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EXHIBIT 4.5
NATCO PROFIT SHARING AND
SAVINGS PLAN
As Amended and Restated
Effective January 1, 1999
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NATCO PROFIT SHARING AND
SAVINGS PLAN
WHEREAS, NATIONAL TANK COMPANY (the "COMPANY") has heretofore adopted
the NATCO PROFIT SHARING AND SAVINGS PLAN, hereinafter referred to as the
"PLAN," for the benefit of its employees; and
WHEREAS, the Company has heretofore entered into a trust agreement with
the Trustee establishing a trust to hold and invest contributions made under the
Plan and from which benefits will be distributed under the Plan;
WHEREAS, the Company desires to restate the Plan and to amend the Plan
in several respects, intending thereby to provide an uninterrupted and
continuing program of benefits;
NOW THEREFORE, the Plan is hereby restated in its entirety as follows
with no interruption in time, effective as of January 1, 1999, except as
otherwise indicated herein:
(i)
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TABLE OF CONTENTS
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I. DEFINITIONS AND CONSTRUCTION......................................I-1
1.1 DEFINITIONS..............................................I-1
(1) ACCOUNT(S)......................................I-1
(2) ACT.............................................I-1
(3) AFTER-TAX ACCOUNT...............................I-1
(4) BEFORE-TAX ACCOUNT..............................I-1
(5) BEFORE-TAX CONTRIBUTIONS........................I-1
(7) CODE............................................I-1
(8) COMMITTEE.......................................I-1
(9) COMPANY.........................................I-1
(10) COMPANY STOCK...................................I-1
(11) COMPENSATION....................................I-1
(12) CONTROLLED ENTITY...............................I-3
(13) CYNARA PLAN.....................................I-3
(14) DIRECT ROLLOVER.................................I-3
(15) DIRECTORS.......................................I-3
(16) DISTRIBUTEE.....................................I-3
(17) EFFECTIVE DATE..................................I-3
(18) ELIGIBLE EMPLOYEE...............................I-3
(19) ELIGIBLE RETIREMENT PLAN........................I-3
(20) ELIGIBLE ROLLOVER DISTRIBUTION..................I-4
(21) EMPLOYEE........................................I-4
(22) EMPLOYER........................................I-4
(23) EMPLOYER CONTRIBUTION ACCOUNT...................I-4
(24) EMPLOYER CONTRIBUTIONS..........................I-4
(25) EMPLOYER DISCRETIONARY ACCOUNT..................I-4
(26) EMPLOYER DISCRETIONARY CONTRIBUTIONS:...........I-5
(27) EMPLOYER MATCHING ACCOUNT.......................I-5
(28) EMPLOYER MATCHING CONTRIBUTIONS.................I-5
(29) EMPLOYMENT COMMENCEMENT DATE....................I-5
(30) ENTRY DATE......................................I-5
(31) HIGHLY COMPENSATED EMPLOYEE.....................I-5
(32) HOUR OF SERVICE.................................I-6
(33) INVESTMENT FUND.................................I-6
(34) LEASED EMPLOYEE.................................I-6
(35) NORMAL RETIREMENT DATE..........................I-6
(36) ONE-YEAR BREAK-IN-SERVICE:......................I-6
(37) PARTICIPANT.....................................I-7
(38) PARTICIPATION SERVICE...........................I-7
(39) PERIOD OF SERVICE...............................I-7
(40) PERIOD OF SEVERANCE.............................I-7
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(ii)
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(41) PLAN............................................I-7
(42) PLAN YEAR.......................................I-7
(43) REEMPLOYMENT COMMENCEMENT DATE..................I-7
(44) ROLLOVER CONTRIBUTION ACCOUNT...................I-7
(45) ROLLOVER CONTRIBUTIONS..........................I-8
(46) SERVICE.........................................I-8
(47) SEVERANCE FROM SERVICE DATE.....................I-8
(48) TRUST...........................................I-8
(49) TRUST AGREEMENT.................................I-8
(50) TRUST FUND......................................I-8
(51) TRUSTEE.........................................I-8
(52) VESTED INTEREST.................................I-8
(53) VESTING SERVICE.................................I-8
1.2 NUMBER AND GENDER........................................I-8
1.3 HEADINGS.................................................I-9
1.4 CONSTRUCTION.............................................I-9
II. PARTICIPATION....................................................II-1
2.1 ELIGIBILITY.............................................II-1
2.2 PARTICIPATION SERVICE...................................II-2
III. CONTRIBUTIONS...................................................III-1
3.1 BEFORE-TAX CONTRIBUTIONS...............................III-1
3.2 EMPLOYER MATCHING CONTRIBUTIONS........................III-2
3.3 RESTRICTIONS ON EMPLOYER MATCHING CONTRIBUTIONS........III-3
3.4 EMPLOYER DISCRETIONARY CONTRIBUTIONS...................III-3
3.5 RETURN OF CONTRIBUTIONS................................III-3
3.6 DISPOSITION OF EXCESS DEFERRALS AND EXCESS
CONTRIBUTIONS..........................................III-3
3.7 ROLLOVER CONTRIBUTIONS.................................III-5
IV. ALLOCATIONS AND LIMITATIONS......................................IV-1
4.1 SUSPENDED AMOUNTS.......................................IV-1
4.2 ALLOCATION OF CONTRIBUTIONS.............................IV-1
4.3 APPLICATION OF FORFEITURES..............................IV-1
4.4 VALUATION OF ACCOUNTS. ................................IV-1
4.5 LIMITATIONS AND CORRECTIONS.............................IV-1
V. INVESTMENT FUNDS..................................................V-1
5.1 INVESTMENT OF ACCOUNTS...................................V-1
5.2 RESTRICTION ON ACQUISITION OF COMPANY STOCK..............V-1
5.3 VOTING OF COMPANY STOCK..................................V-1
5.4 STOCK RIGHTS, STOCK SPLITS, AND STOCK DIVIDENDS..........V-1
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(iii)
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VI. RETIREMENT BENEFITS..............................................VI-1
6.1 RETIREMENT BENEFITS.....................................VI-1
VII. DISABILITY BENEFITS.............................................VII-1
7.1 DISABILITY BENEFITS....................................VII-1
7.2 TOTAL AND PERMANENT DISABILITY DETERMINED..............VII-1
VIII. SEVERANCE BENEFITS AND DETERMINATION OF VESTED INTEREST........VIII-1
8.1 NO BENEFITS UNLESS HEREIN SET FORTH...................VIII-1
8.2 SEVERANCE BENEFIT.....................................VIII-1
8.3 DETERMINATION OF VESTED INTEREST......................VIII-1
8.4 CREDITING OF VESTING SERVICE..........................VIII-2
