Attachment I for E Attachment I for ESOP Provisions

Part V. Complete This Part if you Are Filing for an
Employee Stock Ownership Program (ESOP)

N/A

General ESOP Provisions:
a. Do the terms of the plan designate it as an ESOP
within the meaning of IRC 4975(e)(7) and also indicate
it is designed to invest primarily in employer stock?
b. Are only employees of the employer or
participating employer eligible to participate in the
plan?
c. Is the adopting employer (and participating
employer, if applicable) limited to a C corporation or S
corporation?
d. Is the term “Employer Stock” defined in the plan
and limited to common stock of the employer?
e. (1) Does the plan satisfy the diversification
requirement of IRC 401(a)(28)(B) or 401(a)(35) as
applicable?
(2) Are the following terms defined:
(i)
Annual election period
(ii)
Qualified election period
(iii)
Qualified participant
f. (1) Will plan assets be valued at least once per year?
(2) Is Employer Stock valued by an independent
appraiser who meets the requirements similar to the
requirements of Treasury regulation 1.170A-13(c).
g. (1) If Employer Stock is a registration-type class of
securities, is each Participant or beneficiary entitled to
direct the plan as to the manner in which shares of
Employer Stock that are entitled to vote, and are
allocated to his or her account, are to be voted?
(2) If Employer Stock is not a registration-type class
of securities, is each Participant or beneficiary entitled
to direct the Plan as to the way voting rights under the
shares of Employer Stock allocated to his or her
account are to be exercised with respect to corporate
matters, such as mergers, consolidations or any others
as noted in IRC 409(e)(3)?
h. (1) If the Employer is a C corporation, will
distributions be made in cash or stock?
(2) If distributions will be made in cash, do
Participants who are entitled to distributions from the
plan have the right to demand their benefits be
distributed in the form of Employer Stock?
(3) If the Employer is an S corporation or a
corporation whose charter or bylaws restrict the
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Article or
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Change OMB No.

1545-0169
For IRS Use Only

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ownership of stock, can a Participant who is entitled to
a distribution either receive the distribution in cash or
in Employer Stock subject to a Mandatory Put?
(4) If there is a Mandatory Put and Employer Stock is
distributed as a total distribution, does payment by the
employer or the Mandatory Put occur over a period of
no greater than five (5) years in at least substantially
equal annual payments?
i. If the Employer is not described under question h(3),
does the Employer purchase Employer Stock that has
been distributed to a Participant or beneficiary if the
Participant or beneficiary offers the Employer Stock for
sale to the Employer or the Plan (put option) during
one of the two put option periods and provide
payment to the participant within the permissible
timeframe?
j. (1) Will distribution begin no later than one year
after the close of the plan year in which the Participant
separates from service by reason of normal retirement
age, disability or death?
(2) If separation other than normal retirement age,
disability or death, will distribution begin during the
year after the close of the plan year in which the
participant separates from service?
(3) Will the distribution be in substantially equal,
periodic payments at least annually for no more than
five year?
(4) Do items j(1) thru j(3) comply with the provisions
of IRC 401(a)(14)?
k. Are shares of Employer Stock acquired with the
proceeds of an Exempt Loan subject to a Right of First
Refusal in accordance with Treasury regulation
54.4975-7(b)(9), unless the stock is readily tradable at
the time the right may be exercised?
Leveraged ESOP Provisions:
a. (1) Does the plan define Exempt Loan including the
requirement of a reasonable rate of interest being
charged and the loan being for a specific term?
(2) Does the plan define Suspense Account?
(3) Is an Exempt Loan primarily for the benefit of the
participants and their beneficiaries?
(4) Are the proceeds of any Exempt Loan used within
a reasonable time after receipt to acquire Employer
Stock, to repay such Exempt Loan or to repay a prior
Exempt Loan?
(5) Is the Exempt Loan without recourse against the
Plan?

