As filed with the Securities and Exchange Commission on October 12, 1999
Registration No. 333-
===========================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
Form S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------
R&B FALCON CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Delaware 76-0544217
(State or Other (I.R.S. Employer
Jurisdiction of Identification No.)
Incorporation or
Organization)
901 Threadneedle
Houston, Texas 77079
(281) 496-5000
(Address of Principal Executive Offices)
--------------
R&B Falcon U.S. Savings Plan
(Full Title of Plans)
------------------
Wayne K. Hillin
R&B Falcon Corporation
901 Threadneedle
Houston, Texas 77079
(Name and Address of Agent For Service)
(281) 496-5000
(Telephone Number, Including Area Code, of Agent For Service)
--------------------
Copies to:
W. Mark Young
Gardere Wynne Sewell & Riggs, L.L.P.
1000 Louisiana, Suite 3400
Houston, Texas 77002-5007
(713) 276-5864
----------------
CALCULATION OF REGISTRATION FEE
==============================================================+============
| | Proposed | Proposed |
| | Maximum | Maximum |
Title of each class | | Offering | Aggregate | Amount of
of Securities to be | Amount to be | Price Per | Offering | Registration
Registered(1) |Registered (3)| Share (4) | Price (4) | Fee
- ---------------------------------------------------------------------------
Common Stock, $0.01 | | | |
par value(2) | 2,000,000 | $12.96875 | $25,937,500 | $7,210.63
===========================================================================
(1) In addition, pursuant to Rule 416(c) under the Securities
Act of 1933, as amended, this Registration Statement also
covers an indeterminate amount of plan interests to be
offered or sold pursuant to the R&B Falcon U.S. Savings
Plan.
(2) Includes associated Rights to purchase shares of the
Registrant's Series A Junior Participating Preferred Stock,
which Rights are not currently separable from the shares of
Common Stock and are not currently exercisable.
(3) The amount being registered represents 2,000,000 authorized
and unissued shares reserved for issuance under the R&B
Falcon U.S. Savings Plan. Pursuant to Rule 416(a), this
Registration Statement covers, in addition to the above
2,000,000 shares of Common Stock, an indeterminate number of
shares that may issuable pursuant to certain anti-dilution
provisions.
(4) Estimated solely for purpose of calculating the registration
fee in accordance with Rules 457(c) and 457(h) on the basis
of the average of the high and low price of the Registrant's
common stock as reported on the New York Stock Exchange,
Inc. on October 11, 1999.
PART I
INFORMATION REQUIRED IN THE SECTION 10 PROSPECTUS
Item 1. Plan Information.*
Item 2. Registrant Information and Employee Plan Annual
Information.*
__________________
* The document(s) containing the plan information required by
Item 1 of Form S-8 and the statement of availability of
registrant information and any other information required by Item
2 of Form S-8 will be sent or given to participants as specified
by Rule 428 under the Securities Act of 1933, as amended (the
"Securities Act"). In accordance with Rule 428 and the
requirements of Part I of Form S-8, such documents are not being
filed with the Securities and Exchange Commission (the
"Commission") either as part of this Registration Statement or as
prospectuses or prospectus supplements pursuant to Rule 424 under
the Securities Act. The Registrant shall maintain a file of such
documents in accordance with the provisions of Rule 428. Upon
request, the Registrant shall furnish to the Commission or its
staff a copy or copies of all of the documents included in such
file.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference.
The following documents filed by R&B Falcon Corporation (the
"Registrant") with the Securities and Exchange Commission (File
No.001-13729) are incorporated in this registration statement by
reference and shall be deemed to be a part hereof.
(1) The Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1998 filed pursuant to Section
13(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
(2) The Registrant's Quarterly Reports on Form 10-Q for
the fiscal quarters ended March 31, 1999 and June 30, 1999.
(3) The Registrant's Current Reports on Form 8-K dated
March 16, 1999, April 19, 1999, April 21, 1999, May 20, 1999
and May 21, 1999 and Registrant's Amendment No. 1 to Current
Report on Form 8-K/A dated January 20, 1999, each filed
pursuant to Section 12 of the Exchange Act.
(4) The description of the Registrant's Common Stock
which is contained in the Registrant's Registration Statement
on Form 8-A dated December 19, 1997 filed pursuant to Section
12 of the Exchange Act, including any amendment or report
filed for the purpose of updating such description.
In addition, all documents subsequently filed by the
Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Exchange Act, prior to the filing of a post-effective amendment
which indicates that all securities offered have been sold or
which deregisters all securities then remaining unsold under this
registration statement, shall be deemed to be incorporated by
reference in this registration statement and to be a part hereof
from the date of filing of such documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
The Amended and Restated Certificate of Incorporation and
Bylaws of R&B Falcon Corporation require the indemnification of
directors and officers to the fullest extent permitted by law.
Section 145 of the Delaware General Corporation Law authorizes
and empowers R&B Falcon Corporation to indemnify the directors,
officers, employees and agents of R&B Falcon Corporation against
liabilities incurred in connection with, and related expenses
resulting from, any claim, action or suit brought against any
such person as a result of his relationship with R&B Falcon
Corporation, provided that such person acted in good faith and in
a manner such person reasonably believed to be in, and not
opposed to, the best interests of R&B Falcon Corporation in
connection with the acts or events on which such claim, action or
suit is based. The finding of either civil or criminal liability
on the part of such persons in connection with such acts or
events is not necessarily determinative of the question of
whether such persons have met the required standard of conduct
and are, accordingly, entitled to be indemnified. The foregoing
statements are subject to the detailed provisions of Section 145
of the General Corporation law of the State of Delaware.
Article 6.1 of the Bylaws of R&B Falcon Corporation provides
that R&B Falcon Corporation shall indemnify to the fullest extent
authorized or permitted by law, any person made, or threatened to
be made, a party to or otherwise involved in any action or
proceeding by reason of the fact that he or she is or was a
director or officer of R&B Falcon Corporation, at the request of
R&B Falcon Corporation or by reason of the fact that such
director or officer at the request of R&B Falcon Corporation, is
or was serving any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise, in any
capacity.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
4.1 -- Amended and Restated Certificate of Incorporation
(incorporated by reference to Exhibit 3.1 to the
Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1997).
4.2 -- Amended and Restated Bylaws (incorporated by
reference to Exhibit 3.2 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1997).
4.3 -- Rights Agreement dated as of December 23, 1997
between the Registrant and American Stock Transfer &
Trust Company, as Rights Agent (incorporated by
reference to Exhibit 4.2 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1997).
4.4* -- R&B Falcon U.S. Savings Plan.
5.1* -- Opinion of Gardere Wynne Sewell & Riggs, L.L.P.,
counsel for the Registrant.
15* -- Letter regarding unaudited interim financial
information.
23.1* -- Consent of Arthur Andersen LLP, independent
accountants.
23.2* -- Consent of Gardere Wynne Sewell & Riggs, L.L.P.
(included in Exhibit 5.1).
24.1* -- Power of Attorney (included on signature page on page
II-4).
Registrant hereby undertakes to submit the R&B Falcon U.S.
Savings Plan and any amendments to the Internal Revenue Service
in a timely manner and to make all changes required by the
Internal Revenue Service in order to qualify the Plan under
Section 401 of the Internal Revenue Code.
___________________
* Filed herewith.
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the
Registration Statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar
value of securities offered would not exceed that which
was registered) and any deviation from the low or high
end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Securities and Exchange Commission pursuant to Rule
424(b) of the Securities Act of 1933 if, in the
aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee"
table in the effective Registration Statement;
(iii) To include any material information with
respect to the plan of distribution not previously
disclosed in the Registration Statement or any material
change to such information in the Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the Registration Statement is on Form S-3 or Form
S-8, and the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to section
13 or section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of the
offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to
section 13(a) or section 15(d) of the Securities Exchange Act of
1934 that is incorporated by reference in the Registration
Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
SIGNATURES
Pursuant to the requirements of the Securities Act, the
registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on October
12, 1999.
R&B FALCON CORPORATION
By: /s/Paul B. Loyd, Jr.
-------------------------------
Paul B. Loyd, Jr.
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Paul B. Loyd,
Jr., Tim W. Nagle and Wayne K. Hillin, and each of them, each of
whom may act without joinder of the other, his or her true and
lawful attorneys and agents, with full power of substitution and
resubstitution, for him or her and in his or her name, place and
stead, in any and all capacities, to sign any or all pre- and
post-effective amendments to this Registration Statement, and to
file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and
each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and
about the premises, as fully as to all intents and purposes as he
or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, and each
of them, or the substitute or substitutes of any or all of them,
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this
Registration Statement has been signed by the following persons
in the capacities and on the dates indicated.
Signature Title Date
/s/Paul B. Loyd, Jr. Chairman of the Board, October 12,1999
- ---------------------- Chief Executive Officer and Director
Paul B. Loyd, Jr. (Principal Executive Officer)
/s/Tim W. Nagle Executive Vice President October 12, 1999
- ---------------------- and Chief Financial Officer
Tim W. Nagle (Principal Accounting and
Financial Officer)
/s/Purnendu Chatterjee Director October 12, 1999
- ------------------------
Purnendu Chatterjee
/s/Arnold L. Chavkin Director October 12, 1999
- ------------------------
Arnold L. Chavkin
/s/Charles A. Donabedian Director October 12, 1999
- ------------------------
Charles A. Donabedian
/s/Douglas A.P. Hamilton Director October 12, 1999
- ------------------------
Douglas A.P. Hamilton
/s/Macko A.E. Laqueur Director October 12, 1999
- ------------------------
Macko A.E. Laqueur
/s/Michael E. Porter Director October 12, 1999
- ------------------------
Michael E. Porter
/s/Robert L. Sandmeyer Director October 12, 1999
- ------------------------
Robert L. Sandmeyer
/s/Douglas E. Swanson Director October 12, 1999
- ------------------------
Douglas E. Swanson
/s/Steven A. Webster Director October 12, 1999
- ------------------------
Steven A. Webster
/s/William R. Ziegler Director October 12, 1999
- ------------------------
William R. Ziegler
INDEX TO EXHIBITS
4.1 -- Amended and Restated Certificate of Incorporation
(incorporated by reference to Exhibit 3.1 to the
Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1997).
4.2 -- Amended and Restated Bylaws (incorporated by
reference to Exhibit 3.2 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1997).
4.3 -- Rights Agreement dated as of December 23, 1997
between the Registrant and American Stock Transfer &
Trust Company, as Rights Agent (incorporated by
reference to Exhibit 4.2 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1997).
4.4* -- R&B Falcon U.S. Savings Plan.
5.1* -- Opinion of Gardere Wynne Sewell & Riggs, L.L.P.,
counsel for the Registrant.
15* -- Letter regarding unaudited interim financial
information.
23.1* -- Consent of Arthur Andersen LLP, independent
accountants.
23.2* -- Consent of Gardere Wynne Sewell & Riggs, L.L.P.
(included in Exhibit 5.1).
24.1* -- Power of Attorney (included on signature page on page
II-4).
Registrant hereby undertakes to submit the R&B Falcon U.S.
Savings Plan and any amendments to the Internal Revenue Service
in a timely manner and to make all changes required by the
Internal Revenue Service in order to qualify the Plan under
Section 401 of the Internal Revenue Code.
___________________
* Filed herewith.
EXHIBIT 4.4
R&B FALCON
U.S. SAVINGS PLAN
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
ADMINISTRATION
2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER
2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY
2.3 ALLOCATION AND DELEGATION OF RESPONSIBILITIES
2.4 POWERS AND DUTIES OF THE ADMINISTRATOR
2.5 RECORDS AND REPORTS
2.6 APPOINTMENT OF ADVISERS
2.7 INFORMATION FROM EMPLOYER
2.8 PAYMENT OF EXPENSES
2.9 MAJORITY ACTIONS
2.10 CLAIMS PROCEDURE
2.11 CLAIMS REVIEW PROCEDURE
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
3.2 EFFECTIVE DATE OF PARTICIPATION
3.3 DETERMINATION OF ELIGIBILITY
3.4 TERMINATION OF ELIGIBILITY
3.5 OMISSION OF ELIGIBLE EMPLOYEE
3.6 INCLUSION OF INELIGIBLE EMPLOYEE
3.7 ELECTION NOT TO PARTICIPATE
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER CONTRIBUTION
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION
4.3 TIME OF PAYMENT OF EMPLOYER CONTRIBUTION
4.4 ALLOCATION OF CONTRIBUTION AND EARNINGS
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS
4.9 MAXIMUM ANNUAL ADDITIONS
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
4.11 TRANSFERS FROM QUALIFIED PLANS
4.12 AFTER-TAX CONTRIBUTIONS
4.13 DIRECTED INVESTMENT ACCOUNT
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND
5.2 METHOD OF VALUATION
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT
6.2 DETERMINATION OF BENEFITS UPON DEATH
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY
6.4 DETERMINATION OF BENEFITS UPON TERMINATION
6.5 DISTRIBUTION OF BENEFITS
6.6 DISTRIBUTION OF BENEFITS UPON DEATH
6.7 TIME OF SEGREGATION OR DISTRIBUTION
6.8 DISTRIBUTION FOR MINOR BENEFICIARY
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
6.10 PRE-RETIREMENT DISTRIBUTION
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP
6.12 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION
6.13 DIRECT ROLLOVER
ARTICLE VII
AMENDMENT, TERMINATION, MERGERS AND LOANS
7.1 AMENDMENT
7.2 TERMINATION
7.3 MERGER OR CONSOLIDATION
7.4 LOANS TO PARTICIPANTS
ARTICLE VIII
TOP HEAVY
8.1 TOP HEAVY PLAN REQUIREMENTS
8.2 DETERMINATION OF TOP HEAVY STATUS
ARTICLE IX
MISCELLANEOUS
9.1 PARTICIPANT'S RIGHTS
9.2 ALIENATION
9.3 CONSTRUCTION OF PLAN
9.4 GENDER AND NUMBER
9.5 LEGAL ACTION
9.6 PROHIBITION AGAINST DIVERSION OF FUNDS
9.7 BONDING
9.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE
9.9 INSURER'S PROTECTIVE CLAUSE
9.10 RECEIPT AND RELEASE FOR PAYMENTS
9.11 ACTION BY THE EMPLOYER
9.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
9.13 HEADINGS
9.14 APPROVAL BY INTERNAL REVENUE SERVICE
9.15 UNIFORMITY
R&B FALCON
U.S. SAVINGS PLAN
THIS PLAN, hereby adopted this __________ day of
______________________, 19____, by R&B Falcon Corporation (herein
referred to as the "Employer").
W I T N E S S E T H:
WHEREAS, Reading & Bates Corporation heretofore established a
401(k) savings plan known as the Reading & Bates Savings Plan
("Reading & Bates Plan") for the exclusive benefit of its eligible
employees;
WHEREAS, Falcon Services Company, Inc. heretofore established a
savings & investment plan known as the Falcon Drilling Company, Inc.
Savings & Investment Plan ("Falcon Drilling Plan") for the exclusive
benefit of its eligible employees;
WHEREAS, Reading & Bates Corporation and Falcon Services
Company, Inc. merged together to form R&B Falcon Corp., the Employer
hereunder;
WHEREAS, by resolution of the board of directors of the
Employer, the Reading & Bates Plan and Falcon Drilling Plan are
merged effective as of January 1, 1999 and amended and restated, as
set out below, to become the R&B Falcon U.S. Savings Plan (herein
referred to as the "Plan") effective as of January 1, 1999;
WHEREAS, the Employer wishes to consolidate the provisions of
the Plan as a consequence of the merger and retains the ability to
amend or terminate the Plan as set out below for this purpose
provided the Trustee joins in such amendment if the provisions of the
Plan affecting the Trustee are amended;
NOW, THEREFORE, effective January 1, 1999, except as otherwise
provided, the Employer in accordance with the provisions of the Plan
pertaining to amendments thereof, hereby amends the Plan in its
entirety and restates the Plan to provide as follows:
ARTICLE I
DEFINITIONS
1.1 "Act" means the Employee Retirement Income Security Act of
1974, as it may be amended from time to time.
1.2 "Administrator" means the person or entity designated by
the Employer pursuant to Section 2.2 to administer the Plan on behalf
of the Employer.
1.3 "Affiliated Employer" means any corporation which is a
member of a controlled group of corporations (as defined in Code
Section 414(b)) which includes the Employer; any trade or business
(whether or not incorporated) which is under common control (as
defined in Code Section 414(c)) with the Employer; any organization
(whether or not incorporated) which is a member of an affiliated
service group (as defined in Code Section 414(m)) which includes the
Employer; and any other entity required to be aggregated with the
Employer pursuant to Regulations under Code Section 414(o).
1.4 "After-Tax Contributions" means the Participant's
nondeductible after-tax contributions made pursuant to Section 4.12
(and are also referred to herein this Plan as voluntary contributions
or voluntary Employee contributions).
1.5 "Aggregate Account" means, with respect to each
Participant, the value of all accounts maintained on behalf of a
Participant, whether attributable to Employer or Employee
contributions, subject to the provisions of Section 8.2.
1.6 "Anniversary Date" means December 31 of each year.
1.7 "Beneficiary" means the person to whom the share of a
deceased Participant's total account is payable, subject to the
restrictions of Sections 6.2 and 6.6.
1.8 "Code" means the Internal Revenue Code of 1986, as amended
or replaced from time to time.
1.9 "Compensation" with respect to any Participant means such
Participant's wages and all other payments of compensation by the
Employer (in the course of the Employer's trade or business) for a
Plan Year for which the Employer is required to furnish the
Participant a written statement under Code Sections 6041(d),
6051(a)(3) and 6052. Compensation must be determined without regard
to any rules that limit the remuneration included in wages based on
the nature or location of the employment or the services
performed.
For purposes of this Section, the determination of Compensation
shall be made by:
(a) excluding (even if includible in gross income)
reimbursements or other expense allowances, fringe benefits
(cash or noncash), moving expenses, deferred compensation, and
welfare benefits.
(b) excluding overtime, for shore-based personnel.
(c) excluding commissions.
(d) excluding bonuses.
(e) excluding Premiums.
(f) excluding Travel Pay.
(g) excluding Operator Incentives.
(h) excluding other special compensation.
(i) including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which are
not includible in the gross income of the Participant under Code
Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or 457(b), and
Employee contributions described in Code Section 414(h)(2) that
are treated as Employer contributions.
For a Participant's initial year of participation, Compensation
shall be recognized as of such Employee's effective date of
participation pursuant to Section 3.2.
Compensation in excess of $150,000 shall be disregarded. Such
amount shall be adjusted for increases in the cost of living in
accordance with Code Section 401(a)(17), except that the dollar
increase in effect on January 1 of any calendar year shall be
effective for the Plan Year beginning with or within such calendar
year. For any short Plan Year the Compensation limit shall be an
amount equal to the Compensation limit for the calendar year in which
the Plan Year begins multiplied by the ratio obtained by dividing the
number of full months in the short Plan Year by twelve (12).
If, in connection with the adoption of this amendment and
restatement, the definition of Compensation has been modified, then,
for Plan Years prior to the Plan Year which includes the adoption
date of this amendment and restatement, Compensation means
compensation determined pursuant to the Plan then in effect.
1.10 "Deferred Compensation" with respect to any Participant
means the amount of the Participant's total Compensation which has
been contributed to the Plan in accordance with the Participant's
deferral election pursuant to Section 4.2 excluding any such amounts
distributed as excess "annual additions" pursuant to Section 4.10(a).
1.11 "Designated Investment Alternative" means a specific
investment identified by name by the Employer as an available
investment under the Plan which may be acquired or disposed of by the
Trustee pursuant to the investment direction by a Participant.
1.12 "Directed Investment Option" means one or more of the
following:
(a) a Designated Investment Alternative.
(b) any other investment permitted by the Plan and the
Participant Direction Procedures and acquired or disposed of by
the Trustee pursuant to the investment direction of a
Participant.
1.13 "Early Retirement Date" means the first day of the month
(prior to the Normal Retirement Date) coinciding with or following
the date on which a Participant or Former Participant attains age
fifty-five (55), and has completed at least five (5) whole years of
his Period of Service with the Employer (Early Retirement Age).
A Former Participant who terminates employment after satisfying
the service requirement for Early Retirement and who thereafter
reaches the age requirement contained herein shall be entitled to
receive his benefits under this Plan.
1.14 "Elective Contribution" means the Employer contributions to
the Plan of Deferred Compensation excluding any such amounts
distributed as excess "annual additions" pursuant to Section 4.10(a).
In addition, any Employer Qualified Non-Elective Contribution made
pursuant to Section 4.1(c) and Section 4.6(b) which is used to
satisfy the "Actual Deferral Percentage" tests shall be considered an
Elective Contribution for purposes of the Plan. Any contributions
deemed to be Elective Contributions (whether or not used to satisfy
the "Actual Deferral Percentage" tests) shall be subject to the
requirements of Sections 4.2(b) and 4.2(c) and shall further be
required to satisfy the nondiscrimination requirements of Regulation
1.401(k)-1(b)(5), the provisions of which are specifically
incorporated herein by reference.
