<Date>
Retirement Services team:
1-800-694-9449 (Option 3)
M–F, 8:30 a.m. to 8:00 p.m. ET
Clients of independent investment
advisors: Please call your advisor
or Schwab Signature Alliance® at
1-800-515-2157.
Your action is required regarding your qualified retirement plan.
Please respond by April 1, 2010.
We’re writing to let you know that your qualified retirement plan (“plan”) urgently needs to be updated for
GUST* and EGTRRA† tax laws. This letter and the enclosed documents contain information about the
steps you must take to do so. We encourage you to call us for help at one of the numbers listed above.
The Internal Revenue Service (IRS) required employers sponsoring qualified retirement plans to update or
“restate” their plans to conform to the GUST tax laws by September 30, 2003. Our records show that you
haven’t completed the required Adoption Agreement documents to restate your plan for GUST tax laws.
However, Schwab filed an application with the IRS so that Schwab’s qualified retirement plan sponsors
who didn’t update their plans for GUST tax laws could have another opportunity to do so under the IRS
Voluntary Correction Program. We hope you’ll follow the steps outlined below and take advantage of this
opportunity to bring your plan into compliance with GUST tax laws.
The IRS also requires that qualified retirement plans be updated to comply with EGTRRA tax laws by
April 30, 2010. However, before qualified retirement plans can be updated for EGTRRA tax laws, they
must first be in compliance with GUST tax laws.
If the IRS audits your plan and determines that it’s out of compliance with GUST and EGTRRA tax laws, your
plan is at risk for potential disqualification and you may be subject to substantial tax penalties.
Your next steps
Please follow the detailed instructions in the enclosed Restatement Checklist to update your plan for
GUST and EGTRRA tax laws and avoid potential IRS tax penalties.
It’s important that you return all required GUST and EGTRRA documents to Schwab by April 1, 2010, so
that we can process them in time to meet the EGTRRA deadline of April 30, 2010. You’ll need to meet
this deadline to be in compliance with the tax laws.
Information about the IRS Voluntary Correction Program
Once we receive your completed documents, Schwab will work directly with the IRS under their Voluntary
Correction Program to address the plan qualification issues resulting from your untimely completion of the
required GUST documents.
As part of the program, Schwab is required to provide to the IRS information about your plan, including
your employer identification number (EIN), the name of your plan, the plan number, the type of plan, and
the number of participants in your plan. However, if the IRS audits your qualified retirement plan, it will not
(Over)
pursue the sanction of plan disqualification because of your failure to restate your plan to comply with
GUST by September 30, 2003.
Please note that your signed GUST Adoption Agreement certifies that you filed Form 5500 for your plan, if
you were required to do so, in a timely manner. If you were required to file a Form 5500 and didn’t, please
call us to discuss the matter.
Unfortunately, you aren’t eligible to participate if you or your plan are already under IRS audit or
investigation, or you were a party to an abusive tax-avoidance transaction involving the plan, as described
in applicable IRS rules. If you’ve recently received notice of an impending IRS audit or investigation,
please call us so that we can discuss the matter.
If you don’t want to participate in this program, you need not do anything. However, please note that if
we don’t receive your completed documents by April 1, 2010, Schwab may no longer be able to service
your plan.
If you’ve already restated your plan to comply with GUST, please call to let us know as soon as possible
so that we can resolve the discrepancy in our records.
We appreciate your business and look forward to continuing to serve your qualified retirement plan needs.
We realize this process may seem complicated, but we want you to know that we’re here to assist you. If
you have any questions, please call us at one of the numbers listed above.
Sincerely,
Ann Insley
Director, Retirement Plan Sponsor Services
Enclosures
GUST and EGTRRA Restatement Checklist
GUST and EGTRRA Restatement Documents
Return Envelope
Independent investment advisors are not owned by, affiliated with, or supervised by Schwab.
*GUST is an acronym for the following tax laws: General Agreement on Tariffs and Trade, Uniformed Services Employment and
Reemployment Rights Act of 1994, Small Business Job Protection Act of 1996, Taxpayer Relief Act of 1997, the Internal Revenue
Service Restructuring and Reform Act of 1998, and the Community Renewal Tax Relief Act of 2000.
†
EGTRRA is an acronym for the Economic Growth and Tax Relief Reconciliation Act of 2001.
©2010 Charles Schwab & Co., Inc. All rights reserved. Member SIPC. CS12209-01 (0210-0861) ALC54134 (01/10)
GUST and EGTRRA Restatement Checklist
Please follow the steps in this checklist to update your qualified retirement
plan (QRP) for GUST* and EGTRRA.† You’ll need to complete all three steps
and return required documents to us by April 1, 2010.
If you have any questions, please call us at 1-800-694-9449 (Option 3), Monday
through Friday, 8:30 a.m. to 8:00 p.m. ET. If you work with an independent investment
advisor, please call your advisor directly, or call Schwab Alliance at 1-800-515-2157.
STEP 1—GUST Restatement
Complete and sign the GUST Restatement Adoption Agreement—Money Purchase
Pension Plan.
When completing the adoption agreement, please complete all sections to reflect how you’re currently
operating your plan.
STEP 2—EGTRRA Restatement
Complete and sign the enclosed EGTRRA Restatement Adoption Agreement—Money
Purchase Pension Plan.
This document provides details about the updated choices for operating your QRP under EGTRRA tax laws.
If you have employees:
Provide a completed copy of the Summary Plan Description to all eligible employees no later than
210 days after the last day of the year in which you complete your EGTRRA Restatement.
STEP 3—Return Documents
Make copies.
Please return copies of the required documents. You should keep the original documents and the Basic Plan
Document booklets with your retirement plan records.
Return all required documents to Schwab by April 1, 2010.
Please use the postage-paid envelope provided, or mail to:
Charles Schwab & Co., Inc.
Orlando Operations Center—Restatement
P.O. Box 628291
Orlando, FL 32862-8291
*GUST is an acronym for the following tax laws: the General Agreement on Tariffs and Trade, the Uniformed Services Employment and Reemployment Rights Act of 1994,
the Small Business Job Protection Act of 1996, the Taxpayer Relief Act of 1997, the Internal Revenue Service Restructuring and Reform Act of 1998, and the Community
Renewal Tax Relief Act of 2000.
†
EGTRRA is an acronym for the Economic Growth and Tax Relief Reconciliation Act of 2001.
©2010 Charles Schwab & Co., Inc. All rights reserved. Member SIPC. CS12209-08 (0210-0861) MKT54137MP (02/10)
GUST and EGTRRA Restatement Checklist | Page 1 of 1
Step 1 – GUST Restatement Documents
CS12209-03 DMF54132OE
Instructions for Completing the
GUST Restatement
GUST
Restatement
Schwab QRP Basic Adoption Agreement
Money Purchase Pension Plan
www.schwab.com
1-800-694-9449 (Option 3)
Page 1 of 2
Getting Started
These instructions are intended to help you, the Adopting Employer, along with your attorney and/or tax advisor, complete the Adoption Agreement for the
Schwab Money Purchase Pension Qualified Retirement Plan. The instructions are to be used only as a general guide and are not intended as a substitute
for qualified legal and tax advice. We recommend that you obtain the advice of your legal or tax advisor before you sign the Adoption Agreement. The
words and phrases that are capitalized are defined terms that may be found in the Basic Plan Document.
Completing the Adoption Agreement
Since this is a Corrective Restatement for GUST, when completing the Adoption Agreement, please complete all sections in accordance with how you’re
currently operating your Plan. If you fail to select an option or complete an election for an elective provision, default provisions will apply. Each applicable
default is detailed below each option or election on the Adoption Agreement.
Employer Information
Fill in the requested information. If you are a self-employed individual, owner-only business or sole proprietor and are not using a “DBA” (“Doing
Business As”) name, enter your name.
The Adopting Employer Federal Tax Identification Number is the tax identification number assigned to your business. Do not use your Social Security
number. If your business does not have a Federal Tax Identification Number, you or your tax advisor may obtain one immediately online or by telephone;
the instructions for IRS Form SS-4 (available on the IRS website at www.irs.gov) explain how to proceed. If you have filed IRS Form SS-4 to request a
number but have not received one, print “Applied for” on the Employer Tax Identification Number (EIN) line. After you receive a tax identification number,
be sure to let us know what that number is.
Plan Information
Fill in the requested information. The three-digit Plan Sequence Number is used to identify your Plan in annual reporting to the IRS. Your business
determines the number, beginning with 001 for the first Plan the business established. Thus, for example, if this is the fourth Plan your business
maintains or has maintained, the Plan Sequence Number would be 004.
Section 1. Effective Dates
Leave Part A blank. Part A is not applicable because this is a restatement of your existing qualified retirement plan.
Part B. Existing Plan Amendment or Restatement Date
Fill in the requested information. The existing qualified plan to be replaced is called a “Prior Plan.” You will need to know the Effective Date of
the Prior Plan. The best way to determine its Effective Date is to refer to the Prior Plan Adoption Agreement.
The restatement Effective Date is the date you sign this Adoption Agreement.
Section 2. Eligibility
Part A. Age and Years of Eligibility Service Requirements
1. Age Requirement
Fill in the age that an Employee must attain (no more than 21) to be eligible to participate in the Plan and to receive Employer Money Purchase
Pension Contributions.
2. Years of Eligibility Service Requirement
Fill in the number of years of service required, as applicable, that an Employee must complete to be eligible to receive Employer Money
Purchase Pension Contributions.
Part B. Hours Required for Eligibility Purposes
One thousand (1,000) hours of service shall be required to constitute a Year of Eligibility Service.
Part C. Entry Dates
Select one entry date for how often during the year your employees who have met the requirements in both Parts A and B can actually begin
participation in the Plan.
WB
©2010 Charles Schwab & Co., Inc. All rights reserved. Member SIPC. CS06943-03 (0609-9548) APP46629GR (01/10)
Page 2 of 2
Section 3. Contributions
Decide whether or not you want to integrate your Plan with Social Security. You can indicate that you want to integrate your Plan with Social Security by
choosing “Yes.” If you don’t want the Social Security Integration feature in your Plan, choose “No.”
If you answer No, complete Option 1. If you answer Yes, complete Option 2.
Option 1. Nonintegrated Formula. If you choose the Nonintegrated Formula, you will contribute the percentage indicated (up to 25 percent of compensation) for the Plan Year.
Option 2. Integrated Formula. Integration, also known as Permitted Disparity, is used to give more highly compensated employees a higher contribution.
Integration is further described in Plan Section 3.01(B)(2).
Frozen Plan. This provision only applies to an amendment to an existing plan if the Employer will not make additional contributions. If applicable, select
the option and enter the date that contributions will cease to be made.
Section 4. Vesting
Select one option and fill in the information, as applicable. The vesting schedule determines how long plan participants must work for the business
before they become entitled to receive their account balance if they leave.
Section 5. Distributions
There are no elections for this section.
Section 6. Definitions
Part A. The Plan Year refers to the 12-month period on which you will base the administration of your Plan. You can choose your fiscal year or the
calendar year.
Part B. The Limitation Year refers to the 12-month period on which you will determine whether your contributions will be within the legal limits, based
on compensation paid during that period. You can make this the same as the Plan Year, or you can use the calendar year. Plan administration
is generally more straightforward if both the Plan Year and the Limitation Year are the same.
