VIEWS: 4,672 PAGES: 16 CATEGORY: Employee Pay and Benefits POSTED ON: 7/27/2009
This is an agreement between a company and its employee outlining an employee retirement or disability plan. The agreement outlines the contribution made by the company, employee voluntary contributions, retirement benefits, death benefits, disability, distribution notices, methods of payment, and withdrawal and termination. Additionally, it can be customized to provide for any additional industry-specific language that may be necessary. This document should be used by small businesses or other entities that want to provide a retirement or disability plan for their employees.
Employee Profit-Sharing Plan This is an agreement between a company and its employee outlining an employee retirement or disability plan. The agreement outlines the contribution made by the company, employee voluntary contributions, retirement benefits, death benefits, disability, distribution notices, methods of payment, and withdrawal and termination. Additionally, it can be customized to provide for any additional industry-specific language that may be necessary. This document should be used by small businesses or other entities that want to provide a retirement or disability plan for their employees. PROFIT SHARING PLAN This Profit Sharing Plan (this “Plan”) is hereby made and entered into this ____ day of ____, 20__ (the “Effective Date”) by and between ______________________ (“Company”) and _______________ (“Employee”) who is an employee of Company. RECITALS WHEREAS, the purpose of this Plan is to encourage employees to systematically save and invest part of their compensation such that they may have a source of additional income upon their Retirement, Disability, or for their family in the event of death; WHEREAS, Company shall make contributions to a Trust Fund (the “Fund”), from which benefits shall be paid pursuant to the terms and conditions of this Agreement; WHEREAS, this Plan is conditioned upon its continued qualification under Section __ of the ________ Code, as amended from time to time, with Employer contributions being deductible under Section __ of the ______ Code, or any other applicable sections thereof, as amended from time to time [Comment: it is best to determine the relevant code sections in your state related to profit sharing and insert them here]; and WHEREAS, it is intended by Company that this Plan qualify as a profit sharing plan. NOW, THEREFORE, Company and Employee hereby agree to the following terms and conditions. TERMS 1. DEFINITIONS The defined terms relative to this Agreement are set forth in Exhibit “A” attached hereto and incorporated herein by reference. 2. SERVICE CREDIT AND PARTICIPATION A. Hour of Service An Hour of Service is any hour for which Employee is directly or indirectly paid or entitled to payment for the performance of his or her duties. B. Service Service is the period of Employment used in determining eligibility for © 2011by Docstoc®, Inc. 2 participation in this Plan, as well as for determining eligibility for benefits. Subject to the loss of Service rules set forth below in this Section, a year of Service is the twelve month period beginning with the date of Employee’s first Hour of Service. C. Participation Originating Under this Plan Each employee shall become a member in this Plan on the first day of the month on which it: (i) is in Covered Employment; (ii) has attained its ___th birthday; and (iii) has completed a year of Service. 3. CONTRIBUTIONS A. Contributions by Employer i. Employer shall, during a Plan Year, contribute to the Trust an amount determined at Employer’s discretion. ii. Notwithstanding the above, such contributions shall be made only from Employer’s current or retained earnings or profits and shall be limited to the amount deductible by Employer. B. Member Voluntary Contributions i. When Employee becomes a Plan Member (“Member”) hereunder and as of the beginning of each Plan Year thereafter, it may, through payroll deduction, elect to make voluntary contributions. ii. A Member may withdraw all or any part of its Employee Contribution Account by filing a written application on a form to be prescribed by the Committee, with at least ________ (__) days advance notice, no more than once in any Plan Year. iii. Members are not required or permitted to make any contributions under this Plan. 4. RETIREMENT On its Normal Retirement Date, a Member shall have a fully vested and non- forfeitable interest in its Individual Employee Contribution Accounts hereunder. Distribution shall be made upon Retirement. The amount of a Member’s Individual Accounts shall be the balance as of the valuation date concurrent with or next preceding the Date of its Retirement, plus any contributions allocated to its Individual Employee Contribution Accounts since such Valuation Date, except that, if a retired Member who retired other than on a Valuation Date so elects, its balance shall be determined as of the Valuation Date next following the date of Retirement, including allocation of any © 2011by Docstoc®, Inc. 3 contribution then being allocated hereunder, as if it had met any applicable Employment and Service requirements for such contribution. 