As Filed with the Securities and Exchange Commission on August 4, 1997
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
ARCH COAL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 43-0921172
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
CITY PLACE ONE, SUITE 300
ST. LOUIS, MISSOURI 63141
(314) 994-2700
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
ARCH COAL, INC. AND SUBSIDIARIES EMPLOYEE THRIFT PLAN
(Full Title of the Plan)
JEFFRY N. QUINN, ESQ.
SENIOR VICE PRESIDENT -- LAW AND HUMAN RESOURCES, SECRETARY AND GENERAL COUNSEL
ARCH COAL, INC.
CITY PLACE ONE, SUITE 300
ST. LOUIS, MISSOURI 63141
(314) 994-2700
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
PROPOSED PROPOSED AMOUNT OF
TITLE OF SECURITIES AMOUNT TO BE MAXIMUM MAXIMUM REGISTRATION
TO BE REGISTERED REGISTERED OFFERING AGGREGATE FEE(1)
PRICE OFFERING
PER SHARE(1) PRICE(1)
- --------------------------------------------------------------------------------
Common Stock, 500,000 $28.125 $14,062,500 $4,262
$.01 par value Shares(2)
per share
-------------------------------------------------------------------------------
(1) Computed pursuant to Rule 457(h) solely for the purpose of determining
the registration fee.
(2) This Registration Statement also covers such additional shares of Common
Stock as may be issuable pursuant to antidilution provisions.
<PAGE>
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by Arch Coal, Inc. (the "Registrant")
with the Securities and Exchange Commission pursuant to the Securities and
Exchange Act of 1934, as amended (the "Exchange Act"), are incorporated by
reference into this Registration Statement:
(a) The Proxy Statement/Prospectus dated May 30, 1997 filed as
part of the Registrant's Registration Statement on Form S-4
(No. 333-28149) pursuant to the Securities Act of 1933, as
amended;
The Annual Report on Form 11-K dated August 4, 1997,
of the Arch Coal, Inc. and Subsidiaries Employee Thrift Plan;
(b) The Current Report on Form 8-K/A-1 filed on July 8, 1997 under
the Exchange Act to report a change in the Registrant's certified
public accountants;
The Current Report on Form 8-K filed on July 15, 1997 under the
Exchange Act to report the acquisition of Ashland Coal, Inc.;
The Current Report on Form 8-K filed on July 30, 1997 to report
the implementation of a share repurchase program; and
(c) The description of the Registrant's Common Stock, par value
$.01 per share (the "Common Stock"), contained in the
Registrant's Registration Statement on Form 8-B filed on June 17,
1997 under the Exchange Act.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in this Registration Statement and to be a part
hereof from the date of filing of such documents. Any statement contained herein
or in a document incorporated or deemed to be incorporated herein by reference
shall be deemed to be modified or superseded for purposes of this Registration
Statement to the extent that a statement contained in any other subsequently
filed document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement.
ITEM 4. DESCRIPTION OF SECURITIES.
The description of the Common Stock contained in Item 1 of the
Registrant's Registration Statement on Form 8-B filed on June 17, 1997 under the
Exchange Act
II-1
<PAGE>
is incorporated herein by reference. The securities are registered
under Section 12(b) of the Exchange Act.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
In accordance with Delaware law, the Registrant's Restated Certificate
of Incorporation, as amended, contains provisions that result in the elimination
of the personal liability of directors to the Registrant and its stockholders
for monetary damages for breaches of their fiduciary duties as a director,
except for (i) breach of a director's duty of loyalty to the company or to the
stockholders, (ii) acts of omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, (iii) dividend or stock
repurchases or redemptions that are illegal under Delaware law, and (iv) any
transaction for which a director receives an improper personal benefit. These
provisions pertain only to breaches of duty by directors as directors and not in
any other capacity, such as officers. As a result of the inclusion of such
provisions, stockholders may be unable to recover monetary damages against
directors for actions taken by them that constitute negligence or gross
negligence or that are in violation of their fiduciary duties, although it may
be possible to obtain injunctive or other equitable relief with respect to such
actions. If equitable remedies are found not to be available to stockholders in
any particular case, stockholders may not have any effective remedy against the
challenged conduct.
Under Section 145 of the Delaware General Corporation law, a
corporation has the power to indemnify directors and officers under certain
prescribed circumstances and subject to certain limitations against certain
costs and expenses, including attorneys' fees actually and reasonably incurred
in connection with any action, suit or proceeding, whether civil, criminal,
administrative or investigative, to which any of them is a party by reason of
this being a director or officer of the corporation if it is determined that he
acted in accordance with the applicable standard of conduct set forth in such
statutory provision. Article V of the Registrant's Bylaws provides that the
Registrant will indemnify any person who may be involved, as a party or
otherwise, in a claim, action, suit or proceeding (other than any claim, action,
suit or proceeding brought by or in the right of the Registrant) by reason of
the fact that such person is or was a director or officer of the Registrant, or
is or was serving at the request of the Registrant as a director or officer of
any other corporation or entity, against certain liabilities, costs and
expenses. The Registrant is also authorized to and does maintain insurance on
behalf of any person who is or was a director or officer of the Registrant , or
is or was serving at the request of the Registrant as a director or officer of
any other corporation or entity, against any liability asserted against such
person and incurred by such person in any such capacity or arising out of his
status as such, whether or not the Registrant would have the power to indemnify
such person against such liability under the Delaware General Corporation law.
The Registrant has entered into indemnity agreements with persons who
are directors and/or officers of the Registrant; and other persons who are or
were serving, shall serve, or shall have served at the request of the Registrant
as a director, officer, partner, trustee, fiduciary, employee or agent of
another foreign or domestic corporation or non-profit corporation,
II-2
<PAGE>
cooperative, partnership, joint venture, trust, employee benefit plan, or other
incorporated or unincorporated enterprise.
Directors of the Registrant who are officers of certain shareholders of
the Registrant also may be entitled to indemnification under the provisions of
that shareholders' Bylaws providing for the indemnity of officers who serve, at
the request of such shareholders, as a director of another corporation.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
Reference is made to the Exhibit Index filed herewith. The Registrant
has not filed certain instruments with respect to long-term debt since the total
amount of securities authorized thereunder does not exceed 10% of the total
assets of the Registrant and its subsidiaries on a consolidated basis. The
Registrant agrees to furnish a copy of any such agreement to the Commission upon
request.
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not
exceed that which was registered) and any deviation from
the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a
20% change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective registration statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
II-3
<PAGE>
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing
of the registrant's annual report pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d)
of the Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial BONA FIDE offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in St. Louis, Missouri on July 31, 1997.
ARCH COAL, INC.
By: /s/ Jeffry N. Quinn
------------------------
Jeffry N. Quinn
Senior Vice President - Law and Human
Resources, General Counsel and
Secretary
POWER OF ATTORNEY
Each person whose signature appears below hereby severally constitutes
and appoints Steven F. Leer, Patrick A. Kriegshauser, Jeffry N. Quinn, and James
P. Pye his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for such person and in such person's name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement on Form
S-8, and to file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent or his substitute may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
SIGNATURES TITLE DATE
/s/ Steven F. Leer President, Chief Executive July 31, 1997
- --------------------------- Officer and Director
Steven F. Leer
/s/ Patrick A. Kriegshauser Senior Vice President, Treasurer July 31, 1997
- ---------------------------
Patrick A. Kriegshauser and Chief Financial Officer
(Principal Financial Officer)
/s/ James P. Pye Controller July 31, 1997
- --------------------------- (Principal Accounting Officer)
James P. Pye
II-5
<PAGE>
/s/ John R. Hall Chairman of the Board of July 31, 1997
- --------------------------- Directors
John R. Hall
/s/ James R. Boyd Director July 31, 1997
- ---------------------------
James R. Boyd
/s/ Robert A. Charpie Director July 31, 1997
- ---------------------------
Robert A. Charpie
/s/ Paul W. Chellgren Director July 31, 1997
- ---------------------------
Paul W. Chellgren
/s/ Thomas L. Feazell Director July 31, 1997
- ---------------------------
Thomas L. Feazell
/s/ Robert L. Hintz Director July 31, 1997
- ---------------------------
Robert L. Hintz
/s/ Douglas H. Hunt Director July 31, 1997
- ---------------------------
Douglas H. Hunt
/s/ Thomas Marshall Director July 31, 1997
- ---------------------------
Thomas Marshall
/s/ James L. Parker Director July 31, 1997
- ---------------------------
James L. Parker
/s/ J. Marvin Quin Director July 31, 1997
- ---------------------------
J. Marvin Quin
/s/ Ronald E. Samples Director July 31, 1997
- ---------------------------
Ronald E. Samples
II-6
<PAGE>
THE PLAN. Pursuant to the requirements of the Securities Act of 1933, the Plan
Administrator has caused this Registration Statement to be signed on the Plan's
behalf by the undersigned, thereunto duly authorized, in the city of
St. Louis, Missouri, as of July 31, 1997.
ARCH COAL, INC. AND SUBSIDIARIES
EMPLOYEE THRIFT PLAN
BY: /s/ Teresa A. Daniel
------------------------
Plan Administrator
<PAGE>
ARCH COAL, INC.
EXHIBIT INDEX
Exhibit Number Description
4.1 Restated Certificate of Incorporation of the Registrant
(incorporated herein by reference to Exhibit 3.2 to the
Registrant's Registration Statement on Form S-4 (No. 333-28149)
filed with the Commission on May 30, 1997 (the "Form S-4")).
4.2 Restated and Amended By-laws of the Registrant (incorporated
herein by reference to Exhibit 3.4 to the Form S-4).
4.3 Stockholders Agreement, dated as of April 4, 1997, among Carboex
International, Ltd., Ashland Inc. and the Registrant
(incorporated herein by reference to Exhibit 4.1 to the Form S-4).
4.4 Registration Rights Agreement, dated as of April 4, 1997, among
the Registrant, Ashland Inc., Carboex International, Ltd. and the
entities listed on Schedules I and II thereto (incorporated
herein by reference to Exhibit 4.2 to the Form S-4).
4.5 Agreement Relating to Nonvoting Observer, executed as of April 4,
1997, among Carboex International, Ltd., Ashland Inc. and the
Registrant (incorporated herein by reference to Exhibit 4.3 to
the Form S-4).
5.1 Opinion of Jeffry N. Quinn regarding the validity of the Common
Stock.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Ernst & Young LLP.
23.3 Consent of Jeffry N. Quinn (included in Exhibit 5.1).
24.1 Power of Attorney (included in Signature Page).
99.1 Arch Coal, Inc. and Subsidiaries Employee Thrift Plan.
EXHIBIT 5.1
July 31, 1997
Board of Directors
Arch Coal, Inc.
City Place One, Suite 300
St. Louis, Missouri 63141
Ladies and Gentlemen:
I have acted as counsel to Arch Coal, Inc., a Delaware corporation (the
"Company"), in connection with the filing of a Registration Statement on Form
S-8 ("Registration Statement") with the Securities and Exchange Commission under
the Securities Act of 1933, as amended (the "Act"), covering the offering and
sale of up to 500,000 shares of the Company's Common Stock, par value $.01 per
share (the "Common Stock"), under the Company's Thrift Plan (the "Plan").
In connection herewith, I have examined and relied without independent
investigation as to matters of fact upon such certificates of public officials,
such statements and certificates of officers of the Company and originals or
copies certified to our satisfaction of the Registration Statement, the Restated
Certificate of Incorporation and the By-laws of the Company, proceedings of the
Board of Directors of the Company and such other corporate records, documents,
certificates and instruments as we have deemed necessary or appropriate in order
to enable us to render the opinions expressed below. In rendering this opinion,
I have assumed the genuineness of all signatures on all documents examined by
us, the authenticity of all documents submitted to us as originals and the
conformity to authentic originals of all documents submitted to us as certified
or photostatted copies.
Based upon the foregoing and in reliance thereon, and subject to the
qualifications and limitations stated herein, I am of the opinion that:
(1) The Company is a corporation validly existing in good standing
under the laws of the State of Delaware;
(2) When,
(i) the Registration Statement shall have become effective
under the Act; and
(ii) the shares of Common Stock being offered and sold by the
Company
<PAGE>
Board of Directors
Arch Coal, Inc.
July 31, 1997
Page 2
pursuant to the Plan shall have been duly issued and
sold in accordance with the terms of the Plan;
then such shares of Common Stock will be legally issued, fully paid
and non-assessable.
This opinion is not rendered with respect to any laws other than the
General Corporation Law of the State of Delaware and the Act.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. I also consent to your filing copies of this opinion as
an exhibit to the Registration Statement with agencies of such states as you
deem necessary in the course of complying with the laws of such states regarding
the offering and sale of such shares of Common Stock.
In giving this consent, I do not admit that I am in the category of
persons whose consent is required under Section 7 of the Act or the rules and
regulations of the Securities and Exchange Commission thereunder.
Very truly yours,
/s/ Jeffry N. Quinn
------------------------
Jeffry N. Quinn
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement on Form S-8 of our report dated July
11, 1997, included in the Arch Coal, Inc. and Subsidiaries Employee Thrift Plan
Form 11-K for the year ended December 31, 1996, and our report dated January 16,
1997, on the Arch Coal, Inc. financial statements for the year ended December
31, 1996, included in the Form S-4 (No. 333-28149).
/s/ ARTHUR ANDERSEN LLP
St. Louis, Missouri
July 31, 1997
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the Arch Coal, Inc. and Subsidiaries Employee Thrift
Plan of our report dated January 22, 1997, with respect to the consolidated
financial statements of Ashland Coal, Inc. and subsidiaries as of December 31,
1996 and 1995 and for each of the three years in the period ended December 31,
1996 included in the current Report (Form 8-K) of Arch Coal, Inc. filed with the
Securities and Exchange Commission on July 15, 1997.
