<PAGE> 1
Registration No. 333-_______
- --------------------------------------------------------------------------------
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 28, 1997.
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------
ONEOK, Inc. KGS 401(k) Thrift Plan
-------------------------
ONEOK, INC.
100 West Fifth Street, Tulsa, Oklahoma 74103
(Name of the issuer of the equity securities being offered pursuant
to the Plan and the address of its principal office)
OKLAHOMA 73-1520922
(State or other jurisdiction of (IRS Employer
Incorporation or organization) Identification No.)
J.D. NEAL DONALD A. KIHLE
Vice President, Chief Financial Gable Gotwals Mock Schwabe Kihle Gaberino
Officer and Treasurer 100 West Fifth Street
ONEOK, Inc. Suite 1000
100 West Fifth Street Tulsa, Oklahoma 74103
Tulsa, Oklahoma 74103 (918) 585-8141
(918) 588-7000
(Name, addresses, and telephone numbers of agents for service)
-------------------------
Appropriate date of commencement of proposed sale pursuant to the Plan:
from time to time after the effective date hereof
- --------------------------------------------------------------------------------
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Proposed Proposed
Maximum Maximum
Offering Aggregate Amount of
Title of Securities Amount to be Price Offering Registration
to be Registered(1) Registered(2) Per Unit (3) Price (4) Fee
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common stock with
$0.01 par value 3,600,000 $ 36.656 $ 131,961,600 $ 45,504
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
Exhibits Index on Page 5.
<PAGE> 2
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
this Registration Statement also covers an indeterminate amount of
interests in the Plan to be offered or sold pursuant to the employee
benefit plan described herein.
(2) Represents the estimated maximum amount of common stock of ONEOK, Inc.
(hereinafter referred to as "Common Stock") which could be contributed
or acquired under the ONEOK, Inc. KGS 401(k) Thrift Plan (hereinafter
referred to as the "Plan") either directly from ONEOK, Inc. (herein
referred to as the "Company"), or from purchases in the open market
during the years of operation of the Plan.
(3) Based on price of $36.656 per share of the Common Stock, the average
sales price of the Common Stock published in the Wall Street Journal
reports of the New York Stock Exchange Composite Transaction for
November 25, 1997.
(4) Estimated pursuant to Rule 457(c) solely for the purpose of
calculating the registration fee.
2
<PAGE> 3
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The document(s) containing the information specified in Part I of Form S-8 will
be sent or given to employees as specified in Rule 428(b)(1). These documents
(and the documents incorporated by reference pursuant to Item 3 of Part II of
this Registration Statement) taken together, constitute the prospectus for
purpose of Section 10(a) of the Securities Act of 1933, as amended.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3
INCORPORATION OF DOCUMENTS BY REFERENCE
The Company and the Plan hereby incorporate by reference in this Registration
Statement the following documents of the Company (SEC File No. 1-2572)
heretofore filed with the Securities and Exchange Commission:
(1) Annual Report on Form 10-K of ONEOK Inc. (predecessor by
merger to the Company, herein after referred to as "Old
ONEOK") for the year ended August 31, 1997.
(2) Form 8-K reporting the consummation of the merger of ONEOK
Inc. with and into WAI filed November 26, 1997.
(3) Old ONEOK's Proxy Statement dated August 6, 1997 in connection
with its Special Meeting of Shareholders held September 25,
1997.
(4) In addition, there is incorporated herein by reference all
documents filed subsequent to the date hereof, by the Company
and the Plan pursuant to Sections 13(a), 13(c), 14, or 15(d)
of the Securities Exchange Act of 1934, as amended, prior to
the filing of a post-effective amendment which indicates that
all securities have been sold or which deregisters all
securities then remaining unsold. Such documents are deemed
to be a part hereof from the date of filing of such documents.
ITEM 4
DESCRIPTION OF SECURITIES
The following is a description of the securities offered.
Holders of ONEOK, Inc. Common Stock are entitled to (1) vote for each share
held of record. The holders of Common Stock are entitled to receive any
dividends that may be declared by the Corporation's Board of Directors from
funds legally available therefor and to share pro rata in the net assets of the
Corporation upon liquidation. Holders of Common Stock have no preemptive
rights and no rights to convert their Common Stock into any other securities of
the Corporation. All outstanding shares of Common Stock are fully paid and are
not subject to calls or assessments. Each share of Common Stock includes an
associated right, each right (the Right) entitling the holder to purchase one
one-hundredth (1/100) of a share of Series C Participating Preference Stock par
value $0.01 per share of the Company pursuant to a Rights Agreement between the
Company and a designated rights agent (the "Rights Agreement"). The
designation of Rights (Exhibit 4(c) hereto) is incorporated herein by
reference.
3
<PAGE> 4
ITEM 5
INTERESTS OF NAMED EXPERTS AND COUNSEL
The legality of the securities which may be purchased under the Plan has been
passed upon by the firm of Gable Gotwals Mock Schwabe Kihle Gaberino, 100 West
Fifth Street, Suite 1000, Tulsa, Oklahoma 74103, counsel for the Company. The
firm of Gable Gotwals Mock Schwabe Kihle Gaberino, has reviewed the
statements made as to matters of law and legal conclusions under "Securities to
be Offered" and such statements are set forth in the documents which form a
part of the prospectus in reliance upon its authority as an expert.
ITEM 6
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Pursuant to Article VIII of the bylaws of ONEOK, Inc. upon authorization and
determination either (1) by the board of directors by a majority of a quorum is
not consisting of directors who were not parties to the action, suit, or
proceeding involved; (2) if such a quorum is not obtainable, or even if
obtainable and a quorum of disinterested directors so directs, by independent
counsel in a written opinion; or (3) by the stockholders, the Company is
obligated to indemnify any person who incurs liability by reason of the fact
that he is or was a director, officer, employee, or agent of the Company, or is
or was serving at its request as a director , officer, employee, or agent of
another corporation, partnership, joint venture, trust or other enterprise, or
as a member of any committee or similar body, if he acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interest of
the Company, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. However, in an action by
or in the right of the Company, no indemnification will be made if such person
shall be adjudged to be liable to the Company, unless such indemnification is
allowed by a court of competent jurisdiction.
Under insurance obtained by the Company, coverage of Company officers and
directors against liability for neglect, errors, omission, or breaches of duty
in their capacities as such is provided for both the Company, to the extent
that it is obligated to indemnify such officers and directors, and the officers
and directors themselves. Such coverage is provided in the amount of
$75,000,000 with a retained limit by the Company of $250,000. The insurance
companies are obligated to pay covered losses in excess of the $250,000
retained limit, up to the policies' limits of $75,000,000. Among the policies'
exclusions are those which exclude coverage for accounting for profits made
within the meaning of Section 16(b) of the Securities Act of 1934, claims based
upon or attributable to directors and officers gaining any personal profit or
advantage to which such individuals are not legally entitled, and for any
claims brought about or attributable to the dishonesty of an officer or
director.
The registrant has been advised that, in the opinion of the Securities and
Exchange Commission, provisions providing for the indemnification by the
corporation of its officers, directors, and controlling persons against
liabilities imposed by the Securities Act of 1933 are against public policy as
expressed in said Act and are therefore unenforceable. It is recognized that
the above-summarized provisions of the registrant's bylaws and the applicable
Oklahoma General Corporation Law may be sufficiently broad to indemnify
officers, directors, and controlling persons of the registrant against
liabilities arising under said Act. Therefore, in the event that a claim of
indemnification against liability under said Act (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) shall be asserted by an officer, director, or controlling person
under said provisions, the registrant will, unless in the opinion of its
counsel the question has already been settled by the controlling precedent,
submit to a court of appropriate jurisdiction the question of whether or not
such indemnification by it is against public policy as expressed in said Act
and will be governed by the final adjudication of such issue.
4
<PAGE> 5
ITEM 8
EXHIBITS
The following exhibits are attached hereto or incorporated by reference herein:
<TABLE>
<CAPTION>
Page Number or
Incorporation by
Reference to
-------------------
<S> <C> <C>
(4)(a) Certificate of Incorporation
ONEOK, Inc. Exhibit (3.1) to Form
S-4 Registration
Statement No.
333-27467
(4)(b) Bylaws of ONEOK, Inc., as Amended Exhibit (3.2) to Form
S-4 Registration
Statement No.
333-27467
(4)(c) Certificate of Description, Exhibit A to Exhibit (3.4)
Preference of Rights of Series C To Form S-4 Registration
Participating Preferred Stock of Statement No. 333-27467
the Corporation
(5) Opinion of Gable Gotwals Mock Schwabe
Kihle Gaberino
(23)(a) Consent of Gable Gotwals Mock Schwabe
Kihle Gaberino (See Item 5)
(23)(b) Independent Auditors' Consent
(23)(c) Independent Auditors' Consent
(24) Powers of Attorney (Included on pages 8,
9, and 10)
(99) ONEOK, Inc. KGS 401(k) Thrift Plan 12 - 69
and Subsidiaries, as Amended and Restated
January 10, 1997.
</TABLE>
5
<PAGE> 6
ITEM 9
UNDERTAKINGS
a. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration
statement:
(a) To include any prospectus required by Section 10
(a)(3) of the Securities Act of 1933;
(b) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the registration statement;
(c) To include any material information with respect to
the Plan of distribution not previously disclosed in
the registration statement or any material change to
such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each 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 the time of shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
b. The undersigned registrant hereby undertakes that, for purpose 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 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that
is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered herein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
c. The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus to each employee to whom the prospectus
is sent or given, the latest Annual Report to Shareholders unless such
employee otherwise has received a copy of such report, in which case
the registrant shall state in the prospectus that it will promptly
furnish, without charge, a copy of such report on written request of
the employee. If the last fiscal year of the registrant has ended
within 120 days prior to the use of the prospectus, the Annual Report
of the registrant of the preceding fiscal year may be delivered, but
within such 120-day period the Annual Report for the last fiscal year
will be furnished to each such employee.
The undersigned registrant hereby undertakes to transmit or cause to be
transmitted to all employees participating in the Plan who do not
otherwise receive such material as stockholders or the registrant, at
the time and in the manner such material is sent to its stockholders,
copies of all reports, proxy statements, and other communications
distributed to its stockholders generally.
d. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In
6
<PAGE> 7
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.
7
<PAGE> 8
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8, and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Tulsa and the State of Oklahoma, on the 26th day of
November, 1997.
ONEOK, Inc.
By: LARRY BRUMMETT
------------------------------------
Larry Brummett, Chairman of the
Board and Chief Executive
Officer
8
<PAGE> 9
POWER OF ATTORNEY
Each person whose individual signature appears below hereby authorizes Larry
Brummett and J. D. Neal, or either of them, as attorney-in-fact with full power
of substitution, to execute in the name and on behalf of each person,
individually and in each capacity stated below, and to file any and all
amendments to this registration statement, including any and all post-effective
amendments and all instruments necessary or incidental in connection therewith.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the undersigned
certify that to the best of their knowledge and belief, the registrant meets
all the requirements for filing on Form S-8. This registration statement has
been signed below by the following persons in the capacities indicated in the
City of Tulsa and the State of Oklahoma, on this 26th day of November, 1997.
LARRY BRUMMETT J. D. NEAL
- ---------------------- ----------------------------
Larry Brummett J. D. Neal
Chairman of the Board, Vice President,
Chief Executive Chief Financial Officer, and
Officer, and Director Treasurer
E. G. ANDERSON STEVEN L. KITCHEN
- ---------------------- -------------------------
E. G. Anderson Steven L. Kitchen
Director Director
W. M. BELL D. L. KYLE
- ---------------------- ----------------------------
W. M. Bell D. L. Kyle
Director Director
D. R. CUMMINGS B. H. MACKIE
- ---------------------- ----------------------------
D. R. Cummings B. H. Mackie
Director Director
W. L. FORD D. A. NEWSOM
- ---------------------- ----------------------------
W. L. Ford D. A. Newsom
Director Director
HOWARD R. FRICKE G. D. PARKER
- ---------------------- ----------------------------
Howard R. Fricke G. D. Parker
Director Director
J. M. GRAVES J. D. SCOTT
- ---------------------- ----------------------------
J. M. Graves J. D. Scott
Director Director
S. J. JATRAS S. L. YOUNG
- ---------------------- ----------------------------
S. J. Jatras S. L. Young
Director Director
9
<PAGE> 10
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Plan has caused
this registration statement to be signed on its behalf by the undersigned in
their capacity as members of the registrant's Thrift Plan Committee, the
administrator of the Plan, duly authorized, in the City of Tulsa and the State
of Oklahoma, on this 26th day of November, 1997.
ONEOK, INC. KGS 401(k) THRIFT PLAN
LARRY W. BRUMMETT
- ------------------------------
Larry W. Brummett, Chairman
DAVID L. KYLE
- ------------------------------
David L. Kyle, Member
BARRY D. EPPERSON
- ------------------------------
Barry D. Epperson, Member
JAMES C. KNEALE
- ------------------------------
James C. Kneale, Member
JERRY D. NEAL
- ------------------------------
Jerry D. Neal, Member
DEBORAH B. BARNES
- ------------------------------
Deborah B. Barnes, Secretary
LEROY F. FORE
- ------------------------------
LeRoy F. Fore, Authorized
Representative and Fiduciary
This Plan does not have any officers or directors or persons performing similar
functions other than the committee members whose signatures appear above.
10
<PAGE> 11
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT Page Number or
NUMBER DESCRIPTION Incorporation by
- ------- ----------- Reference to
-------------------
<S> <C> <C>
(4)(a) Certificate of Incorporation
ONEOK, Inc. Exhibit (3.1) to Form
S-4 Registration
Statement No.
333-27467
(4)(b) Bylaws of ONEOK, Inc., as Amended Exhibit (3.2) to Form
S-4 Registration
Statement No.
333-27467
(4)(c) Certificate of Description, Exhibit A to Exhibit (3.4)
Preference of Rights of Series C To Form S-4 Registration
Participating Preferred Stock of Statement No. 333-27467
the Corporation
(5) Opinion of Gable Gotwals Mock Schwabe
Kihle Gaberino
(23)(a) Consent of Gable Gotwals Mock Schwabe
Kihle Gaberino (See Item 5)
(23)(b) Independent Auditors' Consent
(23)(c) Independent Auditors' Consent
(24) Powers of Attorney (Included on pages 8,
9, and 10)
(99) ONEOK, Inc. KGS 401(k) Thrift Plan 12 - 69
and Subsidiaries, as Amended and Restated
January 10, 1997.
</TABLE>
<PAGE> 1
EXHIBIT 5
[GABLE GOTWALS MOCK SCHWABE KIHLE GABERINO LETTERHEAD]
November 26, 1997
ONEOK, Inc.
100 West Fifth Street
Tulsa, Oklahoma 74103
Re: S-8 Registration Statement Under the Securities
Act of 1933, Relating to the Shares of Common
Stock of ONEOK, Inc. in Relation to the ONEOK,
Inc. KGS 401(k) Thrift Plan and Interests of
the Participants in the Plan
Gentlemen:
We understand that ONEOK, Inc., an Oklahoma corporation (hereinafter
referred to as the "Company"), will file with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, a Form S-8
Registration Statement relating to the registration of Plan interests, and
registration of shares of the Company's Common Stock, $0.01 par value, (the
"Shares") with respect to the ONEOK, Inc. KGS 401(k) Thrift Plan (the "Plan").
We have examined (a) the above-mentioned Registration Statement which will
be filed with the Securities and Exchange Commission; (b) the Certificate of
Incorporation and Bylaws of the Company, as amended; (c) the ONEOK, Inc. KGS
401(k) Thrift Plan and the corporate actions taken by the Board of Directors in
connection with the Registration Statement and related matters; and (d) such
other corporate records, certificates of public officials and officers of the
Company and other documents as we have considered relevant to the matters
covered by this opinion.
In connection with the foregoing, as counsel for the Company, we wish to
advise you as follows:
<PAGE> 2
ONEOK, Inc.