5. DEATH A. Designation of Beneficiary Each Member may designate _______ (__) or more Beneficiaries and contingent beneficiaries to receive the benefits payable hereunder in the event of the death of such Member. B. Benefit Upon the death of an Employee who is a Member, its designated beneficiary or beneficiaries become fully vested with respect to the balance of its Individual Employee Contribution Accounts as of the Valuation Date concurrent with or next preceding the date of its death, plus any contributions allocated to that Member’s Individual Employee Contribution Accounts since such Valuation Date, except that, if the beneficiary of a Member who died other than on a Valuation Date so elects, such balance shall be determined as of the Valuation Date next following the date of death, including allocation of any contribution then being allocated hereunder as if the Member had met any applicable Employment and Service requirements for such contribution. Payment shall be made at the time and in the manner provided in Section 9 herein and below. 6. DISABILITY In the event of the disability of a Member, such Member shall be fully vested in the balance of its Individual Employee Contribution Accounts as of the Valuation Date, plus any contributions allocated to such accounts since such Valuation Date. 7. FORFEITURES FOR TERMINATION OF EMPLOYMENT, A. Eligibility If a Member’s Employment with all affiliated employers shall terminate for any reason other than its Retirement, death, or Disability, such Member shall be entitled to such benefits as are hereinafter provided. B. Benefit A Member to whom the provisions of Section 7.A are applicable shall be entitled to: i. The balance in that Member’s Employee Contribution Account, as of the Valuation Date concurrent with or next preceding the date of termination, plus any contributions allocated to any such accounts © 2011by Docstoc®, Inc. 4 since such Valuation Date. ii. The “vested percentage” of its Employer Contribution Account. Such amount shall be equal to a percentage of the balance in such account as of the Valuation Date concurrent with or next preceding the date of such termination. The percentage to which said Member shall be so vested and entitled shall be determined in accordance with the following schedule: Completed Years of Service Vested Percentage Less than 3 years . . . . . . . . . . . . . . . . . . . . . . _______% 3 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . _______% 4 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . _______% 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . _______% 6 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . _______% 7 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . _______% C. Forfeitures A Member to whom this Section applies shall forfeit that portion of the amount in its Employer Contribution Account to which it is not entitled and the amount thus forfeited shall remain in the Trust Fund and shall, as of the allocation date following that Member’s termination of Employment, be released for reallocation hereunder. If such former Member resumes covered employment before having a _______ (__)-year break in service and makes the repayment described in the following paragraph, a special contribution, equal to the forfeited amount, will be made to restore such forfeited amount to its Employer Contribution Account. Such special contribution shall, to the extent possible, be made from any other Members’ forfeitures then available for allocation hereunder and, to the extent such other forfeitures are not sufficient, such special contribution shall be made by Employer. In order to receive the restoration described in the above paragraph, the Member must, within _______ (__) years of its reentry into covered employment, repay to this Plan the amount of any distribution it received herefrom on account of such break in service, except for the amount of such distribution attributable to voluntary Employee contributions. D. Early Retirement A Member may commence “Early Retirement” on or after age ____ provided it has completed _________________ (__) years of Service with Employer. 