Section 7. Miscellaneous
There are no elections for this section. Leave Part A blank.
Part A. Addendum is not applicable because this is a restatement of your existing qualified retirement plan. Leave Part A blank.
Part B. Permissible Investments. This part explains what investments are permissible within the Schwab QRP.
Section 8. Plan Administrator, Trustee, Prototype Sponsor and Custodian
Part A. Plan Administrator
If the Adopting Employer will not be responsible for administering the Plan, the Plan Administrator is the individual who will be responsible
for administering the Plan for the Adopting Employer, unless another person is designated by the Adopting Employer as Trustee in the
Adoption Agreement.
Part B. Trustee
Appointing a Trustee is optional if the Plan covers only one or more self-employed individuals or satisfies another exception under ERISA. If you
appoint a Trustee, the Trustee must be an individual (not a financial organization) and must act in a directed capacity. The Trust provisions in
Plan Section 8 will apply. Generally speaking, if your business is a corporation, or your business is not incorporated but no owner or partner will
participate in the Plan, you are required to appoint a Trustee.
Part C. Prototype Sponsor and Custodian
Charles Schwab & Co., Inc. is the entity that makes this prototype plan available to employers for adoption. Charles Schwab & Co., Inc. will be
acting as the Custodian of the assets in the accounts for the Plan, and the custodial provisions in Plan Section 8 will apply.
Section 9. Signature
The Adopting Employer or an authorized representative of the Adopting Employer must sign and date the Adoption Agreement.
Action Required
After you complete all elective sections of this Adoption Agreement, sign and date it in Section 9. Then, make a photocopy and return it to us. Retain the
original in your Schwab QRP files.
WB
©2010 Charles Schwab & Co., Inc. All rights reserved. Member SIPC. CS06943-03 (0609-9548) APP46629GR (01/10)
Schwab Qualified Retirement Plan (QRP)
GUST
Restatement
Basic Adoption Agreement
Money Purchase Pension Plan
www.schwab.com
1-800-694-9449 (Option 3)
Page 1 of 3
•Complete all sections of this document, then sign and date it in Section 9.
•Then make a photocopy and return it with your other GUST Restatement documents. Retain the original in your files.
PRINT
CLEAR
•Call us at the number above with any questions about this document or any of the other GUST Restatement documents.
Employer Information (Required)
Name of Adopting Employer
Employer Tax Identification Number (EIN)
Business Street Address (no P.0. boxes)
City, State, Zip Code
Business Telephone Number
Type of Business (select one)
Sole Proprietorship
Business Email Address (optional)
Employer Fiscal Year (mm/dd)
Partnership
Corporation
Other (specify a legal entity recognized under federal income tax laws):
Plan Information (Required)
Name of Plan
Plan Sequence Number
Do you or your spouse participate in the plan? (check all that apply)
Do you have employees that participate (other than yourself or your spouse)?
I participate (employer)
Yes. Enter number of employees that participate _______________________________.
My spouse participates
No
Existing Money Purchase Pension Plan Account Number (Required)
—
1. Effective Dates Complete Part B only.
Part A. Effective Date
Part B. Restatement Date
This is the initial adoption of a money purchase pension plan
by the Employer.
The Effective Date of this Plan is _____________________.
(mm/dd/yyyy)
x This is a restatement of an existing money purchase pension
plan (a Prior Plan).
The Prior Plan was initially effective on _____________________.
The Effective Date of this restatement is ___________________.
(mm/dd/yyyy)
(mm/dd/yyyy)
NOTE: If left blank, the Effective Date is the first day of the Plan Year in which this Adoption Agreement is signed.
2. Eligibility Complete Parts A through C.
Part A. Age and Years of Eligibility Service Requirements
1. Age Requirement. An Employee will be eligible to become a
Participant in the Plan after attaining age _______ (no more
than 21).
NOTE: If left blank, there is no age requirement for eligibility.
2. Years of Eligibility Service Requirement. An Employee will be
eligible to become a Participant in the Plan after completing
_____ (enter 0, 1, 2 or any fraction less than 2) Years of
Eligibility Service.
NOTE: If more than 1 year is selected, all Participants will
automatically be 100% vested immediately. If left blank, the Years
of Eligibility Service required will be 0. If a fraction is selected, an
Employee will not be required to complete any specified number
of Hours of Service to receive credit for a fractional year.
Part B. Hours Required for Eligibility Purposes. One thousand (1,000)
Hours of Service shall be required to constitute a Year of
Eligibility Service.
Part C. Entry Dates. The Entry Dates for participation shall be (select one):
Monthly: The first day of each calendar month, from and after
the Effective Date.
Quarterly: The first day of the Plan Year and the first days of
the fourth, seventh and tenth months of the Plan Year.
Semiannually: The first day of the Plan Year and the first day of
the seventh month of the Plan Year.
NOTE: If left blank, Entry Dates will be monthly.
WB
©2010 Charles Schwab & Co., Inc. All rights reserved. Member SIPC. CS06943-03 (0609-9548) APP46629GR (01/10)
Page 2 of 3
3. Contributions
Decide whether or not you want to integrate your Plan with Social Security, completing either Option 1 or Option 2 as appropriate.
Employer Money Purchase Pension Contributions
Social Security Integration (Permitted Disparity) is a method of giving
some participants in the Plan a higher contribution than others. Because
of the complexity of Social Security Integration, you may want to consult
your tax advisor before choosing to integrate your Plan. Will this Plan be
integrated with Social Security? (select one)
No (Go to Option 1) Step 2. An amount equal to ______% (not to exceed the smaller of
(a) the percentage in Step 1, or (b) 5.7%) of such
Participant’s Compensation for the Plan Year in excess
of the integration level.
The integration level shall be (select one):
The Taxable Wage Base.
Yes (Go to Option 2)
$_________ (a dollar amount less than the Taxable
Wage Base).
NOTE: If no option is selected, the Plan will NOT be integrated with Social
Security.
Option 1: For each Plan Year, the Employer will contribute for each
Qualifying Participant an amount equal to ______% (not to
exceed 25%) of each Qualifying Participant’s Compensation
for the Plan Year.
Option 2: For each Plan Year, the Employer will contribute for each
Qualifying Participant an amount equal to the sum of the
amounts determined in Steps 1 and 2:
Step 1.An amount equal to ______% (must be at least 3%) of
each Qualifying Participant’s Compensation for the Plan
Year, plus (go to Step 2)
__________% (not more than 100%) of the Taxable
Wage Base.
NOTE: If left blank or incompletely filled out, the
integration level shall be the Taxable Wage Base.
NOTE: IF APPROPRIATE BLANKS IN THIS SECTION ARE NOT COMPLETED,
YOU HAVE NOT ESTABLISHED A VALID PLAN.
Frozen Plan. Check this box and provide an Effective Date only if you
have an existing Schwab Money Purchase Pension Plan to which you will
not be making additional contributions.
This Plan is frozen effective _____________________ and the Employer
will not make additional contributions to the Plan after such date.
4. Vesting Choose Option 1, 2 or 3
Vesting Schedule
A Participant shall become vested in his or her Individual Account upon completion of Years of Vesting Service as follows (select one):
NOTE: If left blank, all Participants will be 100% vested immediately.
Vested Percentage
Completed Years
of Vesting Service
Option 1
100% Immediate
Option 2
3-Year Cliff
Option 3
6-Year Graded
Less than one
100%
0%
0%
1
100%
0%
0%
2
100%
0%
20%
3
100%
100%
40%
4
100%
100%
60%
5
100%
100%
80%
6 and over
100%
100%
100%
5. Distributions
There are no elections required with regard to distributions. Refer to the Basic Plan Document for information regarding distribution provisions.
6. Definitions Complete Parts A and B.
Part A. The Plan Year is: the Employer’s fiscal year NOTE: If left blank, the Plan Year will be the Employer’s fiscal year.
Part B. The Limitation Year is: the calendar year
the Plan Year the calendar year
NOTE: If left blank, the Limitation Year shall be the same period as the Plan Year (Part A).
7. Miscellaneous Leave Part A blank.
Part A. Addenda Check here if this Adoption Agreement includes an addendum under Section 3.12(B)(2) or 3.12(B)(3) of the Basic Plan Document or an
addendum to the definition of “Present Value” therein. No other attachments are permitted.
Part B. Permissible Investments
The assets of the Plan shall be invested only in those investments available from time to time through Charles Schwab & Co., Inc. in the ordinary
course of its business which may legally be held in a qualified plan, excluding assets which may not be maintained in the possession and control
of a brokerage firm pursuant to the rules of the Securities and Exchange Commission (such as some direct investments in real estate), and
provided that no investment in insurance policies or contracts or securities issued by the Employer shall be permitted.
FOR CHARLES SCHWAB USE ONLY:
Branch Office and
Account Number
WB
©2010 Charles Schwab & Co., Inc. All rights reserved. Member SIPC. CS06943-03 (0609-9548) APP46629GR (01/10)
Page 3 of 3
8. Plan Administrator, Trustee, Prototype Sponsor and Custodian Complete Parts A and B as applicable.
Part A. Plan Administrator. If you wish to appoint a Plan Administrator other than the Employer, you must complete this part and the Plan Administrator
must sign. If this part is not completed, the Employer shall be the Plan Administrator.
Plan Administrator Information:
Name
Social Security Number
Mother’s Maiden Name
Street Address (no P.O. boxes)
City, State, Zip Code
Name of Employer
Telephone Number
(
)
I agree to serve as Plan Administrator of this Plan, and I understand and accept the responsibilities associated with serving as Plan Administrator.
Signature and Date Required
X
Plan Administrator Signature
Title (if applicable)
Date
Part B. Trustee. If your business is a corporation, or if your business is not a corporation and neither you nor any other self-employed individual is
participating in the Plan, you are required by federal law to appoint a Trustee. The Trustee must sign below.
By signing below, I agree to serve as Trustee of this Plan, and I understand and accept the responsibilities associated with serving as Trustee as set
forth in the Basic Plan Document. I hereby appoint Charles Schwab & Co., Inc. as Custodian.
Signature and Date Required
X
Trustee Signature
Print Name
Date
If this part is not completed, the Plan does not have a Trustee.
Part C. Prototype Sponsor and Custodian
Name of Prototype Sponsor and Custodian
Address
City
State
Zip Code
Telephone Number
Charles Schwab & Co., Inc.
211 Main Street
San Francisco
CA
94105
1-800-435-4000
9. Signature (Important: Read before signing.)
I am an authorized representative of the
business named above and I state the following:
1. I acknowledge that I have reviewed this information with my own tax advisor and that I
have relied upon my own advisors regarding
the completion of this Adoption Agreement
and the legal and tax implications of
adopting this Plan. I understand that Charles
Schwab & Co., Inc. (“Schwab”) does not offer
legal or tax advice and I cannot rely upon
Schwab in this capacity.
2. I understand that if I do not properly
complete this Adoption Agreement, my Plan
may be disqualified.
3. I understand that Schwab, as the Prototype
Sponsor, will inform me of any amendments
made to the Plan and will notify me should it
discontinue or abandon the Plan.
4. I have received and retained a copy of this
Adoption Agreement and the corresponding
Basic Plan Document.