November 26, 1997
Page 2
1. The Company is a corporation validly organized and existing under the
laws of the State of Oklahoma and is duly qualified to do business as a
corporation in the State of Oklahoma.
2. The filing of the above-mentioned Registration Statement has been
duly authorized by the proper corporate action on the part of the Company.
3. Assuming the Shares are being issued in compliance with the terms and
conditions of the Plan, when the certificates for the Shares have been executed
by the proper officer of the Company, countersigned by the Transfer Agent and
registered by the Registrar thereof, the certificates for such Shares will
represent, and the Shares will constitute, duly authorized, legally issued,
fully paid, non-assessable, valid and legal shares of the Common Stock of the
Company.
4. When an employee of the Company becomes a participant in the Plan,
such employee is thereby entitled to an interest in the Plan according to the
provisions of the Plan and the elections made by the participant from time to
time. Such interests in the Plan, when created in accordance with the
provisions of the Plan, will constitute legally issued, fully paid and
non-assessable interests except as may be set forth in the Plan.
The statements of law and legal conclusions made in the documents
constituting the prospectus furnished in connection with the Registration
Statement pertaining to the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), have been reviewed by us and are correct. Where appropriate,
the Plan described in the documents constituting the prospectus has been
amended to comply with ERISA, and in such manner that such Plan, as necessary,
may be qualified under the provisions of the Internal Revenue Code of 1986, as
amended ("Code"). We understand that the Company has submitted a request for
determination of the Plan's qualification under the Code to the Internal
Revenue Service. Subject to that determination, and to the foregoing, it is our
opinion that the written documents comprising the Plan comply with ERISA and
the Code.
We hereby consent to:
1. Being named in the Form S-8 Registration Statement and documents
constituting the prospectus which is being furnished, and in any amendments
thereto, as counsel for the Company, passing on legal matters in connection
with the issuance of the Common Stock to the Trustee under the Plan;
2. The making in the Form S-8 Registration Statement and documents
constituting the prospectus, and in any amendments thereto, of the statements
now appearing therein under the caption "interests of Named Experts and
Counsel," insofar as they are applicable to us; and
<PAGE> 3
ONEOK, Inc.
November 26, 1997
Page 3
3. The filing of this opinion as an exhibit to the above-mentioned Form
S-8 Registration Statement.
Very truly yours,
GABLE GOTWALS MOCK SCHWABE KIHLE
GABERINO
By /s/ DONALD A. KIHLE
-----------------------------
Donald A. Kihle
<PAGE> 1
EXHIBIT (23)(b)
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
ONEOK, Inc.
We consent to the incorporation by reference herein of our report on
the Consolidated Financial Statements of ONEOK, Inc. as of August 31, 1997 and
1996, and for each of the years in the three-year period ended August 31, 1997,
which report appears in the August 31, 1997, Annual Report on Form 10-K of
ONEOK, Inc. Our report refers to the adoption of Financial Accounting
Standards No. 121, Accounting for the Impairment of Long-lived Assets and
Long-lived Assets to be Disposed Of in 1996.
KPMG PEAT MARWICK LLP
Tulsa, Oklahoma
November 26, 1997
11
<PAGE> 1
EXHIBIT (23)(c)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Form 8-K of our report for the Gas Business,
a business unit of Western Resources, Inc. dated February 4, 1997 included in
Registration Statement File No. 333-27467. It should be noted that we have not
audited any financial statements of the Gas Business subsequent to August 31,
1996 or performed any audit procedures subsequent to the date of our report.
ARTHUR ANDERSEN LLP
Kansas City, Missouri
November 26, 1997
11b
<PAGE> 1
EXHIBIT (99)
ONEOK, Inc.
KGS 401(k) Thrift Plan
12
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
Article I Establishment of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Article II Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2 "Adjusted Total Compensation" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.3 "Annual Compensation" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.4 "Beneficiary" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.5 "Board" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.6 "Code" or "Internal Revenue Code" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.7 "Committee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.8 "Company" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.9 "Company Stock" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.10 "Contributions" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.11 "Discrimination Testing Compensation" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.12 "Effective Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.13 "Eligible Employee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.14 "Employee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.15 "Employment" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.16 "Employment Commencement Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.17 "Employer" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.18 "ERISA" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.19 "Named Fiduciary" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.20 "Highly Compensated Employee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.21 "Hour of Service" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.22 "Non-highly Compensated Employee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.23 "Normal Retirement Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.24 "Participant" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.25 "Participating Employer" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.26 "Participation Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.27 "Payroll Period" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.28 "Plan" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.29 "Plan Quarter" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.30 "Plan Year" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.31 "Totally and Permanently Disabled" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.32 "Trust Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.33 "Trustee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.34 "Trust Fund" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.35 "Valuation Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.36 "Year of Service" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.37 "Pronouns" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
</TABLE>
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2.38 "Group A Member" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.39 "Group B Member" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.40 "Group C Member" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE III PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.1 Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.2 Enrollment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.3 Election of Nonparticipation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.4 Reemployment of Former Participant or Eligible Employee . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE IV CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.1 Employer Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.2 Timing of Employer Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.3 Active Participant Cash or Deferred Elections . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.4 Return of Contributions; Mistake of Fact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.5 Active Participant Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.6 Rate of Active Participant Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.7 Limitations on Pre-Tax Employer Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.8 Limitations on Elective Deferrals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.9 Limitations on After-Tax Employee Contributions and
Matching Employer Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.10 Multiple Use Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.11 Limitations on Annual Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE V PARTICIPANT'S ACCOUNT AND INVESTMENT FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5.1 Maintenance of Contribution Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5.2 Investment Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.3 Investment of Future Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.4 Transfer of Funds Between Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.5 Rollover Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.6 Loan Reserve Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE VI VESTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.1 Vesting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE VII DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.1 Events Causing Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.2 Form of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.3 Amount and Timing of Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.4 Distributions of Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.5 Distributions Under Qualified Domestic Relations Orders . . . . . . . . . . . . . . . . . . . . . . 31
7.6 Special Distribution Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.7 Direct Rollovers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
</TABLE>
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ARTICLE VIII WITHDRAWALS AND LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
8.1 Withdrawal From After Tax Account or Rollover Account . . . . . . . . . . . . . . . . . . . . . . . 35
8.2 Withdrawal From Company Match Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
8.3 Withdrawal From Rollover Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
8.4 Withdrawals - Age 59-1/2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
8.5 Withdrawals - Financial Hardship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
8.6 Withdrawal Penalty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
8.7 Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE IX TOP-HEAVY PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
9.1 General Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE X ADMINISTRATION OF THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
10.1 Thrift Plan Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
10.2 Trust and Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
10.3 Plan Fiduciaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
10.4 Action by Thrift Plan Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
10.5 Costs of Plan Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
10.6 Uniform and Nondiscrimination Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
10.7 Summary Plan Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
10.8 Recognition of Agency Relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
10.9 Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
10.10 Annual Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE XI AMENDMENT OR TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
11.1 Right to Amend or Terminate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
11.2 Plan Merger or Consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
11.3 Nonforfeitability Upon Plan Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
11.4 Transfer of Plan Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE XII GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
12.1 No Guarantee of Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
12.2 Payment to Incompetent Persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
12.3 Non-Alienation of Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
12.4 Designation of Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
12.5 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
12.6 Waiver of Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
12.7 Litigation by Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
12.8 Absence of Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
12.9 Participant Elections and Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE XIII CLAIMS PROCEDURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
13.1 Filing a Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
13.2 Deciding a Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
13.3 Appealing a Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
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ONEOK, INC.
KGS 401(k) THRIFT PLAN
ARTICLE I ESTABLISHMENT OF THE PLAN
1.1 Purpose The primary purpose of the ONEOK, Inc. KGS 401(k)
Thrift Plan is to provide benefits for eligible Employees of the Employer upon
retirement or earlier termination of employment. This Plan is intended to
serve as the defined contribution plan for individuals becoming employees of
ONEOK, Inc. as a result of the strategic alliance between ONEOK Inc. and
Western Resources, Inc., and new employees of Kansas Gas Service Company, a
division of ONEOK, Inc., who become eligible to participate in the Plan.
This Plan is initially established by WAI, Inc. an Oklahoma
corporation, and is named the ONEOK, Inc. KGS 401(k) Thrift Plan to reflect the
Plan's status as a qualified defined contribution plan to be maintained and
operated on and after the effective date of the strategic alliance of ONEOK
Inc., a Delaware corporation, and Western Resources, Inc., at which time ONEOK
Inc. shall merge into and with WAI, Inc., and WAI, Inc.'s name shall be changed
to ONEOK, Inc.
1.2 Effective Date and Prior Plans The Gas Service Company Union
Employees' Savings Plan, as amended, The Kansas Power and Light Company
Employees' 401(k) Plan, as amended, and The Kansas Power and Light Company
Union Employees' Savings Plan, as amended, were combined effective October 31,
1993, to form the Western Resources, Inc. 401(k) Savings Plan. Effective
January 1, 1995, the Kansas Gas and Electric Company 401(k) Plan, restated
January 1, 1994, was merged into the Western Resources, Inc. Employees' 401(k)
Savings Plan, restated January 1, 1994, to form Western Resources, Inc.
Employees' 401(k) Savings Plan. On the Effective Date or within a reasonable
time thereafter, the assets of the Western Resources, Inc. Employees' 401(k)
Savings Plan attributable to participants therein who become participants in
this Plan are to be transferred to this ONEOK, Inc. KGS 401(k) Thrift Plan, set
forth in its entirety in this document and in a Spin Off Agreement, with an
Effective Date of November 1, 1997, or as otherwise provided herein.
Provisions set forth in this document apply solely to an Eligible
Employee whose employment terminates on or after the effective date of said
strategic alliance and merger of ONEOK Inc., a Delaware corporation, and WAI,
Inc. (hereinafter referred to as the "Effective Date"). Rights and benefits,
if any, of a former Employee shall be determined in accordance with provisions
of the plan in which the former Employee was a participant as in effect on the
date the Employee's employment terminated.
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<PAGE> 6
ARTICLE II DEFINITIONS
2.1 General Unless otherwise required by the context, the terms
used herein shall have the meanings set forth in the remaining sections of this
Article II.
2.2 "Adjusted Total Compensation" shall mean an Active
Participant's Annual Compensation unreduced by overtime, bonuses, and
commissions.
2.3 "Annual Compensation" shall mean, for an Active Participant
that is a Group C Member, the amount of (a) base salary or wage paid to such
Active Participant during a calendar year by the Employer exclusive of (i)
overtime, (ii) the value of group life insurance in excess of $50,000, and
(iii) reimbursement for moving expenses or tuition, plus (b) any payroll
reduction for Pre-Tax Employer Contributions, plus (c) amounts excluded from
the Employee's gross income under Code Section 125, plus (d) amounts payable as
merit recognition awards, incentive compensation program payments, and
commissions, minus (e) any other payments made by an Employer on behalf of an
Employee under any other deferred compensation or welfare plan; provided, that
any amount(s) described in Section 2.3(d) shall only include such amount(s) as
the Committee may designate from time to time by its duly authorized written
resolution as a component of "Annual Compensation" for purposes of the Plan.
"Annual Compensation" shall mean, for an Active Participant that is
not a Group C Member, the base salary or wage paid to such Active Participant
during a calendar year by the Employer, exclusive of overtime, bonuses,
commissions, the value of group life insurance in excess of $50,000,
reimbursement for moving expenses or tuition, or any other payments made by an
Employer on behalf of an Employee under any other deferred compensation or
welfare plan. Annual Compensation shall be such amount prior to any payroll
reduction for Pre-Tax Employer Contributions or amounts excludible from the
Employee's gross income under Code Section 125.
The Annual Compensation and Adjusted Total Compensation of each
Active Participant taken into account for determining all benefits provided
under the Plan for any Plan Year beginning on or after January 1, 1997, shall
not exceed $160,000 as adjusted for increases in the cost-of-living in
accordance with Section 401(a)(17)(B) of the Code. The cost-of-living
adjustment in effect for a calendar year applies to any determination period
beginning in such calendar year.
In determining the compensation of an Employee for purposes of this
limitation, the rules of Section 414(q)(6) of the Code shall apply, except in
applying such rules, the term "family" shall include only the spouse of the
Employee and any lineal descendants of the Employee who have not attained age
19 before the close of the year. If, as a result of the application of such
rules, the adjusted $160,000 limitation is exceeded, then the limitation shall
be prorated among the affected individuals in proportion to each such
individual's compensation as determined under this Section before the
application of this limitation.
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If a determination period consists of fewer than 12 months the Annual
Compensation and Adjusted Total Compensation limit is an amount equal to the
otherwise applicable Annual Compensation and Adjusted Total Compensation limit
multiplied by a fraction, the numerator of which is the number of months in the
short determination period, and the denominator of which is 12.
2.4 "Beneficiary" shall mean any person designated as such by a
Participant, on a form supplied by the Committee, to receive benefits payable
under the provisions of Article VII of the Plan. If a person other than the
Participant's spouse is named as beneficiary, written consent of the spouse
shall be required in accordance with Section 12.4. If no such designation is
in effect at the time of the death of the Participant, or if no person so
designated shall survive the Participant, the Beneficiary shall be the spouse,
if then living; otherwise the surviving children in equal shares; or if the
deceased Participant has no surviving spouse or children, his or her estate.
2.5 "Board" shall mean the Board of Directors of the Company.
2.6 "Code" or "Internal Revenue Code" shall mean the Internal
Revenue Code of 1986, as amended from time to time.
2.7 "Committee" shall mean the 401(k) Thrift Plan Committee as
defined in Article X of this Plan.
2.8 "Company" shall mean ONEOK, Inc., an Oklahoma corporation
(named WAI, Inc. at the time of initial establishment of the Plan), or any
predecessor company which maintained the plan, or any successor to ONEOK, Inc.
2.9 "Company Stock" means shares of voting common stock or any
class of capital stock convertible into voting common stock which the Company
is authorized to issue.
2.10 "Contributions" shall mean any of the following contributions
placed into an account on behalf of Eligible Employees:
(a) "Pre-Tax Employer Contribution" shall mean the amount
of elective contribution made by payroll reduction
on behalf of an Active Participant by the Active
Participant's Employer pursuant to the Active
Participant's cash or deferred election.
(b) "After-Tax Employee Contribution" shall mean the
voluntary employee contribution made by payroll
deduction by an Active Participant on an after-tax
basis (i.e., the amount is reported as taxable income
to the Active Participant).
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<PAGE> 8
(c) "Matching Employer Contribution" shall mean the
contribution made by the Employer to the Plan on
account of a Pre-Tax Employer Contribution or an
After-Tax Employee Contribution.
2.11 "Discrimination Testing Compensation" shall mean all wages,
salaries, fees for professional service and other amounts, including bonuses,
overtime pay, and commissions paid to an Employee during a Plan Year for
personal services actually rendered by the Employee for the Company during the
Plan Year to the extent includible in gross income, but excluding
reimbursements or other expense allowances, fringe benefits (cash or noncash),
deductible moving expenses, deferred compensation and welfare benefits, and
including "elective contributions." "Elective contributions" are amounts
excludible from the Employee's gross income under Code Sections 401(k) or 125.
2.12 "Effective Date" shall mean the effective date of the
strategic alliance between ONEOK Inc., a Delaware corporation, and Western
Resources, Inc. and the merger of said ONEOK Inc. with and into WAI, Inc., an
Oklahoma corporation and sponsor of this Plan, which shall have its name then
changed to ONEOK, Inc.
2.13 "Eligible Employee" shall mean an Employee who was previously
eligible to participate in, or who was a participant in the Western Resources,
Inc. Employees' 401(k) Savings Plan and was transferred to and employed by
ONEOK, Inc. on the Effective Date is eligible to participant in the Plan, and
any Employee hired into the Kansas Gas Service Company division of ONEOK, Inc.
after the Effective Date who is eligible to participate in the Plan as provided
in Section 3.1.
