EXHIBIT 4.4
<PAGE>
BASF CORPORATION
EMPLOYEE SAVINGS PLAN
Effective January 1, 1992
September 28, 1992
<PAGE>
BASF CORPORATION EMPLOYEE SAVINGS PLAN
TABLE OF CONTENTS
INTRODUCTION i
ARTICLE I - DEFINITIONS
1.01 Accrued Benefit 1
1.02 Actual Deferral Percentage 1
1.03 Affiliate 2
1.04 After-Tax Contribution 2
1.05 Before-Tax Contribution 2
1.06 Beneficiary 3
1.07 Board of Directors 3
1.08 Committee 3
1.09 Compensation 3
1.10 Contributions 5
1.11 Contribution Percentage 6
1.12 Corporation 6
1.13 Disability 6
1.14 Early Retirement 6
1.15 Effective Date 6
1.16 Elective Deferrals 7
1.17 Employee 7
1.18 Employer 8
1.19 Employer Matching Contribution Account 8
1.20 Employer Matching Contributions 9
1.21 Excess Aggregate Contributions 9
1.22 Excess Contributions 9
1.23 Excess Deferrals 10
1.24 Employment Date 11
1.25 ERISA 11
1.26 Family Member 11
1.27 Fiduciary 11
1.28 Forfeiture 11
1.29 Former Participant 11
1.30 Hardship 11
1.31 Highly Compensated Employee 12
1.32 Hour of Service 16
1.33 Individual Account 16
ii
<PAGE>
1.34 Individual Retirement Account 16
1.35 Investment Fund 16
1.36 Investment Manager 16
1.37 IRC 17
1.38 Limitation Year 17
1.39 Non-Participating Contributions 17
1.40 Non-Participating Contribution Account 17
1.41 Normal Retirement Age 17
1.42 Over-The-Road Driver 17
1.43 Participant 17
1.44 Participant Loan Fund 18
1.45 Participating Contributions 18
1.46 Participating Contribution Account 18
1.47 Period of Employment 18
1.48 Period of Severance 20
1.49 Plan 20
1.50 Plan Year 20
1.51 Predecessor Plan 20
1.52 Predecessor Plan Account 21
1.53 Qualified Nonelective Contributions 21
1.54 Qualified Plan Rollover Contribution 21
1.55 Reemployment Date 21
1.56 Rollover Account 21
1.57 Rollover Contribution 21
1.58 Severance from Service Date 21
1.59 Special Stock Fund 22
1.60 Spouse 22
1.61 Trust 22
1.62 Trust Agreement 22
1.63 Trustee 22
1.64 Valuation Date 23
ARTICLE II - ELIGIBILITY AND PARTICIPATION
2.01 Eligibility 23
2.02 Participation 24
2.03 Beneficiary Designation 25
ARTICLE III - CONTRIBUTIONS
3.01 Participating Contributions 26
3.02 Employer Matching Contributions 27
3.03 Non-Participating Contributions 28
iii
<PAGE>
3.04 Maximum Deductible Contributions and 29
Statutory Limitation on Contributions
3.05 Election 38
3.06 Predecessor Plan Accounts 38
3.07 Rollover Contributions 38
ARTICLE IV - INVESTMENT OPTIONS AND FUNDS
4.01 Investment Options 40
4.02 Direction of Investments 41
4.03 Investment Fund Transfers 42
ARTICLE V - ALLOCATION TO INDIVIDUAL ACCOUNTS
5.01 Individual Accounts 43
5.02 Allocation of Contributions 43
5.03 Allocation of Adjustment 44
5.04 Equitable Allocations 44
5.05 Maximum Additions 44
ARTICLE VI - DISTRIBUTIONS AND VESTING
6.01 Vesting of Participant's Accounts 46
6.02 Vesting of Employer Matching Account 46
6.03 Retirement 47
6.04 Disability 47
6.05 Death Before Retirement or Termination 48
of Employment
6.06 Severance from Service 48
6.07 Method of Payment 49
6.08 Benefits to Minors and Incompetents 54
6.09 Payment of Benefits 55
ARTICLE VII - WITHDRAWALS
7.01 Withdrawals Generally 62
7.02 Order of Withdrawals 62
7.03 Withdrawal Because of Hardship 64
7.04 Projected Interest on Withdrawals 65
7.05 IRC Section 72 65
7.06 Qualified Domestic Relations Orders 65
iv
<PAGE>
ARTICLE VIII - FUNDING
8.01 Contributions 66
8.02 Trustee 67
ARTICLE IX - FIDUCIARIES
9.01 General 67
9.02 Corporation 68
9.03 Trustee 68
9.04 Committee 68
9.05 Missing Persons 70
9.06 Indemnification of Fiduciaries 70
ARTICLE X - AMENDMENT AND TERMINATION OF PLAN
10.01 Amendment of the Plan 71
10.02 Termination of the Plan 71
10.03 Allocation of Assets 72
10.04 Application of Assets 72
10.05 Merger, Consolidation and Transfers of 73
Assets or Liabilities
ARTICLE XI - PROVISIONS RELATING TO EMPLOYERS INCLUDED IN PLAN
11.01 Method of Participation 74
11.02 Withdrawal 74
ARTICLE XII - TOP HEAVY PROVISIONS
12.01 Definitions 75
12.02 Top Heavy Plan 78
ARTICLE XIII - MISCELLANEOUS
13.01 Governing Law 80
13.02 Construction 81
13.03 Administration Expenses 81
13.04 Participant's Rights; Acquittance 81
13.05 Spendthrift Clause 81
13.06 Return of Contributions 82
13.07 Counterparts 82
v
<PAGE>
ARTICLE XIV - LOANS
14.01 Loans to Participants 82
ARTICLE XV - ADOPTION OF THE PLAN 86
ARTICLE XVI - SPECIAL PROVISIONS WITH RESPECT TO EMPLOYEES OF
DETROIT MILFORD AVENUE LABORATORY
16.01 Detroit Plan 86
ARTICLE XVII - SPECIAL PROVISIONS WITH RESPECT TO EMPLOYEES OF
CERTAIN PREDECESSOR PLANS
17.01 BSM Plan 88
17.02 Knoll Plan 88
17.03 FDO Plan 89
17.04 Polysar Plan 90
17.05 Wintershall Plan 90
17.06 Information Systems Plan 91
17.07 Olin Plan 92
17.08 Mobil Plan 93
vi
<PAGE>
INTRODUCTION
Effective January 1, 1992, BASF Corporation hereby amends and restates the BASF
Corporation Employee Savings Plan, effective January 1, 1987 (the "Plan"). The
provisions of certain sections of the Plan shall become effective as of the
dates specified in such sections.
The purpose of this Plan, which shall be qualified as a profit sharing plan
under applicable governmental rules, is to provide additional incentive and
retirement security for eligible employees of participating Employers.
It is intended that this Plan, together with the Trust Agreement, meet all the
requirements of the Employee Retirement Income Security Act of 1974 and the Plan
shall be interpreted to comply with the terms of the Act and all formal
regulations and rulings issued under such Act and amendments thereto. It is
further intended that the Plan shall be qualified under Sections 401(a), 401(k)
and 401(m) of the Internal Revenue Code, and that the trust established for the
Plan shall be a qualified trust and exempt from taxation under Section 501(a) of
such Code.
i
<PAGE>
ARTICLE I
DEFINITIONS
As used herein, unless otherwise required by the context, the following words
and phrases shall have the meanings indicated:
1.01 Accrued Benefit, as used in regard to a Participant's or Former
Participant's Individual Account or stipulated portion thereof, means,
as of any date, the account balance as of the most recent Valuation
Date plus Contributions made to the Trust since such Valuation Date on
behalf of such Participant reduced by any withdrawals and
distributions.
1.02 Actual Deferral Percentage, for a specified group of Employees for a
Plan Year, shall mean the average of the ratios (calculated separately
for each Employee in such group) of:
(i) the amount of Before-Tax Contributions actually paid over
to the Trust on behalf of each such Employee for such Plan Year, to
(ii) the Employee's Compensation for such Plan Year. For these
purposes, a Before-Tax Contribution shall be taken into account for a
Plan Year only if it is allocated to the Employee under the Plan as of
a date within that Plan Year and relates to compensation that either
would have been received by the Employee in the Plan Year (but for the
deferral election) or is attributable to services performed by the
Employee in the Plan Year and would have been received by the Employee
within 2-1/2 months after the close of the Plan Year (but for the
deferral election). A Before-Tax Contribution is considered allocated
as of a date within a Plan Year only if (i) the allocation is not
contingent upon the Employee's participation in the Plan or performance
of services on any date subsequent to that date and (ii) the Before-Tax
Contribution is actually paid to the trust no later than the end of the
12-month period immediately following the Plan Year to which the
contribution relates.
For purposes of computing an Employee's Actual Deferral Percentage for
a Plan Year, Compensation shall be limited to only that Compensation
received by the Employee while such Employee is eligible to participate
in the Plan.
1.03 Affiliate means the Employer and any corporation which is a member of a
controlled group of corporations (as defined in Section 414(b) of the
Code) which includes the Employer; any trade or business (whether or
not incorporated) which is under common control (as defined in Section
414(c) of the Code) with the
1
<PAGE>
Employer; any organization (whether or not incorporated) which is a
member of an affiliated service group (as defined in Section 414(m) of
the Code) which includes the Employer; and any other entity required to
be aggregated with the Employer pursuant to regulations under Section
414(o) of the Code.
1.04 After-Tax Contributions means Contributions made to the Plan by a
Participant in accordance with Section 3.01 or 3.03 of Article III
which are not Before-Tax Contributions.
1.05 Before-Tax Contributions means Contributions made to the Plan by the
Employer in accordance with Section 3.01 and 3.03 of Article III
pursuant to a salary reduction election by the Participant. Such
election shall provide that the Participant's Employer shall reduce the
Participant's compensation during each pay period by a designated
percentage of Compensation and contribute the amount so determined to
the Plan on behalf of the Participant.
1.06 Beneficiary means any person designated by a Participant, pursuant to
Section 2.03, to receive such benefits as may become payable hereunder
after the death of such Participant.
1.07 Board of Directors means the Board of Directors of the Corporation.
1.08 Committee means the Pension and Benefits Committee of BASF Corporation
as described in Section 9.04.
1.09 Compensation means (a) the base pay as recorded in the payroll records
or, as the case may be, salary administration prior to any salary
reduction elections under this Plan or any other plan meeting the
requirements of IRC Sections 125 and 401(k), and shall include (b)
straight-time pay for overtime work and commissions, but shall not
include (c) awards; half-time premiums for overtime; bonuses and
incentive pay; moving expense reimbursements; payments from any
Corporation sponsored health plan; payments or bonuses made to attract
new employees or similar payments; and, effective January 1, 1995,
retention or retention type payments, plant shut-down premiums and
similar payments made upon termination of employment. Notwithstanding
the foregoing sentence, a bonus paid in 1987 to an Employee previously
covered by the Badische Corporation Savings Plan and/or the Inmont
Savings Plan attributable to services performed in 1986 shall be
included in compensation. With respect to Over-The-Road Drivers,
Compensation shall mean gross pay.
Notwithstanding any other contrary provision of the Plan, Compensation
taken into account under the Plan shall not exceed $150,000 ($200,000
for Plan Years ending on or before January 1, 1994), adjusted for
changes in the cost of living as provided in IRC Section 415(d), or
such other amount as required by IRC
2
<PAGE>
Section 414, for the purpose of calculating a Participant's Accrued
Benefit (including the right to any optional benefit provided under the
Plan) for any Plan Year beginning after December 31, 1988. However, the
Accrued Benefit determined in accordance with this provision shall not
be less than the Accrued Benefit determined on January 1, 1989 without
regard to this provision. Notwithstanding the preceding sentence, the
Accrued Benefit of any Participant who is a Highly Compensated
Employee, within the meaning of IRC Section 414(q), is reduced to the
extent a benefit has accrued with respect to Compensation in excess of
$200,000 during the 1989 Plan Year before the later of the adoption or
effective date of this provision. Additionally, in the case of
determining the Compensation of a five-percent (5%) owner or of a
Highly Compensated Employee in the group consisting of the 10 Highly
Compensated Employees paid the greatest compensation for the year, the
family aggregation rules, as contained in 414(q) shall apply. If, as a
result of the application of such rules the compensation limit is
exceeded, then the compensation limit shall be prorated among the
affected individuals in proportion to each such individual's
compensation as determined prior to the application of the compensation
limit. For purposes of Section 5.05, Compensation means the amount
incredible in gross income for the taxable year which coincides with
the Plan Year excluding (i) any salary reduction contributions under
this Plan or any plan meeting the requirements of IRC Sections 125 or
401(k), (ii) Employer contributions on behalf of an Employee to a
simplified employee pension described in Code Section 408(k); (iii) any
distribution from a plan of deferred compensation; (iv) amounts
realized from the sale, exchange or other disposition of stock acquired
under a qualified stock option; (v) amounts realized from the exercise
of a non-qualified stock option, or when restricted stock (or property)
held by the Employee either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture; and (vi) other amounts
which receive special tax benefits, such as premiums for group term
life insurance or contributions made by an Employer towards the
purchase of an annuity contract described in IRC Section 403(b). For
purposes of the Actual Deferral Percentage test described in Section
3.04(C) and the Contribution Percentage Test described in Section
3.04(g), Compensation means base pay as recorded in the payroll records
or, as the case may be, salary administration prior to any salary
reduction election under this Plan or any other plan meeting the
requirements of IRC Sections 125 or 401(k), and shall include
straight-time pay for overtime work, commissions, and bonuses.
1.10 Contributions means payments as provided herein by the Employer and/or
the Participants to the Trustee for the purpose of providing the
benefits under this Plan.
3
<PAGE>
1.11 Contribution Percentage, for a specified group of Employees for a Plan
Year, shall mean the average for the ratios (calculated separately for
each Employee in such group) of:
(i) the sum of the Employer Matching Contributions and
After-Tax Contributions paid under the Plan on behalf of each such
Employee for such Plan Year, to
(ii) the Employee's Compensation for such Plan Year.
For purposes of calculating an Employee's Contribution Percentage for a
Plan Year, Compensation shall be limited to only that Compensation
which was received by the Employee while such Employee was eligible to
participate in the Plan.
1.12 Corporation means BASF Corporation, a Delaware corporation, or any
successor thereto. The Corporation is the sponsor, the named Fiduciary
and the administrator of the Plan (unless delegated by the Corporation)
for purposes of ERISA as it relates to the employees of each Employer.
1.13 Disability or Disabled shall mean a Participant's qualification for
long-term disability benefits under a plan(s) sponsored by the
Corporation.
1.14 Early Retirement means termination of employment while eligible for an
early retirement benefit under the Employer's pension plan covering the
Participant.
1.15 Effective Date means January 1, 1992.
1.16 Elective Deferrals means any Employer contributions made to a qualified
cash or deferred arrangement as described at IRC Section 401(k), at the
election of the Participant, in lieu of cash compensation, and shall
include contributions made pursuant to a salary reduction election
described in Sections 3.01 and 3.03 of Article III of the Plan.
1.17 Employee means any employee not covered by a collective bargaining
agreement entered into by the Employer, unless such agreement, by
specific reference to the Plan, provides for coverage under the Plan,
and any employee of such other groups as are authorized to participate
by the Committee and for whom the Employer is obligated to withhold
FICA and/or Federal withholding taxes. Notwithstanding the foregoing,
part-time or full-time interns, contract workers or workers who are
characterized by the Company as independent contractors are not covered
by and shall not be eligible to participate in the Plan. No such
individual shall be covered by, or eligible to participate in the Plan
even if such individual has been or, in the future may be determined to
be a common law employee of the Company. A Leased Employee shall mean
any person
4
<PAGE>
(other than an employee of the recipient employer) who pursuant to an
agreement between the recipient employer and any other person (the
Leasing Organization), has performed services for the recipient
employer (or for the recipient employer and related persons determined
in accordance with Section 414(n) of the Code) on a substantially
full-time basis for a period of at least one year and such services are
of a type historically performed by employees in the business field of
the recipient employer. Contributions or benefits provided a Leased
Employee by the Leasing Organization which are attributable to services
performed for the recipient employer shall be treated as provided by
the recipient employer.
Leased Employees shall not be treated as Employees unless the
requirements of Section 414(n) require such Leased Employees to be
included in the definition of Employee in order to meet the Plan
qualification requirements in that IRC Section and then only if the
coverage requirements of IRC Section 410(b) would otherwise not be met.
If a Leased Employee should become an Employee eligible to participate
in the Plan, such former Leased Employee shall be credited with his
service as a Leased Employee for purposes of participation and vesting
under the Plan.
1.18 Employer means, collectively or individually as the context may
indicate, the Corporation and any other corporation which (a) is a
member of the same controlled group of corporations as the Corporation
(as determined pursuant to IRC Sections 414(b), (c), (m), and (o), (b)
the Committee shall have authorized to adopt the Plan and (c) by action
of such other's corporation's board of directors shall adopt the Plan
and become signatory to the Trust Agreement, or any successor to one or
more of such entities.
1.19 Employer Matching Contribution Account means the account to which
amounts attributable to Employer Matching Contributions (including any
additional Employer contribution, as described in Section 3.04(d)(ii),
other than a contribution made by reason of a salary reduction election
which may be made to the Plan) shall be credited.
1.20 Employer Matching Contributions means the Employer contribution as
determined in accordance with Section 3.02.
1.21 Excess Aggregate Contributions means with respect to any Plan Year, the
excess of: (i) the aggregate Contribution Percentage amounts taken into
account in computing the numerator of the Contribution Percentage
actually made on behalf of Highly Compensated Employees for such Plan
Year, over (ii) the maximum Contribution Percentage amounts permitted
by the actual Contribution Percentage (the "ACP") test of Section
3.04(g) of the Plan, determined by reducing contributions made on
behalf of Highly Compensated Employees in
5
<PAGE>
order of their Contribution Percentages beginning with the highest of
such percentages in the manner set forth in Treasury Regulation Section
1.401(m)-1(e)(2). This leveling method is accomplished by first
reducing the Contribution Percentage of the Highly Compensated Employee
with the highest Contribution Percentage to the extent necessary to
satisfy the ACP test or cause such ratio to equal the Contribution
Percentage of the Highly Compensated Employee with the next highest
ratio and then repeating this process until the ACP test is satisfied.