8.5 FORFEITURE OF VESTING SERVICE.........................VIII-2
8.6 FORFEITURES OF NONVESTED ACCOUNT BALANCE..............VIII-2
8.7 RESTORATION OF FORFEITED ACCOUNT BALANCE..............VIII-3
8.8 SPECIAL FORMULA FOR DETERMINING VESTED INTEREST FOR
PARTIAL ACCOUNTS......................................VIII-3
IX. DEATH BENEFITS...................................................IX-1
9.1 DEATH BENEFITS..........................................IX-1
9.2 DESIGNATION OF BENEFICIARIES............................IX-1
X. TIME AND FORM OF PAYMENT OF BENEFITS..............................X-1
10.1 DETERMINATION OF BENEFIT COMMENCEMENT DATE...............X-1
10.2 FORM OF PAYMENT AND PAYEE................................X-2
10.3 DIRECT ROLLOVER ELECTION.................................X-2
10.4 UNCLAIMED BENEFITS.......................................X-3
10.5 CLAIMS REVIEW............................................X-3
XI. IN-SERVICE WITHDRAWALS...........................................XI-1
11.1 IN-SERVICE WITHDRAWALS..................................XI-1
11.2 RESTRICTION ON IN-SERVICE WITHDRAWALS...................XI-2
XII. LOANS...........................................................XII-1
12.1 ELIGIBILITY FOR LOAN...................................XII-1
12.2 MAXIMUM LOAN...........................................XII-1
XIII. ADMINISTRATION OF THE PLAN.....................................XIII-1
13.1 APPOINTMENT OF COMMITTEE.............................XIII-1
13.2 TERM, VACANCIES, RESIGNATION, AND REMOVAL.............XIII-1
13.3 OFFICERS, RECORDS, AND PROCEDURES.....................XIII-1
13.4 MEETINGS..............................................XIII-1
13.5 SELF-INTEREST OF MEMBERS..............................XIII-1
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(iv)
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13.6 COMPENSATION AND BONDING..............................XIII-2
13.7 COMMITTEE POWERS AND DUTIES...........................XIII-2
13.8 EMPLOYER TO SUPPLY INFORMATION........................XIII-3
13.9 INDEMNIFICATION.......................................XIII-3
XIV. TRUSTEE AND ADMINISTRATION OF TRUST FUND........................XIV-1
14.1 APPOINTMENT, RESIGNATION, REMOVAL, AND REPLACEMENT
OF TRUSTEE.............................................XIV-1
14.2 TRUST AGREEMENT........................................XIV-1
14.3 PAYMENT OF EXPENSES....................................XIV-1
14.4 TRUST FUND PROPERTY....................................XIV-1
14.5 DISTRIBUTIONS FROM PARTICIPANTS' ACCOUNTS..............XIV-2
14.6 PAYMENTS SOLELY FROM TRUST FUND........................XIV-2
14.7 NO BENEFITS TO THE EMPLOYER............................XIV-2
XV. FIDUCIARY PROVISIONS.............................................XV-1
15.1 ARTICLE CONTROLS........................................XV-1
15.2 GENERAL ALLOCATION OF FIDUCIARY DUTIES..................XV-1
15.3 FIDUCIARY DUTY..........................................XV-1
15.4 DELEGATION AND ALLOCATION OF FIDUCIARY DUTIES...........XV-1
15.5 INVESTMENT MANAGER......................................XV-2
XVI. AMENDMENTS......................................................XVI-1
16.1 RIGHT TO AMEND.........................................XVI-1
16.2 LIMITATION ON AMENDMENTS...............................XVI-1
XVII.DISCONTINUANCE OF CONTRIBUTIONS, TERMINATION,
PARTIAL TERMINATION, AND MERGER OR CONSOLIDATION...............XVII-1
17.1 RIGHT TO DISCONTINUE CONTRIBUTIONS, TERMINATE, OR
PARTIALLY TERMINATE...................................XVII-1
17.2 PROCEDURE IN THE EVENT OF DISCONTINUANCE OF
CONTRIBUTIONS, TERMINATION, OR PARTIAL
TERMINATION...........................................XVII-1
17.3 MERGER, CONSOLIDATION, OR TRANSFER....................XVII-1
XVIII.PARTICIPATING EMPLOYERS..........................................XVIII-1
18.1 DESIGNATION OF OTHER EMPLOYERS.......................XVIII-1
18.2 SINGLE PLAN..........................................XVIII-2
XIX. MISCELLANEOUS PROVISIONS........................................XIX-1
19.1 NOT CONTRACT OF EMPLOYMENT.............................XIX-1
19.2 ALIENATION OF INTEREST FORBIDDEN.......................XIX-1
19.3 UNIFORMED SERVICES EMPLOYMENT AND REEMPLOYMENT
RIGHTS ACTS REQUIREMENTS...............................XIX-1
19.4 PAYMENTS TO MINORS AND INCOMPETENTS....................XIX-1
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(v)
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19.5 ACQUISITION AND HOLDING OF COMPANY STOCK...............XIX-2
19.6 PARTICIPANT'S ADDRESS..................................XIX-2
19.7 SEVERABILITY...........................................XIX-2
19.8 JURISDICTION...........................................XIX-2
XX. TOP-HEAVY STATUS.................................................XX-1
20.1 ARTICLE CONTROLS........................................XX-1
20.2 DEFINITIONS.............................................XX-1
(a) ACCOUNT BALANCE:...............................XX-1
(b) ACCRUED BENEFIT................................XX-1
(c) AGGREGATION GROUP..............................XX-1
(d) ASSUMPTIONS....................................XX-2
(e) DETERMINATION DATE.............................XX-2
(f) KEY EMPLOYEE...................................XX-2
(g) PLAN YEAR......................................XX-2
(h) REMUNERATION...................................XX-2
(i) VALUATION DATE.................................XX-2
20.3 TOP-HEAVY STATUS........................................XX-2
20.4 TERMINATION OF TOP-HEAVY STATUS.........................XX-3
20.5 EFFECT OF ARTICLE.......................................XX-4
APPENDIX A........................................................Appendix A-1
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(vi)
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I.
DEFINITIONS AND CONSTRUCTION
1.1 DEFINITIONS. Where the following words and phrases appear in the
Plan, they shall have the respective meanings set forth below, unless their
context clearly indicates to the contrary.
(1) ACCOUNT(S): A Participant's After-Tax Account, Before-Tax Account,
Employer Contribution Account, Employer Discretionary Account, Employer
Matching Account, and/or Rollover Contribution Account, including the
amounts credited thereto.
(2) ACT: The Employee Retirement Income Security Act of 1974, as amended.
(3) AFTER-TAX ACCOUNT: An individual account for a Participant which is
credited with (A) amounts attributable to after-tax contributions to
the Combustion Engineering, Inc. Thrift-Investment Plan and (B)
amounts transferred from Participant Nondeductible Voluntary
Contribution Accounts under the Cynara Plan, and which is credited with
(or debited for) such account's allocation of net income (or net loss)
and changes in value of the Trust Fund.