2.14 "Employee" shall mean any person (except an independent
contractor) who is employed by the Company in rendering personal services to
the Company or other Employer for which the person is compensated by a wage or
salary.
2.15 "Employment" shall mean the service of an Employee with an
Employer, but only to the extent required by ERISA.
2.16 "Employment Commencement Date" shall mean the date on which an
Employee first performs an Hour of Service for the Employer as an Employee of
the Company, whether prior to or after the Effective Date.
2.17 "Employer" shall mean the Company and any other Participating
Employer that adopts this Plan.
2.18 "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended, (Act), and any regulations as such Act affects this Plan.
2.19 "Named Fiduciary" shall mean the Company.
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<PAGE> 9
2.20 "Highly Compensated Employee" shall have the meaning given
such term under Code Section 414(q) and the regulations promulgated thereunder,
and the term "Highly Compensated Employee Group" shall mean the group of Highly
Compensated Employees who are Eligible Employees under the Plan.
A Highly Compensated Employee is an Employee who performs service
during the determination year and is described in one or more of the following
groups:
1. An Employee who is a 5% owner, as defined in Code Section
416(i)(1)(B)(i), at any time during the determination year or
the preceding year.
2. An Employee who receives compensation in excess of $80,000
(indexed in accordance with Code Section 415(d), during the
preceding year.
3. An Employee who during the preceding year was a member of the
top-paid group of Employees for the preceding year.
Compensation as used in this Section 2.22 is defined as compensation
within the meaning of Code Section 415(c)(3) including elective or salary
reduction contributions to a cafeteria plan, cash or deferred arrangement or
tax-sheltered annuity.
Employers aggregated under Code Sections 414(b), (c), (m), or (o) are
treated as a single employer.
A family member is the spouse and the lineal ascendant and descendants
(and spouses of such ascendant and descendants) of any Employee or former
Employee.
2.21 "Hour of Service" shall mean:
(a) Each hour for which an Employee is directly or
indirectly paid, or entitled to payment for the
performance of duties. These hours shall be credited
to the Employee for the computation period or periods
in which the duties are performed;
(b) Each hour for which an Employee is directly or
indirectly paid or entitled to payment for reasons
(such as vacation, sickness or disability) other than
for the performance of duties. These hours shall be
calculated and credited to the Employee in accordance
with Department of Labor Regulation Section
2530.200b-2;
(c) Each hour for which back pay, irrespective of
mitigation of damages, has been either awarded or
agreed to by the Company. These hours shall be
credited to the Employee for the computation period
or periods to which the award or agreement pertains
rather than the computation period in which the
award, agreement, or payment was made;
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<PAGE> 10
(d) Each hour the Employee would have normally worked
during any period of Company-approved temporary leave
of absence (such period not to exceed 12 months) due
to sickness, accident, military or Government service
during time of war, or other cause, provided the
Employee returns to the Employment of the Company at
the expiration of such leave of absence; and
(e) Each hour the Employee would have normally worked
during any period he or she is on lay-off (such
period not to exceed 12 months) provided the Employee
returns to active Employment with the Company when
recalled or during the period authorized by the
Company to return.
2.22 "Non-highly Compensated Employee" shall mean any Employee who
is not a Highly Compensated Employee, and the term "Non-highly Compensated
Employee Group" shall mean the group of Non-highly Compensated Employees who
are Eligible Employees under the Plan.
2.23 "Normal Retirement Date" shall mean the first day of the month
coincident with or next following a Participant's attainment of age 65.
2.24 "Participant" shall mean one of the following, as applicable:
(a) "Active Participant" shall mean any Employee who is
or becomes eligible and elects to participate in the
Plan under Article III, until he or she becomes a
Former Participant.
(b) "Former Participant" shall mean any Active
Participant who retires from employment on or after
his or her Normal Retirement Date, or otherwise
leaves employment (including by termination of
employment or due to Total and Permanent Disability)
until he or she either again becomes an Active
Participant or is no longer eligible for any benefits
under the Plan.
2.25 "Participating Employer" shall mean the Company and all other
organizations (a) in which the Company has at least an 80 percent ownership
interest, and (b) that have executed a Participation Agreement in the form
designated by the Committee. A Participation Agreement, when duly executed,
shall become a part of the Plan.
2.26 "Participation Date" shall mean the date on which an Employee
begins to participate in the Plan according to Article III. The Participation
Date for Employees
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<PAGE> 11
who were participants in the Western Resources, Inc. Employees' 401(k) Savings
Plan, shall be the date such Employee began to participate in the Western
Resources, Inc. Employees' 401(k) Savings Plan, or predecessor plans taken into
account thereunder as to such Employees.
2.27 "Payroll Period" shall mean any Employer's payroll period over
which the payroll deduction of Section 4.1, constituting Pre-Tax Employer
Contributions on behalf of any Active Participant, are made and administered.
2.28 "Plan" shall mean the ONEOK, Inc. KGS 401(k) Thrift Plan set
forth in its entirety in this document as a profit sharing plan with a cash or
deferred arrangement, and the Trust Agreement, as these documents may be
amended from time to time.
2.29 "Plan Quarter" shall mean the three-month calendar quarter.
2.30 "Plan Year" shall mean the calendar year.
2.31 "Totally and Permanently Disabled" An Active Participant
shall be deemed to be Totally and Permanently Disabled only when, on the basis
of medical evidence, it is determined that:
(a) The Active Participant is totally disabled so as to
be prevented from any employment with the Employer,
including a disability resulting from an occupational
cause, but excluding a disability resulting from
services in the armed forces of any country or
political subdivision thereof, war or an act of war,
participation in a felonious criminal act or
intentional self-infliction; and
(b) The disability will be permanent.
All questions as to the fact of, commencement of, or cessation of an Active
Participant being Totally and Permanently Disabled shall be determined by the
Company, whose decisions shall be final and binding on the Active Participant.
2.32 "Trust Agreement" shall mean the trust agreement entered into
between the Company and the Trustee to carry out the purposes of the Plan, as
set forth herein, which Trust Agreement shall form a part of the Plan.
2.33 "Trustee" shall mean any qualified party selected, or any
successor thereto, as trustee of the trust created by the Trust Agreement.
2.34 "Trust Fund" shall mean the cash and other properties held and
administered by the Trustee in accordance with the provisions of the Plan and
the Trust Agreement.
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<PAGE> 12
2.35 "Valuation Date" shall mean the last day of any calendar
month.
2.36 "Year of Service" shall mean an initial 12 consecutive month
period beginning with the Employee's date of employment, or any subsequent
Plan Year beginning within such initial 12 consecutive month period during
which the Employee is credited with at least 1,000 Hours of Service.
For purposes of determining under Article III whether a Year of
Service has occurred, an Employee who is absent from work for any period:
(a) By reason of the pregnancy of the Employee;
(b) By reason of the birth of a child of the Employee;
(c) By reason of the placement of a child with the
Employee in connection with the adoption of such
child by the Employee; or
(d) For purposes of caring for such child for a period
beginning immediately following such birth or
placement;
shall be credited with the Hours of Service that otherwise would normally have
been credited to the Employee but for the absence, or if the Plan Administrator
is not able to make that determination, 8 Hours of Service per normal work day
of absence, provided that the total number of hours credited shall not exceed
501 hours. These hours will be treated as Hours of Service in the Plan Year in
which the absence begins.
2.37 "Pronouns" Masculine pronouns used herein shall refer to men
or women or both, and nouns and pronouns when stated in the singular shall
include the plural and when stated in the plural shall include the singular,
wherever appropriate.
2.38 "Group A Member" means any Active Participant that is
represented by Local 12329, 12561, 13417, 14224, 14228, or 15162 of the United
Steel Workers of America, Local 53 of the International Brotherhood of
Electrical Workers, Local 781 of the Gas Workers, Metal Trades Union for the
Cities of Monett and Kansas City, Missouri and Beloit, Kansas, Local 5266 of
the Oil Chemical and Atomic Workers International Union, or local 126 of the
International Union of Operating Engineers.
2.39 "Group B Member" means any Active Participant that is
represented by Local 304 or Local 1523 of the International Brotherhood of
Electrical Workers.
2.40 "Group C Member" means any Active Participant that is neither
a Group A Member nor a Group B Member.
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<PAGE> 13
ARTICLE III PARTICIPATION
3.1 Participation. All Employees of the Employer who are
employed by the Employer, Kansas Gas Service Company, a division of the
Company, shall become an Eligible Employee, or a former Eligible Employee shall
become an Eligible Employee, as of the first day of the calendar month next
following commencement of such Employee's active full time employment, or
reemployment, as the case may be, with an Employer. Employees who transfer
employment directly from Western Resources, Inc., and who were eligible to
participate in or was a Participant of the Western Resources, Inc. Employees'
401(k) Savings Plan shall be eligible to participate as of the Effective Date.
3.2 Enrollment To become an Active Participant under the Plan, an
Eligible Employee must complete an enrollment form and elect to have his or her
Employer make a Pre-Tax Employer Contribution by payroll reduction. An
Eligible Employee's earliest eligible Participation Date shall be the first day
of the calendar month coincident with or next following such Employee's active
full time employment, or re-employment, as the case may be, with the Employer
after the receipt of such form by the Company.
3.3 Election of Nonparticipation Notwithstanding any other
provisions of the Plan, an Employee otherwise eligible for participation in the
Plan may elect to discontinue participation in the Plan for any length of time.
Such election must be furnished to the Company in writing and must authorize
the Employer to discontinue Employer Contributions. The Eligible Employee may
resume participation by written election effective with the first Payroll
Period of the calendar month next following the receipt of such written
election by the Company. Election of nonparticipation shall not result in a
distribution if the Eligible Employee remains in the employment of the Employer
and does not become a Former Participant.
3.4 Reemployment of Former Participant or Eligible Employee If a
Former Participant or a former Eligible Employee returns to the employment of
the Employer before the fifth anniversary of the date of termination of
employment, the rehired Former Participant or former Eligible Employee will
again become an Active Participant in the Plan upon the first day of the
calendar month that next follows both commencement of the Employee's active
full time re-employment and receipt by the Company of an appropriately
completed enrollment form in accordance with Section 3.2. For such an Eligible
Employee, Matching Employer Contributions would also be applicable.
If a Former Participant or former Eligible Employee returns to the
employment of the Employer after the fifth anniversary of the date of
termination of employment, the rehired Former Participant or former Eligible
Employee will become an Active Participant in the Plan on the first day of the
calendar month that next follows both commencement of the Employee's active
full-time re-employment and receipt by the Company of an appropriately
completed enrollment form in accordance with Section 3.2, above. Matching
Employer Contributions for such an Eligible Employee shall only
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<PAGE> 14
be made as to Employer Contributions beginning after the first day of the
calendar month coincident with or next following the completion of One Year of
Service after any such return to employment with an Employer.
ARTICLE IV CONTRIBUTIONS
4.1 Employer Contributions Subject to the limitations imposed
elsewhere under the Plan, the Employer shall contribute the following amounts
with respect to each Active Participant in at least monthly installments:
(a) For each Payroll Period ending after the Effective
Date, a "Pre-Tax Employer Contribution" in accordance
with the cash or deferred election made by each
Active Participant, provided that such Participant is
an Active Participant during a portion of such
Payroll Period. Such contribution shall be from 1%
to 14% of the amount of the Active Participant's
Adjusted Total Compensation paid during the Payroll
Period (in 1% increments), to be made by payroll
reduction.
(b) For each Payroll Period a "Matching Employer
Contribution" equal to 50% of the percentage of any
Pre-Tax Employer Contribution and of any After-Tax
Employee Contribution for the Payroll Period times
the Active Participant's Annual Compensation;
provided, however, that the Matching Employer
Contribution shall apply only to the first 6% of the
amount of the Active Participant's Annual
Compensation paid for the Payroll Period, and any
such Matching Contribution shall only be made with
respect to an Active Participant's Adjusted Total
Compensation for Payroll Period(s) beginning after
the first day of the calendar month coincident with
or next following completion of one (1) Year of
Service by such Active Participant.
Notwithstanding the amount of such Employer Contributions that would
otherwise be contributed by the Employer, the amount of Employer
Contributions for any Plan Year shall not exceed the amount allowable
as a deduction to the Employer under Section 404 of the Internal
Revenue Code, or any other limiting statute of similar importance.
All Employer Contributions are expressly conditioned on such
deductibility. Notwithstanding the provisions of Section 4.4, any
such contributions as are later determined by the Internal Revenue
Service not to be deductible for the Plan Year for which contributed
shall be immediately returned to the Employer; provided, however, that
no such contribution shall be returned to the Employer more than one
(1) year after the disallowance of the deduction, unless permitted
under the Internal Revenue Code at such time.
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<PAGE> 15
Notwithstanding the foregoing, on or about the end of each Plan
Quarter, an Active Participant will be allowed to contribute in a lump
sum amount the additional cash necessary to meet his maximum
contribution percentage. Such pre-tax catch-up contributions will be
made through payroll deduction and must be greater than $25.00. In a
Plan Year the Active Participant will be allowed to make this catch-up
contribution for previous quarters in the year. This contribution
will be considered in determining the Matching Employer Contribution.
4.2 Timing of Employer Contributions All Employer Contributions
for each Plan Year shall be delivered to the Trustee by each Employer within
the time permitted by the Internal Revenue Code and ERISA and the regulations
promulgated thereunder.
4.3 Active Participant Cash or Deferred Elections Not more
frequently than once per calendar month an Active Participant may elect to
discontinue making Pre-Tax Employer Contributions or reduce the rate at which
such contributions are being made on his or her behalf by giving written
instructions to the Company on a form prescribed by the Company. Any such
discontinuance or reduction shall become effective at the start of the next
following Payroll Period after the election is received by the Company. An
Active Participant may resume making Pre-Tax Employer Contributions or increase
the rate at which such contributions are being made on his or her behalf by
giving written instructions to the Company on a form prescribed by the Company.
Any such resumption or increase shall become effective on the first day of the
Payroll Period following the end of the calendar month in which the Active
Participant's form is received by the Company.
4.4 Return of Contributions; Mistake of Fact Except as otherwise
specifically provided under this Article, under no circumstances shall any of
the assets of the Trust Fund be returned or transferred to an Employer, or to
any person for the benefit of an Employer. In the case of a contribution that
is made by an Employer due to a mistake of fact, and notwithstanding the
provisions of the preceding sentence, the contribution shall be returned to the
Employer; provided, however, that no such contribution shall be returned to
such Employer more than 1 year after the payment of the contribution. Earnings
attributable to the Excess Contribution will not be returned to the Company,
but losses attributable thereto will reduce the amount to be returned.
4.5 Active Participant Contributions For each Payroll Period, any
Active Participant may make an After-Tax Employee Contribution to the Plan
through payroll deduction, in accordance with an election made by the Active
Participant. Such contribution is the amount elected to be contributed by the
Active Participant up to a maximum of 4% of the amount of the Active
Participant's Adjusted Total Compensation for the Payroll Period.
Notwithstanding the foregoing, on or about the end of each Plan
Quarter, an Active Participant will be allowed to contribute in a lump sum
amount the additional
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<PAGE> 16
cash necessary to meet his maximum contribution percentage. Such after-tax
catch-up contributions may be made through payroll deduction, certified check,
cashier's check or money order and must be greater than $25.00. During a Plan
Year the Active Participant will be allowed to make this catch-up contribution
for previous quarters in that Plan Year. This contribution will be considered
in determining the Matching Employer Contribution.
4.6 Rate of Active Participant Contributions Not more frequently
than once per calendar month an Active Participant may elect to discontinue
making After-Tax Employee Contributions or reduce the rate at which such
contributions are made by giving written instructions to the Company on the
form prescribed by the Company. Any such discontinuance or reduction shall
become effective at the start of the Payroll Period next following the
Company's receipt of the election. An Active Participant may resume making
After-Tax Employee Contributions or increase the rate at which such
contributions are made by giving written instructions to the Company on the
form prescribed by the Company. Any such resumption or increase shall become
effective on the first day of the first Payroll Period next following the end
of the calendar month in which the Company receives the election.