1.22 Excess Contributions means, with respect to any Plan Year, the excess
of: (i) Before-Tax Contributions (including any Qualified Nonelective
Contributions and Employer Matching Contributions that are treated as
Before-Tax Contributions for purposes of the Actual Deferral Percentage
(the "ADP") test of Section 3.04(C) of the Plan) actually made on
behalf of Highly Compensated Employees for such Plan Year, over (ii)
the maximum amount of Before-Tax Contributions permitted by the ADP
test, determined by reducing contributions made on behalf of Highly
Compensated Employees in order of their actual deferral ratios
beginning with the highest of such ratios in the manner set forth in
Treasury Regulation Section 1.401(k)-1(f)(2). This leveling method is
accomplished by first reducing the actual deferral ratio of the Highly
Compensated Employee with the highest actual deferral ratio to the
extent necessary to satisfy the ADP test or cause such ratio to equal
the actual deferral ratio of the Highly Compensated Employee with the
next highest ratio and then repeating this process until the ADP test
is satisfied. The amount of Excess Contributions for a Highly
Compensated Employee is then equal to the total of Elective and other
Contributions taken into account for the ADP test minus the product of
the Employee's reduced deferral ratio as determined above and the
Employee's Compensation.
In the case of a Highly Compensated Employee whose actual deferral
ratio is determined under the family aggregation rules, the
determination of the amount of Excess Contributions shall be made as
follows: the actual deferral ratio shall be reduced in accordance with
the leveling method set forth in Treasury Regulation Section 1.401(k) -
1(f)(2) and the Excess Contributions will be allocated among the Family
Members in proportion to the contributions of each Family member that
have been combined.
1.23 Excess Deferral has the meaning defined in IRC Section 402(g)(2), but
excluding amounts described in Section 1105(C)(5) of the Tax Reform Act
of 1986.
1.24 Employment Date means the date an Employee first performs an Hour of
Service for the Employer.
1.25 ERISA or Act means the Employee Retirement Income Security Act of 1974
as amended from time to time.
6
<PAGE>
1.26 Family Member means an individual described in IRC Section 414(q)(6).
1.27 Fiduciary means the Corporation, the Employer, the Trustee, the
Committee, and any individual, corporation, firm or other entity which
assumes, in accordance with Article IX, responsibilities of the
Corporation, the Employer, the Trustee or the Committee respecting
management of the Plan or the disposition of its assets.
1.28 Forfeiture has the meaning referred to in Section 6.06.
1.29 Former Participant means a Participant whose participation in the Plan
has terminated but who has not received payment in full of the balance
in his Individual Account to which he is entitled.
1.30 Hardship means an immediate and heavy financial need of the Participant
where the Participant establishes, pursuant to Section 7.03, that the
hardship withdrawal is for: (1) costs directly related to the purchase
of a principal residence for the Participant (excluding mortgage
payments); (2) payment of tuition and related educational fees for the
next 12 months of post-secondary education for the Participant or the
Participant's spouse, children or dependents (as defined in IRC Section
152); (3) payments necessary to prevent the eviction of the Participant
from his principal residence or foreclosure on the mortgage on that
residence; (4) expenses for medical care described in IRC Section
213(d) previously incurred by the Participant, the Participant's
spouse, or any dependents of the Participant (as defined in IRC Section
152) or necessary for those persons to obtain medical care described in
IRC Section 213(d); or (5) any other hardship consistent with rules,
regulations, or other guidelines issued by the IRS.
Such Hardship is limited to the amount of actual financial need that is
unavailable to the Participant from the Participant's other sources.
The determination with respect to the Hardship shall be made by the
Committee in accordance with Section 7.03, and such determination shall
be made on a non-discriminatory basis, and applied uniformly to all
Participants under similar circumstances.
1.31 Highly Compensated Employee means, generally, any eligible Employee
who, with respect to an Employer, performs services during the
determination year and is described in any one or more of the following
groups applicable with respect to the look-back year calculation and/or
determination year calculation for such determination year:
(i) any Employee who at any time during the determination year
or the look-back year was a five-percent owner;
(ii) any Employee who during the look-back year received
compensation in excess of $75,000 (or its indexed equivalent);
7
<PAGE>
(iii) any Employee who during the look-back year both (a)
received compensation in excess of $50,000 (or its indexed equivalent)
and (b) was a member of the top-paid group (the top-paid 20% of the
Employers in the controlled group of corporations on the basis of
compensation for the Plan Year);
(iv) any Employee who during the look-back year both (a) was
an officer within the controlled group of corporations and (b) received
compensation in excess of $45,000 (or its indexed equivalent).
An Employee who is not determined to be a Highly Compensated Employee
under any of the above four categories must be considered a Highly
Compensated Employee if, during the determination year, such Employee
(i) is among the 100 top-paid employees of the controlled group of
corporations and (ii) meets any one of the categories (ii), (iii), or
(iv) above for the determination year.
The dollar amounts set forth in paragraphs (ii), (iii) and (iv) shall
be adjusted annually for increases in the cost of living in accordance
with Section 415(d) of the Code effective as of January 1 of the
calendar year such increase is promulgated and applicable to the Plan
Year which begins with or within such calendar year.
For purposes of paragraph (iv), no more than 50 employees (or if less,
the greater of three employees or 10% of the employees) shall be
treated as officers. If no officer of the employer is described in this
paragraph, the highest paid officer of the employer shall be treated as
highly compensated. A highly compensated employee shall also include a
Highly Compensated Former Employee. A Highly Compensated Former
Employee is any employee who separates from service (or was deemed to
have separated) prior to the Determination Year, performs no service
for the Employer during the Determination Year, and was a highly
compensated employee for either the separation year or any
Determination Year ending on or after the employee's 55th birthday.
For purposes of these definitions, the following shall be applicable:
(i) Compensation shall mean compensation within the meaning of
Section 415(C)(3) of the Code, including elective salary reduction
contributions to a cafeteria plan described in Section 125 of the Code
and a cash or deferred arrangement as described in Section 402(a)(8)
and 402(h)(1)(B) of the Code.
8
<PAGE>
(ii) The Determination Year is the applicable plan year for
which a determination is being made and the Look-Back Year is the
12-month period immediately preceding the Determination Year.
(iii) The determination of who is a highly compensated
employee, including the determination of the number and identity of
employees in the top-paid group, the top 100 employees and the number
of employees treated as officers shall be governed by Section 414(q) of
the Code and Treasury Regulation Section 1.414(q)-1T. For this purpose,
all employers required to be aggregated with the Employer under
Sections 414(b), (c), (m) or (o) will be treated as a single employer.
(iv) The compensation and contributions under the Plan of a
highly compensated employee who is a 5% owner or in the group
consisting of the ten highly compensated employees paid the greatest
compensation during any Determination Year or Look-Back Year shall be
determined by aggregating such amounts with the compensation and
contribution of each other employee who is the spouse, lineal ascendant
or descendant or spouse of a lineal ascendant or descendant of such
highly compensated employee.
(v) The Corporation may make the following elections as
provided for in Code Section 414(q) and Treasury Regulation Section
1.414(q)-1T:
(A) the simplified method for determining highly compensated
employees in accordance with Code Section 414(q)(12);
(B) the special rule for determining Highly Compensated Former
Employees who separated from service before January 1, 1987 in
accordance with Treasury Regulation Section 1.414(q)-1T Q&A-4(d);
(C) the calendar year election or the Look-Back Year election in
accordance with Treasury Regulation Section 1.414(q)-1T
Q&A-14(b);
(D) the modification on a consistent and uniform basis of the
permissible age and service exclusions in accordance with
Treasury Regulation Section 1.414(q)-1T, Q&A-9(b)(2);
(E) the inclusion of employees covered under a collective
bargaining agreement in accordance with Treasury Regulation
Section 1.414(q)-1T, Q&A-9(b)(2)(ii);
(F) the inclusion of leased employees in determining the highly
compensated group in accordance with Treasury Regulation Section
1.414(q)-1T Q&A-7(b)(4); and
9
<PAGE>
(G) the transition rule in accordance with Treasury Regulation
Section 1.414(q)-1T Q&A-15.
1.32 Hour of Service means the first hour for which an employee is paid for
the performance of duties for the Employer.
1.33 Individual Account means the detailed record kept of the amounts
credited or charged to each Participant in accordance with the terms
hereof. Such Individual Account may consist of After-Tax or Before-Tax
Accounts in a Participating Contribution Account, Non-Participating
Contribution Account, an Employer Matching Contribution Account, a
Rollover Account and a Predecessor Plan Account as required or
determined by the Committee.
1.34 Individual Retirement Account has the meaning referred to in Section
3.07(C).
1.35 Investment Fund means any fund selected by and approved by the
Committee for the investment of assets held in the trust fund, pursuant
to Article IV.
1.36 Investment Manager means a person or entity (as defined in section
3(38) of ERISA) which has been appointed under the terms of the Trust
Agreement and which has the power to manage, acquire, or dispose of
Plan assets and which is either:
(a) an investment advisor registered under the Investment
Advisors Act of 1940, as amended; or
(b) a bank as defined in the Investment Advisors Act of 1940,
as amended; or
(c) an insurance company qualified to manage assets of
retirement plans or perform similar functions under the laws of more
than one state; and which acknowledges in writing that it is a
Fiduciary with respect to the Plan.
1.37 IRC or Code means the Internal Revenue Code of 1986, as amended from
time to time.
1.38 Limitation Year means the twelve (12) month period commencing January 1
and ending December 31.
1.39 Non-Participating Contributions means Contributions made to the Plan
pursuant to Section 3.03 of Article III. Contributions may be made (a)
by the Participant as After-Tax Contributions or (b) through salary
reduction elections hereinafter provided by the Employer on the
Participant's behalf as Before-Tax contributions.
10
<PAGE>
1.40 Non-Participating Contribution Account means that portion of a
Participant's Individual Account attributable to Non-Participating
Contributions. A Participant's Non-Participating Contribution Account
shall be further divided into an After-Tax Account and a Before-Tax
Account.
1.41 Normal Retirement Age means the date a Participant attains the age of
sixty-five (65).
1.42 Over-The-Road-Driver means any employee who transports materials for
the Corporation, whose Compensation is based on mileage, and who is
paid on a weekly basis.
1.43 Participant means any employee who becomes a Participant as provided in
Article II hereof.
1.44 Participant Loan Fund means an account invested in debt obligations
evidencing loans to the Participant pursuant to Article XIV or pursuant
to provisions relating to loans under any Predecessor Plan.
1.45 Participating Contributions means Contributions made to the Plan
pursuant to Section 3.01. Participating Contributions may be made (a)
by the Participant as After-Tax contributions or (b) through salary
reduction elections hereinafter provided by the Employer on the
Participant's behalf as Before-Tax Contributions.
1.46 Participating Contribution Account means that portion of a
Participant's Individual Account attributable to Participating
Contributions. A Participant's Participating Contribution Account shall
be further divided into an After-Tax Account and a Before-Tax Account.
1.47 Period of Employment means the period which commences on an Employee's
Employment Date or Reemployment Date and ends on a Severance from
Service Date. All periods of service shall be aggregated. For purposes
of determining participation in Article II and vesting in Article VI:
(a) periods of employment with an Affiliate which would have
constituted a twelve-month Period of Employment had the Employee been
employed by the Employer shall be included as if such periods had been
performed for the Employer; and
(b) periods of employment with the Employer other than as an
Employee which would have constituted a twelve-month Period of
Employment had the Employee been employed as an Employee shall be
included as if such periods had been performed as an Employee.
11
<PAGE>
With respect to a former Employee who is reemployed within twelve
months of a Severance from Service Date, such former Employee's Period
of Severance shall be credited towards his Period of Employment for
purposes of participation and vesting under the Plan.
(c) Service Spanning Rules: If an Employee incurs a Period of
Severance by reason of a quit, discharge, disability, or retirement and
then performs an Hour of Service within 12 months of the Severance from
Service Date, such Employee's Period of Severance and Periods of
Employment prior to the Severance from Service Date shall be included
in determining his Periods of Employment for purposes of participation
and vesting under the Plan. Further, if an Employee incurs a Period of
Severance by reason of a quit, discharge or retirement during an
absence from service of 12 months or less for any reason other than a
quit, discharge or retirement or death, and then performs an Hour of
Service within 12 months of the date on which the Employee was first
absent from service, such Period of Severance and Periods of Employment
prior to the Severance from Service Date shall be included in
determining the Employee's Periods of Employment for purposes of
participation and vesting under the Plan. Notwithstanding anything
herein to the contrary, a Period of Employment shall include periods of
employment with an employer prior to the date such employer becomes
related to the Company by purchase, acquisition, merger consolidation
or otherwise, to the extent such service has been approved by
resolution of the Committee.
Notwithstanding anything herein to the contrary, a period of qualified
military service as defined in IRC Section 414(u) shall be included in
a Participant's Period of Employment under the Plan in accordance with
the requirements of such Section 414(u).
1.48 Period of Severance means a period of time commencing on an Employee's
Severance from Service Date and ending on his subsequent Reemployment
Date. A one-year Period of Severance is a 12-consecutive month period,
beginning on the Severance from Service Date and ending on the first
anniversary of such Date, provided that the Employee does not perform
an Hour of Service for the Employer during such 12-consecutive month
period.
1.49 Plan means the BASF Corporation Employee Savings Plan as contained
herein or as duly amended.
1.50 Plan Year means the twelve (12) month period beginning on each January
1 and ending on each December 31.
12
<PAGE>
1.51 Predecessor Plan means any plan:
a) in which a Participant participated before becoming a
Participant of this Plan, and
(b) from which his accounts were transferred into the Trust,
and
(c) which is designated by the Committee as a Predecessor
Plan.
1.52 Predecessor Plan Account means the account to which amounts
attributable to a Participant's account under a Predecessor Plan have
been credited.
1.53 Qualified Nonelective Contributions has the meaning defined in IRC
Section 401(m)(4)(c).
1.54 Qualified Plan Rollover Contribution has the meaning referred to in
Section 3.07(b).
1.55 Reemployment Date means the date, following a Severance from Service
Date, on which an Employee again performs an Hour of Service.
1.56 Rollover Account means an account used to receive transfers or
rollovers in accordance with Section 3.07.
1.57 Rollover Contribution has the meaning referred to in Section 3.07.
1.58 Severance from Service Date means the earlier of the following dates:
(a) the date on which an Employee quits, retires, is
discharged, becomes disabled or dies,
(b) the first anniversary date of the beginning of a period in
which an employee remains absent from service (with or without pay)
with the employer for any reason other than quit, retirement,
discharge, disability or death. Such absence includes, by the way of
example without limitation: vacation, holiday, sickness, leave of
absence or layoff.
To the extent not already credited, service shall be credited solely
for purposes of determining whether a Severance from Service Date has
occurred with respect to an Employee who is absent from work regardless
of whether the Employee is paid for such absence but only through the
second anniversary of the first date of such absence:
(a) by reason of the pregnancy of the Employee,
13
<PAGE>
(b) by reason of the birth of a child of the Employee,
(c) by reason of the placement of a child with the Employee in
connection with the adoption of such child by such Employee, or
(d) for purposes of caring for such child for a period
beginning immediately following such birth or placement.
Further, the Committee may request that the Employee furnish any
information the Committee may require to establish that the absence is
for the reasons hereinbefore provided and the number of days for which
there was such an absence. In the event such information is not
submitted in a timely manner, no service shall be credited pursuant to
this paragraph.
1.59 Special Stock Fund means the account which holds certain assets from
former qualified plans as described in Section 3.06.
1.60 Spouse means the person to whom the Participant is legally married.
1.61 Trust means the trust established pursuant to the Trust Agreement to
hold the assets of the Plan.
1.62 Trust Agreement means the agreement entered into between the
Corporation and the Trustee pursuant to Article VIII hereof.
1.63 Trustee means such individual, individuals or financial institution, or
a combination of them as shall be designated in the Trust Agreement to
hold in trust any assets of the Plan for the purpose of providing
benefits under the Plan, and shall include any successor trustee to the
trustee initially designated thereunder.
1.64 Valuation Date means each business day. The Trust shall be valued at
fair market value at the close of business on each business day. The
Committee may from time to time value the Trust as of any other date as
it deems desirable.
14
<PAGE>
ARTICLE II
ELIGIBILITY AND PARTICIPATION
2.01 Eligibility.
A) Any Employee who was eligible to participate in the Plan or who was a
Participant of the Plan on December 31, 1991 shall continue to be eligible to
participate in the Plan or continue as a Participant in the Plan on January 1,
1992.
B) Any other Employee shall be eligible to participate in the Plan upon
completion of a one-year Period of Employment and may enroll in the Plan as of
the first day of the month coincident with or next following satisfaction of
this requirement. An Employee shall be eligible to participate in the Plan on
the date he first performs an Hour of Service for his Employer.
In determining the completion of a one-year Period of Employment for
eligibility to participate in the Plan, an Employee who completes the one-year
Period of Employment requirement on the first anniversary of his Employment Date
satisfies the minimum service requirement as of such date. In the case of an
Employee who fails to complete a one-year Period of Employment on the first
anniversary of his Employment Date, all Periods of Employment shall be
aggregated so that a one-year Period of Employment shall be completed as of the
date the Employee completes 12 months of service (30 days are deemed to be a
month in the aggregation of fractional months) or 365 days of service.
2.02 Participation. Participation in the Plan is voluntary. In order to
become a Participant, an eligible Employee must complete an application form
provided by the Committee and make an investment selection on or before the
fifteenth (15th) day of the month preceding the month in which it is to be
effective. Each eligible Employee, in order to become a Participant, must have
Participating Contributions contributed on his behalf to the Plan in accordance
with Section 3.01 of Article III hereof. In the event an Employee does not
participate when initially eligible he may elect to participate effective the
first day of any subsequent month if he is then eligible by filing an
application on a timely basis.
Once a Participant, an Employee shall remain a Participant until his
Severance from Service Date. In the event either an Employee ceases to be a
Participant due to his termination of employment or is a former eligible
Employee and is later reemployed as an Employee, he shall be eligible to
participate immediately on his Reemployment Date. The Employee may enroll in the
Plan as of the first day of the month coincident with or next following his
Reemployment Date and shall resume participation by filing an application for
reenrollment by the fifteenth day of the month of reemployment.
15
<PAGE>
A Participant who transfers to a noncovered status shall continue to be
considered a Participant but shall no longer be eligible to make contributions
pursuant to Article III. An eligible Employee shall commence Plan participation
as of the first pay cycle following completion of the enrollment process
established by the Committee, or as soon thereafter as is administratively
practicable. The Committee may permit enrollment through the completion and
filing of forms provided for this purpose and/or through electronic or computer
means, or as otherwise determined by the Committee in its sole discretion.
2.03 Beneficiary Designation. Upon commencing participation, each
Participant shall designate a Beneficiary on forms furnished by the Committee.
Such Participant may then from time to time change his designated Beneficiary by
written notice to the Committee and, upon such change, the rights of all
previously designated Beneficiaries to receive any benefits under this Plan
shall cease. It is specifically provided that the Spouse of the Participant
shall consent in writing to any Beneficiary designation other than the Spouse.
