As filed with the Securities and Exchange Commission on August 27, 1998
REGISTRATION NO. 333-______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
METALS USA, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 76-0533626
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
THREE RIVERWAY
SUITE 600
HOUSTON, TEXAS 77056
(713) 965-0990
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
METALS USA, INC.
401(K) PLAN
(Full Title of Plan)
ARTHUR L. FRENCH
PRESIDENT AND CHIEF EXECUTIVE OFFICER
METALS USA, INC.
THREE RIVERWAY
SUITE 600
HOUSTON, TEXAS 77056
(713) 965-0900
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
COPY TO:
WILLIAM D. GUTERMUTH
BRACEWELL & PATTERSON, L.L.P.
SOUTH TOWER, PENNZOIL PLACE
711 LOUISIANA STREET, SUITE 2900
HOUSTON, TEXAS 77002-2781
(713) 223-2900
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=====================================================================================================================
PROPOSED
MAXIMUM PROPOSED AMOUNT OF
TITLE OF AMOUNT TO OFFERING MAXIMUM AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED BE REGISTERED(1) PRICE PER SHARE(2) OFFERING PRICE(2) FEE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Common Stock, par value $.01 per share 500,000 $14.00 $7,000,000 $2,065
=====================================================================================================================
</TABLE>
(1) Pursuant to Rule 457(h)(1), the registration fee is calculated with
respect to the maximum number of the registrant's securities issuable
under the Metals USA, Inc. 401(k) Plan (the "Plan"). In addition, pursuant
to Rule 416(a) of the Securities Act of 1933, as amended (the "Act"), this
Registration Statement is deemed to register an indeterminate amount of
employee participation interests in the Plan that constitute separate
securities.
(2) Pursuant to Rule 457(c), the registration fee for these shares is
calculated based on the average of the high and low sales price per share
of the Company's Common Stock, as reported by the New York Stock Exchange
on August 26, 1998.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
Metals USA, Inc., a Delaware company, ("the Company") hereby incorporates
by reference into this registration statement (the "Registration Statement"):
(i) the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1997; (ii) the description of the Company's Common Stock, par value $.01 per
share, contained in the Company's Form 8-A, dated July 10, 1997, including any
amendment or report filed for the purpose of updating such description; and
(iii) all other reports filed by the Company pursuant to Section 13(a) or 15(d)
of the Securities and Exchange Act of 1934, as amended (the "Exchange Act"),
since the fiscal year ended December 31, 1997.
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the filing
date of this Registration Statement and prior to the filing of a post-effective
amendment to this Registration Statement 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.
The Company will provide, without charge, to each participant in the
Company's 401(k) Plan (the "Plan"), on written or oral request of such person, a
copy (without exhibits, unless such exhibits are specifically incorporated by
reference) of any or all of the documents incorporated by reference pursuant to
this Item 3. All such requests should be directed to Metals USA, Inc., Three
Riverway, Suite 600, Houston, Texas 77056, Attention: John A. Hageman, Senior
Vice President, General Counsel and Secretary, phone number (713) 965-0990.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law (the "DGCL") permits a
corporation to indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that he is or was a director, officer, employee or agent of the corporation or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses, judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action.
In an action brought to obtain a judgment in the corporation's favor,
whether by the corporation itself or derivatively by a stockholder, the
corporation may only indemnify for expenses, including attorney's fees, actually
and reasonably incurred in connection with the defense or settlement of such
action, and the corporation may not indemnify for amounts paid in satisfaction
of a judgment or in settlement of the claim. In any such action, no
indemnification may be paid in respect of any claim, issue or matter as to which
such person shall have been adjudged liable to the corporation except as
otherwise approved by the Delaware Court of Chancery or the court in which the
claim was
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<PAGE>
brought. In any other type of proceeding, the indemnification may extend to
judgments, fines and amounts paid in settlement, actually and reasonably
incurred in connection with such other proceeding, as well as to expenses.
The statute does not permit indemnification unless the person seeking
indemnification has acted in good faith and in a manner reasonably believed to
be in, or not opposed to, the best interests of the corporation and, in the case
of criminal actions or proceedings, the person had no reasonable cause to
believe his conduct was unlawful. The statute contains additional limitations
applicable to criminal actions and to actions brought by or in the name of the
corporation. The determination as to whether a person seeking indemnification
has met the required standard of conduct is to be made (1) by a majority vote of
a quorum of disinterested members of the board of directors, (2) by independent
legal counsel in a written opinion, if such a quorum does not exist or if the
disinterested directors so direct, or (3) by the stockholders.
The Company's Certificate of Incorporation requires the Company to
indemnify its directors and officers to the fullest extent permitted by Section
145 of the DGCL. In addition, the Company maintains liability insurance for its
directors and officers.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4.1 The Metals USA, Inc. 401(k) Plan
5.1 Opinion of Bracewell & Patterson, LLP
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Ernst & Young LLP
23.3 Consent of McGladrey & Pullen, LLP
23.4 Consent of Rubin, Brown Gornstein & Co.
23.5 Consent of Klein, Bogakos and Rovertson, CPA's Inc.
23.6 Consent of Bracewell & Patterson, L.L.P. (included in Exhibit 5.1)
23.7 Consent of Ernst & Young LLP
23.8 Consent of Perkins & Company, P.C.
23.9 Consent of Arthur Andersen LLP
23.10 Consent of Arthur Andersen LLP
24.1 Form of Power of Attorney
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<PAGE>
ITEM 9. UNDERTAKINGS.
A. UNDERTAKING TO UPDATE
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 this 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 and of the
estimated maximum offering range may be reflected in the form
of a 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 percent change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement.
(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 this Registration Statement;
PROVIDED, HOWEVER, that paragraphs (A)(1)(i) and (A)(1)(ii) of this
section do not apply if 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 Exchange Act, that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act, 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. UNDERTAKING WITH RESPECT TO DOCUMENTS INCORPORATED BY REFERENCE
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 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.
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<PAGE>
C. UNDERTAKING WITH RESPECT TO INDEMNIFICATION
Insofar as indemnification for liabilities arising under the
Securities Act 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.
[SIGNATURE PAGE FOLLOWS]
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<PAGE>
SIGNATURES
In accordance with 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 of filing on Form S-8 and has duly authorized this
Registration Statement to be signed on its behalf by the undersigned, in the
City of Houston, State of Texas on August 27, 1998.
METALS USA, INC.
By: /s/ ARTHUR L. FRENCH
Arthur L. French,
PRESIDENT AND CHIEF EXECUTIVE
OFFICER
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated on August 27, 1998.
SIGNATURE TITLE
------------- ---------
/s/ ARTHUR L. FRENCH Chairman of the Board and Chief
Arthur L. French Executive Officer (Principal
Executive Officer)
/s/ J. MICHAEL KIRKSEY Chief Financial Officer and Director
J. Michael Kirksey (Principal Financial Officer)
/s/ TERRY L. FREEMAN Chief Accounting Officer and
Terry L. Freeman Corporate Controller (Principal
Accounting Officer)
ARNOLD W. BRADBURD* Vice-Chairman of the Board of
Directors
MARK ALPER* Director
MICHAEL E. CHRISTOPHER* Director
CRAIG R. DOVEALA* Director
WILLIAM B. EDGE* Director
STEVEN S. HARTER* Director
A. LEON JEFFREYS* Director
TOMMY E. KNIGHT* Director
RICHARD H. KRISTINIK* Director
PATRICK A. NOTESTINE* Director
LESTER G. PETERSON* Director
T. WILLIAM PORTER* Director
TOM SHAPIRO* Director
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<PAGE>
RICHARD A. SINGER* Director
*BY:/s/ ARTHUR L. FRENCH
Arthur L. French
Attorney-in-Fact
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<PAGE>
EXHIBIT INDEX
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- -------- ---------------- ------------
4.1 The Metals USA, Inc. 401(k) Plan.........................
5.1 Opinion of Bracewell & Patterson, L.L.P..................
23.1 Consent of Arthur Andersen LLP...........................
23.2 Consent of Ernst & Young LLP.............................
23.3 Consent of McGladrey & Pullen, LLP.......................
23.4 Consent of Rubin, Brown Gornstein & Co...................
23.5 Consent of Klein, Bogakos and Robertson, CPA's Inc.......
23.6 Consent of Bracewell & Patterson, L.L.P.
(included in Exhibit 5.1) ..............................
23.7 Consent of Ernst & Young LLP ............................
23.8 Consent of Perkins & Company, P.C........................
23.9 Consent of Arthur Andersen LLP...........................
23.10 Consent of Arthur Andersen LLP...........................
24.1 Form of Power of Attorney................................
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EXHIBIT 4.1
METALS USA, INC. 401(K) PLAN
<PAGE>
TABLE OF CONTENTS
Page No.
PREAMBLE.....................................................................1
ARTICLE I--DEFINITIONS.......................................................2
1.1 Plan Definitions.................................................2
1.2 Interpretation...................................................8
ARTICLE II--SERVICE..........................................................9
2.1 Definitions......................................................9
2.2 Crediting of Hours of Service...................................10
2.3 Crediting of Continuous Service.................................10
2.4 Eligibility Service.............................................10
2.5 Vesting Service.................................................10
2.6 Crediting of Service on Transfer or Amendment...................10
ARTICLE III--ELIGIBILITY....................................................12
3.1 Eligibility.....................................................12
3.2 Transfers of Employment.........................................12
3.3 Reemployment....................................................12
3.4 Notification Concerning New Eligible Employees..................12
3.5 Effect and Duration.............................................12
ARTICLE IV--TAX-DEFERRED CONTRIBUTIONS......................................14
4.1 Tax-Deferred Contributions......................................14
4.2 Amount of Tax-Deferred Contributions............................14
4.3 Changes in Reduction Authorization..............................14
4.4 Suspension of Tax-Deferred Contributions........................15
4.5 Resumption of Tax-Deferred Contributions........................15
4.6 Delivery of Tax-Deferred Contributions..........................15
4.7 Vesting of Tax-Deferred Contributions...........................15
ARTICLE V--AFTER-TAX AND ROLLOVER CONTRIBUTIONS.............................16
5.1 No After-Tax Contributions......................................16
5.2 Rollover Contributions..........................................16
5.3 Vesting of Rollover Contributions...............................16
ARTICLE VI--EMPLOYER CONTRIBUTIONS..........................................17
6.1 Contribution Period.............................................17
6.2 Profit-Sharing Contributions....................................17
6.3 Allocation of Profit-Sharing Contributions......................17
6.4 Qualified Nonelective Contributions.............................17
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6.5 Allocation of Qualified Nonelective Contributions...............17
6.6 Matching Contributions..........................................18
6.7 Allocation of Matching Contributions............................18
6.8 Verification of Amount of Employer Contributions by the Sponsor.18
6.9 Payment of Employer Contributions...............................19
6.10 Eligibility to Participate in Allocation........................19
6.11 Vesting of Employer Contributions...............................19
6.12 Election of Former Vesting Schedule.............................20
6.13 Forfeitures to Reduce Employer Contributions....................21
ARTICLE VII--LIMITATIONS ON CONTRIBUTIONS...................................22
7.1 Definitions.....................................................22
7.2 Code Section 402(g) Limit.......................................25
7.3 Distribution of Excess Deferrals................................25
7.4 Limitation on Tax-Deferred
Contributions of Highly Compensated Employees ............26
7.5 Distribution of Excess Tax-Deferred Contributions...............27
7.6 Limitation on Matching Contributions
of Highly Compensated Employees.................................28
7.7 Forfeiture or Distribution of Excess Contributions..............29
7.8 Multiple Use Limitation.........................................29
7.9 Determination of Income or Loss.................................30
7.10 Code Section 415 Limitations on
Crediting of Contributions and Forfeitures......................30
7.11 Coverage Under Other Qualified Defined Contribution Plan........31
7.12 Coverage Under Qualified Defined Benefit Plan...................31
7.13 Scope of Limitations............................................32
ARTICLE VIII--TRUST FUNDS AND PARTICIPANT ACCOUNTS..........................33
8.1 General Fund....................................................33
8.2 Investment Funds................................................33
8.3 Loan Investment Fund............................................33
8.4 Income on Trust.................................................33
8.5 Participant Accounts............................................34
8.6 Sub-Accounts....................................................34
ARTICLE IX--LIFE INSURANCE CONTRACTS........................................35
9.1 No Life Insurance Contracts.....................................35
ARTICLE X--DEPOSIT AND INVESTMENT OF CONTRIBUTIONS..........................36
10.1 Future Contribution Investment Elections........................36
10.2 Deposit of Contributions........................................36
10.3 Election to Transfer Between Funds..............................36
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10.4 ESOP Diversification Requirements...............................37
10.5 404(c) Plan.....................................................37
ARTICLE XI--CREDITING AND VALUING PARTICIPANT ACCOUNTS......................38
11.1 Crediting Participant Accounts..................................38
11.2 Valuing Participant Accounts....................................38
11.3 Plan Valuation Procedures.......................................38
11.4 Finality of Determinations......................................39
11.5 Notification....................................................39
ARTICLE XII--LOANS..........................................................40
12.1 Application for Loan............................................40
12.2 Reduction of Account Upon Distribution..........................40
12.3 Requirements to Prevent a Taxable Distribution..................41
12.4 Administration of Loan Investment Fund..........................41
12.5 Default.........................................................42
12.6 Special Rules Applicable to Loans...............................42
ARTICLE XIII--WITHDRAWALS WHILE EMPLOYED....................................44
13.1 Withdrawals of Prior After-Tax Contributions....................44
13.2 Withdrawals of Rollover Contributions...........................44
13.3 Withdrawals of Employer Contributions...........................44
13.4 Withdrawals of Tax-Deferred Contributions.......................45
13.5 Limitations on Withdrawals Other than Hardship Withdrawals......45
13.6 Conditions and Limitations on Hardship Withdrawals..............45
13.7 Order of Withdrawal from a Participant's Sub-Accounts...........47
ARTICLE XIV--TERMINATION OF EMPLOYMENT AND SETTLEMENT DATE..................48
14.1 Termination of Employment and Settlement Date...................48
14.2 Separate Accounting for Non-Vested Amounts......................48
14.3 Disposition of Non-Vested Amounts...............................48
14.4 Recrediting of Forfeited Amounts................................49
ARTICLE XV--DISTRIBUTIONS...................................................50
15.1 Distributions to Participants...................................50
15.2 Distributions to Beneficiaries..................................50
15.3 Cash Outs and Participant Consent...............................50
15.4 Required Commencement of Distribution...........................51
15.5 Reemployment of a Participant...................................51
15.6 Restrictions on Alienation......................................52
15.7 Facility of Payment.............................................52
15.8 Inability to Locate Payee.......................................52
15.9 Distribution Pursuant to Qualified Domestic Relations Orders....52
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ARTICLE XVI--FORM OF PAYMENT................................................54
16.1 Definitions.....................................................54
16.2 Normal Form of Payment..........................................55
16.3 Optional Forms of Payment.......................................55
16.4 Change of Option Election.......................................56
16.5 Form of Annuity Requirements....................................56
16.6 Qualified Preretirement Survivor Annuity Requirements...........56
16.7 Direct Rollover.................................................57
16.8 Notice Regarding Forms of Payment...............................58
16.9 Reemployment....................................................59
16.10 Distribution in the Form of Employer Stock......................59
ARTICLE XVII--BENEFICIARIES.................................................60
17.1 Designation of Beneficiary......................................60
17.2 Spousal Consent Requirements....................................60
ARTICLE XVIII--ADMINISTRATION...............................................61
18.1 Authority of the Sponsor........................................61
18.2 Action of the Sponsor...........................................61
18.3 Claims Review Procedure.........................................62
18.4 Qualified Domestic Relations Orders.............................62
18.5 Indemnification.................................................63
18.6 Actions Binding.................................................63
ARTICLE XIX--AMENDMENT AND TERMINATION......................................64
19.1 Amendment.......................................................64
19.2 Limitation on Amendment.........................................64
19.3 Termination.....................................................64
19.4 Reorganization..................................................65
19.5 Withdrawal of an Employer.......................................66
ARTICLE XX--ADOPTION BY OTHER ENTITIES......................................67
20.1 Adoption by Related Companies...................................67
20.2 Effective Plan Provisions.......................................67
ARTICLE XXI--MISCELLANEOUS PROVISIONS.......................................68
21.1 No Commitment as to Employment..................................68
21.2 Benefits........................................................68
21.3 No Guarantees...................................................68
21.4 Expenses........................................................68
21.5 Precedent.......................................................68
21.6 Duty to Furnish Information.....................................68
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21.7 Withholding.....................................................69
21.8 Merger, Consolidation, or Transfer of Plan Assets...............69
21.9 Back Pay Awards.................................................69
21.10 Condition on Employer Contributions.............................70
21.11 Return of Contributions to an Employer..........................70
21.12 Validity of Plan................................................70
21.13 Trust Agreement.................................................70
21.14 Parties Bound...................................................71
21.15 Application of Certain Plan Provisions..........................71
21.16 Leased Employees................................................71
21.17 Transferred Funds...............................................72
21.18 Military Leave..................................................72
ARTICLE XXII--TOP-HEAVY PROVISIONS..........................................73
22.1 Definitions.....................................................73
22.2 Applicability...................................................75
22.3 Minimum Employer Contribution...................................75
22.4 Adjustments to Section 415 Limitations..........................76
22.5 Accelerated Vesting.............................................76
ARTICLE XXIII--EFFECTIVE DATE...............................................78
23.1 Effective Date..................................................78
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PREAMBLE
The Plan established hereunder, to be known as the Metals USA, Inc. 401 (k)
Plan, is intended to qualify as a profit-sharing plan under Section 401 (a) of
the Code, and includes a cash or deferred arrangement that is intended to
qualify under Section 401 (k) of the Code. The Plan is established and
maintained for the exclusive benefit of eligible employees and their
beneficiaries. It is contemplated that a number of plans maintained by the
Sponsor and other Predecessor Employers shall be merged into and made a part of
the Plan.
Notwithstanding any other provision of the Plan to the contrary, a Participant's
vested interest in his Participant Account under the Plan on and after the
effective date of any plan merger shall be not less than his vested interest in
his accounts under the merged plan(s) on the day immediately preceding the
merger date. In addition, notwithstanding any other provision of the Plan to the
contrary, the forms of payment and other plan provisions that were available
under the merged plan(s) immediately prior to the effective date of any plan
merger and that may not be eliminated under Section 411 (d)(6) of the Code shall
continue to be available to Participants who had an account under the merged
plan(s) on the day immediately preceding the effective date of such plan merger.
Moreover, any provision of the merged plan(s) that restricted or limited
withdrawals, loans, or other distributions or otherwise required separate
accounting with respect to any portion of a Participant's Participant Account
immediately prior to the effective date of such a plan merger and the
elimination of which would adversely affect the qualification of the Plan under
Section 401 (a) of the Code shall continue in effect with respect to the portion
of the Participant's Participant Account that is attributable to such merged
plan as if fully set forth in this Plan.
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ARTICLE I
DEFINITIONS
1.1 PLAN DEFINITIONS
As used herein, the following words and phrases have the meanings hereinafter
set forth, unless a different meaning is plainly required by the context:
The "ADMINISTRATOR" means the Sponsor unless the Sponsor designates another
person or persons to act as such.
An "AFTER-TAX CONTRIBUTION" means any after-tax employee contribution made by a
Participant as may be permitted under Article V.
The "BENEFICIARY" of a Participant means the person or persons entitled under
the provisions of the Plan to receive distribution hereunder in the event the
Participant dies before receiving distribution of his entire interest under the
Plan.
The "Code" means the Internal Revenue Code of 1986, as amended from time to
time. Reference to a section of the Code includes such section and any
comparable section or sections of any future legislation that amends,
supplements, or supersedes such section.