(4) BEFORE-TAX ACCOUNT: An individual account for each Participant which is
credited with the sum of (A) the Before-Tax Contributions made by the
Employer on such Participant's behalf and (B) amounts transferred from
Elective Deferral Accounts under the Cynara Plan, and which is credited
with (or debited for) such account's allocation of net income (or net
loss) and changes in value of the Trust Fund.
(5) BEFORE-TAX CONTRIBUTIONS: Contributions made to the Plan by the
Employer on a Participant's behalf in accordance with the Participant's
elections to defer Compensation under the Plan's qualified cash or
deferred arrangement as described in Section 3.1.
(6) BENEFIT COMMENCEMENT DATE: With respect to each Participant or
beneficiary, the date such Participant's or beneficiary's benefit is
paid to him from the Trust Fund.
(7) CODE: The Internal Revenue Code of 1986, as amended.
(8) COMMITTEE: The administrative committee appointed by the Directors to
administer the Plan.
(9) COMPANY: National Tank Company.
(10) COMPANY STOCK: The common stock of NATCO Group, Inc.
(11) COMPENSATION: The total of all wages, salaries, fees for professional
service and other amounts received in cash or in kind by a Participant
for services actually rendered or labor
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performed for the Employer while a Participant and an Employee to the
extent such amounts are includable in gross income, subject to the
following adjustments and limitations:
(A) The following shall be excluded:
(i) reimbursements and other expense allowances;
(ii) cash and noncash fringe benefits;
(iii) moving expenses;
(iv) Employer contributions to or payments from this or
any other deferred compensation program, whether such
program is qualified under section 401(a) of the Code
or nonqualified;
(v) welfare benefits;
(vi) amounts realized from the receipt or exercise of a
stock option that is not an incentive stock option
within the meaning of section 422 of the Code;
(vii) amounts realized at the time property described in
section 83 of the Code is freely transferable or no
longer subject to a substantial risk of forfeiture;
(viii) amounts realized as a result of an election described
in section 83(b) of the Code;
(ix) any amount realized as a result of a disqualifying
disposition within the meaning of section 421(a) of
the Code; and
(x) any other amounts that receive special tax benefits
under the Code but are not hereinafter included.
(B) Elective contributions made on a Participant's behalf by the
Employer that are not includable in income under section 125
or section 402(e)(3) of the Code and any amounts that are not
includable in the gross income of a Participant under a salary
reduction agreement by reason of the application of section
132(f) of the Code shall be included.
(C) The Compensation of any Participant taken into account for
purposes of the Plan shall be limited to $160,000 for any Plan
Year with such limitation to be:
(i) adjusted automatically to reflect any amendments to
section 401(a)(17) of the Code and any cost-of-living
increases authorized by section 401(a)(17) of the
Code; and
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(ii) prorated for a Plan Year of less than twelve months
and to the extent otherwise required by applicable
law.
(12) CONTROLLED ENTITY: Each corporation that is a member of a controlled
group of corporations, within the meaning of section 1563(a)
(determined without regard to sections 1563(a)(4) and 1563(e)(3)(C)) of
the Code, of which the Employer is a member, each trade or business
(whether or not incorporated) with which the Employer is under common
control, and each member of an affiliated service group, within the
meaning of section 414(m) of the Code, of which the Employer is a
member.
(13) CYNARA PLAN: The Cynara Company Savings Plan that was merged into this
Plan effective December 31, 1998.
(14) DIRECT ROLLOVER: A payment by the Plan to an Eligible Retirement Plan
designated by a Distributee.
(15) DIRECTORS: The Board of Directors of the Company.
(16) DISTRIBUTEE: Each (A) Participant entitled to an Eligible Rollover
Distribution, (B) Participant's surviving spouse with respect to the
interest of such surviving spouse in an Eligible Rollover Distribution,
and (C) former spouse of a Participant who is an alternate payee under
a qualified domestic relations order, as defined in section 414(p) of
the Code, with regard to the interest of such former spouse in an
Eligible Rollover Distribution.
(17) EFFECTIVE DATE: January 1, 1999, as to this restatement of the Plan,
except (A) as otherwise indicated in specific provisions of the Plan
and (B) that provisions of the Plan required to have an earlier
effective date by applicable statute and/or regulation shall be
effective as of the required effective date in such statute and/or
regulation and shall apply, as of such required effective date, to any
plan merged into this Plan. The original effective date of the Plan was
September 1, 1989.
(18) ELIGIBLE EMPLOYEE: Each Employee other than (A) an Employee whose terms
and conditions of employment are governed by a collective bargaining
agreement, unless such agreement provides for his coverage under the
Plan, (B) a nonresident alien who receives no earned income from the
Employer that constitutes income from sources within the United States,
(C) an Employee who is a Leased Employee or who is designated,
compensated, or otherwise classified by the Employer as a Leased
Employee, and (D) an Employee who is classified as a "Project Employee"
under the Employer's classification system. Notwithstanding any
provision of the Plan to the contrary, no individual who is designated,
compensated, or otherwise classified or treated by the Employer as an
independent contractor shall be eligible to become a Participant in the
Plan.
(19) ELIGIBLE RETIREMENT PLAN: (A) With respect to a Distributee other than
a surviving spouse, an individual retirement account described in
section 408(a) of the Code, an individual retirement annuity described
in section 408(b) of the Code, an annuity plan described in
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section 403(a) of the Code, or a qualified plan described in section
401(a) of the Code, which under its provisions and applicable law may
accept such Distributee's Eligible Rollover Distribution, and (B) with
respect to a Distributee who is a surviving spouse, an individual
retirement account described in section 408(a) of the Code or an
individual retirement annuity described in section 408(b) of the Code.
(20) ELIGIBLE ROLLOVER DISTRIBUTION: Any distribution of all or any portion
of the Accounts of a Distributee other than (A) a 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, (B) a distribution to the extent
such distribution is required under section 401(a)(9) of the Code, (C)
the portion of a distribution that is not includable in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities), (D) a loan treated
as a distribution under section 72(p) of the Code and not excepted by
section 72(p)(2), (E) a loan in default that is a deemed distribution,
(F) any corrective distribution provided in Sections 3.6 and 4.5(b),
and (G) any other distribution so designated by the Internal Revenue
Service in revenue rulings, notices, and other guidance of general
applicability. Further, from and after January 1, 2000, a distribution
from a Participant's Before-Tax Account pursuant to Section 11.1(c)
shall not constitute an Eligible Rollover Distribution.
(21) EMPLOYEE: Each (A) individual employed by the Employer and (B) Leased
Employee.
(22) EMPLOYER: The Company and each entity that has been designated to
participate in the Plan pursuant to the provisions of Article XVIII.
(23) EMPLOYER CONTRIBUTION ACCOUNT: An individual account for each
Participant which is credited with the Employer Contributions made on
such Participant's behalf for Plan Years beginning prior to January 1,
1999, and which is credited with (or debited for) such account's
allocation of net income (or net loss) and changes in value of the
Trust Fund.
(24) EMPLOYER CONTRIBUTIONS: The total of Employer Matching Contributions
and Employer Discretionary Contributions.
