The maximum amount you may borrow in any 12-month period is the lesser of :
There is a minimum loan requirement of $1,000.
You can choose to repay your loan over a period of 12, 24, 36, 48 or 60 months.
Repayments are made by check and must received by the Plan Administrator no later than the 10th pay date of each month. Coupons are provided for your convenience.
You may two loans outstanding at any given time.
The interest rate is fixed for the term of the loan. The interest rate will be the prime rate at LaSalle Bank, Sargent & Lundy LLC's trustee, which is in effect as of the end of the last business day of the previous month. Interest is calculated as simple interest on your unpaid balance. This rate basis is subject to change at the discretion of the SIP Committee.
Fidelity willl apply a $35 application fee, which will be debited from your account. There is also a maintenance fee, paid to Fidelity, of $3.75 each quarter during the life of the loan. This is also debited from your account.
You do not need to give a reason for your loan request.
All interest payments are credited to your account. These payments are treated as tax deferred earnings until you receive them by withdrawal or by terminating your SIP account.
You must call Fidelity (1-800-835-5095) to request a loan application. This application will be mailed to your home, or you can request that it be faxed to you.
Once you receive the loan application and an amortization schedule, the signed loan application should be mailed to the SIP Office. The SIP Administrator will then authorize Fidelity to release the loan check. It may take Fidelity up to 5 business days to mail the check, so please plan accordingly. A copy of the approved loan application will be returned to you, along with monthly payment coupons.
The assets of the employee's account will be used as the source of the loan in the following order as available:
Funds used for the loan are withdrawn from each investment fund in your account, in the same proportion that investments exist in your account at the time of the loan.
Your repayments will be reinvested according to the Contribution Election on file with Fidelity. Please verify this information when you request a new loan. You can make any necessary changes at that time, or at any time in the future.
For tax purposes, your loan payments (principal and interest) are not classified as contributions to your account. They are paid with after-tax dollars but the interest is considered tax deferred earnings.
No partial prepayments are allowed. You may prepay the outstanding principal amount in full without penalty after the first six months of the loan .
If you have an outstanding loan you will still participate in all benefits of the plan: transfers, withdrawals, gains/losses, etc.
If you request a withdrawal, you may withdraw amounts in excess of your outstanding loan subject to the restrictions governing withdrawals.
The following situations constitute a default:
In the event of a default, the outstanding principal amount will be treated as a withdrawal from your account. Withdrawal amounts may be subject to tax penalties. If taxable funds (company match, 401(k) and/or earnings) are withdrawn that amount is treated by the IRS as income received during the current year. Those funds are subject to applicable taxes in accordance with the Tax Reform Act of 1986.
Although the plan does not require written consent from your spouse, loans are permitted with the understanding that your spouse is aware of your participation in the Savings Investment Plan and that a loan has been granted to you.
Rev. 10/2000