Such consent shall be witnessed by a notary public or a representative of the
Committee. The Committee may accept a Beneficiary designation without the
consent of the Spouse if there is no Spouse, the Spouse cannot be located, or in
such other circumstances as may be prescribed by regulations. Any Spousal
consent shall only be applicable to the Spouse granting such consent. If, at the
date of death of the Participant, no duly designated Beneficiary exists, or if
the Beneficiary designated shall have died prior to the death of the
Participant, or if the Participant has revoked a prior designation by a writing
filed with the Committee without having filed a new designation, then any death
benefits which would have been payable to the Beneficiary shall be payable to
the Participant's Spouse, if any, at the date of the Participant's death; if no
such Spouse is living, to the Participant's children, equally; or if none
survive, then to the Participant's estate.
ARTICLE III
CONTRIBUTIONS
3.01 Participating Contributions. A Participant may elect to have
contributed to the Plan on his behalf up to 4% of his Compensation as his
Participating Contribution percentage. Such Contribution may be made as either
Before-Tax Contribution or an After-Tax Contribution or any combination thereof
in 1% increments (except to the extent of any limitation imposed by the Code).
However, in no event, may there be more than a total of 4% of Compensation
contributed as Participating Contributions.
Participating Contribution elections shall be made on appropriate forms to
be provided by the Committee. Such forms shall authorize the Employer to deduct
from the Participant's pay thereafter payable to the Participant in the case of
a Participant's
16
<PAGE>
After-Tax contributions or to reduce the Participant's pay in the case of a
Participant's Before-Tax Contributions an amount produced by multiplying the
Participating Contribution percentage elected by the Participant by his
Compensation. Deductions or reductions shall commence on the date the
contribution election shall become effective.
Once contributed to the Plan, Participating Contributions shall be
credited to a Participant's Participating Contribution Account at the end of
each month and shall be further maintained in a Before-Tax Account or an
After-Tax Account. A Participant's designation of a Participating Contribution
percentage shall continue in effect until changed by the Participant, as
hereinafter provided unless changed by recharacterization.
A Participant may, on an appropriate form provided by the Committee,
change his Participating Contribution percentage to any percentage prescribed in
this Section 3.01 to become effective pursuant to Section 3.05.
A Participant may elect to cease future Participating Contributions to the
Plan. Such election shall become effective pursuant to Section 3.05 and shall
automatically be treated as an election to cease future Non-Participating
Contributions. In the event any such Participant desires thereafter to have
contributions made on his behalf, he shall be allowed to do so as of the first
pay received in any subsequent month by making a timely and proper application
on a form as provided by the Committee.
The employer shall pay to the Trustee each Participant's Participating
Contributions within one (1) month following the month such Participating
Contribution was deducted or reduced from the Participant's Compensation but no
later than 30 days after the end of the Plan Year.
3.02 Employer Matching Contributions. Concurrently with the Participant's
Participating Contributions, the Employer shall contribute to the Plan for the
account of each Participant an amount equal to each such Participant's
Participating Contributions made to the Plan. Employer Matching Contributions
with respect to a month shall be credited to each Participant's Employer
Matching Contribution account.
3.03 Non-Participating Contributions. A Participant who has elected to
make Participating contributions of 4% of Compensation may elect to have
contributed to the Plan on his behalf an additional 1% to 10% of his
Compensation as his Non-Participating Contribution. Effective November 1, 1992,
a Participant may elect to have contributed to the Plan on his behalf an
additional 1% to 12% of his Compensation as his Non-Participating Contribution.
Non-Participating Contributions may be either Before-Tax Contributions or
After-Tax Contributions or any combination thereof in increments of 1%.
17
<PAGE>
Once contributed to the Plan, Non-Participating Contributions shall be
credited to a Participant's Non-Participating Contribution Account and shall
further be maintained as a Before-Tax Account or an After-Tax Accounts directed
by the Participant. Non-Participating Contributions, as provided in this Section
3.03, shall not be matched by Employer Matching Contributions.
Any such Non-Participating Contributions, whether they be Before-Tax
Contributions or After-Tax Contributions, shall be made by payroll deduction or
reduction at the same time and in the same manner as Participating Contributions
as provided in Section 3.01.
A Participant's designation of a Non-Participating Contribution percentage
shall continue in effect until changed by the Participant, as hereinafter
provided. A Participant may, on an appropriate form provided by the Committee,
change his Non-Participating Contribution percentage to any percentage
prescribed in this Section 3.03 to become effective pursuant to Section 3.05.
Such designation shall also allow a Participant to change the percentage
applicable to After-Tax Contributions, to be effective as of the aforementioned
date.
A Participant may elect to cease future Non-Participating Contributions to
the Plan. Such election shall become effective pursuant to Section 3.05. In the
event any such Participant desires thereafter to have Non-Participating
Contributions made on his behalf, he shall be allowed to do so as of the first
of any subsequent month by making a timely and proper application on a form
provided by the Committee.
The Employer shall pay to the Trustee each Participant's Non-Participating
Contributions within one (1) month following the month such Non-Participating
Contributions was deducted or reduced from the Participant's Compensation.
3.04 Maximum Deductible Contributions and Statutory Limitation on
Contributions. In no event shall the Employer be obligated to make a
Contribution for a given Plan Year in excess of the maximum amount deductible
for the Employer under IRC Section 404(a)(3)(A), or any statute or rule of
similar import.
Notwithstanding any other provision in the Plan relating to Elective
Deferrals, Employer Matching Contributions and/or employee contributions, the
following provisions shall control:
(a) Effective for Plan Years beginning after December 31, 1987, the amount
of Elective Deferrals for a Participant under the Plan (and any other plan
maintained by the Employer or an Affiliate) for his taxable year shall not
exceed $7,000 (or such increased amount reflecting changes in the cost of living
in the manner described at Code Section 402(g)(5)). Any Excess Deferral may be
distributed to the Participant in accordance with the rules of subsection (b)
hereof.
18
<PAGE>
(b) To the extent the Participant has made Elective Deferrals to the Plan
in excess of the amount set forth is subsection (a), such Excess Deferrals may
be distributed to him no later than the 15th day of April following the end of
the taxable year during which such Elective Deferrals are made. The amount of
Excess Deferrals that may be distributed hereunder with respect to a Participant
for a taxable year shall be reduced by any Excess Contributions previously
distributed or recharacterized for the Plan Year beginning in such taxable year.
If, for a taxable year, a Participant makes Elective Deferrals to this
Plan and to any other plan or arrangement, he may allocate the amount of any
Excess Deferrals for such taxable year among such plans. No later than the first
day of March following the close of the taxable year during which the Excess
Deferrals are made, the Participant shall notify the Committee in writing of the
amount of the Excess Deferrals allocated to this Plan. Such amount may then be
distributed (including income thereon) to the Participant no later than the
following April 15th.
Income allocable to Excess Deferrals is equal to the allocable gain or
loss for the taxable year of the individual. Income on Excess Deferrals for the
taxable year of the individual shall be allocated by multiplying the income for
the taxable year allocable to Elective Deferrals by a fraction, the numerator of
which is the Excess Deferrals by the Employee for the taxable year and the
denominator of which is the sum of (i) the total account balance of the employee
attributable to Before-Tax Contributions as of the beginning of the taxable
year, plus (ii) the Employee's Before-Tax Contributions for the taxable year.
(c) For each Plan Year beginning after December 31, 1986, the Actual
Deferral Percentage for the group of eligible Highly Compensated Employees shall
bear a relationship to the Actual Deferral Percentage for all other eligible
Employees that meets either of the following tests:
(i) the Actual Deferral Percentage for the group of eligible Highly
Compensated Employees is not more than the Actual Deferral Percentage
of all other eligible Employees multiplied by 1.25; or
(ii) the excess of Actual Deferral Percentage for the group of eligible
Highly Compensated Employees over that of all other eligible Employees
is not more than 2 percentage points, and the Actual Deferral
Percentage for the group of eligible Highly Compensated Employees is
not more than the Actual Deferral Percentage of all other eligible
Employees multiplied by 2.
(d) For purposes of computing the Actual Deferral Percentages in
subsection (c) hereof for such Plan Year, the Employer contributions on behalf
of any Participant shall include:
19
<PAGE>
(i) any Employer contributions made pursuant to the Participant's
elections; and
(ii) at the election of the Corporation, Employer Matching
Contributions that meet the withdrawal and nonforfeitability
restrictions of IRC Section 401(k)(2)(B) and (C) and/or Qualified
Nonelective Contributions providing such Employer Matching
Contributions and Qualified Nonelective Contributions satisfy the
requirements of Code Section 401(a)(4). Such contributions made at the
election of the Corporation shall be allocated in a uniform and
non-discriminatory manner among persons similarly situated.
(iii) for purposes of determining the Actual Deferral Percentage for
any Highly Compensated Employee who is among the group of the 10 Highly
Compensated Employees paid the greatest compensation during the year,
such Actual Deferral Percentage shall be the greater of:
(a) the Actual Deferral Percentage determined by combining the
Elective Deferrals and compensation of the Highly Compensated
Employee and all other Family Members who are Highly
Compensated Employees without regard to the family attribution
rules, and
(b) the Actual Deferral Percentage determined by combining the
Elective Deferrals and Compensation of all eligible Family
Members.
(e) For purposes of applying the provisions of subsection (C) hereof, the
Actual Deferral Percentage taken into account for any Highly Compensated
Employee who is a Participant in two or more cash or deferred arrangements of
the Employer shall be the sum of the Actual Deferral Percentages for such Highly
Compensated Employee under each of such arrangements.
(f) Except to the extent provided under rules provided by the Secretary of
the Treasury, notwithstanding the distribution of any portion of an Excess
Deferral under subsection (a) or (b) hereof, such portion shall, for purposes of
applying subsections (c) through (f) hereof, be treated as an Employer
contribution.
(g) for each Plan Year beginning after December 31, 1986, the Contribution
Percentage for the group of eligible Highly Compensated Employees shall bear a
relationship to the Contribution Percentage for all other eligible Employees
that meets either of the following tests:
(i) the Contribution Percentage for the group of eligible Highly
Compensated Employees is not more than the Contribution Percentage of
all other eligible Employees multiplied by 1.25; or
(ii) the excess of the Contribution Percentage for the group of
eligible Highly Compensated Employees over that of all other eligible
Employees is not more than 2 percentage points, and the Contribution
Percentage for the group of eligible Highly Compensated Employees is
not more than the Contribution Percentage of all other eligible
Employees multiplied by 2.
(h) (i) If two or more plans of the Employer to which Employer Matching
Contributions, Employee Contributions, or Elective Deferrals are made are
treated as one plan for purposes of IRC Section 410(b), such plans shall be
treated as one plan and (ii) if a Highly Compensated Employee participates in
two or more plans of the Employer to which such contributions are made, all such
contributions shall be aggregated.
20
<PAGE>
(i) any Employee who is eligible to make an Employee contribution (or, if
the Corporation takes elective contributions into account, elective
contributions) or to receive an Employer Matching Contribution shall be
considered an eligible Employee. In addition, if an Employee contribution is
required as a condition of participation in the Plan, any Employee who would be
a Participant in the Plan if such Employee made such a contribution shall be
treated as an eligible Employee on behalf of whom no Employer contributions are
made.
(j) For purposes of computing the Contribution Percentages, the
Corporation may elect to take into account for any Plan Year Elective Deferrals
and/or Qualified Nonelective Contributions allocated to a Participant's account
under the Plan or any other plan it sponsors. Such contributions made at the
election of the Corporation shall be allocated in a uniform and
non-discriminatory manner among persons similarly situated.
For purposes of determining the Contribution Percentage for any Highly
Compensated Employee who is among the 10 Highly Compensated Employees paid the
greatest compensation during the year, such Contribution Percentage shall be the
greater of:
(a) the Contribution Percentage determined by combining After-tax
contributions, Employer Matching Contributions and compensation of
the Highly Compensated Employee and all other Family Members who
are Highly Compensated Employees without regard to the family
attribution rules, and
(b) the Contribution Percentage determined by combining the
After-tax contributions, Employer Matching Contributions and
compensation of all eligible Family Members.
(k) Notwithstanding anything herein to the contrary, in satisfying the
Actual Deferral Percentage test set forth in Section 3.04(C) and the
Contributions Percentage test set forth in Section 3.04(g), multiple use of the
alternative rules set forth in Section 3.04(c)(ii) and 3.04(g)(ii) shall not be
permitted.
Multiple use of the alternative rules occurs if the sum of the Actual
Deferral Percentage for the entire group of eligible Highly Compensated
Employees and the Contribution Percentages of the group of eligible Highly
Compensated Employees exceeds the "aggregate limit". The "aggregate limit" is
the greater of:
(i) the sum of--
(a) 1.25 times the greater of (1) the Actual Deferral Percentage
of the group of eligible non-Highly Compensated Employees, or
(2) the Contribution Percentages of the group of eligible
non-Highly Compensated Employees, and
21
<PAGE>
(b) Two percentage points plus the lesser of (1) or (2) above.
In no event shall this amount exceed twice the lesser of (1)
or (2) above; OR
(ii) the sum of--
(a) 1.25 times the lesser of (1) or (2) above, and
(b) Two percentage points plus the greater of (1) or (2) above.
In no event, however, may this amount exceed twice the greater
of (1) or (2) above.
(l)The Plan shall be treated as satisfying the requirements of subsections
(C) and (g) hereof for any Plan Year if, after the close of such Plan Year in
which Excess Contributions or Excess Aggregate Contributions arose and within 12
months after the close of the Plan Year, (i) the amount of the Excess
Contributions and Excess Aggregate Contributions for such Plan Year (and income
thereon, as determined below) is designated by the Employer as a distribution of
Excess Contributions or Excess Aggregate Contributions (and income thereon, as
determined below) and are distributed to the appropriate Highly Compensated
Employees; (ii) in the case of Excess Contributions, to the extent provided in
regulations issued by the Secretary of the Treasury, and Employee election to
treat such Excess Contribution as distributed to and recontributed by the
Employee to the Plan, or (iii) in the case of Excess Aggregate Contributions, to
the extent such contributions are forfeitable, are forfeited.
The amount of Excess Contributions to be distributed or recharacterized
under this Section shall be reduced by Excess Deferrals previously distributed
for the taxable year ending in the same Plan Year.
Failure to correct Excess Contributions within 12 months after the close
of the Plan Year for which they were made will cause the Plan to fail to satisfy
the requirements of IRC Section 401(k)(3) for the Plan Year for which the Excess
Contributions were made and for all subsequent years they remain in the Trust.
The Employer will be liable for a 10% excise tax on the amount of Excess
Contributions unless they are corrected within 2-1/2 months after the close of
the Plan Year for which they are made.
Recharacterized Excess Contributions shall remain subject to the
nonforfeitability requirements and distribution limitations that apply to
Elective Deferrals.
In the event of termination of the Plan during the Plan Year in which an
Excess Contribution or Excess Aggregate Contribution arose, the corrective
distribution shall be made as soon as administratively feasible after the date
of termination of the Plan, but in no event later than 12 months after the date
of termination. If the entire account balance of a Highly Compensated Employee
is distributed during the Plan Year in which an Excess Contribution or Excess
Aggregate Contribution arose, the distribution shall be deemed to have been a
corrective distribution of Excess Contributions or Excess Aggregate
Contributions (and income thereon) to the extent that a corrective distribution
would otherwise have been required.
22
<PAGE>
Income allocable to Excess Contributions is equal to the allocable gain or
loss for the Plan Year. Income on Excess Contributions for the Plan Year shall
be allocated by multiplying the income for the Plan Year allocable to Excess
Contributions by a fraction, the numerator of which is the Excess Contributions
for the Employee for the Plan Year and the denominator of which is equal to the
sum of (i)the total account balance of the employee attributable to Before-Tax
Contributions as of the beginning of the Plan Year, plus (ii) the Employee's
Before-Tax Contributions for the Plan Year.
Income allocable to Excess Aggregate Contributions is equal to the
allocable gain or loss for the Plan Year. Income on Excess Aggregate
Contributions for the Plan Year shall be allocated by multiplying the income for
the Plan Year allocable to Employee After-tax Contributions, Employer Matching
Contributions and amounts treated as Employer Matching Contributions by a
fraction, the numerator of which is the Excess Aggregate Contributions for the
Employee for the Plan Year and the denominator of which is equal to the sum of
(i) the total account balance of the Employee attributable to Employee After-tax
Contributions and Employer Matching Contributions, and amounts treated as
Employer Matching Contributions as of the beginning of the Plan Year; plus (ii)
the Employee After-tax Contributions and Employer Matching Contributions, and
amounts treated as Employer Matching Contributions for the Plan Year.
3.05 Election. All elections to start, modify or suspend a Contribution
pursuant to Article III must be submitted in a timely manner and in accordance
with the procedures established by the Committee, with such election being
implemented as soon as administratively practicable following its receipt.
3.06 Predecessor Plan Accounts. Amounts transferred to the Plan on behalf
of a Participant from a Predecessor Plan shall be held in the Trust pursuant to
the terms of this Plan and allocated appropriately among the Participant's
Participating Contribution Account and Non-Participating Contribution Account
and the Before-Tax and After-Tax Accounts maintained thereunder, the
participant's Employer Matching Account and the Rollover Account. In the event
any Participant or group of Participants hold assets from a former qualified
plan in the form of stock of a previous employer, such assets shall be retained
in a Special Stock Fund until liquidated pursuant to Section 4.03. Any interest
received on the accounts such as dividends or interest payments shall be
invested according to the individual's most recent investment direction for Plan
Contributions.
3.07 Rollover Contributions. An Employee (whether or not otherwise a
participant) may make a Rollover Contribution to the Plan at any time consisting
of either a "Qualified Plan Rollover Contribution" or an "Individual Retirement
Account". In no event shall a rollover contribution occur hereinunder if it
would adversely affect the tax-qualified status of the Plan under Section 401(a)
of the Code (or the qualified status of the Plan's cash or deferred arrangement
under Section 401(k) of the Code).
23
<PAGE>
(a) Any Rollover Contribution shall be held in a separate account, shall
be invested in accordance with the direction of the Participant pursuant to
Article IV, shall be distributed in the same manner and at the same time as
described in Article VI with respect to a distribution to such Employee of
benefits under the Plan.