The "COMPENSATION" of a Participant for any period means his wages, salaries,
fees for professional service, and all other amounts received for personal
services actually rendered in the course of employment with an Employer paid to
him for such period for services as an Employee, but excluding (i) contributions
made by the Participant's Employer to a plan of deferred compensation to the
extent that, before application of the limitations of Section 415 of the Code to
such plan, the contributions are not includible in the gross income of the
Participant for the taxable year in which contributed, (ii) contributions made
by the Employer to a simplified employee pension described in Section 408(k) of
the Code, (iii) any distributions from a plan of deferred compensation (except
amounts received pursuant to an unfunded non-qualified plan in the year such
amounts are includible in the gross income of the Participant), (iv) amounts
received from the exercise of a non-qualified stock option or when restricted
stock held by the Participant becomes freely transferable or is no longer
subject to substantial risk of forfeiture, (v) amounts received from the sale,
exchange or other disposition of stock acquired under a qualified or incentive
stock option, and (vi) any other amounts which receive special tax benefits,
such as premiums for group term life insurance (but only to the extent that the
premiums are not includible in the gross income of the Participant).
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In addition to the foregoing, Compensation includes any amount that would have
been included in the foregoing description, but for a Participant's election to
defer payment of such amount under Section 125, 402(e)(3), 402(h)(1)(B), 403(b),
or 457(b) of the Code and certain contributions described in Section 414(h)(2)
of the Code that are picked up by the employing unit and treated as employer
contributions.
In no event, however, shall the Compensation of a Participant taken into account
under the Plan for any Plan Year exceed $150,000 (subject to adjustment annually
as provided in Section 401 (a)(1 7)(B) and Section 415(d) of the Code; provided,
however, that the dollar increase in effect on January I of any calendar year,
if any, is effective for Plan Years beginning in such calendar year). If the
Compensation of a Participant is determined over a period of time that contains
fewer than 12 calendar months, then the annual compensation limitation described
above shall be adjusted with respect to that Participant by multiplying the
annual compensation limitation in effect for the Plan Year by a fraction the
numerator of which is the number of full months in the period and the
denominator of which is 12; provided, however, that no proration is required for
a Participant who is covered under the Plan for less than one full Plan Year if
the formula for allocations is based on Compensation for a period of at least 12
months.
A "CONTRIBUTION PERIOD" means the period specified in Article VI for which
Employer Contributions shall be made.
An "ELIGIBLE EMPLOYEE" means any Employee who has met the eligibility
requirements of Article III to have Tax-Deferred Contributions made to the Plan
on his behalf.
The "ELIGIBILITY SERVICE" of an employee means the period or periods of service
credited to him under the provisions of Article 11 for purposes of determining
his eligibility to participate in the Plan as May be required under Article III
or Article VI.
An "EMPLOYEE" means any employee of an Employer other than the following:
(a) an employee who is covered by a collective bargaining agreement that does
not specifically provide for coverage under the Plan;
(b) an employee who is a nonresident alien who does not receive United States
source income; and
(c) any individual who is a signatory to a contract, letter of agreement, or
other document that acknowledges his status as an independent contractor
not entitled to benefits under the Plan or who is not otherwise classified
by the Employer as a common law employee and with
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respect to whom the Employer does not withhold income taxes and file Form
W-2 (or any replacement Form), with the Internal Revenue Service and does
not remit Social Security payments to the Federal government, even if such
individual is later reclassified as a common law employee; provided,
however, that if any such individuals are reclassified as employees of an
Employer and if as a result of such reclassification the Plan would not
otherwise meet the minimum coverage requirements of Section 41 0(b) of the
Code in any Plan Year, the group of employees eligible to participate in
the Plan shall be expanded to include the minimum number of reclassified
employees that is necessary to meet the minimum coverage requirements. The
reclassified employees who become eligible to participate under the
provisions of the immediately preceding clause shall be those reclassified
employees who have completed the greatest number of Hours of Service
during the Plan Year.
An "EMPLOYER" means the Sponsor and any entity which has adopted the Plan as may
be provided under Article XX.
An "EMPLOYER CONTRIBUTION" means the amount, if any, that an Employer
contributes to the Plan as may be provided under Article VI or Article XXII.
An "ENROLLMENT DATE" means the first day of each calendar month of the Plan
Year.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time. Reference to a section of ERISA includes such section and any
comparable section or sections of any future legislation that amends,
supplements, or supersedes such section.
"ESOP SUB-ACCOUNT" means that portion of a Participant's Participant Account
that is attributable to amounts merged into the Plan from the Jeffreys Steel
Company, Inc. Employee Profit Sharing Pension Stock Ownership Plan and Trust or
the Pacific Metal Company Amended and Restated Employee Stock Ownership Plan and
Trust, if any.
The "GENERAL FUND" means a Trust Fund maintained by the Trustee as required to
hold and administer any assets of the Trust that are not allocated among any
separate Investment Funds as may be provided in the Plan or the Trust Agreement.
No General Fund shall be maintained if all assets of the Trust are allocated
among separate Investment Funds.
A "HIGHLY COMPENSATED EMPLOYEE" means an Employee or former Employee who is a
highly compensated active employee or highly compensated former employee as
defined hereunder.
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A "highly compensated active employee" includes any Employee who performs
services for an Employer during the determination year and who (i) was a five
percent owner at any time during the determination year or the look back year,
(ii) received compensation from an Employer during the look back year in excess
of $75,000 (subject to adjustment annually at the same time and in the same
manner as under Section 415(d) of the Code), (iii) was in the top paid group of
employees for the look back year and received compensation from an Employer
during the look back year in excess of $50,000 (subject to adjustment annually
at the same time and in the same manner as under Section 415(d) of the Code),
(iv) was an officer of an Employer during the look back year and received
compensation during that year in excess of 50 percent of the dollar limitation
in effect for that year under Section 415(b)(1)(A) of the Code or, if no officer
received compensation in excess of that amount for the look back year or the
determination year, received the greatest compensation for the look back year of
any officer, or (v) was one of the 100 employees paid the greatest compensation
by an Employer for the determination year and would be described in (ii), (iii),
or (iv) above if the term "determination year" were substituted for "look back
year".
A "highly compensated former employee" includes any Employee who separated from
service from an Employer and all Related Companies (or is deemed to have
separated from service from an Employer and all Related Companies) prior to the
determination year, performed no services for an Employer during the
determination year, and was a highly compensated active employee for either the
separation year or any determination year ending on or after the date the
Employee attains age 55.
The determination of who is a Highly Compensated Employee hereunder, including
determinations as to the number and identity of employees in the top paid group,
the 100 employees receiving the greatest compensation from an Employer, the
number of employees treated as officers, and the compensation considered, shall
be made in accordance with the provisions of Section 414(q) of the Code and
regulations issued thereunder. For purposes of this definition, the following
terms have the following meanings:
(a) The "determination year" means the Plan Year.
(b) The "look back year" means the 12-month period immediately preceding the
determination year.
An "HOUR OF SERVICE" with respect to a person means each hour, if any, that may
be credited to him in accordance with the provisions of Article 11.
An "INVESTMENT FUND" means any separate investment Trust Fund maintained by the
Trustee as may be provided in the Plan or the Trust Agreement or any separate
investment fund maintained by
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the Trustee, to the extent that there are Participant Sub-Accounts under such
funds, to which assets of the Trust may be allocated and separately invested.
A "MATCHING CONTRIBUTION" means any Employer Contribution made to the Plan on
account of a Participant's Tax-Deferred Contributions as provided in Article V1.
The "NORMAL RETIREMENT DATE" of an employee means the date he attains age 65.
A "PARTICIPANT" means any person who has a Participant Account in the Trust.
A "PARTICIPANT ACCOUNT" means the account maintained by the Trustee in the name
of a Participant that reflects his interest in the Trust and any Sub-Accounts
maintained thereunder, as provided in Article VIII.
The "PLAN" means the Metals USA, Inc. 401 (k) Plan, as from time to time in
effect.
A "PLAN YEAR" means the period beginning June 1, 1998 and ending December 31,
1998, and each 12-consecutive-month period thereafter.
A "PREDECESSOR EMPLOYER" means any predecessor organization to an Employer,
whether or not the Employer maintains a plan of such predecessor organization.
A "PROFIT-SHARING CONTRIBUTION" means any Employer Contribution made to the Plan
as provided in Article VI, other than Matching Contributions and Qualified
Nonelective Contributions.
A "QUALIFIED MATCHING CONTRIBUTION" means any Matching Contribution made to the
Plan as provided in Article VI that may be taken into account to satisfy the
limitations on contributions by Highly Compensated Employees under Article VII.
A "QUALIFIED NONELECTIVE CONTRIBUTION" means any Employer Contribution made to
the Plan as provided in Article VI that may be taken into account to satisfy the
limitations on contributions by Highly Compensated Employees under Article VII,
except Qualified Matching Contributions.
A "RELATED COMPANY" means any corporation or business, other than an Employer,
which would be aggregated with an Employer for a relevant purpose under Section
414 of the Code.
A "ROLLOVER CONTRIBUTION" means any rollover contribution to the Plan made by a
Participant as may be permitted under Article V.
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The "SETTLEMENT DATE" of a Participant means the date on which a Participant's
interest under the Plan becomes distributable in accordance with Article XV.
The "SPONSOR" means Metals USA, Inc., and any successor thereto.
A "SUB-ACCOUNT" means any of the individual sub-accounts of a Participant's
Participant Account that is maintained as provided in Article VIII.
A "TAX-DEFERRED CONTRIBUTION" means the amount contributed to the Plan on a
Participant's behalf by his Employer in accordance with his reduction
authorization executed pursuant to Article IV.
The "TRUST" means the trust, custodial accounts, annuity contracts, or insurance
contracts maintained by the Trustee under the Trust Agreement.
The "TRUST AGREEMENT" means the agreement entered into between the Sponsor and
the Trustee relating to the holding, investment, and reinvestment of the assets
of the Plan, together with all amendments thereto and shall include any
agreement establishing a custodial account, an annuity contract, or an insurance
contract (other than a life, health or accident, property, casualty, or
liability insurance contract) for the investment of assets if the custodial
account or contract would, except for the fact that it is not a trust,
constitute a qualified trust under Section 401 of the Code.
The "TRUSTEE" means the trustee or any successor trustee which at the time shall
be designated, qualified, and acting under the Trust Agreement and shall include
any insurance company that issues an annuity or insurance contract pursuant to
the Trust Agreement or any person holding assets in a custodial account pursuant
to the Trust Agreement. The Sponsor may designate a person or persons other than
the Trustee to perform any responsibility of the Trustee under the Plan, other
than trustee responsibilities as defined in Section 405(c)(3) of ERISA, and the
Trustee shall not be liable for the performance of such person in carrying out
such responsibility except as otherwise provided by ERISA. The term Trustee
shall include any delegate of the Trustee as may be provided in the Trust
Agreement.
A "TRUST FUND" means any fund maintained under the Trust by the Trustee.
A "VALUATION DATE" means the date or dates designated by the Sponsor and
communicated in writing to the Trustee for the purpose of valuing the General
Fund and each Investment Fund and adjusting Participant Accounts and
Sub-Accounts hereunder, which dates need not be uniform with respect to the
General Fund, each Investment Fund, Participant Account, or Sub-Account;
provided, however, that the General Fund and each Investment Fund shall be
valued and each Participant Account and Sub-Account shall be adjusted no less
often than once annually.
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The "VESTING SERVICE" of an employee means the period or periods of service
credited to him under the provisions of Article 11 for purposes of determining
his vested interest in his Employer Contributions Sub-Account, if Employer
Contributions are provided for under either Article VI or Article XXII.
1.2 INTERPRETATION
Where required by the context, the noun, verb, adjective, and adverb forms of
each defined term shall include any of its other forms. Wherever used herein,
the masculine pronoun shall include the feminine, the singular shall include the
plural, and the plural shall include the singular.
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ARTICLE II
SERVICE
2.1 DEFINITIONS
For purposes of this Article, the following terms have the following meanings:
(a) The "continuous service" of an employee means the service credited to him
in accordance with the provisions of Section 2.3 of the Plan.
(b) The "employment commencement date" of an employee means the date he first
completes an Hour of Service.
(c) A "maternity/paternity absence" means a person's absence from employment
with an Employer or a Related Company because of the person's pregnancy,
the birth of the person's child, the placement of a child with the person
in connection with the person's adoption of the child, or the caring for
the person's child immediately following the child's birth or adoption. A
person's absence from employment will not be considered a
maternity/paternity absence unless the person furnishes the Administrator
such timely information as may reasonably be required to establish that
the absence was for one of the purposes enumerated in this paragraph and
to establish the number of days of absence attributable to such purpose.
(d) The "reemployment commencement date" of an employee means the first date
following a severance date on which he again completes an Hour of Service.
(e) The "severance date" of an employee means the earlier of (i) the date on
which he retires, dies, or his employment with an Employer and all Related
Companies is otherwise terminated, or (ii) the first anniversary of the
first date of a period during which he is absent from work with an
Employer and all Related Companies for any other reason; provided,
however, that if he terminates employment with or is absent from work with
an Employer and all Related Companies on account of service with the armed
forces of the United States, he shall not incur a severance date if he is
eligible for reemployment rights under the Uniformed Services Employment
and Reemployment Rights Act of 1994 and he returns to work with an
Employer or a Related Company within the period during which he retains
such reemployment rights.
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2.2 CREDITING OF HOURS OF SERVICE
A person shall be credited with an Hour of Service for each hour for which he is
paid, or entitled to payment, for the performance of duties for an Employer, a
Predecessor Employer, or any Related Company.
2.3 CREDITING OF CONTINUOUS SERVICE
A person shall be credited with continuous service for the aggregate of the
periods of time between his employment commencement date or any reemployment
commencement date and the severance date that next follows such employment
commencement date or reemployment commencement date; provided, however, that an
employee who has a reemployment commencement date within the 12-
consecutive-month period following the earlier of the first date of his absence
or his severance date shall be credited with continuous service for the period
between such severance date and reemployment commencement date.
2.4 ELIGIBILITY SERVICE
An employee shall be credited with Eligibility Service equal to his continuous
service.
2.5 VESTING SERVICE
An employee shall be credited with years of Vesting Service equal to his period
of continuous service.
2.6 CREDITING OF SERVICE ON TRANSFER OR AMENDMENT
Notwithstanding any other provision of the Plan to the contrary, if an Employee
is transferred from employment covered under a qualified plan maintained by an
Employer or a Related Company for which service is credited based on Hours of
Service and computation periods in accordance with Department of Labor
Regulations ss.2530.200 through 2530.203 to employment covered under the Plan
or, prior to amendment, the Plan provided for crediting of service on the basis
of Hours of Service and computation periods, an affected Employee shall be
credited with Eligibility Service and Vesting Service hereunder equal to:
(a) the Employee's years of service credited to him under the Hours of Service
method before the computation period in which the transfer or the
effective date of the amendment occurs, plus
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(b) the greater of (i) the period of service that would be credited to the
Employee under the elapsed time method provided hereunder for his
employment during the entire computation period in which the transfer or
the effective date of the amendment occurs or (ii) the service taken into
account under the Hours of Service method for such computation period as
of the transfer date or the effective date of the amendment, plus
(c) the service credited to such Employee under the elapsed time method
provided hereunder for the period of time beginning on the day after the
last day of the computation period in which the transfer or the effective
date of the amendment occurs.
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ARTICLE III
ELIGIBILITY
3.1 ELIGIBILITY
Each Employee who was a participant in a plan that was merged into the Plan
shall become an Eligible Employee in this Plan as of the date of the merger.
Each other Employee shall become an Eligible Employee as of the Enrollment Date
coinciding with or next following the date on which he has completed six full
calendar months of Eligibility Service.
3.2 TRANSFERS OF EMPLOYMENT
If a person is transferred directly from employment with an Employer or with a
Related Company in a capacity other than as an Employee to employment as an
Employee, he shall become an Eligible Employee as of the date he is so
transferred if prior to an Enrollment Date coinciding with or preceding such
transfer date he has met the eligibility requirements of Section 3. 1.
Otherwise, the eligibility of a person who is so transferred to elect to have
Tax-Deferred Contributions made to the Plan on his behalf shall be determined in
accordance with Section 3. 1.
3.3 REEMPLOYMENT
If a person who terminated employment with an Employer and all Related Companies
is reemployed as an Employee and if he had been an Eligible Employee prior to
his termination of employment, he shall again become an Eligible Employee on the
date he is reemployed. Otherwise, the eligibility of a person who terminated
employment with an Employer and all Related Companies and who is reemployed by
an Employer or a Related Company to elect to have Tax-Deferred Contributions
made to the Plan on his behalf shall be determined in accordance with Section
3.1 or 3.2.
3.4 NOTIFICATION CONCERNING NEW ELIGIBLE EMPLOYEES
Each Employer shall notify the Administrator as soon as practicable of Employees
becoming Eligible Employees as of any date.
3.5 EFFECT AND DURATION
Upon becoming an Eligible Employee, an Employee shall be entitled to elect to
have Tax-Deferred Contributions made to the Plan on his behalf and shall be
bound by all the terms and conditions of the Plan and the Trust Agreement. A
person shall continue as an Eligible Employee eligible to have
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Tax-Deferred Contributions made to the Plan on his behalf only so long as he
continues employment as an Employee.
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ARTICLE IV
TAX-DEFERRED CONTRIBUTIONS
4.1 TAX-DEFERRED CONTRIBUTIONS
Effective as of the date he becomes an Eligible Employee, or any subsequent
Enrollment Date, each Eligible Employee may elect in accordance with rules
prescribed by the Administrator to have Tax- Deferred Contributions made to the
Plan on his behalf by his Employer as hereinafter provided. An Eligible
Employee's election shall include his authorization for his Employer to reduce
his Compensation and to make Tax-Deferred Contributions on his behalf and his
election as to the investment of his contributions in accordance with Article X.
Tax-Deferred Contributions on behalf of an Eligible Employee shall commence with
the first payment of Compensation made on or after the date on which his
election is effective.
4.2 AMOUNT OF TAX-DEFERRED CONTRIBUTIONS
The amount of Tax-Deferred Contributions to be made to the Plan on behalf of an
Eligible Employee by his Employer shall be an integral percentage of his
Compensation of not less than one percent nor more than 15 percent. In the event
an Eligible Employee elects to have his Employer make Tax- Deferred
Contributions on his behalf, his Compensation shall be reduced for each payroll
period by the percentage he elects to have contributed on his behalf to the Plan
in accordance with the terms of his currently effective reduction authorization.
4.3 CHANGES IN REDUCTION AUTHORIZATION
An Eligible Employee may change the percentage of his future Compensation that
his Employer contributes on his behalf as Tax-Deferred Contributions at such
time or times during the Plan Year as the Administrator may prescribe by filing
an amended reduction authorization with his Employer such number of days prior
to the date such change is to become effective as the Administrator shall
prescribe. An Eligible Employee who changes his reduction authorization shall be
limited to selecting a percentage of his Compensation that is otherwise
permitted hereunder. Tax-Deferred Contributions shall be made on behalf of such
Eligible Employee by his Employer pursuant to his amended reduction
authorization filed in accordance with this Section commencing with Compensation
paid to the Eligible Employee on or after the date such filing is effective,
until otherwise altered or terminated in accordance with the Plan.
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4.4 SUSPENSION OF TAX-DEFERRED CONTRIBUTIONS
An Eligible Employee on whose behalf Tax-Deferred Contributions are being made
may have such contributions suspended at any time by giving such number of days
advance notice to his Employer as the Administrator shall prescribe. Any such
voluntary suspension shall take effect commencing with Compensation paid to such
Eligible Employee on or after the expiration of the required notice period and
shall remain in effect until Tax-Deferred Contributions are resumed as
hereinafter set forth.
4.5 RESUMPTION OF TAX-DEFERRED CONTRIBUTIONS
An Eligible Employee who has voluntarily suspended his Tax-Deferred
Contributions may have such contributions resumed at such time or times during
the Plan Year as the Administrator may prescribe, by filing a new reduction
authorization with his Employer such number of days prior to the date as of
which such contributions are to be resumed as the Administrator shall prescribe.
4.6 DELIVERY OF TAX-DEFERRED CONTRIBUTIONS
As soon after the date an amount would otherwise be paid to an Employee as it
can reasonably be separated from Employer assets, each Employer shall cause to
be delivered to the Trustee in cash all Tax-Deferred Contributions attributable
to such amounts.
4.7 VESTING OF TAX-DEFERRED CONTRIBUTIONS
A Participant's vested interest in his Tax-Deferred Contributions Sub-Account
shall be at all times 100 percent.