5. I have received, read, and understand the
Basic Plan Document and this Adoption
Agreement. I hereby adopt the Employer’s
Schwab Qualified Retirement Plan, consisting
of this Adoption Agreement and the
corresponding Basic Plan Document, and I
hereby appoint Schwab as Custodian. This
Adoption Agreement will be effective when
Schwab, as Custodian, receives it.
Signature and Date Required
X
Employer Signature
Print Name
NOTE: The Adopting Employer may rely on an
opinion letter issued by the Internal Revenue
Service as evidence that the Plan is qualified
under Section 401 of the Code except to the
extent provided in Revenue Procedure 2000-20,
2000-6 I.R.B. 553 and Announcement 2001-77,
2001-30 I.R.B. An Employer who has ever
maintained or who later adopts any Plan
(including a welfare benefit fund, as defined in
Section 419(e) of the Code, which provides
post-retirement medical benefits allocated to
separate accounts for key employees, as
defined in Section 419A(d)(3) of the Code, or an
individual medical account, as defined in
Section 415(l)(2) of the Code) in addition to this
Plan may not rely on the opinion letter issued by
the Internal Revenue Service with respect to the
requirements of Section 415 and 416 of the
Code. If the Employer who adopts or maintains
multiple plans wishes to obtain reliance with
respect to the requirements of Sections 415
and 416 of the Code, application for a determi-
FOR CHARLES SCHWAB USE ONLY:
Approved by
Date Approved
Source Code
Print Name of Approver
Branch Office and
Account Number
WB
©2010 Charles Schwab & Co., Inc. All rights reserved. Member SIPC. CS06943-03 (0609-9548) APP46629GR (01/10)
Date
nation letter must be made to Employee Plans
Determinations of the Internal Revenue Service.
The Employer may not rely on the opinion letter
in certain other circumstances, which are
specified in the opinion letter issued with
respect to the Plan or in Revenue Procedure
2000-20 and Announcement 2001-77. This
Adoption Agreement may be used only in
conjunction with Basic Plan Document #03.
Step 2 – EGTRRA Restatement Documents
CS12209-04 DMF54131OE
Instructions for Completing the
Schwab QRP Adoption Agreement
Simplified Money Purchase Pension Plan
www.schwab.com
1-800-694-9449 (Option 3) (inside the U.S.)
+1-415-667-8400 (outside the U.S.)
Page 1 of 3
Getting Started
The Schwab Money Purchase Pension Qualified Retirement Plan (“Schwab QRP”) is designed specifically for Self-Employed Individuals, owner-only
businesses or owner-spouse businesses, sole proprietorships, small incorporated companies (C corporations, S corporations, and limited liability
corporations, with fewer than 100 employees) and small partnerships.
These instructions are intended to help you, the Adopting Employer, along with your attorney and/or tax advisor, complete the Adoption Agreement for the
Schwab Money Purchase Pension Qualified Retirement Plan. The instructions are to be used only as a general guide and are not intended as a substitute
for qualified legal and tax advice. We recommend that you obtain the advice of your legal or tax advisor before you sign the Adoption Agreement. The
words and phrases that are capitalized are defined terms that may be found in the Basic Plan Document.
Completing the Adoption Agreement
If you fail to select an option or complete an election for an elective provision, default provisions will apply. Each applicable default is detailed below
each option or election on the Adoption Agreement. Certain options are pre-checked based on the Schwab QRP features.
Important Note: This Schwab QRP Adoption Agreement, which has been updated for EGTRRA, provides expanded elective provisions; however, you may
not reduce or eliminate protected benefits when restating your Plan.
Employer Information
Fill in the requested information. If you are a Self-Employed Individual, owner-only business or sole proprietor and are not using a “DBA” (“Doing
Business As”) name, enter your name.
The Adopting Employer Federal Tax Identification Number is the tax identification number assigned to your business. Do not use your Social Security
Number. If your business does not have a Federal Tax Identification Number, you or your tax advisor may obtain one immediately online or by telephone;
the instructions for IRS Form SS-4 (available on the IRS website at www.irs.gov) explain how to proceed. If you have filed IRS Form SS-4 to request a
number but have not received it, print “Applied for” on the Adopting Employer Federal Tax Identification Number line. After you receive a tax identification
number, be sure to let us know what that number is.
Plan Information
Fill in the requested information.
The three-digit Plan Sequence Number is used to identify your Plan in annual reporting to the IRS. Your business determines the number, beginning with
001 for the first Plan the business established. Thus, for example, if this is the fourth Plan your business maintains or has maintained, the Plan
Sequence Number would be 004.
Fill in the Plan Identification Number (if applicable). This is the tax identification number assigned to your Plan for reporting purposes. Do not use your
Social Security Number. If your Plan does not have a Plan Identification Number, you or your tax advisor may obtain one immediately online or by
telephone; the instructions for IRS Form SS-4 (available on the IRS website at www.irs.gov) explain how to proceed. If you have filed IRS Form SS-4 to
request a number but have not received it, print “Applied for” on the Adopting Employer’s Federal Tax Identification Number line. After you receive a tax
identification number for your Plan, be sure to let us know what that number is.
If the Adopting Employer will not be responsible for administering the Plan, the Plan Administrator is the individual who will be responsible for administering
the Plan for the Adopting Employer, unless another person is designated by the Adopting Employer as Trustee in the Adoption Agreement.
Section One. Effective Dates
Part A is not applicable because this is a restatement of your existing qualified retirement plan.
Part B. Existing Plan Amendment or Restatement Date
Fill in the requested information. The existing qualified plan to be replaced is called a “Prior Plan.” You will need to know the Effective Date of
the Prior Plan. The best way to determine its Effective Date is to refer to the Prior Plan Adoption Agreement.
The amendment or restatement Effective Date is generally the first day of the Plan Year in which this Adoption Agreement is signed.
WB
©2009 Charles Schwab & Co., Inc. All rights reserved. Member SIPC. FTA 07944 (0709-10088) APP20166ER (07/09)
Page 2 of 3
Section Two. Eligibility
Part A. Age and Years of Eligibility Service
Age Requirement
Fill in the age that an Employee must attain (no more than 21) to be eligible to participate in the Plan and to receive Employer Money Purchase
Pension Contributions.
Years of Eligibility Service Requirement
Select one option and fill in the amount of service required, as applicable, that an Employee must complete to be eligible to receive Employer
Profit Sharing Contributions.
Part B. Employees Employed as of Effective Date
This provision only applies to an initial adoption of a Plan as defined in Section One, Part A of the Adoption Agreement.
The age and service requirements may be waived for those Employees who are employed as of the Effective Date of this Plan. If the eligibility
requirements are waived, then only those Employees hired after the original Effective Date will have to meet the eligibility requirements as
defined in Part A in this section of the Adoption Agreement.
Part C. Hours Required for Eligibility Purposes (Not applicable if the Plan will use the Elapsed Time method under Section Six.)
1. Fill in the Hours of Service (may not be more than 1,000) that shall constitute a Year of Eligibility Service.
2. Fill in the Hours of Service (may not be more than 500) that must be exceeded to avoid a Break in Eligibility Service.
Section Three. Contributions
Part A. Employer Money Purchase Pension Contributions
Select how the contributions will be allocated:
1. Nonintegrated Formula. If you choose the Nonintegrated Formula, you will contribute the percentage indicated (up to 25 percent of compensation) for the Plan Year.
2. Integrated Formula. Integration, also known as Permitted Disparity, is used to give more highly compensated employees a higher contribution. Integration is further described in Plan Section 3.04(B)(2).
3. Frozen Plan. This provision only applies to an amendment to an existing plan if the Employer will not make additional contributions. If
applicable, select the option and enter the date that contributions will cease to be made.
Part B. Qualifying Participants
A Participant is a Qualifying Participant by satisfying all the eligibility requirements and thus is entitled to share in Employer Money Purchase
Pension Contributions for any Plan Year. If the Participant has incurred a Termination of Employment during the Plan Year, an additional Hours
of Service Requirement applies. Fill in the Hours of Service (may not be more than 500 hours) that must be completed for a Participant who
has incurred a Termination of Employment during the Plan Year.
Section Four. Vesting and Forfeitures
Part A. Vesting Schedule or Employer Money Purchase Pension Contributions
Select one option and fill in the information, as applicable. The vesting schedule determines how long plan participants must work for the
business before they become entitled to receive their account balance if they leave.
Part B. Year of Vesting Service
1. Fill in the Hours of Service (may not be more than 1,000 hours) that shall constitute a Year of Vesting Service.
2. Fill in the Hours of Service (may not be more than 500 hours but must be less than Part B, item 1) that must be exceeded to avoid a
Break in Vesting Service.
Section Five. Distributions and Loans
Part A. Form of Distribution
This part provides the distribution options allowed from the Plan for Vested balances greater than $1,000. Some of the options in this section
are pre-checked based on the Schwab QRP features. Select whether you want to allow Partial and Installment Payments.
Part B. Loans
Loans are not available under the Schwab QRP.
WB
©2009 Charles Schwab & Co., Inc. All rights reserved. Member SIPC. FTA 07944 (0709-10088) APP20166ER (07/09)
Page 3 of 3
Section Six. Definitions
Part A. Hours of Service—Method of Determining Service
Select the method in which service will be determined.
Elapsed Time means that service is based solely on length of employment instead of hours worked.
Part B. Normal Retirement Age
Define the Normal Retirement Age by selecting one option, and fill in the requested information.
Part C. Plan Year Means
Define the Adopting Employer’s Plan Year by selecting one option, and fill in the requested information.
Part D. Predecessor Employer Service
Service for a Predecessor Employer will not be treated as service or credited toward Eligibility, Vesting or Contributions for the Employer unless
otherwise elected in this section. Select all that apply (if any), and fill in the information, as applicable.
Section Seven. Miscellaneous
Part A. Life Insurance
Life Insurance investments are not available under the Schwab QRP.
Part B. ERISA 404(c) Compliance
Select whether you intend to operate the Plan in accordance with ERISA 404(c) regulations, which provides relief from liability for the performance of the investments selected by plan participants and beneficiaries. This option is generally not applicable to Self-Employed Individuals,
owner-only businesses, owner-spouse businesses, sole proprietorships or partnerships.
Section Eight. Trustee and Custodian
Part A. Trustee
Appointing a Trustee is optional if the Plan covers only one or more Self-Employed Individuals or satisfies another exception under ERISA. If you
appoint a Trustee, the Trustee must be an individual (not a financial organization) and must act in a directed capacity. The Trust provisions in
Plan Section Eight will apply. Generally speaking, if your business is a corporation, or your business is not incorporated but no owner or partner
will participate in the Plan, you are required to appoint a Trustee.
Part B. Custodian
Charles Schwab & Co., Inc. will be acting as the Custodian of the assets in the accounts for the Plan, and the custodial provisions in Plan
Section Eight will apply.
Section Nine. Employer Signature
Name of Prototype Sponsor
Charles Schwab & Co., Inc. is the entity that makes this prototype plan available to employers for adoption.
Authorized Employer Signature
The Adopting Employer or an authorized representative of the Adopting Employer must sign and date the Adoption Agreement.
Note: For the majority of all qualified retirement plans, an IRS favorable opinion letter is the only IRS approval letter needed. Under certain circumstances,
the IRS opinion letter covering this Plan may not apply. If you wish to obtain assurance that this Plan meets the requirements for qualification under the
tax laws and regulations, this can be done by requesting an additional approval letter called an IRS determination letter from the Employee Plans
Determinations Office of the IRS. Your attorney or tax advisor can help you obtain an IRS determination letter if your plan requires this type of approval.