/s/ ERNST & YOUNG LLP
Louisville, Kentucky
July 31, 1997
EXHIBIT 99.1
ARCH COAL, INC. AND SUBSIDIARIES EMPLOYEE THRIFT PLAN
TABLE OF CONTENTS
PAGE
SECTION 1 NAME OF PLAN......................................................1
SECTION 2 DEFINITIONS.......................................................2
2.1 "ARCH COAL STOCK FUND"...............................................2
2.2 "BOARD"..............................................................2
2.3 "BREAK IN SERVICE"...................................................2
2.4 "CODE"...............................................................3
2.5 "COMMITTEE"..........................................................3
2.6 "COMPANY"............................................................3
2.7 "COMPENSATION".......................................................3
2.8 "CONTROLLED GROUP"...................................................5
2.9 "DAYS OF PARTICIPATION"..............................................5
2.10 "DAYS OF SERVICE"....................................................6
2.11 "DISABILITY RETIREMENT DATE".........................................6
2.12 "EARLY RETIREMENT DATE"..............................................7
2.13 "EMPLOYEE"...........................................................7
2.14 "EMPLOYER"...........................................................7
2.15 "FIVE PERCENT OWNER".................................................8
2.16 "HOUR OF EMPLOYMENT".................................................8
2.17 "INVESTMENT MANAGER(S)"..............................................8
2.18 "NORMAL RETIREMENT DATE".............................................8
2.19 "PARTICIPANT"........................................................8
2.20 "PLAN"...............................................................8
2.21 "PLAN ADMINISTRATOR".................................................8
2.22 "PLAN YEAR"..........................................................8
2.23 "QUALIFIED PLAN".....................................................9
2.24 "SERVICE PERIOD".....................................................9
2.25 "SEVERANCE DATE".....................................................9
2.26 "SEVERANCE PERIOD"...................................................9
2.27 "TRUST AGREEMENT"....................................................9
2.28 "TRUSTEE"...........................................................10
2.29 "TRUST FUND"........................................................10
2.30 "VALUATION DATE"....................................................10
SECTION 3 ELIGIBILITY......................................................11
3.1 IN GENERAL...........................................................11
3.2 NEW PARTICIPANTS.....................................................11
3.3 FORMER PARTICIPANTS..................................................11
3.4 CESSATION OF PARTICIPATION...........................................11
3.5 REQUIREMENTS FOR PARTICIPATION.......................................11
SECTION 4 CONTRIBUTIONS....................................................12
4.1 BASIC PAYROLL REDUCTION CONTRIBUTIONS................................12
4.2 ADDITIONAL PAYROLL REDUCTION CONTRIBUTIONS...........................13
4.3 MAXIMUM PAYROLL REDUCTION CONTRIBUTION...............................13
4.4 EMPLOYER CONTRIBUTIONS...............................................14
4.5 ELECTIONS............................................................15
4.6 CHANGES IN AND SUSPENSION OF CONTRIBUTIONS...........................15
4.7 TAX DEDUCTIONS.......................................................16
4.8 ROLLOVER CONTRIBUTIONS AND TRANSFERS.................................17
4.9 PAYMENT OF CONTRIBUTIONS.............................................18
SECTION 5 DISTRIBUTIONS OF EXCESS AMOUNTS..................................19
i
<PAGE>
5.1 DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS............................19
5.2 LIMITATIONS ON PRE-TAX CONTRIBUTIONS FOR HIGHLY COMPENSATED
EMPLOYEES............................................................19
5.3 LIMITATIONS ON AFTER-TAX AND MATCHING CONTRIBUTIONS FOR HIGHLY
COMPENSATED EMPLOYEES................................................23
5.4 LIMITATIONS ON MULTIPLE USE OF ALTERNATIVE LIMITATION................25
5.5 DEFINITIONS AND SPECIAL RULES........................................26
5.6 ELECTION TO TREAT QUALIFIED NONELECTIVE CONTRIBUTIONS AND QUALIFIED
MATCHING CONTRIBUTIONS AS ELECTIVE DEFERRALS.........................36
5.7 ELECTION TO TREAT QUALIFIED NONELECTIVE CONTRIBUTIONS AND ELECTIVE
DEFERRALS AS MATCHING CONTRIBUTIONS..................................38
SECTION 6 WITHDRAWALS AND LOANS............................................40
6.1 WITHDRAWALS..........................................................40
6.2 LOANS................................................................44
SECTION 7 INVESTMENT OF ACCOUNTS...........................................48
7.1 PARTICIPANT'S SELECTION OF INVESTMENT FUND...........................48
7.2 CHANGES IN INVESTMENT DIRECTION......................................48
7.3 TRANSFERS BETWEEN FUNDS..............................................48
7.4 PARTICIPANT'S FAILURE TO SPECIFY INVESTMENT OPTION...................49
SECTION 8 ALLOCATION.......................................................50
8.1 ESTABLISHMENT OF ACCOUNTS............................................50
8.2 PURCHASE OF UNITS AND ALLOCATION OF EARNINGS, LOSSES AND EXPENSES....51
SECTION 9 DISTRIBUTIONS AT RETIREMENT......................................52
9.1 NORMAL RETIREMENT DISTRIBUTIONS......................................52
9.2 EARLY RETIREMENT DISTRIBUTIONS.......................................52
9.3 REQUIRED MINIMUM DISTRIBUTIONS.......................................54
9.4 REQUIRED BEGINNING DATE..............................................55
9.5 NOTIFICATION OF ELIGIBILITY TO RECEIVE AND CONSENT TO EARLY
RETIREMENT BENEFITS..................................................55
9.6 WAIVER OF NOTICE.....................................................56
9.7 DEFERRAL OF DISTRIBUTION.............................................56
9.8 INSTALLMENT OPTION...................................................57
SECTION 10 DISTRIBUTIONS AT DISABILITY.....................................58
10.1 DISTRIBUTIONS UPON DISABILITY.......................................58
10.2 DETERMINATION OF DISABILITY.........................................60
10.3 PURPOSE OF DISABILITY PAYMENTS......................................60
10.4 NOTIFICATION OF ELIGIBILITY TO RECEIVE AND CONSENT TO DISABILITY
BENEFITS............................................................61
10.5 WAIVER OF NOTICE....................................................61
10.6 DEFERRAL OF DISTRIBUTION TO REQUIRED BEGINNING DATE.................62
SECTION 11 DISTRIBUTIONS AT TERMINATION OF EMPLOYMENT (VESTING)............63
11.1 DISTRIBUTIONS UPON TERMINATION OF EMPLOYMENT........................63
11.2 DETERMINATION OF VESTED PORTION.....................................64
11.3 FORFEITURES.........................................................65
11.4 BUY-BACK............................................................65
11.5 NOTIFICATION OF ELIGIBILITY TO RECEIVE AND CONSENT TO VESTED
BENFITS.............................................................66
11.6 WAIVER OF NOTICE....................................................66
11.7 DEFERRAL OF DISTRIBUTION TO REQUIRED BEGINNING DATE.................67
SECTION 12 DISTRIBUTIONS AT DEATH..........................................68
12.1 DISTRIBUTIONS UPON DEATH............................................68
12.2 DISTRIBUTION TO SPOUSE..............................................68
12.3 DESIGNATION OF BENEFICIARY..........................................69
12.4 BENEFICIARY NOT DESIGNATED..........................................69
12.5 SPOUSAL CONSENT TO DESIGNATION OF BENEFICIARY.......................69
SECTION 13 LEAVES OF ABSENCE AND TRANSFERS.................................70
13.1 MILITARY LEAVE OF ABSENCE...........................................70
13.2 OTHER LEAVES OF ABSENCE.............................................70
13.3 TRANSFERS...........................................................71
SECTION 14 TRUSTEE.........................................................74
SECTION 15 CLAIMS PROCEDURE................................................75
15.1 CLAIM...............................................................75
15.2 CLAIM DECISION......................................................75
ii
<PAGE>
15.3 REQUEST FOR REVIEW..................................................76
15.4 REVIEW ON APPEAL....................................................76
SECTION 16 AMENDMENT OR TERMINATION........................................78
SECTION 17 TOP-HEAVY DEFINITIONS...........................................79
17.1 "ACCRUED BENEFITS"..................................................79
17.2 "BENEFICIARIES".....................................................79
17.3 "DETERMINATION DATE"................................................79
17.4 "FORMER KEY EMPLOYEE"...............................................79
17.5 "KEY EMPLOYEE"......................................................79
17.6 "NON-KEY EMPLOYEE"..................................................80
17.7 "PERMISSIVE AGGREGATION GROUP"......................................80
17.8 "REQUIRED AGGREGATION GROUP"........................................80
17.9 "SUPER TOP-HEAVY GROUP".............................................81
17.10 "TOP-HEAVY COMPENSATION"............................................82
17.11 "TOP-HEAVY GROUP"...................................................82
SECTION 18 TOP-HEAVY RULES.................................................84
18.1 SPECIAL TOP-HEAVY RULES.............................................84
18.2 MINIMUM ALLOCATION IF PLAN IS PART OF TOP-HEAVY GROUP...............84
18.3 ADJUSTMENTS IN SECTION 415 LIMITS...................................85
SECTION 19 MISCELLANEOUS...................................................86
19.1 PARTICIPANTS' RIGHTS................................................86
19.2 SPENDTHRIFT CLAUSE..................................................86
19.3 DELEGATION OF AUTHORITY BY EMPLOYER.................................86
19.4 DISTRIBUTIONS TO MINORS.............................................86
19.5 CONSTRUCTION OF PLAN................................................87
19.6 GENDER AND NUMBER...................................................87
19.7 SEPARABILITY OF PROVISIONS..........................................87
19.8 DIVERSION OF ASSETS.................................................87
19.9 SERVICE OF PROCESS..................................................88
19.10 MERGER..............................................................88
19.11 BENEFIT LIMITATION..................................................89
19.12 COMMENCEMENT OF BENEFITS............................................90
19.13 QUALIFIED DOMESTIC RELATIONS ORDER..................................92
19.14 WRITTEN EXPLANATION OF ROLLOVER TREATMENT...........................95
19.15 LEASED EMPLOYEES....................................................96
19.16 SPECIAL DISTRIBUTION OPTION.........................................96
19.17 LIMITATIONS ON SPECIAL DISTRIBUTIONS OPTIONS........................98
iii
<PAGE>
ARCH COAL, INC. AND SUBSIDIARIES EMPLOYEE THRIFT PLAN
SECTION 1
NAME OF PLAN
The Plan created in accordance with the terms hereof shall be known
as the "Arch Coal, Inc. and Subsidiaries Employee Thrift Plan." The Plan will be
considered a profit sharing plan even thought contributions are not dependent on
profits.
<PAGE>
SECTION 2
DEFINITIONS
2.1 "ARCH COAL STOCK FUND" means that portion of the Trust Fund
which will be separately held and invested by the Trustee in accordance with the
terms of the Trust in the common stock of Arch Coal, Inc.
2.2 "BOARD" means the board of directors of the Company.
2.3 "BREAK IN SERVICE" means any twelve consecutive month
Severance Period. If a person's employment with the Employer is terminated on or
before June 30, 1985, when he has no nonforfeitable right to a benefit derived
from Employer contributions under the Plan and if as of June 30, 1985, the
number of days in the Employee's Severance Period equals or exceeds his years of
service, whether or not consecutive, completed before such Severance Period, any
Days of Participation and Days of Service accrued prior to such Break in Service
shall be disregarded. If any other person's employment with the Employer is
terminated when he has no nonforfeitable right to a benefit derived from
Employer contributions under the Plan and the number of days in the Employee's
Severance Period equals or exceeds the greater of five years or his years of
service, whether or not consecutive, completed before such Severance Period, any
Days of Participation and Days of Service accrued prior to such termination of
employment will be disregarded. In computing the aggregate number of Days of
Service prior to such
2
<PAGE>
Break in Service, Days of Service which could have been disregarded under this
Section by reason of any prior Break in Service shall be disregarded. If an
Employee is absent from work and incurs one or more Breaks in Service because of
the Employee's pregnancy, birth or adoption of the Employee's child or caring
for the newborn or newly adopted child by such Employee, the first such Break in
Service which would otherwise be incurred under this Section shall be
disregarded.
2.4 "CODE" means the Internal Revenue Code of 1986, as amended.
2.5 "COMMITTEE" means the three individuals appointed by the Plan
Administrator to review claims made pursuant to Section 15.
2.6 "COMPANY" means Arch Coal, Inc., a Delaware Corporation.
2.7 "COMPENSATION" means any amount paid to an Employee during the
Plan Year for services rendered while a Participant which constitutes:
(a) regular salary,
(b) regular wages,
(c) overtime pay,
(d) amounts contributed through a salary reduction arrangement to
a Qualified Plan which meets the requirements of Section
401(k) of the Code,
(e) earned vacation pay.
3
<PAGE>
Compensation shall not include any other item not specifically listed above.
Items excluded from Compensation include, but are not necessarily limited to:
(a) severance payments,
(b) separation payments,
(c) mileage allowance,
(d) automobile allowance,
(e) relocation allowance and reimbursements,
(f) educational reimbursements,
(g) imputed income on life insurance,
(h) other miscellaneous allowances,
(i) any amounts deferred or paid under the Arch Coal Incentive
Compensation Plan,
(j) any amounts deferred or paid under the Arch Mineral
Corporation Performance Unit Plan,
(k) any amounts deferred or paid under any award or program based
on increases in the assets of the Company,
(l) benefits paid under any long-term incentive program,
(m) housing allowances,
(n) tax gross-ups,
(o) foreign goods and services differentials,
(p) quarterly safety awards,
(q) accrued vacation pay,
4
<PAGE>
(r) Office of the Chairman special achievement awards,
(s) gain sharing awards,
(t) strike pay, or
(u) Employer contributions to or benefits under this Plan or any
other Qualified Plan.
Compensation for any calendar year in excess of the amount described in Code
Section 401(a)(17) shall be disregarded. In the case of an Employee who is a
Five Percent Owner or one of the ten persons paid the highest remuneration (as
defined in Code Section 415(c)(3)) by the Controlled Group during the Plan Year,
the Compensation of such Employee for such Plan Year shall be reduced to the
extent necessary such that the aggregate Compensation paid during the Plan Year
to the Employee, the Employee's spouse, and to any of the Employee's lineal
descendants who have not attained age 19 before the close of the Plan Year is
limited to the amount in Code Section 401(a)(17).
2.8 "CONTROLLED GROUP" means the Company and all other entities
required to be aggregated with the Company under Sections 414(b), (c), or (m) of
the Code or the regulations issued pursuant to Section 414(o) of the Code. For
purposes of Section 19.11, in determining which entities shall be aggregated
under Section 414(b) or (c) of the Code, the modifications made by Section
415(h) of the Code shall be applied.
2.9 "DAYS OF PARTICIPATION" means the total number of days in an
Employee's Service Periods which fall within a month of the year during which
the Employee elected to make a
5
<PAGE>
contribution under Section 4.1. A Participant shall accrue one year of
participation for each 365 Days of Participation (whether or not consecutive).
2.10 "DAYS OF SERVICE" means the total number of days in a person's
Service Periods, whether or not such periods were completed consecutively,
reduced by the total number of days occurring in such Service Periods which fall
within a month of the year during which the person had an opportunity to make a
contribution under Section 4.1 and failed to do so. Days of Service shall also
include the number of days in all Severance Periods, if any, in which:
(a) The Employee severs from service by reason of quit,
discharge or retirement and immediately prior to such quit, discharge or
retirement was not absent from service if the Employee performs an Hour of
Employment within twelve months of the date of such severance; or
(b) Notwithstanding (a) above, the Employee severs from
service by reason of quit, discharge or retirement during an absence from
service of twelve months or less for any reason other than a quit,
discharge, retirement or death if the Employee performs an Hour of
Employment within twelve months of the date on which the Employee was
first absent from service.
A Participant shall accrue one year of service for each 365 Days of
Service (whether or not consecutive).
2.11 "DISABILITY RETIREMENT DATE" means the date on
6
<PAGE>
which a Participant is determined by the Plan Administrator to be permanently
and totally disabled in accordance with Section 10.2 and has terminated his
employment.
2.12 "EARLY RETIREMENT DATE" means the date on which a Participant
terminates his employment with the Employer (except by death) after completion
of ten (10) years of Service provided such date is on or after such
Participant's 55th birthday but before his 65th birthday.
2.13 "EMPLOYEE" means any full-time (as defined in the Employer's
employment practices) salaried person employed by an Employer, and any full-time
hourly person employed by an Employer who is designated in a resolution of the
board of directors of such Employer as covered under the Plan, other than:
(i) an individual covered by another defined contribution
plan maintained by the Employer;
(ii) a person who is eligible to participate in the Ashland
Coal, Inc. Employee Thrift Plan; or
(iii) a member of a collective bargaining unit for which
either
(a) a separate retirement plan has been established
pursuant to collective bargaining negotiations; or
(b) no separate plan has been established after
collective bargaining which has included discussion of retirement
benefits, unless such collective bargaining provided for coverage
under this Plan.
2.14 "EMPLOYER" means the Company or any other member of the
Controlled Group which has, with the consent of the Board, adopted the Plan.
7
<PAGE>
2.15 "FIVE PERCENT OWNER" means any person who owns (or is
considered as owning within the meaning of Section 318 of the Code) more than
five percent of the outstanding stock of any corporation in the Controlled Group
or stock possessing more than five percent of the total combined voting power of
all stock of any corporation in the Controlled Group or who owns more than five
percent of the capital or profits interest of any unincorporated entity in the
Controlled Group.
2.16 "HOUR OF EMPLOYMENT" means an hour for which a person is
directly or indirectly paid, or entitled to payment, by the Employer for the
performance of duties.
2.17 "INVESTMENT MANAGER(S)" means any investment manager or
managers under the Trust Agreement.
2.18 "NORMAL RETIREMENT DATE" means the date on which a Participant
terminates his employment with the Employer (except by death or permanent and
total disability as defined in Section 10.2) provided such date is on or after
such Participant's 65th birthday.