4.7 Limitations on Pre-Tax Employer Contributions The Plan's
provisions for Pre-Tax Employer Contributions constitute a cash or deferred
arrangement intended to be qualified under Code Section 401(k). Accordingly,
the cash or deferred arrangement must satisfy the Actual Deferral Percentage
Test (the "ADP Test") under Code Section 401(k)(3) for each Plan Year. The ADP
Test shall be conducted in accordance with the following rules.
(a) Actual Deferral Percentage Test. For any Plan Year,
the ADP Test will be satisfied if the Actual Deferral
Percentage for the Highly Compensated Employee Group
does not exceed the greater of:
(1) 1.25 times the ADP for the Non-highly
Compensated Employee Group; or
(2) The lesser of: (A) two times the ADP for the
Non-highly Compensated Employee Group; and
(B) the ADP for the Non-highly Compensated
Employee Group plus two percentage points.
(b) Determination of ADP Test For purposes of
determining the precise manner in which the ADP Test
is to be conducted, the provisions of Code Section
401(k)(3) and the regulations promulgated thereunder
are incorporated herein by reference (the "401(k)
Regulations"). For purposes of conducting the ADP
Test, the Participant's compensation shall be the
Participant's Discrimination Testing Compensation.
The Plan will take into account the actual deferral
ratios of all Eligible Employees in
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<PAGE> 17
conducting the ADP Test. For purposes of conducting
the ADP Test, Employees in the Highly Compensated
Employee Group and Non-highly Compensated Employee
Group shall include any Eligible Employee who is
directly or indirectly eligible to make a cash or
deferred election under the Plan for all or a portion
of a Plan Year and includes: an Employee who would be
a Plan Participant but for the failure to make
required contributions; an Employee whose eligibility
to make elective contributions has been suspended
because of an election (other than certain one-time
elections) not to participate, a distribution, or a
loan; and an Employee who cannot defer because of the
Code Section 415 limits on annual additions. In the
case of an Eligible Employee who makes no elective
contributions the deferral ratio that is to be
included in determining the actual deferral
percentage is zero.
(c) Preliminary ADP Test The Committee may, from time to
time during the course of a Plan Year, make its best
estimate as to whether the ADP Test will be satisfied
for the year. In doing so, the Committee may conduct
one or more preliminary ADP Tests based on the
projected compensation and contribution level of
Participants. If it appears there will be "excess
contributions" as defined in the 401(k) Regulations,
the Committee may, in its discretion, limit Pre-Tax
Employer Contributions in a manner designed to
prevent excess contributions from being made, or use
a combination of methods acceptable under the 401(k)
Regulations, in order to provide reasonable assurance
that excess contributions shall be avoided or
corrected during the Plan Year.
(d) Correction of Excess Contributions Notwithstanding
any other provision of this Plan, if it is determined
that Excess Contributions exist for a Plan Year, such
Excess Contributions shall be corrected within 2 1/2
months after the end of such Plan Year, in order to
avoid the imposition of an excise tax that might
otherwise apply under Code Section 4979, and in any
event within 12 months after the close of the Plan
Year for which the contributions were made. The
Committee may, in its discretion, use any of the
following correction methods, as described in Code
Section 401(k) Regulations:
(1) The Committee may require employers to make
"Qualified Nonelective Contributions" or
"Qualified Matching Contributions" (as
defined in the Code Section 401(k)
Regulations;
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<PAGE> 18
(2) Excess Contributions may be recharacterized
and treated as employee contributions in
accordance with the Code Section 401(k)
Regulations; or
(3) Excess Contributions (and income allocable
thereto) may be distributed to the
appropriate Highly Compensated Employees.
The Committee shall determine which of the
correction methods is to be used to correct the
Excess Contributions, or may use a combination of the
correction methods, as it deems advisable. The
amount of Excess Contributions for a Highly
Compensated Employee, for the purposes of
distribution or recharacterization, will be
determined in the following manner. First, the
actual deferral ration ("ADR") of the Highly
Compensated Employee with the highest ADR is reduced
to the extent necessary to satisfy the ADP Test or
cause such ratio to equal the ADR of the Highly
Compensated Employee with the next highest ratio.
Second, this process is repeated until the ADP Test
is satisfied. The amount of Excess Contributions for
a Highly Compensated Employee is then equal to the
total of elective and other contributions taken into
account for the ADP Test minus the product of the
Employee's reduced deferral ratio as determined above
and the Employee's compensation. In the case of a
Highly Compensated Employee whose ADR is determined
under the family aggregation rules, the determination
of the amount of Excess Contributions, for the
purposes of distribution or recharacterization, shall
be made as follows: The ADR is reduced in accordance
with the "leveling" method described in Code Section
1.401(k)-1(f)(2) of the Regulations and the Excess
Contributions are allocated among the family members
in proportion to the contributions of each family
member that have been combined. The amount of Excess
Contributions to be distributed or recharacterized
shall be reduced by excess deferrals previously
distributed for the taxable year ending in the same
Plan Year and excess deferrals to be distributed for
a taxable year will be reduced by Excess
Contributions previously distributed or
recharacterized for the Plan Year beginning in such
taxable year. Recharacterized Excess Contributions
will remain subject to the nonforfeitability
requirements and distribution limitations that apply
to elective contributions.
Nonelective contributions and matching
contributions may be treated as elective
contributions for purposes of the ADP Test only if
such contributions are nonforfeitable when made and
subject
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<PAGE> 19
to the same distribution restrictions that apply to
elective contributions. Non-elective contributions
and matching contributions which may be treated as
elective contributions must satisfy these
requirements without regard to whether they are
actually taken into account as elective
contributions. Non-elective contributions and/or
matching contributions may be treated as elective
contributions only if the conditions described in
Code Section 1.401(k)-1(b)(5) of the Regulations are
satisfied. If matching employer contributions have
been made to the Plan with respect to an amount that
constitutes an Excess Contribution, then such
matching employer contributions shall be forfeited
(without regard to whether the Participant's interest
in such matching employer contributions is
nonforfeitable). Such forfeited matching employer
contributions shall be reallocated to the accounts of
Non-highly Compensated Employees for the Plan Year in
which the forfeiture occurs pro rata based on
deferrals.
If Excess Contributions are distributed,
income allocable to the distributed Excess
Contributions shall also be distributed. The income
allocable to Excess Contributions includes income for
the Plan Year for which the Excess Contributions were
made. The Committee shall allocate income to such
distributed Excess Contributions in the same manner
that other income is allocated among Participant
Accounts under Article V of the Plan Income allocable
to the period between the end of the Plan Year and
the date of distribution (the "Gap Period") shall be
disregarded for this purpose.
4.8 Limitations on Elective Deferrals
(a) General Rule Notwithstanding anything herein to the
contrary, the Elective Deferrals on behalf of an Active
Participant under the Plan (and all other plans, contracts, or
arrangements of the Employer) may not exceed the Applicable
Limit under Code Section 402(g) and the regulations
promulgated thereunder for the Participant's taxable year
beginning in the calendar year. For this purpose, the term
"Elective Deferrals" and the term "Applicable Limit" are
defined in the regulations issued under Code Section 402(g),
the provisions of which are incorporated herein by reference.
(b) Correction of Excess Deferrals If in any calendar
year an Active Participant's Elective Deferrals exceed the
Applicable Limit, then by March 1 following the close of the
Participant's income tax year, the Participant may notify each
plan under which deferrals were made of the amount of Excess
Deferrals received by that plan. Any such notification
30
<PAGE> 20
provided by a Participant must be in writing and the
Participant must certify or otherwise establish to the
satisfaction of the Committee that the designated amount is an
Excess Deferral. A Participant shall be deemed to have
notified the Plan of Excess Deferrals to the extent they are
attributable solely to Elective Deferrals under the Plan and
other plans of the Employer immediately upon the occurrence of
such event. In such event, the Plan shall distribute, not
later than the immediately following April 15, the amount of
the Excess Deferrals allocated to this Plan by the
Participant, together with any income allocable to that
amount. The Committee shall allocate income to such
distributed excess deferrals in the same manner that other
income is allocated among Participant's Account under Article
V of the Plan. Income allocable to the Gap Period shall be
disregarded for this purpose. In the event a Participant's
income tax year is not the calendar year, appropriate
adjustments shall be made in the periods set forth above.
(c) Correction of Excess Deferrals During Taxable Year A
Participant who has Excess Deferrals during the Participant's
income tax year may receive a corrective distribution of
Excess Deferrals during the same year. This corrective
distribution may be made only if all of the following
conditions are satisfied:
(1) The Participant designates the distribution
as an Excess Deferral. The Participant's
designation must be in writing, and the
Participant must certify or otherwise
establish to the satisfaction of the
Committee that the designated amount is an
Excess Deferral. A Participant will be
deemed to have designated the distribution as
such to the extent the Excess Deferral is
attributable solely to Elective Deferrals
under the Plan and other plans of the
Employer immediately upon the occurrence of
such event.
(2) The distribution must be made after the date
on which the Plan receives the Excess
Deferral.
(3) The Plan designates the distribution as a
distribution of Excess Deferrals.
4.9 Limitations on After-Tax Employee Contributions and
Matching Employer Contributions Plan provisions for After-Tax Employee
Contributions and Matching Employer Contributions are subject to the provisions
of Code Section 401(m). Accordingly, these contributions must satisfy the
Actual Contribution Percentage Test (ACP Test) under Code Section 401(m)(2) for
each Plan Year. The ACP Test shall be conducted in accordance with the
following rules.
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<PAGE> 21
(a) Actual Contribution Percentage Test For any Plan
Year, the ACP Test will be satisfied if the Actual
Contribution Percentage for the Highly Compensated
Employee Group does not exceed the greater of:
(1) 1.25 times the ACP for the Non-highly
Compensated Employee Group; or
(2) the lesser of: (A) two times the ACP for the
Non-highly Compensated Employee Group; and
(B) the ACP for the Non-highly Compensated
Employee Group plus two percentage points.
(b) Determination of ACP Test For purposes of
determining the precise manner in which the ACP Test
is to be conducted, the provisions of Code Section
401(m) and regulations promulgated thereunder are
incorporated herein by reference 401(m)
Regulations). For purposes of conducting the ACP
Test, the Participant's compensation shall be the
Participant's Discrimination Testing Compensation.
The ACP Test shall be conducted in accordance with
these provisions, and the Employer shall maintain
records sufficient to demonstrate satisfaction of the
ACP Test for each Plan Year. The Plan will take into
account the annual contribution ratios of all
Eligible Employees in conducting the ACP Test. For
purposes of conducting the ACP Test, Employees in the
Highly Compensated Employee Group and the Non-highly
Compensated Employee Group shall include any Eligible
Employee who is directly or indirectly eligible to
receive an allocation of matching contributions or to
make employee contributions and includes: an Employee
who would be a Plan Participant but for the failure
to make required contributions; an Employee whose
right to make employee contributions or receive
matching contributions has been suspended because of
an election (other than certain one-time elections)
not to participate; and an Employee who cannot make
an employee contribution or receive a matching
contribution because Code Sections 415(c)(1) or
415(e) prevents the Employee from receiving
additional annual additions. In the case of an
Eligible Employee who makes no employee contributions
and who receives no matching contributions, the
contribution ratio that is to be included in
determining the actual contribution percentage is
zero.
(c) Preliminary ACP Test The Committee may, from time to
time during the course of a Plan Year, make its best
estimate as to whether the ACP Test will be satisfied
for the year. In doing so, the
32
<PAGE> 22
Committee may conduct one or more preliminary ACP
Tests based on the projected compensation and
contribution level of Participants. If it appears
there will be Excess Aggregate Contributions as
defined in the 401(m) Regulations, the Committee may,
in its discretion, limit After-Tax Employee
Contributions and Matching Employer Contributions in
a manner designed to prevent Excess Aggregate
Contributions from being made, or use a combination
of methods acceptable under the 401(m) Regulations,
in order to provide reasonable assurance that Excess
Aggregate Contributions shall be avoided or be
corrected during the Plan Year.
(d) Correction of Excess Aggregate Contributions
Notwithstanding any other provision of this Plan, if
it is determined that Excess Aggregate Contributions
exist for a Plan Year, such Excess Aggregate
Contributions shall be corrected within 2 1/2 months
after the end of such Plan Year in order to avoid the
imposition of an excise tax that might otherwise
apply under Code Section 4979, and in any event
within 12 months after the closing of the Plan Year
for which the contributions were made. The Committee
may, in its discretion, use any of the following
correction methods, as described in the Code Section
401(m) Regulations:
(1) The Committee may require Employers to make
"Qualified Nonelective Contributions" or
"Elective Contributions" (as defined in the
Code Section 401(m) Regulations) in
accordance with Regulation Section
1.401(m)-1(b)(5);
(2) Excess Aggregate Contributions (and income
allocable thereto) may be distributed to the
appropriate Highly Compensated Employees; or
(3) Matching Employer Contributions (and income
allocable thereto) that are not vested
(determined without regard to any increase in
vesting that may occur after the date of the
forfeiture) may be forfeited. Such
forfeitures will be used to reduce subsequent
Matching Employer Contributions.
The Committee shall determine which of the
correction methods is to be used to correct the
Excess Aggregate Contributions, and may use a
combination of the correction methods, as it deems
advisable. The amount of Excess Aggregate
Contributions for a Plan Year shall be determined
only after first determining the Excess Contributions
that are treated as employee contributions due to
recharacterization. The amount of Excess
33
<PAGE> 23
Aggregate Contributions for a Highly Compensated
Employee will be determined in the following manner.
First, the actual contribution ratio ("ACR") of the
Highly Compensated Employee with the highest ACR is
reduced to the extent necessary to satisfy the ACP
Test or cause such ratio to equal the ACR of the
Highly Compensated Employee with the next highest
ratio. Second, this process is repeated until the
ACP Test is satisfied. The amount of Excess
Aggregate Contributions for a Highly Compensated
Employee is then equal to the total of employee,
matching and other contributions taken into account
for the ACP Test minus the product of the employee's
contribution ratio as determined above and the
employee's compensation. In the case of a Highly
Compensated Employee whose ACR is determined under
the family aggregation rules, the determination of
the amount of Excess Aggregate Contributions shall be
made as follows: the ACR is reduced in accordance
with the "leveling" method described in Section
1.401(m)-1(e)(2) of the Code Section 401(m)
Regulations and the Excess Aggregate Contributions
are allocated among the family members in proportion
to the contributions of each family member that have
been combined. A distribution of Excess Aggregate
Contributions shall be made on the basis of the
respective portions of such amounts attributable to
each Highly Compensated Employee. If Excess
Aggregate Contributions are distributed, income
allocable to the distributed Excess Aggregate
Contributions includes income for the Plan Year for
which the Excess Aggregate Contributions were made.
The Committee shall allocate income to such
distributed Excess Contributions in the same manner
that other income is allocated among Participant
Accounts under Article V of the Plan. Income
allocable to the Gap Period shall be disregarded for
this purpose.
Nonelective employer contributions shall be
treated as matching contributions for purposes of the
ACP Test only if such contributions are
nonforfeitable when made and distributable only under
the following circumstances:
1. The Employee's retirement, death, disability
or separation from service;
2. The termination of the Plan without
establishment of maintenance of another
defined contribution plan (other than an ESOP
or SEP);
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<PAGE> 24
3. In the case of a profit-sharing or stock
bonus plan, the Employee's attainment of age
59 1/2 or the Employee's hardship;
4. The sale or other disposition by a
corporation to an unrelated corporation of
substantially all of the assets used in a
trade or business, but only with respect to
employees who continue employment with the
acquiring corporation and the acquiring
corporation does not maintain the plan after
the disposition; and,
5. The sale or other disposition by a
corporation of its interest in a subsidiary
to an unrelated entity, but only with respect
to employees who continue employment with the
subsidiary and the acquiring entity does not
maintain the plan after the disposition.
