal
If the Employer has elected in Section X and the promissory note so provides, a loan becomes due and
payable when the participant separates from service. If the terms of the loan contain this provision, the
outstanding loan amount is ".deemed" in default as of the date of separation from service. The amount of
the outstanding loan, will be reported to the IRS as a distribution which may be subject to taxes and
possibly a penalty for early withdrawal.
If the Employer has so elected in Section X and the promissory note so provides, a loan becomes due and
payable when the .participant takes a distribution of some or all of the balance in his/her account after
separation from service. If the terms of the loan contain such a provision and the outstanding loan balance
is not paid prior to the distribution from the account, the outstanding loan amount will be considered in
default upon issuance of the distribution. check. The amount of the outstanding loan,will be reported to
,,,.,.:, the IRS as a distribution which may be subject to taxes and possibly a penalty for early withdrawal.
Participants who have. an existing loan in default will not be eligible for additional loans.
ICMA RETIREMEN T C O R P O R A T I O N
,., XV. DE MINIMIS .ACCOUNTS AND OUTSTANDING LOAN BALANCE
If a participant separates from service and the participant's total vested account balance, including the
outstanding loan balance, is $5,000 or less, the Plan will automatically foreclose the loan. The account
balance remaining after the loan has been satisfied will be .disbursed in accordance with De Minimis
provisions of Section 10.04 of the Plan. If this occurs, the amount of the loan, will be reported to the
IRS as part of the distribution, which may be subject to taxes and possibly a penalty for early withdrawal.
Participants who have an existing loan in default will not be eligible for additional loans.
XVL FEES
Fees may be charged for various services associated with the application for and issuance of loans. All
applicable fees will be debited from the participant's account balance and/or from the participant's loan
repayments prior to crediting the repayment of principal and interest to the participant's account. A
schedule of fees applicable to this Plan is available from the Plan Administrator.
XVI1. OTHER
The Employer has the right to set .other terms and conditions as it deems necessary for loans from the
Plan in order to comply with any legal requirements. All terms and conditions will be administered in a
uniform and non-discriminatory manner.
In Witness Whereof, the Employer hereby caused these Guidelines to be executed this 11th day
of February ~ 2002
EMPLOYER
BY:
TITLE: Mayor
ATTEST:
ACCEPTED: ICMA Retirement Corporation
BY:
TITLE: Corporate Secretary
ATTEST:
LC)AN ~tJtO~~.t~t~S
NAME OF Pl.AIV; ~it9~a~~,q p
.~
}. PURPOSE
The purposo ctf these guidelines is to estttbli$h ttte terms and conditions antler wbfch ~ Parnplayet will grant
loans tv particapaat4. Tlis is tine ozuy official Loan Pcogcaui Aocument of the abava aasaed Plait.
It. EfIGIBiLt7'Y
Loans sxe available to aiI active exaployees. T~oans will ntat be granted to participants wha have ant existir,~ loan
in dePauit.
Laarss at~a availalrte fYgin the ftstlgwing souCce$: [Select one oc beth)
~, ~:snployer Contribution Accauxtt (vested balansxs Daly}
Partic:part CQti*xibettirm Accowtts {pre- and pest-ta~c, ff appStcat~fe, inoiur3ing Eanpioyee ;+~f~atxdatory,
P~nployeo Volurt~y, Esrtployec Rgllovet, and Portablo Bcaufits Accounts, butt excluding the Deciuct-
able Em-playee Consributiar~lQua]ifiad v'aluntaci+ Smplayee Car~rsibutiaa Account)
.~.
i°oatts wjll be prc•ratcd among all the fltriats isc w~Ch the participant is invested at ttte came the Ioazt is made.
Loans ace availably for the following purposes:. ~salecr one]
(~, All purposes
D Leans shalt only be granted in the event of a parQriptrnt's 6azd&#up ar fsu the purpose of enabling a
participant to meet ceatain speaiBed financial situations. The Ernploydr shalt sletermiru, tsased on all
relevant facts and circumstaaoes, thu ttte asaowat of the Iaan Is rat in etccess of the atttaunt regnfired
la reti8ve the financial steed. Far this purpose, f1,>sadat need shad !include, but rAt be limited to:
urtreirrtbucsed raedtcal expeflses of tlrs partiapant ar membexs of tare particspartt's immediate family,
sstablislsirtg or substantially rchabilitatirig ttte pritrdipsl msiadence of ilia participant; or paying for a
cotlegs edueariaa (includiatg gratlua-te shstties} for the participant oar buslher dependents.
3 i t. i:REQIIEN~Y Of LOANS
(select one}
Q PutQc€pants play receive one loan per calendar year, Moreover. patdcipants may have Duty one
outstanntliYtg bast ax a time.