2.19 "PARTICIPANT" means an Employee who has satisfied the
eligibility requirements of Section 3 and who has elected to participate in the
Plan.
2.20 "PLAN" means this Arch Coal, Inc. and Subsidiaries Employee
Thrift Plan.
2.21 "PLAN ADMINISTRATOR" means the Vice President - Human
Resources of the Company.
2.22 "PLAN YEAR" means:
8
<PAGE>
(a) prior to July 1, 1989, the 12-month period commencing on
July 1 and ending on June 30;
(b) the short year from July 1, 1989 through December 31,
1989; and
(c) on and after January 1, 1990, the calendar year.
2.23 "QUALIFIED PLAN" means any plan qualified under Section 401 of
the Code. For purposes of Sections 17 and 18 only, the term "Qualified Plan"
also means a simplified employee pension described in Section 408(k) of the
Code.
2.24 "SERVICE PERIOD" means the period of time commencing on the
date on which a person performs an Hour of Employment with the Employer and
ending on the person's Severance Date.
2.25 "SEVERANCE DATE" means the date on which the earliest of
the following occurs:
(a) A person employed by the Employer quits, retires, is
discharged or dies or
(b) The first anniversary of the first date of a period in
which the person remains absent from service with the Employer (with or
without pay) for any reason other than quit, retirement, discharge or
death.
2.26 "SEVERANCE PERIOD" means the period of time commencing the day
after a person's Severance Date and ending on the day before the person performs
an Hour of Employment.
2.27 "TRUST AGREEMENT" means the Trust Agreement
9
<PAGE>
between the Company and the Trustee.
2.28 "TRUSTEE" means the trustee under the Trust Agreement.
2.29 "TRUST FUND" means all cash, securities or other property
received by the Trustee from time to time as a result of contributions under the
Plan or as income or proceeds thereof.
2.30 "VALUATION DATE" means each day on which INVESCO values its
mutual funds.
10
<PAGE>
SECTION 3
ELIGIBILITY
3.1 IN GENERAL. Each Employee who was a Participant on December
31, 1992 shall continue to be a Participant as of January 1, 1993 provided he is
still an Employee on such date.
3.2 NEW PARTICIPANTS. Each other Employee shall become a
Participant on the first day of the first full pay period of the first full
month following the date he becomes an Employee.
3.3 FORMER PARTICIPANTS. A former Participant who is reemployed
by the Employer shall become a Participant on the first day of the first full
pay period of the first full month following the date he is reemployed as an
Employee.
3.4 CESSATION OF PARTICIPATION. A person shall cease to be a
Participant and shall become a former Participant when he
(a) has ceased to be employed by the Employer, and
(b) has no undistributed account balance under the Plan.
3.5 REQUIREMENTS FOR PARTICIPATION. An eligible Employee must
file with the Plan Administrator an election form prepared by the Plan
Administrator if the Employee wishes to make contributions to the Plan through
payroll deductions.
11
<PAGE>
SECTION 4
CONTRIBUTIONS
4.1 BASIC PAYROLL REDUCTION CONTRIBUTIONS
(a) A Participant, other than an Employee at the Ridgeline
Mine, may elect to have a basic contribution of up to 6% of his
Compensation in increments of 1% contributed by the Employer to the Plan
through payroll reductions. Each Participant shall elect on forms provided
by the Employer in increments of 1% the percentage of his Contributions
under this Section 4.1(a) to be credited to his Salary Reduction Account
and the percentage of his contributions to be credited to his Participant
Contribution Account. The contributions credited to the Salary Reduction
Account shall be pre-tax contributions and the contributions credited to
the Participant Contribution Account shall be after-tax contributions.
(b) A Participant who is an Employee at the Ridgeline Mine
may elect on forms provided by the Employer to have a basic contribution
of up to 2% of his Compensation in increments of 1% contributed by the
Employer to the Plan through payroll deductions. In addition, an Employee
at the Ridgeline Mine may elect on forms provided by the Employer to have
100% of his safety bonus and 100% of his production bonus contributed by
the Employer to the Plan through payroll deduction. Contributions under
this Section 4.1(b) are pre-tax contributions to be credited to the
12
<PAGE>
Participant's Salary Reduction Account.
4.2 ADDITIONAL PAYROLL REDUCTION CONTRIBUTIONS.
(a) A Participant who has elected to have 6% of his
Compensation contributed by the Employer to the Plan under Section 4.1(a)
may elect to have up to an additional 10% of his Compensation contributed
by the Employer to the Plan in increments of 1% through payroll
reductions. Each Participant shall elect on forms provided by the Employer
in increments of l% the percentage of his contributions under this Section
4.2(a) to be credited to his Salary Reduction Account and the percentage
of his contributions to be credited to his Participant Contribution
Account; provided, however, that the salary reduction contribution which
is credited to his Salary Reduction Account under this Section 4.2 may not
exceed 6% of his Compensation.
(b) An Employee at the Ridgeline Mine who has elected to
have 2% of his Compensation contributed by the Employer to the Plan under
Section 4.1(b) may elect on forms provided by the Employer to have up to
an additional 8% of his Compensation contributed by the Employer to the
Plan in increments of 1% through payroll deductions. Contributions under
this Section 4.2(b) shall be credited to the Participant's Salary
Reduction Account.
4.3 MAXIMUM PAYROLL REDUCTION CONTRIBUTION. The maximum amount
which may be contributed to the Plan by a Participant on a pre-tax basis in any
calendar year is limited to
13
<PAGE>
$7,000 (or such higher amount determined under Section 402(g) of the Code). If a
Participant's pre-tax contributions reach this maximum, the Plan Administrator
shall credit subsequent contributions to the Participant's Participant
Contribution Account for the remainder of the calendar year.
4.4 EMPLOYER CONTRIBUTIONS.
(a) The Employer will contribute to the trust which funds
the Plan an amount equal to 100% of the amount by which each Participant
elects to have his Compensation reduced under Section 4.1(a). In the case
of a Participant whose contributions under Section 4.1(a) are stopped
during a Plan Year because of the limitation in Section 4.3, Employer
matching contributions for the pay period in which such contributions
cease and subsequent pay periods during such Plan Year shall equal the
difference between (1) and (2) below:
(1) The lesser of 6% of his Compensation for the
Plan Year or the amount of his contributions for the Plan Year
under Sections 4.1 and 4.2, reduced by
(2) Company matching contributions contributed on
his behalf for any previous pay period during the Plan Year.
(b) The Employer will contribute to the trust which funds
the Plan on behalf of each Participant who is an Employee at the Ridgeline
Mine an amount equal to:
14
<PAGE>
(1) 100% of the amount, excluding safety bonuses and
production bonuses, by which such Participant elects to have his
Compensation reduced under Section 4.1(b) plus
(2) 1% of Compensation.
The Employer will contribute to the trust which funds the Plan on behalf of each
Participant who is an Employee at the Ridgeline Mine an amount equal to:
(1) 100% of the amount by which such Participant
elects to have his Compensation reduced under Section 4.1(b), plus
(2) 1% of Compensation.
4.5 ELECTIONS. Each election by a Participant under Sections
4.1 and 4.2 shall be effective until suspended or amended. Each election shall
be effective only when made on a form prescribed by the Plan Administrator and
filed with the Employer.
4.6 CHANGES IN AND SUSPENSION OF CONTRIBUTIONS.
(a) CHANGES IN CONTRIBUTIONS. Each Participant's
contribution percentage under Sections 4.1 and 4.2 shall continue in
effect until the Participant shall change such percentage. A Participant
may in his discretion change such percentage in accordance with procedures
prescribed by the Company.
(b) (1) SUSPENSION OF PAYROLL REDUCTIONS. A Participant
may at any time suspend his contributions
15
<PAGE>
for a period of not less than three months by giving notice to the
Employer in accordance with rules prescribed by the Company.
(2) SUSPENSION OF PAYROLL REDUCTIONS DURING GOVERNMENT
OR MILITARY SERVICE. Suspension of a Participant's contributions
shall be permitted during any period of military service, or of
government service approved by the Employer, regardless of the
duration of such period.
(3) RESUMPTION OF PAYROLL REDUCTIONS AFTER SUSPENSION.
A Participant who has suspended his contributions under Section
4.6(b)(1) may resume them by giving notice to the Employer in
accordance with rules prescribed by the Company.
4.7 TAX DEDUCTIONS. All Employer contributions are made
conditioned upon their deductibility for federal income tax purposes under
Section 404 of the Code. Amounts contributed by an Employer shall be returned to
the Employer from the Plan by the Trustee under the following circumstances:
(a) If a contribution was made by an Employer by a mistake
of fact, the excess of the amount of such contribution over the amount
that would have been contributed had there been no mistake of fact shall
be returned to the Employer within one year after the payment of the
contribution; and
16
<PAGE>
(b) If an Employer makes a contribution which is not
deductible under Section 404 of the Code, such contribution (but only to
the extent disallowed) shall be returned to the Employer within one year
after the disallowance of the deduction.
Earnings attributable to the contribution shall not be returned to
the Employer, but losses attributable to such excess contribution shall be
deducted from the amount to be returned. In the event (a) or (b) above apply,
the Employer will distribute any salary reduction amounts (less any losses) to
the Employees who elected to reduce their salary by such amounts.
4.8 ROLLOVER CONTRIBUTIONS AND TRANSFERS. The Plan Administrator
may direct the Trustee to accept on behalf of an Employee any cash or other
assets the receipt of which would constitute an eligible rollover contribution
as defined in Section 402(c)(4) of the Code. Only rollovers from Qualified Plans
will be accepted. The Plan Administrator may also direct the Trustee to accept
from the trustee of another Qualified Plan a direct transfer of cash or other
assets which does not constitute an eligible rollover contribution.
Notwithstanding the preceding sentence, the Trustee may not accept the direct
transfer of any assets from any Qualified Plan which does not constitute an
eligible rollover contribution and which would cause the Plan to be subject to
the requirements of Section 401(a)(11) of the Code. Any contributions under this
Section shall be fully vested at all times and shall be
17
<PAGE>
segregated in a Rollover Account which will not share in allocations of
contributions or forfeitures under Section 4.4. Such amounts shall not be
considered as a contribution by a Participant for purposes of Section 4.1, 4.2,
or 19.11 hereof.
4.9 PAYMENT OF CONTRIBUTIONS. All contributions shall be
forwarded by the Employer to the Trustee as soon as possible following the end
of each pay period. All such payments shall be credited to the accounts of each
Participant on the records maintained by the Employer.
18
<PAGE>
SECTION 5
DISTRIBUTIONS OF EXCESS AMOUNTS
5.1 DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS. If a Participant's
Elective Deferrals (as defined in Section 5.5(g)) for any calendar year exceed
$7,000 (or such higher amount determined under Section 402(g) of the Code), then
the Participant may file an election form with the Employer designating in
writing the amount of such excess Elective Deferrals to be distributed from this
Plan. Any such election form must be filed with the Employer no later than the
first March 1 following the close of such calendar year in order for the
Employer to act on it. If such an election form is timely filed, the Trustee
shall distribute to the Participant the amount of such excess Elective Deferrals
which the Participant has allocated to this Plan together with any income or
less any loss allocable to such amount on or before the first April 15 following
the close of such calendar year.
5.2 LIMITATIONS ON PRE-TAX CONTRIBUTIONS FOR HIGHLY COMPENSATED
EMPLOYEES. The Plan Administrator is authorized to reduce to the extent
necessary the maximum deferral percentage under Sections 4.1 and 4.2 for Highly
Compensated Employees (as defined in Section 5.5(k)) prior to the close of the
Plan Year if the Plan Administrator reasonably believes that such reduction is
necessary to prevent the Plan from failing both tests in Section 5.2(a). Such
adjustments shall be made in accordance with rules prescribed by the Plan
Administrator.
19
<PAGE>
(a) ACTUAL DEFERRAL PERCENTAGE TESTS.
(1) The Plan satisfies this subparagraph if the Actual
Deferral Percentage (as defined in Section 5.5(b)) for the group of
Highly Compensated Employees is not greater than 125% of the Actual
Deferral Percentage for the group of Non-Highly Compensated
Employees (as defined in Section 5.5(n)).
(2) The Plan satisfies this subparagraph if:
(i) the excess of the Actual Deferral Percentage
for the group of Highly Compensated Employees over the Actual
Deferral Percentage for the group of Non-Highly Compensated
Employees is not more than two percentage points, and
(ii) the Actual Deferral Percentage for the group of
Highly Compensated Employees is not more than twice the Actual
Deferral Percentage of Non-Highly
Compensated Employees.
(b) DISTRIBUTIONS OF EXCESS CONTRIBUTIONS. If for any Plan
Year the Plan satisfies neither of the tests set forth in Section 5.2(a),
the Trustee shall return to each Highly Compensated Employee his portion
of the Excess Contributions (as defined in Section 5.5(i)) (plus the
income or less the loss allocable to such Excess Contributions) for such
Plan Year within 12 months after the last day of such Plan Year. If such
Excess Contributions are not returned within the first two and one-half
months
20
<PAGE>
after the last day of such Plan Year, the Employer shall timely file with
respect to any and all tax liability arising for failure to timely
distribute the Excess Contributions. The portion of each Highly
Compensated Employee's Excess Contributions for a Plan Year shall be
determined by reducing the pre-tax contributions made on behalf of Highly
Compensated Employees in a manner such that those Highly Compensated
Employees with the highest Actual Deferral Percentages shall each have
their pre-tax contributions reduced to the extent necessary but not below
the next highest level of Actual Deferral Percentages and then those
Highly Compensated Employees with Actual Deferral Percentages greater than
or equal to this level shall each have their pre-tax contributions reduced
(or further reduced, as the case may be) to the extent necessary but not
below the next highest level of Actual Deferral Percentages, and this
reduction process shall continue through each successively lower level of
Actual Deferral Percentages until the Actual Deferral Percentage for the
group of Highly Compensated Employees satisfies one of the tests set forth
in Section 5.2(a). Excess Contributions shall be allocated to Participants
who are subject to the family member aggregation rules of Section
414(q)(6) of the Code in the manner prescribed by the regulations.
(c) COORDINATION WITH DISTRIBUTIONS OF ELECTIVE DEFERRALS.
If the Trustee is required to distribute both
21
<PAGE>
Elective Deferrals and Excess Contributions for a Plan Year, the Trustee
shall:
(1) calculate and distribute the Elective Deferrals
before determining the Excess Contributions to be distributed to
Highly Compensated Employees;
(2) calculate the Average Deferral Percentage in
accordance with Section 5.5(b) including the amount of excess
Elective Deferrals distributed pursuant to (1) above; and
(3) distribute Excess Contributions to Participants by
reducing the Excess Contributions distributed to a Participant by
the amount of excess Elective Deferrals distributed to such
Participant.
(d) ELECTION TO MAKE ADDITIONAL EMPLOYER CONTRIBUTIONS.
Notwithstanding (b) and (c) above, the Employer may elect, in lieu of the
distribution described in (b) above, to make additional Qualified
Nonelective Contributions (as defined in Section 5.5(p)) or Qualified
Matching Contributions (as defined in Section 5.5(o)) which are treated as
Elective Deferrals under the Plan and that, in combination with the
Elective Deferrals satisfies the Actual Deferral Percentage test set forth
in Section 5.2(a) above. Any such additional Qualified Nonelective
Contributions or Qualified Matching Contributions will be credited to the
Participants' Salary Reduction Account.
22
<PAGE>
5.3 LIMITATIONS ON AFTER-TAX AND MATCHING CONTRIBUTIONS FOR HIGHLY
COMPENSATED EMPLOYEES. The Plan Administrator is authorized to reduce to the
extent necessary the maximum amount of after-tax contributions and matching
contributions contributed by or on behalf of any Highly Compensated Employee
prior to the close of the Plan Year if the Plan Administrator reasonably
believes that such reduction is necessary to prevent the Plan from failing both
tests in Section 5.3(a). Such reduction shall be made in accordance with rules
prescribed by the Plan Administrator.