(b) "Qualified Plan Rollover Contributions" means the balance to the
credit of an Employee under a profit sharing, pension or stock bonus plan
meeting the requirements of IRC Section 401(a), the balance to the credit of an
Employee under a profit sharing, pension or stock bonus plan in connection with
the liquidation or sale of the subsidiary or other transfer within the meaning
of IRC Section 402(a)(6) for which the Employee works, paid to an Employee in
one or more distributions which constitute a "lump sum distribution" within the
meaning of IRC Section 402(e)(4)(A) (determined without reference to IRC Section
402(e)(4)(B) and (H)) or within one taxable year of the Employee on account of a
termination of the plan or, in the case of a profit-sharing plan or stock bonus
plan, a complete discontinuance of contributions under such plan. The Employee
may transfer any portion of the cash he receives in such distribution (or the
cash proceeds of the sale of other property received in such distributions) to
the trust under this Plan on or before the 60th day after the day on which he
received the property distributed. The maximum amount which may be transferred
shall not exceed the fair market value of all property received in the
distribution reduced by (a) the sum of (i) the amount of the Employee's own
contributions under such Plan and (ii) any other amounts considered as
contributed by him (determined by applying IRC Section 72(f) less (b) any
amounts previously distributed to him from such other plan and not includible in
his gross income. The amount so transferred must consist of cash distributed
from such other plan or any portion of the cash proceeds from the sale of
distributed property other than cash, to the extent permitted by IRC Section
402(a)(6)(D).
(c) "Individual Retirement Account" means the entire amount received by an
Employee from an individual retirement account representing the entire amount in
the account (the "qualifying amount") if no part of the amount in the account is
attributable to any source other than a rollover contribution from (i) an
employee's trust described in IRC Section 401(a), which is exempt from tax under
IRC Section 501(a), or (ii) a qualified annuity plan meeting the requirement of
IRC Section 403(a) and, in the case of an individual retirement account, any
earnings on such sums. An Individual Retirement Account will be accepted only if
the entire qualifying amount was received by the Employee in cash and only such
cash amount is included in the Individual Retirement Account.
24
<PAGE>
ARTICLE IV
INVESTMENT OPTIONS AND FUNDS
4.01 Investment Options. All Contributions credited to a Participant's
account shall be invested in one or more Investment Funds. If
investments are to be made to more than one Investment Fund,
investments shall be made in increments of one percent (1%).
4.02 Direction of Investments. Each Participant shall have the right to
direct that the entire amount of the Contributions being allocated to
his Individual Account during a Plan Year be invested in one or more of
the Investment Funds offered under the Plan. The Committee has the
authority to designate the Investment Funds to be offered under the
Plan and to make any changes to the Investment Funds from time to time
as may be necessary in the interest of Participants.
Investment Fund elections shall be made on forms provided by the
Committee, and each Participant shall be provided with a summary describing each
Investment Fund and an appropriate election form at the time he becomes a
Participant.
All requests for changes in the allocation of Contributions shall be
addressed in writing to the Committee.
Each Participant shall have the right to change his election concerning
the Investment Fund in which Contributions allocated to him are to be invested.
Any such change shall be applicable as soon as administratively practicable
after the Participant makes a revised investment election in accordance with
procedures established by the Committee for this purpose; provided, however,
that no more than one such revised election shall be effective on any given
Valuation Date. Any such revised election shall continue to apply until the
Participant makes another change of investment election. The Committee may
permit investment elections to be made through the completion and filing of
forms provided for this purpose and/or through electronic, telephonic or
computer means, or as otherwise determined by the Committee in its sole
discretion.
4.03 Investment Fund Transfers. Each participant shall have the right to
change his investment option election concerning the Investment Fund or
Funds in which his prior Contributions are invested (other than the
Special Stock Funds) in accordance with Section 4.02. Any such change
shall be applicable as soon as administratively practicable after the
Participant makes a revised investment election in accordance with
procedures established by the Committee for this purpose; provided,
however, that no more than one such revised election shall continue to
apply until the Participant makes another change of investment
election.
25
<PAGE>
Notwithstanding the above, the Committee, in its sole discretion, may
determine the frequency of such changes and the extent to which any Investment
Fund transfer may occur with respect to the Special Stock Fund.
Each such election shall be in increments of one percent (1%), or in such
other percentage as determined by the Committee from time to time.
Effective for the period commencing on January 1, 1989 and ending on
November 30, 1990, any Participant who had an account in a Special Stock Fund
invested in either shares of United Technologies Corporation or shares of Dow
Chemical Company had the right by written request to the Committee to have made
a one-time election to have shares held in such Special Stock Fund liquidated
and the proceeds reinvested in any other Investment Fund of the Plan. Any such
election was applicable as of the last day of the calendar month in which the
election was received or earlier if determined to be administratively feasible
by the Committee.
If as of November 30, 1990, a Participant continued to have shares held in
either Special Stock Fund, such shares shall be liquidated by the Committee at
the time and in the manner it determines in its discretion. The proceeds of such
sale or sales shall then be reinvested pursuant to such Participant's most
recently executed investment directions.
ARTICLE V
Allocations to Individual Accounts
5.01 Individual Accounts. The Committee shall establish and maintain an
Individual Account in the name of each Participant to which the Committee shall
credit all amounts contributed by or on behalf of each such Participant pursuant
to Article III and shall credit or debit all amounts of income, gain, loss or
distributions pursuant Articles IV, VI and VII. A Participant's Participating
Contribution Account and Non-Participating Contribution Account shall be further
maintained as Before-Tax and/or After-Tax Accounts within each general account
and such sub-accounts as may be necessary.
5.02 Allocation of Contributions. A Participant's Contributions shall be
allocated to his Participating After-Tax or Non-Participating After-Tax Account,
as applicable, and all Employer Matching Contributions made on his behalf shall
be allocated to his Employer Matching Account as of each Valuation Date.
Allocations of Employer Matching Contributions and forfeitures, if
applicable, shall not be discontinued or decreased because of the Participant's
attainment of any age.
26
<PAGE>
5.03 Allocation of Adjustment. As of each Valuation Date, the Committee
shall adjust each Individual Account for the period elapsed since the last
preceding Valuation Date by adding together all income received and accrued,
realized and unrealized profits, and deducting therefrom all taxes, charges or
expenses and any realized or unrealized losses which may have been sustained.
5.04 Equitable Allocations. The Committee shall establish accounting
procedures for the purpose of making the allocations,
valuations and adjustments to Participants' accounts provided for in this
Article V.
5.05 Maximum Additions. Anything herein to the contrary notwithstanding,
the Plan shall be administered in a manner which will result in its complying
with the provisions of IRC Section 415.
The limitation on aggregate benefits from a defined benefit plan and a
defined contribution plan which is contained in IRC Section 415, as amended
shall be complied with by a reduction (if necessary) in the Participant's
benefits under the defined benefit plan(s) (in accordance with the provisions of
the said plan(s)) before a reduction of any benefit in such defined contribution
plan.
If a Participant's After-Tax Contributions under the Plan in any
Limitation Year would cause the annual additions on his behalf to exceed the
maximum permitted annual additions under IRC Section 415, the Committee shall
return such excess After-Tax Contributions to the Participant. For purposes of
this Section 5.05, a Participant's Non-Participating After-Tax Contributions
shall be returned to the Participant before a Participant's Participating
After-Tax Contributions are returned. If any Participant's Participating
After-Tax Contributions are returned to the Participant, corresponding Employer
Matching Contributions shall be reduced.
If as a result of the allocation of forfeitures, a reasonable error is
made in estimating a Participant's Compensation, or is made under other facts
and circumstances as the Committee shall reasonably determine, the annual
additions for a Participant shall exceed the limitations of IRC Section 415 for
a Limitation Year, the amount of such excess shall not be deemed annual
additions for such Limitation Year, shall be held unallocated in a suspense
account for such Participant and shall be used to reduce Employer contributions
for the next Limitation Year (and succeeding Limitation Years, if necessary) for
that Participant if such Participant remains an active Participant under the
Plan as of the end of the Limitation Year. If, however, such Participant is not
an active Participant under the Plan as of the end of the Limitation Year, then
such excess amounts shall be held unallocated in a suspense account for the
Limitation Year and allocated to the Individual Accounts of the remaining
Participants in the next succeeding Limitation Year, subject to the limitations
of IRC Section 415, to reduce any Employer contributions which would constitute
annual additions and which may be made to the Individual Accounts of
Participants for that Limitation Year. Any such suspense account
27
<PAGE>
shall not be valued and no gains and losses of the Trust shall be allocated to
such suspense account. Notwithstanding anything contained herein or in the Trust
Agreement to the contrary, if the Plan is regarded as terminated, the amount
held in the suspense account shall be paid to the Employer that contributed such
amount.
Notwithstanding anything contained herein or in the Trust Agreement to the
contrary, pursuant to Section 13.06, the Committee may take such actions as it
regards advisable, including deeming Employer contributions which would
otherwise be or have already been credited to a Participant's Individual Account
made under a mistake of fact and returnable to the Employer that made such
contributions, in order to fulfill the provisions of this Section 5.05.
ARTICLE VI
DISTRIBUTIONS AND VESTING
6.01 Vesting of Participant's Accounts. A Participant shall be fully
vested at all times in his Participating Contribution Account, Non-Participating
Contribution Account, all Predecessor Plan Accounts and Rollover Accounts.
6.02 Vesting of Employer Matching Account. (a) A Participant shall be
fully vested in his Employer Matching Contribution Account when he dies, incurs
a Disability, incurs an Early Retirement, attains his Normal Retirement Age or
upon an involuntary termination that is the result of an illness or the
elimination of his job title or any other involuntary termination, that deems an
affected Participant fully vested, other than terminations caused by a
Participant's failure to comply with employment rules or standards.
(b) Except as provided in Section 6.02(a), a Participant who is employed
by an Employer on or after January 1, 1989 shall be vested in his Employer
Matching Contribution Account once he has completed a two-year Period of
Employment.
(c) In the event of amendment of the vesting schedule outlined in
subsection (b) above, for every Employee who is a Participant on the amendment
adoption date or the amendment effective date, whichever is later, the
nonforfeitable percentage (determined as of that date) of the Participant's
right to the Employer Matching Account may not be less than the Participant's
percentage determined under the Plan without regard to the amendment.
6.03 Retirement. A Participant shall be deemed to have retired for
purposes of this Plan and IRC Section 72(t) if his Severance from Service Date
occurs after attainment of age 55. Upon the retirement of a Participant in
accordance with the provision of this Section 6.03, the Participant shall be
eligible to receive the vested
28
<PAGE>
portion of his Individual Account determined as of the later of the Valuation
Date coincident with or immediately following his Severance from Service Date or
the date the Committee is notified of his retirement. Such distribution shall be
adjusted to reflect interest earned from the Valuation Date to the date of
distribution as per Section 7.04, except that no interest adjustment will be
made for any funds held in a Special Stock Fund in the Trust. The Committee
shall thereupon direct the Trustee to distribute to such Participant such amount
in accordance with Section 6.07 hereof.
6.04 Disability. For purposes of this Plan, a Participant shall be deemed
Disabled as of the first day of the month coinciding with or next following a
determination by the Committee that such Participant is Disabled.
Upon such determination in accordance with the provisions of this Section
6.04, the Participant shall be eligible to receive the value of his Individual
Account determined as of the Valuation Date next following the determination
that the Participant is Disabled. The Committee shall thereupon direct the
Trustee to distribute to such Participant such amount in accordance with Section
6.07 hereof.
6.05 Death Before Retirement or Termination of Employment. Upon the death
of a Participant or Former Participant, the Beneficiary of such Participant or
such Former Participant shall receive in a lump sum the remaining value of the
Participant's (or Former Participant's) Individual Account determined as of the
Valuation Date immediately following the notification of his death to the
Committee.
6.06 Severance from Service. Upon termination of employment for any reason
other than retirement, death or disability, a Participant shall be entitled to a
lump sum equal to the vested portion of his Individual Account determined as of
the Valuation Date immediately following the later of his termination of
employment or the date the Committee is notified of such termination of
employment.
A Participant who terminates employment before he has completed a two-year
Period of Employment shall be deemed to have received an immediate cash-out of
his Individual Account.
For purposes of this Section 6.06, employment with any participating
Employer shall be deemed employment with any other participating Employer. The
transfer of an employee from one participating Employer to another or to an
Affiliate shall not constitute Severance from Service and such Participant's
Individual Account shall be maintained until he is thereafter eligible for a
distribution in accordance with the terms of the Plan.
The non-vested portion of the Participant's Individual Account shall be
held in his Individual Account until the later of the Valuation Date coincident
with or next following the Participant's termination of employment or the date
the Committee is notified of
29
<PAGE>
such termination at which time it shall become a Forfeiture and shall be used to
reduce the Employer's subsequent Contributions.
Any Participant who is reemployed shall have his Forfeiture automatically
reinstated. Amounts reinstated that were vested pursuant to Article VI and not
distributed shall be reallocated to the account from which they came and
invested pursuant to the investment options under Article IV pertaining to
future Contributions. Reinstatements shall be made by the Employer in cash in an
amount equal to the value of the amount forfeited at the time of Forfeiture and
shall be made first from Forfeitures pursuant to Section 6.06, then from
additional Employer contributions. Any reinstated amount shall be invested
pursuant to the investment option elected or in effect at the time of
reinstatement pursuant to Article IV.
6.07 (a) Method of Payment. Any Participant entitled to a distribution
under Section 6.03, 6.04 or 6.06 in an amount of $5,000 or less shall receive an
immediate lump sum payment.
Any Participant entitled to a distribution under Section 6.03 or 6.04
which exceeds $5,000 may elect to (1) receive an immediate lump sum payment as
described in subsection (c) below, (2) receive payments in installment form as
described in subsection (d) below, or (3) defer receipt of any benefits payable
hereunder until age 70 1/2. Effective June 1, 1992, a Participant may
subsequently revoke his original election to defer payment of benefits until age
70-1/2 and elect to receive the installment form. A second and final revocation
to receive a lump-sum payment may be elected at any time after such revocation.
If no election is received by the Committee within 60 days of the Participant's
Severance from Service Date under Section 6.03 or 6.04, the receipt of benefits
shall automatically be deferred until age 70 1/2.
Any Participant entitled to a distribution under Section 6.06 which
exceeds $5,000 may elect to (1) receive an immediate lump sum payment as
described under subsection (c) below, or (2) irrevocably defer receipt of any
benefits payable hereunder until age 65. In accordance with an irrevocable
election to defer receipt of benefits, the benefits shall be paid in a lump sum
as of the December 31 Valuation Date of the calendar year in which such
Participant reaches age 65. If no election as to the method of payment is
received by the Committee within 60 days of the Participant's Severance from
Service Date under Section 6.06, the receipt of benefit shall be automatically
deferred until age 65.
A Participant's Individual Account shall be revalued as of each Valuation
Date until the Valuation Date as of which any remaining balance is distributed.
All assets held on behalf of a Participant pursuant to this paragraph shall
continue to be invested pursuant to Article IV in accordance with rules
prescribed by the Committee.
Any Participant entitled to a distribution under Section 6.03, 6.04 or
6.06 shall be
30
<PAGE>
permitted to elect to take an Annual Distribution from his Individual Account.
Such Annual Distribution shall equal the amount designated by the Participant at
the time of his election, or the remaining balance in such Participant's
Individual Account, whichever is less. Annual Distributions shall be deducted
from the Participant's individual Account and shall be paid in accordance with
procedures established by the Committee as soon as practicable after that date.
Any such Annual Distribution election shall be made through the completion and
filing of forms provided for this purpose and/or through electronic, telephonic
or computer means, or as otherwise determined by the Committee in its sole
discretion. The minimum amount of any such Annual Distribution shall be $500, or
such other amount as may be established by resolution of the Committee from time
to time.
(b) Application for Benefits. In order to receive a benefit under the
Plan, a Participant, Former Participant, his Beneficiary, next of kin, or estate
must make written application therefor on a form or forms provided by the
Committee. The Committee may require that there be furnished to it in connection
with such application all information pertinent to any question of eligibility
and the amount of any benefit. The Committee may permit applications for
benefits to be made through the completion and filing of forms provided for this
purpose and/or through electronic, telephonic or computer means, or as otherwise
determined by the Committee in its sole discretion.
(c) Normal Form. In the absence of the election of an optional method of
payment denoted in Section 6.07(d), benefit payment shall be payable in cash, in
one lump sum. However, distributions from the Special Stock Funds shall be in
shares of stock in one lump distribution or in such other manner as approved by
the Committee.
(d)(i) Installment Form. In lieu of receiving payment in accordance with
Section 6.07(c), a Participant who retires or becomes Disabled may immediately
elect that his benefit payments be made, in approximately equal installments
from the Trust, over a period of 12 to 180 months subject to the limitation in
Section 6.09. The election must be made within 60 days of retirement or becoming
Disabled and installments will begin as of that Valuation Date. Effective June
1, 1992, this original election may subsequently be revoked to defer further
receipt of benefits until age 70-1/2 or to receive an immediate lump sum
payment. A second and final revocation to receive a lump-sum payment may be
elected at any time after such revocation.
In the event any optional form of payment denoted in Section 6.07(d) is
elected, the Participant's account from which such installments are to be paid
shall be invested pursuant to any investment option as described in Article IV
as elected by the Participant, Former Participant or Beneficiary to be
applicable to such account and the Individual Account shall be invested
accordingly.
(ii) Annuity Form. A Participant who was a former participant in a
Predecessor Plan which provided an optional annuity form of payment and who
retires or becomes
31
<PAGE>
disabled may elect that his benefit payments be made in the form of a single
life annuity, or if he is married, in the form of a "qualified joint and
survivor annuity" but only to the extent of the balance of this Predecessor Plan
accounts as of the day preceding the date such balance is transferred to this
Plan. If such a Participant elects to receive his Predecessor Plan amounts in
the form of an annuity, the Committee shall direct the Trustee to purchase an
annuity. If an annuity is to be purchased and the Participant is married as of
the date on which distribution is to be made, the Committee shall direct the
Trustee to purchase an annuity which shall be in the form of a "qualified joint
and survivor annuity" as defined in IRC Sections 401(a)(11) and 417 pursuant to
which such Participant will receive monthly payments for life commencing on the
first day of the month following his retirement date or the date his is
determined to be Disabled with the provision that after his death, 50% of the
amount of his monthly payments will continue during the life of and be paid to
his spouse, if such spouse shall survive him.
A purchase of a "qualified joint and survivor annuity" shall not be made
with respect to a Participant who has rejected the "qualified joint and survivor
annuity" during the election period commencing 90 calendar days prior to the
date the Participant first qualifies for a benefit. Such rejection of the
"qualified joint and survivor annuity" shall be in writing and the Corporation
must receive notice of the rejection on or before the Participant's retirement
date. The written notice shall not become effective unless the Participant's
spouse consents to such rejection and acknowledges the effect of such waiver in
writing witnessed by a notary public. In the event that the consent of the
Participant's spouse cannot be obtained because there is no spouse, or the
Participant's spouse cannot be located, and this is established to the
Committee, then such election to reject the "qualified joint and survivor"
annuity shall become effective.