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ARTICLE V
AFTER-TAX AND ROLLOVER CONTRIBUTIONS
5.1 NO AFTER-TAX CONTRIBUTIONS
There shall be no After-Tax Contributions made to the Plan. Participant Accounts
may include amounts attributable to After-Tax Contributions made to a plan that
was merged into the Plan prior to the merger date.
5.2 ROLLOVER CONTRIBUTIONS
An Employee who was a participant in a plan qualified under Section 401 or 403
of the Code and who receives a cash distribution from such plan that he elects
either (i) to roll over immediately to a qualified retirement plan or (ii) to
roll over into a conduit IRA from which he receives a later cash distribution,
may elect to make a Rollover Contribution to the Plan if he is entitled under
Section 402(c), Section 403(a)(4), or Section 408(d)(3)(A) of the Code to roll
over such distribution to another qualified retirement plan. The Administrator
may require an Employee to provide it with such information as it deems
necessary or desirable to show that he is entitled to roll over such
distribution to another qualified retirement plan. An Employee shall make a
Rollover Contribution to the Plan by delivering, or causing to be delivered, to
the Trustee the cash that constitutes the Rollover Contribution amount within 60
days of receipt of the distribution from the plan or from the conduit IRA in the
manner prescribed by the Administrator. If the Employee does not already have an
investment election on file with the Administrator, the Employee shall also
deliver to the Administrator his election as to the investment of his
contributions in accordance with Article X.
5.3 VESTING OF ROLLOVER CONTRIBUTIONS
A Participant's vested interest in his Rollover Contributions Sub-Account shall
be at all times 100 percent.
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ARTICLE VI
EMPLOYER CONTRIBUTIONS
6.1 CONTRIBUTION PERIOD
The Contribution Period for Matching Contributions under the Plan shall be each
month. The Contribution Period for Qualified Nonelective and Profit-Sharing
Contributions under the Plan shall be each Plan Year.
6.2 PROFIT-SHARING CONTRIBUTIONS
Each Employer may, in its discretion, make a Profit-Sharing Contribution to the
Plan for the Contribution Period in an amount determined by the Employer.
6.3 ALLOCATION OF PROFIT-SHARING CONTRIBUTIONS
Any Profit-Sharing Contribution made by an Employer for a Contribution Period
shall be allocated among its Eligible Employees during the Contribution Period
who are eligible to participate in the allocation of Profit-Sharing
Contributions for the Contribution Period, as determined under this Article. The
allocable share of each such Eligible Employee shall be in the ratio which his
Compensation from the Employer for the Contribution Period bears to the
aggregate of such Compensation for all such Eligible Employees.
6.4 QUALIFIED NONELECTIVE CONTRIBUTIONS
Each Employer may, in its discretion, make a Qualified Nonelective Contribution
to the Plan for the Contribution Period in an amount determined by the Sponsor.
6.5 ALLOCATION OF QUALIFIED NONELECTIVE CONTRIBUTIONS
Any Qualified Nonelective Contribution made for a Contribution Period shall be
allocated among the Eligible Employees who are eligible to participate in the
allocation of Qualified Nonelective Contributions for the Contribution Period,
as determined under this Article, other than any such Eligible Employee who is a
Highly Compensated Employee. The allocable share of each such Eligible Employee
shall be in the ratio which his Compensation from the Employer for the Plan Year
bears to the aggregate of such Compensation for all such Eligible Employees.
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6.6 MATCHING CONTRIBUTIONS
Each Employer shall make a Matching Contribution to the Plan for each
Contribution Period in an amount equal to 50 percent of the aggregate "eligible
Tax-Deferred Contributions" for the Contribution Period made on behalf of its
Eligible Employees during the Contribution Period who are eligible to
participate in the allocation of Matching Contributions for the Contribution
Period, as determined under this Article. In addition, each Employer may make a
further Matching Contribution to the Plan for the Contribution Period in an
amount equal to a percentage, determined by the Employer, in its discretion, of
the aggregate Tax-Deferred Contributions made on behalf of such Eligible
Employees for the Contribution Period. For purposes of this Article, "eligible
Tax- Deferred Contributions" with respect to an Eligible Employee mean the
Tax-Deferred Contributions made on his behalf for the Contribution Period in an
amount up to, but not exceeding, the "match level". For purposes of this
Article, the "match level" means six percent of an Eligible Employee's
Compensation for the Contribution Period.
An Employer may designate any portion or all of its Matching Contribution as a
Qualified Matching Contribution. Amounts that are designated as Qualified
Matching Contributions shall be accounted for separately and may be withdrawn
only as permitted under the Plan. Notwithstanding any other provision of the
Plan to the contrary, a Participant's vested interest in that portion of his
Employer Contributions Sub-Account that is attributable to Qualified Matching
Contributions shall be at all times 100 percent.
6.7 ALLOCATION OF MATCHING CONTRIBUTIONS
Any Matching Contribution made by an Employer for the Contribution Period shall
be allocated among its Eligible Employees during the Contribution Period who are
eligible to participate in the allocation of Matching Contributions for the
Contribution Period, as determined under this Article. The allocable share of
each such Eligible Employee shall be an amount equal to 50 percent of the
"eligible Tax-Deferred Contributions" made on his behalf for the Contribution
Period. If an Employer makes a further discretionary Matching Contribution for
the Contribution Period, the allocable share of each such Eligible Employee in
the further Matching Contribution shall be an amount equal to the percentage
determined by the Employer of the TaxDeferred Contributions made on his behalf
for the Contribution Period.
6.8 VERIFICATION OF AMOUNT OF EMPLOYER CONTRIBUTIONS BY THE SPONSOR
The Sponsor shall verify the amount of Employer Contributions to be made by each
Employer in accordance with the provisions of the Plan. Notwithstanding any
other provision of the Plan to the contrary, the Sponsor shall determine the
portion of the Employer Contribution to be made by each
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Employer with respect to an Eligible Employee who transfers from employment with
one Employer as an Employee to employment with another Employer as an Eligible
Employee.
6.9 PAYMENT OF EMPLOYER CONTRIBUTIONS
Employer Contributions made for a Contribution Period shall be paid in cash to
the Trustee within the period of time required under the Code in order for the
contribution to be deductible by the Employer in determining its Federal income
taxes for the Plan Year.
6.10 ELIGIBILITY TO PARTICIPATE IN ALLOCATION
Each Employee shall be eligible to participate in the allocation of Employer
Contributions beginning on the date he becomes, or again becomes, an Eligible
Employee in accordance with the provisions of Article 111. Notwithstanding the
foregoing, no person shall be eligible to participate in the allocation of
Profit-Sharing Contributions for a Contribution Period unless he is employed by
an Employer or a Related Company on the last day of the Contribution Period;
provided, however, that the foregoing provision shall not apply to a person who
terminates employment during the Plan Year on or after his Normal Retirement
Date or the date he attains age 55 or because of death or physical or mental
disability such that he can no longer continue in the service of his Employer,
as determined by the Administrator on the basis of a written certificate of a
physician acceptable to it; and provided, further, that if the Plan would not
otherwise meet the minimum coverage requirements of Section 41 0(b) of the Code
in any Plan Year, the group of Employees eligible to participate in the
allocation of Profit-Sharing Contributions shall be expanded to include the
minimum number of Employees who are not employed by an Employer or a Related
Company on the last day of the Contribution Period that is necessary to meet the
minimum coverage requirements. The Employees who become eligible to participate
under the provisions of the immediately preceding clause shall be those
Employees who have completed the greatest number of Hours of Service during the
Contribution Period.
6.11 VESTING OF EMPLOYER CONTRIBUTIONS
A Participant's vested interest in his Qualified Nonelective and Qualified
Matching Contributions Sub-Accounts shall be at all times 100 percent. Except as
otherwise provided below with respect to a Participant's ESOP Sub-Account
attributable to amounts transferred from the Pacific Metal Company Amended and
Restated Employee Stock Ownership Plan and Trust, a Participant's vested
interest in his Profit-Sharing and Matching Contributions Sub-Accounts and his
ESOP Sub-Account that is attributable to amounts transferred from the Jeffreys
Steel Company, Inc. Employee Profit Sharing Pension Stock Ownership Plan shall
be determined in accordance with the following schedule:
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YEARS OF VESTING-SERVICE VESTED INTEREST
Less than 1 0%
I but less than 2 25%
2 but less than 3 50%
3 but less than 4 75%
4 or more 100%
A Participant's vested interest in his ESOP Sub-Account attributable to amounts
transferred from the Pacific Metal Company Amended and Restated Employee Stock
Ownership Plan and Trust shall be determined in accordance with the following
schedule:
YEARS OF VESTING SERVICE VESTED INTEREST
Less than 3 0%
3 but less than 4 20%
4 but less than 5 40%
5 but less than 6 60%
6 but less than 7 80%
7 or more 100%
Notwithstanding the foregoing, if a Participant is employed by an Employer or a
Related Company on his Normal Retirement Date, the date he attains age 55, the
date he becomes physically or mentally disabled such that he can no longer
continue in the service of his Employer, as determined by the Administrator on
the basis of a written certificate of a physician acceptable to it, or the date
he dies, his vested interest in his Employer Contributions SubAccount shall be
100 percent.
6.12 ELECTION OF FORMER VESTING SCHEDULE
If the Sponsor adopts an amendment to the Plan that directly or indirectly
affects the computation of a Participant's vested interest in his Employer
Contributions Sub-Account, any Participant with three or more years of Vesting
Service shall have a right to have his vested interest in his Employer
Contributions Sub-Account continue to be determined under the vesting provisions
in effect prior to the amendment rather than under the new vesting provisions,
unless the vested interest of the Participant in his Employer Contributions
Sub-Account under the Plan as amended is not at any time less than such vested
interest determined without regard to the amendment. A Participant shall
exercise his right under this Section by giving written notice of his exercise
thereof to the Administrator within 60 days after the latest of (i) the date he
receives notice of the amendment from the Administrator, (ii) the effective date
of the amendment, or (iii) the date the amendment is
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adopted. Notwithstanding the foregoing, a Participant's vested interest in his
Employer Contributions Sub-Account on the effective date of such an amendment
shall not be less than his vested interest in his Employer Contributions
Sub-Account immediately prior to the effective date of the amendment.
6.13 FORFEITURES TO REDUCE EMPLOYER CONTRIBUTIONS
Notwithstanding any other provision of the Plan to the contrary, the amount of
the Employer Contribution required under this Article for a Plan Year shall be
reduced by the amount of any forfeitures occurring during the Plan Year.
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ARTICLE VII
LIMITATIONS ON CONTRIBUTIONS
7.1 DEFINITIONS
For purposes of this Article, the following terms have the following meanings:
(a) The "actual deferral percentage" with respect to an Eligible Employee for
a particular Plan Year means the ratio of the Tax-Deferred Contributions
made on his behalf for the Plan Year to his test compensation for the Plan
Year, except that, to the extent permitted by regulations issued under
Section 401 (k) of the Code, the Sponsor may elect to take into account in
computing the numerator of each Eligible Employee's actual deferral
percentage the qualified matching contributions and/or qualified
nonelective contributions made to the Plan on his behalf for the Plan
Year; provided, however, that contributions made on a Participant's behalf
for a Plan Year shall be included in determining his actual deferral
percentage for such Plan Year only if the contributions are made to the
Plan prior to the end of the 12-month period immediately following the
Plan Year to which the contributions relate. The determination and
treatment of the actual deferral percentage amounts for any Participant
shall satisfy such other requirements as may be prescribed by the
Secretary of the Treasury.
(b) The "aggregate limit" means the sum of (i) 125 percent of the greater of
the average contribution percentage for eligible participants other than
Highly Compensated Employees or the average actual deferral percentage for
Eligible Employees other than Highly Compensated Employees and (ii) the
lesser of 200 percent or two plus the lesser of such average contribution
percentage or average actual deferral percentage, or, if it would result
in a larger aggregate limit, the sum of (iii) 125 percent of the lesser of
the average contribution percentage for eligible participants other than
Highly Compensated Employees or the average actual deferral percentage for
Eligible Employees other than Highly Compensated Employees and (iv) the
lesser of 200 percent or two plus the greater of such average contribution
percentage or average actual deferral percentage.
(c) The "annual addition" with respect to a Participant for a limitation year
means the sum of the Tax-Deferred Contributions and Employer Contributions
allocated to his Participant Account for the limitation year (including
any excess contributions that are distributed pursuant to this Article),
the employer contributions, employee contributions, and forfeitures
allocated to his accounts for the limitation year under any other
qualified defined contribution plan (whether or not terminated) maintained
by an Employer or a Related Company concurrently with the Plan, and
amounts described in Sections 415(l)(2) and 419A(d)(2) of the Code
allocated to his account for the limitation year.
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(d) The "Code Section 402(g) limit" means the dollar limit imposed by Section
402(g)(1) of the Code or established by the Secretary of the Treasury
pursuant to Section 402(g)(5) of the Code in effect on January I of the
calendar year in which an Eligible Employee's taxable year begins.
(e) The "contribution percentage" with respect to an eligible participant for
a particular Plan Year means the ratio of the matching contributions made
to the Plan on his behalf for the Plan Year to his test compensation for
such Plan Year, except that, to the extent permitted by regulations issued
under Section 401 (in) of the Code, the Sponsor may elect to take into
account in computing the numerator of each eligible participant's
contribution percentage the Tax-Deferred Contributions and/or qualified
nonelective contributions made to the Plan on his behalf for the Plan
Year; provided, however, that any Tax-Deferred Contributions, qualified
matching contributions, and/or qualified nonelective contributions that
were taken into account in computing the numerator of an eligible
participant's actual deferral percentage may not be taken into account in
computing the numerator of his contribution percentage; and provided,
further, that contributions made by or on a Participant's behalf for a
Plan Year shall be included in determining his contribution percentage for
such Plan Year only if the contributions are made to the Plan prior to the
end of the 12-month period immediately following the Plan Year to which
the contributions relate. The determination and treatment of the
contribution percentage amounts for any Participant shall satisfy such
other requirements as may be prescribed by the Secretary of the Treasury.
(f) An "elective contribution" means any employer contribution made to a plan
maintained by an Employer or any Related Company on behalf of a
Participant in lieu of cash compensation pursuant to his written election
to defer under any qualified CODA as described in Section 401 (k) of the
Code, any simplified employee pension cash or deferred arrangement as
described in Section 402(h)(1)(B) of the Code, any eligible deferred
compensation plan under Section 457 of the Code, or any plan as described
in Section 5 01 (c)(I 8) of the Code, and any contribution made on behalf
of the Participant by an Employer or a Related Company for the purchase of
an annuity contract under Section 403(b) of the Code pursuant to a salary
reduction agreement.
(g) An "eligible participant" means any Employee who is eligible to have
Tax-Deferred Contributions made on his behalf (if Tax-Deferred
Contributions are taken into account in computing contribution
percentages), or to participate in the allocation of matching
contributions (including qualified matching contributions).
(h) An "excess deferral" with respect to a Participant means that portion of a
Participant's Tax- Deferred Contributions that when added to amounts
deferred under other plans or
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arrangements described in Sections 401(k), 408(k), or 403(b) of the Code,
would exceed the Code Section 402(g) limit and is includable in the
Participant's gross income under Section 402(g) of the Code.
(i) A "limitation year" means the calendar year.
(j) A "matching contribution" means any employer contribution allocated to an
Eligible Employee's account under the Plan or any other plan of an
Employer or a Related Company solely on account of elective contributions
made on his behalf or employee contributions made by him.
(k) A "qualified matching contribution" means any matching contribution that is
a qualified matching contribution as defined in regulations issued under Section
401 (k) of the Code, is nonforfeitable when made, and is distributable only as
permitted in regulations issued under Section 401 (k) of the Code.
(1) A "qualified nonelective contribution" means any employer contribution
made on behalf of a Participant that the Participant could not elect
instead to receive in cash, that is a qualified nonelective contribution
as defined in Section 401 (k) and Section 401 (in) of the Code and
regulations issued thereunder, is nonforfeitable when made, and is
distributable only as permitted in regulations issued under Section 401
(k) of the Code.
(m) The "test compensation" of an Eligible Employee for a Plan Year means
compensation as defined in Section 414(s) of the Code and regulations
issued thereunder, limited, however, to $150,000 (subject to adjustment
annually as provided in Section 401 (a)(1 7)(B) and Section 415 (d) of the
Code; provided, however, that the dollar increase in effect on January I
of any calendar year, if any, is effective for Plan Years beginning in
such calendar year). If the test compensation of a Participant is
determined over a period of time that contains fewer than 12 calendar
months, then the annual compensation limitation described above shall be
adjusted with respect to that Participant by multiplying the annual
compensation limitation in effect for the Plan Year by a fraction the
numerator of which is the number of full months in the period and the
denominator of which is 12; provided, however, that no proration is
required for a Participant who is covered under the Plan for less than one
full Plan Year if the formula for allocations is based on Compensation for
a period of at least 12 months.
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7.2 CODE SECTION 402(G) LIMIT
In no event shall the amount of the Tax-Deferred Contributions made on behalf of
an Eligible Employee for his taxable year, when aggregated with any elective
contributions made on behalf of the Eligible Employee under any other plan of an
Employer or a Related Company for his taxable year, exceed the Code Section
402(g) limit. In the event that the Administrator determines that the reduction
percentage elected by an Eligible Employee will result in his exceeding the Code
Section 402(g) limit, the Administrator may adjust the reduction authorization
of such Eligible Employee by reducing the percentage of his Tax-Deferred
Contributions to such smaller percentage that will result in the Code Section
402(g) limit not being exceeded. If the Administrator determines that the
Tax-Deferred Contributions made on behalf of an Eligible Employee would exceed
the Code Section 402(g) limit for his taxable year, the Tax-Deferred
Contributions for such Participant shall be automatically suspended for the
remainder, if any, of such taxable year.
If an Employer notifies the Administrator that the Code Section 402(g) limit has
nevertheless been exceeded by an Eligible Employee for his taxable year, the
Tax-Deferred Contributions that, when aggregated with elective contributions
made on behalf of the Eligible Employee under any other plan of an Employer or a
Related Company, would exceed the Code Section 402(g) limit, plus any income and
minus any losses attributable thereto, shall be distributed to the Eligible
Employee no later than the April 15 immediately following such taxable year. Any
TaxDeferred Contributions that are distributed to an Eligible Employee in
accordance with this Section shall NOT be taken into account in computing the
Eligible Employee's actual deferral percentage for the Plan Year in which the
Tax-Deferred Contributions were made, unless the Eligible Employee is a Highly
Compensated Employee. If an amount of Tax-Deferred Contributions is distributed
to a Participant in accordance with this Section, matching contributions that
are attributable solely to the distributed Tax-Deferred Contributions, plus any
income and minus any losses attributable thereto, shall be forfeited by the
Participant. Any such forfeited amounts shall be treated as a forfeiture under
the Plan in accordance with the provisions of Article XIV as of the last day of
the month in which the distribution of Tax- Deferred Contributions pursuant to
this Section occurs.
7.3 DISTRIBUTION OF EXCESS DEFERRALS
Notwithstanding any other provision of the Plan to the contrary, if a
Participant notifies the Administrator in writing no later than the March I
following the close of the Participant's taxable year that excess deferrals have
been made on his behalf under the Plan for such taxable year, the excess
deferrals, plus any income and minus any losses attributable thereto, shall be
distributed to the Participant no later than the April 15 immediately following
such taxable year. Any TaxDeferred Contributions that are distributed to a
Participant in accordance with this Section shall nevertheless be taken into
account in computing the Participant's actual deferral percentage for the Plan
Year in
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which the Tax-Deferred Contributions were made. If an amount of Tax-Deferred
Contributions is distributed to a Participant in accordance with this Section,
matching contributions that are attributable solely to the distributed
Tax-Deferred Contributions, plus any income and minus any losses attributable
thereto, shall be forfeited by the Participant. Any such forfeited amounts shall
be treated as a forfeiture under the Plan in accordance with the provisions of
Article XIV as of the last day of the month in which the distribution of
Tax-Deferred Contributions pursuant to this Section occurs.