(25) EMPLOYER DISCRETIONARY ACCOUNT: An individual account for each
Participant which is credited with the sum of (A) the Employer Matching
Contributions, if any, made on such Participant's behalf pursuant to
Section 3.2(c) for Plan Years beginning on or after January 1, 1999,
(B) the Employer Discretionary Contributions, if any, made on such
Participant's behalf pursuant to Section 3.4 for Plan Years beginning
on or after January 1, 1999, and (C) amounts transferred from Company
Qualified Matching Contribution Accounts and Company Profit Sharing
Contribution Accounts under the Cynara Plan, and which is credited with
(or debited for) such account's allocation of net income (or net loss)
and changes in value of the Trust Fund.
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(26) EMPLOYER DISCRETIONARY CONTRIBUTIONS: Contributions made to the Plan by
the Employer pursuant to Section 3.4.
(27) EMPLOYER MATCHING ACCOUNT: An individual account for each Participant
which is credited with the sum of (A) the Employer Matching
Contributions made on such Participant's behalf pursuant to Section
3.2(a) and (b) for Plan Years beginning on or after January 1, 1999 and
(B) amounts transferred from Qualified Nonelective Contribution
Accounts under the Cynara Plan, and which is credited with (or debited
for) such account's allocation of net income (or net loss) and changes
in value of the Trust Fund.
(28) EMPLOYER MATCHING CONTRIBUTIONS: Contributions made to the Plan by the
Employer pursuant to Section 3.2.
(29) EMPLOYMENT COMMENCEMENT DATE: The date on which an individual first
performs an Hour of Service.
(30) ENTRY DATE: The first day of each month.
(31) HIGHLY COMPENSATED EMPLOYEE: Each Employee who performs services during
the Plan Year for which the determination of who is highly compensated
is being made (the "Determination Year") and who:
(A) is a five-percent owner of the Employer (within the meaning of
section 416(i)(1)(A)(iii) of the Code) at any time during the
Determination Year or the twelve-month period immediately
preceding the Determination Year (the "Look-Back Year"); or
(B) For the Look-Back Year
(i) receives compensation (within the meaning of section
414(q)(4) of the Code; "compensation" for purposes of
this Paragraph) in excess of $80,000 (with such
amount to be adjusted automatically to reflect any
cost-of-living adjustments authorized by section
414(q)(1) of the Code) during the Look-Back Year; and
(ii) if the Committee elects the application of this
clause in such Look-Back Year, is a member of the top
20% of Employees for the Look-Back Year (other than
Employees described in section 414(q)(5) of the Code)
ranked on the basis of compensation received during
the year.
For purposes of the preceding sentence, (i) all employers aggregated
with the Employer under section 414(b), (c), (m), or (o) of the Code
shall be treated as a single employer and (ii) a former Employee who
had a separation year (generally, the Determination Year such Employee
separates from service) prior to the Determination Year and who was an
active Highly Compensated Employee for either such separation year or
any Determination Year
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ending on or after such Employee's fifty-fifth birthday shall be deemed
to be a Highly Compensated Employee. To the extent that the provisions
of this Paragraph are inconsistent or conflict with the definition of a
"highly compensated employee" set forth in section 414(q) of the Code
and the Treasury regulations thereunder, the relevant terms and
provisions of section 414(q) of the Code and the Treasury regulations
thereunder shall govern and control.
(32) HOUR OF SERVICE: Each hour for which an individual is directly or
indirectly paid, or entitled to payment, by the Employer or a
Controlled Entity for the performance of duties or for reasons other
than the performance of duties; provided, however, that no more than
501 Hours of Service shall be credited to an individual on account of
any continuous period during which he performs no duties. Such Hours of
Service shall be credited to the individual for the computation period
in which such duties were performed or in which occurred the period
during which no duties were performed. An Hour of Service also includes
each hour, not credited above, for which back pay, irrespective of
mitigation of damages, has been either awarded or agreed to by the
Employer or a Controlled Entity. These Hours of Service shall be
credited to the individual for the computation period to which the
award or agreement pertains rather than the computation period in which
the award, agreement, or payment is made. The number of Hours of
Service to be credited to an individual for any computation period
shall be governed by 29 CFR Sections 2530.200b-2(b) and (c). Hours of
Service shall also include any hours required to be credited by federal
law other than the Act or the Code, but only under the conditions and
to the extent so required by such federal law. In addition, the
Committee, in its discretion, may credit individuals with Hours of
Service based on employment with an entity other than the Employer, but
only if and when such individual becomes an Eligible Employee and only
if such crediting of Hours of Service (A) has a legitimate business
reason, (B) does not by design or operation discriminate significantly
in favor of Highly Compensated Employees, and (C) is applied to all
similarly-situated Eligible Employees.
(33) INVESTMENT FUND: A portion of the Trust Fund that is invested in a
specified manner as described in Section 5.1.
(34) LEASED EMPLOYEE: Each person who is not an employee of the Employer or
a Controlled Entity but who performs services for the Employer or a
Controlled Entity pursuant to an agreement (oral or written) between
the Employer or a Controlled Entity and any leasing organization,
provided that such person has performed such services for the Employer
or a Controlled Entity or for related persons (within the meaning of
section 144(a)(3) of the Code) 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 Employer or a Controlled Entity.
(35) NORMAL RETIREMENT DATE: The date a Participant attains the age of
sixty-five.
(36) ONE-YEAR BREAK-IN-SERVICE: Any Plan Year during which an individual has
no more than 500 Hours of Service. Solely for purposes of determining
whether a One-Year Break-in-Service has occurred, an Hour of Service
shall include each normal work hour, not otherwise credited in Section
1.1(32), during which an individual is absent from work by reason of
the
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individual's pregnancy, the birth of a child of the individual, the
placement of a child with the individual in connection with the
adoption of such child by the individual, or for purposes of caring for
such child for the period immediately following such birth or
placement. The Committee may in its discretion require, as a condition
to the crediting of Hours of Service under the preceding sentence, that
the individual furnish appropriate and timely information to the
Committee establishing the reason for any such absence. Such Hours of
Service shall be credited to the individual for the computation period
in which the absence from work begins if such crediting is necessary to
prevent the occurrence of a One-Year Break-in-Service in such
computation period; otherwise such Hours of Service shall be credited
to the individual in the next following computation period.
(37) PARTICIPANT: Each individual who (A) has met the eligibility
requirements for participation in the Plan pursuant to Article II or
(B) has made a Rollover Contribution in accordance with Section 3.7,
but only to the extent provided in Section 3.7. For purposes of Article
V, the beneficiary of a deceased Participant and any alternate payee
under a qualified domestic relations order (as defined in Section 19.2)
shall have the rights of a Participant.
(38) PARTICIPATION SERVICE: The measure of service used in determining an
Employee's eligibility to participate in the Plan as determined
pursuant to Section 2.2.