(a) ACTUAL CONTRIBUTION PERCENTAGE TEST
(1) The Plan satisfies this subparagraph if the Actual
Contribution Percentage (as defined in Section 5.5(a)) for the group
of Highly Compensated Employees is not greater than 125% of the
Actual Contribution Percentage for the group of all Non-Highly
Compensated Employees.
(2) The Plan satisfies this subparagraph if:
(i) the excess of the Actual Contribution Percentage
for the group of Highly Compensated Employees over the Actual
Contribution Percentage for the group of Non-Highly
Compensated Employees is not more than two percentage points,
and
(ii) the Actual Contribution Percentage for the group
of Highly Compensated Employees is not more than twice the
Actual Contribution
23
<PAGE>
Percentage of Non-Highly Compensated Employees.
(b) DISTRIBUTION OF AFTER-TAX AND MATCHING CONTRIBUTIONS OR
FORFEITURE OF MATCHING CONTRIBUTIONS IF TESTS ARE FAILED. If for any Plan
Year the Plan fails to satisfy either of the tests set forth in Section
5.3(a), the Trustee shall return to each Highly Compensated Employee his
portion of the Excess Aggregate Contributions (as defined in Section
5.5(h)) (plus the income or less the losses allocable to such Excess
Aggregate Contributions) for such Plan Year within 12 months after the
last day of such Plan Year. If such Excess Aggregate Contributions are not
returned within the first two and one-half months after the last day of
such Plan Year, the Employer shall timely file with respect to any and all
tax liability arising for failure to timely distribute the Excess
Aggregate Contributions. The portion of each Highly Compensated Employee's
Excess Aggregate Contributions for a Plan Year which shall be distributed
or forfeited shall be determined by reducing the after-tax or matching
contributions made by or on behalf of Highly Compensated Employees in a
manner such that those Highly Compensated Employees with the highest
Actual Contribution Percentages shall each have the after-tax and matching
contributions made by them or on their behalf reduced to the extent
necessary but not below the next highest level of Actual Contribution
Percentages and then those Highly Compensated Employees with Actual
24
<PAGE>
Contribution Percentages greater than or equal to this level shall each
have the after-tax and matching contributions made by them or on their
behalf reduced (or further reduced, as the case may be) to the extent
necessary but not below the next highest level of Actual Contribution
Percentages, and this reduction process shall continue through each
successively lower level of Actual Contribution Percentages until the
Actual Contribution Percentage for the group of Highly Compensated
Employees satisfies one of the tests set forth in Section 5.3(a). Excess
Aggregate Contributions shall be allocated to Participants who are subject
to the family member aggregation rules of Section 414(q)(6) of the Code in
the manner prescribed by the regulations.
(c) ELECTION TO MAKE ADDITIONAL EMPLOYER CONTRIBUTIONS.
Notwithstanding (b) above, the Employer may elect, in lieu of the
distribution described in (b) above, to make an additional Qualified
Nonelective Contribution that, in combination with the Matching
Contributions (as defined in Section 5.5(l)) and after-tax contributions
for the Plan Year, satisfies the Actual Contribution Percentage test set
forth in Section 5.3(a) above. Any such additional Qualified Nonelective
Contributions will be credited to the Participants' Salary Reduction
Account.
5.4 LIMITATIONS ON MULTIPLE USE OF ALTERNATIVE LIMITATION:
25
<PAGE>
(a) DETERMINATION OF MULTIPLE USE. Each Plan Year the Plan
Administrator will determine whether or not multiple use of the
Alternative Limitation (as defined in Section 5.5(e)) has occurred. Such
determination will be made in accordance with Section 401(m)(9) of the
Code.
(b) CORRECTION OF MULTIPLE USE. If a multiple use of the
Alternative Limitation occurs, the Plan Administrator shall correct such
multiple use by reducing the Actual Contribution Percentages of Highly
Compensated Employees in the manner set forth in Section 5.3(b) so that
there is no multiple use of the Alternative Limitation.
5.5 DEFINITIONS AND SPECIAL RULES. For purposes of this
Section 5:
(a) The Actual Contribution Percentage for a group for a
Plan Year means the average of the ratios (calculated separately for
each Employee in the group) of:
(1) the total amount of matching contributions
credited to the Employee's Company Match Account pursuant to Section
4.4 for the Plan Year, plus the total amount of after-tax
contributions credited to the Employee's Participant Contribution
Account pursuant to Sections 4.1 and 4.2 for the Plan Year, plus any
Qualified Nonelective Contributions (as defined in Section 5.5(p))
and Elective Deferrals which the Employer elects to treat as
matching contributions in accordance with Section 5.7 to
(2) the Employee's Compensation for the portion of
such Plan Year while the individual is an Employee.
The Actual Contribution Percentage for each group will be calculated
to the nearest 100th of 1% of the Employee's Compensation.
(b) The Actual Deferral Percentage for a group for a Plan
Year means the average of the ratios (calculated separately for each
Employee in the group) of:
(1) the total amount of contributions credited to the
Employee's Salary Reduction Account for the Plan Year plus any
Qualified Nonelective Contributions (as defined in Section 5.5(p))
and Qualified Matching Contributions (as defined in Section 5.5(o))
which the Employer elects to treat as Elective Deferrals in
accordance with Section 5.6 to
26
<PAGE>
(2) the Employee's Compensation for the portion of
such Plan Year while the individual is an Employee.
The Actual Deferral Percentage for each group will be calculated to
the nearest 100th of 1% of the Employee's Compensation.
(c) For purposes of determining the Actual Contribution
Percentage of a Highly Compensated Employee who is subject to the family
aggregation rules of Section 414(q)(6) of the Code, the combined Actual
Contribution
27
<PAGE>
Percentage of the family group (which is treated as one Highly Compensated
Employee) shall be the Actual Contribution Percentage determined by
combining the Compensation, after-tax contributions, Matching
Contributions and amounts treated as Matching Contributions of all Family
Members (as defined in Section 5.5(j)). The Compensation, after-tax
contributions, Matching Contributions and amounts treated as Matching
Contributions of all Family Members who are Non-Highly Compensated
Employees shall be disregarded in determining the Actual Contribution
Percentage for Non-Highly Compensated Employees.
(d) For purposes of determining the Actual Deferral
Percentage of a Highly Compensated Employee who is subject to the
family aggregation rules of Section 414(q)(6) of the Code, the
combined Actual Deferral Percentage of the family group (which is
treated as one Highly Compensated Employee) shall be the Actual
Deferral Percentage determined by combining the Compensation,
Elective Deferrals and amounts treated as Elective Deferrals of all
Family Members (as defined in Section 5.5(j)). The Compensation,
Elective Deferrals and amounts treated as Elective Deferrals of
Family Members who are Non-Highly Compensated Employees shall be
disregarded in determining the Actual Deferral Percentage for
Non-Highly Compensated Employees.
28
<PAGE>
(e) Alternative Limitation means the alternative methods of
compliance with Sections 401(k)(3)(A)(ii)(II) and 401(m)(2)(A)(ii) of the
Code as set forth in Sections 5.2(a)(2) and 5.3(a)(2) respectively.
(f) For purposes of determining whether the Plan prevents
the multiple use of the Alternative Limitation the following shall
apply:
(1) The Actual Deferral Percentage of the group of
Highly Compensated Employees shall be determined after the
Employer's election, if any, to treat certain Qualified Nonelective
Contributions and Qualified Matching Contributions as Elective
Deferrals in accordance with Section 5.6;
(2) The Actual Contribution Percentage of the group
of Highly Compensated Employees shall be determined after the
Employer's election, if any, to treat certain Qualified Nonelective
Contributions and Elective Deferrals as Matching Contributions in
accordance with Section 5.7; provided that the use of Elective
Deferrals to meet the Actual Contribution Percentage is limited to
the amount necessary to meet the requirements set forth in Section
5.3(a)(2); and
(3) The Actual Deferral Percentage and Actual
Contribution Percentage of the group of Highly Compensated Employees
shall be determined after any corrective distribution of excess
Elective Deferrals,
29
<PAGE>
Excess Contributions and Excess Aggregate Contributions.
(g) The Elective Deferrals for a calendar year mean the sum
of any salary reduction amounts for the Plan Year which relate to
Compensation that would have been received in the Plan Year but for
the election to defer and which are pre-tax or deductible
contributions under:
(1) a qualified cash or deferred arrangement as
defined in Section 401(k) of the Code;
(2) a simplified employee pension as defined in
Section 408(k) of the Code;
(3) a plan under which such salary reduction amounts
are used to purchase an annuity contract under Section 403(b) of
the Code.
(4) any plan described in Section 501(c)(18) of the
Code.
(h) The Excess Aggregate Contributions for a Plan Year means
the excess of the aggregate amount of matching contributions under Section
4.4 made on behalf of Highly Compensated Employees for such Plan Year plus
the aggregate amount of after-tax contributions under Sections 4.1 and 4.2
made by Highly Compensated Employees for such Plan Year over the maximum
amount of such contributions which could have been made for such Plan Year
without causing the Plan to fail both the tests in Section 5.3(a).
30
<PAGE>
(i) The Excess Contributions for a Plan Year means the
excess of the aggregate amount of pre-tax contributions under
Sections 4.1 and 4.2 made on behalf of Highly Compensated Employees
for such Plan Year over the maximum amount of such contributions
which could have been made for such Plan Year without causing the
Plan to fail both the tests in Section 5.2(a).
(j) Family Member means with respect to a Plan Year any
individual who at any time during such Plan Year bears one of the
following relationships to a Five Percent Owner or to one of the ten
Highly Compensated Employees paid the greatest Compensation during such
Plan Year:
(1) Spouse;
(2) Lineal ascendant;
(3) Lineal descendant;
(4) The spouse of a lineal ascendant; or
(5) The spouse of a lineal descendant.
(k) Highly Compensated Employee means any Employee who is a
"highly compensated employee" of the Employer as defined in Section 414(q)
of the Code and is eligible to participate in the Plan.
(l) Matching Contributions means:
(1) Any Employer contribution made to a Qualified
Plan on account of an Employee contribution to a Qualified Plan
maintained by the Employer;
31
<PAGE>
(2) Any Employer contribution made to a Qualified
Plan on account of an Elective Deferral to a Qualified Plan
maintained by the Employer;
(3) Any discretionary Employer contribution that is
allocated to Participants on account of an Employee contribution or
Elective Deferral to a Qualified Plan maintained by the Employer;
and
(4) Any forfeiture allocated on the basis of
Employee contributions, Matching Contributions or Elective
Deferrals.
(m) Nonelective Contributions means Employer contributions
(other than Matching Contributions) made to a Qualified Plan maintained by
the Employer which the Employee may not elect to have paid to him in cash
or other benefits in lieu of being contributed to such Qualified Plan.
(n) Non-Highly Compensated Employee means any Employee who
is not a Highly Compensated Employee and is not a Family Member but who is
eligible to participate in the Plan.
(o) Qualified Matching Contributions means any Employer
Contribution made on account of an Employee's Elective Deferral; provided
that:
(1) such contributions are 100% vested and
nonforfeitable when made; and
(2) such contributions are not distributable to a
Participant or his beneficiaries earlier than:
32
<PAGE>
(A) The Participant's retirement, death,
disability or separation from service.
(B) The Participant's attainment of age 59-1/2.
(C) One of the following events:
(i) the termination of the Plan without
the establishment, within the 12-month period after the
distribution of all of the assets of the Plan, or maintenance
of another defined contribution plan other than an employee
stock ownership plan as defined in Section 4975(e)(7) of the
Code or a simplified employee pension plan as defined in
Section 408(k) of the Code; provided, however, that if fewer
than two percent of the Participants of the Plan at the time
of termination are eligible under another defined contribution
plan at any time during the 24-month period beginning 12
months before the time of the termination, such other defined
contribution plan will not be considered to be a successor
plan;
(ii) the disposition of ubstantially all
the assets (within the meaning of Section 409(d)(2) of
the Code) used in a trade or business with respect to a
33
<PAGE>
Participant who continues employment with the unrelated
corporation acquiring such assets;
(iii) the disposition of the interest in a
subsidiary (within the meaning of Section 409(d)(3) of
the Code) with respect to a Participant who continues
employment with such subsidiary.
Notwithstanding the foregoing, an event shall not
be treated as an event described in (i), (ii) or (iii) above
with respect to any Participant unless he receives a lump sum
distribution (as defined in Section 402(e)(4) of the Code
without regard to clauses (i), (ii), (iii) and (iv) of
subparagraph (A), subparagraph (B) or subparagraph (H)
thereof); and an event shall not be treated as an event
described in (ii) or (iii) above unless the transferor
continues to maintain the Plan.
(p) Qualified Nonelective Contributions means any Employer
Contribution other than a Matching Contribution; provided that:
(1) such contributions are 100% vested and
nonforfeitable when made; and
(2) such contributions are not distributable to a
Participant or his beneficiaries earlier than:
34
<PAGE>
(A) The Participant's retirement, death,
disability or separation from service.
(B) The Participant's attainment of age 59-1/2.
(C) One of the following events:
(i) the termination of the Plan without the
establishment, within the 12-month period after the
distribution of all of the assets of the Plan, or
maintenance of another defined contribution plan other
than an employee stock ownership plan as defined in
Section 4975(e)(7) of the Code or a simplified employee
pension plan as defined in Section 408(k) of the Code;
provided, however, that if fewer than two percent of the
Participants of the Plan at the time of termination are
eligible under another defined contribution plan at any
time during the 24-month period beginning 12 months
before the time of the termination, such other defined
contribution plan will not be considered to be a
successor plan;
(ii) the disposition of substantially all
the assets (within the meaning of Section 409(d)(2) of
the Code) used in a trade or business with respect to a
35
<PAGE>
Participant who continues employment with the unrelated
corporation acquiring such assets;
(iii) the disposition of the interest in a
subsidiary (within the meaning of Section 409(d)(3) of
the Code) with respect to a Participant who continues
employment with such subsidiary.
Notwithstanding the foregoing, an event shall not
be treated as an event described in (i), (ii) or (iii) above
with respect to any Participant unless he receives a lump sum
distribution (as defined in Section 402(e)(4) of the Code
without regard to clauses (i), (ii), (iii) and (iv) of
subparagraph (A), subparagraph (B) or subparagraph (H)
thereof); and an event shall not be treated as an event
described in (ii) or (iii) above unless the transferor
continues to maintain the Plan.
5.6 ELECTION TO TREAT QUALIFIED NONELECTIVE CONTRIBUTIONS AND
QUALIFIED MATCHING CONTRIBUTIONS AS ELECTIVE DEFERRALS. Notwithstanding anything
to the contrary, the Employer may elect to treat all or part of the Qualified
Nonelective Contributions and Qualified Matching Contributions as Elective
Deferrals provided that each of the following is satisfied:
36
<PAGE>
(a) The Nonelective Contributions including Qualified
Nonelective Contributions treated as Elective Deferrals for purposes of
calculating the Actual Deferral Percentage satisfy the requirements of
Section 401(a)(4) of the Code;
(b) The Nonelective Contributions excluding:
(i) Qualified Nonelective Contributions treated as
Elective Deferrals for purposes of calculating the Actual Deferral
Percentage; and
(ii) Qualified Nonelective Contributions treated as
Matching Contributions for purposes of calculating the Actual
Contribution Percentage satisfy the requirements of Section
401(a)(4) of the Code;
(c) The Qualified Nonelective Contributions and Qualified
Matching Contributions for a Plan Year are allocated to Participants as
of a date within that Plan Year;
(d) The Qualified Nonelective Contributions and Qualified
Matching Contributions for a Plan Year relate to Compensation that would
have been received by the Employee in the Plan Year but for the Employee's
election to defer;
(e) If the Qualified Nonelective Contributions or Qualified
Matching Contributions are made to another plan or plans, this Plan and
such other plan(s) must be aggregated for purposes of Section 410(b) of
the Code (other than the
37
<PAGE>
average benefit percentage test); and
(f) The Qualified Nonelective Contributions and Qualified
Matching Contributions for a Plan Year are allocated to Participants as
of a date within that Plan Year.