The Corporation will, within 30 days following receipt of the
Participant's request for information concerning the "qualified joint and
survivor annuity" prior to commencement of the election period, provide the
Participant with a written explanation of the Participant's benefit including
the term, condition and effect of the election on the amount of the
Participant's benefit. Such written explanation shall contain the terms and
conditions of the "qualified joint and survivor annuity," the Participant's
right to make, and the effect of, an election to waive this "qualified joint and
survivor annuity," the rights of the Participant's spouse and the right to make,
and the effect of, a revocation of an election. Benefit payments may be delayed
until the expiration of the 90-day period following the furnishing of the
written explanation. The election is revocable during the election period, but
cannot be revoked once the benefit commences.
If a distribution is to be made by reason of the death of such a married
Participant after he has elected to receive an annuity form of payment and prior
to the purchase of the "qualified joint and survivor annuity," the Committee
shall direct the Trustee to purchase with his Predecessor Plan amounts an
annuity for the life of the Participant's surviving spouse unless the spouse
elects otherwise.
32
<PAGE>
6.08 Benefits to Minors and Incompetents. In case any person entitled to
receive payment under the Plan shall be a minor, the Committee in its discretion
may dispose of such amount in any one or more of the following ways:
(i) by payment thereof to either parent of such minor or to any
adult person with whom such minor may at the time be living or to
any person who shall be legally qualified and shall be acting as
guardian of the person or the property of such minor; provided only
that the parent or adult person to whom any amount shall be paid
shall have advised the Committee in writing that he will hold or
use such amount for the benefit of such minor;
(ii) by payment thereof directly to such minor;
(iii) by application thereof for benefit of such minor.
In the event that it shall be found that a person entitled to receive
payment under the Plan is physically or mentally incapable of personally
receiving and giving a valid receipt for any payment due (unless prior claim
therefor shall have been made by a duly qualified committee or other legal
representative), such payment shall be made to an individual selected by the
Committee.
6.09 Payment of Benefits. In the event that there shall be a portion of a
Participant's Individual Account which shall be due and payable pursuant to this
Article VI, and the Participant or Former Participant has not elected otherwise
in accordance with the provisions of the Plan, any payment of benefits or
commencement thereof to the Participant or Former Participant shall begin not
later than sixty (60) days after the close of the Plan Year in which occurs the
latest of:
(a) the Participant's having attained his Normal Retirement Age; and
(b) termination of service of the Participant, or
(c) the 10th anniversary of the year in which the
Participant commenced participation in the Plan.
Required Beginning Date. On and after January 1, 1997, a Participant,
other than a 5% owner, who continues to be actively employed by the Company
after attaining age seventy and one-half (70-1/2) may elect to commence benefit
payments at that time or to delay benefit distributions until such time as he
incurs a Severance From Service Date. This provision shall be construed and
administered in a manner consistent with Code Sections 401(a)(9) and 411(d)(6).
Limits on Distribution Periods. As of the first Distribution Calendar Year
(defined below), distributions, if not made in a single-sum, may only be made
over one of the following periods (or a combination thereof):
33
<PAGE>
(a) the life of the Participant,
(b) the life of the Participant and a Designated Beneficiary,
(c) a period certain not extending beyond the life expectancy of the
Participant, or
(d) a period certain not extending beyond the joint and last survivor
expectancy of the Participant and a Designated Beneficiary.
If the Participant's Interest is to be distributed in other than a single
lump-sum payment, the following minimum distribution rules shall apply on or
after the Required Beginning Date, defined below.
(a) Individual Account
(b) Other Forms. If the Participant's benefit is distributed in the
form of an annuity purchased from an insurance company, distributions
thereunder shall be made in accordance with the requirements of Section
401(a)(9) of the Code and the proposed Treasury regulations thereunder
and the terms thereof shall comply with the requirements of this Plan.
Death Distribution Provisions.
(a) Distribution Beginning Before Death. If the Participant dies after
distribution of his or her interest has begun, the remaining portion of such
interest will continue to be distributed at least as rapidly as under the method
of distribution being used prior to the Participant's death.
(b) Distribution Beginning After Death.
(i) If the Participant dies before distribution of his or her interest
begins, distribution of the Participant's entire interest shall be completed by
December 31 of the calendar year containing the fifth anniversary of the
Participant's death except to the extent that an election is made to receive
distributions in accordance with (A) or (B) below:
(A) If any portion of the Participant's Interest is payable to a
Designated Beneficiary, distributions may be made over the life or over a period
certain not greater than the Life Expectancy of the Designated Beneficiary
commencing on or before December 31 of the calendar year in which the
Participant died;
(B) If the Designated Beneficiary is the Participant's surviving spouse,
the date distributions are required to begin in accordance with Subparagraph (A)
above shall not be earlier than the later of
(i) December 31 of the calendar year immediately following the
calendar year in which the Participant died and (ii) December 31 of
the calendar year immediately following the calendar year in which
the Participant would have attained age 70-1/2.
(ii) If the Participant has not made an election pursuant to this
Subsection (b) by the time of his or her death, the Participant's
Designated Beneficiary must
34
<PAGE>
elect the method of distribution no later than the earlier of
(1) December 31 of the calendar year in which distributions
would be required to begin under this Subsection (b), or (2)
December 31 of the calendar year which contains the fifth
anniversary of the date of death of the Participant. If the
Participant has no Designated Beneficiary, or if the
Designated Beneficiary does not elect a method of
distribution, distribution of the Participant's entire
interest must be completed by December 31 of the calendar year
containing the Participant's death.
(c) For purposes of Subsection (b) above, if the surviving spouse dies
after the Participant, but before payments to such spouse begin, the provisions
of Subsection (b), with the exception of Paragraph (i)(B) therein, shall be
applied as if the surviving spouse were the Participant.
(d) For purposes of this Section, any amount paid to a child of the
Participant will be treated as if it had been paid to the surviving spouse if
the amount becomes payable to the surviving spouse when the child reaches the
age of majority.
(e) For purposes of this Section, distribution of a Participant's Interest
is considered to begin on the Participant's Required Beginning Date or, if
Subsection (c) above is applicable, the date distribution is required to begin
to the surviving spouse pursuant to Subsection (b) above. If distribution in the
form of an annuity irrevocably commences to the Participant before the Required
Beginning Date, the date distribution is considered to begin is the date
distribution actually commences.
Definitions.
(a) Applicable Life Expectancy. The life expectancy (or joint and last
survivor expectancy) calculated using the attained age of the Participant (or
Designated Beneficiary's) birthday in the applicable calendar year reduced by
one for each calendar year which has elapsed since the date life expectancy was
first calculated. If life expectancy is being recalculated, the Applicable Life
Expectancy shall be the life expectancy as so recalculated. The applicable
calendar year shall be the first distribution calendar year, and if life
expectancy is being recalculated such succeeding calendar year.
(b) Designated Beneficiary. The individual who is designated as the
Beneficiary under Section 2.03 of the Plan in accordance with Section 401(a)(9)
of the Code and the proposed Treasury regulations thereunder.
35
<PAGE>
(c) Distribution Calendar Year. A calendar year for which a minimum
distribution is required. For distributions beginning before the Participant's
death, the first distribution calendar year is the calendar year immediately
preceding the calendar year which contains the Participant's Required Beginning
Date. For distributions beginning after the Participant's death, the first
Distribution Calendar Year is the calendar year in which distributions are
required to begin pursuant to the paragraphs under the Subsection entitled
"Death Distribution Provisions".
(d) Life Expectancy.
(i) Life expectancy and joint and last survivor expectancy are computed
by use of the expected return multiples in Tables V and VI of Section 1.72-9 of
the income tax Treasury regulations.
(ii) Unless otherwise elected by the Participant (or spouse, in the case
of distributions described in Paragraph (b)(i)(B) of the Subsection entitled
"Death Distribution Provisions" above) by the time distributions are required to
begin, life expectancies shall be recalculated annually. Such election shall be
irrevocable as to the Participant (or spouse) and shall apply to all subsequent
years. The life expectancy of a nonspouse beneficiary may not be recalculated.
(e) Participant's Interest.
(i) The account balance as of the last valuation date in the calendar
year immediately preceding the Distribution Calendar Year (valuation calendar
year) increased by the amount of any contributions or forfeitures allocated to
the account balance as of dates in the valuation calendar year after the
valuation date and decreased by distributions made in the valuation calendar
year after the valuation date.
(ii) Exception for second Distribution Calendar Year. For purposes of
Paragraph (i) above, if any portion of the minimum distribution for the first
Distribution Calendar Year is made in the second Distribution Calendar Year on
or before the Required Beginning Date the amount of the minimum distribution
made in the second Distribution Calendar Year shall be treated as if it had been
made in the immediately preceding Distribution Calendar Year.
(f) Required Beginning Date.
(i) General Rule. The Required Beginning Date of a Participant is the
first day of April of the calendar year following the calendar year in which the
participant attains age 70-1/2. On and after January 1, 1997, a Participant,
other than a 5% owner, who continues to be actively employed by the Company
after attaining age seventy and one-half (70-1/2) may elect to commence benefit
payments at that time or to delay benefit distributions until such time as he
incurs a Severance From Service Date. This provision shall be construed and
administered in a manner consistent with Code Sections 401(a)(9) and 411(d)(6).
(ii) Transitional Rules. The Required Beginning Date of a Participant who
attains
36
<PAGE>
age 70-1/2 before January 1, 1988, shall be determined in accordance with (A) or
(B) below:
(A) Non-5-percent Owners. The Required Beginning Date of a
Participant who is not a 5-percent owner is the first day of
April of the calendar year following the calendar year in
which the later of retirement or attainment of age 70-1/2
occurs.
(B) 5-percent Owners. The Required Beginning Date of a
Participant who is a 5-percent Owner during any year beginning
after December 31, 1979, is the first day of April following
the later of:
(1) the calendar year in which the Participant attains age
70-1/2, or
(2) the earlier of (i) the calendar year with or within which
ends the Plan Year in which the Participant becomes a
5-percent Owner, or (ii) the calendar year in which the
Participant retires.
(C) The Required Beginning Date of a Participant who is not a
5-percent Owner who attains age 70-1/2 during 1988 and who has
not retired as of January 1, 1989, is April 1, 1990.
(iii) 5-percent Owner. A Participant is treated as a 5-percent Owner for
purposes of this Section if such Participant is a 5-percent Owner as defined in
Section 416(i) of the Code (determined in accordance with Section 416 but
without regard to whether the Plan is Top-Heavy) at any time during the Plan
Year ending with or within the calendar year in which such owner attains age
66-1/2 or any subsequent Plan Year.
(iv) Once distributions have begun to a 5-percent Owner under this
Section, they must continue to be distributed, even if the Participant ceases to
be a 5-percent Owner in a subsequent year.
ARTICLE VII
WITHDRAWALS
7.01 Withdrawals Generally. Subject to the terms and conditions set forth
below, a Participant may withdraw all or a part of the vested portion of his
Individual Account (except for amounts allocated to the Special Stock Funds) in
the order or priority described below as of the last day of any calendar month
by giving the Committee written notice by the last business day of the month.
Payment of withdrawals shall be made in a lump sum as soon as reasonably
possible after the last day of the calendar month in which the Committee
receives such request. Amounts withdrawn may not be repaid. A withdrawal will be
counted as a withdrawal in the year requested. The provisions of this Article
VII are applicable to withdrawals from a
37
<PAGE>
Participant's Individual Account. If the Participant has investments in more
than one Investment Fund, any withdrawal shall be made from each such Investment
Fund on a prorated basis. The minimum withdrawal limitation shall be $500, or if
less, the Vested Individual Account balance.
7.02 Order of Withdrawals. Withdrawals shall be made in the following
order of priority:
(a) FIRST, a Participant may withdraw all or a portion of his
Non-Participating and Participating After-Tax Contributions made prior to
January 1, 1987.
(b) SECOND, a Participant may withdraw amounts attributable to all or a
portion of his After-tax Contributions made on or after January 1, 1987, plus
earnings on all After-Tax Contributions made prior to and/or after January 1,
1987, plus amounts attributable to all or a portion of his Rollover
Contributions (including earnings thereon).
(c) THIRD, a Participant may withdraw either (i) if the Participant has at
least five total Years of Employment from the date he became a Participant
(included for this purpose are years of participation in a Predecessor Plan),
amounts attributable to vested Employer Matching Contributions (including
earnings thereon) which were not used to meet the requirement of IRC Section
401(k)(3), or (ii) in any other case amounts attributable to vested Employer
Matching Contributions (including earnings thereon) which were not used to meet
the requirements of IRC Section 401(k)(3) provided, however, that amounts
withdrawn under this clause (ii) of this priority THIRD shall not result in
amounts remaining in the Participant's Employer Matching Contribution Account
which are less than an amount equal to the Employer Matching Contributions
allocated to such Account which have remained in the Plan for less than 24
months.
(d) FOURTH, upon attainment of age fifty-nine and one-half (59 1/2),
Participating and Non-Participating Before-Tax Contributions (including earnings
thereon) and vested Employer Matching Contributions (including earnings thereon)
which were used to meet the requirement of IRC ss. 401(k)(3) may be withdrawn.
7.03 Withdrawal Because of Hardship.
(a) The Committee will make a determination that a withdrawal is necessary
to meet a Hardship of a Participant provided that the Participant satisfies one
of the following:
(1) The Participant certifies that the Hardship will place him
and his immediate family in heavy financial need and that he has
insufficient funds reasonably available to meet this financial need and
that the need cannot be relieved:
(i) Through reimbursement or compensation by insurance or
otherwise,
(ii) By reasonable liquidation of his assets, to the extent
such liquidation would not itself cause an immediate and heavy
financial need,
38
<PAGE>
(iii) By cessation of his contributions (including deferrals)
to the Plan, or
(iv) By other distributions or nontaxable (at the time of the
loan) loans from plans maintained by the Corporation or by any
other employer, or by borrowing from commercial sources on
reasonable commercial terms.
(2) The Participant satisfies the following:
(i) The Participant has obtained all other available
distributions and nontaxable loans available under this Plan
or any other Plan maintained by an Employer,
(ii) For the twelve-month period following the Hardship
withdrawal all Elective Deferrals and Participant After-Tax
Contributions under this Plan or any other Plan maintained by
an Employer shall be suspended, and
(iii) The maximum contribution under Section 3.04(a) for the
Plan Year following the Plan Year in which the Hardship
withdrawal occurs is reduced by the amount of a Participant's
Elective Contributions made in the Plan Year in which the
Hardship withdrawal occurred.
(b) Procedures for satisfaction of Section 7.03(a) shall be established by
the Committee. Such procedures will be applicable to all persons similarly
situated. If such procedures are satisfied and the Committee determines that a
Hardship has occurred, a Participant may withdraw part or all of the amounts
held in his Individual Account attributable to (i) Participating and
Non-Participating Before-Tax Contributions and (ii) earning on such Before-Tax
Contributions attributable to the period ending on December 31, 1988. In no
event will a withdrawal exceed the amount actually necessary to meet the
Hardship.
7.04 Projected Interest on Withdrawals. Interest will be accrued on the
amount to be withdrawn at the rate to be determined by the Committee from the
effective date of the withdrawal to the date the payment check is cut.
7.05 IRC Section 72. For purposes of the Plan, all Participating and
Non-Participating After-Tax Contributions made on and after January 1, 1987 (and
earnings thereon) shall be treated as a separate contract for purposes of IRC
Section 72.
7.06 Qualified Domestic Relations Orders. "The Committee shall establish
reasonable procedures to determine the qualified status of domestic relations
orders and to administer distributions under such qualified orders. A
determination by the Committee that a domestic relations order constitutes a
qualified domestic relations order shall be binding and conclusive on all
parties thereto.
The alternate payee of a Participant under a qualified domestic relations
order may, after the order is determined by the Committee to be qualified and
before such alternate payee's benefits under the Plan commence, elect to receive
the benefit to which he is
39
<PAGE>
entitled under such order in a lump sum, payable as soon as practicable
following such election, provided the qualified domestic relations order
provides for such a distribution.
Where the value of the benefit payable to an alternate payee pursuant to a
qualified domestic relations order is not greater than $5,000, such benefit
shall be paid to such alternate payee in a lump sum as promptly as practicable
after the order is determined by the Committee to be a qualified domestic
relations order provided the qualified domestic relations order provides for
such a distribution."
ARTICLE VIII
FUNDING
8.01 Contributions. All Contributions by the Employer shall be
irrevocable, except as herein provided, and may be used only for the benefit of
the Participants and their Beneficiaries and payment of administrative expenses.
On receipt of Contributions, the Trustee shall manage and administer the funds
so received for the exclusive benefit of Participants in accordance with the
provisions of the Plan. No part of the corpus or income thereof shall be used
for, or diverted to purposes other than for the exclusive benefit of the
Participants, Former Participants, and their Beneficiaries, or payment of
reasonable expenses of administering the Plan, nor shall any part thereof be
recoverable by the Employer, except as provided in Section 13.06.
8.02 Trustee. The Corporation will enter into an agreement with the
Trustee whereunder the Trustee will receive, invest and administer as a trust
fund Contributions made under this Plan in accordance with the Trust Agreement.
ARTICLE IX
FIDUCIARIES
9.01 General. Each fiduciary who is allocated specific duties or
responsibilities under the Plan or any Fiduciary who assumes such a position
with respect to the Plan shall discharge his duties solely in the interest of
the Participants and Beneficiaries and for the exclusive purpose of providing
such benefits under the Plan to such Participants and Beneficiaries, or
defraying reasonable expenses of administering the Plan. Each Fiduciary in
carrying out such duties and responsibilities shall act with the care, skill,
prudence, and diligence under the circumstances then prevailing that a prudent
man acting in a like capacity and familiar with such matters would use in
exercising such authority or duties.
40
<PAGE>
A Fiduciary may serve in more than one Fiduciary capacity and may employ
one or more persons to render advice with regard to his Fiduciary
responsibilities. All expenses reasonably incurred by a Fiduciary on behalf of
the Plan, shall be reimbursed by the Corporation or the Employees, as the case
may be, or, at the Corporation's direction, from the Trust.
A Fiduciary may allocate any of his responsibilities for the operation and
administration of the Plan. In limitation of this right, a Fiduciary may not
allocate any responsibilities as contained herein relating to the management or
control of the Trust except through the employment of an Investment Manager as
provided in Section 9.03 following and in the Trust Agreement.
9.02 Corporation. The Corporation establishes and maintains the Plan for
the benefit of its Employees and Employees of its Affiliates and of necessity
retains control of the operation and administration of the Plan.
9.03 Trustee. The Trustee, in accordance with the Trust Agreement, shall
manage and control the assets of the Plan, except that the Corporation may in
its discretion employ at any time and from time to time an Investment Manager
with respect to all or a designated portion of the assets comprising the Trust,
in which case the Investment Manager shall have complete control and
responsibility over all matters pertaining to the investment of such assets.