Action Required
After you complete all elective sections of this Adoption Agreement, sign and date it in Section Nine. Then, make a photocopy and return it to us.
Retain the original in your Schwab QRP files.
WB
©2009 Charles Schwab & Co., Inc. All rights reserved. Member SIPC. FTA 07944 (0709-10088) APP20166ER (07/09)
CLEAR
EGTRRA
Schwab Qualified Retirement Plan (QRP)
PRINT
Restatement
Adoption Agreement
Simplified Money Purchase Pension Plan
www.schwab.com
1-800-435-4000 (inside the U.S.)
+1-415-667-8400 (outside the U.S.)
Page 1 of 5
Employer Information
Name of Adopting Employer
Adopting Employer Federal Tax Identification Number
Business Street Address (no P.O. boxes)
City
State
Zip Code
Business Email Address (optional)
Business Telephone Number
(
)
Type of Business (select one)
Sole Proprietorship Partnership Corporation Other (specify a legal entity recognized under federal income tax laws): __________________________________________________________
Plan Information
Name of Plan
Plan Sequence Number
Name of Plan Administrator (if not the Employer)
Plan Identification Number (if applicable)
Adopting Employer Tax Year End (specify month and day)
Street Address (no P.O. boxes)
City
State
Zip Code
Business Telephone Number
(
)
Existing Schwab Money Purchase Pension QRP Account Number (Required only if this is an amendment or restatement to an existing Schwab Money
Purchase Pension QRP):
—
Section One. Effective Dates (Complete Part A or B)
Part A.
New Plan Effective Date
This is the initial adoption of a money purchase pension plan by the Adopting Employer.
The Effective Date of this Plan is ___________________________.
(mm/dd/yyyy)
Note: The Effective Date is usually the first day of the Plan Year in which this Adoption Agreement is signed and may not be earlier than such date.
Part B.
Existing Plan Amendment or Restatement Date
This is an amendment or restatement of an existing qualified plan (a Prior Plan).
The Prior Plan was initially effective on ___________________________.
(mm/dd/yyyy)
The Effective Date of this amendment or restatement is ___________________________.
(mm/dd/yyyy)
Note: The restatement Effective Date is generally the first day of the Plan Year in which this Adoption Agreement is signed. An amendment
or restatement Effective Date after the first day of the Plan Year in which this Adoption Agreement is signed may result in a reduction or
elimination of accrued benefits, violating Code Section 411(d)(6). Notwithstanding the foregoing, Effective Dates for certain items (e.g.,
EGTRRA and other government pronouncements) are governed by the dates specified in the Basic Plan Document.
Section Two. Eligibility (Complete Parts A through C)
Part A. Age and Years of Eligibility Service
Age Requirement. An Employee will be eligible to become a Participant in the Plan for purposes of receiving an allocation of any Employer Money
Purchase Pension Contributions made pursuant to Section Three of the Adoption Agreement, after attaining age ______ (no more than 21).
Note: If no age is specified, there will be no age requirement.
Years of Eligibility Service Requirement. An Employee will be eligible to become a Participant in the Plan for purposes of receiving an allocation
of any Employer Money Purchase Pension Contributions made pursuant to Section Three of the Adoption Agreement (select one):
Option 1:
No Eligibility Service required.
Option 2:
After completing ______ consecutive Months of Eligibility Service (no more than 12).
Option 3:
After completing ______ Years of Eligibility Service (enter 0, 1 or 2).
Note: If no Years of Eligibility Service requirement is selected, Option 1 will apply. If more than one Year of Eligibility Service is selected in this
Section Two, Part A, the immediate 100 percent vesting schedule in Section Four will automatically apply for Employer Money Purchase Pension
Contributions.
Part B. Employees Employed as of Effective Date
Will an Employee employed as of the Effective Date listed in Section One, Part A of the Adoption Agreement who has not otherwise met the
requirements of Part A above be considered to have met those requirements as of the Effective Date (select one)?
Option 1:
Yes.
Option 2:
No.
Note: If no option is selected, Option 2 will apply.
WB
©2009 Charles Schwab & Co., Inc. All rights reserved. Member SIPC. FTA 07944 (0709-10088) APP20166ER (07/09)
Page 2 of 5
Section Two. Eligibility (Continued)
Part C. Hours Required for Eligibility Purposes
1.______ Hours of Service (no more than 1,000) shall be required to constitute a Year of Eligibility Service.
2.______ Hours of Service (no more than 500 and less than the number specified in Part C, item 1, above) must be exceeded to avoid a Break
in Eligibility Service.
Note: If no hours are specified, 1,000 and 500 will apply for items 1 and 2, respectively, unless the Elapsed Time method of determining service
applies.
Section Three. Contributions (Complete Parts A and B)
Part A. Employer Money Purchase Pension Contributions
For each Plan Year, Employer Money Purchase Pension Contributions will be allocated to the Individual Accounts of Qualifying Participants as follows:
Option 1: Nonintegrated Formula. An amount equal to ______ percent (not to exceed 25 percent) of the Qualifying Participant’s Compensation for the Plan Year.
Option 2: Integrated Formula. An amount equal to the sum of the amounts determined in Step 1 and 2:
Step 1: An amount equal to ______ percent (the base contribution percentage) of the Participant’s Compensation for the Plan Year
up to the integration level; plus
Step 2: An amount equal to ______ percent (not to exceed the base contribution percentage by more than the lesser of: (1) the
base contribution percentage, or (2) the money purchase maximum disparity rate as described in Section 3.04(B)(2) of the
Plan) of such Participant’s Compensation for the Plan Year in excess of the integration level.
The integration level shall be (select one):
Suboption (a): The Taxable Wage Base.
Suboption (b): $_____________ (a dollar amount less than the Taxable Wage Base).
Suboption (c): _____________ percent (not more than 100 percent) of the Taxable Wage Base.
Note: If no suboption is selected, Suboption (a) will apply.
Option 3: Frozen Plan. This Plan is frozen effective _____________, and the Employer will not make additional contributions to the Plan after
such date.
Note: If no option is selected, Option 1 will apply.
Part B. Qualifying Participants
A Participant will be a Qualifying Participant, and thus entitled to share in Employer Money Purchase Pension Contributions for any Plan Year, if
the Participant has satisfied all of the eligibility requirements described in Section Two of this Adoption Agreement on at least one day of such
Plan Year and has not incurred a Termination of Employment. If the Participant has incurred a Termination of Employment during the Plan Year,
the following additional condition(s) apply (select one):
Option 1: Hours of Service Requirement. The Participant completes more than ________ (not more than 500) Hours of Service during the
Plan Year.
Option 2: No Additional Conditions.
Note: If no Hours are specified, Option 1 and a 500 Hours of Service Requirement will apply.
Section Four. Vesting and Forfeitures (Complete Parts A and B)
Part A. Vesting Schedule for Employer Money Purchase Pension Contributions
A Participant will become Vested in the portion of their Individual Account derived from Employer Money Purchase Pension Contributions made
pursuant to Section Three of the Adoption Agreement as follows:
Vested Percentage
Years of
Vesting Service
Money Purchase
Option 1
100% Immediate
Option 2
3-Year Cliff
Option 3
6-Year Graded
Option 4
Variable Graded
(Complete if chosen)
Option 5
Variable Cliff
(Complete if chosen)
Less than One
100%
0%
0%
______%
______%
1
100%
0%
0%
______%
______%
______%
______%
______%
100%
______%
100%
______%
100%
100%
100%
2
100%
0%
20%
3
100%
100%
40%
4
100%
100%
60%
5
100%
100%
80%
6
100%
100%
100%
(not less than 20%)
(not less than 40%)
(not less than 60%)
(not less than 80%)
Note: If no option is selected as of the first date on which such contributions may be made to the Plan, Option 1 will apply.
WB
©2009 Charles Schwab & Co., Inc. All rights reserved. Member SIPC. FTA 07944 (0709-10088) APP20166ER (07/09)
Page 3 of 5
Section Four. Vesting and Forfeitures (Continued)
Part B. Year of Vesting Service
1.______ Hours of Service (no more than 1,000) will be required to constitute a Year of Vesting Service.
2.______ Hours of Service (no more than 500 but less than the number specified in Part B, item 1, above) must be exceeded to avoid a Break
in Vesting Service.
Note: If no hours are specified, 1,000 and 500 will apply for items 1 and 2, respectively.
Section Five. Distributions and Loans (Complete Parts A1b and A1c)
Part A. Form of Distribution
1. Individual Account Balances Exceeding $1,000
a. Lump Sum
Will a Participant be entitled to request a distribution of the Vested portion of their Individual Account in a lump sum, subject to Plan
Section 5.02?
Option 1: ✓ Yes.
Option 2: No.
b. Partial Payments
Will a Participant be entitled to request a partial distribution of the Vested portion of their Individual Account, subject to Plan Section 5.02?
Option 1: Yes.
Option 2: No.
c. Installment Payments
Will a Participant be entitled to request a distribution of the Vested portion of their Individual Account over a period not to exceed the life
expectancy of the Participant or the joint and last survivor life expectancy of the Participant and their designated Beneficiary, subject to
Plan Section 5.02?
Option 1: Yes.
Option 2: No.
d. Annuity Contracts
Will a Participant be entitled to apply the Vested portion of their Individual Account toward the purchase of an annuity contract, subject to
Plan Section 5.02?
Option 1: Option 2: Yes.
✓ No.
Note: Option 1 must be selected for at least one of items (a) through (d). If neither option is selected for items (a) or (b) in Part A, item 1
above, Option 1 will apply. If neither option is selected for items (c) or (d), Option 2 will apply. If this Plan is restating a Prior Plan, the forms of
distribution under this Plan must generally be at least as favorable as under the Prior Plan.
Part B. Loans
Loans are not permitted under this Plan.
Note: Generally, Code Section 411(d)(6) prohibits the elimination of protected benefits. Protected benefits include the timing of payout options. If the
Plan is restating a Prior Plan that permitted a distribution option described above that involves the timing of a distribution, the selections must generally
be at least as favorable as under the Prior Plan. Certain forms of distributions (e.g., redundant forms of distribution) may, however, be eliminated. Refer
to Code Section 411(d)(6) and the corresponding Treasury regulation for details pertaining to the elimination of otherwise protected benefits.
WB
©2009 Charles Schwab & Co., Inc. All rights reserved. Member SIPC. FTA 07944 (0709-10088) APP20166ER (07/09)
Page 4 of 5
Section Six. Definitions (Complete Parts A through D)
Part A. Hours of Service­— Method of Determining Service
Service will be determined on the basis of (select one):
Option 1: Elapsed Time.
Option 2: Actual hours for which an Employee is paid or entitled to payment.
Option 3: Days worked. An Employee will be credited with 10 Hours of Service if under the definition of Hours of Service such Employee
would be credited with at least one Hour of Service during the day.
Option 4: Weeks worked. An Employee will be credited with 45 Hours of Service if under the definition of Hours of Service such Employee
would be credited with at least one Hour of Service during the week.
Option 5: Semi-Monthly payroll periods worked. An Employee will be credited with 95 Hours of Service if under the definition of Hours of
Service such Employee would be credited with at least one Hour of Service during the semi-monthly payroll period.
