(1) General: This is a Summary of Material Modification regarding the C.J. Coakley, I= nc. 401k & Davis Bacon Plan (“Plan”). This Summary of Material Modificat= ion supplements the Summary Plan Description (“SPD”) previously provided to you. You should retain this document with your copy of the SPD.=
(2) Identification of Employer: The legal name, address and Federal employer identification number of the Employer ar= e:
C.J. Coakley, Inc.
7732 Lee Highway
Falls Church, VA 22042-7735
EIN: 54-0804860
(3) &nb=
sp; Summary Description of Modificatio=
n. Below is a summary of the modification mad=
e to
our Plan.
Ability to make Roth 401(k) Deferrals
Beginning January 1, 2006, you will
have a new way to save money in our 401(k) Plan—money which will not =
be
taxed when you take a Plan distribution. This new way for you to defer money
into our Plan is called a "Roth 401(k) deferral."
You will be able to continuing maki=
ng
deferrals as you always have (these are pre-tax deferrals and are referred =
to
as Regular 401(k) deferrals), and/or you may make the new Roth 401(k)
deferral. If you make a Regul=
ar
401(k) deferral, then your taxable income is reduced by the deferral contri=
bution
so you pay less in federal income taxes. Later, when the Plan distributes t=
he
deferrals and earnings, you will pay the taxes on those deferrals and the
earnings. Therefore, with a Regular 401(k) deferral, federal income taxes on
the deferral contributions and on the earnings are only postponed. Eventual=
ly,
you will have to pay taxes on these amounts.
With a Roth 401(k) deferral, you mu=
st
pay current income tax on the deferral contribution. If you elect to make Roth 401(k) deferrals, the deferrals
are subject to federal income taxes in the year of deferral, but the deferr=
als
and, in most cases, the earnings on the deferrals are not subject to federal
income taxes when distributed to you. In order for the
Page 1
earnings to be distributed tax-free,
there must be a qualified
distribution from your Roth 401(k) deferral account.
=
In
order to be a qualified distribution, the distribution must occur af=
ter
one of the following: (1) =
your
attainment of age 59½, (2) your disability, or (3) your death. In
addition, the distribution must occur after the expiration of a 5-year
participation period. The 5-year participation period is the 5-year period
beginning on the calendar year in which you first make a Roth 401(k)
contribution to our Plan (or to another 401(k) Plan or 403(b) plan if such
amount was rolled over into our Plan) and ending on the last day of the
calendar year that is 5 years later.
For example, if you make your first Roth deferral under this Plan on
November 30, 2006, your participation period will end on December 31, 2010.=
It
is not necessary that you make a Roth contribution in each of the five year=
s.
If a distribution from your Roth 401(k) deferral account is not a qualified distribution, the earnings distributed with the Roth 401(k) deferrals will be taxable to you = at the time of distribution (unless you roll over the distribution to a Roth I= RA or other 401(k) plan or 403(b) plan that will accept the rollover). In addition, in some cases, there may be a 10% excise tax on the earnings that are distributed.
Whenever you receive a distribution, the Administrator will deliver to you a more detailed explana= tion of your options. However, the tax rules are very complex and you should con= sult with qualified tax counsel before making a choice.
Treatment of Roth 401(k) deferrals under our Pla= n &= nbsp;
Roth 401(k) deferrals are g= enerally treated in the same manner as Regular 401(k) deferrals. This means that the= se amounts are always fully vested and are subject to the distribution restrictions and provisions set forth in the Summary Plan Description and P= lan.