8. DISTRIBUTION NOTICES AND METHODS OF PAYMENT E. Notice to Trustee © 2011by Docstoc®, Inc. 5 As soon as practicable after a Member becomes entitled to a distribution hereunder, the Committee shall give written notice to the Trustee, which notice shall include the following information: i. Name and address of the Member; ii. Reason for the distribution; iii. Name and address of the beneficiary or beneficiaries in case of a Member’s death; and iv. Time, manner, and amount of payments to be made. F. Time and Methods of Payment Payments of a benefit shall commence as soon as practicable after such benefit becomes distributable hereunder, subject to the following: i. In no event (unless requested by the payee) shall payments commence later than as of a date _________ (__) days after the close of the Plan Year in which a Member’s Employment with all affiliated employers terminates (for whatever reason) or, if later, in which the Member attains its Normal Retirement Date. ii. A former Employee may elect to delay its distribution; however, in no event shall its distribution be delayed beyond ___________ [Comment: insert date] of the calendar year following the calendar year in which such former Employee attains age _____ (__). iii. When benefits become payable, the Member shall direct that such benefits shall be paid in one (1) of the following ways, or a combination thereof: (a) Lump sum, payable in cash, or in kind. (b) Substantially level periodic installments, with any balance, upon the Member’s death, payable to its beneficiary. © 2011by Docstoc®, Inc. 6 9. ADMINISTRATION G. Appointment of Committee Responsibility for administration of this Plan shall be with Employer, which shall be the Plan Administrator hereunder. Employer, as Plan Administrator, shall appoint a Committee consisting of at least ______ (__) persons who shall assist the Plan Administrator in the administration of this Plan. All action taken by the Committee shall be deemed actions taken by the Plan Administrator and the Plan Administrator shall, alone, have fiduciary responsibility in connection with such actions, except with respect to willful misconduct or gross negligence. H. Committee Powers and Duties The Committee shall have such powers as may be necessary to discharge its duties hereunder, including, but not by way of limitation, the following powers and duties: i. To construe and interpret the Plan, decide all questions of eligibility, and determine the amount, manner, and time of payment of any benefits hereunder; ii. To prescribe rules for the operation of the Plan; iii. To receive from Employer and from employees such information as shall be necessary for the proper administration of the Plan; iv. To Employ an independent qualified public accountant to examine the books, records, and any financial statements and schedules required to be included in any reports; v. To file with the appropriate government agency (or agencies) the annual report, plan description, summary plan description, and other pertinent documents that may be duly requested; vi. To furnish each Employee and each Beneficiary receiving benefits hereunder a summary plan description explaining the Plan; vii. To furnish any Employee or Beneficiary, who requests in writing, statements indicating such Employee’s or Beneficiary’s total account balances and non-forfeitable benefits, if any; viii. To maintain all records necessary for verification of information required to be filed with the appropriate government agency (or agencies); © 2011by Docstoc®, Inc. 7 ix. To report to the Trustee all available information regarding the amount of benefits payable to each Employee, the computations with respect to the allocation of assets, and any other information the Trustee may require in order to terminate the Plan; x. To delegate to one or more of the members of the Committee the right to act in its behalf in all matters connected with the administration of the Plan and Trust; xi. To delegate to any individual(s) such of the above powers and duties as the Committee deems appropriate; and xii. To appoint or Employ for the Plan any agents it deems advisable, including, but not limited to, legal counsel. I. Quorum A majority of the members of the Committee shall constitute a quorum for the transaction of business. No action shall be taken except upon a majority vote of the Committee members. An individual shall not vote or decide upon any matter relating solely to itself or vote in any case in which its individual right or claim to any benefit under the Plan is particularly involved. If, in any case in that a Committee member is so disqualified to act, and the remaining members cannot agree, Employer will appoint a temporary substitute member to exercise all the powers of the disqualified member concerning the matter in which it is disqualified. J. Committee Procedures The Committee shall adopt such bylaws as it deems desirable. The Committee shall elect one of its members as chairman and shall elect a secretary who may, but need not, be a member of the Committee. K. Authorization of Benefit Payments The Committee shall issue directions to the Trustee concerning all benefits that are to be paid from the Trust Fund pursuant to the provisions of the Plan. The Committee shall keep on file, in such manner, as it may deem convenient or proper, all reports from the Trustee. L. Payment of Expenses All expenses incident to the administration, termination, or protection of the Plan and Trust, including but not limited to, actuarial, legal, accounting, and Trustee’s fees, shall be paid by Employer, or if not paid