Option 6: Months worked. An Employee will be credited with 190 Hours of Service if under the definition of Hours of Service such Employee
would be credited with at least one Hour of Service during the month.
Note: If no option is selected, Option 2 will apply.
Part B. Normal Retirement Age
The Normal Retirement Age under this Plan will be:
Option 1:
Age ________ (not to exceed 65 or such later age as may be allowed in Code Section 411(a)(8)).
Option 2:
The later of age ________ (not to exceed 65 or such later age as may be allowed in Code Section 411(a)(8)) or the ________ (not to
exceed fifth) anniversary of the first day of the first Plan Year in which the Participant commenced participation in the Plan.
Note: If no option is selected, Option 1 and age 65 will apply.
Part C. Plan Year Means
Option 1: The 12-consecutive-month period which coincides with the Adopting Employer’s tax year.
Option 2: The calendar year.
Option 3: The 52-/53-week period ending on the last ________________ (specify day of the week) nearest ________________ (specify month
and day) of each year.
Option 4: Other 12-consecutive-month period (specify a 12-consecutive-month period selected in a uniform and nondiscriminatory manner):
____________________________________________________________________________________________________________________.
Note: If no option is selected, Option 1 will apply.
If the initial Plan Year or any subsequent Plan Year is less than 12 months (a short Plan Year), specify such Plan Year’s beginning and ending
dates: __________________________________________________________________________________________________________________________.
Part D. Predecessor Employer Service
In addition to the Hours of Service credited when an Employer maintains the plan of a predecessor employer, Hours of Service with a predecessor
employer will be credited for the following purposes where the Employer does not maintain the plan of a predecessor employer (select all that apply):
Eligibility.
Vesting.
Allocation of Contributions.
Name of Predecessor Employer(s): ________________________________________________________________________________________________.
If service with a predecessor is taken into account for one or more of the items listed above, specify any additional limitations on crediting
service that apply (e.g., limitations by business classification, length of service): _______________________________________________________
_______________________________________________________________________________________________________________________________.
Section Seven. Miscellaneous
Part A. Life Insurance
Life insurance investments are not permitted under this Plan.
Part B. ERISA 404(c) Compliance
Does the Adopting Employer intend to operate this Plan in compliance with ERISA Section 404(c) as set forth in Plan Section 7.22(B)?
Option 1: Yes.
Option 2: No.
Note: If no option is selected, Option 1 will apply.
WB
©2009 Charles Schwab & Co., Inc. All rights reserved. Member SIPC. FTA 07944 (0709-10088) APP20166ER (07/09)
Page 5 of 5
Section Eight. Trustee and Custodian (Complete Part A unless the Plan only covers one or more Self-Employed Individuals or satisfies another
exception under ERISA)
Part A. Trustee
1. Trustee Appointment
The Trustee of this Plan shall be a Directed Trustee.
Name of Trustee
Trustee Address
City
State
Zip
Telephone Number
(
)
Signature Required
X
Trustee Signature
Date
2. Trust Agreement
If a Trustee is designated in Part A, item 1, above, the Trust provisions contained in Plan Section Eight will apply to the Plan.
Part B. Custodian
1. Custodian Appointment
Name of Custodian
Address
City
State
Zip
Telephone Number
Charles Schwab & Co., Inc.
211 Main Street
San Francisco
CA
94105
1-800-435-4000
2. Custodial Agreement
The Custodial provisions contained in Plan Section Eight will apply to the Plan.
Section Nine. Employer Signature
Prototype Sponsor
Name of Prototype Sponsor
Address
City
State
Zip
Telephone Number
Charles Schwab & Co., Inc.
211 Main Street
San Francisco
CA
94105
1-800-435-4000
Check this box if there is an attachment that applies to this Plan other than a separate trust or custodial agreement.
If this box is checked, please describe the attachment:___________________________________________________________________________________.
Authorized Employer Signature
I am an authorized representative of the Adopting Employer named above, and I state the following:
1. I acknowledge that I have relied upon my own advisors regarding the completion of this Adoption Agreement and the legal tax implications of adopting
this Plan;
2. I understand that my failure to properly complete this Adoption Agreement may result in disqualification of the Plan;
3. I understand that the Prototype Sponsor will inform me of any amendments made to the Plan and will notify me should it discontinue or abandon the
Plan; and
4. I have received a copy of this Adoption Agreement, the corresponding Basic Plan Document and, if applicable, any separate trust or custodial
agreement used in lieu of the trust or custodial agreement contained in the Basic Plan Document.
Signature and Date Required
X
Signature of Adopting Employer
Print Name
Date
Title
Note: The Adopting Employer may rely on an opinion letter issued by the Internal Revenue Service as evidence that the Plan is qualified under Code Section
401 of the Internal Revenue Code except to the extent provided in Revenue Procedure 2005-16. An Employer who has ever maintained or who later
adopts any plan (including a welfare benefit fund, as defined in Code Section 419(e), which provides post-retirement medical benefits allocated to separate
accounts for key employees, as defined in Code Section 419A(d)(3)), or an individual medical account, as defined in Code Section 415(l)(2), in addition
to this Plan may not rely on the opinion letter issued by the Internal Revenue Service with respect to the requirements of Code Sections 415 and 416.
If the Employer who adopts or maintains multiple plans wishes to obtain reliance with respect to the requirements of Code Sections 415 and 416,
application for a determination letter must be made to Employee Plans Determinations of the Internal Revenue Service. The Employer may not rely on
the opinion letter in certain other circumstances, which are specified in the opinion letter issued with respect to the Plan or in Revenue Procedure
2005-16. This Adoption Agreement may be used only in conjunction with Basic Plan Document #01.
PRINT
WB
©2009 Charles Schwab & Co., Inc. All rights reserved. Member SIPC. FTA 07944 (0709-10088) APP20166ER (07/09)
Schwab Qualified Retirement Plan (QRP)
Summary Plan Description
Simplified Money Purchase Plan
Page 1 of 11
Employer Instructions
1. If you have employees, complete the Summary Plan Description (SPD) in accordance with the elections you made on the Adoption Agreement.
2. Provide a photocopy of the completed SPD to each eligible employee (“Participant”).
3. Retain the original completed copy for your records. Do not send the SPD to Schwab.
To the Participant
Your Employer has adopted the Schwab QRP (“the Plan”) to help you and other employees save for retirement.
This SPD summarizes the important features of the Plan, including your benefits and obligations under the Plan. If you want more detailed information
about certain Plan features or have questions about the information contained in this SPD, you should contact your Employer. You may also see a copy of
the Plan document by making arrangements with your Employer. Certain terms in the SPD have a special meaning when used in the Plan. These terms
are capitalized throughout the SPD and are defined in more detail in the Definitions section of the SPD. If any information in this SPD conflicts with the
terms of the Plan document adopted by your Employer, the terms of the Plan document—not this SPD—will apply.
This SPD summarizes features of your Employer’s current Plan. If you receive this SPD because the Plan is being restated (updated), please note that
some provisions from prior versions of your Employer’s Plan document may continue to apply to some of the assets under the Plan. In addition, some
provisions under this Plan document may have special effective dates. A summary of any prior plan provisions or special effective dates (and who is
affected by these special provisions) is listed in the section titled “Administrative Information and Rights Under ERISA.”
Page 3 of 11
Plan Name: _____________________________________________________________________________.
Eligibility
Q1. Am I eligible to participate in the Plan?
You will be eligible to participate in the Plan after meeting certain age and service requirements described in Question 2 below. However, if you are
covered by a collective bargaining agreement (for example, union agreement) and your exclusion from coverage under this Plan was part of the negotiated agreement, or you are a nonresident alien and received no income from within the United States, you will be excluded from the Plan. If you became
an employee as a result of a recent merger, acquisition, or similar transaction, you will not be eligible to participate in the Plan during a transition period
covering the Plan Year in which the transaction occurred and the following Plan Year.
Q2. What requirements do I have to meet before I am eligible to participate in the Plan?
You will generally become eligible to participate in the Plan after you meet the age and service requirements listed below.
Age: _____________
Eligibility Service:
No eligibility service requirements apply.
You must complete ______ consecutive months of eligibility service.
You must complete ______ years of eligibility service.
Your initial eligibility measuring period will be the 12-month period beginning with your hire date. If you do not satisfy the eligibility requirements
during that first measuring period, eligibility will be calculated based on the Plan Year.
You will be credited with a year of eligibility service if ______ hours were worked during the eligibility measuring period. You will need to work ______
hours to avoid a break in eligibility service.
You will be given credit for eligibility purposes for your Hours of Service with the following predecessor employer(s):
_________________________________________________________________________________________________________ .
will
will not apply to you, and you will be eligible to enter the Plan on the next entry date if you were employed by
These service requirements
the Employer when this Plan became effective on __________________. If the Plan document is being amended or restated on to a new Plan
(mm/dd/yyyy)
document and you were eligible to participate in the prior plan, you will continue to be eligible to participate in this Plan without satisfying any
additional age or service requirements.
Q3. When can I enter the Plan?
Once you have met any age and service requirements indicated above, you will enter the Plan on the next semi-annual entry date (the first day of the
Plan Year and the first day of the seventh month of the Plan Year).
Q4. What happens to my Plan eligibility if I terminate my employment and am later rehired?
Once you meet the eligibility requirements and enter the Plan, you will continue to participate while you are still employed by the Employer, even if you
have a break in eligibility service. If you had not yet met the eligibility requirements and had a break in eligibility service, the periods before your break in
service will not be taken into account and you will have to satisfy the eligibility requirements following your break in service. Periods during which you
have a break in eligibility service will not count against you if you were absent because you were pregnant, had a child or adopted a child, were serving in
the military, or provided certain service during a national emergency (and reemployment is protected under federal or state law), and you start working
again for your same Employer within the time required by law.
If you had met the eligibility requirements and were a Participant in the Plan before terminating employment or having a break in eligibility service, and
are later rehired, you will enter the Plan immediately.
Q5. Once I am a Plan Participant, what must I do to continue to participate in the Plan?
You will continue to participate in the Plan as long as you do not have a break in service. A break in service is a 12-consecutive-month period during
which you fail to work more than the minimum number of Hours of Service indicated in Question 2 in this section. But no break in service will occur if the
reason you did not work more than the required number of hours was because of certain absences due to birth of a child, pregnancy, adoption of
children, military service or other service during a national emergency during which your reemployment is protected under a federal or state law and you
do, in fact, return to your employment within the time required by law.
Page 4 of 11
Contributions and Vesting
Q1. Will my Employer make Money Purchase Pension Contributions to the Plan on my behalf?
To receive a Money Purchase Pension Contribution for the Plan Year during which you terminate your employment, you must meet the eligibility
requirements described in the Eligibility section of this Summary Plan Description on at least one day during that Plan Year and you must satisfy the
following requirements.
You must work ______ hours during the Plan Year.
You will be given credit for contribution allocation purposes for your Hours of Service with the following predecessor employer(s):
_________________________________________________________________________________________________________ .
Each year that you satisfy the eligibility requirements, a Money Purchase Pension Contribution will be allocated to you using
a nonintegrated formula. Under this formula, you will receive an amount equal to ______% of your Compensation.
an integrated formula. Under this formula, you will receive a base contribution of ______% up to ______ (the integration level). You will receive an
additional contribution of ______% if you have Compensation above the integration level. The integration level will be
the Taxable Wage Base ($106,800 for 2009).