1.15 "Eligible Employee" means any Employee, subject to the
following:
Employees who are Leased Employees within the meaning of Code
Sections 414(n)(2) and 414(o)(2) shall not be eligible to participate
in this Plan.
Employees whose employment is governed by the terms of a
collective bargaining agreement between Employee representatives
(within the meaning of Code Section 7701(a)(46)) and the Employer
under which retirement benefits were the subject of good faith
bargaining between the parties will not be eligible to participate in
this Plan unless such agreement expressly provides for coverage in
this Plan.
Employees who are nonresident aliens (within the meaning of Code
Section 7701(b)(1)(B)) and who receive no earned income (within the
meaning of Code Section 911(d)(2)) from the Employer which
constitutes income from sources within the United States (within the
meaning of Code Section 861(a)(3)) shall not be eligible to
participate in this Plan.
Employees who are not on a United States dollar payroll shall
not be eligible to participate in the Plan.
Employees classified as Temporary Employees who are hired for a
specific period of time with a discernible beginning and end or for a
specified project shall not be eligible to participate in the Plan.
Employees of Affiliated Employers shall not be eligible to
participate in this Plan unless such Affiliated Employers have
specifically adopted this Plan in writing.
1.16 "Employee" means any person who is employed by the Employer
or Affiliated Employer. Employee shall include Leased Employees
within the meaning of Code Sections 414(n)(2) and 414(o)(2) unless
such Leased Employees are covered by a plan described in Code
Section 414(n)(5) and such Leased Employees do not constitute more
than 20% of the recipient's non-highly compensated work force.
1.17 "Employer" means R&B Falcon Corporation and any successor
which shall maintain this Plan; and the sponsors of any predecessor
plans. The Employer is a corporation, with principal offices in the
State of Texas.
1.18 "Excess Aggregate Contributions" means, with respect to any
Plan Year, the excess of the aggregate amount of the Employer
matching contributions made pursuant to Section 4.1(b), voluntary
Employee contributions made pursuant to Section 4.12, Excess
Contributions recharacterized as voluntary Employee contributions
pursuant to Section 4.6(a) and any qualified non-elective
contributions or elective deferrals taken into account pursuant to
Section 4.7(c) on behalf of Highly Compensated Participants for such
Plan Year, over the maximum amount of such contributions permitted
under the limitations of Section 4.7(a).
1.19 "Excess Contributions" means, with respect to a Plan Year,
the excess of Elective Contributions used to satisfy the "Actual
Deferral Percentage" tests made on behalf of Highly Compensated
Participants for the Plan Year over the maximum amount of such
contributions permitted under Section 4.5(a). Excess Contributions,
including amounts recharacterized pursuant to Section 4.6(a)(2),
shall be treated as an "annual addition" pursuant to Section 4.9(b).
1.20 "Excess Deferred Compensation" means, with respect to any
taxable year of a Participant, the excess of the aggregate amount of
such Participant's Deferred Compensation and the elective deferrals
pursuant to Section 4.2(f) actually made on behalf of such
Participant for such taxable year, over the dollar limitation
provided for in Code Section 402(g), which is incorporated herein by
reference. Excess Deferred Compensation shall be treated as an
"annual addition" pursuant to Section 4.9(b) when contributed to the
Plan unless distributed to the affected Participant not later than
the first April 15th following the close of the Participant's taxable
year. Additionally, for purposes of Sections 8.2 and 4.4(f), Excess
Deferred Compensation shall continue to be treated as Employer
contributions even if distributed pursuant to Section 4.2(f).
However, Excess Deferred Compensation of Non-Highly Compensated
Participants is not taken into account for purposes of Section 4.5(a)
to the extent such Excess Deferred Compensation occurs pursuant to
Section 4.2(d).
1.21 "Fiduciary" means any person who (a) exercises any
discretionary authority or discretionary control respecting
management of the Plan or exercises any authority or control
respecting management or disposition of its assets, (b) renders
investment advice for a fee or other compensation, direct or
indirect, with respect to any monies or other property of the Plan or
has any authority or responsibility to do so, or (c) has any
discretionary authority or discretionary responsibility in the
administration of the Plan, including, but not limited to, the
Trustee, the Employer and its representative body, and the
Administrator.
1.22 "Fiscal Year" means the Employer's accounting year of 12
months commencing on January 1 of each year and ending the following
December 31.
1.23 "Forfeiture." Under this Plan, Participant accounts are
100% Vested at all times. Any amounts that may otherwise be forfeited
under the Plan pursuant to Section 3.6, 4.2(f), 4.6(a) or 6.9 shall
be used to reduce the contribution of the Employer.
1.24 "Former Participant" means a person who has been a
Participant, but who has ceased to be a Participant for any reason.
1.25 "415 Compensation" with respect to any Participant means
such Participant's wages and all other payments of compensation by
the Employer (in the course of the Employer's trade or business) for
a Plan Year for which the Employer is required to furnish the
Participant a written statement under Code Sections 6041(d),
6051(a)(3) and 6052. "415 Compensation" must be determined without
regard to any rules that limit the remuneration included in wages
based on the nature or location of the employment or the services
performed.
For Plan Years beginning after December 31, 1997, for purposes
of this Section, the determination of "415 Compensation" shall be
made by including amounts which are contributed by the Employer
pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Sections 125,
402(e)(3), 402(h)(1)(B), 403(b) or 457(b), and Employee contributions
described in Code Section 414(h)(2) that are treated as Employer
contributions.
If, in connection with the adoption of this amendment and
restatement, the definition of "415 Compensation" has been modified,
then, for Plan Years prior to the Plan Year which includes the
adoption date of this amendment and restatement, "415 Compensation"
means compensation determined pursuant to the Plan then in effect.
1.26 "414(s) Compensation" with respect to any Participant means
such Participant's Elective Contributions attributable to Deferred
Compensation recharacterized as voluntary Employee contributions
pursuant to Section 4.6(a) plus "415 Compensation" paid during a Plan
Year. The amount of "414(s) Compensation" with respect to any
Participant shall include "414(s) Compensation" for the entire twelve
(12) month period ending on the last day of such Plan Year, except
that "414(s) Compensation" shall only be recognized for that portion
of the Plan Year during which an Employee was a Participant in the
Plan.
For purposes of this Section, the determination of "414(s)
Compensation" shall be made by including amounts which are
contributed by the Employer pursuant to a salary reduction agreement
and which are not includible in the gross income of the Participant
under Code Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or 457(b),
and Employee contributions described in Code Section 414(h)(2) that
are treated as Employer contributions.
"414(s) Compensation" in excess of $150,000 shall be
disregarded. Such amount shall be adjusted for increases in the cost
of living in accordance with Code Section 401(a)(17), except that the
dollar increase in effect on January 1 of any calendar year shall be
effective for the Plan Year beginning with or within such calendar
year. For any short Plan Year the "414(s) Compensation" limit shall
be an amount equal to the "414(s) Compensation" limit for the
calendar year in which the Plan Year begins multiplied by the ratio
obtained by dividing the number of full months in the short Plan Year
by twelve (12).
If, in connection with the adoption of this amendment and
restatement, the definition of "414(s) Compensation" has been
modified, then, for Plan Years prior to the Plan Year which includes
the adoption date of this amendment and restatement, "414(s)
Compensation" means compensation determined pursuant to the Plan then
in effect.
1.27 "Highly Compensated Employee" means, for Plan Years
beginning after December 31, 1996, an Employee described in Code
Section 414(q) and the Regulations thereunder, and generally means an
Employee who performed services for the Employer during the
"determination year" and is in one or more of the following groups:
(a) Employees who at any time during the "determination
year" or "look-back year" were "five percent owners" as defined
in Section 1.33(c).
(b) Employees who received "415 Compensation" during the
"look-back year" from the Employer in excess of $80,000.
The "determination year" shall be the Plan Year for which
testing is being performed, and the "look-back year" shall be the
immediately preceding twelve-month period.
For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts which are
contributed by the Employer pursuant to a salary reduction agreement
and which are not includible in the gross income of the Participant
under Code Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or 457(b),
and Employee contributions described in Code Section 414(h)(2) that
are treated as Employer contributions. Additionally, the dollar
threshold amount specified in (b) above shall be adjusted at such
time and in the same manner as under Code Section 415(d), except that
the base period shall be the calendar quarter ending September 30,
1996. In the case of such an adjustment, the dollar limit which shall
be applied is the limit for the calendar year in which the "look-back
year" begins.
In determining who is a Highly Compensated Employee, Employees
who are non-resident aliens and who received no earned income (within
the meaning of Code Section 911(d)(2)) from the Employer constituting
United States source income within the meaning of Code
Section 861(a)(3) shall not be treated as Employees. Additionally,
all Affiliated Employers shall be taken into account as a single
employer and Leased Employees within the meaning of Code
Sections 414(n)(2) and 414(o)(2) shall be considered Employees unless
such Leased Employees are covered by a plan described in Code
Section 414(n)(5) and are not covered in any qualified plan
maintained by the Employer. The exclusion of Leased Employees for
this purpose shall be applied on a uniform and consistent basis for
all of the Employer's retirement plans. Highly Compensated Former
Employees shall be treated as Highly Compensated Employees without
regard to whether they performed services during the "determination
year."
1.28 "Highly Compensated Former Employee" means a former
Employee who had a separation year prior to the "determination year"
and was a Highly Compensated Employee in the year of separation from
service or in any "determination year" after attaining age 55.
Notwithstanding the foregoing, an Employee who separated from service
prior to 1987 will be treated as a Highly Compensated Former Employee
only if during the separation year (or year preceding the separation
year) or any year after the Employee attains age 55 (or the last year
ending before the Employee's 55th birthday), the Employee either
received "415 Compensation" in excess of $50,000 or was a "five
percent owner." For purposes of this Section, "determination year,"
"415 Compensation" and "five percent owner" shall be determined in
accordance with Section 1.27. Highly Compensated Former Employees
shall be treated as Highly Compensated Employees. The method set
forth in this Section for determining who is a "Highly Compensated
Former Employee" shall be applied on a uniform and consistent basis
for all purposes for which the Code Section 414(q) definition is
applicable.
1.29 "Highly Compensated Participant" means any Highly
Compensated Employee who is eligible to participate in the Plan.
1.30 "Hour of Service" means each hour for which an Employee is
paid or entitled to payment for the performance of duties for the
Employer.
1.31 "Income" means the income or losses allocable to Excess
Deferred Compensation, Excess Contributions or Excess Aggregate
Contributions which amount shall be allocated in the same manner as
income or losses are allocated pursuant to Section 4.4(f).
1.32 "Investment Manager" means an entity that (a) has the power
to manage, acquire, or dispose of Plan assets and (b) acknowledges
fiduciary responsibility to the Plan in writing. Such entity must be
a person, firm, or corporation registered as an investment adviser
under the Investment Advisers Act of 1940, a bank, or an insurance
company.
1.33 "Key Employee" means an Employee as defined in Code
Section 416(i) and the Regulations thereunder. Generally, any
Employee or former Employee (as well as each of his Beneficiaries) is
considered a Key Employee if he, at any time during the Plan Year
that contains the "Determination Date" or any of the preceding four
(4) Plan Years, has been included in one of the following categories:
(a) an officer of the Employer (as that term is defined
within the meaning of the Regulations under Code Section 416)
having annual "415 Compensation" greater than 50 percent of the
amount in effect under Code Section 415(b)(1)(A) for any such
Plan Year.
(b) one of the ten employees having annual "415
Compensation" from the Employer for a Plan Year greater than the
dollar limitation in effect under Code Section 415(c)(1)(A) for
the calendar year in which such Plan Year ends and owning (or
considered as owning within the meaning of Code Section 318)
both more than one-half percent interest and the largest
interests in the Employer.
(c) a "five percent owner" of the Employer. "Five percent
owner" means any person who owns (or is considered as owning
within the meaning of Code Section 318) more than five percent
(5%) of the outstanding stock of the Employer or stock
possessing more than five percent (5%) of the total combined
voting power of all stock of the Employer or, in the case of an
unincorporated business, any person who owns more than five
percent (5%) of the capital or profits interest in the Employer.
In determining percentage ownership hereunder, employers that
would otherwise be aggregated under Code Sections 414(b), (c),
(m) and (o) shall be treated as separate employers.
(d) a "one percent owner" of the Employer having an annual
"415 Compensation" from the Employer of more than $150,000. "One
percent owner" means any person who owns (or is considered as
owning within the meaning of Code Section 318) more than one
percent (1%) of the outstanding stock of the Employer or stock
possessing more than one percent (1%) of the total combined
voting power of all stock of the Employer or, in the case of an
unincorporated business, any person who owns more than one
percent (1%) of the capital or profits interest in the Employer.
In determining percentage ownership hereunder, employers that
would otherwise be aggregated under Code Sections 414(b), (c),
(m) and (o) shall be treated as separate employers. However, in
determining whether an individual has "415 Compensation" of more
than $150,000, "415 Compensation" from each employer required to
be aggregated under Code Sections 414(b), (c), (m) and (o) shall
be taken into account.
For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts which are
contributed by the Employer pursuant to a salary reduction agreement
and which are not includible in the gross income of the Participant
under Code Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or 457(b),
and Employee contributions described in Code Section 414(h)(2) that
are treated as Employer contributions.
1.34 "Late Retirement Date" means the first day of the month
coinciding with or next following a Participant's actual Retirement
Date after having reached his Normal Retirement Date.
1.35 "Leased Employee" means, for Plan Years beginning after
December 31, 1996, any person (other than an Employee of the
recipient) who pursuant to an agreement between the recipient and any
other person ("leasing organization") has performed services for the
recipient (or for the recipient and related persons determined in
accordance with Code Section 414(n)(6)) on a substantially full time
basis for a period of at least one year, and such services are
performed under primary direction or control by the recipient
employer. Contributions or benefits provided a Leased Employee by the
leasing organization which are attributable to services performed for
the recipient employer shall be treated as provided by the recipient
employer. A Leased Employee shall not be considered an Employee of
the recipient:
(a) if such employee is covered by a money purchase
pension plan providing:
(1) a non-integrated employer contribution rate of at
least 10% of compensation, as defined in Code
Section 415(c)(3), but including amounts which are
contributed by the Employer pursuant to a salary reduction
agreement and which are not includible in the gross income
of the Participant under Code Sections 125, 402(e)(3),
402(h)(1)(B), 403(b) or 457(b), and Employee contributions
described in Code Section 414(h)(2) that are treated as
Employer contributions.
(2) immediate participation; and
(3) full and immediate vesting; and
(b) if Leased Employees do not constitute more than 20% of
the recipient's non-highly compensated work force.
1.36 "Non-Elective Contribution" means the Employer
contributions to the Plan excluding, however, contributions made
pursuant to the Participant's deferral election provided for in
Section 4.2 and any Qualified Non-Elective Contribution used in the
"Actual Deferral Percentage" tests.
1.37 "Non-Highly Compensated Participant" means any Participant
who is not a Highly Compensated Employee. However, for the Plan Year
prior to the first Plan Year of this amendment and restatement, for
the purposes of Section 4.5(a) and Section 4.6, if the prior year
testing method is used, a Non-Highly Compensated Participant shall be
determined using the definition of highly compensated employee in
effect for the preceding Plan Year.
1.38 "Non-Key Employee" means any Employee or former Employee
(and his Beneficiaries) who is not a Key Employee.
1.39 "Normal Retirement Age" means the Participant's sixty-fifth
birthday. Notwithstanding the preceding sentence, for any Participant
who is a "pilot", "Normal Retirement Age" means the Participant's
sixtieth (60th) birthday. A Participant shall be classified as a
"pilot" if he is classified by the Employer or Affiliate as a pilot
or co-pilot of aircraft or was so classified through age fifty-four
(54).
1.40 "Normal Retirement Date" means the first day of the month
coinciding with or next following the Participant's Normal Retirement
Age.
1.41 "1-Year Break in Service" means a Period of Severance of at
least 12 consecutive months.
1.42 "Participant" means any Eligible Employee who participates
in the Plan and has not for any reason become ineligible to
participate further in the Plan.
1.43 "Participant Direction Procedures" means such instructions,
guidelines or policies, the terms of which are incorporated herein,
as shall be established pursuant to Section 4.13 and observed by the
Administrator and applied and provided to Participants who have
Participant Directed Accounts.
1.44 "Participant's Account" means the account established and
maintained by the Administrator for each Participant with respect to
his total interest in the Plan and Trust resulting from the Employer
Non-Elective Contributions.
A separate accounting shall be maintained with respect to that
portion of the Participant's Account attributable to Employer
matching contributions made pursuant to Section 4.1(b), Employer
discretionary contributions made pursuant to Section 4.1(d) and any
Employer Qualified Non-Elective Contributions.
1.45 "Participant's Combined Account" means the total aggregate
amount of each Participant's Elective Account and Participant's
Account.
1.46 "Participant's Directed Account" means that portion of a
Participant's interest in the Plan with respect to which the
Participant has directed the investment in accordance with the
Participant Direction Procedure.
1.47 "Participant's Elective Account" means the account
established and maintained by the Administrator for each Participant
with respect to his total interest in the Plan and Trust resulting
from the Employer Elective Contributions used to satisfy the "Actual
Deferral Percentage" tests. A separate accounting shall be maintained
with respect to that portion of the Participant's Elective Account
attributable to such Elective Contributions pursuant to Section 4.2
and any Employer Qualified Non-Elective Contributions.
1.48 "Period of Service" means the aggregate of all periods
commencing with the Employee's first day of employment or
reemployment with the Employer or Affiliated Employer and ending on
the date a 1-Year Break in Service begins. The first day of
employment or reemployment is the first day the Employee performs an
Hour of Service. An Employee will also receive partial credit for any
Period of Severance of less than 12 consecutive months. Fractional
periods of a year will be expressed in terms of days.
1.49 "Period of Severance" means a continuous period of time
during which the Employee is not employed by the Employer. Such
period begins on the date the Employee retires, quits or is
discharged, or if earlier, the 12 month anniversary of the date on
which the Employee was otherwise first absent from service.
In the case of an individual who is absent from work for
maternity or paternity reasons, the 12-consecutive month period
beginning on the first anniversary of the first day of such absence
shall not constitute a 1-Year Break in Service. For purposes of this
paragraph, an absence from work for maternity or paternity reasons
means an absence (a) by reason of the pregnancy of the individual,
(b) by reason of the birth of a child of the individual, (c) by
reason of the placement of a child with the individual in connection
with the adoption of such child by such individual, or (d) for
purposes of caring for such child for a period beginning immediately
following such birth or placement.
1.50 "Plan" means this instrument, including all amendments
thereto.
1.51 "Plan Year" means the Plan's accounting year of twelve (12)
months commencing on January 1 of each year and ending the following
December 31.
1.52 "Qualified Non-Elective Contribution" means any Employer
contributions made pursuant to Section 4.1(c) and Section 4.6(b) and
Section 4.8(f). Such contributions shall be considered an Elective
Contribution for the purposes of the Plan and may be used to satisfy
the "Actual Deferral Percentage" tests or the "Actual Contribution
Percentage" tests.
1.53 "Regulation" means the Income Tax Regulations as
promulgated by the Secretary of the Treasury or his delegate, and as
amended from time to time.
1.54 "Retired Participant" means a person who has been a
Participant, but who has become entitled to retirement benefits under
the Plan.
1.55 "Retirement Date" means the date as of which a Participant
retires for reasons other than Total and Permanent Disability,
whether such retirement occurs on a Participant's Normal Retirement
Date, Early or Late Retirement Date (see Section 6.1).
1.56 "Super Top Heavy Plan" means a plan described in Section
8.2(b).
1.57 "Terminated Participant" means a person who has been a
Participant, but whose employment has been terminated other than by
death, Total and Permanent Disability or retirement.
1.58 "Top Heavy Plan" means a plan described in Section 8.2(a).
1.59 "Top Heavy Plan Year" means a Plan Year during which the
Plan is a Top Heavy Plan.
1.60 "Total and Permanent Disability" means that a Participant
is unable, solely because of physical disease or accidental bodily
injury, or because of confinement to a hospital or other institution
due to mental disease, to work at any reasonable occupation. A
reasonable occupation includes any gainful activity for which the
Participant is, or may reasonably become, fitted by education,
training, or experience. The disability of a Participant shall be
determined by a licensed physician chosen by the Administrator. The
determination shall be applied uniformly to all Participants.
1.61 "Trustee" means the person or entity named as trustee
herein or in any separate trust forming a part of this Plan, and any
successors.