(39) PERIOD OF SERVICE: Each period of an individual's Service commencing on
his Employment Commencement Date or a Reemployment Commencement Date,
if applicable, and ending on a Severance from Service Date.
Notwithstanding the foregoing, a period during which an individual is
absent from Service by reason of the individual's pregnancy, the birth
of a child of the individual, the placement of a child with the
individual in connection with the adoption of such child by the
individual, or for the purposes of caring for such child for the period
immediately following such birth or placement shall not constitute a
Period of Service between the first and second anniversary of the first
date of such absence. A Period of Service shall also include any period
required to be credited as a Period of Service by federal law other
than the Act or the Code, but only under the conditions and to the
extent so required by such federal law.
(40) PERIOD OF SEVERANCE: Each period of time commencing on an individual's
Severance from Service Date and ending on a Reemployment Commencement
Date.
(41) PLAN: The NATCO Profit Sharing and Savings Plan, as amended from time
to time.
(42) PLAN YEAR: The twelve-consecutive month period commencing January 1 of
each year.
(43) REEMPLOYMENT COMMENCEMENT DATE: The first date upon which an individual
performs an Hour of Service following a Severance from Service Date.
(44) ROLLOVER CONTRIBUTION ACCOUNT: An individual account for an Eligible
Employee which is credited with the sum of (A) the Rollover
Contributions of such Employee and (B) amounts transferred from
Rollover Contribution Accounts under the Cynara Plan, and which
I-7
<PAGE> 15
is credited with (or debited for) such account's allocation of net
income (or net loss) and changes in value of the Trust Fund.
(45) ROLLOVER CONTRIBUTIONS: Contributions made by an Eligible Employee
pursuant to Section 3.7.
(46) SERVICE: The period of an individual's employment with the Employer or
a Controlled Entity. In addition, the Committee, in its discretion, may
credit individuals with Service for employment with any other entity,
but only if and when such individual becomes an Eligible Employee and
only if such crediting of Service (A) has a legitimate business reason,
(B) does not by design or operation discriminate significantly in favor
of Highly Compensated Employees, and (C) is applied to all
similarly-situated Eligible Employees.
(47) SEVERANCE FROM SERVICE DATE: The first date on which an individual
terminates his Service following his Employment Commencement Date or a
Reemployment Commencement Date, if applicable. Notwithstanding the
foregoing, the Severance from Service Date of an individual who is
absent from Service by reason of the individual's pregnancy, the birth
of a child of the individual, the placement of a child with the
individual in connection with the adoption of such child by the
individual, or for purposes of caring for such child for the period
immediately following such birth or placement shall be the second
anniversary of the first date of such absence.
(48) TRUST: The trust(s) established under the Trust Agreement(s) to hold
and invest contributions made under the Plan and income thereon, and
from which the Plan benefits are distributed.
(49) TRUST AGREEMENT: The agreement(s) entered into between the Company and
the Trustee establishing the Trust, as such agreement(s) may be amended
from time to time.
(50) TRUST FUND: The funds and properties held pursuant to the provisions of
the Trust Agreement for the use and benefit of the Participants,
together with all income, profits, and increments thereto.
(51) TRUSTEE: The trustee or trustees qualified and acting under the Trust
Agreement at any time.
(52) VESTED INTEREST: The portion of a Participant's Accounts which,
pursuant to the Plan, is nonforfeitable.
(53) VESTING SERVICE: The measure of service used in determining a
Participant's Vested Interest as determined pursuant to Section 8.4.
1.2 NUMBER AND GENDER. Wherever appropriate herein, words used in the
singular shall be considered to include the plural and words used in the plural
shall be considered to include the singular. The masculine gender, where
appearing in the Plan, shall be deemed to include the feminine gender.
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<PAGE> 16
1.3 HEADINGS. The headings of Articles and Sections herein are included
solely for convenience, and if there is any conflict between such headings and
the text of the Plan, the text shall control.
1.4 CONSTRUCTION. It is intended that the Plan be qualified within the
meaning of section 401(a) of the Code and that the Trust be tax exempt under
section 501(a) of the Code, and all provisions herein shall be construed in
accordance with such intent.
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<PAGE> 17
II.
PARTICIPATION
2.1 ELIGIBILITY. Each Eligible Employee shall become a Participant upon
the Entry Date coincident with or next following the later of the date on which
such Eligible Employee completes three months of Participation Service or the
date on which such Eligible Employee attains the age of eighteen.
Notwithstanding the foregoing:
(a) An Eligible Employee who was a Participant in the Plan on
the day prior to the Effective Date shall remain a Participant in this
restatement thereof as of the Effective Date;
(b) An Eligible Employee who was a Participant in the Plan
prior to a termination of employment shall remain a Participant upon
his reemployment as an Eligible Employee;
(c) An Employee who has completed three months of
Participation Service and has attained the age of eighteen but who has
not become a Participant in the Plan because he was not an Eligible
Employee shall become a Participant in the Plan upon the later of (i)
the date he becomes an Eligible Employee as a result of a change in his
employment status or (ii) the first Entry Date upon which he would have
become a Participant if he had been an Eligible Employee;
(d) An Eligible Employee who had completed three months of
Participation Service but who had not attained the age of eighteen
prior to a termination of his employment shall become a Participant
upon the later of (i) the date of his reemployment or (ii) the first
Entry Date following his attainment of age eighteen;
(e) An Eligible Employee who had met the age and service
requirements of this Section to become a Participant in the Plan but
who terminated employment prior to the Entry Date upon which he would
have become a Participant shall become a Participant upon the later of
(i) the date of his reemployment or (ii) the Entry Date upon which he
would have become a Participant if he had not terminated employment;
and
(f) A Participant who ceases to be an Eligible Employee but
remains an Employee shall continue to be a Participant but, on and
after the date he ceases to be an Eligible Employee, he shall no longer
be entitled to defer Compensation hereunder or share in allocations of
Employer Contributions unless and until he shall again become an
Eligible Employee.
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<PAGE> 18
2.2 PARTICIPATION SERVICE.
(a) Subject to the remaining Paragraphs of this Section, an
individual shall be credited with Participation Service in an amount equal to
his aggregate Periods of Service whether or not such Periods of Service are
completed consecutively.
(b) Paragraph (a) above notwithstanding, if an individual
terminates his Service (at a time other than during a leave of absence) and
subsequently resumes his Service, if his Reemployment Commencement Date is
within twelve months of his Severance from Service Date, such Period of
Severance shall be treated as a Period of Service for purposes of Paragraph (a)
above.
(c) Paragraph (a) above notwithstanding, if an individual
terminates his Service during a leave of absence and subsequently resumes his
Service, if his Reemployment Commencement Date is within twelve months of the
beginning of such leave of absence, such Period of Severance shall be treated as
a Period of Service for purposes of Paragraph (a) above.
(d) In the case of an individual who has never been a
Participant in the Plan and who incurs a Period of Severance which equals or
exceeds the greater of (1) five years or (2) his Period of Service prior to such
Period of Severance, such individual's Period of Service completed before such
Period of Severance shall be disregarded in determining his Participation
Service.