Paragraph 2, 4 and 5 above, apply only if the
transfer corporation continues to maintain the plan.
Non-elective contributions which may be treated as
matching employer contributions must satisfy these
requirements without regard to whether they are
actually taken into account as matching employer
contributions.
4.10 Multiple Use Limitation The Committee shall ensure that
multiple use of the Alternative Limitation does not occur, and if it does, that
it is adjusted in accordance with Regulation Section 1.401(m)-2. The term
Alternative Limitation has the meaning ascribed to such term under Regulation
Section 1.401(m)-2(b)(2), and refers to the alternatives for satisfying the ADP
and ACP Tests provided in Sections 4.7(a)(2) and 4.9(a)(2), respectfully. If
multiple use of the Alternative Limitation occurs, it shall be adjusted by
reducing the ACP of the Highly Compensated Employee Group in the manner
described in Regulation Section 1.401(m)-1(e)(2), so that there is no multiple
use of the Alternative Limitation. Instead of making this reduction, the
Committee may eliminate multiple use of the Alternative Limitation by making
Qualified Nonelective Contributions in accordance with Regulation Section
1.401(m)-1(b)(5).
4.11 Limitations on Annual Additions
(a) In no event shall the sum of the Annual Additions to
a Participant's Account for any calendar year exceed
the lesser of:
(1) $30,000 (or, if greater, one-fourth of the
defined benefit dollar limitation in effect
under Code Section 415(b)(1)(A)); or
(2) 25 percent of the Active Participant's
Compensation.
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<PAGE> 25
(b) Correction of Excess Annual Additions If, but for
the limitations set forth in Section 4.11(a), the
Annual Additions to a Participant's accounts for any
calendar year would exceed the limitation set forth
in that section, such Annual Additions shall be
reduced to the extent necessary to comply with the
requirements of Section 4.11(a). Any such reduction
shall comply with the applicable regulations under
Code Section 415 and shall be accomplished in the
following order:
(1) Any contribution made by the Active
Participant to his or her After-Tax Account
or any contribution to the Pre-Tax Account
shall be returned to the Participant; and
(2) if any further reduction is necessary, the
portion of the Employer's contribution for
the calendar year and forfeitures which are
to be allocated during the calendar year to
the Active Participant shall be reduced.
Any portion of the Employer's contribution or forfeitures
which must be reallocated as a result of the requirements of Section
4.11(a) shall be reallocated as many times as is necessary among the
remaining Active Participants in the same manner as the initial
allocation was made. If the sum of Annual Additions, as defined in
Section 4.11(e), for all Participants for the calendar year exceeds
the sum of the limitations described in that paragraph for such
Participants, the excess shall be held unallocated in a suspense
account. If a suspense account is in existence at any time during a
particular calendar year, other than the calendar year referred to in
the preceding sentence, all amounts in the suspense account shall be
allocated and reallocated to the Accounts of Active Participants,
subject to the limitations of Section 415 of the Internal Revenue
Code, before any Employer contributions which would constitute Annual
Additions may be made to the Plan for that calendar year. For this
purpose such allocations and reallocations shall be made in the same
manner forfeitures would be allocated for the calendar year.
(c) Annual Additions to Other Defined Contribution Plans
If any Participant is a participant under any other
defined contribution plan maintained by the Employer
the total of the Annual Additions to such
Participant's account from all such defined
contribution plans shall not exceed the limitations
set forth in Section 4.11(a). If it is determined
that as a result of the limitation set forth in the
preceding sentence, the Annual Additions to a
Participant's Account in this Plan must be reduced,
such reduction shall be accomplished in accordance
with the provisions of Section 4.11(b).
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<PAGE> 26
(d) Combined Limitation To the extent applicable, if any
Participant is a participant under a Defined Benefit
Plan maintained by the Employer, the sum of the
Defined Benefit Plan Fraction for a calendar year and
the Defined Contribution Plan Fraction for that year
shall be no greater than one (1.0). For purposes of
this Section, Annual Additions attributable to
accounts established for the Participant's benefit to
provide post-retirement medical and life insurance
benefits shall be disregarded. If it is determined
that as a result of the limitation set forth in the
preceding sentence, the Annual Additions to a
Participant's account in this Plan must be reduced,
such reduction shall be accomplished in accordance
with the provisions of Section 4.11(b).
(e) Definitions For purposes of Section 4.11, the
following words shall have the meaning ascribed to
them below.
(1) The term "Annual Additions shall mean the sum
of the following amounts credited to an
Active Participant's Account for a calendar
year: (A) all Employer contributions; (B)
all Active Participant contributions; and (C)
all forfeitures. Except to the extent
provided in Treasury regulations, Annual
Additions include excess contributions
described in Code Section 401(k) and excess
aggregate contributions described in Code
Section 401(m), irrespective of whether the
Plan distributes or forfeits such excess
amounts. Excess deferrals under Section
402(g), are not Annual Additions unless
distributed after the correction period
described in Code Section 402(g).
(2) For purposes of applying the limitations of
Code Section 415, the term "Compensation"
includes:
(A) The Active Participant's wages,
salaries, fees for professional
services, and other amounts received
for personal services actually
rendered in the course of employment
with the Employer including, but not
limited to, commissions paid
salesmen, compensation for services
on the basis of a percentage of
profits, commissions on insurance
premiums, tips, and bonuses.
(3) The term Compensation does not include:
(A) Contributions made by the Employer
to a plan of deferred compensation,
to the extent that, before the
37
<PAGE> 27
application of the section 415
limitations to that plan, the
contributions are not includable in
the gross income of the employee
for the income tax year in which
contributed. In addition, employer
contributions made on behalf of an
employee to a simplified employee
pension described in section 408(k)
are not considered as compensation
for the income tax year in which
contributed to the extent such
contributions are deductible by the
Employee under section 219(b)(7).
Additionally, any distributions from
a plan of deferred compensation are
not considered as compensation for
section 415 purposes, regardless of
whether such amounts are includable
in the gross income of the employee
when distributed. However, any
amounts received by an employee
pursuant to an unfunded
non-qualified plan may be considered
as compensation for section 415
purposes in the year such amounts
are includable in the gross income
of the employee.
(B) Amounts realized from the exercise
of a non-qualified stock option, or
when restricted stock or property
held by an employee either becomes
freely transferable or is no longer
subject to a substantial risk of
forfeiture.
(C) Amounts realized from the sale,
exchange or other disposition of
stock acquired under a qualified
stock option.
(D) 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 includable in the gross income
of the employee), or contributions
made by an employer (whether or not
under a salary reduction agreement)
toward the purchase of an annuity
contract described in section 403(b)
(whether or not the contributions
are excludable from the gross income
of the employee).
(E) Amounts contributed by the Employer
pursuant to a salary reduction
arrangement which are excludable
from the Employee's gross income
under Code Sections 125, 402(3)(3),
402(h) or 403(b).
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<PAGE> 28
(4) The words Defined Benefit Plan shall mean any
retirement plan maintained by the Employer
which is not a Defined Contribution Plan.
(5) The words Defined Benefit Plan Fraction shall
mean, for any calendar year, a fraction
(A) the numerator of which is the
projected annual benefit of the
Participant, that is, the annual
benefit to which he would be
entitled under the terms of the
Defined Benefit Plan on the
assumptions that he continues
employment until his normal
retirement date as determined under
the terms of the Defined Benefit
Plan, that his compensation
continues at the same rate as in
effect in the calendar year under
consideration until his normal
retirement date and that all other
relevant factors used to determine
benefits under such Defined Benefit
Plan remain constant as of the
current calendar year for future
calendar years, under all Defined
Benefit Plans maintained by the
Employer, determined as of the close
of the calendar year, and
(B) the denominator of which is the
lesser of
(i) one and one-fourth (1.25)
(subject to the one (1.)
limitation in paragraph (8)
below), times the projected
annual benefit of such
Participant under the Defined
Benefit Plans determined as
of the close of the calendar
year as if the Defined
Benefit Plans provided the
maximum benefits allowable
under Section 415(b)(1)(A) of
the Internal Revenue Code
after taking into account all
applicable modifications of
that dollar limit found in
the Code, and
(ii) one and four-tenths (1.4)
times the projected annual
benefit of such Participant
under the Defined Benefit
Plans determined as of the
close of the calendar year as
if the Defined Benefit Plans
provided benefits in the
amount of the maximum
percentage-of-compensation
limit allowable under Section
415(b)(1)(B) of the Internal
Revenue Code after taking into
account all applicable
modifications of that
percentage of compensation
limit found in the Code.
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<PAGE> 29
(6) The words Defined Contribution Plan shall
mean a retirement plan maintained by the
Employer which provides for an individual
account for each Participant and for benefits
based solely on the amount contributed to the
Participant's account and any income,
expenses, gains and losses, and any
forfeitures of accounts of other Participants
which may be allocated to such Participant's
accounts.
(7) The words Defined Contribution Plan Fraction
shall mean, for any calendar year, a fraction
(A) the numerator of which is the sum of
the Annual Additions to the
Participant's account for all years
under all Defined Contribution Plans
maintained by the Employer in that
calendar year, and
(B) the denominator of which is the sum
for the calendar year and all prior
years of the lesser of:
(i) one and one-fourth (1.25)
(subject to the one (1.)
limitation in paragraph (8)
below), times the maximum
amount of Annual Additions to
such Participant's account
under the Defined
Contribution Plans which
could have been made in
accordance with the
limitations set forth in
Section 415(c)(1)(A) of the
Internal Revenue Code after
taking into account all
applicable modifications of
that dollar limitation found
in the Code, and
(ii) one and four-tenths (1.4)
times the maximum annual
addition to such Participant's
account under Defined
Contribution Plans which could
have been made in accordance
with the percentage-of-
compensation limitation set
forth in Section 415(c)(1)(B)
of the Internal Revenue Code
after taking into account all
applicable modifications of
that percentage-of-
compensation limitation found
in the Code.
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<PAGE> 30
To determine the denominator
of this fraction, the
Committee will make any
adjustment required under Code
Section 415(b) and will
determine a Year of Service as
a Plan Year in which the
Employee completed at least
1,000 Hours of Service.
(8) The words "retirement plan" shall mean (A)
any profit sharing, pension or stock bonus
plan described in Section 401(a) and 501(a)
of the Internal Revenue Code, (B) any annuity
plan or annuity contract described in Section
403(a) or 403(b) of the Internal Revenue
Code, (C) any qualified bond purchase plan
described in Section 405(a) of the Internal
Revenue Code, and (D) any individual
retirement account, individual retirement
annuity or retirement bond described in
Section 408(a), 408(b) or 409 of the Internal
Revenue Code.
(9) If the 1.0 limitation applies, the Committee
must determine the denominator of the Defined
Benefit Plan Fraction and the denominator of
the Defined Contribution Plan Fraction by
substituting 1.0 for 1.25. The 1.0
limitation applies only if (i) the Plan's top
heavy ratio exceeds 90%; or (ii) the Plan's
top heavy ratio is greater than 60% and the
Employer does not provide extra minimum
benefits which satisfy Code Section
416(h)(2).
ARTICLE V PARTICIPANT'S ACCOUNT AND INVESTMENT FUNDS
5.1 Maintenance of Contribution Accounts The following separate
accounts shall be maintained with respect to each Participant (collectively,
the "Participant's Account"):
(a) The Pre-Tax Account represents Pre-Tax Employer
Contributions made on an Active Participant's behalf,
(b) The After-Tax Account represents After-Tax Employee
Contributions made by the Active Participant,
(c) The Company Match Account represents Matching
Employer Contributions made on the Active
Participant's behalf, and
(d) The Rollover Account represents Rollover
Contributions received on behalf of an Active
Participant.
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<PAGE> 31
A Participant's Account shall be invested or reinvested in accordance with the
Participant's election and the provisions of the Trust Agreement. The
Participant's election will apply uniformly to the separate accounts listed in
Section 5.1(a) through (c) above comprising the Participant's Account. The
Participant may not elect to invest a separate account listed in Section 5.1(a)
through (c) above differently than the investment of the other separate
accounts. The value of a Participant's Account shall be determined by the
Company or the Administrator as of each Valuation Date on the basis of the
market values of each Fund as of each Valuation Date, and shall show the effect
of Contributions, income received or accrued, realized and unrealized
appreciation or depreciation, distributions, withdrawals, inter-fund transfers,
expenses, and all other transactions affecting the respective Funds since the
next preceding Valuation Date.
5.2 Investment Funds
(a) The Investment Funds shall consist of at least one of
each of the following funds: a Balanced Fund, a
Growth Fund, an Equity Index Fund, a Diversified
Equity Fund, a Money Market Fund, an Investment
Contract Fund, an International Growth Fund, a Bond
Index Fund, and a Company Stock Fund. There shall be
a frozen stock fund to hold Western Resources, Inc.
Common Stock in the accounts of any Eligible Employee
transferred to the Plan, which shall be administered
as prescribed by the Committee. All
dividends/earnings from the Western Resources Common
Stock Fund will be reinvested in the Plan's Money
Market Fund. The number and type of Investment Funds
may be adjusted from time to time by the 401(k)
Thrift Plan Committee as it deems advisable.
(b) As of each Valuation Date, a valuation of each of the
Investment Funds shall be performed by the Trustee in
order to determine the market values of each
Investment Fund and the reconciliation of the
Investment Fund from the prior Valuation Date.
5.3 Investment of Future Contributions An Active Participant's
future After-Tax Contributions, Pre-Tax Employer Contributions to be made on
his or her behalf, Matching Employer Contributions, and any Rollover
Contributions may be allocated by the Participant among the Investment Funds in
multiples of 10%, where the same directions will apply to each type of
Contribution (except for Rollover Contributions). Each Participant shall
direct initially in writing, on a form prescribed by the Company, the
allocation of such Contributions among the Investment Funds, with such
direction continuing in effect until notice of change is made under rules
prescribed by the Committee. An election may be made on any day during a Plan
Year to the extent administratively practicable. If a Participant fails to
direct the investment of the Active Participant's Contributions, either by
failing to make an election or by revoking an
42
<PAGE> 32
election without offering a replacement election, the Trustee shall invest the
Participant's Account as it deems appropriate.
5.4 Transfer of Funds Between Accounts A Participant may elect to
transfer his or her interest in the Participant's Account, in whole or in part,
from one Investment Fund to another Investment Fund. All transfers are subject
to the rules established for transfers by the applicable Investment Fund. Such
transfer shall be made as soon as practicable following the date the request is
made under rules satisfactory to the 401(k) Thrift Plan Committee. An election
may be made on any day during a Plan Year to the extent administratively
practicable.
5.5 Rollover Contribution Any Employee may file a written
application with the Committee requesting that the Trustee accept a Rollover
Contribution. The term Rollover Contribution shall include (a) permitted
rollover contributions under the Code from one qualified plan to another
qualified plan or (b) so long as such contribution is not deemed to be a
distribution of benefits under the Code, then the direct transfer from the
trustee of a qualified plan to the Trustee of this Plan. The Committee, in its
sole discretion, shall determine whether the Employee shall be permitted to
make a Rollover Contribution to the Trust Fund. Any written application filed
pursuant to this Section shall set forth the amount of the Rollover
Contribution; that the nature of the property making up the Rollover
Contribution is from an ERISA qualified retirement plan under Code Section
401(a) and is attributable to employer contributions and/or gain on voluntary
nondeductible contributions; a statement, satisfactory to the Committee, that
the contribution constitutes a Rollover Contribution; and such other evidence
as the Committee may require to establish that the Rollover Contribution will
not adversely affect the qualified status of this Plan. In the event the
Committee permits an Employee to make a Rollover Contribution, the Rollover
Contribution shall become a part of the Trust Fund and shall be maintained in a
separate, nonforfeitable account. The adjustment of the Participant's Account
required by Section 5.1 shall be made separately with respect to each of the
separate accounts comprising a Participant's Account, including the account
established for the Rollover Contribution. An Employee who makes a Rollover
Contribution to the Plan shall be considered an Active Participant for all
purposes of the Plan, except that he or she shall not be entitled to Matching
Employer Contributions or to elect Pre-Tax Employer Contributions or After-Tax
Employee Contributions until such time as the Employee becomes an Active
Participant in accordance with the requirements and procedures set forth in
Article III.