1.62 "Trust Fund" means the assets of the Plan and Trust as the
same shall exist from time to time.
1.63 "USERRA" means the Uniformed Services Employment and
Reemployment Rights Act of 1994. Notwithstanding any provision of
this Plan to the contrary, contributions, benefits and service credit
with respect to qualified military service will be provided in
accordance with Code Section 414(u).
1.64 "Valuation Date" means the Anniversary Date and such other
date or dates deemed necessary by the Administrator. The Valuation
Date may include any day during the Plan Year that the Trustee, any
transfer agent appointed by the Employer and any stock exchange used
by such agent are open for business.
1.65 "Vested" means the nonforfeitable portion of any account
maintained on behalf of a Participant.
1.66 "After-Tax Contribution Account" means the account
established and maintained by the Administrator for each Participant
with respect to his total interest in the Plan resulting from the
Participant's After-Tax Contributions made pursuant to Section 4.12.
Amounts recharacterized as After-Tax Contributions pursuant to
Section 4.6(a) shall remain subject to the limitations of Sections
4.2(b) and 4.2(c). Therefore, a separate accounting shall be
maintained with respect to that portion of the Voluntary Contribution
Account attributable to After-Tax Contributions made pursuant to
Section 4.12.
ARTICLE II
ADMINISTRATION
2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER
(a) In addition to the general powers and responsibilities
otherwise provided for in this Plan, the Employer shall be
empowered to appoint and remove the Trustee and the
Administrator from time to time as it deems necessary. The
Employer may appoint counsel, specialists, advisers, agents
(including any nonfiduciary agent) and other persons as the
Employer deems necessary or desirable in connection with the
exercise of its fiduciary duties under this Plan. The Employer
may compensate such agents or advisers from the assets of the
Plan as fiduciary expenses (but not including any business
(settlor) expenses of the Employer), to the extent not paid by
the Employer.
(b) The Employer may, by written agreement or designation,
appoint at its option one or more Investment Managers (qualified
under the Investment Company Act of 1940 as amended), investment
adviser, or other agent to provide direction to the Trustee with
respect to any or all of the Plan assets. Such appointment shall
be given by the Employer in writing in a form acceptable to the
Trustee and shall specifically identify the Plan assets with
respect to which the Investment Manager or other agent shall
have authority to direct the investment.
(c) The Employer shall establish a "funding policy and
method," i.e., it shall determine whether the Plan has a short
run need for liquidity (e.g., to pay benefits) or whether
liquidity is a long run goal and investment growth (and
stability of same) is a more current need, or shall appoint a
qualified person to do so. The Employer or its delegate shall
communicate such needs and goals to the Trustee, who shall
coordinate such Plan needs with its investment policy. The
communication of such a "funding policy and method" shall not,
however, constitute a directive to the Trustee as to investment
of the Trust Funds. Such "funding policy and method" shall be
consistent with the objectives of this Plan and with the
requirements of Title I of the Act.
(d) The Employer shall periodically review the performance
of any Fiduciary or other person to whom duties have been
delegated or allocated by it under the provisions of this Plan
or pursuant to procedures established hereunder. This
requirement may be satisfied by formal periodic review by the
Employer or by a qualified person specifically designated by the
Employer, through day-to-day conduct and evaluation, or through
other appropriate ways.
2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY
The board of directors of the Employer shall appoint one or more
persons to a plan administration committee to serve as the
Administrator. Any person, including, but not limited to, the
Employees of the Employer, shall be eligible to serve on the
committee. Any person so appointed shall signify his acceptance by
filing written acceptance with the Employer. The board of directors
may appoint one of the members of the committee to serve as Chairman
of the committee and may appoint a Secretary for the committee who
may, but need not, be a member of the committee. A committee member
may resign by delivering his written resignation to the Employer or
be removed by the board of directors of the Employer by delivery of
written notice of removal, to take effect at a date specified
therein, or upon delivery to the member if no date is specified.
The Committee shall be the Administrator of the Plan within the
meaning of Section 3(16) of the Act, a fiduciary with respect to the
Plan within the meaning of Section 3(21)(A)(i) and (iii) of the Act
and the named fiduciary under Section 402 of the Act.
The Employer, upon the resignation or removal of a committee
member, shall promptly designate a successor to this position. If the
Employer does not appoint a successor, the remaining members may fill
the position.
2.3 ALLOCATION AND DELEGATION OF RESPONSIBILITIES
The responsibilities of each committee member may be specified
by the board of directors of the Employer and accepted in writing by
each member. In the event that no such delegation is made by the
board of directors of the Employer, the committee members may
allocate the responsibilities among themselves, in which event the
members shall notify the Employer and the Trustee in writing of such
action and specify the responsibilities of each member. The Trustee
thereafter shall accept and rely upon any documents executed by the
appropriate committee member until such time as the Employer or the
committee members file with the Trustee a written revocation of such
designation.
2.4 POWERS AND DUTIES OF THE ADMINISTRATOR
The primary responsibility of the Administrator is to administer
the Plan for the exclusive benefit of the Participants and their
Beneficiaries, subject to the specific terms of the Plan. The
Administrator shall administer the Plan in accordance with its terms
and shall have the power and discretion to construe the terms of the
Plan and to determine all questions arising in connection with the
administration, interpretation, and application of the Plan. Any such
determination by the Administrator shall be conclusive and binding
upon all persons. The Administrator may establish procedures, correct
any defect, supply any information, or reconcile any inconsistency in
such manner and to such extent as shall be deemed necessary or
advisable to carry out the purpose of the Plan; provided, however,
that any procedure, discretionary act, interpretation or construction
shall be done in a nondiscriminatory manner based upon uniform
principles consistently applied and shall be consistent with the
intent that the Plan shall continue to be deemed a qualified plan
under the terms of Code Section 401(a), and shall comply with the
terms of the Act and all regulations issued pursuant thereto. The
Administrator shall have all powers necessary or appropriate to
accomplish his duties under this Plan.
The Administrator shall be charged with the duties of the
general administration of the Plan, including, but not limited to,
the following:
(a) the discretion to determine all questions relating to
the eligibility of Employees to participate or remain a
Participant hereunder and to receive benefits under the Plan;
(b) to compute, certify, and direct the Trustee with
respect to the amount and the kind of benefits to which any
Participant shall be entitled hereunder;
(c) to authorize and direct the Trustee with respect to
all nondiscretionary or otherwise directed disbursements from
the Trust;
(d) to maintain all necessary records for the
administration of the Plan;
(e) to interpret the provisions of the Plan and to make
and publish such rules for regulation of the Plan as are
consistent with the terms hereof;
(f) to determine the size and type of any Contract to be
purchased from any insurer, and to designate the insurer from
which such Contract shall be purchased;
(g) to compute and certify to the Employer and to the
Trustee from time to time the sums of money necessary or
desirable to be contributed to the Plan;
(h) to consult with the Employer and the Trustee regarding
the short and long-term liquidity needs of the Plan in order
that the Trustee can exercise any investment discretion in a
manner designed to accomplish specific objectives;
(i) to prepare and implement a procedure to notify
Eligible Employees that they may elect to have a portion of
their Compensation deferred or paid to them in cash;
(j) to act as the named Fiduciary responsible for
communications with Participants as needed to maintain Plan
compliance with ERISA Section 404(c), including but not limited
to the receipt and transmitting of Participant's directions as
to the investment of their account(s) under the Plan and the
formulation of policies, rules, and procedures pursuant to which
Participants may give investment instructions with respect to
the investment of their accounts;
(k) to assist any Participant regarding his rights,
benefits, or elections available under the Plan.
2.5 RECORDS AND REPORTS
The Administrator shall keep a record of all actions taken and
shall keep all other books of account, records, policies, and other
data that may be necessary for proper administration of the Plan and
shall be responsible for supplying all information and reports to the
Internal Revenue Service, Department of Labor, Participants,
Beneficiaries and others as required by law.
2.6 APPOINTMENT OF ADVISERS
The Administrator, or the Trustee with the consent of the
Administrator, may appoint counsel, specialists, advisers, agents
(including nonfiduciary agents) and other persons as the
Administrator or the Trustee deems necessary or desirable in
connection with the administration of this Plan, including but not
limited to agents and advisers to assist with the administration and
management of the Plan, and thereby to provide, among such other
duties as the Administrator may appoint, assistance with maintaining
Plan records and the providing of investment information to the
Plan's investment fiduciaries and to Plan Participants.
2.7 INFORMATION FROM EMPLOYER
To enable the Administrator to perform his functions, the
Employer shall supply full and timely information to the
Administrator on all matters relating to the Compensation of all
Participants, their Hours of Service, their Periods of Service, their
retirement, death, disability, or termination of employment, and such
other pertinent facts as the Administrator may require; and the
Administrator shall advise the Trustee of such of the foregoing facts
as may be pertinent to the Trustee's duties under the Plan. The
Administrator may rely upon such information as is supplied by the
Employer and shall have no duty or responsibility to verify such
information.
2.8 PAYMENT OF EXPENSES
All expenses of administration may be paid out of the Trust Fund
unless paid by the Employer. Such expenses shall include any expenses
incident to the functioning of the Administrator, or any person or
persons retained or appointed by any Named Fiduciary incident to the
exercise of their duties under the Plan, including, but not limited
to, fees of accountants, counsel, Investment Managers, agents
(including nonfiduciary agents) appointed for the purpose of
assisting the Administrator or the Trustee in carrying out the
instructions of Participants as to the directed investment of their
accounts and other specialists and their agents, and other costs of
administering the Plan. Until paid, the expenses shall constitute a
liability of the Employer or the Trust Fund.
2.9 MAJORITY ACTIONS
Except where there has been an allocation and delegation of
administrative authority pursuant to Section 2.3, if there shall be
more than one Administrator, they shall act by a majority of their
number, but may authorize one or more of them to sign all papers on
their behalf.
2.10 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed in writing with
the Administrator. Written notice of the disposition of a claim shall
be furnished to the claimant within 90 days after the application is
filed. In the event the claim is denied, the reasons for the denial
shall be specifically set forth in the notice in language calculated
to be understood by the claimant, pertinent provisions of the Plan
shall be cited, and, where appropriate, an explanation as to how the
claimant can perfect the claim will be provided. In addition, the
claimant shall be furnished with an explanation of the Plan's claims
review procedure.
2.11 CLAIMS REVIEW PROCEDURE
Any Employee, former Employee, or Beneficiary of either, who has
been denied a benefit by a decision of the Administrator pursuant to
Section 2.10 shall be entitled to request the Administrator to give
further consideration to his claim by filing with the Administrator
(on a form which may be obtained from the Administrator) a request
for a hearing. Such request, together with a written statement of the
reasons why the claimant believes his claim should be allowed, shall
be filed with the Administrator no later than 60 days after receipt
of the written notification provided for in Section 2.10. The
Administrator shall then conduct a hearing within the next 60 days,
at which the claimant may be represented by an attorney or any other
representative of his choosing and at which the claimant shall have
an opportunity to submit written and oral evidence and arguments in
support of his claim. At the hearing (or prior thereto upon 5
business days written notice to the Administrator) the claimant or
his representative shall have an opportunity to review all documents
in the possession of the Administrator which are pertinent to the
claim at issue and its disallowance. Either the claimant or the
Administrator may cause a court reporter to attend the hearing and
record the proceedings. In such event, a complete written transcript
of the proceedings shall be furnished to both parties by the court
reporter. The full expense of any such court reporter and such
transcripts shall be borne by the party causing the court reporter to
attend the hearing. A final decision as to the allowance of the claim
shall be made by the Administrator within 60 days of receipt of the
appeal (unless there has been an extension of 60 days due to special
circumstances, provided the delay and the special circumstances
occasioning it are communicated to the claimant within the 60 day
period). Such communication shall be written in a manner calculated
to be understood by the claimant and shall include specific reasons
for the decision and specific references to the pertinent Plan
provisions on which the decision is based.
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
Any Eligible Employee who has completed 3 months of employment
shall be eligible to participate hereunder as of the date he has
satisfied such requirements. However, any Employee who was a
Participant in the Plan prior to the effective date of this amendment
and restatement shall continue to participate in the Plan.
3.2 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee shall become a Participant effective as of
the first day of the month coinciding with or next following the date
on which such Employee met the eligibility requirements of Section
3.1, provided said Employee was still employed as of such date (or if
not employed on such date, as of the date of rehire if a 1-Year Break
in Service has not occurred).
If the number of consecutive 1-Year Breaks in Service do not
equal or exceed the greater of five or the number of Years of Service
the Employee had before such 1-Year Breaks in Service, the Years of
Service he had at such 1-Year Breaks in Service shall be reinstated
upon his reemployment.
3.3 DETERMINATION OF ELIGIBILITY
The Administrator shall determine the eligibility of each
Employee for participation in the Plan based upon information
furnished by the Employer. Such determination shall be conclusive and
binding upon all persons, as long as the same is made pursuant to the
Plan and the Act. Such determination shall be subject to review per
Section 2.11.
3.4 TERMINATION OF ELIGIBILITY
(a) In the event a Participant shall go from a
classification of an Eligible Employee to an ineligible
Employee, such Former Participant shall continue to be vested in
his interest in the Plan for each Period of Service completed
while a noneligible Employee, until such time as his
Participant's Account shall be forfeited or distributed pursuant
to the terms of the Plan. Additionally, his interest in the Plan
shall continue to share in the earnings of the Trust Fund.
(b) In the event a Participant is no longer a member of an
eligible class of Employees and becomes ineligible to
participate, such Employee will participate immediately upon
returning to an eligible class of Employees.
3.5 OMISSION OF ELIGIBLE EMPLOYEE
If, in any Plan Year, any Employee who should be included as a
Participant in the Plan is erroneously omitted and discovery of such
omission is not made until after a contribution by his Employer for
the year has been made, the Employer shall make a subsequent
contribution with respect to the omitted Employee in the amount which
the said Employer would have contributed with respect to him had he
not been omitted. Such contribution shall be made regardless of
whether or not it is deductible in whole or in part in any taxable
year under applicable provisions of the Code.
3.6 INCLUSION OF INELIGIBLE EMPLOYEE
If, in any Plan Year, any person who should not have been
included as a Participant in the Plan is erroneously included and
discovery of such incorrect inclusion is not made until after a
contribution for the year has been made, the Employer shall not be
entitled to recover the contribution made with respect to the
ineligible person regardless of whether or not a deduction is
allowable with respect to such contribution. In such event, the
amount contributed with respect to the ineligible person shall
constitute a Forfeiture (except for Deferred Compensation which shall
be distributed to the ineligible person) for the Plan Year in which
the discovery is made.
3.7 ELECTION NOT TO PARTICIPATE
An Employee may, subject to the approval of the Employer, elect
voluntarily not to participate in the Plan.
3.8 VESTING
A Participant shall become fully Vested in his Participant's
Account immediately upon entry into the Plan.
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER CONTRIBUTION
For each Plan Year, the Employer shall contribute to the Plan:
(a) The amount of the total salary reduction elections of
all Participants made pursuant to Section 4.2(a), which amount
shall be deemed an Employer Elective Contribution.
(b) For any Plan Year, the Employer may provide for
Employer matching contributions to be made under the Plan on
behalf of each active Participant employed by the Employer. The
determination as to whether such Employer matching contributions
are to be made for any Plan Year, and the determination of the
amount of such contributions, shall be in the sole discretion of
the board of directors of the Employer, after giving
consideration to the budgeted sales and profit objectives of the
Employer for the Plan Year. The determination of the
contribution percentage rate of any such Employer matching
contributions by the Employer for a Plan Year may be
communicated to the Eligible Employees of the Employer prior to
the beginning of the applicable Plan Year, or may be
communicated to such Eligible Employees at any time during or
after such Plan Year. The matching contribution made on behalf
of each eligible Participant shall be deemed an Employer Non-
Elective Contribution.
The amount of the Employer matching contributions (if any)
determined with respect to the Employer for a particular Plan
Year shall be stated in terms of a matching contribution rate
for the sum of the Deferred Compensation and After-Tax
Contributions made by the active Participants employed by the
Employer during the applicable Plan Year. Such matching
contribution rate shall also be stated as a uniform rate
applicable to any Deferred Compensation and After-Tax
Contributions contributed on behalf of an active Participant for
a pay period which do not exceed six percent (6%) of the active
Participant's Compensation for such pay period. The Employer
shall then contribute as an Employer matching contribution an
amount equal to such matching contribution rate times the amount
of Deferred Compensation and After-Tax Contributions contributed
on behalf of each active Participant employed by the Employer
during such Plan Year; provided, however, that no such Employer
matching contributions shall be made with respect to any
Deferred Compensation and After-Tax Contributions contributed on
behalf of an active Participant for a pay period which are in
excess of six percent (6%) of the active Participant's
Compensation for such pay period. The Employer matching
contributions to be made on behalf of an active Participant for
a Plan Year shall be determined by reference to each pay period
within such Plan Year during which the active Participant has an
election in effect with respect to Deferred Compensation and/or
After-Tax Contributions.
In making its determination of Employer matching
contributions with respect to any Plan Year, the Employer may
make its determination with respect to any business or operating
unit within such Employer. In such case, each such separate
business or operating unit for which such determination is made
shall be treated as a separate "Employer" for purposes of
applying the foregoing provisions of this Section 4.1(b).
(c) On behalf of each Non-Highly Compensated Participant
who is eligible to share in the Qualified Non-Elective
Contribution for the Plan Year, a discretionary Qualified
Non-Elective Contribution equal to a uniform percentage of each
eligible individual's Compensation, the exact percentage, if
any, to be determined each year by the Employer. Any Employer
Qualified Non-Elective Contribution shall be deemed an Employer
Elective Contribution.
(d) A discretionary amount, which amount, if any, shall be
deemed an Employer Non-Elective Contribution.
(e) Additionally, to the extent necessary, the Employer
shall contribute to the Plan the amount necessary to provide the
top heavy minimum contribution. All contributions by the
Employer shall be made in cash.
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION
(a) Each Participant may elect to defer from 1% to 15% of
his Compensation which would have been received in the Plan
Year, but for the deferral election. A deferral election (or
modification of an earlier election) may not be made with
respect to Compensation which is currently available on or
before the date the Participant executed such election. For
purposes of this Section, Compensation shall be determined prior
to any reductions made pursuant to Code Sections 125, 402(e)(3),
402(h)(1)(B), 403(b) or 457(b), and Employee contributions
described in Code Section 414(h)(2) that are treated as Employer
contributions.
The amount by which Compensation is reduced shall be that
Participant's Deferred Compensation and be treated as an
Employer Elective Contribution and allocated to that
Participant's Elective Account.
(b) The balance in each Participant's Elective Account
shall be fully Vested at all times and shall not be subject to
Forfeiture for any reason.
(c) Notwithstanding anything in the Plan to the contrary,
amounts held in the Participant's Elective Account may not be
distributable (including any offset of loans) earlier than:
(1) a Participant's separation from service, Total and
Permanent Disability, or death;
(2) a Participant's attainment of age 59 1/2;
(3) the termination of the Plan without the establishment
or existence of a "successor plan," as that term is
described in Regulation 1.401(k)-1(d)(3);
(4) the date of disposition by the Employer to an entity
that is not an Affiliated Employer of substantially all of
the assets (within the meaning of Code Section 409(d)(2))
used in a trade or business of such corporation if such
corporation continues to maintain this Plan after the
disposition with respect to a Participant who continues
employment with the corporation acquiring such assets;
(5) the date of disposition by the Employer or an
Affiliated Employer who maintains the Plan of its interest
in a subsidiary (within the meaning of Code
Section 409(d)(3)) to an entity which is not an Affiliated
Employer but only with respect to a Participant who
continues employment with such subsidiary; or
(6) the proven financial hardship of a Participant,
subject to the limitations of Section 6.11.
(d) For each Plan Year, a Participant's Deferred
Compensation made under this Plan and all other plans, contracts
or arrangements of the Employer maintaining this Plan shall not
exceed, during any taxable year of the Participant, the
limitation imposed by Code Section 402(g), as in effect at the
beginning of such taxable year. If such dollar limitation is
exceeded, a Participant will be deemed to have notified the
Administrator of such excess amount which shall be distributed
in a manner consistent with Section 4.2(f). The dollar
limitation shall be adjusted annually pursuant to the method
provided in Code Section 415(d) in accordance with Regulations.
(e) In the event a Participant has received a hardship
distribution from his Participant's Elective Account pursuant to
Section 6.11(b) or pursuant to Regulation
1.401(k)-1(d)(2)(iv)(B) from any other plan maintained by the
Employer, then such Participant shall not be permitted to elect
to have Deferred Compensation contributed to the Plan on his
behalf for a period of twelve (12) months following the receipt
of the distribution. Furthermore, the dollar limitation under
Code Section 402(g) shall be reduced, with respect to the
Participant's taxable year following the taxable year in which
the hardship distribution was made, by the amount of such
Participant's Deferred Compensation, if any, pursuant to this
Plan (and any other plan maintained by the Employer) for the
taxable year of the hardship distribution.