7.4 LIMITATION ON TAX-DEFERRED CONTRIBUTIONS OF HIGHLY COMPENSATED EMPLOYEES
Notwithstanding any other provision of the Plan to the contrary, the
Tax-Deferred Contributions made with respect to a Plan Year on behalf of
Eligible Employees who are Highly Compensated Employees may not result in an
average actual deferral percentage for such Eligible Employees that exceeds the
greater of
(a) a percentage that is equal to 125 percent of the average actual deferral
percentage for all other Eligible Employees; or
(b) a percentage that is not more than 200 percent of the average actual
deferral percentage for all other Eligible Employees and that is not more
than two percentage points higher than the average actual deferral
percentage for all other Eligible Employees.
In order to assure that the limitation contained herein is not exceeded with
respect to a Plan Year, the Administrator is authorized to suspend completely
further Tax-Deferred Contributions on behalf of Highly Compensated Employees for
any remaining portion of a Plan Year or to adjust the projected actual deferral
percentages of Highly Compensated Employees by reducing their percentage
elections with respect to Tax-Deferred Contributions for any remaining portion
of a Plan Year to such smaller percentages that will result in the limitation
set forth above not being exceeded. In the event of any such suspension or
reduction, Highly Compensated Employees affected thereby shall be notified of
the reduction or suspension as soon as possible and shall be given an
opportunity to make a new Tax-Deferred Contribution election to be effective the
first day of the next following Plan Year. In the absence of such an election,
the election in effect immediately prior to the suspension or adjustment
described above shall be reinstated as of the first day of the next following
Plan Year.
In determining the actual deferral percentage for any Eligible Employee who is a
Highly Compensated Employee for the Plan Year, elective contributions, qualified
nonelective contributions, and qualified matching contributions (to the extent
that qualified nonelective contributions and qualified matching contributions
are taken into account in computing actual
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deferral percentages) made to his accounts under any other plan of an Employer
or a Related Company shall be treated as if all such contributions were made to
the Plan; provided, however, that if such a plan has a plan year different from
the Plan Year, any such contributions made to the Highly Compensated Employee's
accounts under the plan for the plan year ending with or within the same
calendar year as the Plan Year shall be treated as if such contributions were
made to the Plan. Notwithstanding the foregoing, such contributions shall not be
treated as if they were made to the Plan if regulations issued under Section 401
(k) of the Code do not permit such plan to be aggregated with the Plan.
If one or more plans of an Employer or Related Company are aggregated with the
Plan for purposes of satisfying the requirements of Section 401 (a)(4) or 41
O(b) of the Code, then actual deferral percentages under the Plan shall be
calculated as if the Plan and such one or more other plans were a single plan.
Plans may be aggregated to satisfy Section 401(k) of the Code only if they have
the same plan year.
The Administrator shall maintain records sufficient to show that the limitation
contained in this Section was not exceeded with respect to any Plan Year and the
amount of the qualified nonelective contributions and/or qualified matching
contributions taken into account in computing actual deferral percentages for
any Plan Year.
7.5 DISTRIBUTION OF EXCESS TAX-DEFERRED CONTRIBUTIONS
Notwithstanding any other provision of the Plan to the contrary, in the event
that the limitation contained in Section 7.4 is exceeded in any Plan Year, the
Tax-Deferred Contributions and qualified matching contributions (to the extent
that such qualified matching contributions are taken into account in computing
his actual deferral percentage) made with respect to a Highly Compensated
Employee that exceed the maximum amount permitted to be contributed to the Plan
on his behalf under Section 7.4, plus any income and minus any losses
attributable thereto, shall be distributed to the Highly Compensated Employee
prior to the end of the next succeeding Plan Year. If such excess amounts are
distributed more than 2 1/2 months after the last day of the Plan Year for which
the excess occurred, an excise tax may be imposed under Section 4979 of the Code
on the Employer maintaining the Plan with respect to such amounts.
The maximum amount permitted to be contributed to the Plan on a Highly
Compensated Employee's behalf under Section 7.4 shall be determined by reducing
Tax-Deferred Contributions and qualified matching contributions (to the extent
that such qualified matching contributions are taken into account in computing
his actual deferral percentage) made on behalf of Highly Compensated Employees
in order of their actual deferral percentages beginning with the highest of such
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percentages. The determination of the amount of excess Tax-Deferred
Contributions shall be made after application of Section 7.3, if applicable.
If an amount of Tax-Deferred Contributions is distributed to a Participant in
accordance with this Section, matching contributions that are attributable
solely to the distributed Tax-Deferred Contributions, plus any income and minus
any losses attributable thereto, shall be forfeited by the Participant. Any such
forfeited amounts shall be treated as a forfeiture under the Plan in accordance
with the provisions of Article XIV as of the last day of the month in which the
distribution of Tax- Deferred Contributions pursuant to this Section occurs.
7.6 LIMITATION ON MATCHING CONTRIBUTIONS OF HIGHLY COMPENSATED EMPLOYEES
Notwithstanding any other provision of the Plan to the contrary, the matching
contributions made with respect to a Plan Year on behalf of eligible
participants who are Highly Compensated Employees may not result in an average
contribution percentage for such eligible participants that exceeds the greater
of
(a) a percentage that is equal to 125 percent of the average contribution
percentage for all other eligible participants; or
(b) a percentage that is not more than 200 percent of the average contribution
percentage for all other eligible participants and that is not more than
two percentage points higher than the average contribution percentage for
all other eligible participants.
In determining the contribution percentage for any eligible participant who is a
Highly Compensated Employee for the Plan Year, matching contributions, employee
contributions, qualified nonelective contributions, and elective contributions
(to the extent that qualified nonelective contributions and elective
contributions are taken into account in computing contribution percentages) made
to his accounts under any other plan of an Employer or a Related Company shall
be treated as if all such contributions were made to the Plan; provided,
however, that if such a plan has a plan year different from the Plan Year, any
such contributions made to the Highly Compensated Employee's accounts under the
plan for the plan year ending with or within the same calendar year as the Plan
Year shall be treated as if such contributions were made to the Plan.
Notwithstanding the foregoing, such contributions shall not be treated as if
they were made to the Plan if regulations issued under Section 401(m) of the
Code do not permit such plan to be aggregated with the Plan.
If one or more plans of an Employer or a Related Company are aggregated with the
Plan for purposes of satisfying the requirements of Section 401 (a)(4) or 41
0(b) of the Code, the contribution percentages under the Plan shall be
calculated as if the Plan and such one or more other plans were
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a single plan. Plans may be aggregated to satisfy Section 401 (m) of the Code
only if they have the same plan year.
The Administrator shall maintain records sufficient to show that the limitation
contained in this Section was not exceeded with respect to any Plan Year and the
amount of the elective contributions, qualified matching contributions, and
qualified nonelective contributions taken into account in computing contribution
percentages for any Plan Year.
7.7 FORFEITURE OR DISTRIBUTION OF EXCESS CONTRIBUTIONS
Notwithstanding any other provision of the Plan to the contrary, in the event
that the limitation contained in Section 7.6 is exceeded in any Plan Year, the
matching contributions made on behalf of a Highly Compensated Employee that
exceed the maximum amount permitted to be contributed to the Plan on behalf of
such Highly Compensated Employee under Section 7.6, plus any income and minus
any losses attributable thereto, shall be forfeited, to the extent forfeitable,
or distributed to the Participant prior to the end of the next succeeding Plan
Year as hereinafter provided. If such excess amounts are distributed more than 2
1/2 months after the last day of the Plan Year for which the excess occurred, an
excise tax may be imposed under Section 4979 of the Code on the Employer
maintaining the Plan with respect to such amounts.
The maximum amount permitted to be contributed to the Plan on behalf of a Highly
Compensated Employee under Section 7.6 shall be determined by reducing matching
contributions made on behalf of Highly Compensated Employees in order of their
contribution percentages beginning with the highest of such percentages.
Any amounts forfeited with respect to a Participant pursuant to this Section
shall be treated as a forfeiture under the Plan in accordance with the
provisions of Article XIV as of the last day of the month in which the
distribution of contributions pursuant to this Section occurs. Excess matching
contributions shall be distributable to the extent the Participant has a vested
interest in his Employer Contributions Sub-Account that is attributable to
matching contributions, other than qualified matching contributions, and shall
otherwise be forfeitable. The determination of the amount of excess matching
contributions shall be made after application of Section 7.3, if applicable, and
after application of Section 7.5, if applicable.
7.8 MULTIPLE USE LIMITATION
Notwithstanding any other provision of the Plan to the contrary, the following
multiple use limitation as required under Section 401 (m) of the Code shall
apply: the sum of the average actual deferral percentage for Eligible Employees
who are Highly Compensated Employees and the average
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contribution percentage for eligible participants who are Highly Compensated
Employees may not exceed the aggregate limit. In the event that, after
satisfaction of Section 7.5 and Section 7.7, it is determined that contributions
under the Plan fail to satisfy the multiple use limitation contained herein, the
multiple use limitation shall be satisfied by further reducing the actual
deferral percentages of Eligible Employees who are Highly Compensated Employees
(beginning with the highest such percentage) to the extent necessary to
eliminate the excess, with such further reductions to be treated as excess
Tax-Deferred Contributions and disposed of as provided in Section 7.5, or in an
alternative manner, consistently applied, that may be permitted by regulations
issued under Section 401 (m) of the Code.
7.9 DETERMINATION OF INCOME OR LOSS
The income or loss attributable to excess contributions that are distributed
pursuant to this Article shall be determined for the preceding Plan Year under
the method otherwise used for allocating income or loss to Participant's
Participant Accounts.
7.10 CODE SECTION 415 LIMITATIONS ON CREDITING OF CONTRIBUTIONS AND FORFEITURES
Notwithstanding any other provision of the Plan to the contrary, the annual
addition with respect to a Participant for a limitation year shall in no event
exceed the lesser of (i) $30,000 (adjusted as provided in Section 415(d) of the
Code, with the first adjustment being made for limitation years beginning on or
after January 1, 1996) or (ii) 25 percent of the Participant's compensation, as
defined in Section 415(c)(3) of the Code and regulations issued thereunder, for
the limitation year. If the annual addition to the Participant Account of a
Participant in any limitation year would otherwise exceed the amount that may be
applied for his benefit under the limitation contained in this Section, the
limitation shall be satisfied by reducing contributions made on behalf of the
Participant to the extent necessary in the following order:
Tax-Deferred Contributions made on the Participant's behalf for the limitation
year that have not been matched, if any, shall be reduced.
Tax-Deferred Contributions made on the Participant's behalf for the limitation
year that have been matched and the matching contributions attributable thereto,
if any, shall be reduced pro rata.
Employer Contributions (other than matching contributions and qualified
nonelective contributions) otherwise allocable to the Participant's Participant
Account for the limitation year shall be reduced.
Qualified nonelective contributions made on the Participant's behalf for the
limitation year shall be reduced.
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The amount of any reduction of Tax-Deferred Contributions (plus any income
attributable thereto) shall be returned to the Participant. The amount of any
reduction of Employer Contributions shall be deemed a forfeiture for the
limitation year. Amounts deemed to be forfeitures under this Section shall be
held unallocated in a suspense account established for the limitation year and
shall be applied against the Employer's contribution obligation for the next
following limitation year (and succeeding limitation years, as necessary). If a
suspense account is in existence at any time during a limitation year, all
amounts in the suspense account must be allocated to Participants' Participant
Accounts (subject to the limitations contained herein) before any further
Tax-Deferred Contributions or Employer Contributions may be made to the Plan on
behalf of Participants. No suspense account established hereunder shall share in
any increase or decrease in the net worth of the Trust. For purposes of this
Article, excesses shall result only from the allocation of forfeitures, a
reasonable error in estimating a Participant's annual compensation (as defined
in Section 415(c)(3) of the Code and regulations issued thereunder), a
reasonable error in determining the amount of Tax-Deferred Contributions that
may be made with respect to any Participant under the limits of Section 415 of
the Code, or other limited facts and circumstances that justify the availability
of the provisions set forth above.
7.11 COVERAGE UNDER OTHER QUALIFIED DEFINED CONTRIBUTION PLAN
If a Participant is covered by any other qualified defined contribution plan
(whether or not terminated) maintained by an Employer or a Related Company
concurrently with the Plan, and if the annual addition for the limitation year
would otherwise exceed the amount that may be applied for the Participant's
benefit under the limitation contained in Section 7. 10, such excess shall be
reduced first by applying the procedures set forth in Section 7. 10. If the
limitation contained in Section 7. 10 is still not satisfied, such excess shall
be reduced by returning the employee contributions made by the Participant for
the limitation year under all such other plans and the income attributable
thereto to the extent necessary. If the limitation contained in Section 7. 10 is
still not satisfied after returning all of such employee contributions, then the
portion of the employer contributions and of forfeitures for the limitation year
under all such other plans that has been allocated to the Participant
thereunder, but which exceeds the limitation set forth in Section 7. 10 shall be
reduced and disposed of as provided in such other plans; provided, however, that
if the Participant is covered by a money purchase pension plan, the forfeiture
shall be effected first under any other defined contribution plan that is not a
money purchase pension plan and, if the limitation is still not satisfied, then
under such money purchase pension plan.
7.12 COVERAGE UNDER QUALIFIED DEFINED BENEFIT PLAN
If a Participant in the Plan is also covered by a qualified defined benefit plan
(whether or not terminated) maintained by an Employer or a Related Company, in
no event shall the sum of the
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defined benefit plan fraction (as defined in Section 415(e)(2) of the Code) and
the defined contribution plan fraction (as defined in Section 415(e)(3) of the
Code) exceed 1.0 in any limitation year. If, before October 3, 1973, the
Participant was an active participant in a qualified defined benefit plan
maintained by an Employer or a Related Company and otherwise satisfies the
requirements of Section 2004(d)(2) of ERISA, then for purposes of applying this
Section, the defined benefit plan fraction shall not exceed 1.0. In the event
the special limitation contained in this Section is exceeded, contributions and
forfeitures allocated to the Participant under the Plan and any other defined
contribution plan maintained by the Employer or a Related Company shall be
disposed of in the order and manner specified in Section 7.11 to the extent
necessary to meet such limitation.
7.13 SCOPE OF LIMITATIONS
The limitations contained in Sections 7.10, 7.11, and 7.12 shall be applicable
only with respect to benefits provided pursuant to defined contribution plans
and defined benefit plans described in Section 415(k) of the Code.
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ARTICLE VIII
TRUST FUNDS AND PARTICIPANT ACCOUNTS
8.1 GENERAL FUND
The Trustee shall maintain a General Fund as required to hold and administer any
assets of the Trust that are not allocated among the Investment Funds as
provided in the Plan or the Trust Agreement. The General Fund shall be held and
administered as a separate common trust fund. The interest of each Participant
or Beneficiary under the Plan in the General Fund shall be an undivided
interest.
8.2 INVESTMENT FUNDS
The Sponsor shall determine the number and type of Investment Funds and select
the investments for such Investment Funds. The Sponsor shall communicate the
same and any changes therein in writing to the Administrator and the Trustee.
Each Investment Fund shall be held and administered as a separate common trust
fund. The interest of each Participant or Beneficiary under the Plan in any
Investment Fund shall be an undivided interest.
The Sponsor may determine to offer one or more Investment Funds that are
invested in whole or in part in equity securities issued by an Employer or a
Related Company that are publicly traded and are "qualifying employer
securities" as defined in Section 407(d)(5) of ERISA.
8.3 LOAN INVESTMENT FUND
If a loan from the Plan to a Participant is approved in accordance with the
provisions of Article XII, the Sponsor shall direct the establishment and
maintenance of a loan Investment Fund in the Participant's name. The assets of
the loan Investment Fund shall be held as a separate investment fund. A
Participant's loan Investment Fund shall be invested in the note reflecting the
loan that is executed by the Participant in accordance with the provisions of
Article XII. Notwithstanding any other provision of the Plan to the contrary,
income received with respect to a Participant's loan Investment Fund shall be
allocated and the loan Investment Fund shall be administered as provided in
Article XII.
8.4 INCOME ON TRUST
Any dividends, interest, distributions, or other income received by the Trustee
with respect to any Trust Fund maintained hereunder shall be allocated by the
Trustee to the Trust Fund for which the income was received.
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8.5 PARTICIPANT ACCOUNTS
As of the first date a contribution is made by or on behalf of an Employee,
there shall be established a Participant Account in his name reflecting his
interest in the Trust. Each Participant Account shall be maintained and
administered for each Participant and Beneficiary in accordance with the
provisions of the Plan. The balance of each Participant Account shall be the
balance of the account after all credits and charges thereto, for and as of such
date, have been made as provided herein.
8.6 SUB-ACCOUNTS
A Participant's Participant Account shall be divided into individual
Sub-Accounts reflecting the portion of the Participant's Participant Account
that is derived from Tax-Deferred Contributions, Rollover Contributions, prior
After-Tax Contributions or Employer Contributions. If amounts are transferred
into the Plan in connection with a plan merger, they shall be deposited in the
SubAccount that reflects their origin under the merged plan (e.g., amounts
attributable to deferrals made under the merged plan pursuant to Section 401 (k)
of the Code shall be deposited in a Participant's Tax- Deferred Contributions
Sub-Account) or, if none, in a separate Sub-Account. Each Sub-Account shall
reflect separately contributions allocated to each Trust Fund maintained
hereunder and the earnings and losses attributable thereto. The Employer
Contributions SubAccount shall reflect separately that portion of such
Sub-Account that is derived from Employer Contributions that may be taken into
account to satisfy the limitations on contributions for Highly Compensated
Employees contained in Article VII. Such other Sub-Accounts may be established
as are necessary or appropriate to reflect a Participant's interest in the
Trust.
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ARTICLE IX
LIFE INSURANCE CONTRACTS
9.1 NO LIFE INSURANCE CONTRACTS
There shall be no life insurance contracts purchased under the Plan.
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ARTICLE X
DEPOSIT AND INVESTMENT OF CONTRIBUTIONS
10.1 FUTURE CONTRIBUTION INVESTMENT ELECTIONS
Each Eligible Employee shall make an investment election in the manner and form
prescribed by the Administrator directing the manner in which his Tax-Deferred,
Rollover, and Employer Contributions and his prior After-Tax and ESOP
Sub-Accounts shall be invested. An Eligible Employee's investment election shall
specify the percentage, in the percentage increments prescribed by the
Administrator, of such contributions that shall be allocated to one or more of
the Investment Funds with the sum of such percentages equaling 100 percent. The
investment election by a Participant shall remain in effect until his entire
interest under the Plan is distributed or forfeited in accordance with the
provisions of the Plan or until he files a change of investment election with
the Administrator, in such form as the Administrator shall prescribe. A
Participant's change of investment election may be made effective as of the date
or dates prescribed by the Administrator.
10.2 DEPOSIT OF CONTRIBUTIONS
All Tax-Deferred, Rollover, and Employer Contributions shall be deposited in the
Trust and allocated among the Investment Funds in accordance with the
Participant's currently effective investment election. If no investment election
is on file with the Administrator at the time contributions are to be deposited
to a Participant's Participant Account, the Participant shall be notified and an
investment election form shall be provided to him. Until such Participant shall
make an effective election under this Section, his contributions shall be
allocated among the Investment Funds as directed by the Administrator.
10.3 ELECTION TO TRANSFER BETWEEN FUNDS
A Participant may elect to transfer investments from any Investment Fund to any
other Investment Fund; provided, however, that subject to the provisions of
Section 10.4, a Participant may not transfer amounts held in his ESOP
Sub-Account out of the Employer stock Investment Fund prior to September 26,
1998, with respect to his ESOP Sub-Account attributable to amounts transferred
to the Plan from the Jeffreys Steel Company, Inc. Employee Profit-Sharing
Pension Stock Ownership Plan, or March 3, 1999, with respect to his ESOP
Sub-Account attributable to amounts transferred to the Plan from the Pacific
Metal Company Amended and Restated Employee Stock Ownership Plan and Trust. The
Participant's transfer election shall specify either (i) a percentage, in the
percentage increments prescribed by the Administrator, of the amount eligible
for transfer, which percentage may not exceed 100 percent, or (ii) a dollar
amount that is to be transferred.