by Employer, shall be paid by Trustee from the Trust Fund and, until paid, shall constitute a first and prior claim and lien against the Trust Fund. © 2011by Docstoc®, Inc. 8 10. TRUST FUND M. Establishment of Trust Fund A Trust Fund shall be established for the purpose of receiving contributions and paying benefits under this Plan. A Trustee (or Trustees) shall be appointed under the terms of a Trust Agreement to administer the Trust Fund in accordance with the terms of such Trust Agreement. N. Payment of Contributions to Trust Fund All contributions under this Plan shall be paid to Trustee and shall be held, invested and reinvested by Trustee in accordance with the terms of the Trust Agreement. All property and funds of the Trust Fund, including income from investments and from all other sources, shall be retained for the exclusive benefit of Employees, as provided in the Plan, and shall be used to pay benefits to Employees or their Beneficiaries, or to pay expenses of administration of the Plan and Trust Fund. 11. AMENDMENTS Employer reserves the right to make, from time to time, any amendment or amendments to this Plan that do not permit reversion of any part of the Trust Fund to Employer and do not cause any part of the Trust Fund to be used for, or diverted to, any purpose other than the exclusive benefit of Employees included in this Plan. 12. WITHDRAWAL AND TERMINATION O. Transfers Assets and Mergers The Plan and Trust Fund shall not be merged or consolidated with, nor shall any Plan assets or liabilities be transferred to, any other plan, unless each participant in the Plan receives a benefit immediately after such merger, consolidation, or transfer, that is equal to or greater than the benefit it would have been entitled to receive immediately before such merger, consolidation, or transfer. P. Plan Termination Employer may at any time, by adoption of a resolution, terminate this Plan. This Plan shall automatically terminate if Employer ceases to exist and no successor continues the Plan. Q. Suspension and Discontinuance of Contributions and Plan Termination i. If the Employer decides it is impossible or inadvisable to continue to make its contributions hereunder, it shall have the power to: © 2011by Docstoc®, Inc. 9 (a) Suspend contributions to the Plan; (b) Discontinue contributions to the Plan; or (c) Terminate the Plan as to its Employees. ii. Suspension shall be temporary cessation of contributions and such suspension that has not ripened into a complete and permanent discontinuance shall not require any vesting of Individual Accounts. iii. A discontinuance of contributions, unless considered complete and permanent, shall not require any vesting of Individual Accounts. In such event, Employees who become eligible to enter the Plan subsequent to the discontinuance shall receive no benefit, and no additional benefits attributable to Employer contributions shall accrue to any of the Members unless contributions are resumed. After the date of discontinuance of contributions, the Trust Fund shall remain in existence as provided in this Section, and the provisions of the Plan and Trust Fund shall remain in force as may be necessary in the sole opinion of the Committee. iv. Upon termination, partial termination, or complete discontinuance of contributions to the Plan, the Individual Accounts of each affected Member not theretofore fully vested shall be and become fully vested and non-forfeitable in each such Member. R. Liquidation of Trust Fund Upon termination, or partial termination, of the Plan, the proportionate interests of the affected Members and their beneficiaries shall be liquidated after provision is made for the expenses of administration, termination, and liquidation. Thereafter, the Trustee shall distribute as soon as administratively feasible the amount to the credit of each such Member and beneficiary as the Committee shall direct. 13. EMPLOYMENT NOT GUARANTEED Nothing contained in this Plan shall be construed as a contract of Employment between Employer and Employee, or as a right of any Employee to be continued in the Employment of Employer, or as a limitation of the right of Employer to discharge any of its Employees, with or without cause. © 2011by Docstoc®, Inc. 10 14. WAIVER; AMENDMENTS The failure of a party to insist upon strict adherence to any term of this Agreement, on any occasion, shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term, or any other term, of this Agreement. No modification, variation, amendment, or waiver of this Agreement shall be effective without the written consent of both parties hereto at the time of such modification, variation, amendment, or waiver. 15. MEDIATION In the event a claim or dispute shall arise between the parties to this Agreement, arising out of or relating to this Agreement, or the breach thereof, the parties agree to participate in at least _________ (__) hours of mediation prior to filing a formal complaint in a court of law. The parties agree to share equally in the costs of mediation. 