(f) If a Participant's Deferred Compensation under this
Plan together with any elective deferrals (as defined in
Regulation 1.402(g)-1(b)) under another qualified cash or
deferred arrangement (as defined in Code Section 401(k)), a
simplified employee pension (as defined in Code Section 408(k)),
a salary reduction arrangement (within the meaning of Code
Section 3121(a)(5)(D)), a deferred compensation plan under Code
Section 457(b), or a trust described in Code Section 501(c)(18)
cumulatively exceed the limitation imposed by Code
Section 402(g) (as adjusted annually in accordance with the
method provided in Code Section 415(d) pursuant to Regulations)
for such Participant's taxable year, the Participant may, not
later than March 1 following the close of the Participant's
taxable year, notify the Administrator in writing of such excess
and request that his Deferred Compensation under this Plan be
reduced by an amount specified by the Participant. In such
event, the Administrator may direct the Trustee to distribute
such excess amount (and any Income allocable to such excess
amount) to the Participant not later than the first April 15th
following the close of the Participant's taxable year. Any
distribution of less than the entire amount of Excess Deferred
Compensation and Income shall be treated as a pro rata
distribution of Excess Deferred Compensation and Income. The
amount distributed shall not exceed the Participant's Deferred
Compensation under the Plan for the taxable year (and any Income
allocable to such excess amount). Any distribution on or before
the last day of the Participant's taxable year must satisfy each
of the following conditions:
(1) the distribution must be made after the date on which the
Plan received the Excess Deferred Compensation;
(2) the Participant shall designate the distribution as Excess
Deferred Compensation; and
(3) the Plan must designate the distribution as a distribution
of Excess Deferred Compensation.
Any distribution made pursuant to this Section 4.2(f) shall
be made first from unmatched Deferred Compensation and,
thereafter, from Deferred Compensation which is matched.
Matching contributions which relate to such Deferred
Compensation shall be forfeited.
(g) Notwithstanding Section 4.2(f) above, a Participant's
Excess Deferred Compensation shall be reduced, but not below
zero, by any distribution and/or recharacterization of Excess
Contributions pursuant to Section 4.6(a) for the Plan Year
beginning with or within the taxable year of the Participant.
(h) At Normal Retirement Date, or such other date when the
Participant shall be entitled to receive benefits, the fair
market value of the Participant's Elective Account shall be used
to provide additional benefits to the Participant or his
Beneficiary.
(i) Employer Elective Contributions made pursuant to this
Section may be segregated into a separate account for each
Participant in a federally insured savings account, certificate
of deposit in a bank or savings and loan association, money
market certificate, or other short-term debt security acceptable
to the Trustee until such time as the allocations pursuant to
Section 4.4 have been made.
(j) The Employer and the Administrator shall implement the
salary reduction elections provided for herein this Section 4.2
and Section 4.12 in accordance with the following:
(1) A Participant must make his initial salary deferral
election within a reasonable time after entering the Plan
pursuant to Section 3.2. If the Participant fails to make an
initial salary deferral election within such time, then such
Participant may thereafter make an election in accordance with
the rules governing modifications. The Participant shall make
such an election by filing such agreement with the
Administrator. Such election shall initially be effective as
soon as administratively possible following the acceptance of
the salary reduction agreement by the Administrator. It shall
not have retroactive effect and shall remain in force until
revoked.
(2) A Participant may modify a prior election at any time
during the Plan Year and concurrently make a new election by
filing a written notice with the Administrator within a
reasonable time before the pay period for which such
modification is to be effective. Any modification shall not have
retroactive effect and shall remain in force until revoked.
(3) A Participant may elect to prospectively revoke his salary
reduction agreement in its entirety at any time during the Plan
Year by providing the Administrator with notice of such
revocation. Such revocation shall become effective as soon as
administratively feasible following receipt of the Participant's
notice. Furthermore, the termination of the Participant's
employment, or the cessation of participation for any reason,
shall be deemed to revoke any salary reduction agreement then in
effect, effective immediately following the close of the pay
period within which such termination or cessation occurs.
4.3 TIME OF PAYMENT OF EMPLOYER CONTRIBUTION
The Employer shall generally pay to the Trustee its contribution
to the Plan for each Plan Year within the time prescribed by law,
including extensions of time, for the filing of the Employer federal
income tax return for the Fiscal Year.
However, Employer Elective Contributions accumulated through
payroll deductions shall be paid to the Trustee as of the earliest
date on which such contributions can reasonably be segregated from
the Employer general assets, but in any event within ninety (90) days
from the date on which such amounts would otherwise have been payable
to the Participant in cash. The provisions of Department of Labor
regulations 2510.3-102 are incorporated herein by reference.
Furthermore, any additional Employer contributions which are
allocable to the Participant's Elective Account for a Plan Year shall
be paid to the Plan no later than the twelve-month period immediately
following the close of such Plan Year.
4.4 ALLOCATION OF CONTRIBUTION AND EARNINGS
(a) The Administrator shall establish and maintain an
account in the name of each Participant to which the
Administrator shall credit as of each Anniversary Date all
amounts allocated to each such Participant as set forth herein.
(b) The Employer shall provide the Administrator with all
information required by the Administrator to make a proper
allocation of the Employer contributions for each Plan Year.
Within a reasonable period of time after the date of receipt by
the Administrator of such information, the Administrator shall
allocate such contribution as follows:
(1) With respect to the Employer Elective Contribution made
pursuant to Section 4.1(a), to each Participant's Elective
Account in an amount equal to each such Participant's Deferred
Compensation for the year.
(2) With respect to the Employer Non-Elective Contribution made
pursuant to Section 4.1(b), to each Participant's Account in
accordance with Section 4.1(b).
Any Participant actively employed during the Plan Year shall be
eligible to share in the matching contribution for the Plan
Year.
(3) With respect to the Employer Qualified Non-Elective
Contribution made pursuant to Section 4.1(c), to each
Participant's Elective Account when used to satisfy the "Actual
Deferral Percentage" tests or Participant's Account in
accordance with Section 4.1(c).
Only Non-Highly Compensated Participants who are actively
employed on the last day of the Plan Year or who complete more
than three (3) consecutive months of service during the Plan
Year prior to terminating employment shall be eligible to share
in the Qualified Non-Elective Contribution for the year.
(4) With respect to the Employer Non-Elective Contribution made
pursuant to Section 4.1(d), to each Participant's Account in the
same proportion that each such Participant's Compensation for
the year bears to the total Compensation of all Participants for
such year.
Only Participants who are actively employed on the last day of
the Plan Year shall be eligible to share in the discretionary
contribution for the year.
(c) For any Top Heavy Plan Year, Non-Key Employees not
otherwise eligible to share in the allocation of contributions
as provided above, shall receive the minimum allocation provided
for in Section 4.4(f) if eligible pursuant to the provisions of
Section 4.4(h).
(d) Notwithstanding the foregoing, Participants who are
not actively employed on the last day of the Plan Year due to
Retirement (Early, Normal or Late), Total and Permanent
Disability or death shall share in the allocation of
contributions for that Plan Year.
(e) Earnings or losses with respect to a Participant's
Directed Account shall be allocated in accordance with Section
4.13. On each business day of the Plan Year, a daily
determination of unrealized and realized gains and losses,
interest, dividends and capital gain distributions will be
calculated and allocated based on the actual activity in each
Participant's account. Activity includes, but is not limited to,
allocation of contributions, forfeitures and
distributions.
Participants' transfers from other qualified plans and
voluntary contributions deposited in the general Trust Fund
shall share in any earnings and losses (net appreciation or net
depreciation) of the Trust Fund in the same manner provided
above. Each segregated account maintained on behalf of a
Participant shall be credited or charged with its separate
earnings and losses.
(f) Minimum Allocations Required for Top Heavy Plan Years:
Notwithstanding the foregoing, for any Top Heavy Plan Year, the
sum of the Employer contributions allocated to the Participant's
Combined Account of each Non-Key Employee shall be equal to at
least three percent (3%) of such Non-Key Employee's "415
Compensation" (reduced by contributions and forfeitures, if any,
allocated to each Non-Key Employee in any defined contribution
plan included with this plan in a Required Aggregation Group).
However, if (1) the sum of the Employer contributions allocated
to the Participant's Combined Account of each Key Employee for
such Top Heavy Plan Year is less than three percent (3%) of each
Key Employee's "415 Compensation" and (2) this Plan is not
required to be included in an Aggregation Group to enable a
defined benefit plan to meet the requirements of Code
Section 401(a)(4) or 410, the sum of the Employer contributions
allocated to the Participant's Combined Account of each Non-Key
Employee shall be equal to the largest percentage allocated to
the Participant's Combined Account of any Key Employee. However,
in determining whether a Non-Key Employee has received the
required minimum allocation, such Non-Key Employee's Deferred
Compensation and matching contributions needed to satisfy the
"Actual Contribution Percentage" tests pursuant to Section
4.7(a) shall not be taken into account.
However, no such minimum allocation shall be required in
this Plan for any Non-Key Employee who participates in another
defined contribution plan subject to Code Section 412 included
with this Plan in a Required Aggregation Group.
(g) For purposes of the minimum allocations set forth
above, the percentage allocated to the Participant's Combined
Account of any Key Employee shall be equal to the ratio of the
sum of the Employer contributions allocated on behalf of such
Key Employee divided by the "415 Compensation" for such Key
Employee.
(h) For any Top Heavy Plan Year, the minimum allocations
set forth above shall be allocated to the Participant's Combined
Account of all Non-Key Employees who are Participants and who
are employed by the Employer on the last day of the Plan Year,
including Non-Key Employees who have (1) failed to complete a
Period of Service; and (2) declined to make mandatory
contributions (if required) or, in the case of a cash or
deferred arrangement, elective contributions to the Plan.
(i) For the purposes of this Section, "415 Compensation"
shall be limited to $150,000. Such amount shall be adjusted for
increases in the cost of living in accordance with Code
Section 401(a)(17), except that the dollar increase in effect on
January 1 of any calendar year shall be effective for the Plan
Year beginning with or within such calendar year. For any short
Plan Year the "415 Compensation" limit shall be an amount equal
to the "415 Compensation" limit for the calendar year in which
the Plan Year begins multiplied by the ratio obtained by
dividing the number of full months in the short Plan Year by
twelve (12).
(j) Notwithstanding anything herein to the contrary,
Participants who terminated employment for any reason during the
Plan Year shall share in the salary reduction contributions made
by the Employer for the year of termination without regard to
the Hours of Service credited.
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS
(a) Maximum Annual Allocation: For each Plan Year
beginning after December 31, 1996, the annual allocation derived
from Employer Elective Contributions to a Highly Compensated
Participant's Elective Account shall satisfy one of the
following tests:
(1) The "Actual Deferral Percentage" for the Highly Compensated
Participant group shall not be more than the "Actual Deferral
Percentage" of the Non-Highly Compensated Participant group (for
the preceding Plan Year if the prior year testing method is used
to calculate the "Actual Deferral Percentage" for the Non-Highly
Compensated Participant group) multiplied by 1.25, or
(2) The excess of the "Actual Deferral Percentage" for the
Highly Compensated Participant group over the "Actual Deferral
Percentage" for the Non-Highly Compensated Participant group
(for the preceding Plan Year if the prior year testing method is
used to calculate the "Actual Deferral Percentage" for the Non-
Highly Compensated Participant group) shall not be more than two
percentage points. Additionally, the "Actual Deferral
Percentage" for the Highly Compensated Participant group shall
not exceed the "Actual Deferral Percentage" for the Non-Highly
Compensated Participant group (for the preceding Plan Year if
the prior year testing method is used to calculate the "Actual
Deferral Percentage" for the Non-Highly Compensated Participant
group) multiplied by 2. The provisions of Code Section 401(k)(3)
and Regulation 1.401(k)-1(b) are incorporated herein by
reference.
However, in order to prevent the multiple use of the alternative
method described in (2) above and in Code Section 401(m)(9)(A),
any Highly Compensated Participant eligible to make elective
deferrals pursuant to Section 4.2 and to make Employee
contributions or to receive matching contributions under this
Plan or under any other plan maintained by the Employer or an
Affiliated Employer shall have a combination of his Elective
Contributions and Employer matching contributions and his
Employee contributions reduced pursuant to Section 4.6(a) and
Regulation 1.401(m)-2, the provisions of which are incorporated
herein by reference.
(b) For the purposes of this Section "Actual Deferral
Percentage" means, with respect to the Highly Compensated
Participant group and Non-Highly Compensated Participant group
for a Plan Year, the average of the ratios, calculated
separately for each Participant in such group, of the amount of
Employer Elective Contributions allocated to each Participant's
Elective Account for such Plan Year, to such Participant's
"414(s) Compensation" for such Plan Year. The actual deferral
ratio for each Participant and the "Actual Deferral Percentage"
for each group shall be calculated to the nearest one-hundredth
of one percent. Employer Elective Contributions allocated to
each Non-Highly Compensated Participant's Elective Account shall
be reduced by Excess Deferred Compensation to the extent such
excess amounts are made under this Plan or any other plan
maintained by the Employer.
Notwithstanding the above, if the prior year test
method is used to calculate the "Actual Deferral Percentage" for
the Non-Highly Compensated Participant group for the first Plan
Year of this amendment and restatement, the "Actual Deferral
Percentage" for the Non-Highly Compensated Participant group for
the preceding Plan Year shall be calculated pursuant to the
provisions of the Plan then in effect.
(c) For the purposes of Sections 4.5(a) and 4.6, a Highly
Compensated Participant and a Non-Highly Compensated Participant
shall include any Employee eligible to make a deferral election
pursuant to Section 4.2, whether or not such deferral election
was made or suspended pursuant to Section 4.2.
Notwithstanding the above, if the prior year testing
method is used to calculate the "Actual Deferral Percentage" for
the Non-Highly Compensated Participant group for the first Plan
Year of this amendment and restatement, for purposes of Section
4.5(a) and 4.6, a Non-Highly Compensated Participant shall
include any such Employee eligible to make a deferral election,
whether or not such deferral election was made or suspended,
pursuant to the provisions of the Plan in effect for the
preceding Plan Year.
(d) If the Plan uses the prior year testing method, the
"Actual Deferral Percentage" for the Non-Highly Compensated
Participant group is determined without regard to changes in the
group of Non-Highly Compensated Participants who are eligible
under the Plan in the testing year. However, if the Plan results
from, or is otherwise affected by, a "Plan Coverage Change" that
becomes effective during the testing year, then the "Actual
Deferral Percentage" for the Non-Highly Compensated Participant
group for the prior year is the "Weighted Average Of The Actual
Deferral Percentages For The Prior Year Subgroups."
Notwithstanding the above, if ninety (90) percent or more of the
total number of Non-Highly Compensated Participants from all
"Prior Year Subgroups" are from a single "Prior Year Subgroup,"
then in determining the "Actual Deferral Percentage" for the Non-
Highly Compensated Participants for the prior year, the Employer
may elect to use the "Actual Deferral Percentage" for Non-Highly
Compensated Participants for the prior year under which that
single "Prior Year Subgroup" was eligible, in lieu of using the
weighted averages. For purposes of this Section the following
definitions shall apply:
(1) "Plan Coverage Change" means a change in the group or
groups of eligible Participants on account of (i) the
establishment or amendment of a plan, (ii) a plan merger,
consolidation, or spinoff under Code Section 414(l), (iii) a
change in the way plans within the meaning of Code Section
414(l) are combined or separated for purposes of Regulation
1.401(k)-1(g)(11), or (iv) a combination of any of the
foregoing.
(2) "Prior Year Subgroup" means all Non-Highly Compensated
Participants for the prior year who, in the prior year, were
eligible Participants under a specific Code Section 401(k) plan
maintained by the Employer and who would have been eligible
Participants in the prior year under the plan tested if the plan
coverage change had first been effective as of the first day of
the prior year instead of first being effective during the
testing year.
(3) "Weighted Average Of The Actual Deferral Percentages For
The Prior Year Subgroups" means the sum, for all prior year
subgroups, of the "Adjusted Actual Deferral Percentages."
(4) "Adjusted Actual Deferral Percentage" with respect to a
prior year subgroup means the Actual Deferral Percentage for Non-
Highly Compensated Participants for the prior year of the
specific plan under which the members of the prior year subgroup
were eligible Participants, multiplied by a fraction, the
numerator of which is the number of Non-Highly Compensated
Participants in the prior year subgroup and the denominator of
which is the total number of Non-Highly Compensated Participants
in all prior year subgroups.
(e) For the purposes of this Section and Code Sections
401(a)(4), 410(b) and 401(k), if two or more plans which include
cash or deferred arrangements are considered one plan for the
purposes of Code Section 401(a)(4) or 410(b) (other than Code
Section 410(b)(2)(A)(ii)), the cash or deferred arrangements
included in such plans shall be treated as one arrangement. In
addition, two or more cash or deferred arrangements may be
considered as a single arrangement for purposes of determining
whether or not such arrangements satisfy Code Sections
401(a)(4), 410(b) and 401(k). In such a case, the cash or
deferred arrangements included in such plans and the plans
including such arrangements shall be treated as one arrangement
and as one plan for purposes of this Section and Code Sections
401(a)(4), 410(b) and 401(k). Plans may be aggregated under this
paragraph (e) only if they have the same plan year.
Notwithstanding the above, for Plan Years beginning after
December 31, 1996, if two or more plans which include cash or
deferred arrangements are permissively aggregated under
Regulation 1.410(b)-7(d), all plans permissively aggregated must
use either the current year test method or the prior year
testing method for the testing year.
Notwithstanding the above, an employee stock ownership plan
described in Code Section 4975(e)(7) or 409 may not be combined
with this Plan for purposes of determining whether the employee
stock ownership plan or this Plan satisfies this Section and
Code Sections 401(a)(4), 410(b) and 401(k).
(f) For the purposes of this Section, if a Highly
Compensated Participant is a Participant under two or more cash
or deferred arrangements (other than a cash or deferred
arrangement which is part of an employee stock ownership plan as
defined in Code Section 4975(e)(7) or 409) of the Employer or an
Affiliated Employer, all such cash or deferred arrangements
shall be treated as one cash or deferred arrangement for the
purpose of determining the actual deferral ratio with respect to
such Highly Compensated Participant. However, if the cash or
deferred arrangements have different plan years, this paragraph
shall be applied by treating all cash or deferred arrangements
ending with or within the same calendar year as a single
arrangement.
(g) For the purpose of this Section, when calculating the
"Actual Deferral Percentage" for the Non-Highly Compensated
Participant group, the prior year testing method shall be used.
Any change from the current year testing method to the prior
year testing method shall be made pursuant to Internal Revenue
Service Notice 98-1, Section VII, the provisions of which are
incorporated herein by reference.
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS
In the event (or if it is anticipated) that the initial
allocations of the Employer Elective Contributions made pursuant to
Section 4.4 do (or might) not satisfy one of the tests set forth in
Section 4.5(a)for Plan Years beginning after December 31, 1996, the
Administrator shall adjust Excess Contributions pursuant to the
options set forth below:
(a) On or before the fifteenth day of the third month
following the end of each Plan Year, the Highly Compensated
Participant having the largest amount of Elective Contributions
shall have a portion of his Elective Contributions distributed
to him and/or at his election recharacterized as a voluntary
Employee contribution pursuant to Section 4.12 and/or at his
election recharacterized as a voluntary Employee contribution
pursuant to Section 4.12 until the total amount of Excess
Contributions has been distributed, or until the amount of his
Elective Contributions equals the Elective Contributions of the
Highly Compensated Participant having the second largest amount
of Elective Contributions. This process shall continue until the
total amount of Excess Contributions has been distributed. In
determining the amount of Excess Contributions to be distributed
and/or recharacterized with respect to an affected Highly
Compensated Participant as determined herein, such amount shall
be reduced pursuant to Section 4.2(f) by any Excess Deferred
Compensation previously distributed to such affected Highly
Compensated Participant for his taxable year ending with or
within such Plan Year.
(1) With respect to the distribution of Excess Contributions
pursuant to (a) above, such distribution:
(i) may be postponed but not later than the close of the
Plan Year following the Plan Year to which they are
allocable;
(ii) shall be adjusted for Income; and
(iii) shall be designated by the Employer as a
distribution of Excess Contributions (and Income).