5.7 ELECTION TO TREAT QUALIFIED NONELECTIVE CONTRIBUTIONS AND
ELECTIVE DEFERRALS AS MATCHING CONTRIBUTIONS. Notwithstanding anything to the
contrary, the Employer may elect to treat all or part of the Qualified
Nonelective Contributions and Elective Deferrals as Matching Contributions
provided that each of the following is satisfied:
(a) The Nonelective Contributions including Qualified
Nonelective Contributions treated as Matching Contributions for purposes
of calculating the Actual Contribution Percentage satisfy the requirements
of Section 401(a)(4) of the Code;
(b) The Nonelective Contributions excluding:
(i) Qualified Nonelective Contributions treated as
Matching Contributions for purposes of calculating the Actual
Contribution Percentage; and
(ii) Qualified Nonelective Contributions treated as
Elective Deferrals for purposes of calculating the Actual Deferral
Percentage satisfy the requirements of Section 401(a)(4) of the
Code;
(c) The Elective Deferrals including the Elective Deferrals
treated as Matching Contributions for purposes of
38
<PAGE>
calculating the Actual Contribution Percentage satisfy the requirements
of Section 401(k)(3) of the Code;
(d) The Qualified Nonelective Contributions for a Plan Year
are allocated to Participants as of a date within that Plan Year;
(e) The Qualified Nonelective Contributions and Qualified
Matching Contributions for a Plan Year relate to Compensation that would
have been received by the Employee in the Plan Year but for the Employee's
election to defer; and
(f) If Qualified Nonelective Contributions and Elective
Deferrals are made to another plan or plan(s), this Plan and such other
plan(s) must be aggregated for purposes of Section 410(b) of the Code
(other than the average benefit percentage test).
39
<PAGE>
SECTION 6
WITHDRAWALS AND LOANS
6.1 WITHDRAWALS.
(a) PARTICIPANT CONTRIBUTION ACCOUNT AND ROLLOVER ACCOUNT.
An Employee (other than an Employee of Paint Creek Terminals, Inc.) who
has been a Participant in the Plan for more than one year may withdraw all
or part of his Participant Contribution Account. An Employee may withdraw
all or any part of his Rollover Account.
(b) COMPANY MATCH ACCOUNT. An Employee (other than an
Employee of Paint Creek Terminals, Inc.) who has been a Participant in the
Plan for more than sixty (60) months may withdraw all or part of his
Company Match Account (and earnings thereon).
(c) PRE-TAX CONTRIBUTIONS. A Participant in the employment
of the Employer may withdraw up to an amount equal to his pre-tax
contributions to the Plan (but not the earnings credited after December
31, 1988, on such pre-tax contributions) upon his attainment of age 59-1/2
or upon a showing of substantial hardship to the Plan Administrator. The
Plan Administrator will grant a distribution on account of hardship only
if the distribution is made on account of an immediate and heavy financial
need of the Participant and is necessary to satisfy such financial need.
The determination of the existence of an immediate and heavy financial
need and of the amount necessary to meet the need
40
<PAGE>
must be made in accordance with nondiscriminatory and objective standards
on the basis of all relevant facts and circumstances. A distribution will
be deemed to be made on account of an immediate and heavy financial need
of the Participant only if the distribution is on account of:
(1) expenses for medical care described in Section
213(d) of the Code previously incurred by the Participant, the
Participant's spouse or any of the Participant's dependents (as
defined in Section 152 of the Code) or necessary for these persons
to obtain medical care described in Section 213(d) of the Code;
(2) costs directly related to the purchase (excluding
mortgage payments) of a principal residence of the Participant;
(3) the payment of tuition and related educational
fees (excluding expenses for room and board) for the next 12 months
of post-secondary education for the Participant, the Participant's
spouse, or the Participant's children or dependents (as defined in
Section 152 of the Code); or
(4) payments necessary to prevent the eviction of the
Participant from his principal residence or foreclosure on the
mortgage of the Participant's principal residence.
A distribution will not be treated as necessary to satisfy an immediate and
heavy financial need of a Participant to the extent
41
<PAGE>
the amount of the distribution is in excess of the amount required to relieve
the financial need or to the extent such need may be satisfied from other
resources that are reasonably available to the Participant. A hardship
withdrawal will be granted only if no loans or other distributions are available
under this Plan.
(d) PENALTY FOR HARDSHIP WITHDRAWALS. A Participant who
receives a hardship withdrawal will be unable to make pre-tax or after-tax
contributions to the Plan or any other Qualified Plan maintained by the
Controlled Group for a period of twelve months after the Valuation Date as
of which the hardship distribution is made. Moreover, the maximum amount
of a Participant's pre-tax contributions to the Plan or any other
Qualified Plan maintained by the Controlled Group for the calendar year
following the calendar year of the hardship withdrawal may not exceed
$9,240 (or such higher amount determined under Section 402(g) of the Code)
reduced by the amount of such Participant's pre-tax contributions for the
calendar year of the hardship withdrawal.
(e) SUBMISSION OF WITHDRAWAL APPLICATIONS. An application
for a withdrawal must be made on forms prescribed by the Plan
Administrator.
(f) ORDER OF INVESTMENT LIQUIDATION. The amount of each fund
to be liquidated to provide the proceeds for any withdrawal shall be equal
to the withdrawal amount
42
<PAGE>
multiplied by the percentage of the Participant's accounts which are
invested in such fund as of the Valuation Date coinciding with or
preceding the date as of which the withdrawal is made.
(g) WITHDRAWAL LIMITS. No withdrawal shall be permitted
under this Section 6.1 if after such withdrawal any loans to the
Participant pursuant to Section 6.2 exceed the value of the Participant's
accounts.
(h) LIMIT ON NUMBER OF WITHDRAWALS. Withdrawals will be
permitted on a quarterly basis.
6.2 LOANS. Upon the application of an Employee (other than an
Employee of Paint Creek Terminals, Inc.) who has been a Participant in the Plan
for at least 12 months, the Plan Administrator, as administrator of the loan
program, in accordance with his uniform nondiscriminatory policy, shall direct
the Trustee to make a loan to the Participant and to direct the Trustee to
distribute the proceeds of the loan to such Participant and accept repayments of
the loan. All loans shall comply with the following terms and conditions:
(a) LOAN APPLICATION. Each application for a loan shall be
made in accordance with rules prescribed by the Company.
(b) LOAN LIMITS. No loan shall be made if immediately
after the loan the unpaid balance of all loans by this Plan and all other
plans maintained by the Controlled Group to the Participant would exceed
the lesser
44
<PAGE>
of
(l) $50,000, or
(2) 50% of the vested portion of the Participant's
accounts under this Plan.
Notwithstanding the foregoing:
(3) the $50,000 limitation in (1) above shall be
reduced by the highest outstanding loan balance for the one-year
period ending on the day before a new loan is made minus the
outstanding balance of existing loans to the Participant on the date
of the new loan.
(c) REPAYMENT PERIOD. A fixed period for repayment of the
loan not in excess of 5 years shall be specified in the loan agreement;
provided, that if the loan is used to acquire any dwelling unit which
within a reasonable time is used as a principal residence of the
Participant, the specified repayment period may not exceed 15 years.
(d) MANNER AND TIMING OF REPAYMENTS. Loans will be repaid
through substantially equal payroll deductions; provided, that a
Participant may at any time prepay a portion of the amount due on any loan
(with a minimum partial prepayment of $1,000) or the entire amount due on
the loan in one lump sum. Upon a Participant's termination of employment,
the entire loan balance shall be in default and shall become due and
payable immediately and shall be
45
<PAGE>
set off against the Participant's account balance at the time and in the
manner prescribed by the Company if repayment has not previously been
made. Notwithstanding the preceding, a loan balance held by a Participant
who is employed as of January 30, 1995 by R & H Service and Supply Company
shall not be in default on and after such date provided such Participant
repays the balance of the loan in accordance with rules prescribed by the
Company.
(e) SECURITY. Each loan shall be secured by assignment of
the Participant's accounts in the Plan and by the Participant's collateral
promissory note for the amount of the loan, including interest thereon,
payable to the order of the Trustee.
(f) INTEREST. Each loan shall bear a reasonable rate of
interest equal to the prime rate of interest quoted in the Wall Street
Journal on the first day of the month in which the loan is made.
(g) SEGREGATED INVESTMENT. Any loan made to a Participant
shall be treated as a segregated investment of his account.
(h) ORDER OF INVESTMENT LIQUIDATION. Loan amounts will be
obtained from a Participant's Salary Reduction, Retirement Medical,
Target, Company Match, Rollover and Participant Contribution Accounts, in
that order. Amounts invested in various investment funds within an account
will be reduced proportionately to provide the
46
<PAGE>
proceeds for the loan.
(i) INVESTMENT OF LOAN REPAYMENTS. As the Participant's loan
is repaid,
(1) amounts shall be returned to accounts in the
reverse order specified in Section (h);
(2) the amount of the repayments shall be invested in
the Funds according to the Participant's designation in effect under
Section 7.1 as of the date such repayments are made; and
(3) the amount of the repayments will share in the
allocation of earnings and losses in accordance with Section 8.2 as
if such repayments were a contribution to the Plan.
(j) ADDITIONAL LIMITATIONS. The minimum loan amount is $500.
A Participant may borrow money under this Section not more than once in
any calendar quarter, and may have no more than six loans outstanding at
any given time.
(k) LOANS AVAILABLE TO PARTIES-IN-INTEREST. Notwithstanding
anything in this Section to the contrary, loans shall be available to a
Participant who is a party-in-interest to the Plan as defined in Section
3(14) of the Employee Retirement Income Security Act of 1974, as amended,
even if such Participant is no longer an Employee.
(l) DEFAULT. Generally, a default shall occur upon the
failure of a Participant to timely remit payments under the loan when due.
In such event, the Trustee shall
47
<PAGE>
take such reasonable actions which a prudent fiduciary in like
circumstances would take to protect and preserve Plan assets, including
foreclosing on any collateral and commencing such other legal action for
collection which the Trustee deems necessary and advisable. However, the
Trustee shall not be required to commence such actions immediately upon a
default. Instead, the Trustee may grant the Participant reasonable rights
to cure any default, provided such actions would constitute a prudent and
reasonable course of conduct for a professional lender in like
circumstances. In addition, if no risk of loss of principal or income
would result to the Plan, the Trustee may choose, in its discretion, to
defer enforcement proceedings. If the qualified status of the Plan is not
jeopardized, the Trustee and the Committee may treat a loan that has been
defaulted upon and not cured within a reasonable period of time as a
deemed distribution from the Plan.
<PAGE>
SECTION 7
INVESTMENT OF ACCOUNTS
7.1 PARTICIPANT'S SELECTION OF INVESTMENT FUND. Each Participant
may, at any time or from time to time, in accordance with rules and limitations
prescribed by the Company, designate the manner in which his accounts shall be
invested among the Arch Coal Stock Fund or the INVESCO mutual funds which are
made available by the Company as investment choices.
7.2 CHANGES IN INVESTMENT DIRECTION. Any investment direction
by a Participant may be changed in such manner and at such times as may be
permitted by the Company.
7.3 TRANSFERS BETWEEN FUNDS. A Participant may transfer funds
from one investment option to another at such times and in accordance with such
rules as may be established by the Company and INVESCO.
48
<PAGE>
7.4 PARTICIPANT'S FAILURE TO SPECIFY INVESTMENT OPTION If a
Participant has not, by written instructions to the Company, directed how the
cash in his accounts shall be invested, then the Company shall, by written
notice to the Participant, request such direction. If, within ten days after the
mailing of such written notice, the Participant does not, by written
instructions to the Company, direct how the cash in his accounts shall be
invested, then all contributions of the Participant and the Company shall be
invested in a default fund designated by the Company, until such time as the
Participant directs how his accounts shall be invested.
49
<PAGE>
SECTION 8
ALLOCATION
8.1 ESTABLISHMENT OF ACCOUNTS. The Plan Participant Administrator
shall establish and maintain accounts for each Participant. All pre-tax
contributions made by a Participant pursuant to Sections 4.1 and 4.2 (as well as
any Employer contributions under Sections 5.2(d) and 5.3(c)) shall be credited
to his Salary Reduction Account, all after-tax contributions made by a
Participant pursuant to Sections 4.1 and 4.2 shall be credited to his
Participant Contribution Account, all rollover contributions or direct transfers
pursuant to Section 4.8 shall be credited to his Rollover Account, all Employer
matching contributions pursuant to Section 4.4 shall be credited to his Company
Match Account, all Employer contributions under the Medicine Bow Coal Company
Target Benefit Plan shall be allocated to his Target Account, and all other
Employer contributions shall be allocated to his Retirement Medical Account. The
Trustee shall separately account for an Employee's voluntary contributions made
on or after January 1, 1987 and earnings on those contributions. Withdrawals of
after-tax contributions and earnings on after-tax contributions will be made in
the following order:
a. Pre-1987 after-tax contributions;
b. Post-1986 after-tax contributions and earnings
attributable to post-1986 after-tax contributions; and
50
<PAGE>
c. Earnings on pre-1987 after-tax contributions.
8.2 PURCHASE OF UNITS AND ALLOCATION OF EARNINGS, LOSSES AND
EXPENSES. No Participant shall have an ownership interest in any particular
asset or investment under any investment option. Earnings, losses and expenses
shall be allocated on a daily basis in accordance with INVESCO's standard
procedures.
51
<PAGE>
SECTION 9
DISTRIBUTIONS AT RETIREMENT
9.1 NORMAL RETIREMENT DISTRIBUTIONS. Upon a Participant's
Normal Retirement Date, the Participant's accounts shall become fully vested (if
not already fully vested) and shall be distributed to him in a lump sum within
60 days following the date which is one year after the Participant's Normal
Retirement Date unless the Participant elects on forms prescribed by the Plan
Administrator to receive distribution on an earlier date after his Normal
Retirement Date, in which event distribution shall be made within 60 days after
the election form is received by the Plan Administrator in the St. Louis office.
9.2 EARLY RETIREMENT DISTRIBUTIONS. Upon a Participant's Early
Retirement Date, the Participant's accounts shall become fully vested (if not
already fully vested), and shall be distributed to him in a lump sum in
accordance with Sections 9.2(a), (b), or (c) below.
(a) DISTRIBUTIONS OF $3,500 OR LESS. Distribution to a
Participant who terminates employment at his Early Retirement Date and
whose vested account balances do not exceed $3,500 shall be made within 60
days following the date which is one year after the Participant's Early
Retirement Date unless the Participant elects on forms prescribed by the
Plan Administrator to receive distributions on an earlier date after his
Early Retirement Date, in which event distribution shall be made within 60
52
<PAGE>
days after the Valuation Date coinciding with or next following the date
the election form is received by the Plan Administrator in the St. Louis
office.
(b) DISTRIBUTIONS IN EXCESS OF $3,500. In the event that the
vested account balances of a Participant who terminates employment at his
Early Retirement Date exceed $3,500, such Participant shall receive the
notice described in Section 9.5 during the period which is not less than
30 or more than 90 days prior to the date which is one year after the
Participant's Early Retirement Date unless the Participant elects on forms
prescribed by the Plan Administrator to receive distribution on an earlier
date after his Early Retirement Date, in which event the Participant shall
receive the notice as soon as administratively feasible following the date
the election form is received by the Plan Administrator. If the
Participant consents to the distribution of his accounts in the manner
required under Section 9.5 within 60 days after receiving such notice,
distribution of his accounts will be made within 60 days after the
Valuation Date coincident with or next following the later of the date the
Participant consents to the distribution or the date 30 days after the
Participant receives the notice.