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Subject to any restrictions pertaining to a particular Investment Fund, a
Participant's transfer election may be made effective as of the date or dates
prescribed by the Administrator.
10.4 ESOP DIVERSIFICATION REQUIREMENTS
For periods prior to the date that a Participant may transfer amounts held in
his ESOP Sub-Account out of the Employer stock Investment Fund without
restriction in accordance with the provisions of Section 10.3, an "eligible
Participant" may elect at any time during the 90-day period following the close
of each Plan Year during his "election period" to transfer up to 25 percent of
his ESOP SubAccount from the Employer stock Investment Fund to any other
Investment Fund; provided, however, that for the last Plan Year of his "election
period" such 25 percent shall be increased to 50 percent. The percentage of an
"eligible Participant's" ESOP Sub-Account that is eligible for transfer shall be
determined taking into account amounts that were previously transferred out of
the Employer stock Investment Fund pursuant to the "eligible Participant's"
prior election in accordance with this Section. Within 90 days after the close
of the 90-day period during which an "eligible Participant" may make a transfer
hereunder, transfers out of the Employer stock Investment Fund shall be made in
accordance with each "eligible Participant's" election. For purposes of this
Section, the following terms have the following meanings:
(a) A Participant's "election period" mans the six- Plan Year period beginning
with the later of (i) the Plan Year in which the Participant first becomes
an "eligible Participant" or (ii) the first Plan Year beginning on or
after January 1, 1987.
(b) An "eligible Participant" means any Participant who has attained age 55
and completed at least 10 years of participation under the Plan.
10.5 404(C) PLAN
The Plan is intended to constitute a plan described in Section 404(c) of ERISA
and regulations issued thereunder. The fiduciaries of the Plan may be relieved
of liability for any losses that are the direct and necessary result of
investment instructions given by a Participant, his Beneficiary, or an alternate
payee under a qualified domestic relations order.
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ARTICLE XI
CREDITING AND VALUING PARTICIPANT ACCOUNTS
11.1 CREDITING PARTICIPANT ACCOUNTS
All contributions made under the provisions of the Plan shall be credited to
Participant Accounts in the Trust Funds by the Trustee, in accordance with
procedures established in writing by the Administrator, either when received or
on the succeeding Valuation Date after valuation of the Trust Fund has been
completed for such Valuation Date as provided in Section 11.2, as shall be
determined by the Administrator.
11.2 VALUING PARTICIPANT ACCOUNTS
Participant Accounts in the Trust Funds shall be valued by the Trustee on the
Valuation Date, in accordance with procedures established in writing by the
Administrator, either in the manner adopted by the Trustee and approved by the
Administrator or in the manner set forth in Section 11. 3 as Plan valuation
procedures, as determined by the Administrator.
11.3 PLAN VALUATION PROCEDURES
With respect to the Trust Funds, the Administrator may determine that the
following valuation procedures shall be applied. As of each Valuation Date
hereunder, the portion of any Participant Accounts in a Trust Fund shall be
adjusted to reflect any increase or decrease in the value of the Trust Fund for
the period of time occurring since the immediately preceding Valuation Date for
the Trust Fund (the "valuation period") in the following manner:
(a) First, the value of the Trust Fund shall be determined by valuing all of
the assets of the Trust Fund at fair market value.
(b) Next, the net increase or decrease in the value of the Trust Fund
attributable to net income and all profits and losses, realized and
unrealized, during the valuation period shall be determined on the basis
of the valuation under paragraph (a) taking into account appropriate
adjustments for contributions, loan payments, and transfers to and
distributions, withdrawals, loans, and transfers from such Trust Fund
during the valuation period.
(c) Finally, the net increase or decrease in the value of the Trust Fund shall
be allocated among Participant Accounts in the Trust Fund in the ratio of
the balance of the portion of such Participant Account in the Trust Fund
as of the preceding Valuation Date less any distributions, withdrawals,
loans, and transfers from such Participant Account balance in the
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Trust Fund since the Valuation Date to the aggregate balances of the
portions of all participant Accounts in the Trust Fund similarly adjusted,
and each Participant Account in the Trust Fund shall be credited or
charged with the amount of its allocated share. Notwithstanding the
foregoing, the Administrator may adopt such accounting procedures as it
considers appropriate and equitable to establish a proportionate crediting
of net increase or decrease in the value of the Trust Fund for
contributions, loan payments, and transfers to and distributions,
withdrawals, loans, and transfers from such Trust Fund made by or on
behalf of a Participant during the valuation period.
11.4 FINALITY OF DETERMINATIONS
The Trustee shall have exclusive responsibility for determining the balance of
each Participant Account maintained hereunder. The Trustee's determinations
thereof shall be conclusive upon all interested parties.
11.5 NOTIFICATION
Within a reasonable period of time after the end of each Plan Year, the
Administrator shall notify each Participant and Beneficiary of the balances of
his Participant Account and Sub-Accounts as of a Valuation Date during the Plan
Year.
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ARTICLE XII
LOANS
12.1 APPLICATION FOR LOAN
A Participant who is a party in interest, as defined in Section 3 (14) of ERISA,
may make application to the Administrator for a loan from his Participant
Account, other than his ESOP Sub-Accounts. Loans shall be made to Participants
in accordance with written loan procedures prescribed by the Administrator which
are hereby incorporated into and made a part of the Plan.
As collateral for any loan granted hereunder, the Participant shall grant to the
Plan a security interest in his vested interest under the Plan equal to the
amount of the loan; provided, however, that in no event may the security
interest exceed 50 percent of the Participant's vested interest under the Plan,
determined as of the date as of which the loan is originated in accordance with
Plan provisions and excluding the Participant's ESOP Sub-Accounts. In the case
of a Participant who is an active employee, the Participant also shall enter
into an agreement to repay the loan by payroll withholding. No loan in excess of
50 percent of the Participant's vested interest under the Plan, determined
excluding the Participant's ESOP Sub-Accounts, shall be made from the Plan.
Loans shall not be made available to Highly Compensated Employees in an amount
greater than the amount made available to other employees.
A loan shall not be granted unless the Participant consents to the charging of
his Participant Account for unpaid principal and interest amounts in the event
the loan is declared to be in default. If a Participant's Participant Account is
subject to the qualified joint and survivor annuity provisions under Article
XVI, the Participant's spouse must consent in writing to any loan hereunder. Any
spousal consent given pursuant to this Section must acknowledge the effect of
the loan and must be witnessed by a Plan representative or a notary public. Such
spousal consent shall be binding with respect to the consenting spouse and any
subsequent spouse with respect to the loan. A new spousal consent shall be
required if the Participant's Participant Account is used for security in any
renegotiation, extension, renewal, or other revision of the loan.
12.2 REDUCTION OF ACCOUNT UPON DISTRIBUTION
Notwithstanding any other provision of the Plan, the amount of a Participant's
Participant Account that is distributable to the Participant or his Beneficiary
under Article XIII or XV shall be reduced by the portion of his vested interest
that is held by the Plan as security for any loan outstanding to the
Participant, provided that the reduction is used to repay the loan. If
distribution is made because of the Participant's death prior to the
commencement of distribution of his Participant Account and less than 100
percent of the Participant's vested interest in his Participant Account
(determined
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without regard to the preceding sentence) is payable to his surviving spouse,
then the balance of the Participant's vested interest in his Participant Account
shall be adjusted by reducing the vested account balance by the amount of the
security used to repay the loan, as provided in the preceding sentence, prior to
determining the amount of the benefit payable to the surviving spouse.
12.3 REQUIREMENTS TO PREVENT A TAXABLE DISTRIBUTION
Notwithstanding any other provision of the Plan to the contrary, the following
terms and conditions shall apply to any loan made to a Participant under this
Article:
(a) The interest rate on any loan to a Participant shall be a reasonable
interest rate commensurate with current interest rates charged for loans
made under similar circumstances by persons in the business of lending
money.
(b) The amount of any loan to a Participant (when added to the outstanding
balance of all other loans to the Participant from the Plan or any other
plan maintained by an Employer or a Related Company) shall not exceed the
lesser of:
(i) $50,000, reduced by the excess, if any, of the highest outstanding
balance of any other loan to the Participant from the Plan or any
other plan maintained by an Employer or a Related Company during the
preceding 12-month period over the outstanding balance of such loans
on the date a loan is made hereunder; or
(ii) 50 percent of the vested portions of the Participant's Participant
Account and his vested interest under all other plans maintained by an
Employer or a Related Company.
(c) The term of any loan to a Participant shall be no greater than five years,
except in the case of a loan used to acquire any dwelling unit which
within a reasonable period of time is to be used (determined at the time
the loan is made) as a principal residence of the Participant.
(d) Except as otherwise permitted under Treasury regulations, substantially
level amortization shall be required over the term of the loan with
payments made not less frequently than quarterly.
12.4 ADMINISTRATION OF LOAN INVESTMENT FUND
Upon approval of a loan to a Participant, the Administrator shall direct the
Trustee to transfer an amount equal to the loan amount from the Investment Funds
in which it is invested, as directed by the Administrator, to the loan
Investment Fund established in the Participant's name. Any loan
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approved by the Administrator shall be made to the Participant out of the
Participant's loan Investment Fund. All principal and interest paid by the
Participant on a loan made under this Article shall be deposited to his
Participant Account and shall be allocated upon receipt among the Investment
Funds in accordance with the Participant's currently effective investment
election. The balance of the Participant's loan Investment Fund shall be
decreased by the amount of principal payments and the loan Investment Fund shall
be terminated when the loan has been repaid in full.
12.5 DEFAULT
If a Participant fails to make or cause to be made, any payment required under
the terms of the loan within 90 days following the date on which such payment
shall become due or there is an outstanding principal balance existing on a loan
after the last scheduled repayment date, the Administrator shall direct the
Trustee to declare the loan to be in default, and the entire unpaid balance of
such loan, together with accrued interest, shall be immediately due and payable.
In any such event, if such balance and interest thereon is not then paid, the
Trustee shall charge the Participant Account of the borrower with the amount of
such balance and interest as of the earliest date a distribution may be made
from the Plan to the borrower without adversely affecting the tax qualification
of the Plan or of the cash or deferred arrangement.
12.6 SPECIAL RULES APPLICABLE TO LOANS
Any loan made hereunder shall be subject to the following rules:
(a) Loans limited to Eligible Employees: No loans shall be made to an Employee
who makes a Rollover Contribution in accordance with Article V, but who is
not an Eligible Employee as provided in Article 111.
(b) Minimum Loan Amount: A Participant may not request a loan for less than $
1,000.
(c) Maximum Number of Outstanding Loans: A Participant with an outstanding
loan may not apply for another loan until the existing loan is paid in
full and may not refinance an existing loan or obtain a second loan for
the purpose of paying off the existing loan. The provisions of this
paragraph shall not apply to any loans made prior to the effective date of
this amendment and restatement; provided, however, that a Participant may
not apply for a new loan hereunder until all outstanding loans made to the
Participant prior to the effective date of this amendment and restatement
have been paid in full.
(d) Maximum Period for Real Estate Loans: The term of any loan to a
Participant that is used to acquire any dwelling unit which within a
reasonable period of time is to be used
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(determined at the time the loan is made) as a principal residence of the
Participant shall be no greater than fifteen years.
(e) Pre-Payment Without Penalty: A Participant may pre-pay the balance of any
loan hereunder prior to the date it is due without penalty.
(f) Effect of Termination of Employment: Upon a Participant's termination of
employment, the balance of any outstanding loan hereunder shall
immediately become due and owing unless the Participant elects to roll
over the outstanding loan to another qualified plan that accepts such
rollovers.
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ARTICLE XIII
WITHDRAWALS WHILE EMPLOYED
13.1 WITHDRAWALS OF PRIOR AFTER-TAX CONTRIBUTIONS
A Participant who is employed by an Employer or a Related Company may, at any
time, elect, subject to the limitations and conditions prescribed in this
Article, to make a cash withdrawal or a withdrawal in the form of a qualified
joint and survivor annuity as provided in Article XVI from his frozen After-Tax
Contributions Sub-Account.
13.2 WITHDRAWALS OF ROLLOVER CONTRIBUTIONS
A Participant who is employed by an Employer or a Related Company may, at any
time, elect, subject to the limitations and conditions prescribed in this
Article, to make a cash withdrawal or a withdrawal in the form of a qualified
joint and survivor annuity as provided in Article XVI from his Rollover
Contributions Sub-Account.
13.3 WITHDRAWALS OF EMPLOYER CONTRIBUTIONS
A Participant who is employed by an Employer or a Related Company and has
attained age 59 V2 may elect, subject to the limitations and conditions
prescribed in this Article to make a cash withdrawal or a withdrawal in the form
of a qualified joint and survivor annuity as provided in Article XVI from his
vested interest in his Employer Contributions Sub-Account, excluding his ESOP
Sub-Accounts and any amounts that are attributable to assets transferred to the
Plan from a money purchase plan. The maximum amount that a Participant may
withdraw pursuant to this Section shall be an amount ("X") determined by the
following formula:
X = P(AB + R x D))-(R x D)
For purposes of the formula:
P = The Participant's vested interest in his Employer Contributions
Sub-Account on the date distribution is to be made;
AB = The balance of the Participant's Employer Contributions Sub-Account as
of the Valuation Date immediately preceding the date distribution is to be
made;
R = The ratio of (i) the balance of the Participant's Employer Contributions
Sub Account as of the Valuation Date immediately preceding the date
distribution
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is to be made to (ii) the balance of the Participant's Employer
Contributions Sub-Account after distribution is made.
D = The amount of all prior withdrawals from the Participant's Employer
Contributions Sub-Account made pursuant to this Section.
13.4 WITHDRAWALS OF TAX-DEFERRED CONTRIBUTIONS
A Participant who is employed by an Employer or a Related Company and who has
attained age 59 1/2 or is determined by the Administrator to have incurred a
hardship as defined in this Article may elect, subject to the limitations and
conditions prescribed in this Article, to make a cash withdrawal or a withdrawal
in the form of a qualified joint and survivor annuity as provided in Article XVI
from his Tax-Deferred Contributions Sub-Account. The maximum amount that a
Participant may withdraw pursuant to this Section because of a hardship is the
balance of his Tax-Deferred Contributions Sub-Account, exclusive of any earnings
credited to such Sub-Account.
13.5 LIMITATIONS ON WITHDRAWALS OTHER THAN HARDSHIP WITHDRAWALS
Withdrawals made pursuant to this Article, other than hardship withdrawals,
shall be subject to the following conditions and limitations:
A Participant must file a withdrawal application with the Administrator
such number of days prior to the date as of which it is to be effective as
the Administrator shall prescribe.
Withdrawals may be made effective as soon as reasonably practicable
following the Administrator's receipt and acceptance of the Participant's
application.
If a Participant's Participant Account is subject to the qualified joint and
survivor annuity provisions under Article XVI, the Participant's spouse must
consent in writing to any withdrawal hereunder.
13.6 CONDITIONS AND LIMITATIONS ON HARDSHIP WITHDRAWALS
A Participant must file an application for a hardship withdrawal with the
Administrator such number of days prior to the date as of which it is to be
effective as the Administrator may prescribe. Hardship withdrawals may be made
effective as soon as reasonably practicable following the Administrator's
approval of the Participant's hardship withdrawal application. If a
Participant's Participant Account is subject to the qualified joint and survivor
annuity provisions under Article XVI, the Participant's spouse must consent to
any withdrawal hereunder. The Administrator shall grant a hardship withdrawal
only if it determines that the withdrawal is necessary to meet an immediate and
heavy
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financial need of the Participant. An immediate and heavy financial need of the
Participant means a financial need on account of:
(a) expenses previously incurred by or necessary to obtain for the
Participant, the Participant's spouse, or any dependent of the Participant
(as defined in Section 152 of the Code) medical care described in Section
213(d) of the Code;
(b) costs directly related to the purchase (excluding mortgage payments) of a
principal residence for the Participant;
(c) payment of tuition, related educational fees, and room and board expenses
for the next 12 months of post-secondary education for the Participant,
the Participant's spouse, or any dependent of the Participant; or
(d) the need to prevent the eviction of the Participant from his principal
residence or foreclosure on the mortgage of the Participant's principal
residence.
A withdrawal shall be deemed to be necessary to satisfy an immediate and heavy
financial need of a Participant only if all of the following requirements are
satisfied:
The withdrawal is not in excess of the amount of the immediate and heavy
financial need of the Participant.
The Participant has obtained all distributions, other than hardship
distributions, and all non-taxable loans currently available under all
plans maintained by an Employer or any Related Company.
The Participant's Tax-Deferred Contributions and the Participant's
elective tax-deferred contributions and employee after-tax contributions
under all other tax-qualified plans maintained by an Employer or any
Related Company shall be suspended for at least twelve months after his
receipt of the withdrawal.
The Participant shall not make Tax-Deferred Contributions or elective
tax-deferred contributions under any other tax-qualified plan maintained
by an Employer or any Related Company for the Participant's taxable year
immediately following the taxable year of the withdrawal in excess of the
applicable limit under Section 402(g) of the Code for such next taxable
year less the amount of the Participant's Tax-Deferred Contributions and
elective tax-deferred contributions under any other plan maintained by an
Employer or any Related Company for the taxable year of the withdrawal.
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The amount of a hardship withdrawal may include any amounts necessary to pay any
Federal, state, or local income taxes or penalties reasonably anticipated to
result from the distribution. A Participant shall not fail to be treated as an
Eligible Employee for purposes of applying the limitations contained in Article
VII of the Plan merely because his Tax-Deferred Contributions are suspended in
accordance with this Section.
13.7 ORDER OF WITHDRAWAL FROM A PARTICIPANT'S SUB-ACCOUNTS
Distribution of a withdrawal amount shall be made from a Participant's
Sub-Accounts, to the extent necessary, in the order prescribed by the
Administrator, which order shall be uniform with respect to all Participants and
non-discriminatory. If the Sub-Account from which a Participant is receiving a
withdrawal is invested in more than one Investment Fund, the withdrawal shall be
charged against the Investment Funds as directed by the Administrator.
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ARTICLE XIV
TERMINATION OF EMPLOYMENT AND SETTLEMENT DATE
14.1 TERMINATION OF EMPLOYMENT AND SETTLEMENT DATE
A Participant's Settlement Date shall occur on the date he terminates employment
with an Employer and all Related Companies because of death, disability,
retirement, or other termination of employment. Written notice of a
Participant's Settlement Date shall be given by the Administrator to the
Trustee.
14.2 SEPARATE ACCOUNTING FOR NON-VESTED AMOUNTS
If as of a Participant's Settlement Date the Participant's vested interest in
his Employer Contributions Sub-Account is less than 100 percent, that portion of
his Employer Contributions Sub-Account that is not vested shall be accounted for
separately from the vested portion and shall be disposed of as provided in the
following Section. If prior to his Settlement Date such a Participant made a
withdrawal in accordance with the provisions of Article XIII, the vested portion
of his Employer Contributions Sub-Account shall be equal to the maximum
withdrawable amount as determined under Article XIII.
14.3 DISPOSITION OF NON-VESTED AMOUNTS
That portion of a Participant's Employer Contributions Sub-Account that is not
vested upon the occurrence of his Settlement Date shall be disposed of as
follows:
(a) If the Participant has no vested interest in his Participant Account upon
the occurrence of his Settlement Date or his vested interest in his
Participant Account as of the date of distribution does not exceed $5,000
resulting in the Participant's receipt of a single sum payment of such
vested interest, the non-vested balance remaining in the Participant's
Employer Contributions Sub-Account will be forfeited and his Participant
Account closed as of the end of the one- year period beginning on the
Participant's Settlement Date, if the Participant has no vested interest
in his Participant Account, or the date the Participant receives the
single sum payment.
(b) If the Participant's vested interest in his Participant Account exceeds
$5,000 and the Participant is eligible for and consents in writing to a
single sum payment of his vested interest in his Participant Account, the
non-vested balance remaining in the Participant's Employer Contributions
Sub-Account will be forfeited and his Participant Account closed as of the
end of the one-year period beginning on the date the Participant receives
the single
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sum payment, provided that such distribution occurs prior to the end of
the second Plan Year beginning on or after the Participant's Settlement
Date.