16. GOVERNING LAW; VENUE The validity, performance, and interpretation of this Agreement shall be governed and construed in accordance with the laws of the State of _________, without regard to its conflicts of law provisions. Each of the parties irrevocably submits for all purposes in connection with this Agreement to the exclusive jurisdiction of the state and federal courts located in the County of ___________, State of __________. In addition, each party consents to venue and hereby waives objections to venue for any action commenced in such courts. 17. ENTIRE AGREEMENT This Agreement, including all exhibits incorporated herein by reference, constitutes the entire agreement between the parties with respect to the subject matter hereof, and supersedes and replaces all prior and contemporaneous understandings or agreements, written or oral, regarding such subject matter. No amendment or modification of this Agreement shall be valid and binding on the parties unless in writing and duly executed by an authorized representative of the parties. 18. HEADINGS The headings of the sections of this Agreement are for convenience only and shall not affect the meaning of the provisions of this Agreement. 19. SEVERABILITY If any provision of this Agreement shall be unenforceable or invalid under any applicable law or be so held by applicable court decision, such unenforceability or invalidity shall not render this Agreement unenforceable or invalid, as a whole, and the © 2011by Docstoc®, Inc. 11 unenforceable or invalid provision shall be amended to achieve as closely as possible the economic effect of the original provision. 20. FORCE MAJEURE Except for the payment of money, neither party shall be liable for any delay in performing any of its obligations under this Agreement if such delay is caused by circumstances beyond the reasonable control of the party so delayed and such party shall be entitled (subject to giving the other party written notice of the full particulars of the circumstances in question and using diligent efforts to resume full performance without avoidable delay) to a reasonable extension of time for the performance of such obligations. [SIGNATURE PAGE TO FOLLOW] © 2011by Docstoc®, Inc. 12 IN WITNESS WHEREOF, Company and Employee hereby execute this Agreement on the date first above written. COMPANY EMPLOYEE Signature Signature Print Name Print Name © 2011by Docstoc®, Inc. 13 EXHIBIT “A” DEFINITIONS Allocation Date The date upon which contributions are allocated hereunder, which shall be the last day of the Plan Year. The Committee may use more frequent Allocation Dates as it deems fit. Affiliated Employer Any business entity (including an Employer hereunder) that, together with an Employer hereunder, constitutes a controlled group of corporations, a group of trades or businesses under common control, or an affiliated Service group. Beneficiary A person designated by a Member to receive the benefits hereunder upon death of such Member. Covered Employment The Employment category for which the Plan is maintained, which includes any Employment with Employer. Disability A physical or mental condition which, in the judgment of the Committee, prevents an Employee from engaging in substantial gainful Employment with Employer. Employee Any person who, on or after the Effective Date, is receiving remuneration for personal Services rendered as an Employee of the Employer or Affiliated. Individual Account Each of the accounts maintained by the Committee showing the individual interests in the Trust Fund of each Member, former Member, and Beneficiary. Member An Employee who has met the eligibility requirements for participation, or a former Member for whom an Individual Account continues to be maintained hereunder. © 2011by Docstoc®, Inc. 14 Normal Retirement Date The __th birthday of a Member. Plan ________________, the Plan set forth herein as amended from time to time. Plan Administrator ________________. Plan Year The annual period beginning on _____ and ending on ________. Retirement Termination of Employment with all Affiliated Employers after a Member has reached its Normal Retirement Date. Retirement shall be considered as commencing on the day immediately following a Member’s last day of Employment. Service A period or periods of Employment of an Employee as described herein. Trust Agreement ______________, as amended from time to time, which constitutes a part of this Plan. Trust or Trust Fund The fund maintained in accordance with the terms of the Trust Agreement. Trustee The corporation or individuals appointed by Employer to administer the Trust in accordance with the Trust Agreement. Valuation Date The date as of which the Trust Fund is valued and gains or losses allocated, which shall be the last day of each Plan Year. The Committee may use more frequent Valuation Dates if it so desires. © 2011by Docstoc®, Inc. 15
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