(2) With respect to the recharacterization of Excess
Contributions pursuant to (a) above, such recharacterized
amounts:
(i) shall be deemed to have occurred on the date on which
the last of those Highly Compensated Participants with
Excess Contributions to be recharacterized is notified of
the recharacterization and the tax consequences of such
recharacterization;
(ii) shall not exceed the amount of Deferred Compensation
on behalf of any Highly Compensated Participant for any
Plan Year;
(iii) shall be treated as voluntary Employee
contributions for purposes of Code Section 401(a)(4) and
Regulation 1.401(k)-1(b). However, for purposes of Sections
8.2 and 4.4(f), recharacterized Excess Contributions
continue to be treated as Employer contributions that are
Deferred Compensation. Excess Contributions recharacterized
as voluntary Employee contributions shall continue to be
nonforfeitable and subject to the same distribution rules
provided for in Section 4.2(c);
(iv) are not permitted if the amount recharacterized plus
voluntary Employee contributions actually made by such
Highly Compensated Participant, exceed the maximum amount
of voluntary Employee contributions (determined prior to
application of Section 4.7(a)) that such Highly Compensated
Participant is permitted to make under the Plan in the
absence of recharacterization; and
(v) shall be adjusted for Income.
(3) Any distribution and/or recharacterization of less
than the entire amount of Excess Contributions shall be
treated as a pro rata distribution and/or
recharacterization of Excess Contributions and Income.
(4) Matching contributions which relate to Excess
Contributions shall be forfeited unless the related
matching contribution is distributed as an Excess Aggregate
Contribution pursuant to Section 4.8.
(b) Within twelve (12) months after the end of the Plan
Year, the Employer may make a special Qualified Non-Elective
Contribution on behalf of Non-Highly Compensated Participants in
an amount sufficient to satisfy (or to prevent an anticipated
failure of) one of the tests set forth in Section 4.5(a). Such
contribution shall be allocated to the Participant's Elective
Account of each Non-Highly Compensated Participant in the same
proportion that each Non-Highly Compensated Participant's
Compensation for the year bears to the total Compensation of all
Non-Highly Compensated Participants.
However, if the prior year testing method is used, the
special Qualified Non-Elective Contribution shall be allocated
in the prior Plan Year to the Participant's Elective Account on
behalf of each Non-Highly Compensated Participant who was
employed by the Employer on the last day of the prior Plan Year
in the same proportion that each such Non-Highly Compensated
Participant's Compensation for the prior Plan Year bears to the
total Compensation of all such Non-Highly Compensated
Participants for the prior Plan Year. Such contribution shall be
made by the Employer prior to the end of the current Plan Year.
(c) If during a Plan Year the projected aggregate amount
of Elective Contributions to be allocated to all Highly
Compensated Participants under this Plan would, by virtue of the
tests set forth in Section 4.5(a), cause the Plan to fail such
tests, then the Administrator may automatically reduce
proportionately or in the order provided in Section 4.6(a) each
affected Highly Compensated Participant's deferral election made
pursuant to Section 4.2 by an amount necessary to satisfy one of
the tests set forth in Section 4.5(a).
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) The "Actual Contribution Percentage" for Plan Years
beginning after December 31, 1996 for the Highly Compensated
Participant group shall not exceed the greater of:
(1) 125 percent of such percentage for the Non-Highly
Compensated Participant group (for the preceding Plan Year if
the prior year testing method is used to calculate the "Actual
Contribution Percentage" for the Non-Highly Compensated
Participant group); or
(2) the lesser of 200 percent of such percentage for the
Non-Highly Compensated Participant group (for the preceding Plan
Year if the prior year testing method is used to calculate the
"Actual Contribution Percentage" for the Non-Highly Compensated
Participant group), or such percentage for the Non-Highly
Compensated Participant group (for the preceding Plan Year if
the prior year testing method is used to calculate the "Actual
Contribution Percentage" for the Non-Highly Compensated
Participant group) plus 2 percentage points. However, to prevent
the multiple use of the alternative method described in this
paragraph and Code Section 401(m)(9)(A), any Highly Compensated
Participant eligible to make elective deferrals pursuant to
Section 4.2 or any other cash or deferred arrangement maintained
by the Employer or an Affiliated Employer and to make Employee
contributions or to receive matching contributions under this
Plan or under any plan maintained by the Employer or an
Affiliated Employer shall have a combination of his Elective
Contributions and Employer matching contributions and his
Employee contributions reduced pursuant to Regulation 1.401(m)-2
and Section 4.8(a). The provisions of Code Section 401(m) and
Regulations 1.401(m)-1(b) and 1.401(m)-2 are incorporated herein
by reference.
(b) For the purposes of this Section and Section 4.8,
"Actual Contribution Percentage" for a Plan Year means, with
respect to the Highly Compensated Participant group and
Non-Highly Compensated Participant group (for the preceding Plan
Year if the prior year testing method is used to calculate the
"Actual Contribution Percentage" for the Non-Highly Compensated
Participant group), the average of the ratios (calculated
separately for each Participant in each group rounded to the
nearest one-hundredth of one percent) of:
(1) the sum of Employer matching contributions made pursuant to
Section 4.1(b), voluntary Employee contributions made pursuant
to Section 4.12 and Excess Contributions recharacterized as
voluntary Employee contributions pursuant to Section 4.6(a) on
behalf of each such Participant for such Plan Year; to
(2) the Participant's "414(s) Compensation" for such Plan Year.
Notwithstanding the above, if the prior year testing method is
used to calculate the "Actual Contribution Percentage" for the
Non-Highly Compensated Participant group for the first Plan Year
of this amendment and restatement, for purposes of
Section 4.7(a), the "Actual Contribution Percentage" for the
Non-Highly Compensated Participant group for the preceding Plan
Year shall be determined pursuant to the provisions of the Plan
then in effect.
(c) For purposes of determining the "Actual Contribution
Percentage", only Employer matching contributions contributed to
the Plan prior to the end of the succeeding Plan Year shall be
considered. In addition, the Administrator may elect to take
into account, with respect to Employees eligible to have
Employer matching contributions pursuant to Section 4.1(b) or
voluntary Employee contributions pursuant to Section 4.12 ,
Employer matching contributions pursuant to Section 4.1(b) or
voluntary Employee contributions pursuant to Section 4.12
allocated to their accounts, elective deferrals (as defined in
Regulation 1.402(g)-1(b)) and qualified non-elective
contributions (as defined in Code Section 401(m)(4)(C))
contributed to any plan maintained by the Employer. Such
elective deferrals and qualified non-elective contributions
shall be treated as Employer matching contributions subject to
Regulation 1.401(m)-1(b)(5) which is incorporated herein by
reference. However, the Plan Year must be the same as the plan
year of the plan to which the elective deferrals and the
qualified non-elective contributions are made.
(d) For purposes of this Section and Code
Sections 401(a)(4), 410(b) and 401(m), if two or more plans of
the Employer to which matching contributions, Employee
contributions, or both, are made are treated as one plan for
purposes of Code Sections 401(a)(4) or 410(b) (other than the
average benefits test under Code Section 410(b)(2)(A)(ii)), such
plans shall be treated as one plan. In addition, two or more
plans of the Employer to which matching contributions, Employee
contributions, or both, are made may be considered as a single
plan for purposes of determining whether or not such plans
satisfy Code Sections 401(a)(4), 410(b) and 401(m). In such a
case, the aggregated plans must satisfy this Section and Code
Sections 401(a)(4), 410(b) and 401(m) as though such aggregated
plans were a single plan. Plans may be aggregated under this
paragraph (e) only if they have the same plan year.
Notwithstanding the above, for Plan Years beginning after
December 31, 1996, if two or more plans which include cash or
deferred arrangements are permissively aggregated under
Regulation 1.410(b)-7(d), all plans permissively aggregated must
use either the current year test method or the prior year
testing method for the testing year.
Notwithstanding the above, an employee stock ownership plan
described in Code Section 4975(e)(7) or 409 may not be
aggregated with this Plan for purposes of determining whether
the employee stock ownership plan or this Plan satisfies this
Section and Code Sections 401(a)(4), 410(b) and 401(m).
(e) If a Highly Compensated Participant is a Participant
under two or more plans (other than an employee stock ownership
plan as defined in Code Section 4975(e)(7) or 409) which are
maintained by the Employer or an Affiliated Employer to which
matching contributions, Employee contributions, or both, are
made, all such contributions on behalf of such Highly
Compensated Participant shall be aggregated for purposes of
determining such Highly Compensated Participant's actual
contribution ratio. However, if the plans have different plan
years, this paragraph shall be applied by treating all plans
ending with or within the same calendar year as a single plan.
(f) For purposes of Sections 4.7(a) and 4.8, a Highly
Compensated Participant and Non-Highly Compensated Participant
shall include any Employee eligible to have Employer matching
contributions (whether or not a deferral election was made or
suspended) or voluntary employee contributions (whether or not
voluntary employee contributions are made) allocated to his
account for the Plan Year.
Notwithstanding the above, if the prior year testing method
is used to calculate the "Actual Contribution Percentage" for
the Non-Highly Compensated Participant group for the first Plan
Year of this amendment and restatement, for the purposes of
Section 4.7(a), a Non-Highly Compensated Participant shall
include any such Employee eligible to have Employer matching
contributions (whether or not a deferral election was made or
suspended) or voluntary employee contributions (whether or not
voluntary employee contributions are made) allocated to his
account for the preceding Plan Year pursuant to the provisions
of the Plan then in effect.
(g) If the Plan uses the prior year testing method, the
"Actual Contribution Percentage" for the Non-Highly Compensated
Participant group is determined without regard to changes in the
group of Non-Highly Compensated Participants who are eligible
under the Plan in the testing year. However, if the Plan results
from, or is otherwise affected by, a "Plan Coverage Change" that
becomes effective during the testing year, then the "Actual
Contribution Percentage" for the Non-Highly Compensated
Participant group for the prior year is the "Weighted Average Of
The Actual Contribution Percentages For The Prior Year
Subgroups." Notwithstanding the above, if ninety (90) percent or
more of the total number of Non-Highly Compensated Participants
from all "Prior Year Subgroups" are from a single "Prior Year
Subgroup," then in determining the "Actual Contribution
Percentage" for the Non-Highly Compensated Participants for the
prior year, the Employer may elect to use the "Actual
Contribution Percentage" for Non-Highly Compensated Participants
for the prior year under which that single "Prior Year Subgroup"
was eligible, in lieu of using the weighted averages. For
purposes of this Section the following definitions shall apply:
(1) "Plan Coverage Change" means a change in the group or
groups of eligible Participants on account of (i) the
establishment or amendment of a plan, (ii) a plan merger,
consolidation, or spinoff under Code Section 414(l), (iii) a
change in the way plans within the meaning of Code
Section 414(l) are combined or separated for purposes of
Regulation 1.401(k)-1(g)(11), or (iv) a combination of any of
the foregoing.
(2) "Prior Year Subgroup" means all Non-Highly Compensated
Participants for the prior year who, in the prior year, were
eligible Participants under a specific Code Section 401(m) plan
maintained by the Employer and who would have been eligible
Participants in the prior year under the plan tested if the plan
coverage change had first been effective as of the first day of
the prior year instead of first being effective during the
testing year.
(3) "Weighted Average Of The Actual Contribution Percentages
For The Prior Year Subgroups" means the sum, for all prior year
subgroups, of the "Adjusted Actual Contribution Percentages."
(4) "Adjusted Actual Contribution Percentage" with respect to a
prior year subgroup means the Actual Contribution Percentage for
Non-Highly Compensated Participants for the prior year of the
specific plan under which the members of the prior year subgroup
were eligible Participants, multiplied by a fraction, the
numerator of which is the number of Non-Highly Compensated
Participants in the prior year subgroup and the denominator of
which is the total number of Non-Highly Compensated Participants
in all prior year subgroups.
(h) For the purpose of this Section, when calculating the
"Actual Contribution Percentage" for the Non-Highly Compensated
Participant group, the prior year testing method shall be used.
Any change from the current year testing method to the prior
year testing method shall be made pursuant to Internal Revenue
Service Notice 98-1, Section VII, the provisions of which are
incorporated herein by reference.
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) In the event (or if it is anticipated) that, for Plan
Years beginning after December 31, 1996, the "Actual
Contribution Percentage" for the Highly Compensated Participant
group exceeds (or might exceed) the "Actual Contribution
Percentage" for the Non-Highly Compensated Participant group
pursuant to Section 4.7(a), the Administrator (on or before the
fifteenth day of the third month following the end of the Plan
Year, but in no event later than the close of the following Plan
Year) shall direct the Trustee to distribute to the Highly
Compensated Participant having the largest amount of
contributions determined pursuant to Section 4.7(b)(2), his
Vested portion of such contributions (and Income allocable to
such contributions) and, if forfeitable, forfeit such non-Vested
Excess Aggregate Contributions attributable to Employer matching
contributions (and Income allocable to such forfeitures) until
the total amount of Excess Aggregate Contributions has been
distributed, or until his remaining amount equals the amount of
contributions determined pursuant to Section 4.7(b)(2) of the
Highly Compensated Participant having the second largest amount
of contributions. This process shall continue until the total
amount of Excess Aggregate Contributions has been distributed.
The distribution and/or forfeiture of Excess Aggregate
Contributions shall be made in the following order:
(1) Voluntary Employee contributions including Excess
Contributions recharacterized as voluntary Employee
contributions pursuant to Section 4.6(a)(2);
(2) Employer matching contributions.
(b) Any distribution and/or forfeiture of less than the
entire amount of Excess Aggregate Contributions (and Income)
shall be treated as a pro rata distribution and/or forfeiture of
Excess Aggregate Contributions and Income. Distribution of
Excess Aggregate Contributions shall be designated by the
Employer as a distribution of Excess Aggregate Contributions
(and Income). Forfeitures of Excess Aggregate Contributions
shall be treated in accordance with Section 4.4.
(c) Excess Aggregate Contributions attributable to amounts
other than voluntary Employee contributions, including forfeited
matching contributions, shall be treated as Employer
contributions for purposes of Code Sections 404 and 415 even if
distributed from the Plan.
Forfeited matching contributions that are reallocated to
Participants' Accounts for the Plan Year in which the forfeiture
occurs shall be treated as an "annual addition" pursuant to
Section 4.9(b) for the Participants to whose Accounts they are
reallocated and for the Participants from whose Accounts they
are forfeited.
(d) The determination of the amount of Excess Aggregate
Contributions with respect to any Plan Year shall be made after
first determining the Excess Contributions, if any, to be
treated as voluntary Employee contributions due to
recharacterization for the plan year of any other qualified cash
or deferred arrangement (as defined in Code Section 401(k))
maintained by the Employer that ends with or within the Plan
Year or which are treated as voluntary Employee contributions
due to recharacterization pursuant to Section 4.6(a).
(e) If during a Plan Year the projected aggregate amount
of Employer matching contributions, voluntary Employee
contributions and Excess Contributions recharacterized as
voluntary Employee contributions to be allocated to all Highly
Compensated Participants under this Plan would, by virtue of the
tests set forth in Section 4.7(a), cause the Plan to fail such
tests, then the Administrator may automatically reduce
proportionately or in the order provided in Section 4.8(a) each
affected Highly Compensated Participant's projected share of
such contributions by an amount necessary to satisfy one of the
tests set forth in Section 4.7(a).
(f) Notwithstanding the above, within twelve (12) months
after the end of the Plan Year, the Employer may make a special
Qualified Non-Elective Contribution on behalf of Non-Highly
Compensated Participants in an amount sufficient to satisfy (or
to prevent an anticipated failure of) one of the tests set forth
in Section 4.7(a). Such contribution shall be allocated to the
Participant's Account of each Non-Highly Compensated Participant
in the same proportion that each Non-Highly Compensated
Participant's Compensation for the Plan Year bears to the total
Compensation of all Non-Highly Compensated Participants for the
Plan Year. A separate accounting of any special Qualified
Non-Elective Contribution shall be maintained in the
Participant's Account.
However, if the prior year testing method is used, the
special Qualified Non-Elective Contribution shall be allocated
in the prior Plan Year to the Participant's Account on behalf of
each Non-Highly Compensated Participant who was employed by the
Employer on the last day of the prior Plan Year in the same
proportion that each such Non-Highly Compensated Participant's
Compensation for the prior Plan Year bears to the total
Compensation of all such Non-Highly Compensated Participants for
the prior Plan Year. Such contribution shall be made by the
Employer prior to the end of the current Plan Year. A separate
accounting of any special Qualified Non-Elective Contributions
shall be maintained in the Participant's Account.
4.9 MAXIMUM ANNUAL ADDITIONS
(a) Notwithstanding the foregoing, the maximum "annual
additions" credited to a Participant's accounts for any
"limitation year" shall equal the lesser of: (1) $30,000
adjusted annually as provided in Code Section 415(d) pursuant to
the Regulations, or (2) twenty-five percent (25%) of the
Participant's "415 Compensation" for such "limitation year." For
any short "limitation year," the dollar limitation in (1) above
shall be reduced by a fraction, the numerator of which is the
number of full months in the short "limitation year" and the
denominator of which is twelve (12).
(b) For purposes of applying the limitations of Code
Section 415, "annual additions" means the sum credited to a
Participant's accounts for any "limitation year" of (1) Employer
contributions, (2) Employee contributions, (3) forfeitures,
(4) amounts allocated, after March 31, 1984, to an individual
medical account, as defined in Code Section 415(l)(2) which is
part of a pension or annuity plan maintained by the Employer and
(5) amounts derived from contributions paid or accrued after
December 31, 1985, in taxable years ending after such date,
which are attributable to post-retirement medical benefits
allocated to the separate account of a key employee (as defined
in Code Section 419A(d)(3)) under a welfare benefit plan (as
defined in Code Section 419(e)) maintained by the Employer.
Except, however, the "415 Compensation" percentage limitation
referred to in paragraph (a)(2) above shall not apply to:
(1) any contribution for medical benefits (within the meaning of
Code Section 419A(f)(2)) after separation from service which is
otherwise treated as an "annual addition," or (2) any amount
otherwise treated as an "annual addition" under Code
Section 415(l)(1).
(c) For purposes of applying the limitations of Code
Section 415, the transfer of funds from one qualified plan to
another is not an "annual addition." In addition, the following
are not Employee contributions for the purposes of Section
4.9(b)(2): (1) rollover contributions (as defined in Code
Sections 402(e)(6), 403(a)(4), 403(b)(8) and 408(d)(3));
(2) repayments of loans made to a Participant from the Plan;
(3) repayments of distributions received by an Employee pursuant
to Code Section 411(a)(7)(B) (cash-outs); (4) repayments of
distributions received by an Employee pursuant to Code
Section 411(a)(3)(D) (mandatory contributions); and (5) Employee
contributions to a simplified employee pension excludable from
gross income under Code Section 408(k)(6).
(d) For purposes of applying the limitations of Code
Section 415, the "limitation year" shall be the Plan Year.
(e) For the purpose of this Section, all qualified defined
contribution plans (whether terminated or not) ever maintained
by the Employer shall be treated as one defined contribution
plan.
(f) For the purpose of this Section, if the Employer is a
member of a controlled group of corporations, trades or
businesses under common control (as defined by Code
Section 1563(a) or Code Section 414(b) and (c) as modified by
Code Section 415(h)), is a member of an affiliated service group
(as defined by Code Section 414(m)), or is a member of a group
of entities required to be aggregated pursuant to Regulations
under Code Section 414(o), all Employees of such Employers shall
be considered to be employed by a single Employer.
(g) For the purpose of this Section, if this Plan is a
Code Section 413(c) plan, each Employer who maintains this Plan
will be considered to be a separate Employer.
(h)(1) If a Participant participates in more than one
defined contribution plan maintained by the Employer which have
different Anniversary Dates, the maximum "annual additions"
under this Plan shall equal the maximum "annual additions" for
the "limitation year" minus any "annual additions" previously
credited to such Participant's accounts during the "limitation
year."
(2) If a Participant participates in both a defined
contribution plan subject to Code Section 412 and a defined
contribution plan not subject to Code Section 412 maintained by
the Employer which have the same Anniversary Date, "annual
additions" will be credited to the Participant's accounts under
the defined contribution plan subject to Code Section 412 prior
to crediting "annual additions" to the Participant's accounts
under the defined contribution plan not subject to Code
Section 412.
(3) If a Participant participates in more than one defined
contribution plan not subject to Code Section 412 maintained by
the Employer which have the same Anniversary Date, the maximum
"annual additions" under this Plan shall equal the product of
(A) the maximum "annual additions" for the "limitation year"
minus any "annual additions" previously credited under
subparagraphs (1) or (2) above, multiplied by (B) a fraction
(i) the numerator of which is the "annual additions" which would
be credited to such Participant's accounts under this Plan
without regard to the limitations of Code Section 415 and
(ii) the denominator of which is such "annual additions" for all
plans described in this subparagraph.
(i) Notwithstanding anything contained in this Section to
the contrary, the limitations, adjustments and other
requirements prescribed in this Section shall at all times
comply with the provisions of Code Section 415 and the
Regulations thereunder, the terms of which are specifically
incorporated herein by reference.