5.6 Loan Reserve Fund A Loan Reserve Fund shall be established
for the distribution and repayment of loan proceeds in accordance with the
Plan's loan provisions and rules adopted by the 401(k) Thrift Plan Committee.
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<PAGE> 33
ARTICLE VI VESTING
6.1 Vesting A Participant shall have a nonforfeitable right to
the value of his or her Pre-Tax Account, After-Tax Account, Company Match
Account, and Rollover Account at all times.
ARTICLE VII DISTRIBUTIONS
7.1 Events Causing Distribution A Participant, or Beneficiary,
shall be eligible to receive a distribution when a Participant becomes a Former
Participant or dies, or, if earlier, upon termination of this Plan.
Distributions shall be payable as provided in Sections 7.2 and 7.3.
7.2 Form of Distribution Distribution to a Participant who
becomes a Former Participant, or to a Beneficiary in the event of a
Participant's death, shall be in the form of one lump sum cash payment.
7.3 Amount and Timing of Distributions A Former Participant shall
be entitled to the distribution of the value of the Former Participant's
Account as of the Valuation Date coincident with or next following the date as
of which he or she becomes a Former Participant. Such distribution shall be
made available to the Former Participant or Beneficiary, as the case may be, in
the form described in Section 7.2 above, not later than 60 days after such
Valuation Date. If the aggregate value of the Former Participant's Account
does not exceed $3,500, payment shall be made as soon as administratively
practicable after the occurrence of the distribution event described in Section
7.1. If the aggregate value of the Former Participant's Account exceeds
$3,500, the Former Participant may elect to defer distribution for a minimum of
one year from the date on which he or she becomes a Former Participant up to a
maximum deferral period ending upon the Former Participant's required beginning
date pursuant to Code Section 401(a)(9). If the Former Participant does not
consent to the distribution, payment shall be made not later than the 60th day
following the end of the Plan Year in which the latest of the following events
occur:
(a) The Former Participant's attaining age 70 1/2
(notwithstanding the preceding provisions of Section
7.3, such distribution must comply with the
provisions of Regulation Section 1.401(a)-14(b) and
must be made in accordance with Section 401(a)(9) of
the Code);
(b) the termination of the Active Participant's
employment with the Employer; or
(c) the date specified in an election, made in writing,
signed by the Former Participant, and submitted to
the Plan Administrator.
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<PAGE> 34
Amounts attributable to Pre-Tax Contributions may not be distributed
earlier than upon one of the following events:
1. The Participant's retirement, death, disability or separation
from service;
2. The termination of the Plan without establishment of
maintenance of another defined contribution plan (other than
an ESOP or SEP);
3. In the case of a profit-sharing or stock bonus plan, the
Participant's attainment of age 59 1/2 or the Participant's
hardship;
4. The sale or other disposition by a corporation to an unrelated
corporation of substantially all of the assets used in a trade
or business, but only with respect to employees who continue
employment with the acquiring corporation and the acquiring
corporation does not maintain the plan after the disposition;
and,
5. The sale or other disposition by a corporation of its interest
in a subsidiary to an unrelated entity, but only with respect
to employees who continue employment with the subsidiary and
the acquiring entity does not maintain the plan after the
disposition.
Paragraphs 2, 4, and 5, above, apply only if the distribution is in the form of
a lump sum. Paragraphs 4 and 5, above, apply if the transferor corporation
continues to maintain the plan.
7.4 Distributions of Common Stock Notwithstanding Sections 7.2
and 7.3 above, a Former Participant may request that amounts invested in the
Company Stock Fund or the Western Resources, Inc. Stock Fund be distributed in
whole shares of Common Stock or Western Resources, Inc. Common Stock,
respectively. Any fractional shares allocated to a Former Participant's
Account shall be paid in cash, the amount of such payment to be based upon the
closing price of Common Stock, or Western Resources, Inc. Common Stock, as the
case may be, on the New York Stock Exchange Consolidated Tape, on a trading day
which does not precede the date of the distribution by more than 10 trading
days.
7.5 Distributions Under Qualified Domestic Relations Orders
Notwithstanding anything in this Article VII to the contrary, the Plan may make
distribution to an alternate payee under a Qualified Domestic Relations Order
(Order) at any time specified in such order, whether before, at, or after a
Participant's Earliest Retirement Age, as such terms are defined in Code
Section 414(p), provided that any such distribution before a Participant's
earliest retirement age shall be subject to the following conditions:
(a) The Order must either provide for, or permit the Plan
and alternate payee to agree to, such an early
distribution;
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<PAGE> 35
(b) The distribution must constitute a single-sum payment
of all Plan benefits to which the alternate payee may
become entitled under the terms of the Order; and
(c) If the Order so provides, any such distribution that
exceeds $3,500 shall be made only with the alternate
payee's written consent.
Unless the context clearly requires a contrary interpretation, any Order
providing for a single-sum distribution to an alternate payee as of a
Participant's Earliest Retirement Age shall be construed as providing for such
payment to be made on the date which is as soon as administratively practicable
after the Committee has determined that the Order constitutes a Qualified
Domestic Relations Order.
7.6 Special Distribution Limitations
(a) This Section sets forth rules concerning when
distributions must begin and over what period of time
they must be made. Any rules concerning the timing
and duration of benefits found in other Sections of
the Plan shall be altered only to the extent
necessary to avoid violating the rules of this
Section. In no event shall these rules be read to
provide any option as to the time, manner, or
duration of benefits in addition to those found in
other provisions of the Plan. All distributions
made under this Article shall be made in accordance
with Code Section 401(a)(9) and the regulations
promulgated thereunder, including the minimum
distribution incidental benefit rules of Section
1.401(a)(9)-2 of the proposed regulations as they may
hereafter be modified. Any Plan provisions
reflecting Section 401(a)(9) shall override any
distribution options in the Plan that are
inconsistent with Section 401(a)(9).
(b) In no event shall the distribution of a Participant's
benefit commence later than April 1 of the calendar
year following the calendar year in which such
Participant attains age 70 1/2.
(c) In no event shall distribution with respect to a
Participant be made over a period extending beyond
the later of:
(1) the life of the Participant or the lives of
the Participant and the beneficiary
designated by him or her, if any, or
(2) the life expectancy of the Participant or the
life expectancy of the Participant and the
beneficiary designated by him or her, if any.
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<PAGE> 36
(d) If a Participant dies after a distribution of his or
her interest in the Plan has begun and before the
complete interest has been distributed, the remaining
portion shall be distributed at least as rapidly as
under the method of distribution (consistent with (c),
above) being used at the time of the Participant's
death.
(e) If a Participant dies before distribution of his or
her interest has begun, distribution of the entire
interest shall be completed within 5 years after the
Participant's death. However, if a portion of the
Participant's interest is to be paid to a Beneficiary
designated by him or her, that portion may, if the
other provisions of this Plan so provide, be
distributed over the life or life expectancy of the
Beneficiary. In that case, distribution must begin
not later than one year after the date of the
Participant's death or such later date as the
Secretary of the Treasury may by regulations
prescribe. If the Beneficiary is the Participant's
surviving spouse, and other provisions of the Plan so
provide, distribution need not begin until the date on
which the Participant would have attained age 70 1/2.
If the surviving spouse dies before distribution to
him or her begins, for purposes of the requirements of
this and the preceding subsections of this Section
concerning the latest date a distribution may begin
and the longest period of time over which payments may
be made, the surviving spouse shall be treated as if
he or she were a Participant.
(f) In no event shall distribution with respect to a
Participant commence before the earliest of the events
described in Section 72(t)(2) of the Code, unless the
Participant provides the Plan Administrator with a
written election requesting the distribution and a
written acknowledgment that he or she has received an
explanation of the tax consequences of receiving the
distribution.
7.7 Direct Rollovers Notwithstanding any provision of the Plan to
the contrary that would otherwise limit a distributee's election under this
Section, a distributee may elect, at the time and in the manner prescribed by
the plan administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the
distributee in a direct rollover.
Definitions:
(a) Eligible rollover distribution: An "eligible
rollover distribution" is any distribution of all or
any portion of the balance to the credit of the
distributee, except that an eligible rollover
distribution does not include: any distribution that
is one of a series of substantially equal periodic
payments (not less frequently than annually) made for
the
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<PAGE> 37
life (or life expectancy) of the distributee or the
joint lives (or joint life expectancies) of the
distributee and the distributee's designated
beneficiary, or for a specified period of ten years
or more; any distribution to the extent such
distribution is required under Code Section
401(a)(9); and the portion of any distribution that
is not includible in gross income (determined without
regard to the exclusion for net unrealized
appreciation with respect to employer securities.)
(b) Eligible retirement plan: An "eligible retirement
plan" is 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 the distributee's
eligible rollover distribution. However, in the case
of an eligible rollover distribution to the surviving
spouse, an eligible retirement plan is an individual
retirement account or individual retirement annuity.
(c) Distributee: A "distributee" includes an employee or
former employee. In addition, the employee's or
former employee's surviving spouse and the employee's
or former employee's spouse or former spouse who is
the alternate payee under a qualified domestic
relations order, as defined in Section 414(p) of the
Code, are distributees with regard to the interest of
the spouse or former spouse.
(d) Direct rollover: A "direct rollover" is a payment by
the Plan to the eligible retirement plan specified by
the distributee.
ARTICLE VIII WITHDRAWALS AND LOANS
8.1 Withdrawal From After Tax Account or Rollover Account A
Participant may request to withdraw in a lump sum all or any part of the value
of the Participant's After Tax Account, provided that the withdrawal is for at
least $500 or the full value of the Account, if less. A Participant may
request a withdrawal in writing on a form prescribed by the 401(k) Thrift Plan
Committee.
The amount of the withdrawal shall be withdrawn from the Participant's
After Tax Account in proportion to the value of the Investment Funds in the
Participant's Account.
A withdrawal may be made once per quarter and shall be paid as soon as
practicable after the appropriate request is received by the Trustee. A
withdrawal shall be paid in cash, except that if a Participant's After Tax
Account is invested in the
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Company Stock Fund, a Participant may request that the value withdrawn from the
Company Stock Fund be distributed in whole shares of Company Stock. Any
fractional shares shall be paid in cash, the amount of such payment to be based
upon the closing price of the Common Stock on the New York Stock Exchange
Consolidated Tape, on a trading date which does not precede the date of the
distribution by more than 10 trading days.
8.2 Withdrawal From Company Match Account In the event that a
Participant withdraws the full value of the After Tax Account under the
provisions of Section 8.1, the Participant who has been a Participant in the
Plan for a period of five (5) years or more may additionally withdraw in a lump
sum any or all of the Participant's Company Match Account, provided that the
aggregate amount of the withdrawal from the Participant's After Tax Account and
Company Match Account is for at least $500 or the full value of the After Tax
Account and the Company Match Account, if less. A Participant may request a
withdrawal in writing on a form prescribed by the 401(k) Thrift Plan Committee.
The amount of the withdrawal shall be withdrawn from the Participant's
Company Match Account in proportion to the value of the Investment Funds in the
Participant's Account.
A withdrawal may be made once per quarter and shall be paid as soon
as practicable after the appropriate request is received by the Trustee.. A
withdrawal shall be paid in cash, except that if a Participant's Company Match
Account is invested in the Company Stock Fund, a Participant may request that
the value withdrawn from the Company Stock Fund be distributed in whole shares
of Company Stock. Any fractional shares shall be paid in cash, the amount of
such payment to be based upon the closing price of the Common Stock on the New
York Stock Exchange Consolidated Tape, on a trading date which does not precede
the date of the distribution by more than 10 trading days.
8.3 Withdrawal From Rollover Account In the event that a
Participant withdraws the full value of the After Tax Account and the Company
Match Account under the provisions of Sections 8.1 and 8.2, the Participant may
additionally withdraw in a lump sum any or all of the Participant's Rollover
Account, provided that the aggregate amount of the withdrawal from the
Participant's After Tax Account, Company Match Account, and Rollover Account is
at least $500 or the full value of the After Tax Account, Company Match
Account, and Rollover Account, if less. A Participant may request a withdrawal
in writing on a form prescribed by the 401(k) Thrift Plan Committee.
The amount of the withdrawal shall be withdrawn from the Participant's
After Tax Account, Company Match Account, and Rollover Account.
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A withdrawal may be made once per quarter and shall be paid as soon as
practicable after the appropriate withdrawal request is received by the
Trustee. A withdrawal shall be paid in cash, except that if a Participant's
Rollover Account is invested in the Company Stock Fund, a Participant may
request that the value withdrawn from the Company Stock Fund be distributed in
whole shares of Company Stock. Any fractional shares shall be paid in cash,
the amount of such payment to be based upon the closing price of the Common
Stock on the New York Stock Exchange Consolidated Tape, on a trading date which
does not precede the date of the distribution by more than 10 trading days.
8.4 Withdrawals - Age 59-1/2 A Participant who has attained age
59-1/2 may withdraw all or a portion of his or her Pre-Tax Account as of the
Valuation Date next following the Participant's delivery of request for
withdrawal to the Trustee. A withdrawal may be made once per quarter and shall
be paid as soon as practicable after the appropriate request is received by the
Trustee.
8.5 Withdrawals - Financial Hardship
(a) A Participant may request an in-service distribution
from his Pre-Tax Contribution Account for purposes of
financial hardship. A distribution is for purposes
of financial hardship only if the distribution both:
o is made on account of an immediate and heavy
financial need of the Participant and,
o is necessary to satisfy such financial need.
Need A distribution shall be deemed to be made on account of
an immediate and heavy financial need of the Participant if the distribution is
on account of:
o expenses, as described in Code Section
213(d), for medical care previously incurred
by the Participant, the Participant's spouse,
or any dependents of the Participant, as
defined in Code Section 152, or necessary for
these persons to obtain medical care;
o purchase, excluding mortgage payments, of a
principal residence for the Participant;
o payment of tuition for not more than the next
twelve months of post-secondary education for
the Participant, the Participant's spouse,
child or any dependent of the Participant, as
defined in Code Section 152; or
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o to prevent eviction of the Participant from
his principal residence, or foreclosure on
the mortgage of the Participant's principal
residence.
Satisfaction of Need A distribution will be deemed to be
necessary to satisfy an immediate and heavy financial need of a Participant
only if all the requirements or conditions set forth below are satisfied or
agreed to by the Participant, as appropriate.
o The distribution is not in excess of the
amount of the immediate and heavy financial
need of the Participant.
o The Participant has obtained all
distributions, other than financial hardship
distributions, and all non-taxable loans
currently available under all plans subject
to Code Section 415 maintained by the
Company.
o The Participant's Pre-Tax Employer and
After-Tax Employee Contributions under this
Plan and each other plan maintained by the
Company in which the Participant participates
are suspended for twelve full calendar months
after receipt of the distribution.
o The Participant does not make elective
contributions under this Plan or any other
plan maintained by the Company for the year
immediately following the income tax year of
the financial hardship distribution in excess
of the applicable limit under Code Section
402(g) for such next income tax year reduced
by the amount of the Participant's elective
contributions for the taxable year of the
financial hardship distribution.
(b) Limitations Distributions on account of financial
hardships shall be limited to the sum of (i) the
Participant's elective contributions under the Plan
and (ii) any income allocable to such contributions
credited to the Participant's account for periods
prior to January 1, 1989. No more than one
distribution may be made to any Participant under
this Section in any Plan Year except for
distributions on account of tuition. Any
distribution must be for a minimum of $500 or, if
less, the maximum distribution allowed pursuant to
this subsection. Distributions shall be subject to
any applicable withholding requirements.