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<PAGE> 19
III.
CONTRIBUTIONS
3.1 BEFORE-TAX CONTRIBUTIONS.
(a) A Participant may elect to defer an integral percentage of
from 1% to 15% (or such lesser percentage, not less than 5%, as may be
prescribed from time to time by the Committee) of his Compensation for a Plan
Year by having the Employer contribute the amount so deferred to the Plan.
Compensation for a Plan Year not so deferred by such election shall be received
by such Participant in cash. A Participant's election to defer an amount of his
Compensation pursuant to this Section shall be made by authorizing his Employer,
in the manner prescribed by the Committee, to reduce his Compensation in the
elected amount and the Employer, in consideration thereof, agrees to contribute
an equal amount to the Plan. The Compensation elected to be deferred by a
Participant pursuant to this Section shall become a part of the Employer's
Before-Tax Contributions.
(b) A Participant's deferral election shall remain in force
and effect for all periods following its effective date until modified or
terminated or until such Participant terminates his employment. A Participant
who has elected to defer a portion of his Compensation may change his deferral
election percentage (within the percentage limits set forth in Paragraph (a)
above), effective as of any Entry Date, by communicating such new deferral
election percentage to his Employer in the manner and within the time period
prescribed by the Committee.
(c) A Participant may cancel his deferral election the first
day of any payroll period by communicating such cancellation to his Employer in
the manner and within the time period prescribed by the Committee. A Participant
who so cancels his deferral election may resume deferrals effective as of the
first Entry Date at least 90 days after the Participant's cancellation, by
communicating his new deferral election to his Employer in the manner and within
the time period prescribed by the Committee.
(d) In restriction of the Participants' elections provided in
Paragraphs (a), (b), and (c) above, the Before-Tax Contributions and the
elective deferrals (within the meaning of section 402(g)(3) of the Code) under
all other plans, contracts, and arrangements of the Employer on behalf of any
Participant for any calendar year shall not exceed $10,000 (with such amount to
be adjusted automatically to reflect any cost-of-living adjustments authorized
by section 402(g)(5) of the Code).
(e) The Plan shall utilize the safe harbor method of
satisfying the "actual deferral percentage" test set forth in section 401(k)(3)
of the Code pursuant to section 401(k)(12) of the Code and Internal Revenue
Service Notice 98-52 and shall be considered to be using the "current year
testing method" as such term is defined in Internal Revenue Service Notice 98-1.
(f) If, for any Plan Year, the Committee determines that the
Plan did not satisfy the conditions for the safe harbor method of satisfying the
"actual deferral percentage" test set forth in section 401(k)(3) of the Code as
described in Paragraph (e) above, one of the "actual deferral
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<PAGE> 20
percentage" tests set forth in section 401(k)(3) of the Code and the Treasury
regulations thereunder must be met for such Plan Year. Such testing shall
utilize the current year testing method as such term is defined in Internal
Revenue Service Notice 98-1. The Committee may elect, in accordance with
applicable Treasury regulations, to treat Employer Matching Contributions to the
Plan as Before-Tax Contributions for the purposes of meeting these requirements.
If multiple use of the alternative limitation (within the meaning of section
401(m)(9) of the Code and Treasury regulation Section 1.401(m)-2(b)) occurs
during such Plan Year, such multiple use shall be corrected in accordance with
the provisions of Treasury regulation Section 1.401(m)-2(c) by reducing the
"actual contribution percentages" of all Highly Compensated Employees
participating in the Plan and distributing such excess in accordance with the
provisions of Section 3.6(c) and applicable Treasury regulations, so that there
is no such multiple use.
(g) If the restrictions set forth in Paragraph (d) or (f)
above would not otherwise be met for any Plan Year, the Compensation deferral
elections made pursuant to Paragraphs (a), (b), and (c) above of affected
Participants may be reduced by the Committee on a temporary and prospective
basis in such manner as the Committee shall determine.
(h) As soon as administratively feasible following the end of
each payroll period, but no later than the time required by applicable law, the
Employer shall contribute to the Trust, as Before-Tax Contributions with respect
to each Participant, an amount equal to the amount of Compensation elected to be
deferred, pursuant to Paragraphs (a) and (b) above (as adjusted pursuant to
Paragraph (g) above), by such Participant during such payroll period. Such
contributions, as well as the contributions made pursuant to Sections 3.2 and
3.4, shall be made without regard to current or accumulated profits of the
Employer. Notwithstanding the foregoing, the Plan is intended to qualify as a
profit sharing plan for purposes of sections 401(a), 402, 412, and 417 of the
Code.
3.2 EMPLOYER MATCHING CONTRIBUTIONS.
(a) For each payroll period, the Employer shall contribute to
the Trust as Employer Matching Contributions, the sum of (1) an amount that
equals 100% of the Before-Tax Contributions that were made pursuant to Section
3.1 on behalf of each of the Participants during such Plan Year and that were
not in excess of 3% of each such Participant's Compensation for such Plan Year
and (2) an amount that equals 50% of the Before-Tax Contributions that were made
pursuant to Section 3.1 on behalf of each of the Participants during such Plan
Year in excess of 3%, but not in excess of 5%, of each such Participant's
Compensation for such Plan Year.
(b) In addition to the Employer Matching Contributions made
pursuant to Paragraph (a) above, for each Plan Year the Employer shall
contribute to the Trust, as Employer Matching Contributions, an amount equal to
the difference, if any, between (1) and (2) where (1) is the sum of (A) 100% of
the Before-Tax Contributions that were made pursuant to Section 3.1 on behalf of
each of the Participants during such Plan Year and that were not in excess of 3%
of each such Participant's Compensation for such Plan Year and (B) 50% of the
Before-Tax Contributions that were made pursuant to Section 3.1 on behalf of
each of the Participants during such Plan Year and that were in excess of 3%,
but not in excess of 5%, of each such Participant's Compensation for
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<PAGE> 21
such Plan Year and (2) is the Employer Matching Contributions made pursuant to
Paragraph (a) above for each such Participant for such Plan Year.
(c) For each Plan Year, the Employer may contribute to the
Trust as Employer Matching Contributions, an additional amount as determined in
its discretion equal to a percentage of the Before-Tax Contributions made
pursuant to Section 3.1 on behalf of each of the Participants during such Plan
Year and that were not in excess of 3% of each such Participant's Compensation
for such Plan Year; provided, however, that the total Employer Matching
Contributions on behalf of any Participant for any Plan Year shall not exceed 6%
of such Participant's Compensation for such Plan Year.
(d) The Plan shall utilize the safe harbor method of
satisfying the "actual contribution percentage" test set forth in section
401(m)(2) of the Code pursuant to section 401(m)(11) of the Code and Internal
Revenue Service Notice 98-52 and shall be considered to be using the "current
year testing method" as such term is defined in Internal Revenue Service Notice
98-1.