(c) If neither paragraph (a) nor paragraph (b) is applicable, the non-vested
portion of the Participant's Employer Contributions Sub-Account will
continue to be held in such Sub- Account and will not be forfeited until
the end of the five-year period beginning on his Settlement Date.
Whenever the non-vested portion of a Participant's Employer Contributions
Sub-Account is forfeited under the provisions of the Plan with respect to a Plan
Year, the amount of such forfeiture, as of the last day of the Plan Year, shall
be applied against the Employer Contribution obligations for the Plan Year of
the Employer for which the Participant last performed services as an Employee.
Notwithstanding the foregoing, however, should the amount of all such
forfeitures for any Plan Year with respect to any Employer exceed the amount of
such Employer's Employer Contribution obligation for the Plan Year, the excess
amount of such forfeitures shall be held unallocated in a suspense account
established with respect to the Employer and shall for all Plan purposes be
applied against the Employer's Employer Contribution obligations for the
following Plan Year.
14.4 RECREDITING OF FORFEITED AMOUNTS
A former Participant who forfeited the non-vested portion of his Employer
Contributions Sub- Account in accordance with the provisions of this Article and
who is reemployed by an Employer or a Related Company shall have such forfeited
amounts recredited to a new Participant Account in his name, without adjustment
for interim gains or losses experienced by the Trust, if he returns to
employment with an Employer or a Related Company before the end of the five-year
period beginning on the later of his Settlement Date or the date he received
distribution of his Participant Account. Funds needed in any Plan Year to
recredit the Participant Account of a Participant with the amounts of prior
forfeitures in accordance with the preceding sentence shall comb first from
forfeitures that arise during such Plan Year, and then from Trust income earned
in such Plan Year, with each Trust Fund being charged with the amount of such
income proportionately, unless his Employer chooses to make an additional
Employer Contribution, and shall finally be provided by his Employer by way of a
separate Employer Contribution.
A former Participant who received a distribution and who returns to employment
within the time period described above may elect to repay to the Plan the full
amount of such distribution that is attributable to Employer Contributions
before the end of the five-year period beginning on the date he is reemployed.
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ARTICLE XV
DISTRIBUTIONS
15.1 DISTRIBUTIONS TO PARTICIPANTS
A Participant whose Settlement Date occurs shall receive distribution of his
vested interest in his Participant Account in the form provided under Article
XVI beginning as soon as reasonably practicable following his Settlement Date or
the date his application for distribution is filed with the Administrator, if
later.
15.2 DISTRIBUTIONS TO BENEFICIARIES
If a Participant dies prior to the date distribution of his vested interest in
his Participant Account begins under this Article, his Beneficiary shall receive
distribution of the Participant's vested interest in his Participant Account in
the form provided under Article XVI beginning as soon as reasonably practicable
following the date the Beneficiary's application for distribution is filed with
the Administrator. Unless distribution is to be made over the life or over a
period certain not greater than the life expectancy of the Beneficiary,
distribution of the Participant's entire vested interest shall be made to the
Beneficiary no later than the end of the fifth calendar year beginning after the
Participant's death. If distribution is to be made over the life or over a
period certain no greater than the life expectancy of the Beneficiary,
distribution shall commence no later than:
(a) If the Beneficiary is not the Participant's spouse, the end of the first
calendar year beginning after the Participant's death; or
(b) If the Beneficiary is the Participant's spouse, the later of (i) the end
of the first calendar year beginning after the Participant's death or (ii)
the end of the calendar year in which the Participant would have attained
age 70 1/2.
If distribution is to be made to a Participant's spouse, it shall be made
available within a reasonable period of time after the Participant's death that
is no less favorable than the period of time applicable to other distributions.
If a Participant dies after the date distribution of his vested interest in his
Participant Account begins under this Article, but before his entire vested
interest in his Participant Account is distributed, his Beneficiary shall
receive distribution of the remainder of the Participant's vested interest in
his Participant Account beginning as soon as reasonably practicable following
the Participant's date of death in a form that provides for distribution at
least as rapidly as under the form in which the Participant was receiving
distribution.
15.3 CASH OUTS AND PARTICIPANT CONSENT
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Notwithstanding any other provision of the Plan to the contrary, if a
Participant's vested interest in his Participant Account does not exceed $5,000,
distribution of such vested interest shall be made to the Participant in a
single sum payment as soon as reasonably practicable following his Settlement
Date. If a Participants vested interest in his Participant Account is $0, he
shall be deemed to have received distribution of such vested interest as of his
Settlement Date. If a Participant's vested interest in his Participant Account
exceeds $5,000, distribution shall not commence to such Participant prior to his
Normal Retirement Date without the Participant's written consent and the written
consent of his spouse if the Participant's Participant Account is subject to the
qualified joint and survivor annuity provisions under Article XVI and payment is
not made through the purchase of a qualified joint and survivor annuity. If at
the time of a distribution or deemed distribution to a Participant from his
Participant Account, the Participant's vested interest in his Participant
Account exceeded $5,000, then for purposes of this Section, the Participant's
vested interest in his Participant Account on any subsequent date shall be
deemed to exceed $5,000.
15.4 REQUIRED COMMENCEMENT OF DISTRIBUTION
Notwithstanding any other provision of the Plan to the contrary, distribution of
a Participant's vested interest in his Participant Account shall commence to the
Participant no later than the earlier of:
(a) unless the Participant elects a later date, 60 days after the close of the
Plan Year in which (i) the Participant's Normal Retirement Date occurs,
(ii) the I 0th anniversary of the year in which he commenced participation
in the Plan occurs, or (iii) his Settlement Date occurs, whichever is
latest; or
(b) the April I following the close of the calendar year in which he attains
age 70 1/2, whether or not his Settlement Date has occurred, except that
if a Participant attained age 70 1/2 prior to January 1, 1988, and was not
a five-percent owner (as defined in Section 416 of the Code) at any time
during the five-Plan-Year period ending within the calendar year in which
he attained age 70 1/2, distribution of such Participant's vested interest
in his Participant Account shall commence no later than the April I
following the close of the calendar year in which he attains age 70 1/2 or
retires, whichever is later.
Distributions required to commence under this Section shall be made in the form
provided under Article XVI and in accordance with Section 401 (a)(9) of the Code
and regulations issued thereunder, including the minimum distribution incidental
benefit requirements.
15.5 REEMPLOYMENT OF A PARTICIPANT
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If a Participant whose Settlement Date has occurred is reemployed by an Employer
or a Related Company, he shall lose his right to any distribution or further
distributions from the Trust arising from his prior Settlement Date and his
interest in the Trust shall thereafter be treated in the same manner as that of
any other Participant whose Settlement Date has not occurred.
15.6 RESTRICTIONS ON ALIENATION
Except as provided in Section 401 (a)(I 3) of the Code relating to qualified
domestic relations orders and Section 1.40 1 (a)- I 3(b)(2) of Treasury
regulations relating to Federal tax levies and judgments, no benefit under the
Plan at any time shall be subject in any manner to anticipation, alienation,
assignment (either at law or in equity), encumbrance, garnishment, levy,
execution, or other legal or equitable process; and no person shall have power
in any manner to anticipate, transfer, assign (either at law or in equity),
alienate or subject to attachment, garnishment, levy, execution, or other legal
or equitable process, or in any way encumber his benefits under the Plan, or any
part thereof, and any attempt to do so shall be void.
15.7 FACILITY OF PAYMENT
If the Administrator finds that any individual to whom an amount is payable
hereunder is incapable of attending to his financial affairs because of any
mental or physical condition, including the infirmities of advanced age, such
amount (unless prior claim therefor shall have been made by a duly qualified
guardian or other legal representative) may, in the discretion of the
Administrator, be paid to another person for the use or benefit of the
individual found incapable of attending to his financial affairs or in
satisfaction of legal obligations incurred by or on behalf of such individual.
The Trustee shall make such payment only upon receipt of written instructions to
such effect from the Administrator. Any such payment shall be charged to the
Participant Account from which any such payment would otherwise have been paid
to the individual found incapable of attending to his financial affairs and
shall be a complete discharge of any liability therefor under the Plan.
15.8 INABILITY TO LOCATE PAYEE
If any benefit becomes payable to any person, or to the executor or
administrator of any deceased person, and if that person or his executor or
administrator does not present himself to the Administrator within a reasonable
period after the Administrator mails written notice of his eligibility to
receive a distribution hereunder to his last known address and makes such other
diligent effort to locate the personas the Administrator determines, that
benefit will be forfeited. However, if the payee later files a claim for that
benefit, the benefit will be restored.
15.9 DISTRIBUTION PURSUANT TO QUALIFIED DOMESTIC RELATIONS ORDERS
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Notwithstanding any other provision of the Plan to the contrary, if a qualified
domestic relations order so provides, distribution may be made to an alternate
payee pursuant to a qualified domestic relations order, as defined in Section
414(p) of the Code, regardless of whether the Participant's Settlement Date has
occurred or whether the Participant is otherwise entitled to receive a
distribution under the Plan.
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ARTICLE XVI
FORM OF PAYMENT
16.1 DEFINITIONS
For purposes of this Article, the following terms have the following meanings:
(a) A Participant's "annuity starting date" means the first day of the first
period for which an amount is paid as an annuity or any other form.
(b) The "automatic annuity form" means the form of annuity that will be
purchased on behalf of a Participant who has elected the optional annuity
form of payment unless the Participant elects another form of annuity.
(c) A "qualified election" means an election that is made during the qualified
election period. A qualified election of a form of payment other than a
qualified joint and survivor annuity or designating a Beneficiary other
than the Participant's spouse to receive amounts otherwise payable as a
qualified prerefirement survivor annuity must include the written consent
of the Participant's spouse, if any. A Participant's spouse will be deemed
to have given written consent to the Participant's election if the
Participant establishes to the satisfaction of a Plan representative that
spousal consent cannot be obtained because the spouse cannot be located or
because of other circumstances set forth in Section 401 (a)(11) of the
Code and regulations issued thereunder. The spouse's written consent must
acknowledge the effect of the Participant's election and must be witnessed
by a Plan representative or a notary public. In addition, the spouse's
written consent must either (i) specify the form of payment selected
instead of a joint and survivor annuity, if applicable, and that such form
may not be changed (except to a qualified joint and survivor annuity)
without written spousal consent and specify any non-spouse Beneficiary
designated by the Participant, if applicable, and that such Beneficiary
may not be changed without written spousal consent or (ii) acknowledge
that the spouse has the right to limit consent as provided in clause (i),
but permit the Participant to change the form of payment selected or the
designated Beneficiary without the spouse's further consent. Any written
consent given or deemed to have been given by a Participant's spouse
hereunder shall be irrevocable and shall be effective only with respect to
such spouse and not with respect to any subsequent spouse.
(d) The "qualified election period" with respect to the automatic annuity form
means the 90 day period ending on a Participant's annuity starting date.
The "qualified election period" with respect to a qualified preretirement
survivor annuity means the period beginning on the later of (i) the date
he elects an annuity form of payment or (ii) the first day of the Plan
Year in
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which the Participant attains age 3 5 or, if he terminates employment
prior to such date, the day he terminates employment with his Employer and
all Related Companies.
A Participant whose employment has not terminated may make a qualified
election designating a Beneficiary other than his spouse prior to the Plan
Year in which he attains age 35; provided, however, that such election
shall cease to be effective as of the first day of the Plan Year in which
the Participant attains age 35.
(e) A "qualified joint and survivor annuity" means an immediate annuity
payable at earliest retirement age under the Plan, as defined in
regulations issued under Section 401 (a)(I 1) of the Code, for the life of
a Participant with a survivor annuity payable for the life of the
Participant's spouse that is equal to at least 50 percent of the amount of
the annuity payable during the joint lives of the Participant and his
spouse, provided that the survivor annuity shall not be payable to a
Participant's spouse if such spouse is not the same spouse to whom the
Participant was married on his annuity starting date.
(f) A "qualified preretirement survivor annuity" means an annuity payable to
the surviving spouse of a Participant in accordance with the provisions of
Section 16.6.
(g) A "single life annuity" means an annuity payable for the life of the
Participant.
16.2 NORMAL FORM OF PAYMENT
Except as otherwise provided in Section 16.5, and 16.6, unless a Participant, or
his Beneficiary, if the Participant has died, elects one of the optional forms
of payment, distribution shall be made to the Participant, or his Beneficiary,
as the case may be, in a single sum payment.
16.3 OPTIONAL FORMS OF PAYMENT
A Participant, or his Beneficiary, as the case may be, may elect to receive
distribution of all or a portion of his Participant Account in one of the
following optional forms of payment:
(a) Installment Payments Distribution shall be made in a series of
installments over a period not exceeding the life expectancy of the
Participant, or the Participant's Beneficiary, if the Participant has
died, or a period not exceeding the j oint life and last survivor
expectancy of the Participant and his Beneficiary. Each installment shall
be equal in amount except as necessary to adjust for any changes in the
value of the Participant's Participant Account. The determination of life
expectancies shall be made on the basis of the expected return multiples
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in Tables V and VI of Section 1.72-9 of the Treasury regulations and shall
be calculated once at the time installment payments begin.
(b) Annuity Contract - Distribution shall be made through the purchase of a
single premium, nontransferable annuity contract for such term and in such
form as the Participant, or his Beneficiary, if the Participant has died,
shall select, subject to the provisions of Section 16.5; provided,
however, that a Participant's Beneficiary may not elect to receive
distribution of an annuity payable over the joint lives of the Beneficiary
and any other individual. The terms of any annuity contract purchased
hereunder and distributed to a Participant or his Beneficiary shall comply
with the requirements of the Plan.
16.4 CHANGE OF OPTION ELECTION
Subject to the provisions of Section 16.5, a Participant or Beneficiary who has
elected an optional form of payment may revoke or change his election at any
time prior to his annuity starting date by filing with the Administrator a
written election in the form prescribed by the Administrator.
16.5 FORM OF ANNUITY REQUIREMENTS
If a Participant's Participant Account includes assets transferred to the Plan
from a plan that is subject to the requirements of Sections 401 (a)(I 1) and 417
of the Code, or if a Participant elects to receive distribution through the
purchase of an annuity contract, distribution shall be made to such Participant
through the purchase of an annuity contract that provides for payment in one of
the following automatic annuity forms, unless the Participant elects a different
type of annuity:
(a) The automatic annuity form for a Participant who is married on his annuity
starting date is the 5 0 percent qualified joint and survivor annuity.
(b) The automatic annuity form for a Participant who is not married on his
annuity starting date is the single life annuity.
A Participant's election of an annuity other than the automatic annuity form
shall not be effective unless it is a qualified election; provided, however,
that spousal consent shall not be required if the form of annuity elected by the
Participant is a qualified joint and survivor annuity. A Participant who has
elected the optional annuity form of payment can revoke or change his election
only pursuant to a qualified election.
16.6 QUALIFIED PRERETIREMENT SURVIVOR ANNUITY REQUIREMENTS
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If a married Participant's Participant Account includes assets transferred to
the Plan from a plan that is subject to the requirements of Sections 40 1 (a)(I
1) and 417 of the Code, or if a married Participant elects to receive
distribution through the purchase of an annuity contract and dies before his
annuity starting date, his spouse shall receive distribution of the value of the
Participant's vested interest in his Participant Account through the purchase of
an annuity contract that provides for payment over the life of the Participant's
spouse. A Participant's spouse may elect to receive distribution under any one
of the other forms of payment available under this Article instead of in the
qualified preretirement survivor annuity form. If a married Participant's
Beneficiary designation on file with the Administrator pursuant to Article XVII
designates a non-spouse Beneficiary, the designation shall become inoperative
upon the Participant's election to receive distribution through the purchase of
an annuity contract, unless the Participant files a new designation of
Beneficiary form with the Administrator. A Participant can only designate a
non-spouse Beneficiary to receive distribution of that portion of his
Participant Account otherwise payable as a qualified preretirement survivor
annuity pursuant to a qualified election.
16.7 DIRECT ROLLOVER
Notwithstanding any other provision of the Plan to the contrary, in lieu of
receiving distribution in the form of payment provided under this Article, a
"qualified distributee" may elect in writing, in accordance with rules
prescribed by the Administrator, to have any portion or all of a distribution
that is an "eligible rollover distribution" paid directly by the Plan to the
"eligible retirement plan" designated by the "qualified distributee"; provided,
however, that this provision shall not apply if the total distribution is less
than $200 and that a "qualified distributee" may not elect this provision with
respect to a portion of a distribution that is less than $500. Any such payment
by the Plan to another "eligible retirement plan" shall be a direct rollover and
shall be made only after all applicable consent requirements are satisfied. For
purposes of this Section, the following terms have the following meanings:
(a) An "eligible retirement plan" means an individual retirement account
described in Section 408(a) of the Code, an individual retirement annuity
described in Section 408(b) of the Code, an annuity plan described in
Section 403(a) of the Code, or a qualified trust described in Section 401
(a) of the Code that accepts rollovers; provided, however, that, in the
case of a direct rollover by a surviving spouse, an eligible retirement
plan does not include a qualified trust described in Section 401 (a) of
the Code.
(b) An "eligible rollover distribution" means any distribution of all or any
portion of the balance of a Participant's Participant Account; provided,
however, that an eligible rollover distribution does not include: any
distribution that is one of a series of substantially equal periodic
payments made not less frequently than annually for the life or life
expectancy of
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the qualified distributee or the joint lives or joint life expectancies of
the qualified distributee and the qualified distributee's designated
beneficiary, or for a specified period of ten years or more; and any
distribution to the extent such distribution is required under Section 401
(a)(9) of the Code.
(c) A "qualified distributee" means a Participant, his surviving spouse, or
his spouse or former spouse who is an alternate payee under a qualified
domestic relations order, as defined in Section 414(p) of the Code.
16.8 NOTICE REGARDING FORMS OF PAYMENT
Within the 60 day period ending 30 days before a Participant's annuity starting
date, the Administrator shall provide him with a written explanation of his
right to defer distribution until his Normal Retirement Date, or such later date
as may be provided in the Plan, his right to make a direct rollover, and the
forms of payment available under the Plan, including a written explanation of
(i) the terms and conditions of the automatic annuity form applicable if the
Participant elects to receive distribution through the purchase of an annuity
contract, (ii) the Participant's right to choose a form of payment other than
the automatic annuity form or to revoke such choice, and (iii) the rights of the
Participant's spouse. Notwithstanding the foregoing, distribution of the
Participant's Participant Account may commence less than 30 days after such
notice is provided to the Participant if (i) the Administrator clearly informs
the Participant of his right to consider his election of whether or not to make
a direct rollover or to receive a distribution prior to his Normal Retirement
Date and his election of a form of payment for a period of at least 30 days
following his receipt of the notice, (ii) the Participant, after receiving the
notice, affirmatively elects an early distribution with his spouse's written
consent, if necessary, (iii) the Participant's annuity starting date is a date
after the date the notice is provided to him, (iv) the Participant may revoke
his election at any time prior to the later of his annuity starting date or the
expiration of the seven-day period beginning the day after the date the notice
is provided to him, and (v) distribution does not commence to the Participant
before such revocation period ends.
In addition, the Administrator shall provide such a Participant with a written
explanation of (i) the terms and conditions of the qualified preretirement
survivor annuity, (ii) the Participant's right to designate a non-spouse
Beneficiary to receive distribution of that portion of his Participant Account
otherwise payable as a qualified preretirement survivor annuity or to revoke
such designation, and (iii) the rights of the Participant's spouse. The
Administrator shall provide such explanation within one of the following
periods, whichever ends last:
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(a) the period beginning with the first day of the Plan Year in which the
Participant attains age 32 and ending on the last day of the Plan Year
preceding the Plan Year in which the Participant attains age 35;
(b) the period beginning 12 calendar months before the date an individual
becomes a Participant and ending 12 calendar months after such date; or
(c) the period beginning 12 calendar months before the date the Participant
elects to receive distribution through the purchase of an annuity contract
and ending 12 calendar months after such date;
provided, however, that in the case of a Participant who separates from service
prior to attaining age 3 5, the explanation shall be provided to such
Participant within the period beginning 12 calendar months before the
Participant's separation from service and ending 12 calendar months after his
separation from service.