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
(a) If, as a result of a reasonable error in estimating a
Participant's Compensation, a reasonable error in determining
the amount of elective deferrals (within the meaning of Code
Section 402(g)(3)) that may be made with respect to any
Participant under the limits of Section 4.9 or other facts and
circumstances to which Regulation 1.415-6(b)(6) shall be
applicable, the "annual additions" under this Plan would cause
the maximum "annual additions" to be exceeded for any
Participant, the Administrator shall (1) distribute any elective
deferrals (within the meaning of Code Section 402(g)(3)) or
return any Employee contributions (whether voluntary or
mandatory), and for the distribution of gains attributable to
those elective deferrals and Employee contributions, to the
extent that the distribution or return would reduce the "excess
amount" in the Participant's accounts (2) hold any "excess
amount" remaining after the return of any elective deferrals or
voluntary Employee contributions in a "Section 415 suspense
account" (3) use the "Section 415 suspense account" in the next
"limitation year" (and succeeding "limitation years" if
necessary) to reduce Employer contributions for that Participant
if that Participant is covered by the Plan as of the end of the
"limitation year," or if the Participant is not so covered,
allocate and reallocate the "Section 415 suspense account" in
the next "limitation year" (and succeeding "limitation years" if
necessary) to all Participants in the Plan before any Employer
or Employee contributions which would constitute "annual
additions" are made to the Plan for such "limitation year"
(4) reduce Employer contributions to the Plan for such
"limitation year" by the amount of the "Section 415 suspense
account" allocated and reallocated during such "limitation
year."
(b) For purposes of this Article, "excess amount" for any
Participant for a "limitation year" shall mean the excess, if
any, of (1) the "annual additions" which would be credited to
his account under the terms of the Plan without regard to the
limitations of Code Section 415 over (2) the maximum "annual
additions" determined pursuant to Section 4.9.
(c) For purposes of this Section, "Section 415 suspense
account" shall mean an unallocated account equal to the sum of
"excess amounts" for all Participants in the Plan during the
"limitation year." The "Section 415 suspense account" shall not
share in any earnings or losses of the Trust Fund.
4.11 TRANSFERS FROM QUALIFIED PLANS
(a) With the consent of the Administrator, amounts may be
transferred from other qualified plans by Eligible Employees,
provided that the trust from which such funds are transferred
permits the transfer to be made and the transfer will not
jeopardize the tax exempt status of the Plan or Trust or create
adverse tax consequences for the Employer. The amounts
transferred shall be set up in a separate account herein
referred to as a "Participant's Rollover Account." Such account
shall be fully Vested at all times and shall not be subject to
Forfeiture for any reason.
(b) Amounts in a Participant's Rollover Account shall be
held by the Trustee pursuant to the provisions of this Plan and
may not be withdrawn by, or distributed to the Participant, in
whole or in part, except as provided in paragraphs (c) and (d)
of this Section.
(c) Except as permitted by Regulations (including
Regulation 1.411(d)-4), amounts attributable to elective
contributions (as defined in Regulation 1.401(k)-1(g)(3)),
including amounts treated as elective contributions, which are
transferred from another qualified plan in a plan-to-plan
transfer shall be subject to the distribution limitations
provided for in Regulation 1.401(k)-1(d).
(d) The Administrator, at the election of the Participant,
shall direct the Trustee to distribute all or a portion of the
amount credited to the Participant's Rollover Account. Any
distributions of amounts held in a Participant's Rollover
Account shall be made in a manner which is consistent with and
satisfies the provisions of Section 6.5, including, but not
limited to, all notice and consent requirements of Code Section
411(a)(11) and the Regulations thereunder. Furthermore, such
amounts shall be considered as part of a Participant's benefit
in determining whether an involuntary cash-out of benefits
without Participant consent may be made.
(e) The Administrator may direct that employee transfers
made after a Valuation Date be segregated into a separate
account for each Participant in a federally insured savings
account, certificate of deposit in a bank or savings and loan
association, money market certificate, or other short term debt
security acceptable to the Trustee until such time as the
allocations pursuant to this Plan have been made, at which time
they may remain segregated or be invested as part of the general
Trust Fund, to be determined by the Administrator.
(f) For purposes of this Section, the term "qualified
plan" shall mean any tax qualified plan under Code
Section 401(a). The term "amounts transferred from other
qualified plans" shall mean: (i) amounts transferred to this
Plan directly from another qualified plan; (ii) distributions
from another qualified plan which are eligible rollover
distributions and which are either transferred by the Employee
to this Plan within sixty (60) days following his receipt
thereof or are transferred pursuant to a direct rollover;
(iii) amounts transferred to this Plan from a conduit individual
retirement account provided that the conduit individual
retirement account has no assets other than assets which
(A) were previously distributed to the Employee by another
qualified plan as a lump-sum distribution (B) were eligible for
tax-free rollover to a qualified plan and (C) were deposited in
such conduit individual retirement account within sixty (60)
days of receipt thereof and other than earnings on said assets;
and (iv) amounts distributed to the Employee from a conduit
individual retirement account meeting the requirements of clause
(iii) above, and transferred by the Employee to this Plan within
sixty (60) days of his receipt thereof from such conduit
individual retirement account.
(g) Prior to accepting any transfers to which this Section
applies, the Administrator may require the Employee to establish
that the amounts to be transferred to this Plan meet the
requirements of this Section and may also require the Employee
to provide an opinion of counsel satisfactory to the Employer
that the amounts to be transferred meet the requirements of this
Section.
(h) This Plan shall not accept any direct or indirect
transfers (as that term is defined and interpreted under Code
Section 401(a)(11) and the Regulations thereunder) from a
defined benefit plan, money purchase plan (including a target
benefit plan), stock bonus or profit sharing plan which would
otherwise have provided for a life annuity form of payment to
the Participant.
(i) Notwithstanding anything herein to the contrary, a
transfer directly to this Plan from another qualified plan (or a
transaction having the effect of such a transfer) shall only be
permitted if it will not result in the elimination or reduction
of any "Section 411(d)(6) protected benefit" as described in
Section 7.1.
4.12 AFTER-TAX CONTRIBUTIONS
(a) In order to allow Participant the opportunity to
increase their retirement income, each Participant, other than a
Participant who is a Highly Compensated Employee, may, at the
discretion of the Administrator, elect to voluntarily contribute
a portion of his Compensation at a rate up to the difference
between 15% and the rate of his Deferred Compensation for the
same period, in multiples of 1%. Such After-Tax Contributions
shall be paid to the Trustee within a reasonable period of time
but in no event later than ninety (90) days after the Employer
receives the contribution. The Employer and the Administrator
shall implement a Participant's election to contribute After-Tax
Contributions in accordance with the procedures set forth in
Section 4.2(j)(1) and (2) the balance in each Participant's
Voluntary Contribution Account shall be fully Vested at all
times and shall not be subject to Forfeiture for any reason.
(b) A Participant may elect to withdraw his voluntary
contributions from his Voluntary Contribution Account and the
actual earnings thereon in a manner which is consistent with and
satisfies the provisions of Section 6.5, including, but not
limited to, all notice and consent requirements of Code Section
411(a)(11) and the Regulations thereunder. If the Administrator
maintains sub-accounts with respect to After-Tax Contributions
(and earnings thereon) which were made on or before a specified
date, a Participant shall be permitted to designate which
sub-account shall be the source for his withdrawal.
In the event such a withdrawal is made, or in the event a
Participant has received a hardship distribution from his
Participant's Elective Account pursuant to Section 6.11(b) or
pursuant to Regulation 1.401(k)-1(d)(2)(iv)(B) from any other
plan maintained by the Employer, then such Participant shall be
barred from making any After-Tax Contributions to the Trust Fund
for a period of twelve (12) months after receipt of the
withdrawal or distribution.
(c) At Normal Retirement Date, or such other date when the
Participant or his Beneficiary shall be entitled to receive
benefits, the fair market value of the Voluntary Contribution
Account shall be used to provide additional benefits to the
Participant or his Beneficiary.
(d) The Administrator may direct that After-Tax
Contributions made after a Valuation Date be segregated into a
separate account for each Participant in a federally insured
savings account, certificate of deposit in a bank or savings and
loan association, money market certificate, or other short term
debt security acceptable to the Trustee until such time as the
allocations pursuant to this Plan have been made, at which time
they may remain segregated or be invested as part of the general
Trust Fund, to be determined by the Administrator.
4.13 DIRECTED INVESTMENT ACCOUNT
(a) Participants may, subject to a procedure established
by the Administrator (the Participant Direction Procedures) and
applied in a uniform nondiscriminatory manner, direct the
Trustee to invest all of their accounts in specific assets,
specific funds or other investments permitted under the Plan and
the Participant Direction Procedures. That portion of the
interest of any Participant so directing will thereupon be
considered a Participant's Directed Account.
If the Employer identifies common stock of the Employer as
a Designated Investment Alternative under the Plan at any time,
Participants shall be permitted to direct the investment of up
to twenty-five percent (25%) of their future contributions
(Employee) deposited into the Plan to their account(s) in such
Directed Investment Alternative.
Voting Rights for Common Stock. Each Participant shall be
entitled to direct the Trustee as to the manner in which the
shares of Common Stock in the R&B Falcon Stock Fund which are
allocable to such Participant's Account are to be voted, and as
to the manner in which rights other than voting rights are to be
exercised. To the extent possible the Trustee shall vote
combined fractional shares, or fractional rights to shares, to
reflect the direction of the Members to whose Accounts
fractional shares, or fractional rights to shares are allocable.
The Trustee shall notify Participants of each occasion for the
exercise of voting or other rights within a reasonable time, but
not less than thirty (30) days, before such rights are to be
exercised. This notification shall include all information,
which the Company distributes to its shareholders regarding the
exercise of such rights. To the extent that a Participant does
not direct the Trustee as to the manner in which such voting or
other rights are to be exercised, such rights shall be exercised
in such a manner as the Trustee, in its sole discretion, may
determine.
The Committee shall establish procedures to safeguard the
confidentiality of information relating to the purchase, sale,
holding and exercise of voting and similar rights with respect
to Common Stock. Where the Committee determines, in its
discretion, that the potential for undue Employer influence
exists over its Participants' exercise of such rights, it shall
appoint an "independent fiduciary", as described in the
regulations regarding ERISA Section 404(c), to monitor
compliance with such procedures.
(b) As of each Valuation Date, all Participant Directed
Accounts shall be charged or credited with the net earnings,
gains, losses and expenses as well as any appreciation or
depreciation in the market value using publicly listed fair
market values when available or appropriate.
(1) To the extent that the assets in a Participant's
Directed Account are accounted for as pooled assets or
investments, the allocation of earnings, gains and losses of
each Participant's Directed Account shall be based upon the
total amount of funds so invested, in a manner proportionate to
the Participant's share of such pooled investment.
(2) To the extent that the assets in the Participant's
Directed Account are accounted for as segregated assets, the
allocation of earnings, gains and losses from such assets shall
be made on a separate and distinct basis.
(c) The Participant Direction Procedures shall provide an
explanation of the circumstances under which Participants and
their Beneficiaries may give investment instructions, including,
but need not be limited to, the following:
(1) the conveyance of instructions by the Participants and
their Beneficiaries to invest Participant Directed Accounts in
Directed Investments;
(2) the name, address and phone number of the Fiduciary
(and, if applicable, the person or persons designated by the
Fiduciary to act on its behalf) responsible for providing
information to the Participant or a Beneficiary upon request
relating to the investments in Directed Investments;
(3) applicable restrictions on transfers to and from any
Designated Investment Alternative;
(4) any restrictions on the exercise of voting, tender and
similar rights related to a Directed Investment by the
Participants or their Beneficiaries;
(5) a description of any transaction fees and expenses
which affect the balances in Participant Directed Accounts in
connection with the purchase or sale of Directed Investments;
and
(6) general procedures for the dissemination of investment
and other information relating to the Designated Investment
Alternatives as deemed necessary or appropriate, including but
not limited to a description of the following:
(i) the investment vehicles available under the Plan,
including specific information regarding any Designated
Investment Alternative;
(ii) any designated Investment Managers; and
(iii) a description of the additional information which
may be obtained upon request from the Fiduciary designated to
provide such information.
(d) Any information regarding investments available under
the Plan, to the extent not required to be described in the
Participant Direction Procedures, may be provided to the
Participant in one or more written documents which are separate
from the Participant Direction Procedures and are not thereby
incorporated by reference into this Plan.
(e) The Administrator may, at its discretion, include in
or exclude by amendment or other action from the Participant
Direction Procedures such instructions, guidelines or policies
as it deems necessary or appropriate to ensure proper
administration of the Plan, and may interpret the same
accordingly.
(f) ERISA 404(c) Plan. The provisions in this Article 4
and other Plan provisions pertaining to Participant-directed
investments are intended to qualify the Plan for exemption of
the Plan, the Employers, and the Committee from liability for
investment losses where a Participant exercises control over the
assets in his Account, in accordance with ERISA Section 404(c)
and regulations thereunder. The Committee shall be the Plan
fiduciary designated to provide information to Participants and
to receive investment instructions directly or through an
authorized agent. The Committee shall comply with such
investment instructions except in cases where a fidcuiary is
permitted to decline to implement instructions under the ERISA
regulations.
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND
The Administrator shall direct the Trustee, as of each Valuation
Date, to determine the net worth of the assets comprising the Trust
Fund as it exists on the Valuation Date. In determining such net
worth, the Trustee shall value the assets comprising the Trust Fund
at their fair market value as of the Valuation Date and shall deduct
all expenses for which the Trustee has not yet obtained reimbursement
from the Employer or the Trust Fund. The Trustee may update the value
of any shares held in the Participant Directed Account by reference
to the number of shares held by that Participant, priced at the
market value as of the Valuation Date.
5.2 METHOD OF VALUATION
In determining the fair market value of securities held in the
Trust Fund which are listed on a registered stock exchange, the
Administrator shall direct the Trustee to value the same at the
prices they were last traded on such exchange preceding the close of
business on the Valuation Date. If such securities were not traded on
the Valuation Date, or if the exchange on which they are traded was
not open for business on the Valuation Date, then the securities
shall be valued at the prices at which they were last traded prior to
the Valuation Date. Any unlisted security held in the Trust Fund
shall be valued at its bid price next preceding the close of business
on the Valuation Date, which bid price shall be obtained from a
registered broker or an investment banker. In determining the fair
market value of assets other than securities for which trading or bid
prices can be obtained, the Trustee may appraise such assets itself,
or in its discretion, employ one or more appraisers for that purpose
and rely on the values established by such appraiser or appraisers.
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT
Every Participant may terminate his employment with the Employer
and retire for the purposes hereof on his Normal Retirement Date or
Early Retirement Date. However, a Participant may postpone the
termination of his employment with the Employer to a later date, in
which event the participation of such Participant in the Plan,
including the right to receive allocations pursuant to Section 4.4,
shall continue until his Late Retirement Date. Upon a Participant's
Retirement Date or attainment of his Normal Retirement Date without
termination of employment with the Employer, or as soon thereafter as
is practicable, the Trustee shall distribute, at the election of the
Participant, all amounts credited to such Participant's Combined
Account in accordance with Section 6.5.
6.2 DETERMINATION OF BENEFITS UPON DEATH
(a) Upon the death of a Participant before his Retirement
Date or other termination of his employment, all amounts
credited to such Participant's Combined Account shall become
fully Vested. The Administrator shall direct the Trustee, in
accordance with the provisions of Sections 6.6 and 6.7, to
distribute the value of the deceased Participant's accounts to
the Participant's Beneficiary.
(b) Upon the death of a Former Participant, the
Administrator shall direct the Trustee, in accordance with the
provisions of Sections 6.6 and 6.7, to distribute any remaining
Vested amounts credited to the accounts of a deceased Former
Participant to such Former Participant's Beneficiary.
(c) Any security interest held by the Plan by reason of an
outstanding loan to the Participant or Former Participant shall
be taken into account in determining the amount of the death
benefit.
(d) The Administrator may require such proper proof of
death and such evidence of the right of any person to receive
payment of the value of the account of a deceased Participant or
Former Participant as the Administrator may deem desirable. The
Administrator's determination of death and of the right of any
person to receive payment shall be conclusive.
(e) The Beneficiary of the death benefit payable pursuant
to this Section shall be the Participant's spouse. Except,
however, the Participant may designate a Beneficiary other than
his spouse if:
(1) the spouse has waived the right to be the
Participant's Beneficiary, or
(2) the Participant is legally separated or has been
abandoned (within the meaning of local law) and the Participant
has a court order to such effect (and there is no "qualified
domestic relations order" as defined in Code Section 414(p)
which provides otherwise), or
(3) the Participant has no spouse, or
(4) the spouse cannot be located.
In such event, the designation of a Beneficiary shall be
made on a form satisfactory to the Administrator. A Participant
may at any time revoke his designation of a Beneficiary or
change his Beneficiary by filing written notice of such
revocation or change with the Administrator. However, the
Participant's spouse must again consent in writing to any change
in Beneficiary unless the original consent acknowledged that the
spouse had the right to limit consent only to a specific
Beneficiary and that the spouse voluntarily elected to
relinquish such right. In the event no valid designation of
Beneficiary exists at the time of the Participant's death, the
death benefit shall be payable to his estate.
(f) Any consent by the Participant's spouse to waive any
rights to the death benefit must be in writing, must acknowledge
the effect of such waiver, and be witnessed by a Plan
representative or a notary public. Further, the spouse's consent
must be irrevocable and must acknowledge the specific nonspouse
Beneficiary.
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY
In the event of a Participant's Total and Permanent Disability
prior to his Retirement Date or other termination of his employment,
all amounts credited to such Participant's Combined Account shall
become fully Vested. In the event of a Participant's Total and
Permanent Disability, the Trustee, in accordance with the provisions
of Sections 6.5 and 6.7, shall distribute to such Participant all
amounts credited to such Participant's Combined Account as though he
had retired.
6.4 DETERMINATION OF BENEFITS UPON TERMINATION
(a) If a Participant's employment with the Employer is
terminated for any reason other than death, Total and Permanent
Disability or retirement, such Participant shall be entitled to
such benefits as are provided hereinafter pursuant to this
Section 6.4.
Distribution of the funds due to a Terminated Participant
shall be made on the occurrence of an event which would result
in the distribution had the Terminated Participant remained in
the employ of the Employer (upon the Participant's death, Total
and Permanent Disability, Early or Normal Retirement). However,
at the election of the Participant, the Administrator shall
direct the Trustee to cause the entire Vested portion of the
Terminated Participant's Combined Account to be payable to such
Terminated Participant. Any distribution under this paragraph
shall be made in a manner which is consistent with and satisfies
the provisions of Section 6.5, including, but not limited to,
all notice and consent requirements of Code Section 411(a)(11)
and the Regulations thereunder.
If the value of a Terminated Participant's Vested benefit
derived from Employer and Employee contributions does not exceed
$5,000 and has never exceeded $5,000 at the time of any prior
distribution, the Administrator shall direct the Trustee to
cause the entire Vested benefit to be paid to such Participant
in a single lump sum.
(b) A Participant shall become fully Vested in his
Participant's Account immediately upon entry into the Plan.
(c) The computation of a Participant's nonforfeitable
percentage of his interest in the Plan shall not be reduced as
the result of any direct or indirect amendment to this Plan. For
this purpose, the Plan shall be treated as having been amended
if the Plan provides for an automatic change in vesting due to a
change in top heavy status. In the event that the Plan is
amended to change or modify any vesting schedule, a Participant
with at least three (3) whole years of his Period of Service as
of the expiration date of the election period may elect to have
his nonforfeitable percentage computed under the Plan without
regard to such amendment. If a Participant fails to make such
election, then such Participant shall be subject to the new
vesting schedule. The Participant's election period shall
commence on the adoption date of the amendment and shall end 60
days after the latest of:
(1) the adoption date of the amendment,
(2) the effective date of the amendment, or
(3) the date the Participant receives written notice of
the amendment from the Employer or Administrator.
(d)(1) If any Former Participant shall be reemployed by
the Employer before a 1-Year Break in Service occurs, he shall
continue to participate in the Plan in the same manner as if
such termination had not occurred.
(2) If a Former Participant is reemployed by the Employer,
he shall participate in the Plan immediately on his date of
reemployment.
(3) If a Former Participant (a 1-Year Break in Service
previously occurred, but employment had not terminated) is
credited with an Hour of Service after the first eligibility
computation period in which he incurs a 1-Year Break in Service,
he shall participate in the Plan immediately.
6.5 DISTRIBUTION OF BENEFITS
(a) Subject to subparagraphs (b) and (c) of this Section
6.5, the Administrator, pursuant to the election of the
Participant, shall direct the Trustee to distribute to a
Participant or his Beneficiary any amount to which he is
entitled under the Plan in one lump-sum payment in cash or in
property.