(c) FAILURE TO CONSENT TO DISTRIBUTION. In the event that a
Participant whose vested account balances exceed $3,500 does not consent
to the distribution of his
53
<PAGE>
accounts in accordance with Sections 9.2(a) or (c) above when first
eligible to do so, his accounts shall be distributed to him within 60 days
after the Valuation Date coincident with or next following his attainment
of age 65. Notwithstanding the preceding, such Participant may notify the
Employer at any time following his Early Retirement Date that he wants to
receive the notice described in Section 9.5. The Committee shall
distribute such notice as soon as administratively feasible following the
date the request is received by the Plan Administrator. If such
Participant consents to the distribution of his accounts in the manner
required under Section 9.5 within 60 days following the receipt of such
notice, distribution of his accounts will be made within 60 days after the
Valuation Date coincident with or next following the later of the date the
Participant consents to the distribution or the date 30 days after the
Participant receives the notice.
9.3 REQUIRED MINIMUM DISTRIBUTIONS. Notwithstanding anything to
the contrary contained in the Plan, the entire interest of a Participant will be
distributed in accordance with Section 401(a)(9) of the Code and the regulations
thereunder beginning no later than the Participant's Required Beginning Date as
determined under Section 9.4 below. Minimum distributions will be made based on
either (i) the life expectancy of such Employee or (ii) the joint life
expectancies of such Employee and his spouse, as elected in a one-time,
irrevocable election made
54
<PAGE>
by such Employee. For purposes of determining the amount of such minimum
distribution, the Employee's life expectancy (or joint life expectancies, as the
case may be) will be recalculated if so elected in a one-time, irrevocable
election made by such Employee. Notwithstanding the preceding, a Participant may
elect, at any time prior to his Required Beginning Date, to receive the entire
amount of his accounts in a lump sum. If such an election is made, the
Participant will receive, on or before December 31 of each subsequent calendar
year, a lump sum distribution of any subsequent amounts allocated to his
account.
9.4 REQUIRED BEGINNING DATE. The Required Beginning Date of a
Participant who attained age 70-1/2 before January 1, 1988 and who was not a
Five Percent Owner at any time after the first day of the Plan Year in which he
attained age 66-1/2 shall be the April 1 following the calendar year in which he
terminates employment. The Required Beginning Date of any other Participant
shall be the later of April 1, 1990, or the April 1 following the calendar year
in which the Participant attains age 70-1/2.
9.5 NOTIFICATION OF ELIGIBILITY TO RECEIVE AND CONSENT TO EARLY
RETIREMENT BENEFITS. In the event that the amount to be distributed to a
Participant pursuant to Section 9.2 exceeds $3,500, such Participant shall
receive from the Committee a written notification of:
(a) the value of his benefits under the Plan; and
(b) his right, if any, to defer receipt of Early Retirement
benefits.
55
<PAGE>
The Participant's consent to the distribution of disability benefits
must be:
(a) in writing;
(b) made after the Participant receives the notice described
in the preceding sentence; and
(c) made within 90 days before the Valuation Date as of
which distribution to the Participant is to be made.
9.6 WAIVER OF NOTICE. Notwithstanding the provisions of this
Section which require that distribution cannot be made as of a Valuation Date
which occurs less than 30 days after the date the Participant receives the
notice described in Section 9.5, a Participant may waive the 30-day requirement
by returning his distribution election forms before 30 days have elapsed. In
this event distribution will be made within 60 days after the Valuation Date
next following the date the Participant returns his forms.
9.7 DEFERRAL OF DISTRIBUTION. Notwithstanding the provisions of
this Section, a Participant who is entitled to a distribution under Section 9.1
or 9.2 may elect to defer his distribution beyond his Early Retirement Date or
Normal Retirement Date. Such a Participant may withdraw all or any portion of
his vested account balances as of any subsequent Valuation Date. If the
Participant has not withdrawn all of his vested account balances as of his
Required Beginning Date, his accounts will be distributed in accordance with
Section 9.3.
56
<PAGE>
9.8 INSTALLMENT OPTION. Subject to the provisions of Section
9.3, a Participant who has terminated employment and has either (i) completed
ten (10) years of Service and reached age 55, (ii) reached age 65, or (iii)
terminated employment on account of permanent and total disability may elect, on
a form provided by the Plan Administrator, distribution of his accounts in equal
annual, semi-annual or quarterly payments.
An installment payment shall not be less than $500 and shall continue in the
amount and for the frequency elected until the Participant shall change such
election. A Participant may in his discretion change the amount and/or frequency
of his installment payments in accordance with procedures prescribed by the
Company. In the event that a Participant who elects this installment option dies
before the entire amount in his accounts has been distributed, distribution will
be made to such Participant's surviving spouse or designated beneficiary (as
provided in Section 12) in a lump sum.
57
<PAGE>
SECTION 10
DISTRIBUTIONS AT DISABILITY
10.1 DISTRIBUTIONS UPON DISABILITY. If a Participant becomes
permanently and totally disabled while in the employment of the Employer, his
accounts shall become fully vested, and shall be distributed to him in a lump
sum in accordance with Sections 10.1 (a), (b), or (c) below.
(a) DISTRIBUTIONS OF $3,500 OR LESS. Distribution to a
Participant who terminates employment at his Disability Retirement Date
and whose vested account balances do not exceed $3,500 shall be made
within 60 days following the date which is one year after the
Participant's Disability Retirement Date unless the Participant elects on
forms prescribed by the Plan Administrator to receive distribution on an
earlier date after his Disability Retirement Date, in which event
distribution shall be made within 60 days after the Valuation Date
coinciding with or next following the date the election form is received
by the Plan Administrator in the St. Louis office.
(b) DISTRIBUTIONS IN EXCESS OF $3,500. In the event that the
vested account balances of a Participant who terminates employment at his
Disability Retirement Date exceed $3,500, such Participant shall receive
the notice described in Section 10.4 during the period which is not less
than 30 or more than 90 days prior to the date which is one year after the
Participant's Disability Retirement Date
58
<PAGE>
unless the Participant elects on forms prescribed by the Plan
Administrator to receive distribution on an earlier date after his
Disability Retirement Date, in which event the Participant shall receive
the notice as soon as administratively feasible following the date the
election form is received by the Plan Administrator. If the Participant
consents to the distribution of his accounts in the manner required under
Section 10.4 within 60 days after receiving such notice, distribution of
his accounts will be made within 60 days after the Valuation Date
coincident with or next following the later of the date the Participant
consents to the distribution or the date 30 days after the Participant
receives the notice.
(c) FAILURE TO CONSENT TO DISTRIBUTION. In the event that
a Participant whose vested account balances exceed $3,500 does not consent
to the distribution of his accounts in accordance with Sections 10.1(a) or
(c) above when first eligible to do so, his accounts shall be distributed
to him within 60 days after the Valuation Date coinciding with or next
following his attainment of age 65. Notwithstanding the preceding, such
Participant may notify the Employer at any time following his Disability
Retirement Date that he wants to receive the notice described in Section
10.4. The Committee shall distribute such notice as soon as
administratively feasible following the date such request is received by
the Plan Administrator. If such
59
<PAGE>
Participant consents to the distribution of his accounts in the manner
required under Section 10.4 within 60 days following the receipt of such
notice, distribution of his accounts will be made within 60 days after the
Valuation Date coincident with or next following the later of the date the
Participant consents to the distribution or the date 30 days after the
Participant receives the notice.
For purposes of this Section and Sections 11.1 and 12.1, a
Participant who is permanently and totally disabled as described in Section 10.2
while in the employment of the Employer shall be deemed to have terminated such
employment on the date the Plan Administrator determines that he is permanently
and totally disabled.
10.2 DETERMINATION OF DISABILITY. A Participant shall be
considered permanently and totally disabled only if:
(a) he has been totally disabled by bodily injury or
disease so as to be prevented thereby from engaging in any occupation or
employment for remuneration or financial benefit to himself or others, and
(b) such total disability shall have continued for a period
of 6 consecutive months and will, in the opinion of a qualified physician
satisfactory to the Plan Administrator, be permanent and continuous during
the remainder of such Participant's lifetime.
10.3 PURPOSE OF DISABILITY PAYMENTS. The provisions of this
Section of the Plan are intended to serve as an accident or
60
<PAGE>
health plan and payments under this Section constitute payments for the
permanent loss or loss of use of a member or function of the body, or the
permanent disfigurement of a Participant. Any such payments are intended to
qualify for the exclusion from gross income described in Section 105(c) of the
Code.
10.4 NOTIFICATION OF ELIGIBILITY TO RECEIVE AND CONSENT TO
DISABILITY BENEFITS. In the event that the amount to be distributed to a
Participant pursuant to Section 10.1 exceeds $3,500, such Participant shall
receive from the Committee a written notification of:
(a) the value of his benefits under the Plan; and
(b) his right, if any, to defer receipt of disability
benefits.
The Participant's consent to the distribution of disability benefits
must be:
(a) in writing;
(b) made after the Participant receives the notice described
in the preceding sentence; and
(c) made within 90 days before the Valuation Date as of which
distribution to the Participant is to be made.
10.5 WAIVER OF NOTICE. Notwithstanding the provisions of this
Section which require that distribution cannot be made as of a Valuation Date
which occurs less than 30 days after the date the Participant receives the
notice described in Section 10.4, a Participant may waive the 30-day requirement
by returning his distribution election forms before 30 days have elapsed. In
this
61
<PAGE>
event distribution will be made within 60 days after the Valuation Date next
following the date the Participant returns his forms.
10.6 DEFERRAL OF DISTRIBUTION TO REQUIRED BEGINNING DATE.
Notwithstanding the provisions of this Section, a Participant may submit to the
Plan Administrator a written statement, signed by the Participant, which sets
forth a Valuation Date after his Normal Retirement Date but before his Required
Beginning Date as of which his accounts will be paid.
62
<PAGE>
SECTION 11
DISTRIBUTIONS AT TERMINATION OF EMPLOYMENT (VESTING)
11.1 DISTRIBUTIONS UPON TERMINATION OF EMPLOYMENT. A Participant
whose employment with the Employer is terminated prior to the earliest of his
death, Disability Retirement Date or Early or Normal Retirement Date shall
receive a distribution of the vested portion of his accounts in a lump sum in
accordance with Sections 11.1 (a), (b), or (c) below:
(a) DISTRIBUTIONS OF $3,500 OR LESS. Distribution to a
Participant who terminates employment prior to his death, Disability
Retirement Date or Early or Normal Retirement Date and whose vested
account balances do not exceed $3,500 shall be made within 60 days after
the last day of the Plan Year in which he terminates employment, provided
he is not an Employee on such date.
(b) DISTRIBUTIONS IN EXCESS OF $3,500. In the event that
the vested account balances of a Participant who terminates employment
prior to his death, Disability Retirement Date or Early or Normal
Retirement Date exceed $3,500, such Participant shall receive a
distribution of his accounts in a lump sum within 60 days after the
Employee attains age 65.
(c) FAILURE TO CONSENT TO DISTRIBUTION. In the event that
a Participant whose vested account balances exceed $3,500 wishes to
receive distribution of his accounts before age 65, such Participant may
notify the Employer at
63
<PAGE>
any time after his termination that he wants to receive the notice
described in Section 11.5. The Committee shall distribute such notice as
soon as administratively feasible following the date such request is
received by the Plan Administrator. If such Participant consents to the
distribution of his accounts in the manner required under Section 11.5
within 60 days following the receipt of such notice, distribution of his
accounts will be made within 60 days after the Valuation Date coincident
with or next following the later of the date the Participant consents to
the distribution or the date 30 days after the Participant receives the
notice.
11.2 DETERMINATION OF VESTED PORTION.
(a) A Participant's Salary Reduction and Participant
Contribution Account shall be 100% vested and nonforfeitable at all times.
(b) A Participant (other than a Participant described in
Section 11.2(c) below) shall have a vested and nonforfeitable percentage
of his Company Match and Retirement Medical Accounts equal to the greater
of the percentage determined under the following two schedules:
1. YEARS PERCENTAGE OF
OF PARTICIPATION ACCOUNT VESTED
less than 2 0%
2 but less than 3 25%
3 but less than 4 50%
4 but less than 5 75%
5 or more 100%
64
<PAGE>
2. YEARS PERCENTAGE OF
OF SERVICE ACCOUNT VESTED
less than 5 0%
5 or more 100%
(c) A Participant who is an Employee of Paint Creek
Terminals, Inc. shall have a vested and nonforfeitable percentage of his
Company Match and Retirement Medical Accounts determined solely under
schedule 2 above.
(d) All earnings allocated to a Participant's account under
the Plan shall be 100% vested and nonforfeitable at all times.
11.3 FORFEITURES. When a Participant's employment with the
Employer is terminated prior to the earliest of his death, Disability Retirement
Date or Early or Normal Retirement Date and he has either received a
distribution of his entire vested accounts or incurred six consecutive Breaks in
Service, the lesser of the non-vested portion of his accounts or the non-vested
amount of Company Contributions made on behalf of the Participant shall
immediately be forfeited and shall be used to reduce Employer Contributions
otherwise due under Section 4.4. Following such forfeiture, the Participant
shall be 100% vested in the balance, if any, of his accounts.
11.4 BUY-BACK. In the event that a Participant whose accounts
are not 100% vested receives a distribution of his account before he has
suffered five consecutive Breaks in Service, if such Participant is subsequently
rehired before he suffers five consecutive Breaks in Service, the Participant
may,
65
<PAGE>
before the earlier of: (a) the date which is five years after the date the
Participant was reemployed by the Employer; and (b) the date the Participant
suffers a fifth consecutive Break in Service, repay the amount of the
distribution which he previously received as a result of his election under
Section 11.1. When such repayment occurs, the balance of the non-vested portion
of the Participant's accounts as of the date of the Participant's termination of
employment will be restored through an Employer Contribution unadjusted by gains
or losses which occurred subsequent to the Participant's termination of
employment.
11.5 NOTIFICATION OF ELIGIBILITY TO RECEIVE AND CONSENT TO VESTED
BENEFITS. In the event that the amount to be distributed to a Participant
pursuant to Section 11.1 exceeds $3,500, such Participant shall receive a
written notification of:
(a) the value of his benefits under the Plan; and
(b) his right, if any, to defer receipt of vested
benefits.
The Participant's consent to the distribution of the vested portion
of his accounts must be:
(a) in writing;
(b) made after the Participant receives the written notice
described in the preceding sentence; and
(c) made within 90 days before the Valuation Date as of
which distribution to the Participant is to be made.
11.6 WAIVER OF NOTICE. Notwithstanding the provisions of this
Section which require that distribution cannot be made as
66
<PAGE>
of a Valuation Date which occurs less than 30 days after the date the
Participant receives the notice described in Section 11.5, a Participant may
waive the 30-day requirement by returning his distribution election forms before
30 days have elapsed. In this event distribution will be made within 60 days
after the Valuation Date next following the date the Participant returns his
forms.
11.7 DEFERRAL OF DISTRIBUTION TO REQUIRED BEGINNING DATE.
Notwithstanding the provisions of this Section, a Participant may submit to the
Plan Administrator a written statement, signed by the Participant, which sets
forth a Valuation Date after his Normal Retirement Date but before his Required
Beginning Date as of which his accounts will be paid.
67
<PAGE>
SECTION 12
DISTRIBUTIONS AT DEATH
12.1 DISTRIBUTIONS UPON DEATH. Upon the death of a Participant
while in the employment of the Employer, the Participant's accounts shall become
fully vested and shall be distributed in a lump sum to his spouse or
beneficiaries in accordance with Sections 12.2, 12.3 and 12.4 within 90 days
after the Valuation Date coinciding with or next following his date of death.
Upon the death of a Participant after termination of his employment with the
Employer, the vested portion of the Participant's remaining account balances
shall be distributed in a lump sum to his spouse or beneficiaries in accordance
with Sections 12.2, 12.3 and 12.4 within 90 days after the Valuation Date
coinciding with or next following his date of death.