$__________________.
______% of the Taxable Wage Base.
The $106,800 limit for the Taxable Wage Base will increase as the cost of living increases.
a frozen plan formula. Because the Plan was frozen effective __________________, your Employer will not make any additional contributions to the
Plan after that date.
Q2. Will my Employer make any other types of contributions to the Plan on my behalf?
If more than 60% of the assets in the Plan are held by Key Employees, your Employer may need to make an additional contribution for Participants who
are not Key Employees.
Q3. If I have money in other retirement plans, can I combine them with my dollars under this Plan?
Your Employer may allow you to roll over dollars you have saved in qualified plans, 403(b) annuity contracts, eligible plans under Code Section 457(b) and
IRAs into this Plan unless you are part of any excluded class of employees. The Plan will accept both rollovers paid directly from the distributing plan to
this Plan and rollovers distributed to you and then deposited into this Plan through an indirect rollover procedure. Nondeductible Employee Contributions
may not be rolled into this Plan. Your Employer will provide you with the forms or information needed to determine whether your prior plan balance is
qualified to be rolled over into this Plan and whether you meet the eligibility requirements for a rollover. You are always 100% vested in your rollover
contributions.
Your Employer may allow you to transfer dollars you have saved in other retirement arrangements into this Plan unless you are part of any excluded class
of employees. Your Employer will provide you with the forms or information needed to determine whether your prior plan balance is qualified to be
transferred into this Plan. You are always 100% vested in your transfer contributions.
Q4. Are there any limits on how much can be contributed for me?
You may not have total contributions of more than $49,000 (in 2009) or an amount equal to 100% of your Compensation, whichever is less, allocated to
the Plan for your benefit each year. The $49,000 limit will increase as the cost of living increases.
Q5. Will contributions be made for me if I am called to military service?
If you are reemployed by your Employer after completing military service, you may be entitled to receive certain make-up contributions from your
Employer. If you are reemployed after military service, contact your Plan Administrator for more information about your options under the Uniformed
Services Employment and Reemployment Rights Act (USERRA) of 1994.
Q6. Will I be able to keep my Employer contributions if I terminate employment or am no longer eligible to participate in the Plan?
Money Purchase Pension Contributions will be subject to a vesting schedule and could be forfeited if you terminate your employment or experience a
break in service. You will earn the right to a greater portion of your Money Purchase Pension Contributions the longer you work for your Employer, as
outlined in the schedules below.
Year of Vesting Service
Generally, all of your Years of Service with the Employer count toward determining your vested percentage, and you will be credited with a Year of Vesting
Service if you are paid or entitled to pay from the Employer during the Plan Year.
To earn a Year of Vesting Service, you must work at least ______ hours during the Plan Year.
You will be given credit for vesting purposes for your Hours of Service with the following predecessor employer(s):
____________________________________________________________________________________________________________ .
To avoid a break in vesting service, you must work at least ______ hours during a Year of Vesting Service.
Although your Employer has adopted a vesting schedule, your balance will become 100% vested when you reach Normal Retirement Age, the Plan is
terminated, contributions to the Plan are discontinued, or when you die, become Disabled, or reach the Early Retirement Age.
Page 5 of 11
Contributions and Vesting (Continued)
The following vesting schedule will apply to Money Purchase Pension Contributions.
Money Purchase Pension Contribution Vested Percentage
Option 1
100% Immediate
Option 2
3-Year Cliff
Option 3
6-Year Graded
Option 4
Variable Graded
(Complete if chosen)
Option 5
Variable Cliff
(Complete if chosen)
Less than One
100%
0%
0%
______%
______%
1
100%
0%
0%
______%
______%
______%
______%
______%
100%
______%
100%
______%
100%
100%
100%
Years of
Vesting Service
2
100%
0%
20%
3
100%
100%
40%
4
100%
100%
60%
5
100%
100%
80%
6
100%
100%
100%
(not less than 20%)
(not less than 40%)
(not less than 60%)
(not less than 80%)
Example: Your Employer has selected Option 3 above. You have worked for your Employer for four years and have received Money Purchase Pension
Contributions of $1,000. You terminate employment and request a distribution of your Money Purchase Pension Contribution balance. Because you have
four years of vesting service, you will receive 60%, or $600.
Q7. What happens to my nonvested percentage if I terminate employment?
If you terminate employment, you will always retain the right to the vested portion of your Plan balance. If you do not take a distribution, the nonvested
portion of your Plan balance will be placed in a suspense account, and will be restored to you if you are rehired before five breaks in vesting service have
occurred. If you decide to take a payout of the entire vested portion of your balance, your nonvested portion will be forfeited. If you are rehired before
five breaks in vesting service occur, your forfeited amount will be restored if you repay to the Plan the full amount of your payout. Forfeitures may be
used to pay the Plan’s administrative expenses. Forfeitures may also be used to reduce future Employer contributions to the Plan.
Distributions and Loans
Q1. Can I withdraw money from the Plan while I am still employed?
The Plan is designed to help you build an account that will help support you during your retirement years. However, you will be able to take certain
distributions from the Plan while you are still working for your Employer. You may request a distribution of Transfer Contributions and rollover contributions, if applicable, at any time. In addition, you may request a distribution of the entire vested portion of your Plan balance if you become Disabled.
Q2. What money is available once I terminate my employment?
Once you are no longer working for your Employer, you may access the vested portion of your balance in the Plan.
Q3. How do I request a distribution?
You (or your beneficiary) must complete a distribution form. Your distribution will begin as soon as administratively feasible following your request for a
distribution.
Q4. If I am married, does my spouse have to approve my distributions from the Plan?
If you are married, you must get written consent from your spouse to take a distribution from the Plan in any form other than a qualified joint and survivor
annuity or to name someone other than your spouse as your beneficiary. The annuity would need to be structured to provide a benefit while you are both
alive and then to provide a survivor benefit that is equal to 50% of the amount you received while you were both living. Your Employer will provide you
with more information regarding your annuity options when it comes time for you to make a distribution decision. Your Employer’s distribution request
forms or other procedures established by your Employer will provide you and your spouse the option to waive the annuity and take the payment in some
other form permitted by the Plan.
Q5. How will my money be distributed to me if I request a distribution from the Plan?
You may choose from the following options for your distribution:
Lump sum
Partial payments
Installment (periodic) payments
If your distribution is eligible to be rolled over, you may choose to have your distribution paid to another eligible retirement arrangement. Contact your
Employer for the documentation and procedures that apply to rollovers.
Page 6 of 11
Distributions and Loans (Continued)
Q6. Do any penalties or restrictions apply to my distribution?
Generally, if you take a distribution from the Plan before you are age 59½, a 10% early distribution penalty will apply to the taxable portion of your
distribution. There are some exceptions to the 10% penalty. Your tax advisor can assist you in determining whether you qualify for a penalty exception.
If your distribution is eligible to be rolled over and you take the payout rather than rolling it over to another retirement arrangement, 20% of the taxable
portion of your distribution will be withheld and sent to the IRS as a credit toward the taxes you will owe on the distribution amount.
Example: You request a $10,000 distribution from your Plan balance. If the amount is eligible to be rolled over to another plan, but you choose not to roll
it over, you will receive $8,000 and $2,000 will be sent to the IRS.
Q7. Can I take a loan from the Plan?
No. Your Plan is designed to help you save for retirement and does not allow you to take a loan from your account under this Plan.
Q8. How do I apply for a loan?
This is not applicable to the Plan.
Q9. What if I don’t repay my loan?
This is not applicable to the Plan.
Q10. What if I die before receiving all of my money from the Plan?
If you die before taking all of your assets from the Plan, the remaining balance will be paid to your designated beneficiary. If you do not name a beneficiary and you are married, your spouse will be your beneficiary. If you do not name a beneficiary and you are not married, your remaining balance in the
Plan will be paid to your estate.
To designate your beneficiary, you must complete a beneficiary designation form or follow alternate procedures established by your Employer. If you are
married and decide to name someone other than your spouse as your beneficiary, your spouse must consent in writing to your designation. It is important
to review your designation from time to time and update it if your circumstances change (for example, a divorce, death of a named beneficiary).
Your beneficiary will generally have the same options regarding the form of the distribution that are available to you as a Participant. If the Plan is
subject to the spousal consent requirements, however, and the balance is greater than $5,000, your beneficiary may be required to take the payouts in
the form of a life annuity, unless the annuity has been properly waived by you (and your spouse, if applicable) during your lifetime. Your spouse beneficiary may also have the option of rolling their distribution into an IRA.
If you die after beginning age 70½ distributions, your beneficiary must continue taking annual distributions from the Plan at least annually. If you die
before beginning age 70½ payments, your beneficiary may have the option of (1) taking annual payments beginning the year following your death (or the
year you would have reached age 70½, if your spouse is your beneficiary), or (2) delaying their distribution until the year containing the fifth anniversary
of your death, provided they take the entire amount remaining during that fifth year.
Q11. How long can I leave my money in the Plan?
How long you can leave your money in the Plan varies depending on your Plan balance and whether you are still employed.
Cashouts at Termination of Employment
If your vested balance at the time you terminate from employment is less than $1,000, you must take it out of the Plan when you terminate employment.
If you do not tell your Employer what to do with your account under the Plan (for example, roll it over to an IRA), your Employer will distribute your Plan
account as a lump sum. If your balance is greater than $1,000, even if you terminate service, you are not required to take a distribution from the Plan
until the age 70½ required distribution rules apply to you. Rollover contributions will be included in determining your balance for these cashout purposes.
Age 70½ Required Distributions
When you reach age 70½, you will generally need to begin taking a portion of your balance out of the Plan each year. If you continue to work for your
Employer after age 70½, you may delay required distributions until you actually stop working for your Employer, unless you own more than 5% of the
Employer. If you own more than 5% of the Employer, you will need to begin taking payments at age 70½ even if you are still employed. The annual
required distribution amount is generally based on your account balance divided by a life expectancy factor outlined in retirement plan regulations.
Q12. What if the Plan is terminated?
If the Plan is terminated, you will be required to take your entire account balance from the Plan.
Page 7 of 11
Investing Your Plan Account
Q1. What investments are permitted under the Plan?
You direct the investments for your account in the Plan. You may choose from the full array of stocks, bonds and mutual funds available through Charles
Schwab & Co., Inc. However, you cannot invest in life insurance policies, employer securities or real estate. You should carefully review the investment
prospectus or other available information before making your investment selections.
Note: Your Employer (or someone appointed by your Employer) may choose to select a list of investments that you’ll be permitted to invest in and that
may change from time to time. Contact your Employer if you are not certain whether a particular investment is permitted under the Plan.
Q2. Am I responsible for selecting the investments for my account under the Plan?
You have the right to decide how all of your Plan account will be invested. However, your Employer (or someone appointed by your Employer) may choose
to select a list of investments that will be permitted for you to invest in, as well as establish administrative procedures that you must follow to select
your investments. If you do not select investments for your Plan account, your Employer may determine how your account will be invested. Contact your
Employer if you are not certain whether a particular investment is permitted under the Plan.
Will this Plan be operated in compliance with ERISA Section 404(c)?