9.04 Committee. The Board of Directors or its designate shall appoint a
committee to hold office at the pleasure of the Corporation, such committee to
be known as the Committee. Any action of the Committee shall be determined by
the vote of a majority of its members. Any member of the Committee or his
designate may execute any certificate or other written direction on behalf of
the Committee.
The Committee shall hold meetings upon such notice, at such place or
places and at such time or times as it may from time to time determine. A
majority of the members of the Committee in office at the time shall constitute
a quorum for the transaction of business.
In accordance with the provisions hereof, the Committee has been delegated
certain administrative functions relating to the Plan with all powers necessary
to enable it to properly carry out such duties. The Committee shall have sole
discretion to make decisions and take any action with respect to questions
arising in connection with the construction of the Plan and Trust (including
questions that may arise thereunder relating to (a) the eligibility of
individuals to participate in the Plan and, (b) the amount of benefits to which
any Participant or Beneficiary may become entitled hereunder). All disbursements
by the Trustee, except for the ordinary expenses of administration of the Trust
or the reimbursements of reasonable expenses at the direction of the Corporation
as provided herein, shall be made upon, and in accordance with, the written
directions of the Committee. When the Committee is required in the performance
of its duties
41
<PAGE>
hereunder to administer or construe, or to reach a determination, under any of
the provisions of the Plan, it shall do so in a uniform, equitable and
non-discriminatory basis.
After the close of each calendar quarter or as determined by the
Committee, the Committee shall distribute to each Participant a statement
setting fourth a summary of his account balances.
The Committee shall establish rules and procedures to be followed by the
Participants and Beneficiaries in filing applications for benefits and for
furnishing and verifying proofs necessary to establish age, Years of Employment,
and any other matters required in order to establish their rights to benefits in
accordance with the Plan.
9.05 Missing Persons. The Committee shall direct the Trustee to make a
reasonable effort to locate all persons entitled to benefits under the Plan;
however, notwithstanding any provision in the Plan to the contrary, if, after a
period of five (5) years from the date such benefit shall be due, any such
persons entitled to benefits have not been located, their rights under the Plan
shall be construed as if the Participant had died. Before this provision becomes
operative, the Trustee shall send a certified letter to all such persons at
their last known address advising them that their interest or benefits under the
Plan shall be construed. Any such amounts shall be held by the Trustee for a
period of three (3) additional years (or a total of eight (8) years from the
time the benefits first become payable). If no distributee can be found, then
any unclaimed benefits shall be deemed forfeited and shall be used to reduce
future Employer Matching Contributions. If the Participant shall be located at a
later date, his rights to such amounts shall be reinstated.
9.06 Indemnification of Fiduciaries. Each member of the Board of Directors
and each other employee of the Corporation who is determined to be a Fiduciary
under the terms of ERISA with respect to the Plan, shall be indemnified by the
Corporation against liability imposed on him and against all expenses and costs
which may be reasonably incurred by him in connection with or resulting from any
actions, suit or proceeding, or any claim against him, if he shall have been
made a party to such actions, suit or proceeding, or such claim shall have been
made by reason of his being or having been a Fiduciary with respect to the Plan
except to the extent such liability is attributable to the Fiduciary's gross
negligence or willful action. In the case of a settlement of any such action,
proceeding or claim before a final adjudication thereof, the right of
indemnification shall exist only to the extent the Corporation shall have
consented to the settlement.
42
<PAGE>
ARTICLE X
AMENDMENT AND TERMINATION OF THE PLAN
10.01 Amendment of the Plan. The Board of Directors shall have the right
to modify, alter or amend the Plan in whole or in part; provided, however, that
the duties, powers and liabilities of any Trustee hereunder shall not be
increased without its written consent; and provided, further, that any such
action shall not adversely affect benefits accrued prior to the effective date
of such action. No amendment, modification or alteration shall have the effect
of reverting to the Employer any part of the principal or income of the Trust.
10.02 Termination of the Plan. The Board of Directors shall have the right
to modify, alter or amend the Plan in whole or in part; provided, however, that
the duties, powers and liabilities of any Trustee hereunder shall not be
increased without its written consent; and provided, further, that any such
action shall not reduce or restrict, either directly or indirectly, the benefit
provided any Plan Participant prior to the amendment. Each Employer reserves the
right to discontinue its Contributions and to terminate the Plan as it relates
to its Employees without terminating the Plan with respect to any other
Employer. Any Employer desiring to terminate the Plan as it relates to its
Employees shall give notice of such termination of the Corporation and the
Trustee at least thirty (30) days prior to the effective date thereof. On
termination of the Plan (or in the event of a partial termination), or
discontinuance of Contributions, the rights of present Participants (to the
extent affected by such action) in their account balances held pursuant to the
Plan as of the date of such event shall be nonforfeitable and the Trustee shall
continue to administer the Trust in accordance with the provisions of the Plan
and the Trust Agreement for the sole benefit of the then Participants, Former
Participants or Beneficiaries then receiving or entitled to receive future
benefits. In the event of a termination or partial termination no further
contributions will be made to the Plan on behalf of affected Participants.
An Employer under the Plan shall not be permitted, through the exercise of
discretion, to deny a Participant a IRC Section 411(d)(6) protected benefit for
which the Participant is otherwise eligible.
10.03 Allocation of Assets. In the event of termination of the Plan, the
Committee shall allocate to the terminating Employer's Employees as of the date
of termination any previously unallocated Contributions, realized and unrealized
appreciation or depreciation, income or loss of the Trust to the accounts of the
Participants of the Plan affected by the termination and any income, losses,
realized and unrealized appreciation or depreciation to Former Participants of
the Plan who have not received their benefits under the Plan.
43
<PAGE>
10.04 Application of Assets. After assets of the Trust pertaining to the
terminating Employer have been allocated as provided in Section 10.03, such
assets shall be applied to whichever of the following options is specified by
the terminating Employer:
(a) Transfer to a separate trust and held therein to provide benefits to
the persons entitled to benefits under the Plan as it applies to the terminating
Employer.
(b) Transfer to an insurance company to purchase nontransferable annuity
contracts for the persons entitled to benefits under the plan to the extent they
have received an allocation pursuant to Section 10.03.
(c) Distribution in a single lump sum, in cash to each individual pursuant
to Section 10.03. Notwithstanding the foregoing, in the case of an Employee of
the terminating Employer who has not retired, died, incurred a disability, had a
separation from service or attained age 59 1/2, distribution of Elective
Deferrals shall be made only (i) upon termination of the Plan without
establishment or maintenance by the Employer of a successor plan as defined
under the Treasury Regulations under Section 401(k) or (ii) in the case of the
disposition by the Corporation of its interest in a subsidiary or of
substantially all of its assets (within the meaning of Code Section 409 (d)(2))
used by the Corporation in its trade or business, provided in either the sale of
the subsidiary or substantially all of the assets in the trade or business, the
Participant continues employment with the corporation acquiring the interest in
such subsidiary or such assets and the Corporation continues to maintain the
Plan after such sale. This (ii) shall be subject to Code Section 401(k)(10) and
Treasury Regulations thereunder.
10.05 Merger, Consolidation and Transfers of Assets or Liabilities. No
merger or consolidation with, or transfer of assets or liabilities to this Plan
or from this Plan to any other plan shall be made, unless each Participant would
receive immediately after such event, a benefit (determined as if the Plan had
terminated at that time) which is equal to or greater than the benefit he would
have been entitled to receive under the Plan immediately before such event had
the Plan terminated at that time.
ARTICLE XI
PROVISIONS RELATING TO EMPLOYERS INCLUDED IN PLAN
11.01 Method of Participation - Any corporation which is a member of the
same controlled group of corporations, as determined pursuant to IRC Sections
414 (b), (c), (m), and (o) as the Corporation, with the approval of the
Committee, by taking appropriate board action, may become a party to the Plan,
by adopting the Plan. Any corporation which becomes a party to the Plan shall
thereafter promptly deliver to the
44
<PAGE>
Trustee provided for in Article VIII hereof a certified copy of the resolutions
or other documents evidencing its adoption of the Plan or a similar plan and
also a written instrument showing the Board of Directors' approval of such
corporation's becoming a party to the Plan. The Plan shall be maintained as a
single Plan for all participating Employers.
11.02 Withdrawal. Any one or more of the Employers included in the Plan
may withdraw from the Plan at any time by giving six (6) months' advance notice
in writing of it or their intention to withdraw to the Board of Directors and
the Committee (unless a shorter notice shall be agreed to by the Committee).
Upon receipt of notice of any such withdrawal, the Committee shall certify
to the Trustee the equitable share of such withdrawing Employer in the Trust, as
applicable (to be determined by the Committee).
The Trustee shall thereupon set aside from the Trust then held by it such
securities and other property as it shall, in its sole discretion, deem to be
equal in value to such equitable share. If the Plan is to be terminated with
respect to such Employer, the amount set aside shall be dealt with in accordance
with the provisions of Section 10.02 of Article X. If the Plan is not to be
terminated with respect to such Employer, the Trustee shall turn over such
amount to such trustee as may be designated by such withdrawing Employer, and
such securities and other property shall thereafter be held and invested as a
separate trust of the Employer which has so withdrawn, and shall be used and
applied according to the terms of a new agreement and declaration of trust
between the Employer so withdrawing and the trustee so designated. Neither the
segregation of the Trust assets upon the withdrawal of an Employer, nor the
execution of a new agreement and declaration of trust pursuant to any of the
provisions of this Section 11.02, shall operate to permit any part of the corpus
or income of the Trust to be used for or diverted to purposes other than for the
exclusive benefit of Participants, Former Participants and Beneficiaries.
ARTICLE XII
TOP HEAVY PROVISIONS
12.01 Definitions. As used herein:
(a) "Key Employee", as defined in IRC Section 416(i)(1) is any employee or
former employee who at any time during the Plan Year containing the
Determination Date or the four preceding Plan Years, is or was (1) an officer of
the employer having annual compensation for such Plan Year which is in excess of
50 percent of the dollar limit in effect under IRC Section 415(b)(1)(A) for the
calendar year in which such Plan Year ends; (2) an owner for (or considered as
owning within the meaning of IRC Section 318) both more than an 1/2 percent
interest as well as one of the ten largest interests in the employer and having
annual compensation greater than the dollar limit in effect
45
<PAGE>
under IRC Section 415(c)(1)(A) for the year; (3) a five percent owner of the
employer; or (4) a one percent owner of the employer who has annual compensation
of more than $150,000. For purposes of determining five-percent and one-percent
owners, neither the aggregation rules nor the rules of subsections (b), (c) and
(m) of IRC Section 414 apply. Beneficiaries of an Employee acquire the character
of the Employee who performed service for the employer. Also, inherited benefits
will retain the character of the benefits of the Employee who performed services
for the employer;
(b) "Non-Key Employee" means an employee other than a Key Employee;
(c) "Top Heavy Plan" generally means, on or after January 1, 1984, any
plan under which, as of any determination date the present value of the
cumulative accrued benefits under all plans in an aggregation group for Key
Employees exceeds sixty percent (60%) of the cumulative accrued benefit under
such Plan for all Employees. This definition shall be interpreted consistent
with IRC Section 416 and rules and regulations issued thereunder. Further, such
law and regulations shall be controlling in all determinations under this
definition inclusive of any provisions and requirements stated thereunder but
hereinabove absent;
(d)"Determination Date" means the last day of the preceding Plan Year, or
in the case of the first Plan Year, the last day of such Year. Key Employee and
Top Heavy tests are made as of the Determination Date;
(e)"Required Aggregation Group" means each plan of an employer in which a
Key Employee participates (in the Plan Year containing the Determination Date or
any of the preceding four Plan Years) and each other plan which enables any plan
in which a Key Employee participates during the period tested to meet the
requirements of IRC Sections 401(a)(4) or 410(b) which are required to be
aggregated for Top-Heavy testing purposes. All employers aggregated under IRC
Sections 414(b), (c), (m) and (o) are considered a single employer; and
(f) "Permissive Aggregation Group" is one or more plans that are not
required to be aggregated but which may be aggregated with a Required
Aggregation Group. A plan may be permissively aggregated only if the resulting
aggregation group satisfies the requirements of IRC Sections 401(a)(4) and 410.
Solely for the purpose of determining if the Plan, or any other plan
included in a required aggregation group of which this Plan is a part, is
top-heavy (within the meaning of Code Section 416(g)) the accrued benefit of an
Employee other than a Key Employee (within the meaning of Code Section
416(i)(1)) shall be determined under (a) the method, if any, that uniformly
applies for accrual purposes under all plans maintained by an Employer who is an
Affiliate, or (b) if there is no such method, as if such benefit accrued not
more rapidly than the slowest accrual rate permitted under the fractional
accrual rate of Code Section 411(b)(1)(C).
46
<PAGE>
12.02 Top Heavy Plan. Notwithstanding anything contained herein to the
contrary, in the event that this Plan when combined with all other plans
required to be aggregated pursuant to IRC Section 416(g) is deemed to be Top
Heavy for any Plan Year, the following conditions shall become operative with
respect to such Plan Year and all future Plan Years.
(a) In the event the definition of Compensation as defined in Article I is
allowed to be greater than $200,000, such compensation shall be limited to
$200,000 or such greater amount as shall be determined by the Secretary of the
Treasury pursuant to IRC Section 416(d).
(b) In the event that the aggregate Employer Contributions to all Non-Key
Employees allocated to their Individual Account (inclusive of Employer
Contributions to the Employee's Before-Tax Account) do not exceed three percent
(3%) of compensation, then the Employer shall contribute to the Plan out of
current or accumulated profits an amount necessary to provide a minimum
contribution of at least three percent (3%) of compensation of such Non-Key
Employees. In the event a contribution shall be required hereunder, it shall be
made to each Participant employed on the last day of the Plan Year regardless of
whether such Participant had completed 1,000 Hours of Service or had elected to
make Participating or Non-participating Contributions. In no event, however,
shall the allocation of the minimum Contribution to Non-Key Employees be greater
than the aggregate allocation of Employer Contributions to the Individual
Account for Key Employees.
(c) Contributions made pursuant to this Section shall be deemed 100%
vested at the end of three (3) Years of Employment.
(d) In the event the Employer shall also maintain a defined benefit plan
and such defined benefit plan provided the minimum accrued benefit determined
pursuant to IRC Section 416(C)(1), then the adjustment provided in Section
12.02(b) above shall not be required.
(e) In the event Section 12.02(b) or 12.02(d) is applicable, then the
multiplier of 1.25 in IRC Section 415(e) shall be reduced to 1.0 unless
(i) all plans required to be aggregated and any other plans
which may be permissively aggregated pursuant to IRC Section 416(g) are
ninety percent (90%) or less Top Heavy, and
(ii) the minimum accrued benefit referenced in IRC Section
416(C)(1) is modified by IRC Section 416(h)(2)(A)(ii)(I) or the minimum
contribution in subparagraph (b) above is increased from three percent
(3%) to four percent (4%).
47
<PAGE>
(f) With respect to the operation of these Top Heavy Provisions, there
shall be no requirement that the entire defined benefit minimum benefit and the
defined contribution minimum contribution be provided. To the extent that there
shall be a defined benefit accrued benefit, it shall be controlling. To the
extent that there shall be an Employer Contribution to a defined contribution
plan, then there shall be a determination as to whether the defined contribution
is comparable to the difference between the defined benefit minimum benefit and
the minimum defined benefit accrued benefit required under IRC Section 416. In
the event that the defined contribution amount shall not be comparable, then the
difference shall be provided in the defined benefit plan unless the next
sentence shall apply. Notwithstanding the above, if there shall be a
Contribution to the defined contribution plan of at least seven and one-half
percent (7 1/2%) of compensation to Non-Key Employees, it shall be conclusively
presumed that the minimum benefit requirements of Top Heavy Plans have been met.
(g) For purposes of determining whether a defined benefit plan is Top
Heavy, calculations shall be based upon actuarial assumptions stipulated in such
Plan for this purpose. If no assumptions are provided, the calculation shall be
based upon the 1984 Unisex Pension Mortality Tables, but with no preretirement
mortality, at five percent (5%) interest with such determination being made on
the valuation date which occurs within the Plan Year.
(h) For purposes of determining minimum contributions to a defined
contribution plan and minimum accrued benefits to a defined benefit plan,
compensation shall have the same meaning as it is used in IRC Section 415.
ARTICLE XIII
MISCELLANEOUS
13.01 Governing Law. The Plan shall be construed, regulated and
administered according to the laws of the State of New Jersey except in those
areas preempted by the laws of the United States of America.
13.02 Construction. The headings and subheadings in the Plan have been
inserted for convenience of reference only and shall not affect the construction
of the provision hereof. In any necessary construction the masculine shall
include the feminine and the singular the plural, and vice versa.
13.03 Administration Expenses. The expenses of administering the Trust and
the Plan shall be payable by the Trust unless paid for by the Company.
48
<PAGE>
13.04 Participant's Rights; Acquittance. No Participant in the Plan shall
acquire any right to be retained in the Employer's employ by virtue of the Plan,
nor, upon his dismissal, or upon his voluntary termination of employment, shall
he have any right or interest in and to the Trust other than as specifically
provided herein.
The Employer shall not be liable for the payment of any benefit provided
for herein; all benefits hereunder shall be payable only from the Trust.
13.05 Spendthrift Clause. Except as permitted by federal law or
regulations or in the case of a qualified domestic relations order within the
meaning of IRC Section 414(p), none of the benefits, payments, proceeds, or
distributions under this Plan shall be subject to the claim of any creditor of
the Participant, Former Participant or to the claim of any creditor of any
Beneficiary hereunder or to any legal process by any creditor of such
Participant, Former Participant or of any such Beneficiary; and neither such
Participant, Former Participant or any such Beneficiary shall have any right to
alienate, commute, anticipate, or assign any of the benefits, payments, proceeds
or distributions under this Plan.
13.06 Return of Contributions. Notwithstanding anything herein to the
contrary, upon the Employer's request, a Contribution which was made by a
mistake of fact, or conditioned upon initial qualification of the Plan may be
returned to the Employer by the Trustee within one (1) year after the payment of
the Contribution, or the denial of the qualification, whichever is applicable.
Further, notwithstanding any provision to the contrary, each Contribution
by the Employer is conditioned on deductibility under Section 404 of the Code.
To the extent the deductibility is disallowed, the Contribution (to the extent
disallowed) shall be returned to the Employer, upon its request, within one year
after such disallowance.
13.07 Counterparts. The Plan and the Trust Agreement may be executed in
any number of counterparts, each of which shall constitute but one and the same
instrument and may be sufficiently evidenced by any one counterpart.