12.2 DISTRIBUTION TO SPOUSE. Upon the death of a Participant, the
entire balance of his accounts shall be distributed to his surviving spouse, if
any, unless the surviving spouse has consented in the manner required under
Section 12.5 to a designated beneficiary and one or more designated
beneficiaries survives the Participant. If upon the death of the Participant,
the Participant has no surviving spouse or the Participant's surviving spouse
has consented to the designation of a beneficiary in the manner required under
Section 12.5, the entire balance of his accounts shall be divided among the
primary or contingent beneficiaries designated by such Participant who survive
the Participant.
68
<PAGE>
12.3 DESIGNATION OF BENEFICIARY. Each Participant shall have the
right to name and change primary and contingent beneficiaries under the Plan on
a form provided for that purpose by the Plan Administrator.
12.4 BENEFICIARY NOT DESIGNATED. In the event the Participant has
no surviving spouse and has either failed to designate a beneficiary or no
designated beneficiary survives him, the amounts otherwise payable to a
beneficiary under the provisions of this Section shall be paid to the
Participant's executor or administrator.
12.5 SPOUSAL CONSENT TO DESIGNATION OF BENEFICIARY. The spouse
of a Participant may consent in writing to the designation of a beneficiary
other than the spouse or to a change in the designation of a beneficiary other
than the spouse. The spouse's consent must acknowledge the effect of such
designation of an alternate beneficiary (or change in the alternate beneficiary)
and must be witnessed by a notary public or plan representative. Any such
consent must be filed with the Plan Administrator in order to be effective. No
consent need be obtained in the event the Participant has no spouse or the
Participant's spouse cannot be located. In this event, the Participant must
certify on a form provided by the Employer that he has no spouse or that his
spouse cannot be located in order for his beneficiary designation to be
effective.
69
<PAGE>
SECTION 13
LEAVES OF ABSENCE AND TRANSFERS
13.1 MILITARY LEAVE OF ABSENCE. So long as The Vietnam Era
Veterans Readjustment Act of 1974 or any similar law shall remain in force,
providing for re-employment rights for all persons in military service, as
therein defined, an Employee who leaves the employment of the Employer for
military service in the Armed Forces of the United States, as defined in such
Act from time to time in force, shall, for all purposes of this Plan, be
considered as having been in the employment of the Employer, with the time of
his service in the military credited to his Service; provided that upon such
Employee being discharged from the military service of the United States he
applies for re-employment with the Employer and takes all other necessary action
to be entitled to, and to be otherwise eligible for, re-employment rights, as
provided by The Vietnam Era Veterans Readjustment Act of 1974, or any similar
law from time to time in force.
13.2 OTHER LEAVES OF ABSENCE. An Employee on an Employer-approved
leave of absence not described in Section 13.1 above shall for all purposes of
this Plan be considered as having continued in the employment of the Employer
for the period of such leave, provided that the Employee returns to the active
employment of the Employer before or at the expiration of such leave. Such
approved leaves of absence shall be given on a uniform, non-discriminatory basis
in similar fact situations.
70
<PAGE>
13.3 TRANSFERS. In the event that:
(a) a Participant is transferred to employment with a member
of the Controlled Group which has not adopted the Plan or to employment
with the Employer in a status other than as an Employee; or
(b) a person is transferred from employment with a member of
the Controlled Group which has not adopted the Plan or from other
employment with the Employer in a status other than Employee to employment
with the Employer under circumstances making such person an Employee; or
(c) a person was employed by a member of the Controlled
Group, which has not adopted the Plan, terminated his employment and was
subsequently employed by an Employer as an Employee;
then the following provisions of this Section shall apply:
(a) transfer to employment (i) with a member of the
Controlled Group which has not adopted the Plan or (ii) with the Employer
not as an Employee shall not be considered termination of employment with
the Employer, and such transferred person shall continue to be entitled to
the benefits provided in the Plan, as modified by this Section;
(b) any employment with a member of the Controlled Group
which has not adopted the Plan or with the Employer not as an Employee
will be deemed to be employment by the Employer;
71
<PAGE>
(c) no amounts earned from a member of the Controlled Group
at a time when it has not adopted the Plan or from the Employer not as an
Employee shall constitute Compensation hereunder;
(d) termination of employment with a member of the Controlled
Group which has not adopted the Plan by a person entitled to benefits
under this Plan (other than to transfer to employment with the Company or
another member of the Controlled Group) shall be considered as termination
of employment with the Employer;
(e) all former U.S. Steel Lynch District Salaried Employees
retained by Arch of Kentucky will receive credit for their years of
service and years of participation in the Savings Plan of Salaried
Employees of United States Steel Corporation as of September 28, 1984
provided these employees elect to participate in this Plan by September
28, 1985;
(f) all Arch on the Green, Inc. (formerly Brown Badgett,
Inc.) employees retained by the Employer will receive credit for their
years of service and years of participation in the Diamond Shamrock Coal
Company Defined Contribution Plan as of June 30, 1987 provided these
employees elect to participate in this Plan by June 30, 1988;
(g) all Employees of Red Warrior Coal Company, Arch of
Wyoming, Inc., Paint Creek Terminals, Inc., Big
72
<PAGE>
Sandy Terminal, Inc., and Lone Mountain Processing, Inc. will receive
credit for years of service for their period of employment with their
respective Employer prior to the date these companies became members of
the Controlled Group; and
(h) all other terms and provisions of this Plan shall fully
apply to such person and to any benefits to which he may be entitled
hereunder.
73
<PAGE>
SECTION 14
TRUSTEE
The Company has selected INVESCO to hold and administer the assets
of the Plan and shall enter into a trust or custodial agreement with such
Trustee. The Company may change the Trustee from time to time subject to the
terms of the trust or custodial agreement.
74
<PAGE>
SECTION 15
CLAIMS PROCEDURE
15.1 CLAIM. A Participant or beneficiary or other person who
believes that he is being denied a benefit to which he is entitled (hereinafter
referred to as "Claimant") may file a written request for such benefit with the
Plan Administrator, setting forth his claim. The request must be addressed to:
Plan Administrator, Arch Coal, Inc. and Subsidiaries Employee Thrift Plan,
CityPlace One, St. Louis, Missouri 63141.
15.2 CLAIM DECISION. Upon receipt of a claim the Plan
Administrator shall advise the Claimant that a reply will be forthcoming within
90 days and shall in fact deliver such reply in writing within such period. The
Plan Administrator may, however, extend the reply period for an additional 90
days for reasonable cause. If the claim is denied in whole or in part, the Plan
Administrator will adopt a written opinion using language calculated to be
understood by the Claimant setting forth:
(a) the specific reason or reasons for the denial;
(b) specific references to pertinent Plan provisions on
which the denial is based;
(c) a description of any additional material or information
necessary for the Claimant to perfect the claim and an explanation why
such material or such information is necessary;
75
<PAGE>
(d) appropriate information as to the steps to be taken if
the Claimant wishes to submit the claim for review; and
(e) the time limits for requesting a review under Section
15.3 and a review under Section 15.4.
15.3 REQUEST FOR REVIEW. Within 60 days after the receipt by the
Claimant of the written opinion described above, the Claimant may request in
writing that the Committee review the determination of the Plan Administrator.
Such request must be addressed to: Committee, Arch Coal, Inc. and Subsidiaries
Employee Thrift Plan, CityPlace One, St. Louis, Missouri 63141. The Claimant or
his duly authorized representative may, but need not, review the pertinent
documents and submit issues and comments in writing for consideration by the
Committee. If the Claimant does not request a review of the Plan Administrator's
determination by the Committee within such 60-day period, he shall be barred and
estopped from challenging the Plan Administrator's determination.
15.4 REVIEW ON APPEAL. Within 60 days after the Committee's
receipt of a request for review, the Committee will review the Plan
Administrator's determination. After considering all materials presented by the
Claimant, the Committee will render a written opinion, written in a manner
calculated to be understood by the Claimant, setting forth the specific reasons
for the decision and containing specific references to the pertinent Plan
provisions on which the decision is based. If
76
<PAGE>
special circumstances require that the 60-day period be extended, the Committee
will so notify the Claimant and will render the decision as soon as possible but
not later than 120 days after receipt of the request for review. The Committee
shall possess and exercise discretionary authority to make determinations as to
a Participant's eligibility for benefits and to construe the terms of the Plan.
The decision of the Committee shall be final and non-reviewable unless found to
be arbitrary and capricious by a court of competent review. Such decision will
be binding upon the Employer and the Claimant.
77
<PAGE>
SECTION 16
AMENDMENT OR TERMINATION
The Company shall have the right, by action of the Board, at any time
and from time to time to amend, in whole or in part, any and all of the
provisions of the Plan and to terminate the Plan. Each Employer shall have the
right at any time to terminate the Plan with respect to Participants employed by
it. The right is subject to the condition that no part of the assets shall, by
reason of any amendment or termination, be used for or diverted to purposes
other than for the exclusive benefit of the Participants or their beneficiaries
under the Plan. Upon termination, partial termination, complete discontinuance
of contributions, or a Participant's involuntary termination of employment
without cause as a direct result of the sale or other disposition by the Company
of a portion of its business, all Participants' accounts (or, in the case of a
partial termination or involuntary termination of employment as a direct result
of the sale or other disposition by the Company of a portion of its business,
the accounts of that particular group of Participants) shall become fully
vested, and shall not thereafter be subject to forfeiture.
78
<PAGE>
SECTION 17
TOP-HEAVY DEFINITIONS
17.1 "ACCRUED BENEFITS" means "the present value of accrued
benefits" as that phrase is defined under regulations issued under Section 416
of the Code. For purposes of Sections 17 and 18 hereof, the Accrued Benefits of
any Participant (other than a Key Employee) shall be determined under the single
accrual rate used for all Qualified Plans of the Employer which are defined
benefit plans, or if there is no single accrual rate, Accrued Benefits shall be
determined as accruing no more rapidly than the slowest rate permitted under
Section 411(b)(1)(C) of the Code.
17.2 "BENEFICIARIES" means the person or persons to whom the share
of a deceased Participant's account is payable.
17.3 "DETERMINATION DATE" means for a Plan Year the last day of
the preceding Plan Year.
17.4 "FORMER KEY EMPLOYEE" means any person presently or
formerly employed by the Controlled Group (and the Beneficiaries of such person)
who during the Plan Year is not classified as a Key Employee but who was
classified as a Key Employee in a previous Plan Year; provided, however, that a
person who has not performed any services for the Controlled Group at any time
during the five year period ending on the Determination Date (and the
Beneficiaries of such persons) shall not be considered a Former Key Employee.
17.5 "KEY EMPLOYEE" means any person presently or
79
<PAGE>
formerly employed by the Controlled Group (and the Beneficiaries of such person)
who is a "key employee" as that term is defined in Section 416(i) of the Code
and the regulations thereunder; provided, however, that a person who has not
performed any services for the Controlled Group at any time during the five year
period ending on the Determination Date (and the Beneficiaries of such persons)
shall not be considered a Key Employee. For purposes of determining whether a
person is a Key Employee, the definition of Top-Heavy Compensation shall be
applied.
17.6 "NON-KEY EMPLOYEE" means any person presently or formerly
employed by the Controlled Group (and the Beneficiaries of such person) who is
not a Key Employee or a Former Key Employee; provided, however, that a person
who has not performed any services for the Controlled Group at any time during
the five year period ending on the Determination Date (and the Beneficiaries of
such persons) shall not be considered a Non-Key Employee.
17.7 "PERMISSIVE AGGREGATION GROUP" means each Qualified Plan of
the Controlled Group in the Required Aggregation Group plus each other Qualified
Plan which is not part of the Required Aggregation Group but which satisfies the
requirements of Sections 401(a)(4) and 410 of the Code when considered together
with the Required Aggregation Group.
17.8 "REQUIRED AGGREGATION GROUP" means each Qualified Plan
(including any terminated Qualified Plan) of the Controlled
80
<PAGE>
Group in which a Key Employee participates during the Plan Year containing the
Determination Date or any of the four preceding Plan Years and each other
Qualified Plan (including any terminated Qualified Plan) of the Controlled Group
which during this Period enables any Qualified Plan (including any terminated
Qualified Plan) in which a Key Employee participates to meet the requirements of
Section 401(a)(4) or 410 of the Code.
17.9 "SUPER TOP-HEAVY GROUP" means, for a Plan Year, the Required
Aggregation Group if, and only if, the sum of the Accrued Benefits (valued as of
the Determination Date for such Plan Year) under all Qualified Plans in the
Required Aggregation Group for Key Employees exceeds 90% of the sum of the
Accrued Benefits (valued as of such Determination Date) under all Qualified
Plans in the Required Aggregation Group for all Key Employees and Non-Key
Employees; provided, however, that the Required Aggregation Group will not be a
Super Top-Heavy Group for a Plan Year if the sum of the Accrued Benefits (valued
as of the Determination Date for such Plan Year) under all Qualified Plans in
the Required Aggregation Group for Key Employees does not exceed 90% of the sum
of the Accrued Benefits (valued as of such Determination Date) under all
Qualified Plans in the Permissive Aggregation Group for all Key Employees and
Non-Key Employees. If the Qualified Plans in the Required or Permissive
Aggregation Group have different Determination Dates, the Accrued Benefits under
each such Plan shall be calculated separately, and the Accrued Benefits as of
Determination Dates for such Plans
81
<PAGE>
that fall within the same calendar year shall be aggregated.
17.10 "TOP-HEAVY COMPENSATION" means the lesser of $200,000 or the
gross amount earned by an Employee from the Employer during the Plan Year for
services rendered while a Participant as shown on his Form W-2.
17.11 "TOP-HEAVY GROUP" means, for a Plan Year, the Required
Aggregation Group if, and only if, the sum of the Accrued Benefits (valued as of
the Determination Date for such Plan Year) under all Qualified Plans (including
any terminated Qualified Plan) in the Required Aggregation Group for Key
Employees exceeds 60% of the sum of the Accrued Benefits (valued as of such
Determination Date) under all Qualified Plans (including any terminated
Qualified Plan) in the Required Aggregation Group for all Key Employees and
Non-Key Employees; provided, however, that the Required Aggregation Group will
not be a Top-Heavy Group for a Plan Year if the sum of the Accrued Benefits
(valued as of the Determination Date for such Plan Year) under all Qualified
Plans in the Required Aggregation Group for Key Employees does not exceed 60% of
the sum of the Accrued Benefits (valued as of such Determination Date) under all
Qualified Plans (including any terminated Qualified Plan) in the Permissive
Aggregation Group for all Key Employees and Non-Key Employees. If the Qualified
Plans in the Required or Permissive Aggregation Group have different
Determination Dates, the Accrued Benefits under each such Plan shall be
calculated separately, and the Accrued Benefits as of Determination Dates for
such Plans
82
<PAGE>
that fall within the same calendar year shall be aggregated.
83
<PAGE>
SECTION 18
TOP-HEAVY RULES
18.1 SPECIAL TOP-HEAVY RULES. If for any Plan Year the Plan is
part of a Top-Heavy Group, then, effective as of the first day of such Plan Year
the following provisions shall apply to Participants who accrue an Hour of
Employment on or after the first day of such Plan Year:
(a) The vesting schedule in Section 11.2(b)(2) is deleted
and replaced by the following:
YEARS OF SERVICE PERCENTAGE OF ACCOUNT VESTED
Less than 3 0%
3 or more 100%
(b) A new Section 8.3 is added as follows:
18.2 MINIMUM ALLOCATION IF PLAN IS PART OF TOP-HEAVY GROUP.
Notwithstanding the foregoing, for each Plan Year in which the Plan is part of a
Top-Heavy Group, the sum of the Employer contributions and forfeitures allocated
under the Plan to the account of each Non-Key Employee who is both a Participant
and Employee on the last day of such Plan Year shall be at least equal to the
lesser of three percent of such Non-Key Employee's Top-Heavy Compensation for
such Plan Year or the largest percentage of Top-Heavy Compensation allocated to
the account of any Key Employee; provided, however, that if for any Plan Year a
Non-Key Employee is a Participant in both this Plan and one or more defined
contribution plans, the Employer need not provide the minimum allocation
described in the preceding sentence for
84
<PAGE>
such Non-Key Employee if the Employer satisfies the minimum allocation
requirement of Section 416(c)(2)(B) of the Code for the Non-Key Employee in such
other defined contribution plans. Amounts which a Non-Key Employee or Key
Employee elects to contribute on a pre-tax basis to a Qualified Plan which meets
the requirements of Section 401(k) of the Code shall be considered an Employer
contribution for purposes of Section 17.1; provided, however, that such pre-tax
contributions made by Non-Key Employees may not be taken into account in
determining the minimum allocation provided under this Section 8.3. In addition,
Matching Contributions made on behalf of Non-Key Employees may not be taken into
account in determining the minimum allocation provided under this Section 8.3.