No
Yes
If “Yes” is selected, your Employer intends to operate this Plan in compliance with Section 404(c) of the Employee Retirement Income Security Act
(ERISA) and Title 29 of the Code of the Federal Regulations Section 2550.404c-1. This means that your Employer and others in charge of the Plan
will not be responsible for any losses that result from investment instruction given by you or your beneficiary.
Q3. How frequently can I change my investment selections?
You may change your investment selections at any time, unless otherwise designated by your Employer or someone appointed by your Employer.
Administrative Information and Rights Under ERISA
Q1. Who established the Plan?
The Official Name of the Plan Is
The Employer Who Adopted the Plan Is
Business Address
Business Telephone Number
Federal Tax Identification Number
Fiscal Year End
Plan Number
Additional Employers that share common ownership with your Employer will also be included in the Plan. You may obtain a complete list of other
Employers adopting the Plan by submitting a written request to your Employer.
If applicable, the Plan trustee is:
Trustee Name
Title
Business Address
Business Telephone
This Plan is a Money Purchase Pension defined contribution plan, which means that contributions to the Plan made on your behalf (and earnings) will be
separately accounted for within the Plan.
Q2. When did the Plan become effective?
New Plan
The effective date of the Plan is ______________________.
(mm/dd/yyyy)
Amendment and Restatement of a Prior Plan
Your Employer has amended and restated the Plan, which was originally adopted on ______________________. The effective date of this amended
(mm/dd/yyyy)
Plan is ______________________.
(mm/dd/yyyy)
Special Effective Dates
If this option is selected, certain features of the Plan take effect on the dates listed below, rather than on the general Plan effective date listed above.
_______________________________________________________________________________________________________
_______________________________________________________________________________________________________
_______________________________________________________________________________________________________
Page 8 of 11
Administrative Information and Rights Under ERISA (Continued)
Q3. Who is responsible for the day-to-day operations of the Plan?
Your Employer is responsible for the day-to-day administration of the Plan unless a Plan Administrator is appointed below.
Appointed Plan Administrator (if not the Employer)
Your Employer has appointed the following Plan Administrator to handle the day-to-day operations of the Plan:
Plan Administrator Name
Business Address
Business Telephone
To assist in operating the Plan efficiently and accurately, your Employer may appoint additional persons or organizations to act on its behalf or to
perform certain functions. References to Employer in this Summary Plan Description will include the Plan Administrator named above.
Q4. Who pays the expenses for operating the Plan?
All reasonable Plan administration expenses, including those involved in retaining necessary professional assistance, may be paid from the assets of the
Plan. These expenses may be allocated among you and all other Plan Participants or, for expenses directly related to you, charged against your account
balance. Examples of expenses that may be directly related to you include fees for processing qualified domestic relations orders, if applicable. Finally,
the Employer may pay any or all of these expenses. For example, the Employer may pay expenses for current employees, but may deduct the expenses
of former employees directly from their accounts. Contact your Employer for information about Plan operating expenses and the method of payment of
the expenses.
Note: For standard commission rates and other fees and charges that may affect your account in the Plan, see the Charles Schwab Pricing Guide for
Individual Investors (the “Guide”), including any amendments to the Guide, for details.
Q5. Does my Employer have the right to change the Plan?
The Plan will be amended from time to time to incorporate changes required by the law and regulations governing retirement plans. Your Employer also has
the right to amend the Plan to add new features or to change or eliminate various provisions. An Employer cannot amend the Plan to take away or reduce
protected benefits under the Plan (for example, the Employer cannot reduce the vesting percentage that applies to your current balance in the Plan).
Your Employer has elected to retain the following provisions from prior versions of the Plan for certain Plan assets:
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
Q6. Does participation in the Plan provide any legal rights regarding my employment?
The Plan does not intend to provide, and does not provide, any additional rights to employment or constitute a contract for your employment. The
purpose of the Summary Plan Description is to help you understand how the Plan operates and the benefits available to you under the Plan. The Plan
document is the legal document that controls the operation of (and rights granted under) the Plan. If there are any inconsistencies between this
Summary Plan Description and the Plan document, the Plan document will be followed.
Q7. Can creditors or other individuals request a payout from my Plan balance?
Creditors (other than the IRS) and others generally may not request a distribution from your Plan balance. One major exception to this rule is that your
Employer may distribute or reallocate your benefits in response to a qualified domestic relations order. A qualified domestic relations order is an order or
decree issued by a court that requires you to pay child support or alimony or to give a portion of your Plan account to an ex-spouse or legally separated
spouse. Your Employer will review the order to ensure that it meets certain criteria before any money is paid from your account. You (or your beneficiary)
may obtain, at no charge, a copy of the procedures your Employer will use for reviewing and qualifying domestic relations orders.
Q8. How do I file a claim?
To claim a benefit that you are entitled to under the Plan, you must file a written request with your Employer. The claim must set forth the reasons you
believe you are eligible to receive benefits, and you must authorize your Employer to conduct any necessary examinations and take the steps to evaluate
your claim.
Q9. What if my claim is denied?
Except as described here, if your claim is denied, your Employer will provide you (or your beneficiary) with a written notice of the denial within 90 days of
the date your claim was filed. This notice will give you the specific reasons for the denial, the specific provisions of the Plan upon which the denial is
based, and an explanation of the procedures for appeal.
In the case of a claim for disability benefits, if the Employer is making a determination of whether you are Disabled, you will be notified of a denial of your
claim within a reasonable amount of time, but not later than 45 days after the Plan receives your claim. The 45-day time period may be extended by the
Plan for up to 30 days if the Employer determines that an extension is necessary due to matters beyond the control of the Plan. The Employer will notify
you, before the end of the 45-day period, of the reason(s) for the extension and the date by which the Plan expects to make a decision regarding your claim.
If, before the end of the 30-day extension, your Employer determines that, due to matters beyond the control of the Plan, a decision regarding your claim
cannot be made within the 30-day extension, the period for making the decision may be extended for an additional 30 days provided that your Employer
notifies you, before the end of the first 30-day extension, of the circumstances requiring the additional extension and the date as of which the Plan
Page 9 of 11
Administrative Information and Rights Under ERISA (Continued)
expects to make a decision. The notice will specifically explain the standards on which the approval of your claim will be based, the unresolved issues
that prevent a decision on your claim, and the additional information needed to resolve those issues. You will have at least 45 days within which to
provide the specified information.
The period of time within which approval or denial of your claim is required to be made generally begins at the time your claim is filed. If the period of time
is extended because you fail to submit information necessary to decide your claim, the period for approving or denying your claim will not include the
period of time between the date on which the notification of the extension is sent to you and the date on which you provide the additional information.
Your Employer will provide you with written or electronic notification if your claim is denied. The notification will provide the following:
i. The specific reason or reasons for the denial;
ii. Reference to the specific section of the Plan on which the denial is based;
iii. A description of any additional information that you must provide before the claim may continue to be processed and an explanation of why such
information is necessary;
iv. A description of the Plan’s review procedures and the time limits applicable to such procedures, including a statement of your right to bring a civil
action under Section 502(a) of the Employee Retirement Income Security Act (ERISA) following a claim denial on review; and
v. In the case of a Plan providing disability benefits, if your Employer used an internal rule or guideline in denying your claim, 1) either the specific rule
or guideline, or a statement that the rule or guideline was relied upon in denying your claim, and 2) that a copy of the rule or guideline will be provided
free of charge to you upon request.
vi. If the claim denial is based on a medical necessity, experimental treatment, or similar situation, either an explanation of the scientific or clinical
basis for the denial, applying the terms of the Plan to your medical circumstances, or a statement that an explanation will be provided free of charge
upon request.
Q10. May I appeal the decision of the Employer?
You or your beneficiary will have 60 days from the date you receive the notice of claim denial in which to appeal your Employer’s decision. You may
request that the review be in the nature of a hearing and an attorney may represent you.
However, in the case of a claim for disability benefits, if your Employer is deciding whether you are Disabled under the terms of the Plan, you will have at
least 180 days following receipt of notification of a claim denial within which to appeal your Employer’s decision.
You may submit written comments, documents, records, and other information relating to your claim. In addition, you will be provided, upon request and
free of charge, reasonable access to, and copies of, all documents, records, and other information pertaining to your claim.
Your appeal will take into account all comments, documents, records, and other information submitted by you relating to the claim, even if the information was not included originally.
If the claim is for disability benefits:
i. Your claim will be reviewed independent of your original claim, and will be conducted by a named fiduciary of the Plan other than the individual who
denied your original claim or any of his or her employees.
ii. In deciding an appeal of a claim denial that is based in whole or in part on a medical judgment, the appropriate named fiduciary will consult with a
health care professional who has appropriate training and experience in the field of medicine involved in the medical judgment;
iii. Your Employer will provide you with the name(s) of the health care professional(s) who was consulted in connection with your original claim, even if
the claim denial was not based on his or her advice. The health care professional consulted for purposes of your appeal will not be the same person
or any of his or her employees.
iv. You will be notified of the outcome of your appeal no later than 45 days after receipt of your request for the appeal, unless the Employer determines
that special circumstances require an extension of time for processing the claim. If your Employer determines that an extension is required, written
notice of the extension will be provided to you before the end of the initial 45-day period. The notice will identify the special circumstances requiring
an extension and the date by which the Plan expects to make a decision regarding your claim.
Your Employer will provide you with written or electronic notification of the final outcome of your claim. The notification will include:
i. A statement that you are entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and
other information relevant to your claim;
ii. A statement describing any additional voluntary appeal procedures offered by the Plan, your right to obtain the information about such procedures,
and a statement of your right to bring an action under Section 502(a) of ERISA; and
iii. If the Employer used an internal rule or guideline in denying your claim, 1) either the specific rule or guideline, or a statement that the rule or
guideline was relied upon in denying your claim, and 2) that a copy of the rule or guideline will be provided free of charge to you upon request.
iv. If the claim denial is based on a medical necessity, experimental treatment, or similar situation, either an explanation of the scientific or clinical
basis for the denial, applying the terms of the Plan to your medical circumstances, or a statement that an explanation will be provided free of charge
upon request.
Q11. If I need to take legal action that involves the Plan, who is the agent for service of legal process?
The person who can be served with legal papers regarding the Plan is the Employer, the Plan Trustee or the Plan Administrator, as applicable.
Name: ______________________________________________________________________________________________________
Address: ____________________________________________________________________________________________________
Page 10 of 11
Administrative Information and Rights Under ERISA (Continued)
Q12. If the Plan terminates, does the federal government insure my benefits under the Plan?
If the Plan terminates, you will become fully vested in your entire balance under the Plan, even though you would not otherwise have a sufficient number
of years of vesting service to be 100% vested in your balance. You will be entitled to take your entire balance from the Plan following termination.
The type of plan in which you participate is not insured by the Pension Benefit Guarantee Corporation, the government agency that insures certain
pension plan benefits upon plan termination.
Q13. What are my legal rights and protections under the Plan?
As a Participant in this Plan, you are entitled to certain rights and protections under ERISA. ERISA provides that all Plan Participants shall be entitled to
do the following.
Receive Information About Your Plan and Benefits
1. Examine, without charge, at the Employer’s office and at other specified locations, such as worksites and union halls, all Plan documents governing
the Plan, including insurance contracts and collective bargaining agreements, and a copy of the latest annual report (Form 5500 Series) filed by the
Plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration.