ARTICLE XIV
LOANS
14.01 Loans to Participants. Effective as of a date to be determined by
the Committee, the Committee, in its sole discretion, may direct the Trustee to
make loans to a Participant from the Participant Loan Fund at the request of the
Participant which request has been approved by the Committee, subject to the
following terms and conditions.
49
<PAGE>
(a) The Committee shall, in its sole discretion exercised in a uniform and
non-discriminatory manner among persons similarly situated, determine whether or
not the loan will be granted and the amount thereof. Loans shall be made
available to all participants and beneficiaries on a reasonably equivalent basis
and shall not be made available to Highly Compensated Employees in an amount
greater than made available to all other eligible Employees.
Except as otherwise permitted by law, the aggregate amount of a loan to a
Participant, when added to the outstanding balance of all other loans from all
qualified plans of the Employer, shall not, at the time of any such loan is made
or renewed as hereinafter provided, exceed the lesser of:
(i) FIFTY THOUSAND ($50,000) DOLLARS reduced by the excess (if
any) of the highest outstanding balance of loans from the Plan to the
Participant during the one-year period ending on the day before the
date on which such loan is made, over the outstanding balance of loans
from the Plan to the Participant on the date on which such loan was
made; or
(ii) Fifty percent (50%) of the Participant's vested interest
under the Plan.
(b) The interest rate charged on a loan made pursuant to this Article XIV
for any calendar month shall be a rate fixed by the Committee and, in
determining the interest rate, the Committee shall take into consideration
interest rates currently being charged. The Committee shall not discriminate
among Participants in the matter of interest rates; but loans granted at
different times may bear different interest rates if, in the opinion of the
Committee, the difference in rates is justified by a change in general economic
conditions. In no instance shall the rate of interest exceed that permitted by
law.
(c) Each loan shall be evidenced by a note.
(d) The principal amount of each loan must be repaid within a sixty (60)
month period through equal monthly payments of principal together with interest
on the unpaid principal amount at the rate determined in accordance with
paragraph (b) above.
(e) (i) Each loan to a Participant shall be adequately secured. A loan
shall be deemed to be adequately secured if the aggregate amount of all such
loans to a Participant does not exceed fifty percent (50%) of the Participant's
vested interest in the Plan immediately after the origination of each such loan.
The types of additional collateral which may secure a Participant loan include,
by way of example and not limitation, cash equivalents, stock, bonds and other
marketable securities, bank accounts, tangible personal property and real
estate. The Committee shall have the full discretion in determining the nature
and amount of security required.
(ii) In the event that Section 6.07(d)(ii) of the Plan applies to a
Participant, such Participant must obtain the consent of his or her spouse, if
any, to use of the account balance as security for the loan. Spousal consent
shall be obtained no earlier than the beginning of the 90-day period that ends
on the date on which the loan is to be so secured. The consent must be in
writing, must acknowledge the effect of the loan, and must be witnessed by a
Plan
50
<PAGE>
representative or notary public. Such consent shall thereafter be binding
with respect to the consenting spouse or any subsequent spouse with respect to
that loan. A new consent shall be required if the account balance is used for
renegotiation, extension, renewal, or other revision of the loan.
(f) In the event a note is not paid on or before maturity and is not
renewed, the Committee shall give written notice to the Participant sent to his
last known address, and, if the note is not paid pursuant to such notice, the
amount allocated to the Participant's account shall be reduced by the amount of
the unpaid balance of the loan, together with unpaid interest accrued thereon,
and the Participant's indebtedness shall thereupon be discharged to the extent
such unpaid balance does not exceed the Participant's then vested interest in
the Plan. To the extent the unpaid balance, together with unpaid interest
accrued thereon, does exceed the Participant's vested interest, the Committee
shall take such legal action as it shall deem necessary and advisable to recover
the remaining unpaid balance and interest.
(g) In the event of the termination of employment of the Participant for
any reason before the Plan loan is repaid in full and in the further event that
the loan meets the requirements of Treasury regulation Section
1.401(a)-13(d)(2)(iii), the unpaid balance thereof, together with unpaid
interest accrued thereon, shall become due and payable, and the Committee shall
first satisfy the indebtedness from the Participant's vested interest in the
Plan before making any payments to the Participant or his Beneficiary. To the
extent such vested interest is insufficient to repay in full the unpaid balance,
together with unpaid interest, the Committee shall make due demand on the
terminated Participant or his estate to meet such demand, and upon failure of
the terminated Participant to meet such demand, the Committee shall take such
legal action as it shall deem necessary and advisable to recover the remaining
unpaid principal and interest.
(h) The Committee may prescribe such other terms and conditions for loans
not inconsistent with the foregoing requirements as the Committee deems
appropriate.
ARTICLE XV
ADOPTION OF THE PLAN
Anything herein to the contrary notwithstanding, the Plan is created and
maintained under the condition that the Corporation receives a determination
letter from the Internal Revenue Service stating that the Plan meets the
requirements for qualification under IRC Section 401(a), (k) and (m) and that
the Trust hereunder is exempt under IRC Section 501(a), or under any comparable
Sections of any future legislation which amends, supplements or supersedes such
Sections.
If any provision of this Plan shall be for any reason invalid or unenforceable,
the remaining provisions shall nevertheless be unaffected.
51
<PAGE>
ARTICLE XVI
SPECIAL PROVISIONS WITH RESPECT TO EMPLOYEES OF DETROIT
MILFORD AVENUE LABORATORY
16.01 Detroit Plan.
(a) Participation. Effective March 1, 1987, hourly employees
located at Detroit Milford Avenue Laboratory decertified Local
412 of the United Auto Workers of America as its
representative for collective bargaining purposes with BASF
Corporation Inmont Division ("Detroit Hourly Employees"). On
and after March 1, 1987 no further contributions were made to
the Detroit Milford Avenue Laboratory Savings Plan ("Detroit
Plan") on behalf of Detroit Hourly Employees and all amounts
credited to such Employees accounts were fully vested.
Effective as of March 1, 1987, the Committee designated the
Detroit Plan, a profit sharing plan described under IRC
Section 401(a), a Predecessor Plan and as of such date Detroit
Hourly Employees shall be eligible to participate in this Plan
provided they have met the eligibility requirements of Section
2.01 of the Plan.
(b) Transfer of Account Balances. Effective as of October 31,
1987, the Detroit Milford Avenue Laboratory Savings Plan shall
be merged into the Plan and the account balances held on
behalf of each Detroit Hourly Employee shall be transferred to
the Plan and allocated and credited in accordance with Section
3.06 of Article III. Any such accounts transferred which were
attributable to Employer Contributions under the Detroit Plan
shall be fully vested.
52
<PAGE>
ARTICLE XVII
SPECIAL PROVISIONS WITH RESPECT TO EMPLOYEES OF CERTAIN
PREDECESSOR PLANS
17.01 BSM Plan
(a) Participation. On and after January 1, 1988 no further
contributions will be made to the BASF Structural Materials,
Inc. Thrift Savings Plan ("BSM Plan") on behalf of employees
covered by the BSM Plan ("BSM Plan Employees") and all amounts
credited to such BSM Plan Employees' account will be fully
vested. Effective as of January 1, 1988, the Committee
designated the BSM Plan, a profit sharing plan described under
IRC Section 401(a), a Predecessor Plan and as of such date BSM
Plan Employees shall be eligible to participate in this Plan
provided they have met the eligibility requirements of Section
2.01 of the Plan.
(b) Transfer of Account Balances. Effective as of January 1 1988,
the BSM Plan shall be merged into the Plan and the account
balances held on behalf of each BSM Plan Employee shall be
transferred to the Plan and allocated and credited in
accordance with Section 3.06 of Article III. Any such accounts
transferred which were attributable to Employer Contributions
under the BSM Plan shall be fully vested.
17.02 Knoll Plan.
(a) Participation. On and after January 1, 1988 no further contributions will be
made to the Knoll Pharmaceuticals Thrift Savings Plan ("Knoll Plan") on behalf
of employees covered by the Knoll Plan ("Knoll Plan Employees") and all amounts
credited to such Knoll Plan Employees' account will be fully vested. Effective
as of January 1, 1988, the Committee designated the Knoll Plan, a profit sharing
plan described under IRC Section 401(a), a Predecessor Plan and as of such date
Knoll Plan Employees shall be eligible to participate in this Plan provided they
have met the eligibility requirements of Section 2.01 of the Plan.
(b) Transfer of Account Balances. Effective as of January 1, 1988, the Knoll
Plan shall be merged into the Plan and the account balances held on behalf of
each Knoll Plan Employee shall be transferred to the Plan and allocated and
credited in accordance with Section 3.06 of Article III. Any such amounts
transferred which were attributable to Employer Contributions under the Knoll
Plan shall be fully vested.
17.03 FDO Plan.
(a) Participation. On and after January 1, 1988 no further
contributions will be made to the Fritzsche Dodge & Olcott
Inc. Employee Savings and Profit Sharing Plan ("FDO Plan") on
behalf of employees covered by the FDO Plan ("FDO Plan
53
<PAGE>
Employees") and all amounts credited to such FDO Plan
Employees' account will be fully vested. Effective as of
January 1, 1988, the Committee designated the FDO Plan, a
profit sharing plan described in IRC Section 401(a), a
Predecessor Plan and as of such date FDO Plan Employees shall
be eligible to participate in this Plan provided they have met
the eligibility requirements of Section 2.01 of the Plan.
(b) Transfer of Account Balances. Effective as of January 1, 1988,
the FDO Plan shall be merged into the Plan and the account
balances held on behalf of each FDO Plan Employee shall be
transferred to the Plan and allocated and credited in
accordance with Section 3.06 of Article III. Any such accounts
transferred which were attributable to Employer Contributions
under the FDO Plan shall be fully vested.
17.04 Polysar Plan.
(a) Participation. Effective as of June 30, 1988, the Committee designated the
Polysar Employees' Savings and Protection Plan (the "Polysar Plan"), a profit
sharing plan described in IRC Section 401(a), a Predecessor Plan and as of such
date those salaried employees employed by the Chemicals Division who were
formerly employed by Polysar Incorporated ("Polysar Employees") shall be
eligible to participate in this Plan.
(b) Transfer of Account Balances. Effective as of June 30, 1988, the Polysar
Plan shall be merged into the Plan and the account balances held on behalf of
each Polysar Plan Employee shall be transferred to the Plan and allocated and
credited in accordance with Section 3.06 of Article III. Any such accounts
transferred which were attributable to Employer Contributions under the Polysar
Plan shall be fully vested.
17.05 Wintershall Plan.
(a) Participation. On and after January 1, 1989, no further
contributions will be made to the Wintershall Oil and Gas
Corporation Employee Savings Plan and Trust ("Wintershall
Plan") on behalf of employees covered by the Wintershall Plan
("Wintershall Plan Employees") and all amounts credited to
such Wintershall Plan Employees' account will be fully vested.
Effective as of January 1, 1989, the Committee designated the
Wintershall Plan, a profit sharing plan described under IRC
Section 401(a), a Predecessor Plan and as of such date
Wintershall Plan Employees shall be eligible to participate in
this Plan provided they have met the eligibility requirements
of Section 2.01 of the Plan.
(b) Transfer of Account Balances. Effective as of January 1, 1989,
the Wintershall Plan shall be merged into the Plan and the
account balances held on behalf of each Wintershall Plan
Employee shall be transferred to the Plan and allocated and
credited in accordance with Section 3.06 of Article III. Any
such accounts transferred which were attributable to Employer
Contributions under the Wintershall Plan shall be fully
vested.
54
<PAGE>
17.06 Information Systems Plan.
(a) Participation. On and after January 1, 1992, no further contributions will
be made to the BASF Corporation Information Systems Employee Savings Plan
("Information Systems Plan") on behalf of employees covered by the Information
Systems Plan ("Information Systems Plan Employees") and all amounts credited to
such Information Systems Plan Employees' accounts will be fully vested.
Effective as of January 1, 1992, the Committee designated the Information
Systems Plan, a profit sharing plan described under IRC Section 401(a), a
Predecessor Plan and as of such date Information Systems Plan Employees shall be
eligible to participate in this Plan provided they have met the eligibility
requirements of Section 2.01 of the Plan.
(b) Transfer of Account Balances. Effective as of January 1, 1992, the
Information Systems Plan shall be merged into the Plan and the account balances
held on behalf of each Information Systems Plan Employee shall be transferred to
the Plan and allocated and credited in accordance with Section 3.06 of Article
III. Any such amounts transferred which were attributable to Employer
Contributions under the Information Systems Plan shall be fully vested.
17.07 Olin Plan.
(a) Participation. Effective as of July 14, 1992, the Committee
designated the Olin Corporation Contributing Employees
Ownership Plan (the "Olin Plan"), a profit sharing plan
described in IRC Section 401(a), a Predecessor Plan, and as of
such date those salaried employees employed by the Polymers
Division who were formerly employed by Olin Corporation (the
"Olin Employees") shall be eligible to participate in this
Plan provided they have met the eligibility requirements of
Section 2.01. For purposes of meeting such eligibility
requirements, service recognized under the Olin Plan shall be
recognized under this Plan.
(b) Transfer of Account Balances. Effective as of July 14, 1992,
the Olin Plan shall be merged into the Plan and the account
balances held on behalf of each Olin Employee, who elected to
have his account balance transferred, shall be transferred to
the Plan and allocated and credited in accordance with Section
3.06 of Article III. Any portion of such accounts transferred
which were attributable to employer contributions under the
Olin Plan shall be fully vested.
17.08 Mobil Plan.
(a) Participation. Effective as of July 24, 1992, the Committee
designated the Employees Savings Plan of Mobil Oil Corporation
(the "Mobil Plan"), a profit sharing plan described under IRC
Section 401(a), a Predecessor Plan, and as of such date those
salaried employees employed by the Polymers Division who were
formerly employed by the Mobil Oil Corporation (the "Mobil
Employees") shall be eligible to participate in this Plan
provided they have met the eligibility requirements of Section
2.01. For purposes of meeting such eligibility
55
<PAGE>
requirements, service recognized under the Mobil Plan shall be
recognized under this Plan.
(b) Transfer of Account Balances. Effective as of July 24, 1992,
the Mobil Plan shall be merged into the Plan and the account
balances held on behalf of each Mobil Employee, who elected to
have his account balance transferred, shall be transferred to
the Plan and allocated and credited in accordance with Section
3.06 of Article III. Any portion of such accounts transferred
which were attributable to employer contributions under the
Mobil Plan shall be fully vested.
56
<PAGE>
Attachment A
AMENDMENT A
RESOLVED, that effective January 1, 1994, Section 1.09 of the BASF Corporation
Employee Savings Plan is hereby amended by adding the following at the end of
the second paragraph:
"In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, for
Plan Years beginning on or after January 1, 1994, the annual
compensation of each Employee taken into account under the Plan shall
not exceed the Omnibus Budget Reconciliation Act of 1993 ("OBRA '93)
annual compensation limit. The OBRA '93 annual compensation limit is
$150,000, as adjusted by the Commissioner for increases in the cost of
living in accordance with Section 401(a)(17)(B) of the Internal Revenue
Code. The cost of living adjustment in effect for a calendar year
applies to any period, not exceeding 12 months, over which compensation
is determined ("determination period") beginning in such calendar year.
If a determination period consists of fewer than 12 months, the OBRA
'93 annual compensation limit will be multiplied by a fraction, the
numerator of which is the number of months in the determination period,
and the denominator of which is 12.
For Plan Years beginning on or after January 1, 1994, any reference in
this Plan to the limitation under Section 401(a)(17) of the Code shall
mean the OBRA '93 annual compensation limit set forth in this
provision.
If compensation for any prior determination period is taken into
account in determining an Employee's benefits accruing in the current
Plan Year, the compensation for that prior determination period is
subject to the OBRA '93 annual compensation limit in effect for that
prior determination period. For this purpose, for determination periods
beginning before the first day of the first plan year beginning on or
after January 1, 1994, the OBRA '93 annual compensation limit is
$150,000.", and it is further
RESOLVED, that effective January 1, 1994, ARTICLE VI of the Savings Plan is
hereby amended by adding a new Section 6.10, as follows:
"Section 6.10. Eligible Rollover Distributions. Effective January 1,
1993, notwithstanding any provisions of the Plan to the contrary that
would otherwise limit a Distributee's election under this Section 6.10,
a Distributee may elect, at the time and in the manner prescribed by
the Committee, to have any portion of an Eligible Rollover Distribution
paid directly to an Eligible Retirement Plan specified by the
Distributee in a Direct Rollover.
<PAGE>
The following definitions apply to this Section 6.10, and unless
otherwise specifically stated in another section thereof, do not apply
to any other section of this Plan.
(a) An "Eligible Rollover Distribution" means any distribution of
all or any portion of the balance to the credit of the
Distributee, except that an Eligible Rollover Distribution
does not include: (I) any distribution that is one of a series
of substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancies) of the
Distributee and the Distributee's designated beneficiary, or
for a specified period of ten (10) years or more; (ii) any
distribution to the extent such distribution is required under
Code Section 401(a)(9); and (iii) the portion of any
distribution that is not includible in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
(b) An "Eligible Retirement Plan" is an individual retirement
account described in Code Section 408(a), an individual
retirement annuity described in Code Section 408(b), an
annuity plan described in Code Section 403(a), or a qualified
trust described in Code Section 401(a), that accepts the
Distributee's Eligible Rollover Distribution; provided,
however, that in the case of an Eligible Rollover Distribution
to the surviving Spouse, an Eligible Retirement Plan is an
individual retirement account or individual retirement annuity
only.
(c) A "Distributee" includes a Participant, an Employee or former
Employee. In addition, the Participant's or former
Participant's surviving Spouse and the Participant's or former
Participant's Spouse or former Spouse who is the alternate
payee under a Qualified Domestic Relations Order, are
Distributees with regard to the interest of the Spouse or
Former Spouse.
(d) A "Direct Rollover" is a payment by the Plan to the Eligible
Retirement Plan specified by the Distributee."
2
<PAGE>
Attachment 1
AMENDMENT 1
The BASF Corporation Employees' Savings Plan, as amended and restated effective
January 1, 1992 (the "Plan"), is hereby amended to:
1. Effective January 1, 1987, delete Section 1.08 of Article I and
substitute, in lieu thereof, a new Section 1.08 as follows:
Committee means the Pension and Benefits Committee of BASF Corporation
as described in Section 9.04.
2. Effective January 1, 1992, delete the first three paragraphs of Section
1.09 of Article I and substitute, in lieu thereof, the following:
Compensation means (a) the base pay as recorded in the payroll records
or, as the case may be, salary administration prior to any salary
reduction elections under this Plan or any other plan meeting the
requirements of IRC Sections 125 and 401(k), and shall include (b)
straight-time pay for overtime work and commissions, but shall not
include (c) awards; half-time premiums for overtime; bonuses and
incentive pay; moving expense reimbursements; payments from any
Corporation sponsored long term incentive program; benefit credits for
any Corporation sponsored health plan; payments or bonuses made to
attract new employees or similar payments; and, effective January 1,
1995, retention or retention type payments, plant shut-down premiums
and similar payments made upon termination of employment.