16.9 REEMPLOYMENT
If a Participant is reemployed by an Employer or a Related Company prior to
receiving distribution of the entire balance of his vested interest in his
Participant Account, his prior election of a form of payment hereunder shall
become ineffective. Notwithstanding the foregoing, if a Participant had elected
to receive distribution through the purchase of an annuity contract, the
requirements of Sections 16.5 and 16.6 of the Plan shall continue in effect with
respect to his entire Participant Account.
16.10 DISTRIBUTION IN THE FORM OF EMPLOYER STOCK
Notwithstanding any other provision of the Plan to the contrary, to the extent
that his Participant Account is invested therein, a Participant may elect to
receive distribution of the fair market value of his Participant Account in the
form of Employer stock.
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ARTICLE XVII
BENEFICIARIES
17.1 DESIGNATION OF BENEFICIARY
A married Participant's Beneficiary shall be his spouse, unless the Participant
designates a person or persons other than his spouse as Beneficiary with his
spouse's written consent; provided, however, that such written spousal consent
shall not be required if the Participant is not married to such spouse on the
date as of which distribution of the Participant's Participant Account
commences. A Participant may designate a Beneficiary on the form prescribed by
the Administrator. If no Beneficiary has been designated pursuant to the
provisions of this Section, or if no Beneficiary survives the Participant and he
has no surviving spouse, then the Beneficiary under the Plan shall be the
Participant's estate. If a Beneficiary dies after becoming entitled to receive a
distribution under the Plan but before distribution is made to him in full, and
if no other Beneficiary has been designated to receive the balance of the
distribution in that event, the estate of the deceased Beneficiary shall be the
Beneficiary as to the balance of the distribution. A Participant's designation
of a Beneficiary shall be subject to the qualified preretirement survivor
annuity provisions of Article XV1.
17.2 SPOUSAL CONSENT REQUIREMENTS
Any written spousal consent given pursuant to this Article must acknowledge the
effect of the action taken and must be witnessed by a Plan representative or a
notary public. In addition, the spouse's written consent must either (i) specify
any non-spouse Beneficiary designated by the Participant and that 'such
Beneficiary may not be changed without written spousal consent or (ii)
acknowledge that the spouse has the right to limit consent to a specific
Beneficiary, but permit the Participant to change the designated Beneficiary
without the spouse's further consent. A Participant's spouse will be deemed to
have given written consent to the Participant's designation of Beneficiary if
the Participant establishes to the satisfaction of a Plan representative that
such consent cannot be obtained because the spouse cannot be located or because
of other circumstances set forth in Section 401 (a)(I 1) of the Code and
regulations issued thereunder. Any written consent given or deemed to have been
given by a Participant's spouse hereunder shall be valid only with respect to
the spouse who signs the consent.
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ARTICLE XVIII
ADMINISTRATION
18.1 AUTHORITY OF THE SPONSOR
The Sponsor, which shall be the administrator for purposes of ERISA and the plan
administrator for purposes of the Code, shall be responsible for the
administration of the Plan and, in addition to the powers and authorities
expressly conferred upon it in the Plan, shall have all such powers and
authorities as may be necessary to carry out the provisions of the Plan,
including the power and authority to interpret and construe the provisions of
the Plan, to make benefit determinations, and to resolve any disputes which
arise under the Plan. The Sponsor may employ such attorneys, agents, and
accountants as it may deem necessary or advisable to assist in carrying out its
duties hereunder. The Sponsor shall be a "named fiduciary" as that term is
defined in Section 402(a)(2) of ERISA. The Sponsor may:
(a) allocate any of the powers, authority, or responsibilities for the
operation and administration of the Plan (other than trustee
responsibilities as defined in Section 405(c)(3) of ERISA) among named
fiduciaries; and
(b) designate a person or persons other than a named fiduciary to carry out
any of such powers, authority, or responsibilities;
except that no allocation by the Sponsor of, or designation by the Sponsor with
respect to, any of such powers, authority, or responsibilities to another named
fiduciary or a person other than a named fiduciary shall become effective unless
such allocation or designation shall first be accepted by such named fiduciary
or other person in a writing signed by it and delivered to the Sponsor.
18.2 ACTION OF THE SPONSOR
Any act authorized, permitted, or required to be taken under the Plan by the
Sponsor and which has not been delegated in accordance with Section 18. 1, may
be taken by a majority of the members of the board of directors of the Sponsor,
either by vote at a meeting, or in writing without a meeting, or by the employee
or employees of the Sponsor designated by the board of directors to carry out
such acts on behalf of the Sponsor. All notices, advice, directions,
certifications, approvals, and instructions required or authorized to be given
by the Sponsor as under the Plan shall be in writing and signed by either (i) a
majority of the members of the board of directors of the Sponsor or by such
member or members as may be designated by an instrument in writing, signed by
all the members thereof, as having authority to execute such documents on its
behalf, or (ii) the employee or employees authorized to act for the Sponsor in
accordance with the provisions of this Section.
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18.3 CLAIMS REVIEW PROCEDURE
Whenever a claim for benefits under the Plan filed by any person (herein
referred to as the "Claimant") is denied, whether in whole or in part, the
Sponsor shall transmit a written notice of such decision to the Claimant within
90 days of the date the claim was filed or, if special circumstances require an
extension, within 180 days of such date, which notice shall be written in a
manner calculated to be understood by the Claimant and shall contain a statement
of (i) the specific reasons for the denial of the claim, (ii) specific reference
to pertinent Plan provisions on which the denial is based, and (iii) a
description of any additional material or information necessary for the Claimant
to perfect the claim and an explanation of why such information is necessary.
The notice shall also include a statement advising the Claimant that, within 60
days of the date on which he receives such notice, he may obtain review of such
decision in accordance with the procedures hereinafter set forth. Within such
60-day period, the Claimant or his authorized representative may request that
the claim denial be reviewed by filing with the Sponsor a written request
therefor, which request shall contain the following information:
(a) the date on which the Claimant's request was filed with the Sponsor;
provided, however, that the date on which the Claimant's request for
review was in fact filed with the Sponsor shall control in the event that
the date of the actual filing is later than the date stated by the
Claimant pursuant to this paragraph;
(b) the specific portions of the denial of his claim which the Claimant
requests the Sponsor to review;
(c) a statement by the Claimant setting forth the basis upon which he believes
the Sponsor should reverse the previous denial of his claim for benefits
and accept his claim as made; and
(d) any written material (offered as exhibits) which the Claimant desires the
Sponsor to examine in its consideration of his position as stated pursuant
to paragraph (c) of this Section.
Within 60 days of the date determined pursuant to paragraph (a) of this Section
or, if special circumstances require an extension, within 120 days of such date,
the Sponsor shall conduct a full and fair review of the decision denying the
Claimant's claim for benefits and shall render its written decision on review to
the Claimant. The Sponsor's decision on review shall be written in a manner
calculated to be understood by the Claimant and shall specify the reasons and
Plan provisions upon which the Sponsor's decision was based.
18.4 QUALIFIED DOMESTIC RELATIONS ORDERS
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The Sponsor shall establish reasonable procedures to determine the status of
domestic relations orders and to administer distributions under domestic
relations orders which are deemed to be qualified orders. Such procedures shall
be in writing and shall comply with the provisions of Section 414(p) of the Code
and regulations issued thereunder.
18.5 INDEMNIFICATION
In addition to whatever rights of indemnification the Trustee or the members of
the board of directors of the Sponsor or any employee or employees of the
Sponsor to whom any power, authority, or responsibility is delegated pursuant to
Section 18.2, may be entitled under the articles of incorporation or regulations
of the Sponsor, under any provision of law, or under any other agreement, the
Sponsor shall satisfy any liability actually and reasonably incurred by any such
person or persons, including expenses, attorneys' fees, judgments, fines, and
amounts paid in settlement (other than amounts paid in settlement not approved
by the Sponsor), in connection with any threatened, pending or completed action,
suit, or proceeding which is related to the exercising or failure to exercise by
such person or persons of any of the powers, authority, responsibilities, or
discretion as provided under the Plan, or reasonably believed by such person or
persons to be provided hereunder, and any action taken by such person or persons
in connection therewith, unless the same is judicially determined to be the
result of such person or persons' gross negligence or willful misconduct.
18.6 ACTIONS BINDING
Subject to the provisions of Section 18.3, any action taken by the Sponsor which
is authorized, permitted, or required under the Plan shall be final and binding
upon the Employers, the Trustee, all persons who have or who claim an interest
under the Plan, and all third parties dealing with the Employers or the Trustee.
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ARTICLE XIX
AMENDMENT AND TERMINATION
19.1 AMENDMENT
Subject to the provisions of Section 19.2, the Sponsor may at any time and from
time to time, by action of its board of directors, or such officers of the
Sponsor as are authorized by its board of directors, amend the Plan, either
prospectively or retroactively. Any such amendment shall be by written
instrument executed by the Sponsor.
19.2 LIMITATION ON AMENDMENT
The Sponsor shall make no amendment to the Plan which shall decrease the accrued
benefit of any Participant or Beneficiary, except that nothing contained herein
shall restrict the right to amend the provisions of the Plan relating to the
administration of the Plan and Trust. Moreover, no such amendment shall be made
hereunder which shall permit any part of the Trust to revert to an Employer or
any Related Company or be used or be diverted to purposes other than the
exclusive benefit of Participants and Beneficiaries.
19.3 TERMINATION
The Sponsor reserves the right, by action of its board of directors, to
terminate the Plan as to all Employers at any time (the effective date of such
termination being hereinafter referred to as the "termination date"). Upon any
such termination of the Plan, the following actions shall betaken for the
benefit of Participants and Beneficiaries:
(a) As of the termination date, each Investment Fund shall be valued and all
Participant Accounts and Sub-Accounts shall be adjusted in the manner
provided in Article XI, with any unallocated contributions or forfeitures
being allocated as of the termination date in the manner otherwise
provided in the Plan. The termination date shall become a Valuation Date
for purposes of Article XI. In determining the net worth of the Trust, to
the extent permitted by ERISA, there shall be included as a liability such
amounts as shall be necessary to pay all expenses in connection with the
termination of the Trust and the liquidation and distribution of the
property of the Trust, as well as other expenses, whether or not accrued,
and shall include as an asset all accrued income.
(b) All Participant Accounts shall then be disposed of to or for the benefit
of each Participant or Beneficiary in accordance with the provisions of
Article XV as if the termination date were his Settlement Date; provided,
however, that notwithstanding the provisions of Article XV,
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if the Plan does not offer an annuity option and if neither his Employer
nor a Related Company establishes or maintains another defined
contribution plan (other than an employee stock ownership plan as defined
in Section 4975(e)(7) of the Code), the Participant's written consent to
the commencement of distribution shall not be required regardless of the
value of the vested portions of his Participant Account.
(c) Notwithstanding the provisions of paragraph (b) of this Section, no
distribution shall be made to a Participant of any portion of the balance
of his Tax-Deferred Contributions Sub-Account prior to his separation from
service (other than a distribution made in accordance with Article XIII or
required in accordance with Section 401(a)(9) of the Code) unless (i)
neither his Employer nor a Related Company establishes or maintains
another defined contribution plan (other than an employee stock ownership
plan as defined in Section 4975(e)(7) of the Code, a tax credit employee
stock ownership plan as defined in Section 409 of the Code, or a
simplified employee pension as defined in Section 408(k) of the Code)
either at the time the Plan is terminated or at any time during the period
ending 12 months after distribution of all assets from the Plan; provided,
however, that this provision shall not apply if fewer than two percent of
the Eligible Employees under the Plan were eligible to participate at any
time in such other defined contribution plan during the 24- month period
beginning 12 months before the Plan termination, and (ii) the distribution
the Participant receives is a "lump sum distribution" as defined in
Section 402(e)(4) of the Code, without regard to clauses (i), (ii), (iii),
and (iv) of sub-paragraph (A), sub-paragraph (B), or sub-paragraph (H)
thereof.
Notwithstanding anything to the contrary contained in the Plan, upon any such
Plan termination, the vested interest of each Participant and Beneficiary in his
Employer Contributions Sub-Account shall be 100 percent; and, if there is a
partial termination of the Plan, the vested interest of each Participant and
Beneficiary who is affected by the partial termination in his Employer
Contributions Sub- Account shall be 100 percent. For purposes of the preceding
sentence only, the Plan shall be deemed to terminate automatically if there
shall be a complete discontinuance of contributions hereunder by all Employers.
19.4 REORGANIZATION
The merger, consolidation, or liquidation of any Employer with or into any other
Employer or a Related Company shall not constitute a termination of the Plan as
to such Employer. If an Employer disposes of substantially all of the assets
used by the Employer in a trade or business or disposes of a subsidiary and in
connection therewith one or more Participants terminates employment but
continues in employment with the purchaser of the assets or with such
subsidiary, no distribution from the Plan shall be made to any such Participant
prior to his separation from service (other than
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a distribution made in accordance with Article XIII or required in accordance
with Section 401 (a)(9) of the Code), except that a distribution shall be
permitted to be made in such a case, subject to the Participant's consent (to
the extent required by law), if (i) the distribution would constitute a "lump
sum distribution" as defined in section 402(e)(4) of the Code, without regard to
clauses (i), (ii), (iii), or (iv) of sub-paragraph (A), sub-paragraph (B), or
sub-paragraph (H) thereof, (ii) the Employer continues to maintain the Plan
after the disposition, (iii) the purchaser does not maintain the Plan after the
disposition, and (iv) the distribution is made by the end of the second calendar
year after the calendar year in which the disposition occurred.
19.5 WITHDRAWAL OF AN EMPLOYER
An Employer other than the Sponsor may withdraw from the Plan at any time upon
notice in writing to the Administrator (the effective date of such withdrawal
being hereinafter referred to as the "withdrawal date"), and shall thereupon
cease to be an Employer for all purposes of the Plan. An Employer shall be
deemed automatically to withdraw from the Plan in the event of its complete
discontinuance of contributions, or, subj ect to Section 19.4 and unless the
Sponsor otherwise directs, it ceases to be a Related Company of the Sponsor or
any other Employer. Upon the withdrawal of an Employer, the withdrawing Employer
shall determine whether a partial termination has occurred with respect to its
Employees. In the event that the withdrawing Employer determines a partial
termination has occurred, the action specified in Section 19.3 shall be taken as
of the withdrawal date, as on a termination of the Plan, but with respect only
to Participants who are employed solely by the withdrawing Employer, and who,
upon such withdrawal, are neither transferred to nor continued in employment
with any other Employer or a Related Company. The interest of any Participant
employed by the withdrawing Employer who is transferred to or continues in
employment with any other Employer or a Related Company, and the interest of any
Participant employed solely by an Employer or a Related Company other than the
withdrawing Employer, shall remain unaffected by such withdrawal; no adjustment
to his Participant Accounts shall be made by reason of the withdrawal; and he
shall continue as a Participant hereunder subject to the remaining provisions of
the Plan.
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ARTICLE XX
ADOPTION BY OTHER ENTITIES
20.1 ADOPTION BY RELATED COMPANIES
A Related Company that is not an Employer may, with the consent of the Sponsor,
adopt the Plan and become an Employer hereunder by causing an appropriate
written instrument evidencing such adoption to be executed in accordance with
the requirements of its organizational authority. Any such instrument shall
specify the effective date of the adoption.
20.2 EFFECTIVE PLAN PROVISIONS
An Employer who adopts the Plan shall be bound by the provisions of the Plan in
effect at the time of the adoption and as subsequently in effect because of any
amendment to the Plan.
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ARTICLE XXI
MISCELLANEOUS PROVISIONS
21.1 NO COMMITMENT AS TO EMPLOYMENT
Nothing contained herein shall be construed as a commitment or agreement upon
the part of any person to continue his employment with an Employer or Related
Company, or as a commitment on the part of any Employer or Related Company to
continue the employment, compensation, or benefits of any person for any period.
21.2 BENEFITS
Nothing in the Plan nor the Trust Agreement shall be construed to confer any
right or claim upon any person, firm, or corporation other than the Employers,
the Trustee, Participants, and Beneficiaries.
21.3 NO GUARANTEES
The Employers, the Administrator, and the Trustee do not guarantee the Trust
from loss or depreciation, nor do they guarantee the payment of any amount which
may become due to any person hereunder.
21.4 EXPENSES
The expenses of administration of the Plan, including the expenses of the
Administrator and fees of the Trustee, shall be paid from the Trust as a general
charge thereon, unless the Sponsor elects to make payment. Notwithstanding the
foregoing, the Sponsor may direct that administrative expenses that are
allocable to the Participant Account of a specific Participant shall be paid
from that Participant Account and the costs incident to the management of the
assets of an Investment Fund or to the purchase or sale of securities held in an
Investment Fund shall be paid by the Trustee from such Investment Fund.
21.5 PRECEDENT
Except as otherwise specifically provided, no action taken in accordance with
the Plan shall be construed or relied upon as a precedent for similar action
under similar circumstances.
21.6 DUTY TO FURNISH INFORMATION
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The Employers, the Administrator, and the Trustee shall furnish to any of the
others any documents, reports, returns, statements, or other information that
the other reasonably deems necessary to perform its duties hereunder or
otherwise imposed by law.
21.7 WITHHOLDING
The Trustee shall withhold any tax which by any present or future law is
required to be withheld, and which the Administrator notifies the Trustee in
writing is to be so withheld, from any payment to any Participant or Beneficiary
hereunder.
21.8 MERGER, CONSOLIDATION, OR TRANSFER OF PLAN ASSETS
The Plan shall not be merged or consolidated with any other plan, nor shall any
of its assets or liabilities be transferred to another plan, unless, immediately
after such merger, consolidation, or transfer of assets or liabilities, each
Participant in the Plan would receive a benefit under the Plan which is at least
equal to the benefit he would have received immediately prior to such merger,
consolidation, or transfer of assets or liabilities (assuming in each instance
that the Plan had then terminated).
21.9 BACK PAY AWARDS
The provisions of this Section shall apply only to an Employee or former
Employee who becomes entitled to back pay by an award or agreement of an
Employer without regard to mitigation of damages. If a person to whom this
Section applies was or would have become an Eligible Employee after such back
pay award or agreement has been effected, and if any such person who had not
previously elected to make Tax-Deferred Contributions pursuant to Section 4.1
shall within 3 0 days of the date he receives notice of the provisions of this
Section make an election to make Tax- Deferred Contributions in accordance with
such Section 4.1 (retroactive to any Enrollment Date as of which he was or has
become eligible to do so), then such Participant may elect that any Tax-
Deferred Contributions not previously made on his behalf but which, after
application of the foregoing provisions of this Section, would have been made
under the provisions of Article IV, shall be made out of the proceeds of such
back pay award or agreement. In addition, if any such Employee or former
Employee would have been eligible to participate in the allocation of Employer
Contributions under the provisions of Article VI for any prior Plan Year after
such back pay award or agreement has been effected, his Employer shall make an
Employer Contribution equal to the amount of the Employer Contribution which
would have been allocated to such Participant under the provisions of Article VI
as in effect during each such Plan Year. The amounts of such additional
contributions shall be credited to the Participant Account of such Participant.
Any additional contributions made by such Participant and by an Employer
pursuant to this Section shall be made
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in accordance with, and subject to the limitations of the applicable provisions
of Articles IV, VI, and VII.
21.10 CONDITION ON EMPLOYER CONTRIBUTIONS
Notwithstanding anything to the contrary contained in the Plan or the Trust
Agreement, any contribution of an Employer hereunder is conditioned upon the
continued qualification of the Plan under Section 401 (a) of the Code, the
exempt status of the Trust under Section 501 (a) of the Code, and the
deductibility of the contribution under Section 404 of the Code. Except as
otherwise provided in this Section and Section 2 1. 11, however, in no event
shall any portion of the property of the Trust ever revert to or otherwise inure
to the benefit of an Employer or any Related Company.
21.11 RETURN OF CONTRIBUTIONS TO AN EMPLOYER
Notwithstanding any other provision of the Plan or the Trust Agreement to the
contrary, in the event any contribution of an Employer made hereunder:
(a) is made under a mistake of fact, or
(b) is disallowed as a deduction under Section 404 of the Code, such
contribution may be returned to the Employer within one year after the
payment of the contribution or the disallowance of the deduction to the
extent disallowed, whichever is applicable. In the event the Plan does not
initially qualify under Section 401 (a) of the Code, any contribution of
an Employer made hereunder may be returned to the Employer within one year
of the date of denial of the initial qualification of the Plan, but only
if an application for determination was made within the period of time
prescribed under Section 403(c)(2)(B) of ERISA.