!'anticipants may receive orue toast ~7e3' calendar yeas: Moteaver, sio paxtx~cigaat icy have mare. than
five (5) loa~as outstandir:~g at ane time.
?P93f
lY. LOAS'd A~+pUNT
minintusn loan asnacutt is ~1,t~0.
The maxirntam lt~an attaalint is:
ilxc iossec ofc
{i) ffi~O,ilC1~, redctced by t<~ access fit' any) of
a. Zhe highest outstaadutg balastce of Ioans d>sris~ t~ onu year period ending tut
tine da~+ before the dots s loa~a ie tts b+o maade, o~rer
b. The outstastdiag baiastce of loans on the data the ?,d'art is tct be ,made; or
(Z) i!Z of the pasttt;ipant'S ~estec! accoe2nt balat3Ce.
.1!' a participant lifts any iaarts ohLcta~tdittg at the lima a stew lt~a is requested, the never loan wilt be 2irnlttd to the
maximttsa3l amount t.alculated above z~iuced by the total of tl~ Ours±audiaa loans.
Y. L~I~i+GTH tli~ LOAM .
A. ltfaa must by $ in subscazttia3ly ec~i instta!limeats 4f petnCipa! anti iattxxest, at lea~t:aos:tr~y, ovtr a g~eriod
that dOeS 7tUi BXCt:ed flue (3) years.
Loans for a principai teside~ repaid in substantially equal instfttltneats of principal and intrerest, at ~98t
trtmstitly, over no utare than [aisle oamb~er of yearaa years ~(snaxlmuttt 3t1 years).
YI. LC9AN R~PAYMENt P~iQC~SS
Loans fur active emplayt:es must be repaid throw payiroll dsdtutioa. l~payrttertt will begin as aobrt as practi-
cable on aslate dt;tet'rttirted by the Ernpioyer's pa~+toll cycle.
L.osns autstazuiing far fnrrtter enpioyaes w!bo era allowed tnsr3e„• Sectsutt X. to maintain titeit loans or ioaas
c~ut8tandin$ fat gmpt4yeeS Oil a have of ab$estce must be s+~id on the aerie schedule as if pztyroll det3ucxlons
were sriil being merle unless they rearnotttze titeicr loftns and establish a new repayment sci~edule which provides
that substas~tiaify equal paymestts are oracle a# least mon~iy over Cite rerttaitti=tg perloG of the loan. Ali ~nopaymeats
must be made through the Eaz~sloyer,
Loan paymett#s, indtsdln$ Iona payouts ~ iar:ct~r empksy+~es, are all+~c~cl to the saute in~~e~nt vpttons
tlesigtss~d oat tiza 40f lrsmoilrr~at palm oz aoc,~ng to the most cuutrnt 4Ql change farm width apedf~s
contribution allocations.
VI1. Lf3AN ! iVT~it~ST RATS
'Y`l~ ratte of iatctest for loans o!'flv~ {~) yeazs ox lass will be based on prima plus 0,5~.
Tho sate of lnter+est Pot ioaas for a ~incipal res3dance wlll be based on the PfiAA-rVVA rate.
interest rates are deteratiaed ors ti.e Fast trosiriess day of tix~ preCediug tip nu~nth the loan is disbitrSed.
'ihct interest r2~ie is iorlted lu at tiro time a lase is approved and *~„~ ;rr comstaa~ thcoaghout fire isfe of the loaA.
'Trio prlimc lz~,terast =ate ~ detsratined on the last busi~ss d$y of each month u~ng the. Waii Stmt Journal
,, as tlae source. The Fl~iANA interest sate i~ also datazinined on the last bnsizv~,ss day of each month using tb~
Telerate information Service as the sour^..e,
PP~3F
Loan en=~'est races Frr nevr loans may fluctuate apward or dowat~cd niontihly, depandlrlg on the movement of i~
prime arsd ~F'HAl'•i'A tntctYst fates.
TtiC I/mploycr 3'l'~a}+ rriodii'y ilia T1U:xuler i13 which loan ilYterest r~s will be xiat~armitted, but only with respect tD
~Ui12r~ ~021'1S•
ylN, JOAN ApP~.lCATi~N PROCEDURE
A111oans must be s+egnested in writing oa an application approved by tt-e Plan Administrator. The application
must be signed by the participant, The Employer must review and approve the applicatson.
if the participant is martie$ rtt the time of application, attd spousal cox~seat zs rcquiteci by the plan for the Iosn,
ttte particilrattt's spouse mitSt consent, in writing, to the Ioan aced the consent must be witacsseti by a plan. tteiue-
sEnte#ive or notary public. Such consent must be given within the airbet:Y ~a~ day period bcfort #l~~e tune the 2aaa
is roads. Spattsal consent, if required, must accompaay the appl3catxaa in order for the application to be
cabsidarecl cornplecc.