(b) Any distribution to a Participant who has a benefit
which exceeds, or has ever exceeded, $5,000 at the time of any
prior distribution shall require such Participant's consent if
such distribution occurs prior to the later of his Normal
Retirement Age or age 62. With regard to this required consent:
(1) The Participant must be informed of his right to defer
receipt of the distribution. If a Participant fails to consent,
it shall be deemed an election to defer the distribution of any
benefit. However, any election to defer the receipt of benefits
shall not apply with respect to distributions which are required
under Section 6.5(c).
(2) Notice of the rights specified under this paragraph
shall be provided no less than 30 days and no more than 90 days
before the date the distribution commences.
(3) Written consent of the Participant to the distribution
must not be made before the Participant receives the notice and
must not be made more than 90 days before the date the
distribution commences.
(4) No consent shall be valid if a significant detriment
is imposed under the Plan on any Participant who does not
consent to the distribution.
Any such distribution may commence less than 30 days after
the notice required under Regulation 1.411(a)-11T(c) is given,
provided that: (1) the Administrator clearly informs the
Participant that the Participant has a right to a period of at
least 30 days after receiving the notice to consider the
decision of whether or not to elect a distribution (and, if
applicable, a particular distribution option), and (2) the
Participant, after receiving the notice, affirmatively elects a
distribution.
(c) Notwithstanding any provision in the Plan to the
contrary, the distribution of a Participant's benefits shall be
made in accordance with the following requirements and shall
otherwise comply with Code Section 401(a)(9) and the Regulations
thereunder (including Regulation 1.401(a)(9)-2), the provisions
of which are incorporated herein by reference:
(1) A Participant's benefits shall be distributed or must
begin to be distributed to him not later than April 1st of the
calendar year following the later of (i) the calendar year in
which the Participant attains age 70 1/2 or (ii) the calendar
year in which the Participant retires, provided, however, that
this clause (ii) shall not apply in the case of a Participant
who is a "five (5) percent owner" at any time during the five
(5) Plan Year period ending in the calendar year in which he
attains age 70 1/2 or, in the case of a Participant who becomes
a "five (5) percent owner" during any subsequent Plan Year,
clause (ii) shall no longer apply and the required beginning
date shall be the April 1st of the calendar year following the
calendar year in which such subsequent Plan Year ends. Such
distributions shall be equal to or greater than any required
distribution. Notwithstanding the foregoing, clause (ii) above
shall not apply to any Participant unless the Participant had
attained age 70 1/2 before January 1, 1988 and was not a "five
(5) percent owner" at any time during the Plan Year ending with
or within the calendar year in which the Participant attained
age 66 1/2 or any subsequent Plan Year.
Notwithstanding the foregoing, any Participant who is not
a "five (5) percent owner" shall continue receiving, or, if
applicable, be entitled to receive, benefit distributions or, he
may elect to defer benefit distributions until the April 1st of
the calendar year following the end of the calendar year in
which the Participant retires.
(2) Distributions to a Participant and his Beneficiaries
shall only be made in accordance with the incidental death
benefit requirements of Code Section 401(a)(9)(G) and the
Regulations thereunder.
(d) For purposes of this Section, the life expectancy of a
Participant and a Participant's spouse shall not be redetermined
in accordance with Code Section 401(a)(9)(D). Life expectancy
and joint and last survivor expectancy shall be computed using
the return multiples in Tables V and VI of Regulation 1.72-9.
6.6 DISTRIBUTION OF BENEFITS UPON DEATH
The death benefit payable pursuant to Section 6.2 shall be
paid to the Participant's Beneficiary in one lump-sum payment in cash
or in property subject to the rules of Section 6.6(b).
6.7 TIME OF SEGREGATION OR DISTRIBUTION
Except as limited by Sections 6.5 and 6.6, whenever the Trustee
is to make a distribution the distribution may be made as soon as is
practicable. However, unless a Former Participant elects in writing
to defer the receipt of benefits (such election may not result in a
death benefit that is more than incidental), the payment of benefits
shall occur not later than the 60th day after the close of the Plan
Year in which the latest of the following events occurs: (a) the date
on which the Participant attains the earlier of age 65 or the Normal
Retirement Age specified herein; (b) the 10th anniversary of the year
in which the Participant commenced participation in the Plan; or
(c) the date the Participant terminates his service with the
Employer.
6.8 DISTRIBUTION FOR MINOR BENEFICIARY
In the event a distribution is to be made to a minor, then the
Administrator may direct that such distribution be paid to the legal
guardian, or if none, to a parent of such Beneficiary or a
responsible adult with whom the Beneficiary maintains his residence,
or to the custodian for such Beneficiary under the Uniform Gift to
Minors Act or Gift to Minors Act, if such is permitted by the laws of
the state in which said Beneficiary resides. Such a payment to the
legal guardian, custodian or parent of a minor Beneficiary shall
fully discharge the Trustee, Employer, and Plan from further
liability on account thereof.
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
In the event that all, or any portion, of the distribution
payable to a Participant or his Beneficiary hereunder shall, at the
later of the Participant's attainment of age 62 or his Normal
Retirement Age, remain unpaid solely by reason of the inability of
the Administrator, after sending a registered letter, return receipt
requested, to the last known address, and after further diligent
effort, to ascertain the whereabouts of such Participant or his
Beneficiary, the amount so distributable shall be treated as a
Forfeiture pursuant to the Plan. In the event a Participant or
Beneficiary is located subsequent to his benefit being reallocated,
such benefit shall be restored unadjusted for earnings or losses.
6.10 PRE-RETIREMENT DISTRIBUTION
The Administrator, at the election of the Participant, shall
direct the Trustee to distribute all or a portion of the
Participant's Voluntary Contribution Account, Participant's Rollover
Account, and the vested portion of the Participant's Account
attributable to Employer matching contributions. In the event that
the Administrator makes such a distribution, the Participant shall
continue to be eligible to participate in the Plan on the same basis
as any other Employee. Any distribution made pursuant to this Section
shall be made in a manner consistent with Section 6.5, including, but
not limited to, all notice and consent requirements of Code Section
411(a)(11) and the Regulations thereunder.
Further, pre-retirement distributions from a Participant's
Elective Account shall be permitted at such time as the Participant
attains age 59 1/2.
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP
(a) The Administrator, at the election of the Participant,
shall direct the Trustee to distribute to any Participant in any
one Plan Year up to the lesser of 100% of his Participant's
Elective Account valued as of the last Valuation Date or the
amount necessary to satisfy the immediate and heavy financial
need of the Participant. Any distribution made pursuant to this
Section shall be deemed to be made as of the first day of the
Plan Year or, if later, the Valuation Date immediately preceding
the date of distribution, and the Participant's Elective Account
shall be reduced accordingly. Withdrawal under this Section
shall be authorized only if the distribution is on account of:
(1) Expenses for medical care described in Code
Section 213(d) previously incurred by the Participant, his
spouse, or any of his dependents (as defined in Code
Section 152) or necessary for these persons to obtain medical
care;
(2) The costs directly related to the purchase of a
principal residence for the Participant (excluding mortgage
payments);
(3) Payment of tuition, related educational fees, and room
and board expenses for the next twelve (12) months of
post-secondary education for the Participant, his spouse,
children, or dependents; or
(4) Payments necessary to prevent the eviction of the
Participant from his principal residence or foreclosure on the
mortgage of the Participant's principal residence.
(b) No distribution shall be made pursuant to this Section
unless the Administrator, based upon the Participant's
representation and such other facts as are known to the
Administrator, determines that all of the following conditions
are satisfied:
(1) The distribution is not in excess of the amount of the
immediate and heavy financial need of the Participant. The
amount of the immediate and heavy financial need may include any
amounts necessary to pay any federal, state, or local income
taxes or penalties reasonably anticipated to result from the
distribution;
(2) The Participant has obtained all distributions, other
than hardship distributions, and all nontaxable (at the time of
the loan) loans currently available under all plans maintained
by the Employer;
(3) The Plan, and all other qualified plans maintained by
the Employer, provide that the Participant's elective deferrals
and voluntary Employee contributions will be suspended for at
least twelve (12) months after receipt of the hardship
distribution or, the Participant, pursuant to a legally
enforceable agreement, will suspend his elective deferrals and
voluntary Employee contributions to the Plan and all other plans
maintained by the Employer for at least twelve (12) months after
receipt of the hardship distribution; and
(4) The Plan, and all other plans maintained by the
Employer, provide that the Participant may not make elective
deferrals for the Participant's taxable year immediately
following the taxable year of the hardship distribution in
excess of the applicable limit under Code Section 402(g) for
such next taxable year less the amount of such Participant's
elective deferrals for the taxable year of the hardship
distribution.
(c) Notwithstanding the above, distributions from the
Participant's Elective Account pursuant to this Section shall be
limited, as of the date of distribution, to the Participant's
Elective Account as of the end of the last Plan Year ending
before July 1, 1989, plus the total Participant's Deferred
Compensation after such date, reduced by the amount of any
previous distributions pursuant to this Section and Section
6.10.
(d) Any distribution made pursuant to this Section shall
be made in a manner which is consistent with and satisfies the
provisions of Section 6.5, including, but not limited to, all
notice and consent requirements of Code Section 411(a)(11) and
the Regulations thereunder.
6.12 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION
(a) Terms. The payment of a Participant's Account shall
be made in accordance with the terms of a Qualified Domestic
Relations Order, provided that such order --
(1) creates or recognizes the existence of an Alternate
Payee's right to, or assigns to an Alternate Payee the right to,
receive all or a portion of the Account payable to a Participant
under the Plan;
(2) clearly specifies (A) the name and the last known
mailing address (if any) of the Participant and the name and
mailing address of each Alternate Payee covered by the order;
(B) the amount or percentage of the Participant's Account to be
paid by the Plan to each such Alternate Payee or the manner in
which such amount or percentage is to be determined; (C) the
number of payments or period to which such order applies; and
(D) the name of each plan to which such order applies;
(3) does not require the Plan to provide any type or form
of benefit, or any option, not otherwise provided under the
Plan;
(4) does not require the Plan to provide increased
benefits (such as accelerated vesting); and
(5) does not require the payment of benefits to an
Alternate Payee, which same benefits are required to be paid to
another Alternate Payee under another order previously
determined to be a Qualified Domestic Relations Order.
(b) Definitions. The following terms shall have the
following meanings for purposes of this Section 7.11:
(6) "Alternate Payee" means any spouse, former spouse,
child or other dependent of a Participant who is recognized by a
domestic relations order as having a right to receive all, or a
portion of, the benefits payable under the Plan with respect to
such Participant.
(7) "Qualified Domestic Relations Order" means any
judgment, decree, or order (including approval of a property
settlement agreement ) which (A) relates to the provision of
child support, alimony payments, or marital property rights to a
spouse, former spouse, child or other dependent of a
Participant; (B) is made pursuant to a state domestic relations
law (including a community property law); and (C) which meets
the requirements of Section 7.11(a).
(c) Payment. To the full extent permitted by Code Section
414(p)(10) and by the terms of a Qualified Domestic Relations
Order, amounts assigned to an Alternate Payee may be paid as
soon as possible in a lump sum, notwithstanding the age,
financial hardship, employment status, or other factors
affecting the ability of the Participant to make a withdrawal or
otherwise receive a distribution of the balances to his credit
under the Plan.
Such distributions may include, but are not limited
to, a payment of benefits to an Alternate Payee as required by a
Qualified Domestic Relations Order --
(8) on or after the date on which the Participant first
attains (or would have attained) his "Earliest Retirement Age";
(9) as if the Participant had retired on the date on which
such payment is to begin under such order; and
(10) in a lump sum form.
For purposes of this Section, the term "Earliest
Retirement Age" means the earlier of (A) the date on which the
Participant is entitled to a distribution under the Plan, or (B)
the later of (i) the date on which the Participant attains age
50, or (ii) the earliest date on which the Participant could
begin receiving benefits under the Plan if he separated from
service.
(d) Notification of Receipt of Order. The Employer shall
promptly notify a Participant and any other Alternate Payee of
the receipt of a domestic relations order and of the Plan's
procedure for determining whether the order meets the
requirements of a Qualified Domestic Relations Order under this
Section 7.11. Within a reasonable period of time after the
receipt of such order, the Employer, in accordance with such
procedures as it shall from time to time establish, shall
determine whether such order meets the requirements of a
Qualified Domestic Relations Order under this Section 7.11 and
shall notify the Participant and each Alternate Payee of such
determination.
(e) During any period of time in which the issue of
whether a domestic relations order qualifies as a Qualified
Domestic Relations Order under this Section 6.12 is being
determined by a court of competent jurisdiction or by the
Committee, the Committee shall separately account for the
amounts (hereafter referred to as the "segregated amounts"),
which would have been payable to the Alternate Payee during such
period if the order had been determined to be a Qualified
Domestic Relations Order under this Section 6.12. If within the
eighteen (18) month period beginning with the date on which the
first payment would be required to be made under the domestic
relations order, such order is determined to be a Qualified
Domestic Relations Order under this Section 6.12, the Committee
shall pay the segregated amounts (plus any interest thereon) to
the person or persons entitled thereto. If within the eighteen
(18) month period referred to above, it is determined that such
order is not a Qualified Domestic Relations Order qualified
under this Section 6.12, or the issue as to whether such order
so qualifies is not resolved, then the Committee shall pay the
segregated amount (plus any interest thereon) to the person or
persons which would have been entitled to such amounts if there
had been no order. Any determination that an order is a
qualified Domestic Relations Order under this Section 6.12 which
is made after the end of the eighteen (18) month period
described above shall be applied prospectively only.
6.13 DIRECT ROLLOVER
(a) 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 Administrator, to have any portion
of an eligible rollover distribution that is equal to at least
$500 paid directly to an eligible retirement plan specified by
the distributee in a direct rollover.
(b) For purposes of this Section the following definitions
shall apply:
(1) 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 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); the portion of any other distribution that is
not includible in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to
employer securities); and any other distribution that is
reasonably expected to total less than $200 during a year.
(2) An eligible retirement plan is an individual
retirement account described in Code Section 408(a), an
individual retirement annuity described in Code Section 408(b),
an annuity plan described in Code Section 403(a), or a qualified
trust described in Code Section 401(a), that accepts the
distributee's eligible rollover distribution. 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.
(3) 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 Code Section 414(p), are
distributees with regard to the interest of the spouse or former
spouse.
(4) A direct rollover is a payment by the Plan to the
eligible retirement plan specified by the distributee.
ARTICLE VII
AMENDMENT, TERMINATION, MERGERS AND LOANS
7.1 AMENDMENT
(a) The Employer shall have the right at any time to amend
the Plan, subject to the limitations of this Section. However,
any amendment which affects the rights, duties or
responsibilities of the Trustee and Administrator, other than an
amendment to remove the Trustee or Administrator, may only be
made with the Trustee's and Administrator's written consent. Any
such amendment shall become effective as provided therein upon
its execution. The Trustee shall not be required to execute any
such amendment unless the Trust provisions contained herein are
a part of the Plan and the amendment affects the duties of the
Trustee hereunder.
(b) No amendment to the Plan shall be effective if it
authorizes or permits any part of the Trust Fund (other than
such part as is required to pay taxes and administration
expenses) to be used for or diverted to any purpose other than
for the exclusive benefit of the Participants or their
Beneficiaries or estates; or causes any reduction in the amount
credited to the account of any Participant; or causes or permits
any portion of the Trust Fund to revert to or become property of
the Employer.
(c) Except as permitted by Regulations, no Plan amendment
or transaction having the effect of a Plan amendment (such as a
merger, plan transfer or similar transaction) shall be effective
to the extent it eliminates or reduces any "Section 411(d)(6)
protected benefit" or adds or modifies conditions relating to
"Section 411(d)(6) protected benefits" the result of which is a
further restriction on such benefit unless such protected
benefits are preserved with respect to benefits accrued as of
the later of the adoption date or effective date of the
amendment. "Section 411(d)(6) protected benefits" are benefits
described in Code Section 411(d)(6)(A), early retirement
benefits and retirement-type subsidies, and optional forms of
benefit.
7.2 TERMINATION
(a) The Employer shall have the right at any time to
terminate the Plan by delivering to the Trustee and
Administrator written notice of such termination. Upon any full
or partial termination, all amounts credited to the affected
Participants' Combined Accounts shall be 100% Vested as provided
in Section 6.4 and shall not thereafter be subject to
forfeiture, and all unallocated amounts shall be allocated to
the accounts of all Participants in accordance with the
provisions hereof.
(b) Upon the full termination of the Plan, the Employer
shall direct the distribution of the assets of the Trust Fund to
Participants in a manner which is consistent with and satisfies
the provisions of Section 6.5. Distributions to a Participant
shall be made in cash or in property or through the purchase of
irrevocable nontransferable deferred commitments from an
insurer. Except as permitted by Regulations, the termination of
the Plan shall not result in the reduction of "Section 411(d)(6)
protected benefits" in accordance with Section 7.1(c).
7.3 MERGER OR CONSOLIDATION
This Plan may be merged or consolidated with, or its assets
and/or liabilities may be transferred to any other plan and trust
only if the benefits which would be received by a Participant of this
Plan, in the event of a termination of the plan immediately after
such transfer, merger or consolidation, are at least equal to the
benefits the Participant would have received if the Plan had
terminated immediately before the transfer, merger or consolidation,
and such transfer, merger or consolidation does not otherwise result
in the elimination or reduction of any "Section 411(d)(6) protected
benefits" in accordance with Section 7.1(c).
7.4 LOANS TO PARTICIPANTS
(a) The Trustee may, in the Trustee's discretion, make
loans to Participants and Beneficiaries under the following
circumstances: (1) loans shall be made available to all
Participants and Beneficiaries on a reasonably equivalent basis;
(2) loans shall not be made available to Highly Compensated
Employees in an amount greater than the amount made available to
other Participants and Beneficiaries; (3) loans shall bear a
reasonable rate of interest; (4) loans shall be adequately
secured; and (5) shall provide for repayment over a reasonable
period of time.
(b) Loans made pursuant to this Section (when added to the
outstanding balance of all other loans made by the Plan to the
Participant) shall be limited to the lesser of:
(1) $50,000 reduced by the excess (if any) of the highest
outstanding balance of loans from the Plan to the Participant
during the one year period ending on the day before the date on
which such loan is made, over the outstanding balance of loans
from the Plan to the Participant on the date on which such loan
was made, or
(2) one-half (1/2) of the present value of the
non-forfeitable accrued benefit of the Participant under the
Plan.
For purposes of this limit, all plans of the Employer
qualified under Code Section 401(a) shall be considered one
plan.
(c) Loans shall provide for level amortization with
payments to be made not less frequently than quarterly over a
period not to exceed five (5) years. However, loans used to
acquire any dwelling unit which, within a reasonable time, is to
be used (determined at the time the loan is made) as a principal
residence of the Participant shall provide for periodic
repayment over a reasonable period of time that may exceed five
(5) years but may not exceed ten (10) years. For this purpose, a
principal residence has the same meaning as a principal
residence under Code Section 1034. Loan repayments will be
suspended under this Plan as permitted under Code Section
414(u)(4).
(d) Any loans granted or renewed shall be made pursuant to
a Participant loan program. Such loan program shall be
established in writing and must include, but need not be limited
to, the following:
(1) the identity of the person or positions authorized to
administer the Participant loan program;
(2) a procedure for applying for loans;
(3) the basis on which loans will be approved or denied;
(4) limitations, if any, on the types and amounts of loans
offered;
(5) the procedure under the program for determining a
reasonable rate of interest;
(6) the types of collateral which may secure a Participant
loan; and
(7) the events constituting default and the steps that
will be taken to preserve Plan assets.
Such Participant loan program shall be contained in a
separate written document which, when properly executed, is
hereby incorporated by reference and made a part of the Plan.
Furthermore, such Participant loan program may be modified or
amended in writing from time to time without the necessity of
amending this Section.
ARTICLE VIII
TOP HEAVY
8.1 TOP HEAVY PLAN REQUIREMENTS
For any Top Heavy Plan Year, the Plan shall provide the special
vesting requirements of Code Section 416(b) pursuant to Section 6.4
of the Plan and the special minimum allocation requirements of Code
Section 416(c) pursuant to Section 4.4 of the Plan.
8.2 DETERMINATION OF TOP HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any Plan Year
in which, as of the Determination Date, (1) the Present Value of
Accrued Benefits of Key Employees and (2) the sum of the
Aggregate Accounts of Key Employees under this Plan and all
plans of an Aggregation Group, exceeds sixty percent (60%) of
the Present Value of Accrued Benefits and the Aggregate Accounts
of all Key and Non-Key Employees under this Plan and all plans
of an Aggregation Group.