3.3 RESTRICTIONS ON EMPLOYER MATCHING CONTRIBUTIONS. If, for any Plan
Year, the Committee determines that the Plan did not satisfy the conditions for
the safe harbor method of satisfying the "actual contribution percentage" test
set forth in section 401(m)(2) of the Code as described in Section 3.2(d), one
of the "actual contribution percentage" tests set forth in section 401(m) of the
Code and the Treasury regulations thereunder must be met for such Plan Year.
Such testing shall utilize the current year testing method as such term is
defined in Internal Revenue Service Notice 98-1.
3.4 EMPLOYER DISCRETIONARY CONTRIBUTIONS. For each Plan Year, the
Employer may contribute to the Trust as an Employer Discretionary Contribution,
an additional amount as determined in its discretion.
3.5 RETURN OF CONTRIBUTIONS. Anything to the contrary herein
notwithstanding, the Employer's contributions to the Plan are contingent upon
the deductibility of such contributions under section 404 of the Code. To the
extent that a deduction for contributions is disallowed, such contributions
shall, upon the written demand of the Employer, be returned to the Employer by
the Trustee within one year after the date of disallowance, reduced by any net
losses of the Trust Fund attributable thereto but not increased by any net
earnings of the Trust Fund attributable thereto. Moreover, if Employer
contributions are made under a mistake of fact, such contributions shall, upon
the written demand of the Employer, be returned to the Employer by the Trustee
within one year after the payment thereof, reduced by any net losses of the
Trust Fund attributable thereto but not increased by any net earnings of the
Trust Fund attributable thereto.
3.6 DISPOSITION OF EXCESS DEFERRALS AND EXCESS CONTRIBUTIONS.
(a) Anything to the contrary herein notwithstanding, any
Before-Tax Contributions to the Plan for a calendar year on behalf of a
Participant in excess of the limitations set forth in Section 3.1(d) and any
"excess deferrals" from other plans allocated to the Plan by such
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<PAGE> 22
Participant no later than March 1 of the next following calendar year within the
meaning of, and pursuant to the provisions of, section 402(g)(2) of the Code,
shall be distributed to such Participant not later than April 15 of the next
following calendar year.
(b) Anything to the contrary herein notwithstanding, if, for
any Plan Year, Section 3.1(f) applies and the aggregate Before-Tax Contributions
made by the Employer on behalf of Highly Compensated Employees exceeds the
maximum amount of Before-Tax Contributions permitted on behalf of such Highly
Compensated Employees pursuant to Section 3.1(f) (determined by reducing
Before-Tax Contributions on behalf of Highly Compensated Employees in order of
the highest dollar amounts contributed on behalf of such Highly Compensated
Employees in accordance with section 401(k)(8)(C) of the Code and the Treasury
regulations thereunder), such excess shall be distributed to the Highly
Compensated Employees on whose behalf such excess was contributed before the end
of the next following Plan Year.
(c) Anything to the contrary herein notwithstanding, if, for
any Plan Year, Section 3.3 applies and the aggregate Employer Matching
Contributions allocated to the Accounts of Highly Compensated Employees exceeds
the maximum amount of such Employer Matching Contributions permitted on behalf
of such Highly Compensated Employees pursuant to Section 3.3 (determined by
reducing Employer Matching Contributions made on behalf of Highly Compensated
Employees in order of the highest dollar amounts contributed on behalf of such
Highly Compensated Employees in accordance with section 401(m)(6)(C) of the Code
and Treasury regulations thereunder), such excess shall be distributed to the
Highly Compensated Employees on whose behalf such excess contributions were made
before the end of the next following Plan Year.
(d) In coordinating the disposition of excess deferrals and
excess contributions pursuant to this Section, such excess deferrals and excess
contributions shall be disposed of in the following order:
(1) First, Before-Tax Contributions that constitute
excess deferrals described in Paragraph (a) above that are not
considered in determining the amount of Employer Matching Contributions
pursuant to Section 3.2 shall be distributed;
(2) Next, excess Before-Tax Contributions that
constitute excess deferrals described in Paragraph (a) above that are
considered in determining the amount of Employer Matching Contributions
pursuant to Section 3.2 shall be distributed;
(3) Next, excess Before-Tax Contributions described
in Paragraph (b) above that are not considered in determining the
amount of Employer Matching Contributions pursuant to Section 3.2 shall
be distributed;
(4) Next, excess Before-Tax Contributions described
in Paragraph (b) above that are considered in determining the amount of
Employer Matching Contributions pursuant to Section 3.2 shall be
distributed;
III-4
<PAGE> 23
(5) Next, excess Employer Matching Contributions
described in Paragraph (c) above shall be distributed; and
(6) Finally, Employer Matching Contributions that
relate to Before Tax Contributions that have been distributed pursuant
to the provisions of Paragraph (2) or (4) above that were not
distributed pursuant to the provisions of Paragraph (5) above shall be
forfeited.
(e) Any distribution or forfeiture of excess deferrals or
excess contributions pursuant to the provisions of this Section shall be
adjusted for income or loss allocated thereto in the manner determined by the
Committee in accordance with any method permissible under applicable Treasury
regulations. Any forfeiture pursuant to the provisions of this Section shall be
considered to have occurred on the date which is 2 1/2 months after the end of
the Plan Year.
3.7 ROLLOVER CONTRIBUTIONS.
(a) Qualified Rollover Contributions may be made to the Plan
by any Eligible Employee of amounts received by such Eligible Employee from an
individual retirement account or annuity or from an employees' trust described
in section 401(a) of the Code, which is exempt from tax under section 501(a) of
the Code, but only if any such Rollover Contribution is made pursuant to and in
accordance with applicable provisions of the Code and Treasury regulations
promulgated thereunder. A Rollover Contribution of amounts that are "eligible
rollover distributions" within the meaning of section 402(f)(2)(A) of the Code
may be made to the Plan irrespective of whether such eligible rollover
distribution was paid to the Eligible Employee or paid to the Plan as a "direct"
Rollover Contribution. A direct Rollover Contribution to the Plan may be
effectuated only by issuance of a check made payable to the Trustee, which is
negotiable only by the Trustee and which identifies the Eligible Employee for
whose benefit the Rollover Contribution is being made. Any Eligible Employee
desiring to effect a Rollover Contribution to the Plan must execute and file
with the Committee the form prescribed by the Committee for such purpose. The
Committee may require as a condition to accepting any Rollover Contribution that
such Eligible Employee furnish any evidence that the Committee in its discretion
deems satisfactory to establish that the proposed Rollover Contribution is in
fact eligible for rollover to the Plan and is made pursuant to and in accordance
with applicable provisions of the Code and Treasury regulations. All Rollover
Contributions to the Plan must be made in cash. A Rollover Contribution shall be
credited to the Rollover Contribution Account of the Eligible Employee for whose
benefit such Rollover Contribution is being made.