2. Obtain, upon request to the Employer, copies of documents governing the operations of the Plan, including insurance contracts and collective
bargaining agreements, and copies of the latest annual report (Form 5500 Series) and updated Summary Plan Description (SPD). The Employer may
charge a reasonable fee for the copies.
3. Receive a summary of the Plan’s annual financial report. The Employer is required by law to furnish each Participant with a copy of this Summary
Annual Report.
4. Obtain, once a year, a statement of the total pension benefits accrued and the vested pension benefits (if any) or the earliest date on which benefits
will become vested. The Plan may require a written request for this statement, but it must provide the statement free of charge.
Prudent Actions by Plan Fiduciaries
In addition to creating rights for Plan Participants, ERISA imposes duties upon the people who are responsible for the operation of the Plan. The people
who operate your Plan, called “fiduciaries” of the Plan, have a duty to do so prudently and in the interest of you and other Plan Participants and
beneficiaries. No one, including your Employer, your union, or any other person, may fire you or otherwise discriminate against you in any way to prevent
you from obtaining a pension benefit or exercising your rights under ERISA.
Enforce Your Rights
If your claim for a benefit is denied or ignored, in whole or in part, you have a right to know why this was done, to obtain copies of documents relating to
the decision without charge, and to appeal any denial, all within certain time schedules. Under ERISA, there are steps you may take to enforce the above
rights. For instance, if you request a copy of Plan documents or the latest annual report from the Plan and do not receive them within 30 days, you may
file suit in a federal court. In such a case, the court may require the Employer to provide the materials and pay you up to $110 a day until you receive the
materials, unless the materials were not sent because of reasons beyond the control of the Employer. If you have a claim for benefits which is denied or
ignored, in whole or in part, you may file suit in a state or federal court. In addition, if you disagree with the Plan’s decision or lack thereof concerning the
qualified status of a domestic relations order or a medical child support order, you may file suit in federal court. If it should happen that Plan fiduciaries
misuse the Plan’s money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you
may file suit in a federal court. The court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you
have sued to pay the costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if the court finds your claim is frivolous.
Assistance with Your Questions
If you have any questions about your Plan, you should contact the Employer. If you have any questions about this statement or about your rights under
ERISA, or if you need assistance in obtaining documents from the Employer, you should contact the nearest area office of the Employee Benefits
Security Administration, U.S. Department of Labor, listed in your telephone directory, or the Division of Technical Assistance and Inquiries, Employee
Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue NW, Washington DC 20210. You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.
Further, if this Plan is maintained by more than one Employer, you may obtain a complete list of all such Employers by making a written request to your
Employer.
Definitions
Compensation—Generally the amount of your earnings from your Employer taken into account under the Plan is all earnings reported to you on Form
W-2. Compensation will include certain amounts that are not included in your taxable income that were deferred under a cafeteria plan, a 401(k) plan, a
salary deferral SEP plan, a 403(b) tax-sheltered annuity plan, a 457 deferred compensation plan of a state or local government or tax-exempt employer,
or transportation fringe benefits.
If you receive payments from your Employer within 2½ months after severing your employment, any regular pay for services you performed before severance
will be included in Compensation. However, unused accrued sick, vacation or other leave that you are entitled to cash out and amounts received under a
nonqualified unfunded deferred compensation program will be excluded from Compensation. Amounts deemed to be compensation that relate to an
automatic enrollment cafeteria plan where you fail to provide proof of insurance will also be excluded when determining your Compensation.
The measuring period for Compensation will be the Plan Year unless a different measuring period is required by law or regulations (for example, certain
compliance tests). Generally, only Compensation paid to an employee after becoming a Participant will be considered. The maximum amount of a Participant’s Compensation that will be taken into account under the Plan is $245,000 (for 2009). This amount will increase as the cost of living increases.
Disabled—You will be considered Disabled if you cannot engage in any substantial, gainful activity because of a medically determined physical or mental
impairment that is expected to last at least 12 months.
Page 11 of 11
Definitions (Continued)
Employer—The Employer who adopted this Plan is ____________________________________________. Your Employer will also serve as the Plan Administrator, as defined in ERISA, who is responsible for the day-to-day operations and decisions regarding the Plan, unless a separate Plan Administrator is
appointed for all or some of the Plan responsibilities. The term Employer, as used in this Summary Plan Description, will also mean Plan Administrator,
as that term is used in ERISA.
Highly Compensated Employee—A Highly Compensated Employee is any employee who
1) was a more than 5% owner at any time during the year or the previous year, or
2) for the previous year had Compensation from the Employer greater than $110,000 (for 2009). This amount will increase as the cost of living increases.
Hour of Service—Service will be measured based on actual hours for which you are entitled to pay.
Key Employee—Any employee in the current year or previous year who is
1) an officer of the Employer whose annual Compensation is greater than $160,000 (for 2009);
2) a more than 5% owner of the Employer; or
3) a more than 1% owner of the Employer who has Compensation of more than $160,000 will be classified as a Key Employee.
The $160,000 amount for officers will increase as the cost of living increases.
Money Purchase Pension Contributions—Your Employer will make the contributions outlined in the Contributions and Vesting section of this Summary
Plan Description (SPD) for each employee who satisfies the eligibility requirements for Money Purchase Pension Contributions described in the Eligibility
section of the SPD.
Normal Retirement Age—Age ___________.
Participant—An employee of the Employer who has satisfied the eligibility requirements and entered the Plan.
Plan—The Plan described in this Summary Plan Description is the ___________________________________________________________________________ .
Plan Administrator—Your Employer is responsible for the day-to-day administration of the Plan unless an appointed Plan Administrator is named below.
To assist in operating the Plan efficiently and accurately, your Employer may appoint additional individuals to act on its behalf or to perform certain
functions. References to Employer in this Summary Plan Description will include any appointed Plan Administrator named in Question 3 of Administrative
Information and Rights Under ERISA.
To assist in operating the Plan efficiently and accurately, your Employer may appoint additional persons or organizations to act on its behalf or to
perform certain functions. References to Employer in this Summary Plan Description will include the Plan Administrator named above.
Plan Year—The Plan Year is
the 12-month period which is the same as your Employer’s tax year.
the calendar year.
the 52-/53-week period ending on the last _________________ nearest _________________ of each year.
other 12-consecutive-month period: ______________________________________________________________________________ .
Tax Year End—Your Employer’s tax year end is _________________.
Taxable Wage Base—The Social Security Administration sets a contribution and benefit base level each year, which is referred to as the Taxable Wage Base.
©2009 Charles Schwab & Co., Inc.
All rights reserved. Member SIPC.
FTA 08025 (0709-10088) REG48692 (08/09)
Schwab Qualified Retirement Plan (QRP)
Summary of Material Modifications for
Pension Protection Act of 2006 (PPA)
Simplified Money Purchase Pension Plan
Page 1 of 2
Plan Name: _____________________________________________________________________________
To the Participant
The purpose of this document is to update several provisions of your Summary Plan Description (SPD). This document is very important and should be
kept with your SPD. If any provisions in this Summary of Material Modifications (SMM) conflict with your SPD, the terms of this SMM will apply. Unless
otherwise noted, the effective date of this SMM is the first day of the first Plan Year beginning after August 17, 2006, or the effective date of the Plan,
whichever is later. To the extent addressed below, the following sections of your SPD are amended to read as follows:
Contributions
Q1. If I have money in other retirement plans, can I combine it with my dollars under this Plan?
Rollover Contributions
Your Employer may allow you to roll over dollars you have saved in qualified plans, 403(b) annuity plans, eligible plans under Code Section 457(b), and
IRAs into this Plan unless you are part of any excluded class of employees. This Plan will accept both rollovers paid directly from the distributing plan to
this Plan and rollovers distributed to you and then deposited into this Plan through an indirect rollover procedure. Nondeductible Employee Contributions, including those from 403(b) annuity plans, may not be rolled into this Plan. Your Employer will provide you with the forms or information needed to
determine whether your prior plan balance is qualified to be rolled over into this Plan and whether you meet the eligibility requirements for a rollover. You
are always 100% vested in your rollover contributions.
Vesting
Q2. Will I be able to keep my Employer contributions if I terminate employment or am no longer eligible to participate in the Plan?
Money Purchase Pension Contributions will be subject to a vesting schedule and could be forfeited if you terminate your employment or experience a
break in service. You will earn the right to a greater portion of your Money Purchase Pension Contributions the longer you work for your Employer as
outlined in the schedule below.
Money Purchase Pension Contributions
For Plan Years beginning on or after January 1, 2007, the Money Purchase Pension Contribution vesting schedule listed below will generally apply to all
Participants and all Money Purchase Pension Contributions that were previously subject to a less favorable vesting schedule.
Vested Percentage
Option 1
3-Year Cliff
Option 2
6-Year Graded
Option 3
100% Immediate
Option 4
Variable Graded
(Complete if chosen)
Less than One
0%
0%
100%
______%
1
0%
0%
100%
______%
2
0%
20%
100%
3
100%
40%
100%
4
100%
60%
100%
5
100%
80%
100%
6
100%
100%
100%
Years of
Vesting Service
______%
(not less than 20%)
______%
(not less than 40%)
______%
(not less than 60%)
______%
(not less than 80%)
100%
If the Money Purchase Pension Contribution vesting schedule listed above does not apply to you, refer to your Summary Plan Description for information
regarding the prior vesting schedules that apply to your Plan balance.
Distributions
Q3. Can I withdraw money from the Plan while I am still employed?
The Plan is designed to help you build an account that will help support you during your retirement years. However, you will be able to take certain
distributions from the Plan while you are still working for your Employer. You may request a distribution of transfer contributions and rollover contributions, if applicable, at any time. In addition, you may request a distribution of the entire vested portion of your Plan balance if you become disabled. You
may take a payout from your Money Purchase Pension account while you are still employed but only after you reach Normal Retirement Age.
Page 2 of 2
Distributions (Continued)
Q4. Does my beneficiary have the option of rolling their distribution to an inherited IRA?
Starting January 1, 2007, the Plan permits your beneficiary to directly roll over their portion of the individual account into an inherited IRA. Such a
distribution must otherwise qualify as a distribution that is eligible to roll over.
Q5. May I take a distribution in a form other than a qualified joint and survivor annuity?
For Plan Years beginning on or after January 1, 2007, in addition to a qualified joint and survivor annuity, a second type of annuity called a qualified
optional survivor annuity is available. This additional payout choice simply gives you more flexibility when choosing an appropriate distribution option.
Your Employer will give you more information about all of your payout options when you are ready to take a distribution.
Investing Your Plan Account
Q6. What if my account contains publicly traded employer stock?
For Plan Years beginning on or after January 1, 2007, if applicable, you were able to change your investments in employer stock held within your
account. This rule allows you to invest your account in a broader range of investments that are offered by your Employer, which may help you to increase
your earnings and/or lessen your risk. If the Plan previously placed restrictions on selling the employer stock held in your account, please review the
“Notice of Right to Diversify Employer Securities” you previously received, or ask your Employer for a copy if you did not previously receive one. If you
have additional questions, please ask your Employer for more information.
Printed on 30% post-consumer recycled paper.
©2009 Charles Schwab & Co., Inc.
All rights reserved. Member SIPC.
FTA 09349 (1109-11673) REG52398 (11/09)
©2009 Charles Schwab & Co., Inc. All rights reserved. Member SIPC. CS12046-04 BDL52453 (11/09)