"Savings Plan Loan Rules Regulations"
Savings plan. SAVINGS PLAN LOAN RULES AND REGULATIONS The following are the general rules and regulations governing loans made under the Savings Plan. 1. Loan Application & Processing—After you have completed an application for a loan and submitted it to , you will be notified within ten days of the receipt of the application and of the acceptance or denial of your request. If accepted, this form will be returned to you, along with appropriate loan documentation for your approval and signature. After receipt of the signed documentation, the Plan Administrator will arrange for a check in the amount of the loan to be issued to you by the Plan. 2. Types of Loans—Two types of loans are permitted under the Plan: (a). General Purpose Loans. The proceeds of these loans may be used by you for any purpose. (b). Principal Residence Loans—These loans are available to you only to acquire your principal residence. You must provide the Plan Administrator with adequate documentation to support an application for a principal residence loan, such as, but not limited to, a purchase contract or mortgage commitment letter. 3. Spousal Consent—If you are married at the time you apply for a loan, you must obtain spousal consent in order to qualify for a loan. 4. Number of Loans—No more than two loans may be outstanding from you at any given time. The amount of your loans may not exceed the maximum limit stated below. If you have two loans outstanding at any given time, one must be a principal residence loan and the other a general purpose loan. 5. Minimum Amount—The minimum amount of a loan is $ provided the assets required to provide this source of the loan are sufficient. 6. Maximum Amount—The maximum amount of a loan will be the lesser of: (a). $ , reduced by the highest outstanding balance of loans to you from the Plan during the year ending on the day before the loan was made, or (b). % of your non-forfeitable vested account under the Plan. 7. Frequency of Loans—After complete repayment of a loan under the Plan, a participant must wait at least months from the last repayment before eligibility for another loan. 8. Term of Loan—A General Purpose Loan must be repaid within months ( years). A Principal Residence Loan must be repaid within months ( years). 9. Interest Rate—The interest rate for each new loan will be a competitive rate set by the Plan Administrator on a periodic basis, not to exceed the rate under applicable state usury laws. Trust earnings will not accrue on funds withdrawn for a loan. Payments of interest will be treated not as earnings of the Plan as a whole but rather of the participant's account. 10. Processing Fees—Loan processing fees will be deducted from your account prior to the issuance of your loan and for each year thereafter that your loan is outstanding. electronic form 2005 WWW.LawCA.com Law Publishers 11. Payments—You will be furnished with a loan amortization schedule. The Internal Revenue Code requires that the loan be amortized in level installments with payments no less frequently than quarterly. If you so elect, payments of principal plus interest will be deducted from your paycheck each pay period pursuant to a Payroll Deduction Authorization which you will have executed. 12. Termination of Employment—Upon the termination of your employment with the company (including your death or retirement) the unpaid balance of your loan will become immediately due and payable. The Plan will allow days from the date of your termination for full repayment. If full repayment of your loan is not made within days, the unpaid balance of your loan will be deducted from your account and treated as a distribution prior to any other distribution being made to you or your beneficiary. 13. Defaults and Penalties—Since your full account balance is pledged as security for the loan, the Plan Administrator has against you all the rights of a secured creditor under the Uniform Commercial Code. A loan will be considered to be in default if you fail to make a scheduled principal or interest payment or fail to repay the loan within the prescribed period after termination of your employment. Once your loan is determined to be in default, the Plan Administrator may (i) deduct the full amount of the unpaid balance of your loan from your account or (ii) cause the unpaid principal and interest to be paid by collection from you. The Plan Administrator also has the right to assess your account for the costs incurred or interest lost due to the default or to collect such amounts from you. In the event a loan default is treated as a distribution under the Plan, you will have to pay taxes on the distribution and the additional tax on early distributions, if applicable. 14. Distribution Withholding—In the event a loan default is treated as a distribution under the Plan, % of the unpaid balance of the loan must be withheld for Federal income tax purposes, unless you have elected in writing not to have withholding apply. 15. Assignments—An approved loan will automatically meet the exception to the assignment or transfer of benefits restrictions set forth in the Plan without further action by the participant or the Plan Administrator. 16. Prepayment—The unpaid balance may be repaid in full at any time after one year from the date of the origination of the loan. Partial prepayments are not permitted. 