This is an agreement between a company and its employee outlining an employee
retirement or disability plan. The agreement outlines the contribution made by the
company, employee voluntary contributions, retirement benefits, death benefits,
disability, distribution notices, methods of payment, and withdrawal and termination.
Additionally, it can be customized to provide for any additional industry-specific
language that may be necessary. This document should be used by small businesses
or other entities that want to provide a retirement or disability plan for their employees.
PROFIT SHARING PLAN
This Profit Sharing Plan (this â€œPlanâ€) is hereby made and entered into this ____
day of ____, 20__ (the â€œEffective Dateâ€) by and between ______________________
(â€œCompanyâ€) and _______________ (â€œEmployeeâ€) who is an employee of Company.
WHEREAS, the purpose of this Plan is to encourage employees to systematically
save and invest part of their compensation such that they may have a source of additional
income upon their Retirement, Disability, or for their family in the event of death;
WHEREAS, Company shall make contributions to a Trust Fund (the â€œFundâ€),
from which benefits shall be paid pursuant to the terms and conditions of this Agreement;
WHEREAS, this Plan is conditioned upon its continued qualification under
Section __ of the ________ Code, as amended from time to time, with Employer
contributions being deductible under Section __ of the ______ Code, or any other
applicable sections thereof, as amended from time to time [Comment: it is best to
determine the relevant code sections in your state related to profit sharing and
insert them here]; and
WHEREAS, it is intended by Company that this Plan qualify as a profit sharing
NOW, THEREFORE, Company and Employee hereby agree to the following
terms and conditions.
The defined terms relative to this Agreement are set forth in Exhibit â€œAâ€ attached
hereto and incorporated herein by reference.
2. SERVICE CREDIT AND PARTICIPATION
A. Hour of Service
An Hour of Service is any hour for which Employee is directly or
indirectly paid or entitled to payment for the performance of his or her
Service is the period of Employment used in determining eligibility for
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participation in this Plan, as well as for determining eligibility for benefits.
Subject to the loss of Service rules set forth below in this Section, a year
of Service is the twelve month period beginning with the date of
Employeeâ€™s first Hour of Service.
C. Participation Originating Under this Plan
Each employee shall become a member in this Plan on the first day of the
month on which it: (i) is in Covered Employment; (ii) has attained its
___th birthday; and (iii) has completed a year of Service.
A. Contributions by Employer
i. Employer shall, during a Plan Year, contribute to the Trust an
amount determined at Employerâ€™s discretion.
ii. Notwithstanding the above, such contributions shall be made only
from Employerâ€™s current or retained earnings or profits and shall
be limited to the amount deductible by Employer.
B. Member Voluntary Contributions
i. When Employee becomes a Plan Member (â€œMemberâ€) hereunder
and as of the beginning of each Plan Year thereafter, it may,
through payroll deduction, elect to make voluntary contributions.
ii. A Member may withdraw all or any part of its Employee
Contribution Account by filing a written application on a form to
be prescribed by the Committee, with at least ________ (__) days
advance notice, no more than once in any Plan Year.
iii. Members are not required or permitted to make any contributions
under this Plan.