8.6 Withdrawal Penalty In the event a Participant withdraws sums
pursuant to Sections 8.1, 8.2, or 8.3, the Participant shall not be entitled to
a Matching Employer
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Contribution until the first of the next month following the expiration of six
months from the date of such withdrawal by the Participant. This abatement of
the Participant's right to receive Matching Employer Contributions shall not
affect the Participant's right to make Pre-Tax Employer Contributions or
After-Tax Employee Contributions pursuant to Sections 4.3 and 4.5 respectively,
except to the extent required by Sections 4.7 or 4.9.
In the event a Participant withdraws sums pursuant to Section 8.5, the
Participant shall not be entitled to a Matching Employer Contribution pursuant
to Section 4.1(b) herein until the first of the month next following the
expiration of twelve months from the date of such withdrawal by the
Participant.
8.7 Loans
(a) The Committee shall direct that a bona fide loan be
made from a Active Participant's Account to any
Active Participant who requests a loan. All such
loans shall be subject to the requirements of this
section and such other rules which the Committee
shall from time to time prescribe. Eligibility for
and the rules with respect to loans shall be
uniformly applied to all Active Participants.
(b) Minimum Requirements To the extent the Committee
authorizes loans to Active Participants, such loans
shall be subject to the following rules:
o Principal Amount The principal amount of the
loan to an Active Participant may not exceed,
when added to the outstanding balance of all
other loans to the Active Participant from
the Plan, the lesser of:
i. $50,000 reduced by the excess of the
highest outstanding balance of loans
to the Active Participant from the
Plan during the one-year period
ending on the day before the date on
which such loan was made over the
outstanding balance of loans to the
Active Participant from the Plan on
the date on which such loan is so
made, or
ii. 50% of the Active Participant's
Account on the date the loan is
requested.
The minimum loan shall be $1000.
o Maximum Term Generally, the term of the loan
may not exceed five years. However, if the
Participant demonstrates that the purpose of
a loan is to acquire a principal residence
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for the Active Participant, then the loan
shall be repaid over a period not to exceed
thirty years.
o Interest Rate The interest rate shall be
reasonable and be determined by the Committee
from time to time at a rate equivalent to
that charged by major financial institutions
for comparable loans at the time the loan is
made.
o Repayment As a condition precedent to
approval of the loan, the Active Participant
shall be required to authorize payroll
withholding in the amount of each level
installment.
o Collateral The loan shall be secured by the
Active Participant's Account to the extent of
the principal amount of the loan plus accrued
interest. No more than 50% of the Active
Participant's Account may be used to secure a
loan. The Committee, according to uniform
rules, may require an Active Participant to
post additional collateral to secure a loan.
o Distribution of Account If all or part of an
Active Participant's Account is to be
distributed pursuant to the distribution
events described in Section 7.1 prior to the
Active Participant's payment of all principal
and accrued interest due on any loan to such
Active Participant, the distribution shall
include as an offset the amount of unpaid
principal and interest due on the loan.
o Notes All loans shall be evidenced by a note
containing such terms and conditions as the
Committee shall require.
(c) Accounting The principal amount of any loan shall be
treated as a separate investment of the borrowing
Active Participant. All payments of principal and
interest with respect to such loan shall be credited
to a separate account for the borrowing Active
Participant until redeposited into the Fund in
accordance with the Active Participant's election
applicable to new contributions as of the date the
payment is received by the Trustee.
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ARTICLE IX TOP-HEAVY PROVISIONS
9.1 General Rule
(a) For any Plan Year for which this Plan is a
"top-heavy plan", as defined in subsection (f) below,
any other provisions of this Plan to the contrary
notwithstanding, this Plan shall be subject to the
following provisions:
(1) the minimum contribution provisions of
subsection (b).
(2) the limitation on contributions set by
subsection (c).
(b) Each Participant who (1) is a non-key employee (as
defined in subsection (h) below) and (2) is employed
on the last day of the Plan Year, even if such
individual has failed to complete 1,000 Hours of
Service during such Plan Year, shall be entitled to
have Employer Contributions and forfeitures allocated
to his or her Accounts of not less than three percent
( minimum contribution percentage) of the
Participant's Compensation as defined in Section
4.11.
The minimum contribution percentage set forth above shall be reduced
for any Plan Year for which the percentage at which Employer
Contributions (including forfeitures) are made (or required to be
made) under the Plan for the Plan Year for the key employee for whom
such percentage is the highest for such Plan Year is less than 3%, to
that percentage. Contributions taken into account under the
immediately preceding sentence shall include contributions under this
Plan and under all other defined contribution plans required to be
included in an aggregation group, as defined in subsection (f)(3)
below, but shall not include any plan required to be included in such
aggregation group if such plan enables a defined contribution plan
required to be included in such group to meet the requirements of the
Internal Revenue Code of 1986, as amended, prohibiting discrimination
as to contributions or benefits in favor of employees who are
officers, shareholders or the highly compensated or prescribing the
minimum participation standards. Contributions taken into account
under this subsection (b) shall not include any contributions under
the Social Security Act or any other Federal or State law.
Elective contributions made on behalf of employees other than
key employees may not be treated as employer contributions for
purposes of providing the Code Section 416(c) required minimum
contribution. For the purpose of determining the percentage at which
contributions and forfeitures are made for the key employee with the
highest percentage, elective contributions on behalf of key employees
are taken into account.
(c) In the event that the Employer also maintains a
defined benefit plan providing benefits on behalf of
Participants in this Plan, one of the two following
provisions shall apply:
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(1) If for the Plan Year this Plan would not be a
"top-heavy plan", as defined in subsection
(e) below, if "90 percent" were substituted
for "60 percent", in subsection (e) below,
then subsection (b) above, shall apply for
such Plan Year as if amended so that "four
percent" were substituted for "three
percent".
(2) If for the Plan Year this plan would continue
to be a "top-heavy plan", as defined in
subsection (e) below, if "90 percent" were
substituted for "60 percent", in subsection
(e) below, then any fraction calculated
pursuant to Section 4.11 regarding maximum
limits on any Participant's Annual Additions
will be calculated as prescribed by Code
Section 416(h)(1).
(d) In the event that another defined contribution or
defined benefit plan maintained by the Employer
provides contributions or benefits on behalf of
Participants in this Plan, such other plan shall be
treated as a part of this Plan pursuant to applicable
principles in determining whether this Plan satisfies
the requirements of subsection (b). Such
determination shall be made by the Committee upon the
advice of counsel.
(e) This Plan shall be a "top-heavy plan" for any Plan
Year if, as of the Determination Date, the aggregate
of the accounts under the Plan for Participants who
are key employees exceeds 60 percent of the present
value of the aggregate of the accounts for all
Participants, excluding former key employees, or if
this Plan is required to be in an Aggregation group
which for such Plan Year is a top-heavy group, as
defined in subsection (f)(4) below.
(f) Definitions:
(1) "Determination Date" means for any Plan Year,
the last day of the immediately preceding
Plan Year except that for the first Plan Year
of this Plan the determination date means the
last day of such Plan Year.
(2) "Determination Period" means the five (5)
year period ending on the Determination Date.
(3) The present value shall be the sum of (A) the
account balances determined as of the most
recent Valuation Date that is within the
twelve-month period ending on the
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Determination Date, and (B) the adjustment
for Contributions due as of the Determination
Date, and as described in the regulations
under the Internal Revenue Code as of 1986,
as amended.
(4) "Aggregation group" means the group of plans,
if any, that includes both the group of plans
that are required to be aggregated and the
group of plans that are permitted to be
aggregated.
(A) For the group of plans that are
required to be aggregated, the
required aggregation group includes:
(i) Each qualified plan of the
Employer (as defined in
subsection (i) below) in
which at least one (1) key
employee is a participant,
including collectively
bargained plans, and
(ii) Each other qualified plan,
including collectively
bargained plans of the
employer (as defined in
subsection (i) below) which
enables a plan in which a key
employee is a participant to
meet the requirements of
Sections 401(a)(4) or 410 of
the Internal Revenue Code of
1986, as amended.
(B) The group of plans that are permitted to be
aggregated (the "permissive aggregation
group") includes the required aggregation
group plus one or more plans of the Employer
(as defined in subsection (i) below) that is
not part of the required aggregation group
and that the Committee certifies as
constituting a plan within the permissive
aggregation group. Such plan or plans may be
added to the permissive aggregation group
only if, after the addition, the aggregation
group as a whole would satisfy Sections
401(a)(4) and 410 of the Internal Revenue
Code of 1986, as amended.
A permissive aggregation group is one or more
plans that are not required to be aggregated
but which may be aggregated with a required
aggregate group if the resulting aggregate
group satisfies the requirements of Code
Sections 401(a) and 410.
(5) "Top-heavy group" means the aggregation group, if as
of the applicable Determination Date, the sum of the
present value of the
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cumulative accrued benefits for key employees under
all defined benefit plans included in the aggregation
group plus the aggregate of the accounts of key
employees under all defined contribution plans
included in the aggregation group exceeds 60% of the
sum of the present value of the cumulative accrued
benefits for all employees, excluding former key
employees, under all such defined benefit plans plus
the aggregate accounts for all employees, excluding
former key employees, under such defined contribution
plans. If the aggregation group that is a top-heavy
group is a required aggregation group, each plan in
the group will be top-heavy. If the aggregation
group that is a top-heavy group is a permissive
aggregation group, only those plans that are part of
the required aggregation group will be treated as
top-heavy. If the aggregation group is not a
top-heavy group, no plan within such group will be
top-heavy.
(6) In determining whether this plan constitutes a
"top-heavy plan", the Committee (or its agent) shall
make the following adjustments in connection
therewith:
(A) When more than one plan is aggregated, the
Committee shall determine separately for each
plan as of each plan's Determination Date the
present value of the accrued benefits or
account balances. The results shall then be
aggregated by adding the results of each plan
as of the Determination Dates for such plans
that fall within the same calendar year.
(B) In determining the present value of the
cumulative accrued benefit or the amount of
the account of any employee, such present
value or account shall include the amount in
dollar value of the aggregate distributions
made to such employee under the applicable
plan during the Determination Period, unless
reflected in the value of the accrued benefit
or account balance as of the most recent
valuation date. Such amounts shall include
distributions to employees which represented
the entire amount credited to their accounts
under the applicable plan. For purposes of
this paragraph, the cumulative accrued
benefits and cumulative accounts of an
individual shall be disregarded if he or she
has not, at any time during the Determination
Period, performed any services for the
Employer.
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(C) Further, in making such determination, such
present value or such account shall include
any rollover contribution (or similar
transfer), as follows:
(i) If the rollover contribution (or
similar transfer) is initiated by
the employee and made to or from a
plan maintained by another employer,
the plan providing the distribution
shall include such distribution in
the present value of such account;
the plan accepting the distribution
shall not include such distribution
in the present value of such account
unless the plan accepted it before
December 31, 1983.
(ii) If the rollover contribution (or
similar transfer) is not initiated
by the employee or made from a plan
maintained by another employer the
plan accepting the distribution
shall include such distribution in
the present value of such account,
whether the plan accepted the
distribution before or after
December 31, 1983; the plan making
the distribution shall not include
the distribution in the present
value of such account.
(D) Further, in making such determination, in any
case where an individual is a "non-key
employee," with respect to an applicable
plan, but was a key employee with respect to
such plan for any prior plan year, any
accrued benefit and any account of such
Employee shall be altogether disregarded.
For this purpose, to the extent that a key
employee is deemed to be a key employee if he
or she met the definition of key employee
within any of the four preceding plan years,
this provision shall apply following the end
of such period of time.
(7) The term "key employee" shall mean an Employee or
former Employee (including the beneficiary of such Employee or former
Employee) who for any Plan Year in the Determination Period was:
(A) an officer of the Employer having an
aggregate annual Compensation from the
Employer of more than 50 percent of the
amount in effect under Section 415(b)(1)(A)
of the Internal Revenue Code for the Plan
Year, but in no event shall more than 50
employees or, if less, the greater of (i)3
employees, or (ii) 10 percent of the
aggregate number of
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employees of the Employer, be taken into
account under this paragraph (1) as officers
of the Employer;
(B) one of the ten employees of the Employer
having an aggregate annual Compensation from
the Employer of more than the limitation in
effect under Section 415(c)(1)(A) of the
Internal Revenue Code for the Plan Year and
owning (or considered as owning within the
meaning of Section 318 of the Internal
Revenue Code) both (i) more than a one-half
percent interest, and (ii) the largest
interests, in the Employer;
(C) a person owning more than 5 percent of the
Employer (within the meaning of Section
416(i)(1)(B)(i) of the Internal Revenue
Code); or
(D) a person having an aggregate annual
Compensation from the Employer of more than
$150,000 and owning more than 1 percent of
the Employer (within the meaning of Section
416(i)(1)(B)(ii) of the Internal Revenue
Code).
For purposes of determining who is a "key employee" under this
subparagraph (7), the term "Compensation" shall mean Adjusted Total
Compensation.
For purposes of applying Section 318 of the Internal Revenue Code to
the provisions of this Paragraph, subparagraph (C) of Section 318(a)(2) shall
be applied by substituting "5 percent" for "50 percent." For purposes of
subparagraph (B) above, if two employees have the same interest in the
Employer, the employee having the greater aggregate annual Compensation from
the Employer shall be treated as having the larger interest.
(8) The term "non-key employee" means any employee (and
any beneficiary of an employee) who is not a key employee.
(9) The term "Employer" means the definition of Employer
in Section 2.17 of this Plan.
(10) For purposes of this Section 9.1, the term
"Participant" includes any Employee otherwise eligible to participate
in the Plan but who is not a Participant because of his failure to
make elective deferrals under a Code Section 401(k) arrangement.
(11) The term "Valuation Date" shall mean the annual date
on which plan assets must be valued for the purpose of determining the
value of account balances or the date on which liabilities and assets
of a defined benefit plan are
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valued. For the purpose of the top-heavy test, the valuation date for
a defined benefit plan shall be the same valuation date used for
computing plan costs for minimum funding. The valuation date for a
defined contribution plan shall be the most recent valuation date
within a 12-month period ending on the Determination Date.
ARTICLE X ADMINISTRATION OF THE PLAN
10.1 Thrift Plan Committee. The Plan shall be administered by a
Committee consisting of not less than three (3) members, who shall be appointed
from time to time by the Board of Directors and shall serve at the pleasure of
the Board. Each of the members of the Committee shall from time to time
designate an alternate who shall have full power to act in his/her absence or
inability to act. Members of the Committee may Participate in the benefits
under the Plan provided they are otherwise eligible to do so. Except as
otherwise provided by the Board of Directors, no member of the Committee shall
receive any compensation for his/her services as such. No bond or other
security shall be required of any member of the Committee in such capacity in
any jurisdiction. In the absence of the Chairman of the Committee, the
alternate designated by the Chairman shall preside at the meetings of the
Committee.