21.12 VALIDITY OF PLAN
The validity of the Plan shall be determined and the Plan shall be construed and
interpreted in accordance with the laws of the State or Commonwealth in which
the Trustee has its principal place of business or, if the Trustee is an
individual or a group of individuals, the State or Commonwealth in which the
Sponsor has its principal place of business, except as preempted by applicable
Federal law. The invalidity or illegality of any provision of the Plan shall not
affect the legality or validity of any other part thereof.
21.13 TRUST AGREEMENT
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The Trust Agreement and the Trust maintained thereunder shall be deemed to be a
part of the Plan as if fully set forth herein and the provisions of the Trust
Agreement are hereby incorporated by reference into the Plan.
21.14 PARTIES BOUND
The Plan shall be binding upon the Employers, all Participants and Beneficiaries
hereunder, and, as the case may be, the heirs, executors, administrators,
successors, and assigns of each of them.
21.15 APPLICATION OF CERTAIN PLAN PROVISIONS
A Participant's Beneficiary, if the Participant has died, or alternate payee
under a qualified domestic relations order shall be treated as a Participant for
purposes of directing investments as provided in Article X or applying for a
loan as provided in Article XII. For purposes of the general administrative
provisions and limitations of the Plan, a Participant's Beneficiary or alternate
payee under a qualified domestic relations order shall be treated as any other
person entitled to receive benefits under the Plan. Upon any termination of the
Plan, any such Beneficiary or alternate payee under a qualified domestic
relations order who has an interest under the Plan at the time of such
termination, which does not cease by reason thereof, shall be deemed to be a
Participant for all purposes of the Plan.
21.16 LEASED EMPLOYEES
Any leased employee, other than an excludable leased employee, shall be treated
as an employee of the Employer for which he performs services for all purposes
of the Plan with respect to the provisions of Sections 401 (a)(3),(4), (7), and
(16), and 408(k), 410, 411, 415, and 416 of the Code; provided, however, that no
leased employee shall accrue a benefit hereunder based on service as a leased
employee except as otherwise specifically provided herein; and provided,
further, that if the Plan would not otherwise meet the minimum coverage
requirements of Section 41 0(b) of the Code in any Plan Year, the group of
employees eligible to participate in the Plan shall be expanded to include the
minimum number of leased employees that is necessary to meet the minimum
coverage requirements. The leased employees who become eligible to participate
under the provisions of the immediately preceding clause shall be those leased
employees who have completed the greatest number of Hours of Service during the
Plan Year. A "leased employee" means any person who performs services for an
Employer or a Related Company (the "recipient") (other than an employee of the
recipient) pursuant to an agreement between the recipient and any other person
(the "leasing organization") on a substantially full-time basis for a period of
at least one year, provided that such services are performed under the primary
direction or control of the recipient. An "excludable leased employee" means any
leased employee of the recipient who is covered by a money purchase pension
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plan maintained by the leasing organization which provides for (i) a
nonintegrated employer contribution on behalf of each participant in the plan
equal to at least ten percent of compensation, (ii) full and immediate vesting,
and (iii) immediate participation by employees of the leasing organization
(other than employees who perform substantially all of their services for the
leasing organization or whose compensation from the leasing organization in each
plan year during the fouryear period ending with the plan year is less than $
1,000); provided, however, that leased employees do not constitute more than 20
percent of the recipient's nonhighly compensated work force. For purposes of
this Section, contributions or benefits provided to a leased employee by the
leasing organization that are attributable to services performed for the
recipient shall be treated as provided by the recipient.
21.17 TRANSFERRED FUNDS
If funds from another qualified plan are transferred or merged into the Plan,
such funds shall be held and administered in accordance with any restrictions
applicable to them under such other plan to the extent required by law and shall
be accounted for separately to the extent necessary to accomplish the foregoing.
21.18 MILITARY LEAVE
Notwithstanding any other provision of the Plan to the contrary, the Plan shall
provide contributions, benefits, and service credit with respect to qualified
military service in accordance with Section 4'14(u) of the Code.
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ARTICLE XXII
TOP-HEAVY PROVISIONS
22.1 DEFINITIONS
For purposes of this Article, the following terms shall have the following
meanings:
(a) The "compensation" of an employee means compensation as defined in Section
415 of the Code and regulations issued thereunder. In no event, however,
shall the compensation of a Participant taken into account under the Plan
for any Plan Year exceed (1) $200,000 for Plan Years beginning prior to
January 1, 1994, or (2) $150,000 for Plan Years beginning on or after
January 1, 1994 (subject to adjustment annually as provided in Section 401
(a)(I 7)(B) and Section 415(d) of the Code; provided, however, that the
dollar increase in effect on January I of any calendar year, if any, is
effective for Plan Years beginning in such calendar year). If the
compensation of a Participant is determined over a period of time that
contains fewer than 12 calendar months, then the annual compensation
limitation described above shall be adjusted with respect to that
Participant by multiplying the annual compensation limitation in effect
for the Plan Year by a fraction the numerator of which is the number of
full months in the period and the denominator of which is 12; provided,
however, that no proration is required for a Participant who is covered
under the Plan for less than one full Plan Year if the formula for
allocations is based on Compensation for a period of at least 12 months.
(b) The "determination date" with respect to any Plan Year means the last day
of the preceding Plan Year, except that the determination date with
respect to the first Plan Year of the Plan, shall mean the last day of
such Plan Year.
(c) A "key employee" means any Employee or former Employee who is a key
employee pursuant to the provisions of Section 416(i)(1) of the Code and
any Beneficiary of such Employee or former Employee.
(d) A "non-key employee" means any Employee who is not a key employee.
(e) A "permissive aggregation group" means those plans included in each
Employer's required aggregation group together with any other plan or
plans of the Employer, so long as the entire group of plans would continue
to meet the requirements of Sections 401 (a)(4) and 410 of the Code.
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(f) A "required aggregation group" means the group of tax-qualified plans
maintained by an Employer or a Related Company consisting of each plan in
which a key employee participates and each other plan that enables a plan
in which a key employee participates to meet the requirements of Section
401 (a)(4) or Section 410 of the Code, including any plan that terminated
within the five-year period ending on the relevant determination date.
(g) A "super top-heavy group" with respect to a particular Plan Year means a
required or permissive aggregation group that, as of the determination
date, would qualify as a top-heavy group under the definition in paragraph
(i) of this Section with "90 percent" substituted for "60 percent" each
place where "60 percent" appears in the definition.
(h) A "super top-heavy plan" with respect to a particular Plan Year means a
plan that, as of the determination date, would qualify as a top-heavy plan
under the definition in paragraph (j) of this Section with "90 percent"
substituted for "60 percent" each place where "60 percent" appears in the
definition. A plan is also a "super top-heavy plan" if it is part of a
super top-heavy group.
(i) A "top-heavy group" with respect to a particular Plan Year means a
required or permissive aggregation group if the sum, as of the
determination date, of the present value of the cumulative accrued
benefits for key employees under all defined benefit plans included in
such group and the aggregate of the account balances of key employees
under all defined contribution plans included in such group exceeds 60
percent of a similar sum determined for all employees covered by the plans
included in such group.
(j) A "top-heavy plan" with respect to a particular Plan Year means (i), in
the case of a defined contribution plan (including any simplified employee
pension plan), a plan for which, as of the determination date, the
aggregate of the accounts (within the meaning of Section 416(g) of the
Code and the regulations and rulings thereunder) of key employees exceeds
60 percent of the aggregate of the accounts of all participants under the
plan, with the accounts valued as of the relevant valuation date and
increased for any distribution of an account balance made in the five-year
period ending on the determination date, (ii), in the case of a defined
benefit plan, a plan for which, as of the determination date, the present
value of the cumulative accrued benefits payable under the plan (within
the meaning of Section 416(g) of the Code and the regulations and rulings
thereunder) to key employees exceeds 60 percent of the present value of
the cumulative accrued benefits under the plan for all employees, with the
present value of accrued benefits to be determined under the accrual
method uniformly used under all plans maintained by an Employer or, if no
such method exists, under the slowest accrual method permitted under the
fractional accrual rate of Section 411 (b)(I )(C) of the Code and
including the present value of any part of any accrued benefits
distributed
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in the five-year period ending on the determination date, and (iii) any
plan (including any simplified employee pension plan) included in a
required aggregation group that is a top-heavy group. For purposes of this
paragraph, the accounts and accrued benefits of any employee who has not
performed services for an Employer or a Related Company during the
five-year period ending on the determination date shall be disregarded.
For purposes of this paragraph, the present value of cumulative accrued
benefits under a defined benefit plan for purposes of top-heavy
determinations shall be calculated using the actuarial assumptions
otherwise employed under such plan, except that the same actuarial
assumptions shall be used for all plans within a required or permissive
aggregation group. A Participant's interest in the Plan attributable to
any Rollover Contributions, except Rollover Contributions made from a plan
maintained by an Employer or a Related Company, shall not be considered in
determining whether the Plan is top-heavy. Notwithstanding the foregoing,
if a plan is included in a required or permissive aggregation group that
is not a top-heavy group, such plan shall not be a top-heavy plan.
(k) The "valuation date" with respect to any determination date means the most
recent Valuation Date occurring within the 12-month period ending on the
determination date.
22.2 APPLICABILITY
Notwithstanding any other provision of the Plan to the contrary, the provisions
of this Article shall be applicable during any Plan Year in which the Plan is
determined to be a top-heavy plan as hereinafter defined. If the Plan is
determined to be a top-heavy plan and upon a subsequent determination date is
determined no longer to be a top-heavy plan, the vesting provisions of Article
VI shall again become applicable as of such subsequent determination date;
provided, however, that if the prior vesting provisions do again become
applicable, any Employee with three or more years of Vesting Service may elect
in accordance with the provisions of Article VI, to continue to have his vested
interest in his Employer Contributions Sub-Account determined in accordance with
the vesting schedule specified in Section 22.5.
22.3 MINIMUM EMPLOYER CONTRIBUTION
If the Plan is determined to be a top-heavy plan, the Employer Contributions
allocated to the Participant Account of each non-key employee who is an Eligible
Employee and who is employed by an Employer or a Related Company on the last day
of such top-heavy Plan Year shall be no less than the lesser of (i) three
percent of his compensation or (ii) the largest percentage of compensation that
is allocated as an Employer Contribution and/or Tax-Deferred Contribution for
such Plan Year to the Participant Account of any key employee; except that, in
the event the Plan is part of a required aggregation group, and the Plan enables
a defined benefit plan included in such group to
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meet the requirements of Section 401 (a)(4) or 410 of the Code, the minimum
allocation of Employer Contributions to each such non-key employee shall be
three percent of the compensation of such non-key employee. In lieu of the
minimum allocation described in the preceding sentence, the Employer
Contributions allocated to the Participant Account of each non-key employee who
is employed by an Employer or a Related Company on the last day of a top-heavy
Plan Year and who is also covered under a top-heavy defined benefit plan
maintained by an Employer or a Related Company will be no less than five percent
of his compensation. Any minimum allocation to a non-key employee required by
this Section shall be made without regard to any social security contribution
made on behalf of the non-key employee, his number of hours of service, his
level of compensation, or whether he declined to make elective or mandatory
contributions.
22.4 ADJUSTMENTS TO SECTION 415 LIMITATIONS
If the Plan is determined to be a top-heavy plan and an Employer maintains a
defined benefit plan covering some or all of the Employees that are covered by
the Plan, the defined benefit plan fraction and the defined contribution plan
fraction, described in Article VII, shall be determined as provided in Section
415(e) of the Code by substituting "l.0" for "1.25" each place where "1.25"
appears, except that such substitutions shall not be applied to the Plan if (i)
the Plan is not a super top-heavy plan, (ii) the Employer Contribution for such
top-heavy Plan Year for each non-key employee who is to receive a minimum
top-heavy benefit hereunder is not less than four percent of such non-key
employee's compensation, and (iii) the minimum annual retirement benefit accrued
by a non-key employee who participates under one or more defined benefit plans
of an Employer or a Related Company for such top-heavy Plan Year is not less
than the lesser of three percent times years of service with an Employer or a
Related Company or thirty percent.
22.5 ACCELERATED VESTING
If the Plan is determined to be a top-heavy plan, a Participant's vested
interest in his ESOP Sub- Account that is attributable to assets transferred
from the Pacific Metal Company Amended and Restated Employee Stock Ownership
Plan and Trust shall be determined no less rapidly than in accordance with the
following vesting schedule:
YEARS OF VESTING SERVICEVESTED INTEREST
less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 but less than 6 80%
6 or more 100%
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ARTICLE XXIII
EFFECTIVE DATE
23.1 EFFECTIVE DATE
The Plan is effective as of June 1, 1998.
EXECUTED AT HOUSTON, TEXAS this 1st day of JUNE, 1998.
METALS USA, INC.
By: /s/ KEITH E. ST. CLAIR
Keith E. St. Clair
Vice President and Treasurer
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EXHIBIT 5.1
August 27, 1998
Metals USA, Inc.
Three Riverway, Suite 600
Houston, Texas 77056
Ladies and Gentlemen:
We have acted as counsel to Metals USA, Inc., a Delaware corporation (the
"Company"), in connection with the preparation and filing of a Registration
Statement on Form S-8 (the "Registration Statement") with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, as amended, relating
to an aggregate of 500,000 shares (the "Shares") of the Company's common stock,
par value $.01 per share, and an indeterminate number of participation interests
to be offered upon the terms and subject to the conditions set
forth in the Metals 401(k) Plan (the "Plan").
We have examined such corporate records, documents, instruments and
certificates of the Company and have considered such questions of law
as we have deemed necessary, relevant or appropriate to enable us to render the
opinion expressed herein. In such examination, we have assumed the genuineness
of all signatures and the authenticity of all documents, instruments, records
and certificates submitted to us as originals. We have not independently
verified any matter of fact relating to this opinion.
Based on such examination and review, we are of the opinion that the
Shares have been duly and validly authorized and will, on issuance and delivery
against payment therefor as contemplated in the Plans, be validly issued, fully
paid and nonassessable.
This firm consents to the filing of this opinion as an exhibit to the
Registration Statement. This opinion is delivered solely for your benefit and
may not be used or relied upon for any purpose by any other person or entity
without our express prior written authorization.
Very truly yours,
/s/Bracewell & Patterson, L.L.P.
EXHIBIT 23.1
CONSENTS OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our reports
(and to all references to our firm) included in or made part of this
registration statement.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Houston, Texas
August 24, 1998
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-00000) pertaining to the Metals USA, Inc. 401(k) Plan of our report
dated October 4, 1996, with respect to the financial statements of Affiliated
Metals Company as of August 31, 1996 and for the fifty-two weeks then ended
included in the Annual Report (Form 10-K) of Metals USA, Inc. for the year ended
December 31, 1997, filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
ERNST & YOUNG LLP
St. Louis, Missouri
August 24, 1998
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Registration Statement (Form S-8 No.
333-00000) of our report, dated February 25, 1997, except for Note 11 as to
which the date is April 18, 1997 and Note 12 as to which the date is July 11,
1997, relating to the financial statements of Queensboro Steel Corporation. We
also consent to the reference to our Firm under the caption "Experts" in the
Prospectus.
/s/ McGLADREY & PULLEN, LLP
MCGLADREY & PULLEN, LLP
Wilmingtion, North Carolina
August 24, 1998
EXHIBIT 23.4
INDEPENDANT AUDITORS' CONSENT
We hereby consent to the use in this Registration Statement on Form S-8 of
Metals USA, Inc. of our report dated October 19, 1995 on Affiliated Metals
Company for the years ended September 3, 1994 and September 2, 1995, and to the
reference to us under the heading "Independant Auditors."
We also consent to the reference to us under the heading "Experts" in this
Registration Statement.
/s/RUBIN, BROWN, GORNSTEIN & CO. LLP
RUBIN, BROWN, GORNSTEIN & CO. LLP
St. Louis, Missouri
August 24, 1998
EXHIBIT 23.5
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the use in this Registration Statement on Form S-8 of
our report, dated September 23, 1997, relating to the financial statements of
Harvey Titanium, Ltd. We also consent to the reference to our Firm under the
caption "Experts" in the Prospectus.
/s/KLEIN, BOGAKOS AND ROBERTSON, CPA'S INC.
KLEIN, BOGAKOS AND ROBERTSON, CPA'S INC.
Santa Monica, California
August 24, 1998
EXHIBIT 23.7
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm in the Registration Statement (Form S-8)
pertaining to the Metals USA, Inc. 401(k) Plan and to the incorporation by
reference therein of our report dated January 23, 1998, except for Note 10 for
which the date is April 17, 1998, with respect to the consolidated financial
statements of Fullerton Industries, Inc., as incorporated by reference in the
Metals USA, Inc. Form S-1 Registration Statement (No. 333-50449), filed with the
Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
ERNST & YOUNG LLP
Chicago, Illinois
August 25, 1998
EXHIBIT 23.8
INDEPENDENT AUDITORS CONSENT
We hereby consent to the incorporation by reference in this Registration
Statement of Metals USA, Inc. on Form S-8 of our report dated February 11, 1998,
on the consolidated financial statements of Pacific Metal Company and Subsidiary
as of December 31, 1997 and 1996 and for the years ended December 31, 1997 and
1996.
/s/PERKINS & COMPANY, P.C.
PERKINS & COMPANY, P.C.
Portland, Oregon
August 24, 1998
EXHIBIT 23.9
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our reports
(and to all references to our firm) included in or made part of this
registration statement.
/s/ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Milwaukee, Wisconsin
August 24, 1998
EXHIBIT 23.10
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
dated March 4, 1998 (except with respect to the matter discused in Note 8, as to
which the date is March 11, 1998), with respect to the financial statements of
The Levinson Steel Company (and to all references to our Firm) included in or
made a part of this registration statement.
/s/ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Pittsburgh, Pennsylvania
August 24, 1998
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer and/or
director of Metals USA, Inc., a Delaware corporation (the "Company"), hereby
constitutes and appoints Arthur L. French, J. Michael Kirksey and John A.
Hageman, and each of them (with full power to each of them to act alone), the
undersigned's true and lawful attorney-in-fact and agent, for the undersigned
and on the undersigned's behalf and in the undersigned's name, place and stead,
in any way and all capacities, to sign, execute and file with the Securities and
Exchange Commission the Company's Registration Statement on Form S-8 to register
500,000 shares of the Company's common stock, par value $.01 per share and an
indeterminate number of employee participation interests under the Securities
Act of 1933, as amended, in connection with the Company's 401(k) Plan, together
with all amendments thereto, with all exhibits and any and all documents
required to be filed with respect thereto with any regulatory authority,
granting unto said attorneys, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises in order to effectuate the same as fully to all intents
and purposes as the undersigned might or could do if personally present, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or either
of them, may lawfully do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereto signed this power of
attorney this 20th day of August 1998.
/s/ ARTHUR L. FRENCH /s/ RICHARD A. SINGER
Arthur L. French Richard A. Singer
/s/ J. MICHAEL KIRKSEY /s/ LESTER G. PETERSON
J. Michael Kirksey Lester G. Peterson
/s/ STEVEN S. HARTER /s/ CRAIG R. DOVEALA
Steven S. Harter Craig R. Doveala
/s/ ARNOLD W. BRADBURD /s/ WILLIAM B. EDGE
Arnold W. Bradburd William B. Edge
/s/ MICHAEL E. CHRISTOPHER /s/ THOMAS J. SHAPIRO
Michael E. Christopher Thomas J. Shapiro
/s/ MARK ALPER /s/ T. WILLIAM PORTER
Mark Alper T. William Porter
/s/ A. LEON JEFFREYS /s/ RICHARD H. KRISTINIK
A. Leon Jeffreys Richard H. Kristinik
/s/ PATRICK S. NOTESTINE /s/ TOMMY E. KNIGHT
Patrick S. Notestine Tommy E. Knight