18.3 ADJUSTMENTS IN SECTION 415 LIMITS. If for any Plan Year the
Plan is part of a Super Top-Heavy Group, or the Plan is part of a Top-Heavy
Group and fails to provide an allocation of Employer contributions and
forfeitures on behalf of each Non-Key Employee who is both a Participant and
Employee on the last day of such Plan Year equal to at least the lesser of four
percent of each such Non-Key Employee's Top-Heavy Compensation or the largest
percentage of Top-Heavy Compensation allocated on behalf of any Key Employee for
the Plan Year, effective as of the first day of such Plan Year the adjustments
to the limits in Section 19.11 set forth in Section 416(h) of the Code shall be
applied.
85
<PAGE>
SECTION 19
MISCELLANEOUS
19.1 PARTICIPANTS' RIGHTS. Neither the establishment of the Plan
hereby created, nor any modification thereof, nor the creation of any fund or
account, nor the payment of any benefits, shall be construed as giving to any
Participant or other person any legal or equitable right against the Employer,
any officer or Employee thereof, the Trustee or the Board except as herein
provided. Under no circumstances shall the terms of employment of any
Participant be modified or in any way affected hereby.
19.2 SPENDTHRIFT CLAUSE. Except as provided in Section 6.2, no
benefit or beneficial interest provided under the Plan shall be subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge, either voluntary or involuntary, and any attempt to so
alienate, anticipate, sell, transfer, assign, pledge, encumber or charge the
same shall be null and void. No such benefit or beneficial interest shall be
liable for or subject to the debts, contracts, liabilities, engagements, or
torts of any person to whom such benefits or funds are or may be payable.
19.3 DELEGATION OF AUTHORITY BY EMPLOYER. Whenever the Employer,
under the terms of this Plan, is permitted or required to do or perform any act
or matter or thing, it shall be done and performed by any officer thereunto duly
authorized by the Board.
19.4 DISTRIBUTIONS TO MINORS. In the event that any portion of
the Plan becomes distributable to a minor or other
86
<PAGE>
person under legal disability (as determined by the laws of the jurisdiction in
which he then resides), the Plan Administrator shall direct that such
distribution be made to the legal representative of such minor or other person.
19.5 CONSTRUCTION OF PLAN. This Plan shall be construed according
to the laws of the State of Missouri, and all provisions of the Plan shall be
administered according to the laws of such state.
19.6 GENDER AND NUMBER. Whenever any words are used herein in
the masculine gender, they shall be construed as though they were also used in
the feminine gender in all cases where they would so apply, and wherever any
words are used herein in the singular form, they shall be construed as though
they were also used in the plural form in all cases where they would so apply.
Headings of sections and subsections are inserted for convenience of reference,
constitute no part of the Plan and are not to be considered in the construction
hereof.
19.7 SEPARABILITY OF PROVISIONS. If any provision o f this Plan
shall be for any reason invalid or unenforceable, the remaining provisions shall
nevertheless be carried into effect.
19.8 DIVERSION OF ASSETS. No part of the assets of the Plan shall
be used for, or diverted to, purposes other than the exclusive benefit of
Participants or their beneficiaries. Except as provided in Section 4.7, the
Employer shall have no beneficial interest in the assets of the Plan or any part
thereof and no part of the assets of the Plan shall revert or be repaid to the
87
<PAGE>
Employer, directly or indirectly.
19.9 SERVICE OF PROCESS. The Vice President/Human Resources of
the Company shall constitute the Plan's agent for service of process.
19.10 MERGER. Effective May 1, 1994, the Agipcoal America, Inc.
Savings Plan and Agipcoal America, Inc. Retirement Plan are merged into the
Plan. No accrued benefit of a participant of the Agipcoal America, Inc. Savings
Plan, the Agipcoal America, Inc. Retirement Plan or the Plan shall decrease on
account of the merger. The accounts from the Agipcoal America, Inc. Savings Plan
and the Agipcoal America, Inc. Retirement Plan shall be segregated from the
other accounts of the Plan and the benefits which accrued under the Agipcoal
America, Inc. Savings Plan and the Agipcoal America, Inc. Retirement Plan on or
before April 30, 1994 shall be 100% vested. Notwithstanding the above, the
distribution options available under the Agipcoal America, Inc. Savings Plan and
the Agipcoal America, Inc. Retirement Plan will continue to be available to
Participants with respect to benefits accrued under the Agipcoal America, Inc.
Savings Plan and the Agipcoal America, Inc. Retirement Plan. In the event of any
merger or consolidation with, or transfer of assets or liabilities to, any other
plan, each Participant shall (as if the Plan had then terminated) receive a
benefit immediately after the merger, consolidation or transfer which is equal
to or greater than the benefit he would have been entitled to receive
immediately before the merger,
88
<PAGE>
consolidation or transfer (if the Plan had then terminated).
19.11 BENEFIT LIMITATION.
(a) Notwithstanding any other provision hereof, the amounts
allocated to a Participant during the Limitation Year under the Plan and
allocated to the Participant under any other defined contribution plan to
which the Company or any other member of the Controlled Group has
contributed shall be proportionately reduced, to the extent necessary, so
that the annual addition does not exceed the least of:
(1) $30,000; or
(2) 25% of the Participant's remuneration (as defined
in Treasury Regulation Section 1.415-2(d)) from the Company or any
member of the Controlled Group during the Limitation Year; or
(3) such other limits set forth in Section 415 of the
Code.
The amount set forth in subparagraph (1) above shall automatically be
adjusted to reflect adjustments made by applicable law.
(b) For purposes of this Section, Limitation Year means the
12 month period commencing on January 1 and ending on December 31.
(c) In the event that a Participant is covered under one or
more defined benefit plans to which the Company or another member of the
Controlled Group contributes, the Participant's projected annual benefit
under such defined
89
<PAGE>
benefit plans shall be limited to the extent necessary so that the sum of
the defined benefit plan fraction and defined contribution plan fraction
(as such terms are defined in Section 415 of the Code) does not exceed the
limits set forth in Section 415(e) of the Code.
(d) If as a result of the allocation of forfeitures, a
reasonable error in estimating a Participant's remuneration, or other
limited facts and circumstances, the annual additions under the Plan for a
particular Participant exceed the limitations in this Section, the excess
amounts will not be deemed annual additions for the Limitation Year but
will be held in a suspense account and used to reduce Employer
contributions otherwise due under Section 4.4.
19.12 COMMENCEMENT OF BENEFITS.
(a) Notwithstanding any other Section of the Plan, the
payment of benefits under the Plan to the Participant will begin not later
than the 60th day after the close of the Plan Year in which the last of
the following occurs, unless the Participant chooses to defer receipt
until a later date as provided under Sections 9, 10 or 11.1:
(1) the date on which the Participant attains age 65;
or
(2) the 10th anniversary of the date on which the
Participant commenced participation in the Plan; or
90
<PAGE>
(3) the Participant's termination of employment with
the Employer.
(b) Notwithstanding Section 19.12(a) or any other provision
of the Plan, if the amount of payment cannot be ascertained, or if it is
not possible to make payment because the Plan Administrator cannot locate
the Participant after making reasonable efforts to do so, a retroactive
payment may be made no later than sixty days after the earliest date on
which the amount of such payment can be ascertained or the date on which
the Participant is located, whichever is applicable.
(c) (1) If the Plan Administrator is unable to locate any
person entitled to receive distribution from an account hereunder,
such account shall be forfeited on the date 2 years after (i) the
date the Plan Administrator sends by certified mail a notice
concerning the benefits to such person at his last known address or
(ii) the Plan Administrator determines that there is no last known
address.
(2) If an account is forfeited under (c)(l) and a
person otherwise entitled to the account subsequently files a claim
with the Plan Administrator during any Plan Year, the account will
be restored to the amount which was forfeited without regard to any
earnings or losses that would have been allocated. Such restoration
shall first be taken out of
91
<PAGE>
forfeitures which have not been used to reduce Employer
Contributions and if such forfeitures are insufficient to restore
such person's account balance, restoration shall be made by an
Employer contribution to the Plan.
19.13 QUALIFIED DOMESTIC RELATIONS ORDER. Notwithstanding anything
in the Plan to the contrary, benefits may be distributed in accordance with the
terms of a Qualified Domestic Relations Order ("QDRO"). For this purpose a QDRO
is any Domestic Relations Order determined by the Employer to be a Qualified
Domestic Relations Order within the meaning of Section 414(p) of the Code
pursuant to this Section.
(a) A Domestic Relations Order means a judgment, decree, or
order (including the approval of a property settlement agreement) which
(1) relates to the provision of child support, alimony
payments, or marital property rights to a spouse, former spouse,
child or other dependent of a Participant,
(2) is made pursuant to a state domestic relations
law, and
(3) creates or recognizes the existence of an
Alternate Payee's right, or assigns to the Alternate Payee the
right, to receive all or a portion of the benefits of the
Participant under the Plan.
An "Alternate Payee" includes any spouse, former spouse,
child, or other dependent of a Participant who is
92
<PAGE>
designated by the Domestic Relations Order as having a right to receive all or a
portion of the benefits payable under the Plan with respect to the concerned
Participant.
(b) To be a QDRO, the Domestic Relations Order must meet
the specifications set forth in Section 414(p) of the Code and must
clearly specify the following:
(1) Name and last known mailing address of the
Participant.
(2) Name and last known mailing address of each
Alternate Payee covered by the Domestic Relations Order.
(3) The amount or the percentage of the Participant's
benefit to be paid to each Alternate Payee, or the manner in which
such amount or percentage is to be determined.
(4) The number of payments or period to which the
Domestic Relations Order applies.
(5) Each Plan to which the Domestic Relations Order
applies.
(c) The status of any Domestic Relations Order as a QDRO
shall be determined under the following procedures:
(1) Promptly upon receiving a Domestic Relations
Order, the Employer will
(A) refer the Domestic Relations Order to legal
counsel for the Plan to render an opinion within 90 days (or
such earlier period as shall be
93
<PAGE>
provided by applicable law) whether the Domestic Relations
Order is a QDRO, and
(B) notify the affected Participant and any
Alternate Payee of the receipt by the Plan of the Domestic
Relations Order and of this procedure.
(2) Promptly upon receiving the determination made by
the Plan's legal counsel of the status of the Domestic Relations
Order, the affected Participant and each Alternate Payee (or any
representative designated by an Alternate Payee by written notice to
the Employer) shall be furnished a copy of such determination. The
notice of determination shall state
(A) whether the Plan's legal counsel has
determined that the Domestic Relations Order is a QDRO, and
(B) once such legal counsel determines whether
the Domestic Relations Order constitutes a QDRO, that the
Employer will commence any payments currently due under the
Plan to the person or persons entitled thereto after the
expiration of a period of 60 days commencing on the date of
the mailing of the notice unless prior thereto the Employer
receives notice of the institution of legal proceedings
disputing the determination.
94
<PAGE>
The Employer shall, as soon as practical after such 60 day
period, ascertain the dollar amount currently payable to each
payee pursuant to the Plan and the QDRO, and any such amounts
shall be disbursed by the Plan.
(3) If there is a dispute on the status of a Domestic
Relations Order as a QDRO, there shall be a delay in making
payments. The Employer shall direct that the amounts otherwise
payable be held in a separate account within the Plan. If within 18
months thereafter, the Domestic Relations Order is determined not to
be a valid QDRO, or the status of the Domestic Relations Order has
not been finally determined, the segregated or escrow amounts
(including interest thereon) shall be paid to the person or persons
who would have been entitled to such amounts if there had been no
Domestic Relations Order. Any determination thereafter that the
Domestic Relations Order is a QDRO shall be applied prospectively
only.
(d) Benefits may be distributed to an Alternate Payee
pursuant to a QDRO in the form of an immediate lump sum even if the
Participant is not currently entitled to receive a lump sum and has not
attained age 50.
19.14 WRITTEN EXPLANATION OF ROLLOVER TREATMENT. The Committee of
this Plan shall, when making an eligible rollover distribution, provide a
written explanation to the recipient of
95
<PAGE>
such distribution of his right to roll over such distribution to an eligible
retirement plan and, if applicable, his right to the special five or ten-year
averaging and capital gains tax treatment in the Code. Such written explanation
will be provided to the recipient in accordance with rules prescribed by the
Internal Revenue Service.
19.15 LEASED EMPLOYEES. Any person who is a leased employee (within
the meaning of Section 414(n) of the Code) of any member of the Controlled Group
shall be treated for all purposes of the Plan as if he were employed by a member
of the Controlled Group which has not adopted the Plan.
19.16 SPECIAL DISTRIBUTION OPTION. This Section applies to
distributions made on or after January 1, 1993. Notwithstanding any provision of
the Plan to the contrary that would otherwise limit a Distributee's (as
hereinafter defined) election this Section, a Distributee may elect, at the time
and in the manner prescribed by the Committee, to have any portion of the
Eligible Rollover Distribution (as hereinafter defined) paid directly to an
Eligible Retirement Plan (as hereinafter defined) specified by the Distributee
in a Direct Rollover.
(a) An Eligible Rollover Distribution is 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: (a) any
distribution that is one of a series of substantial equal periodic
payments (not less frequently than annually) made for the life (or life
96
<PAGE>
expectancy) of the Distributee or the joint lives (or joint life
expectancies) of the Distributee and the Distributee's designated
beneficiary, or for a specified period of ten years or more; (b) any
distribution to the extent such distribution is required under Section
401(a)(9) of the Code; and (c) 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 (a) an individual
retirement account described in Section 408(a) of the Code, (b) an
individual retirement annuity described in Section 408(b) of the Code, (c)
an annuity plan described in Section 403(a) of the Code, or (d) a
qualified trust described in Section 401(a) of the Code that accepts the
Distributee's Eligible Rollover Distribution. However, in the case of an
Eligible Rollover Distribution to a surviving spouse, an Eligible
Retirement Plan is only an individual retirement account or individual
retirement annuity.
(c) A Distributee includes an Employee or former Employee.
In addition, the Employee's or former Employee's surviving spouse and the
Employee's or former Employee's or former spouse who is the alternate
payee under a qualified domestic relation order, as defined in Section
414(p) of the Code, are Distributees with regard to the interest of the
spouse or former spouse.
97
<PAGE>
(d) A Direct Rollover payment is a payment by the Plan to
the Eligible Retirement Plan specified by the Distributee.
19.17 LIMITATIONS ON SPECIAL DISTRIBUTIONS OPTIONS.
(a) Notwithstanding the provisions of the immediately
preceding Section entitled Special Distribution Option, the amount which
may be paid directly to the trustee of another eligible retirement plan
under such Section shall be no less than the smaller of $500 or the total
amount of the eligible rollover distribution which would otherwise by
includible in the Participant's taxable income; and no amount shall be so
paid unless the amount of such distributions in any calendar year which
are otherwise eligible for such payment are reasonably expected to total
$200 or more.
(b) The Employer shall provide notice of the special
distribution option described in the preceding Section to the Participant
in accordance with rules prescribed by the Internal Revenue Service.
19.18 PAYMENT OF ADMINISTRATIVE FEES. The Trustee charges an
administrative fee with respect to each loan, withdrawal or distribution under
the Plan. Notwithstanding any provision of the Plan or Trust to the contrary,
this fee will be deducted from the amount payable with respect to the loan,
withdrawal or distribution to which the fee relates.
98