10.2 Trust and Trustee. The Company and the Trustee have
entered into a Trust Agreement pursuant to which the Trustee is to act as
Trustee under the Plan. The Company may, without further reference to or
action by any Employee, Participant, or any subsidiary of the Company
participating in the Plan, (a) from time to time enter into such further
agreements with the Trustee or other parties, and make such amendments to said
Trust Agreement or such further agreements, as the Company may deem necessary
or desirable to carry out the Plan; and (b) from time to time take such other
steps and execute such other instruments as the Company may deem necessary or
desirable to put the Plan into effect or to carry it out. The Board shall
determine the manner in which the Company shall take any such action. The
Committee shall advise the Trustee in writing with respect to all benefits
which become payable under the terms of the Plan and shall direct the Trustee
to pay such benefits from the respective Participants' Accounts. The Committee
shall have such other powers and duties as are specified in this instrument as
the same may from time to time be constituted, and not in limitation but in
amplification of the foregoing, the Committee shall have power, to the
exclusion of all other persons, to interpret the provisions of this instrument,
to decide any disputes which may arise hereunder; to construe and determine the
effect of beneficiary designations; to determine all questions that shall arise
under the Plan, including questions as to the rights of Employees to become
Participants, as to the rights of Participants, and including questions
submitted by the Trustee on all matters necessary for it properly to discharge
its duties, powers, and obligations; to employ legal counsel, accountants,
actuaries, consultants and agents; to establish and modify such rules and
regulations for carrying out the provisions of the Plan not inconsistent with
the terms and provisions hereof, as the Committee may
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consider proper and desirable; and in all things and respects whatsoever,
without limitation, to direct the administration of the Plan and Trust with the
Trustee being subject to the direction of the Committee. The Committee may
supply any omission or reconcile any inconsistency in this instrument in such
manner and to such extent as it shall deem expedient to carry the same into
effect and it shall be the sole and final judge of such expediency. The
Committee may adopt such regulations with respect to the signature by an
Employee, Participant and/or the spouse of an Employee or Participant to any
directions or other papers to be signed by Employees or Participants and
similar matters as the Committee shall determine in view of the laws of any
state or states.
10.3 Plan Fiduciaries. The Fiduciary of the Plan, who shall
have authority to control and manage the operation and administration of the
Plan, is the Committee. The Fiduciary may serve in more than one (1) fiduciary
capacity under the Plan. It may employ one (1) or more persons to render
advice to it. It may delegate ministerial functions to any person or persons.
The Trustee and the Company may by agreement in writing arrange for the
delegation by the Trustee to the Committee of any of the Trustee's functions
except the custody of the assets, the voting with respect to shares held by the
Trustee, and the purchase and sale or redemption of securities. Any action in
accordance with this paragraph will be subject to advance approval of the Board
of Directors of the Company.
10.4 Action by Thrift Plan Committee. Any act which this
instrument authorizes or requires the Committee to do may be done by a majority
of the then members of the Committee. The action of such majority of the
members expressed either by a vote at a meeting or in writing without a
meeting, shall constitute the action of the Committee and shall have the same
effect for all purposes as if assented to by all of the members of the
Committee at the time in office, provided, however, that the Committee may, in
specific instances, authorize one (1) of its members to act for the Committee
when and if it is found desirable and convenient to do so.
10.5 Costs of Plan Administration. Except as otherwise
expressly provided in this Plan, the Company shall pay all costs and expenses
incurred in administering the Plan including without limitation the expenses of
the Committee, the fees and expenses of the Trustee, the fees of its counsel,
and other administrative expenses.
10.6 Uniform and Nondiscriminatory Application. All rules
and decisions of the Committee shall be uniformly and consistently applied to
all Employees and Participants in similar circumstances. The Committee shall
be entitled to rely upon information furnished by the Company pertinent to any
calculation or determination made pursuant to this Plan.
10.7 Summary Plan Description. The Committee shall cause to
be furnished to each Participant a written summary of the Plan and any
amendment
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thereto. Such summary shall include the designation of the plan administrator,
name of the Trustee, and shall set forth the Participant's rights and duties
with respect to the benefits available to him/her under the Plan. Any
decisions of the Committee respecting an Employee's right to become a
Participant in the Plan or the right of a Participant to benefits shall be
delivered to the Employee or Participant in writing. If an Employee or
Participant is denied benefits under the Plan, the Committee shall notify the
Employee or Participant of its decision in writing, giving the specific reason
or reasons for such decision, and advising the Employee or Participant of
his/her right to request a review of his/her claim, to review pertinent
documents and to submit issues and comments in writing. Such request must be
made in writing to the Committee within sixty (60) days after receipt of the
Committee's notice. Within thirty (30) days after filing such request, the
Employee or Participant shall be granted a hearing before the full Committee.
The Employee or Participant and the Committee shall be entitled to counsel at
such hearing. A decision by the full Committee shall be made within sixty (60)
days after receipt of the request for review. If after such hearing there is
still a dispute between the Committee and an Employee or Participant as to the
Committee's decision, the Employee or Participant may request that such dispute
be submitted to the American Arbitration Association for disposition according
to its rules. The decision of the American Arbitration Association shall be
final and binding on all parties. The cost of such arbitration shall be borne
equally by the Company and the Employee or Participant.
10.8 Recognition of Agency Relationships. The Trustee need
not recognize the agency of any party for an Employee or Participant unless it
shall receive documentary evidence thereof satisfactory to it and thereafter
from time to time, as the Trustee may determine, additional documentary
evidence showing the continuance of such agency; provided that the Trustee
shall not be required to recognize any agency which the Trustee deems to be a
device for violating the provisions of the Plan. Until such time as the
Trustee shall receive documentary evidence satisfactory to it of the cessation
or modification of any agency, the Trustee shall be entitled to rely upon the
continuance of such agency and to deal with the agent as if he/she or it were
the Employee or Participant.
10.9 Audit. The independent accountants who audit the books and
accounts of the Company shall annually examine the records of the Company and
the Committee in respect of the Plan and, on the basis of such examination,
make such report to the Trustee as it may request. The records of the Trustee
and (subject to such report by said independent accountants) the records of the
Company and the Committee shall be conclusive in respect of all matters
involved in the administration of the Plan.
10.10 Annual Reports. The Committee shall annually, mail to each
Participant a statement as of the end of the previous Plan Year, at such time
and in such form as the Committee shall determine, setting forth the account of
such Participant. Such statement shall be deemed to have been accepted as
correct unless
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written notice to the contrary is received by the Trustee within thirty (30)
days after the mailing of such statement to the Participant.
ARTICLE XI AMENDMENT OR TERMINATION
11.1 Right to Amend or Terminate The Board of Directors of the
Company may amend or modify the Plan from time to time without the consent of
Active Participants, Former Employees, and Beneficiaries, provided, however,
that no such action shall adversely affect benefits accrued prior to such
action nor shall it cause any part of the Trust Fund to be used for any purpose
other than the exclusive benefit of Active Participants, Former Participants or
their Beneficiaries. Amendments to the Plan may be effected by written
resolution adopted by a majority of the Board of Directors of the Company.
Notwithstanding the foregoing, however, any modification or amendment of the
Plan may be made retroactively if necessary or appropriate to qualify or
maintain the Plan as a plan meeting the requirements of the Internal Revenue
Code and ERISA, as now in effect or hereafter amended, or any other provisions
of the law, as now in effect or subsequently amended or adopted, and any
regulation issued thereunder.
The Plan may also be amended and modified by written action of the
Chief Executive Officer of the Company, upon approval of the 401(k) Thrift Plan
Committee, by execution of a written instrument containing such amendment or
modification, as the Chief Executive Officer deems necessary or advisable
(pursuant to authority which has been duly delegated to the Chief Executive
Officer by the Board of Directors and is hereby acknowledged and recognized);
provided, that no amendment which would increase the benefits provided to
Participants or increase the rate of contributions required to be made by the
Company under the Plan, or action to terminate, merge or divide the Plan or
Trust shall be made or taken unless authorized pursuant to a resolution adopted
by the Board of Directors.
11.2 Plan Merger or Consolidation In the event of any merger or
consolidation of the Plan with, or transfer of assets or liabilities to, any
other Plan, each Participant shall (if the Plan were then to terminate) be
entitled to the value of his or her accounts determined immediately after the
merger, consolidation or transfer which is equal to or greater than the value
of his or her accounts the Participant would have been entitled to receive
immediately before the merger, consolidation or transfer (if the Plan had then
terminated). The Company does not, however, guarantee the value of a
Participant's accounts at any subsequent date.
11.3 Nonforfeitability Upon Plan Termination Upon the termination
of the plan or upon the partial termination of the Plan with respect to any
group of Participants, the rights of all affected Participants to their
accounts and their values as of the date of such termination or partial
termination are nonforfeitable to the extent funded. All participants will be
fully vested if the Plan has had a complete discontinuance. The values of the
accounts of Participants will be paid to them according to the forms
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described in Article VII, through the continuance of the existing Trust
Agreement or through a new instrument entered into for that purpose, but only
after all related administrative expenses have been paid.
11.4 Transfer of Plan Assets On the Effective Date, certain
Employees who were Participants in the Western Resources, Inc. Employees'
401(k) Savings Plan, as amended, will become employees of Kansas Gas Service
Company, a division of ONEOK, Inc., and then become Participants in this Plan,
with the term "Participant" having the same meaning as that term is defined in
the respective Plans to which the term is applied by this sentence. As a
result and pursuant to a Spin Off Agreement, those particular Employees'
accounts under the Western Resources, Inc. Employees' 401(k) Savings Plan, as
amended, shall be canceled as of the Transfer Date and assets with a fair
market value equal to the sum of their account balances as of that date shall
then be transferred to this Plan. The Committee of this Plan shall establish
accounts for them under the Plan with account balances equal to the balances
they had under the Western Resources, Inc. Employees' 401(k) Savings Plan, as
amended, immediately before the transfer, and agrees that their interest in
each of those accounts shall be, as of the Transfer Date, at least as great as
it had been under the Western Resources, Inc. Employees' 401(k) Savings Plan,
as amended, immediately before the transfer. The term "Transfer Date" as used
in this Section shall mean the Effective Date. This Section 11.4 is applicable
to only former Western Resources, Inc. employees who became employees of Kansas
Gas Service Company, a division of ONEOK, Inc. as described herein.
ARTICLE XII GENERAL PROVISIONS
12.1 No Guarantee of Employment The Plan shall not be deemed to
constitute a contract between the Company and any Employee or to be a
consideration for, or an inducement for, the employment of any Employees by the
Company. Nothing contained in the Plan shall be deemed to give any Employee
the right to be retained in the service of the Company or to interfere with the
right of the Company to discharge or to terminate the service of any Employee
at any time without regard to the effect such discharge or termination may have
on any rights under the Plan.
12.2 Payment to Incompetent Persons Every person receiving or
claiming a benefit under the Plan shall be presumed to be mentally competent
and of age until the Committee receives reliable, written notice that such
person is incompetent or a minor. Payments otherwise due a minor shall be paid
to any custodial parent of such minor. Payments otherwise due any other
incompetent person shall be paid to the guardian, conservator, or other legal
representative of such person. In the event that the Committee is unable to
locate a parent, guardian, conservator, or other legal representative of an
incompetent person who is otherwise entitled to payment under the Plan, such
payment shall be made to the individual determined by the Committee to have
assumed financial responsibility for the care of such person. Before the
initial
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payment is made to an individual designated in this Section 12.2, the minor or
other legally incompetent person shall be notified of the Committee's intent to
make such payment to that other individual. Any payment of a benefit in
accordance with the provisions of this Section shall be a complete discharge of
any further liability to make such payment .
12.3 Non-Alienation of Benefit To the extent permitted by law, no
benefit payable under the Plan will be subject in any manner to anticipation,
assignment, garnishment, or pledge; and any attempt to anticipate, assign,
garnishee or pledge the same will be void; and no such benefits will be in any
manner liable for or subject to the debts, liabilities, engagements, or torts
of any Participant.
The provisions of this Plan prohibiting the assignment or alienation
of benefits under the Plan shall not be construed to forbid the adherence to a
qualified domestic relations order pursuant to procedures adopted by the
Committee.
12.4 Designation of Beneficiary At any time, and from time to
time, each Participant shall have the right, with the written consent of his
spouse, if any, to designate a beneficiary or beneficiaries to receive any
death benefit payable under the Plan, and to amend or revoke the designation.
The number of revocations shall not be limited. The spouse's written consent
shall be ineffective unless it acknowledges the effect of the election and is
witnessed by a Plan representative or a notary public. Any such consent and
acknowledgment shall bind only the spouse who executes it. Any such consent
and acknowledgment shall not be effective unless the election designates a
specific alternate beneficiary, including any class of beneficiaries, or any
contingent beneficiaries, which may not be changed without spousal consent.
Each designation of beneficiary or beneficiaries and any such revocation or
amendment thereof shall be made in writing on a form provided by the Committee
and filed by such Participant with the Committee. The Committee may, however,
within thirty days after receipt of any designation, reject it if the Committee
determines that the designation is unclear or impractical to apply.
12.5 Governing Law The provisions of the Plan will be construed
according to the laws of the State of Oklahoma, to the extent not superseded by
federal laws.
12.6 Waiver of Notice Any notice required under the Plan may be
waived by the person entitled to notice.
12.7 Litigation by Participants If a legal action begun against
the Trustee, the Company, the Committee or any member or members thereof, by or
on behalf of any person results adversely to that person, or if a legal action
arises because of conflicting claims to a Participant's or other person's
benefits, the cost to the Trustee, the Company, the Committee or any member or
members thereof of defending the action will be charged, to the extent
permitted by law, to the sums, if any, which were involved in the action or
were payable to the Participant or other person concerned, provided that such
charge, if any, will be made to the extent that a court of competent
jurisdiction authorizes such payment.
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12.8 Absence of Guarantee Neither the Committee nor the Company in
any way guarantees the Trust Fund from loss or depreciation. Except as
required by applicable law, the Company does not guarantee any payment to any
person. The liability of the Trustee or the Committee to make any payment
under the Plan will be limited to the assets held by the Trustee which are
available for that purpose.
12.9 Participant Elections and Transfers. Notwithstanding
anything to the contrary in the Plan elections and transfers of an Active
Participant shall be subject to restrictions imposed on such elections and
transfers under applicable federal security laws including Section 16 of the
Securities and Exchange Act of 1934.
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ARTICLE XIII CLAIMS PROCEDURE
13.1 Filing a Claim A request for a Plan benefit, other than a
withdrawal, shall be filed with the Committee or with its designee or
authorized representative, on a form prescribed by the Committee. Such a
request, hereinafter referred to as a "claim", shall be deemed filed when the
executed claim form is received by the Committee or by the designee. A request
for withdrawal shall be submitted to the Trustee in accordance with Article
VIII.
13.2 Deciding a Claim The Committee or its designee shall decide
such a claim within a reasonable time after it is received. If a claim is
wholly or partially denied, the claimant shall be furnished a written notice
setting forth in a manner calculated to be understood by the claimant:
(a) The specific reason or reasons for the denial;
(b) A specific reference to pertinent Plan provisions on
which the denial is based;
(c) A description of any additional material or
information necessary for the claimant to perfect the
claim and an explanation of why such material or
information is necessary; and
(d) Appropriate information as to the steps to be taken
if the claimant wishes to appeal the claim,
including the period in which the appeal must be
filed and the period in which it will be decided.
The notice shall be furnished to the claimant within 90 days after
receipt of the claim by the Committee or its designee, unless special
circumstances require an extension of time for processing the claim. No
extension shall be for more than 90 days after the end of the initial 90-day
period. If an extension of time for processing is required, written notice of
the extension shall be furnished to the claimant before the end of the initial
90-day period. The extension notice shall indicate the special circumstances
requiring an extension of time and the date by which a final decision will be
rendered. Participants shall be informed in writing of the time limits set
forth in this paragraph.
13.3 Appealing a Claim If a claim is denied, the claimant may
appeal the denial to the Committee upon written application to it. The
claimant may review documents pertinent to the appeal and may submit issues and
comments in writing to the Committee. No appeal shall be considered unless it
is received by the Committee within 90 days after receipt by the claimant of
written notification of denial of the claim. The Committee shall decide the
appeal within 60 days after it is received. However, if special circumstances
requiring an extension of time for processing, a decision shall be rendered as
soon as possible, but not later than 120 days after the appeal is received.
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If such an extension of time for deciding the appeal is required, written
notice of the extension shall be furnished to the claimant prior to the
commencement of the extension. The Committee's decision shall be in writing
and shall include specific reasons for the decision, written in a manner
calculated to be understood by the claimant, and specific references to the
pertinent Plan provisions upon which the decision is based.
IN WITNESS WHEREOF, WAI Inc. has caused this instrument to be signed
as of the _____ day of _________________, 1997.
WAI, INC.
By:
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Name:
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Title:
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