17. Leaves of Absence—Loan payments during leaves of absence with or without pay must be continued. You are responsible for making timely payments to the Plan Administrator during a leave of absence without pay. 18. Amendments—At the discretion of the Plan Administrator these loan rules and regulations may be changed at any time provided they are changed in a uniform and non-discriminatory manner (unless such change will violate the Plan) provided no such change will affect outstanding loans unless the participant/borrower agrees to the change. (Participant's Signature) (Date) FOR ADMINISTRATOR Participant Loan Application Part I. (to be completed by Participant) electronic form 2005 WWW.LawCA.com Law Publishers Participant Name: Company: Home Address: Home Telephone Number: Social Security #: Do you have any plan loans that are outstanding at the time of Yes No this request? Have you previously been granted a plan loan? Yes No If yes, date of previous loan request. Yes No Is this loan for purchase of a primary residence? Yes No A. I hereby request a loan from the Plan in the amount of $ (minimum $ ). I understand that my loan cannot exceed the allowable limit under the Plan. B. I request that the proceeds for the loan be paid to me in cash from the following investment vehicles and in the following amount(s). Name of Investment Vehicle Amount $ $ $ C. I certify that the proposed borrowing is for my own purposes and not for the benefit of any party in interest to the Plan other than myself. I understand that if this application is approved, I will execute a promissory note which will require that (i) I assign percent of the entire value of my vested balance in the Plan as security for repayment of the loan, (ii) I must repay the loan by regular payroll deductions, and (iii) if my employment with the Employer terminates for any reason before the loan is repaid, I must repay it in full. I further understand that if I fail to repay the loan in full when due, any balance due will be subtracted from the vested balance of my Account in the Plan in determining the amount of any distribution to me. D. I authorize and request the Employer to deduct and withhold on a weekly, biweekly, or monthly basis from my periodic compensation an amount equal to the level installment of principal and interest payable under my Secured Promissory Note of this date to the Trustee of the (Employer, Plan Name) Trust, and to pay over the amounts so deducted to the Trustee on my behalf and in satisfaction of my obligation to pay such principal and interest as described in the Note. This authorization shall continue in effect until I have discharged all such obligation to pay principal and interest as required in the Note, or until I have no further right to payment of compensation by the Employer, whichever occurs earlier. Participant SignatureDate electronic form 2005 WWW.LawCA.com Law Publishers Consent of Spouse I, , the spouse of , a participant in the (Employer, Plan Name), consent to my spouse's application to borrow $ from the (Employer, Plan Name). I understand and acknowledge that by giving this consent I am allowing my spouse to pledge as collateral for a loan funds that otherwise would be payable in the form of a joint and survivor annuity for the benefit of my spouse and me, and that my spouse's failure to repay any part of this loan will result in collection of any unpaid balance from funds held by the Plan for that benefit. I further understand that my consent to this application cannot hereafter be revoked or changed in any manner. Date: [Acknowledgment] Borrower's Spouse Part II. Disposition of Application (to be completed by Administrator) Vested Accounts at last Valuation Date: Principal Amount of Loan: Duration of Loan: Interest Rate: The above Loan Application has been reviewed and is: Approved Approved with the following exception: Amount of payment: $ Source of Funds for this payment is to be obtained from the following Investment Vehicles: Name of Investment Vehicle Amount $ $ $ Disapproved because: unable to obtain requested documentation inadequate collateral other (describe) electronic form 2005 WWW.LawCA.com Law Publishers For the AdministratorDate Loan Disclosure Statement For Administrator Borrower's Name: Office Unit/Location: Home Address: Loan Date: The Administrator has approved the attached Loan Application, and a loan will be made to you by the Plan on the terms described below within approximately days after you complete and return to the Administrator your Secured Promissory Note (the "Note"). The following information, in the format suggested pursuant to the federal Truth in Lending Act, is supplied in connection with a loan to you from the (Employer, Plan Name) Trust (the "Trust") and execution by you of the Note relating to repayment of the amount borrowed: 1. ANNUAL PERCENTAGE 2. FINANCE CHARGE 3. AMOUNT FINANCED 4. TOTAL OF PAYMENTS RATE The cost of your credit as a The total dollar amount the The amount of credit providedThe amount you will have yearly rate credit will cost you to you or on your behalf paid after you have made all scheduled payments % $ $ $ interest $ origination fee Itemization of the Amount Financed: All of the Amount Financed shown in item 3 above will be paid directly to you. Your payment schedule will be: Number of Payments: Amount of Each Payment: When Payments are Due: Security: You are giving a security interest in percent of the vested balance of your accounts in the (Employer, Plan Name) Prepayment: You will not have to pay a penalty if you pay off the Note early.[qp] electronic form 2005 WWW.LawCA.com Law Publishers See your Note for additional information about nonpayment, default, any required repayment in full before the scheduled date, and prepayment refunds and penalties. ********* This disclosure statement was delivered to me on Signed: [Date] Borrower electronic form 2005 WWW.LawCA.com Law Publishers