Notwithstanding the foregoing sentence, a bonus paid in 1987 to an
Employee previously covered by the Badische Corporation Savings Plan
and/or the Inmont Savings Plan attributable to services performed in
1986 shall be included in compensation. With respect to Over-the-Road
Drivers, Compensation shall mean gross pay.
Notwithstanding any other contrary provision of the Plan, Compensation
taken into account under the Plan shall not exceed $150,000 ($200,000
for Plan Years ending on or before January 1, 1994), adjusted for
changes in the cost of living as provided in IRC Section 415(d), or
such other amount as required by IRC Section 414, for the purpose of
calculating a Participant's Accrued Benefit (including the right to any
optional benefit provided under the Plan) for any Plan Year beginning
after December 31, 1988. However, the Accrued Benefit determined in
accordance with this provision shall not be less than the Accrued
Benefit determined on January 1, 1989 without regard to this provision.
Notwithstanding the preceding sentence, the Accrued Benefit of any
Participant who is a Highly Compensated Employee, within the meaning of
IRC Section 414(q), is reduced to the extent a benefit has accrued with
respect to Compensation in excess of $200,000 during the 1989 Plan Year
before the later
3
<PAGE>
of the adoption or effective date of this provision. Additionally, in
the case of determining the Compensation of a five-percent (5%) owner
or of a Highly Compensated Employee in the group consisting of the 10
Highly Compensated Employees paid the greatest compensation for the
year, the family aggregation rules, as contained in 414(q) shall apply.
If, as a result of the application of such rules the compensation limit
is exceeded, then the compensation limit shall be prorated among the
affected individuals in proportion to each such individual's
compensation as determined prior to the application of the compensation
limit.
3. Effective January 1, 1992, add the following at the end of the first
sentence of Section 1.17 of Article I:
Notwithstanding the foregoing, part-time or full-time interns, contract
workers or workers who are characterized by the Company as independent
contractors are not covered by and shall not be eligible to participate
in the Plan. No such individual shall be covered by, or eligible to
participate in the Plan even if such individual has been or, in the
future may be determined to be a common law employee of the Company.
4. Effective January 1, 1992, add the following new paragraph at the end
of Section 1.47 of Article I:
Notwithstanding anything herein to the contrary, a Period of Employment
shall include periods of employment with an employer prior to the date
such employer becomes related to the Company by purchase, acquisition,
merger consolidation or otherwise, to the extent such service has been
approved as service by resolution of the Committee.
5. Effective December 12, 1994, add the following new paragraph at the end
of Section 1.47 of Article I:
Notwithstanding anything herein to the contrary, a period of qualified
military service as defined in IRC Section 414(u) shall be included in
a Participant's Period of Employment under the Plan in accordance with
the requirements of such Section 414(u).
6. Effective April 1, 1997, delete Section 1.64 of Article I and
substitute, in lieu thereof, a new Section 1.64 as follows:
Valuation Date means each business day. The Trust shall be valued at
fair market value at the close of business on each business day. The
Committee may from time to time value the Trust as of any other date as
it deems desirable.
4
<PAGE>
7. Effective April 1, 1997, add the following sentence at the end of
Section 2.01(B) of Article II:
An Employee shall be eligible to participate in the Plan on the date he
first performs an Hour of Service for his Employer.
8. Effective April 1, 1997, add the following two sentences at the end of
Section 2.02 of Article II:
An eligible Employee shall commence Plan participation as of the first
pay cycle following completion of the enrollment process established by
the Committee, or as soon thereafter as is administratively
practicable. The Committee may permit enrollment through the completion
and filing of forms provided for this purpose and/or through electronic
or computer means, or as otherwise determined by the Committee in its
sole discretion.
9. Effective November 1, 1992, delete Sections 3.01, 3.02 and 3.03 of
Article III and substitute, in lieu thereof, the following:
3.01 Before-Tax Contributions. A Participant may elect to have
Before-Tax Contributions contributed to the Plan on his behalf
up to 16% of his Compensation, except to the extent such
Participant is a Highly Compensated Employee, whose maximum
Before-Tax Contribution shall be 8% or such other percentage
or amount as may be determined from time to time by the
Committee in order to comply with regulatory limits on
contributions by such Highly Compensated Employees. Such
Before-Tax Contributions shall be made in 1% increments
(subject to the limitations imposed by IRC Section 401(k)).
Before-Tax Contribution elections shall be made on appropriate
forms to be provided by the Committee or through other
procedures established by the Committee. Such forms or
procedures shall authorize the Employer to reduce the
Participant's pay by an amount produced by multiplying the
Before-Tax Contribution percentage elected by the Participant
by his Compensation. The Committee may establish procedures
which permit Before-Tax Contribution elections to be made
through the telephone, computer or similar devices.
Reductions to Participant's pay to reflect Before-Tax
Contribution elections shall commence on the date the
contribution election shall become effective as provided in
Section 3.05. A Participant's designation of a Before-Tax
Contribution percentage shall continue in effect until changed
by the Participant, as hereinafter provided, unless changed by
recharacterization.
A Participant may, on an appropriate form approved by the
Committee or through other procedures established by the
Committee, change his Before-Tax Contribution percentage to
any percentage prescribed in this Section 3.01, with such
change in election to become effective as provided in Section
3.05.
5
<PAGE>
A Participant may elect, on an appropriate form approved by
the Committee or through other procedures established by the
Committee, to cease future Before-Tax Contributions to the
Plan. Such election shall become effective as provided in
Section 3.05. In the event any such Participant desires
thereafter to have Before-Tax Contributions made on his
behalf, he shall be allowed to do so as of the first pay
received in any subsequent pay period following the making of
a timely and proper application on a form approved by, or in
accordance with procedures established by, the Committee.
The Employer shall pay each Participant's Before-Tax
Contributions to the Trustee no later than one (1) month
following the month such Before-Tax Contribution was deducted
or reduced from the Participant's Compensation, or such
earlier time as may be prescribed by regulations issued by the
Secretary of the Treasury or the Department of Labor, and the
Participant's Before-Tax Contribution Account shall be
credited accordingly.
3.02 Employee After-Tax Contributions. A Participant may elect to
have After-Tax Contributions contributed to the Plan on his
behalf, up to the maximum permitted to be contributed by such
Participant to the Plan under IRC Sections 401(k) and 402(g)
after taking into account the Participant's Before-Tax
Contributions and Employer Matching Contributions credited to
his Individual Account for such Plan Year. Such After-Tax
Contributions shall be made in 1% increments (subject to the
limitations imposed by IRC Sections 401(k) and 402(g)).
After-Tax Contribution elections shall be made on appropriate
forms approved by the Committee or through other procedures
established by the Committee. Such forms or procedures shall
authorize the Employer to reduce the Participant's pay by an
amount produced by multiplying the After-Tax Contribution
percentage elected by the Participant by his Compensation. The
Committee may establish procedures which permit After-Tax
Contribution elections to be made through the telephone,
computer or similar devices.
Reductions to Participant's pay to reflect After-Tax
Contribution elections shall commence on the date the
contribution election shall become effective as provided in
Section 3.05. A Participant's designation of an After-Tax
Contribution percentage shall continue in effect until changed
by the Participant, as hereinafter provided, unless changed by
recharacterization.
A Participant may, on an appropriate form approved by the
Committee or through other procedures established by the
Committee, change his After-Tax Contribution percentage to any
percentage prescribed in this Section 3.03 to become effective
as provided in Section 3.05.
A Participant may elect, on an appropriate form approved by
the Committee or through other procedures established by the
Committee, to cease future After-Tax Contributions to the
Plan, with any such election to become effective as provided
in Section 3.05. In the event any such Participant
6
<PAGE>
desires thereafter to have After-Tax Contributions made on his
behalf, he shall be allowed to do so as of the first pay
received in any subsequent pay period following the making of
timely and proper application on a form approved by, or in
accordance with procedures established by the Committee.
The Employer shall pay each Participant's After-Tax
Contributions to the Trustee no later than one (1) month
following the month such After-Tax Contribution was deducted
or reduced from the Participant's Compensation or such earlier
time as prescribed by regulations issued by the Secretary of
the Treasury or the Department of Labor, and the Participant's
After-Tax Contribution Account shall be credited accordingly.
3.03 Employer Matching Contributions. Concurrently with the
Participant's Before-Tax and/or After-Tax Contributions, the
Employer shall contribute to the Plan for the Account of each
Participant an amount equal to each such Participant's
Before-Tax and/or After-Tax Contributions made to the Plan, up
to a maximum of 4% of such Participant's Compensation.
Employer Matching Contributions shall be credited to each
Participant's Employer Matching Contribution Account. The
maximum amount of Employer Matching Contributions which shall
be credited to a Participant's Individual Account shall be
100% of the Participant's Before-Tax and After-Tax
Contributions, up to a maximum of 4% of such Participant's
Compensation.
10. Effective January 1, 1992, delete Section 3.05 of Article III and
substitute, in lieu thereof, the following:
Election. All elections to start, modify or suspend a Contribution
pursuant to this Article III must be submitted in a timely manner and
in accordance with the procedures established by the Committee, with
such election being implemented as soon as administratively practicable
following its receipt.
11. Effective July 1, 1994, delete the last sentence of Section 4.01 of
Article IV and substitute, in lieu thereof the following:
If investments are to be made to more than one Investment Fund,
investments shall be made in increments of one percent (1%).
12. Effective April 1, 1997, delete the last paragraph of Section 4.02 of
Article IV and substitute, in lieu thereof the following:
Each Participant shall have the right to change his election concerning
the Investment Fund in which future Contributions allocated to him are
to be invested. Any such change shall be applicable as soon as
administratively practicable after the Participant makes a revised
investment election in
7
<PAGE>
accordance with procedures established by the Committee for this
purpose; provided, however, that no more than one such revised election
shall be effective on any given Valuation Date. Any such revised
election shall continue to apply until the Participant makes another
change of investment election.
13. Effective April 1, 1997, add the following sentence at the end of
Section 4.02 of Article IV:
The Committee may permit investment elections to be made through the
completion and filing of forms provided for this purpose and/or through
electronic, telephonic or computer means, or as otherwise determined by
the Committee in its sole discretion.
14. Effective April 1, 1997, delete the first two paragraphs of Section
4.03 of Article IV, and substitute in lieu thereof, the following:
Each Participant shall have the right to change his investment option
election concerning the Investment Fund or Funds in which his prior
Contributions are invested (other than the Special Stock Funds) in
accordance with Section 4.02. Any such change shall be applicable as
soon as administratively practicable after the Participant makes a
revised investment election in accordance with procedures established
by the Committee for this purpose; provided, however, that no more than
one such revised election shall be effective on any given Valuation
Date. Any such revised election shall continue to apply until the
Participant makes another change of investment election.
Notwithstanding the above, the Committee, in its sole discretion, may
determine the frequency of such changes and the extent to which any
Investment Fund transfer may occur with respect to the Special Stock
Fund.
Each such election shall be in increments of one percent (1%), or in
such other percentage as determined by the Committee from time to time.
15. Effective January 1, 1996, add the following new paragraph at the end
of Section 6.07(a) of Article VI:
Any Participant entitled to a distribution under Section 6.03, 6.04 or
6.06 shall be permitted to elect to take an Annual Distribution from
his Individual Account. Such Annual Distribution shall equal the amount
designated by the Participant at the time of his election, or the
remaining balance in such Participant's Individual Account, whichever
is less. Annual Distributions shall be deducted from the Participant's
Individual Account and shall be paid in accordance with procedures
established by the Committee as soon as practicable after that date.
Any such Annual Distribution election shall be made through the
completion and filing of forms provided for this purpose and/or through
electronic, telephonic or computer means, or as otherwise determined by
the Committee in its sole discretion. The
8
<PAGE>
minimum amount of any such Annual Distribution shall be $500, or such
other amount as may be established by resolution of the Committee from
time to time.
16. Effective April 1, 1997, add the following sentence at the end of
Section 6.06(b) of Article VI:
The Committee may permit applications for benefits to be made through
the completion and filing of forms provided for this purpose and/or
through electronic, telephonic or computer means, or as otherwise
determined by the Committee in its sole discretion.
17. Effective January 1, 1998, replace the amount "$3,500", wherever such
amount shall appear throughout Sections 6.07 of Article VI and 7.06 of
Article VII, with "$5,000".
18. Effective January 1, 1997, delete the second paragraph of Section 6.09
of Article VI, "Required Beginning Date" and substitute, in lieu
thereof, the following:
On and after January 1, 1997, a Participant, other than a 5% owner, who
continues to be actively employed by the Company after attaining age
seventy and one-half (70-1/2) may elect to commence benefit payments at
that time or to delay benefit distributions until such time as he
incurs a Severance From Service Date. This provision shall be construed
and administered in a manner consistent with Code Sections 401(a)(9)
and 411(d)(6).
19. Effective January 1, 1997, delete Section 6.09(f)(i) of Article VI and
substitute, in lieu thereof, the following:
The Required Beginning Date of a Participant is the first day of April
of the calendar year following the calendar year in which the
participant attains age 70-1/2. On and after January 1, 1997, a
Participant, other than a 5% owner, who continues to be actively
employed by the Company after attaining age seventy and one-half
(70-1/2) may elect to commence benefit payments at that time or to
delay benefit distributions until such time as he incurs a Severance
From Service Date. This provision shall be construed and administered
in a manner consistent with Code Sections 401(a)(9) and 411(d)(6).
20. Effective immediately, delete the first two paragraphs of Section 9.04
of Article IX and substitute, in lieu thereof, the following:
The Board of Directors or its designate shall appoint a committee to
hold office at the pleasure of the Corporation, such committee to be
known as the Committee.
9
<PAGE>
Any action of the Committee shall be determined by the vote of a
majority of its members. Any member of the Committee or his designate
may execute any certificate or other written direction on behalf of the
Committee.
The Committee shall hold meetings upon such notice, at such place or
places and at such time or times as it may from time to time determine.
A majority of the members of the Committee in office at the time shall
constitute a quorum for the transaction of business.
21. Effective immediately, delete Section 13.03 of Article XIII and
substitute, in lieu thereof, the following:
The expenses of administering the Trust and the Plan shall be payable
by the Trust unless paid for by the Company.
22. Effective July 31, 1996, add the following new Section 17.09 at the end
of Article XVII:
17.09 Boots Be$t Savings Plan
(a) Participation. Effective as of September 1, 1995, former employees
of Boots Pharmaceuticals, Inc. who satisfy the requirements of
Section 2.01, taking into account service with Boots
Pharmaceuticals, Inc., shall be immediately eligible to
participate in the Plan as of September 1, 1995 and shall become
Plan Participants upon completion of the enrollment process, as
established by the Committee.
(b) Transfer of Account Balances. Effective as of July 31, 1996,
the Committee designated the Boots Be$t Savings Plan (the
"Boots Plan"), a defined contribution plan described under IRC
Section 401(a), a Predecessor Plan. As of July 31, 1996, the
Boots Plan shall be merged into the Plan and account balances
held on behalf of each participant covered by the Boots Plan
shall be transferred to the Plan and allocated and credited in
accordance with Section 3.06 of Article III. Any amounts so
transferred which were attributable to Employer Contributions
under the Boots Plan shall be fully vested.
23. Effective January 7, 1997, add the following new Section 17.10 at the
end of Article XVII:
17.10 Participation of Former Employees of Sandoz Agro, Inc.
Effective as of January 7, 1997, (1) former employees of
Sandoz Agro, Inc. who satisfy the requirements of Section 2.01
shall be immediately eligible to participate in the Plan, and
such employees' service with Sandoz Agro, Inc. prior to such
date shall be taken into account as a Period of Employment for
purposes of determining eligibility for membership and vesting
under the Plan, and (2) the Plan Administrator and Plan
Trustee are authorized to accept a direct rollover of an
Eligible Rollover Distribution (as described under Section 402
of the Code) from any such former
10
<PAGE>
employee's account balances under the Sandoz Agro, Inc.
Savings Plan (the "Sandoz Savings Plan"), including (after any
such former employee has executed all acknowledgments, payroll
authorizations and other forms deemed necessary for this
purpose by the Plan Administrator and Plan Trustee) any
outstanding participant loan notes secured by such former
employee's account balances under the Sandoz Savings Plan.
Adopted October 22, 1997
The BASF Corporation Pension and Benefits Committee
11
<PAGE>
Attachment
----------
AMENDMENT 2
-----------
The BASF Corporation Employee Savings Plan, as amended and restated effective
January 1, 1992 and as amended October 22, 1997 (the "Plan"), is hereby further
amended to:
1. Effective January 1, 1999, delete the first two sentences of Section
3.03 of Article Ill and substitute, in lieu thereof, the following:
A Participant who has elected to make Participating contributions of 4%
of compensation may elect to have contributed to the Plan on his behalf
an additional 1% to 16% of such participant's compensation as a
Non-Participating Contribution.
2. Effective January 1, 1999, delete Section 6.02 of Article VI in its
entirety and substitute, in lieu thereof, a new Section 6.02 as follows:
6.02 Vesting of Employer Matching Contribution A Participant shall be
fully vested at all times in all amounts credited to such Participant's
Employer Matching Contribution Account.
3. Effective January 1, 1996, delete the first sentence of the last
paragraph of Section 6.07(a) of Article VI and substitute, in lieu thereof, the
following:
Effective as of April 1, 1997, any Participant entitled to a
distribution under Section 6.03, 6.04 or 6.06 shall be permitted to
elect to take an Annual Distribution from his Individual Account.
4. Effective January 1, 1999, delete Section 7.02(c) of Article VII and
substitute, in lieu thereof, the following:
(c) THIRD, a Participant may withdraw either (i) if the
Participant has at least five total Years of Employment from the date
he became a Participant (included for this purpose are years of
participation in a Predecessor Plan), amounts attributable to vested
Employer Matching Contributions (including earnings thereon) which were
made prior to January 1, 1999 and which were not used to meet the
requirement of IRC Section 401 (k) (3), or (ii) in any other case,
amounts attributable to vested Employer Matching Contributions
(including earnings thereon) which were made prior to January 1, 1999
and which were not
<PAGE>
used to meet the requirements of IRC Section 401 (k) (3) provided,
however, that amounts withdrawn under this clause (ii) of this priority
THIRD shall not result in amounts remaining in the Participant's
Employer Matching Contribution Account which are less than an amount
equal to the Employer Matching Contributions allocated to such Account
which have remained in the Plan for less than 24 months.
2