'Iii parttripant will be required to szga a pxomlcssory note evidencing the loan and a t>isclotturc atatesncat which
Includes an amtmiaatioa st~edule prior m receiving a loao~ check. Loan checks will generally be Issued an the
Friday folIowiag the rcxeipt of a camplece loan application '1Zte loan cheric, promissory noto, ciisclQSt~re statement
anti truth-in-landing mcisiou notice wilt be neat to the F.amploycG wtxr will obtain the necessary signaivresi ~
deilves rho check to the parelcipant. All execu#ed ~cetments moat 6e returnees tct the Flan AdmlWstratat' widuz:l Q
calendar flays ftanrt t~ data the check is issued.
f !X. ~ECURI'1Y/Ct]I.l.ATEitA1.
That portion of a participant's vested account balance that is equal to tltc amoum of the loan is used as coUaseral
for the loan. Tim coliueral atttount may not exceed St39b of the participaat's vested account batapce at the time the
loan is talten. Only that portion of 4he vested accaustt balsmce tbat corresponds to tt~ aatour-t of fife outstatu3ing
loatc balaacc is used as colintersl.
X, ACCEl.ERATfON
[sc3ect cne~
O .All loss era dire and payabls in full upon separadozt gom setvxce.
1~, All loans are dire aad payable when a participant res~eives a distribution of all of hider a+ecount
balsttcc after separation from .service. The $moustt of'ths outstanding Iastt balanea wiI1 be r~CuteG as
a distributions is addition to ~ amowat of cash distntbuted from the plea.
D All Ioanss arc ciao and payable whets a participant receitves a disuibutioa of part of isislhen' account
balaacc~ after scpasa#iots ftvtn service. The artaouaat of tine outstaadiag loan batarue wlll r~ar#ed as a
tlitributton in addltian to the amouat of cash diatribttted from the plan.
PP93F
~9. RirA1VIQR,7i~AaiI3N
~lsty autcEantitng lean may be reart-ar~3. #'.eautaztizatiotl means chas~iug the of a 30ab. such as Iergth of
rcpayntcnt periad, Interest rate, and $eq~nicY of cepayntents. ~ loan may not be razed to ext~d the ie~ltt o£
the lsaan rcpaymettt period to more rhea fe~.(513~ars Iii the dare ttze loan was oti$isiaily or in tiie case t~f'a
loxtt to secttrc a prirtGa~l residcr~cc, beyond the ~t~ser of years spersFed by tine latmpi+oyec in Section'V. above.
A psstiaputx ttttt;~t toquest the r~nottix~Yon of a Moan In writing on a reamattzratioa appIicaiian acceptable to #hc Plan
Admi nisttator. Spousal cat~se~nt must eeCO~~Y ~ request iht r~rnart~ation where snclt coASc.tt# is required by the
plan. U~ ~irtg the req+uest- a riew d~lasure statena~t wil: ~ sit to tkte ~rmployer far etulgrse~cnr by tk~
P~~ ~~ hY ~ . Tl~to executed disclosure statement must he reformed to ~ 1Plait As~min~isbra-
for within 1Q calcu~c+days from rl~ data it is s~gs~d.'Ilte new disclosure statemesst is aoi~sidenad sa atxte~rtslment to the
origit~l Ixntmis~ory n4tc, titerefare s ztrw pren~soty note wt'B not i,e required.
~- resamorthrutiar~ will spot be cot~sldered a raw 10at1 fsu~purpa$cs of catcvlatirtg tha+ numbex of loam cutstandi,ng or ~
o~te Loan pet calendar Iiat~it
Xil. R~ir1NANCtiWG EXlS'~iNG i,~C3A~S
• IF a participant has oae autstandiag loan, that Ivan ~onay be ref t~ariced. Tf a pa~ipaat bas mare than one ovtstastd•
ing loan, sm InanF racy he reFinaaced. Re~itt~igg tnear~s canc+~t*tly reprayt~ aft costing loan said batarowing
a,~ additional asnvunt ihrangh a new than.
In arclct to refttsncc aft existia;g ioaxt, a partir3~an# masf request a rteyv laatl izt writing ozs aft application apprtoved
6y rho I'Ian Aclrninistrator. Sponsor count tttusc accompany the application when such aQasent is regvlrad by the
plan S'ttctt request must be mach at a tame where the partlcipartt is eligible tc~ obtaist a loan as de5med by the
Employer in 5es:tiott IfI. above. 7"he amount of a new laaan requested feu the purpose of ref ttancirtg is subject tv
thn Ivan limits si~gd in aectioa .P+I. above.
Secetuse a rofiataricin,g is considered a rr~w lose, b»ly active erraployces may refir:ance an autstaruii~ loazt.
1(9l1. ~t~i~UCT1C1iV QF lOAN
if a pa~rticipt~t dins anti lcnves an outstanding loan, tk~e unpaid load balance wilt be repaid from the accotuat
balance bcfaro sny tiasta^ibutions asn maw to a b#~ciaty.