If any Participant is a Non-Key Employee for any Plan Year,
but such Participant was a Key Employee for any prior Plan Year,
such Participant's Present Value of Accrued Benefit and/or
Aggregate Account balance shall not be taken into account for
purposes of determining whether this Plan is a Top Heavy or
Super Top Heavy Plan (or whether any Aggregation Group which
includes this Plan is a Top Heavy Group). In addition, if a
Participant or Former Participant has not performed any services
for any Employer maintaining the Plan at any time during the
five year period ending on the Determination Date, any accrued
benefit for such Participant or Former Participant shall not be
taken into account for the purposes of determining whether this
Plan is a Top Heavy or Super Top Heavy Plan.
(b) This Plan shall be a Super Top Heavy Plan for any Plan
Year in which, as of the Determination Date, (1) the Present
Value of Accrued Benefits of Key Employees and (2) the sum of
the Aggregate Accounts of Key Employees under this Plan and all
plans of an Aggregation Group, exceeds ninety percent (90%) of
the Present Value of Accrued Benefits and the Aggregate Accounts
of all Key and Non-Key Employees under this Plan and all plans
of an Aggregation Group.
(c) Aggregate Account: A Participant's Aggregate Account
as of the Determination Date is the sum of:
(1) his Participant's Combined Account balance as of the
most recent valuation occurring within a twelve (12) month
period ending on the Determination Date;
(2) an adjustment for any contributions due as of the
Determination Date. Such adjustment shall be the amount of any
contributions actually made after the Valuation Date but due on
or before the Determination Date, except for the first Plan Year
when such adjustment shall also reflect the amount of any
contributions made after the Determination Date that are
allocated as of a date in that first Plan Year.
(3) any Plan distributions made within the Plan Year that
includes the Determination Date or within the four (4) preceding
Plan Years. However, in the case of distributions made after the
Valuation Date and prior to the Determination Date, such
distributions are not included as distributions for top heavy
purposes to the extent that such distributions are already
included in the Participant's Aggregate Account balance as of
the Valuation Date. Notwithstanding anything herein to the
contrary, all distributions, including distributions under a
terminated plan which if it had not been terminated would have
been required to be included in an Aggregation Group, will be
counted. Further, distributions from the Plan (including the
cash value of life insurance policies) of a Participant's
account balance because of death shall be treated as a
distribution for the purposes of this paragraph.
(4) any Employee contributions, whether voluntary or
mandatory. However, amounts attributable to tax deductible
qualified voluntary employee contributions shall not be
considered to be a part of the Participant's Aggregate Account
balance.
(5) with respect to unrelated rollovers and plan-to-plan
transfers (ones which are both initiated by the Employee and
made from a plan maintained by one employer to a plan maintained
by another employer), if this Plan provides the rollovers or
plan-to-plan transfers, it shall always consider such rollovers
or plan-to-plan transfers as a distribution for the purposes of
this Section. If this Plan is the plan accepting such rollovers
or plan-to-plan transfers, it shall not consider such rollovers
or plan-to-plan transfers as part of the Participant's Aggregate
Account balance.
(6) with respect to related rollovers and plan-to-plan
transfers (ones either not initiated by the Employee or made to
a plan maintained by the same employer), if this Plan provides
the rollover or plan-to-plan transfer, it shall not be counted
as a distribution for purposes of this Section. If this Plan is
the plan accepting such rollover or plan-to-plan transfer, it
shall consider such rollover or plan-to-plan transfer as part of
the Participant's Aggregate Account balance, irrespective of the
date on which such rollover or plan-to-plan transfer is
accepted.
(7) For the purposes of determining whether two employers
are to be treated as the same employer in (5) and (6) above, all
employers aggregated under Code Section 414(b), (c), (m) and (o)
are treated as the same employer.
(d) "Aggregation Group" means either a Required
Aggregation Group or a Permissive Aggregation Group as
hereinafter determined.
(1) Required Aggregation Group: In determining a Required
Aggregation Group hereunder, each plan of the Employer in which
a Key Employee is a participant in the Plan Year containing the
Determination Date or any of the four preceding Plan Years, and
each other plan of the Employer which enables any plan in which
a Key Employee participates to meet the requirements of Code
Sections 401(a)(4) or 410, will be required to be aggregated.
Such group shall be known as a Required Aggregation Group.
In the case of a Required Aggregation Group, each plan in
the group will be considered a Top Heavy Plan if the Required
Aggregation Group is a Top Heavy Group. No plan in the Required
Aggregation Group will be considered a Top Heavy Plan if the
Required Aggregation Group is not a Top Heavy Group.
(2) Permissive Aggregation Group: The Employer may also
include any other plan not required to be included in the
Required Aggregation Group, provided the resulting group, taken
as a whole, would continue to satisfy the provisions of Code
Sections 401(a)(4) and 410. Such group shall be known as a
Permissive Aggregation Group.
In the case of a Permissive Aggregation Group, only a plan
that is part of the Required Aggregation Group will be
considered a Top Heavy Plan if the Permissive Aggregation Group
is a Top Heavy Group. No plan in the Permissive Aggregation
Group will be considered a Top Heavy Plan if the Permissive
Aggregation Group is not a Top Heavy Group.
(3) Only those plans of the Employer in which the
Determination Dates fall within the same calendar year shall be
aggregated in order to determine whether such plans are Top
Heavy Plans.
(4) An Aggregation Group shall include any terminated plan
of the Employer if it was maintained within the last five (5)
years ending on the Determination Date.
(e) "Determination Date" means (a) the last day of the
preceding Plan Year, or (b) in the case of the first Plan Year,
the last day of such Plan Year.
(f) Present Value of Accrued Benefit: In the case of a
defined benefit plan, the Present Value of Accrued Benefit for a
Participant other than a Key Employee, shall be as determined
using the single accrual method used for all plans of the
Employer and Affiliated Employers, or if no such single method
exists, using a method which results in benefits accruing not
more rapidly than the slowest accrual rate permitted under Code
Section 411(b)(1)(C). The determination of the Present Value of
Accrued Benefit shall be determined as of the most recent
Valuation Date that falls within or ends with the 12-month
period ending on the Determination Date except as provided in
Code Section 416 and the Regulations thereunder for the first
and second plan years of a defined benefit plan.
(g) "Top Heavy Group" means an Aggregation Group in which,
as of the Determination Date, the sum of:
(1) the Present Value of Accrued Benefits of Key Employees
under all defined benefit plans included in the group, and
(2) the Aggregate Accounts of Key Employees under all
defined contribution plans included in the group,
exceeds sixty percent (60%) of a similar sum determined for
all Participants.
ARTICLE IX
MISCELLANEOUS
9.1 PARTICIPANT'S RIGHTS
This Plan shall not be deemed to constitute a contract between
the Employer and any Participant or to be a consideration or an
inducement for the employment of any Participant or Employee. Nothing
contained in this Plan shall be deemed to give any Participant or
Employee the right to be retained in the service of the Employer or
to interfere with the right of the Employer to discharge any
Participant or Employee at any time regardless of the effect which
such discharge shall have upon him as a Participant of this Plan.
9.2 ALIENATION
(a) Subject to the exceptions provided below, no benefit
which shall be payable out of the Trust Fund to any person
(including a Participant or his Beneficiary) shall be subject in
any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, or charge, and any attempt to
anticipate, alienate, sell, transfer, assign, pledge, encumber,
or charge the same shall be void; and no such benefit shall in
any manner be liable for, or subject to, the debts, contracts,
liabilities, engagements, or torts of any such person, nor shall
it be subject to attachment or legal process for or against such
person, and the same shall not be recognized by the Trustee,
except to such extent as may be required by law.
(b) This provision shall not apply to the extent a
Participant or Beneficiary is indebted to the Plan, as a result
of a loan from the Plan. At the time a distribution is to be
made to or for a Participant's or Beneficiary's benefit, such
proportion of the amount distributed as shall equal such loan
indebtedness shall be paid by the Trustee to the Trustee or the
Administrator, at the direction of the Administrator, to apply
against or discharge such loan indebtedness. Prior to making a
payment, however, the Participant or Beneficiary must be given
written notice by the Administrator that such loan indebtedness
is to be so paid in whole or part from his Participant's
Combined Account. If the Participant or Beneficiary does not
agree that the loan indebtedness is a valid claim against his
Vested Participant's Combined Account, he shall be entitled to a
review of the validity of the claim in accordance with
procedures provided in Sections 2.10 and 2.11.
(c) This provision shall not apply to a "qualified
domestic relations order" defined in Code Section 414(p), and
those other domestic relations orders permitted to be so treated
by the Administrator under the provisions of the Retirement
Equity Act of 1984. The Administrator shall establish a written
procedure to determine the qualified status of domestic
relations orders and to administer distributions under such
qualified orders. Further, to the extent provided under a
"qualified domestic relations order," a former spouse of a
Participant shall be treated as the spouse or surviving spouse
for all purposes under the Plan.
Notwithstanding any provision of this Section to the
contrary, an offset to a Participant's accrued benefit against
an amount that the Participant is ordered or required to pay the
Plan with respect to a judgment, order, or decree issued, or a
settlement entered into, on or after August 5, 1997, shall be
permitted in accordance with Code Sections 401(a)(13)(C) and
(D).
9.3 CONSTRUCTION OF PLAN
This Plan shall be construed and enforced according to the Act
and the laws of the State of Texas, other than its laws respecting
choice of law, to the extent not preempted by the Act.
9.4 GENDER AND NUMBER
Wherever any words are used herein in the masculine, feminine or
neuter gender, they shall be construed as though they were also used
in another gender in all cases where they would so apply, and
whenever any words are used herein in the singular or plural form,
they shall be construed as though they were also used in the other
form in all cases where they would so apply.
9.5 LEGAL ACTION
In the event any claim, suit, or proceeding is brought regarding
the Trust and/or Plan established hereunder to which the Trustee, the
Employer or the Administrator may be a party, and such claim, suit,
or proceeding is resolved in favor of the Trustee, the Employer or
the Administrator, they shall be entitled to be reimbursed from the
Trust Fund for any and all costs, attorney's fees, and other expenses
pertaining thereto incurred by them for which they shall have become
liable.
9.6 PROHIBITION AGAINST DIVERSION OF FUNDS
(a) Except as provided below and otherwise specifically
permitted by law, it shall be impossible by operation of the
Plan or of the Trust, by termination of either, by power of
revocation or amendment, by the happening of any contingency, by
collateral arrangement or by any other means, for any part of
the corpus or income of any trust fund maintained pursuant to
the Plan or any funds contributed thereto to be used for, or
diverted to, purposes other than the exclusive benefit of
Participants, Retired Participants, or their Beneficiaries.
(b) In the event the Employer shall make an excessive
contribution under a mistake of fact pursuant to Act Section
403(c)(2)(A), the Employer may demand repayment of such
excessive contribution at any time within one (1) year following
the time of payment and the Trustees shall return such amount to
the Employer within the one (1) year period. Earnings of the
Plan attributable to the excess contributions may not be
returned to the Employer but any losses attributable thereto
must reduce the amount so returned.
9.7 BONDING
Every Fiduciary, except a bank or an insurance company, unless
exempted by the Act and regulations thereunder, shall be bonded in an
amount not less than 10% of the amount of the funds such Fiduciary
handles; provided, however, that the minimum bond shall be $1,000 and
the maximum bond, $500,000. The amount of funds handled shall be
determined at the beginning of each Plan Year by the amount of funds
handled by such person, group, or class to be covered and their
predecessors, if any, during the preceding Plan Year, or if there is
no preceding Plan Year, then by the amount of the funds to be handled
during the then current year. The bond shall provide protection to
the Plan against any loss by reason of acts of fraud or dishonesty by
the Fiduciary alone or in connivance with others. The surety shall be
a corporate surety company (as such term is used in Act Section
412(a)(2)), and the bond shall be in a form approved by the Secretary
of Labor. Notwithstanding anything in the Plan to the contrary, the
cost of such bonds shall be an expense of and may, at the election of
the Administrator, be paid from the Trust Fund or by the Employer.
9.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE
Neither the Employer, the Administrator, nor the Trustee, nor
their successors shall be responsible for the validity of any
Contract issued hereunder or for the failure on the part of the
insurer to make payments provided by any such Contract, or for the
action of any person which may delay payment or render a Contract
null and void or unenforceable in whole or in part.
9.9 INSURER'S PROTECTIVE CLAUSE
Any insurer who shall issue Contracts hereunder shall not have
any responsibility for the validity of this Plan or for the tax or
legal aspects of this Plan. The insurer shall be protected and held
harmless in acting in accordance with any written direction of the
Trustee, and shall have no duty to see to the application of any
funds paid to the Trustee, nor be required to question any actions
directed by the Trustee. Regardless of any provision of this Plan,
the insurer shall not be required to take or permit any action or
allow any benefit or privilege contrary to the terms of any Contract
which it issues hereunder, or the rules of the insurer.
9.10 RECEIPT AND RELEASE FOR PAYMENTS
Any payment to any Participant, his legal representative,
Beneficiary, or to any guardian or committee appointed for such
Participant or Beneficiary in accordance with the provisions of the
Plan, shall, to the extent thereof, be in full satisfaction of all
claims hereunder against the Trustee and the Employer, either of whom
may require such Participant, legal representative, Beneficiary,
guardian or committee, as a condition precedent to such payment, to
execute a receipt and release thereof in such form as shall be
determined by the Trustee or Employer.
9.11 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of the Plan is permitted
or required to do or perform any act or matter or thing, it shall be
done and performed by a person duly authorized by its legally
constituted authority.
9.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
The "named Fiduciaries" of this Plan are (1) the Employer, and
(2) the Administrator. The Trustee shall be a Fiduciary but not a
named Fiduciary. The named Fiduciaries shall have only those specific
powers, duties, responsibilities, and obligations as are specifically
given them under the Plan or as accepted by or assigned to them
pursuant to any procedure provided under the Plan, including but not
limited to any agreement allocating or delegating their
responsibilities, the terms of which are incorporated herein by
reference. In general, unless otherwise indicated herein or pursuant
to such agreements, the Employer shall have the duties specified in
Article II hereof, as the same may be allocated or delegated
thereunder, including but not limited to the responsibility for
making the contributions provided for under Section 4.1; and shall
have the authority to appoint and remove the Trustee and the
Administrator; to formulate the Plan's "funding policy and method";
and to amend or terminate, in whole or in part, the Plan. The
Administrator shall have the responsibility for the administration of
the Plan, including but not limited to the items specified in Article
II of the Plan, as the same may be allocated or delegated thereunder.
The Administrator shall act as the named Fiduciary responsible for
communicating with the Participant according to the Participant
Direction Procedures. The Trustee shall have the responsibility of
management and control of the assets held under the Trust, except to
the extent directed pursuant to Article II or with respect to those
assets, the management of which has been assigned to an Investment
Manager, who shall be solely responsible for the management of the
assets assigned to it, all as specifically provided in the Plan and
any agreement with the Trustee. Each named Fiduciary warrants that
any directions given, information furnished, or action taken by it
shall be in accordance with the provisions of the Plan, authorizing
or providing for such direction, information or action. Furthermore,
each named Fiduciary may rely upon any such direction, information or
action of another named Fiduciary as being proper under the Plan, and
is not required under the Plan to inquire into the propriety of any
such direction, information or action. It is intended under the Plan
that each named Fiduciary shall be responsible for the proper
exercise of its own powers, duties, responsibilities and obligations
under the Plan as specified or allocated herein. No named Fiduciary
shall guarantee the Trust Fund in any manner against investment loss
or depreciation in asset value. Any person or group may serve in more
than one Fiduciary capacity. In the furtherance of their
responsibilities hereunder, the "named Fiduciaries" shall be
empowered to interpret the Plan and Trust and to resolve ambiguities,
inconsistencies and omissions, which findings shall be binding, final
and conclusive.
9.13 HEADINGS
The headings and subheadings of this Plan have been inserted for
convenience of reference and are to be ignored in any construction of
the provisions hereof.
9.14 APPROVAL BY INTERNAL REVENUE SERVICE
(a) Notwithstanding anything herein to the contrary,
contributions to this Plan are conditioned upon the initial
qualification of the Plan under Code Section 401. If the Plan
receives an adverse determination with respect to its initial
qualification, then the Plan may return such contributions to the
Employer within one year after such determination, provided the
application for the determination is made by the time prescribed by
law for filing the Employer's return for the taxable year in which
the Plan was adopted, or such later date as the Secretary of the
Treasury may prescribe.
(b) Notwithstanding any provisions to the contrary, except
Sections 3.5, 3.6, and 4.1(e), any contribution by the Employer to
the Trust Fund is conditioned upon the deductibility of the
contribution by the Employer under the Code and, to the extent any
such deduction is disallowed, the Employer may, within one (1) year
following the disallowance of the deduction, demand repayment of such
disallowed contribution and the Trustee shall return such
contribution within one (1) year following the disallowance. Earnings
of the Plan attributable to the excess contribution may not be
returned to the Employer, but any losses attributable thereto must
reduce the amount so returned.
9.15 UNIFORMITY
All provisions of this Plan shall be interpreted and applied in
a uniform, nondiscriminatory manner. In the event of any conflict
between the terms of this Plan and any Contract purchased hereunder,
the Plan provisions shall control.
IN WITNESS WHEREOF, this Plan has been executed the day and year
first above written.
Signed, sealed, and delivered
in the presence of:
R&B Falcon Corporation
____________________________ By_____________________
EMPLOYER
__________________________
WITNESSES AS TO EMPLOYER
EXHIBIT 5.1
(Letterhead of Gardere Wynne Sewell & Riggs, L.L.P.)
October 11, 1999
R&B Falcon Corporation
901 Threadneedle
Houston, Texas 77079
Re: Registration Statement on Form S-8
Gentlemen:
As set forth in the Registration Statement (the "Registration
Statement") on Form S-8 to be filed by R&B Falcon Corporation, a
Delaware corporation (the "Company"), with the Securities and
Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended, relating to the issuance of up to 2,000,000
shares (the "Shares") of the Company's common stock, par value
$0.01 per share, under the R&B Falcon U.S. Savings Plan (the
"Plan"), certain legal matters in connection with the Shares are
being passed upon for the Company by us. At your request, this
opinion is being furnished to you for filing as Exhibit 5.1 to
the Registration Statement.
In our capacity as your counsel in the connection referred to
above, we have examined the Amended and Restated Certificate of
Incorporation and Amended and Restated Bylaws of the Company and
the originals, or copies certified or otherwise identified, of
corporate records of the Company, including minute books of the
Company as furnished to us by the Company, certificates of
public officials and of representatives of the Company, statutes
and other instruments and documents as a basis for the opinions
hereinafter expressed. In giving such opinions, we have relied
upon certificates of officers of the Company with respect to the
accuracy of the material factual matters contained in such
certificates.
We have assumed the authenticity and completeness of all
records, certificates and other instruments submitted to us as
originals, the conformity to original documents of all records,
certificates and other instruments submitted to us as copies,
the authenticity and completeness of the originals of those
records, certificates and other instruments submitted to us as
copies and the correctness of all statements of fact contained
in all records, certificates and other instruments that we have
examined.
Based on the foregoing, and having regard for such legal
considerations as we have deemed relevant, we are of the opinion
that the Shares to be issued by the Company pursuant to the Plan
have been authorized and reserved for issuance and, upon
issuance of such Shares pursuant to the terms of the Plan and
receipt by the Company of consideration at least equal to the
par value of such Shares, such Shares will be legally and
validly issued, fully paid and nonassessable.
The foregoing opinion is limited to the federal laws of the
United States of America and the General Corporation Law of the
State of Delaware, and we are expressing no opinion as to the
effect of the laws of any other jurisdiction.
We hereby consent to the filing of this opinion with the
Commission as an exhibit to the Registration Statement and
further consent to the use of our name wherever appearing in the
Registration Statement and any amendments to it.
Very truly yours,
GARDERE WYNNE SEWELL & RIGGS, L.L.P.
By: /s/ William Mark Young
------------------------
W. Mark Young
EXHIBIT 15.1
Letter regarding unaudited interim financial information
R&B Falcon Corporation:
We are aware that R&B Falcon Corporation has incorporated by reference
in this registration statement on Form S-8, its Form 10-Q for the quarters
ended March 31, 1999 and June 30, 1999, which include our reports dated
April 28, 1999 and July 23, 1999, respectively, covering the unaudited
interim financial information contained therein. Pursuant to Regulation C
of the Securities Act of 1933, those reports are not considered a part of
the registration statement prepared or certified by our Firm or reports
prepared or certified by our Firm within the meaning of Sections 7 and 11
of the Act.
/s/ARTHUR ANDERSEN LLP
Houston, Texas
October 12, 1999
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement on Form S-8 of
our report dated March 26, 1999 included in R&B Falcon Corporation's Form
10-K for the year ended December 31, 1998 and to all references to our
Firm included in this registration statement.
/s/ARTHUR ANDERSEN LLP
Houston, Texas
October 12, 1999