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(6) Can the Exempt Loan not be payable upon
demand of any person except in the event of default?
(7) Does an Exempt Loan provide for the release of
shares from the Suspense Account in accordance with
either the Principal and Interest Payment Release
Method or the Principal Payment Release Method?
(8) Do plan provisions preclude any share of
Employer Stock acquired with the proceeds of an
Exempt Loan to be subject to a put, call or other
option, or buy-sell or similar arrangement while held
by and when distributed from the Plan (other than
with regard to put options subject to either IRC
409(h)(1)(B) or IRC 409(h)(2)(B)), whether or not the
Plan is then an ESOP?
b. (1) If the amount of annual additions is based on an
Exempt Loan, does the plan use either Alternative A
(Employer contributions of both principal and interest)
or Alternative B (fair market value of released shares)
as described in Treasury regulation 1.415(c)-1(f) to
determine the amount of employer contributions?
(2) If the Employer is a C corporation and no more
than one-third of the Employer contributions that are
used to repay the principal and interest due on an
Exempt Loan and that are deductible under IRC
404(a)(9) are allocated to the accounts of highly
compensated employees during the Plan Year, then do
the annual additions not include forfeitures of the
Employer Stock purchased with the proceeds of an
Exempt Loan and also do not include Employer
contributions that are used to pay interest on an
Exempt Loan and are deductible under IRC 404(a)(9)(B)
and charged against the Participant’s account?
Special Provisions:
a. If a forfeiture occurs, is Employer Stock released
from the suspense account and allocated to the
Participant’s account forfeited only after other assets?
b. If Employer Stock is stock in an S corporation, may
no portion of the assets of the Plan attributable to
Employer Stock during a Nonallocation Year accrue as
an Impermissible Accrual or be allocated as an
Impermissible Allocation for the benefit of any
disqualified person?
c. Are the following terms defined:
(1) Impermissible Accrual
(2) Impermissible Allocation
(3) Nonallocation Year
(4) Nonallocation Year Attribution Rules

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(5) Disqualified Person
(6) Disqualified Person Family Member Rules
(7) Deemed-Owned Shares
(8) Synthetic Equity
(9) Synthetic Equity Shares
d. If the Employer is a S corporation, does the plan
provide a method (Method 1 indicating a disqualified
person with the largest number of shares or Method 2
indicating a disqualified person who is an HCE with the
fewest number of shares) of transferring shares of
Employer stock from the ESOP portion of the plan to
the non-ESOP portion in accordance with Treasury
regulation 1.409(p)-1(b)(v) to prevent a Nonallocation
Year?
e. (1) If the Employer is a C corporation, does no
portion of the plan assets attributable to Employer
Stock acquired by the plan in a Section 1042 Sale
accrue during the Nonallocation Period for the benefit
of any Nonallocation Participant or for the benefit of a
25% Shareholder?
(2) Are the following terms defined:
(i)
Employer Stock
(ii)
Section 1042 Sale
(iii)
Nonallocation Period
(iv)
Nonallocation Participant
(v)
25% Shareholder
f. (1) If the Employer is a C corporation that intends to
claim a deduction under IRC 404(k), does the plan
provide for dividends to be treated in one of the ways
set forth in IRC 404(k)(2) and comply with IRC 404(k)?
(2) Does the plan define Applicable Employer Stock?
g. (1) If the Employer is an S corporation, are earnings
as described in IRC 1368(a) with respect to Employer
Stock used at the trustee’s discretion to make
payments on the Exempt Loan used to acquire such
Employer Stock?
(2) If earnings are used to make payments on such
Exempt Loan, will Employer Stock with a fair market
value of not less than the amount of earnings used to
make payments on the Exempt Loan be allocated to a
Participant’s account for the year that such earnings
would have been allocated to the Participant’s account
if they were not used to make payments on the
Exempt Loan?
h. Does the plan provide for rebalancing or reshuffling
and, if so, define either or both in a definitely
determinable manner?

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