X1V. Lt3~N I3l:FAUtT
if a required payment aI` prlnc3pal and interest is not within 94 days of the date suzah paytuent is due, the
loan is c4asidartrd xn c7e."atrit. If a loan is in ~rte#'attlt, thz laaa wlil be fozecl~d dairing ~e caaridar year in wiy'~h
tlar participant sCpsrates from se~vlrx. However, the IIZS °d~rts" a det'~t to be a distribt~tioa in the resat
dnfatiit occurs. Therefore, tIae amo~sna of the autstaredi:ng loaa at tlt~ Erne of the defa~lt- including acerueci iater~-
will be t~ariod to t3ta tRS 2.S ~ sfimtributioAsn !hs year the default Doors tv+~ tfiough th3 loan may n+ot be fore-
clgsed at that tiFnc. " clistr(ibuton may he stsb?ect too taxes artd possibly apeaalty for:rsriy wltttdraw$l.
If a participant fires separated from services tired d~^faults oa s loan, then the l~tt w9i# be l'orecloseci dui the
calcnciat year in which the default decors. 't'its amount of dta outatatidlttg loan, incluchitg accrued iztteaeest, will be
tc~rtctl tct fire IR.4 a~ a distcibc~tion w!+ich may +~e subject to taxxcs ara3 possibly a penalty for early withdrawal.
"" °-.
PP43F
If rho ~nployer has clcctcd Ln Section ~€. sad the ~m~fssary cote sa provides, a toss becomes due seal payable.
wlterx the psriici~t separates from service. If the terms of ttte loan oontaiu t21is p~rision, the twtst8nditig loan
anlautu Is "deemed" In tlafhult as of the date of won fmm service. 'Ilia utmunt of the nutssagd~g loan,
includla~ accrued innerest, wr~l be reported to the 3111.5 as s distribution which may be subject m taxes and pasaYbly
a penalty far Carly withdrawal.
If the EmpZoycs' has sa elected in Secttan X. and Lhc promissory sure so provides, s loan beearn$s duo sand payable
when ttzo garticipatn tekcs a disttibruoa of ~-rrte ~r all of the balance 1n hlsi#~ex arsonist alter saparat3oa From
service. If the t:P.rms of'the Ioa.~,s cor~ixt arch a gmvision and the autstaadirig louu balance is sot paid ~ulor to rise
di3tributaort i'rtsm tht; account, the autstar+dirtg loan amotsnP will be considcred is defhult ugon issuaracs of the
distribution chock. The atnauAt of the outstattding foarw usclttdii~g acCrned i~ntetest, will be reported to thtr IF-S
as a distribution w3uch may be aubjecc to takes alto passlhly s penalty for early wfthckawal.
XY~ D£ 1'vllNtMl~S ACCC?Ul'+tTS At'~iD ClUTS7AN~l1VG LOAN BAlAl~(~CE
If a partacipaat 5eparatcs from service and the psttsClpaat's total vested account balance, inciudirtg the autstatzding
roan balance, is 53,~8t? or less, rise Flan will autoiriaticallyioreclose the losers. The accowr:t balance xemaiaiag a#ter
th® lose. has i>et~ satisfied will ba disbursed is3 accordance with Ae Mlaimis ptovuions of 50ct'iors 10.84 of the
Plan, if lhig occurs, the atnouttt ref the loan, lsicluding accrued interest, w•lll ba nrported to tt-s IRS as ,part o;f the
disuibutioa, wltitl3 may be su1~ jest to taxes sad possibly a pestalty fcsr early wittuh~wal.
XVi~ f~ES
Fecs may be criatgcd for various services associated with the aggllca#otz ~.r alai issuance of Iaa~sts. Al! a~licable
fees wilt be debited lz'om the partlciparg'3 account balsnace..A, schedule of fees appltc8~e to this Plan is available
from the plan AdttslzilstaraWr,
XV!#. OTM~R
1'ho Employer has tiro right to set other tertxls and cx~rsdfdorss as it deems sarcessary for loaiss from the Plan in
order z4 comply with any legal requireiicerats. All teii~ arLd conditiosss v~ill be administered iss d w~iform axed
~n-~3fstxirnfnatory manner.
in Witrtcss Whcre0f, the Employer I:es'eby caus.ti tilers Guid~eJiaes to be exeesit~ad iitis ~~ day of
EMPLOYER ACCEPTEt~• 1C Ric i'IREArt t^ORPURATiC3N
• . +euse
~TITl.E: ~ CtOX~ of A 1 srfi4 to Ra+e:!+!, TITLE: ~~~ _ ~tX ~' ;LC.
ATTEST: ~ ATTF.S~
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A~~~~y ~~