(b) An Eligible Employee who has made a Rollover Contribution
in accordance with this Section, but who has not otherwise become a Participant
in the Plan in accordance with Article II, shall become a Participant coincident
with such Rollover Contribution; provided, however, that such Participant shall
not have a right to defer Compensation or have Employer Contributions made on
his behalf until he has otherwise satisfied the requirements imposed by Article
II.
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<PAGE> 24
IV.
ALLOCATIONS AND LIMITATIONS
4.1 SUSPENDED AMOUNTS. All contributions, forfeitures, and the net
income (or net loss) of the Trust Fund shall be held in suspense until allocated
or applied as provided herein.
4.2 ALLOCATION OF CONTRIBUTIONS.
(a) Before-Tax Contributions made by the Employer on a
Participant's behalf for each payroll period pursuant to Section 3.1 shall be
allocated to such Participant's Before-Tax Account.
(b) The Employer Matching Contributions for each Plan Year
pursuant to Sections 3.2(a) and (b) shall be allocated to the Employer Matching
Accounts of the Participants for whom such contributions were made.
(c) The Employer Matching Contributions, if any, for each Plan
Year pursuant to Section 3.2(c) shall be allocated to the Employer Discretionary
Accounts of the Participants for whom such contributions were made.
(d) The Employer Discretionary Contribution, if any, made
pursuant to Section 3.4 for a Plan Year shall be allocated to the Employer
Discretionary Accounts of the Participants in the ratio of such Participants'
Compensation for such Plan Year.
(e) All contributions to the Plan shall be considered
allocated to Participants' Accounts no later than the last day of the Plan Year
for which they were made, as determined pursuant to Article III, except that,
for purposes of Section 4.4, contributions shall be considered allocated to
Participants' Accounts when received by the Trustee
4.3 APPLICATION OF FORFEITURES. Any amounts that are forfeited under
any provision hereof during a Plan Year shall be applied to reduce Employer
Matching Contributions for the Plan Year in which the forfeiture occurs. Prior
to such application, forfeited amounts shall be invested in the Investment Fund
or Funds designated from time to time by the Committee.
4.4 VALUATION OF ACCOUNTS. All amounts contributed to the Trust Fund
shall be invested as soon as administratively feasible following their receipt
by the Trustee, and the balance of each Account shall reflect the result of
daily pricing of the assets in which such Account is invested from the time of
receipt by the Trustee until the time of distribution.
4.5 LIMITATIONS AND CORRECTIONS.
(a) For purposes of this Section, the following terms and
phrases shall have these respective meanings:
IV-1
<PAGE> 25
(1) "Annual Additions" of a Participant for any
Limitation Year shall mean the total of (A) the Employer Contributions,
Before-Tax Contributions, and forfeitures, if any, allocated to such
Participant's Accounts for such year, (B) Participant's contributions,
if any, (excluding any Rollover Contributions) for such year, and (C)
amounts referred to in sections 415(l)(1) and 419A(d)(2) of the Code.
(2) "415 Compensation" shall mean the total of all
amounts paid by the Employer to or for the benefit of a Participant for
services rendered or labor performed for the Employer which are
required to be reported on the Participant's federal income tax
withholding statement or statements (Form W-2 or its subsequent
equivalent), subject to the following adjustments and limitations:
(A) The following shall be included:
(i) elective deferrals (as defined in
section 402(g)(3) of the Code) from compensation to
be paid by the Employer to the Participant;
(ii) any amount which is contributed
or deferred by the Employer at the election of the
Participant and which is not includible in the gross
income of the Participant by reason of section 125 or
457 of the Code; and
(iii) any amounts that are not
includable in the gross income of a Participant under
a salary reduction agreement by reason of the
application of section 132(f) of the Code.
(B) The 415 Compensation of any Participant
taken into account for purposes of the Plan shall be limited
to $160,000 for any Plan Year with such limitation to be:
(i) adjusted automatically to
reflect any amendments to section 401(a)(17) of the
Code and any cost-of-living increases authorized by
section 401(a)(17) of the Code; and
(ii) prorated for a Plan Year of
less than twelve months and to the extent otherwise
required by applicable law.
(3) "Limitation Year" shall mean the Plan Year.
(4) "Maximum Annual Additions" of a Participant for
any Limitation Year shall mean the lesser of (A) $30,000 (with such
amount to be adjusted automatically to reflect any cost-of-living
adjustment authorized by section 415(d) of the Code) or (B) 25% of such
Participant's 415 Compensation during such Limitation Year, except that
the limitation in this Clause (B) shall not apply to any contribution
for medical benefits (within the meaning of section 419A(f)(2) of the
Code) after separation from service with the
IV-2
<PAGE> 26
Employer or a Controlled Entity which is otherwise treated as an Annual
Addition or to any amount otherwise treated as an Annual Addition under
section 415(l)(1) of the Code.
(b) Contrary Plan provisions notwithstanding, in no event
shall the Annual Additions credited to a Participant's Accounts for any
Limitation Year exceed the Maximum Annual Additions for such Participant for
such year. 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 section 402(g)(3) of the Code) that may be made with
respect to any individual under the limits of section 415 of the Code, or
because of other limited facts and circumstances, the Annual Additions that
would be credited to a Participant's Accounts for a Limitation Year would
nonetheless exceed the Maximum Annual Additions for such Participant for such
year, the excess Annual Additions which, but for this Section, would have been
allocated to such Participant's Accounts shall be disposed of as follows:
(1) First, any such excess Annual Additions in the
form of Before-Tax Contributions on behalf of such Participant that
would not have been considered in determining the amount of Employer
Matching Contributions pursuant to Section 3.2 shall be distributed to
such Participant, adjusted for income or loss allocated thereto;
(2) Next, any such excess Annual Additions in the
form of Before-Tax Contributions on behalf of such Participant that
would have been considered in determining the amount of Employer
Matching Contributions pursuant to Section 3.2 shall be distributed to
such Participant, adjusted for income or loss allocated thereto, and
the Employer Matching Contributions that would have been allocated to
such Participant's Accounts based upon such distributed Before-Tax
Contributions shall, to the extent such amounts would have otherwise
been allocated to such Participant's Accounts, be treated as a
forfeiture;
(3) Finally, any such excess Annual Additions in the
form of Employer Discretionary Contributions shall, to the extent such
amounts would otherwise have been allocated to such Participant's
Accounts, be treated as a forfeiture.
(c) For purposes of determining whether the Annual Additions
under this Plan exceed the limitations herein provided, all defined contribution
plans of the Employer are to be treated as one defined contribution plan. In
addition, all defined contribution plans of Controlled Entities shall be
aggregated for this purpose. For purposes of this Section only, a "Controlled
Entity" (other than an affiliated service group member within the meaning of
section 414(m) of the Code) shall be determined by application of a more than
50% control standard in lieu of an 80% control standard. If the Annual Additions
credited to a Participant's Accounts for any Limitation Year under this Plan
plus the additions credited on his behalf under other defined contribution plans
required to be aggregated pursuant to this Paragraph would exceed the Maximum
Annual Additions for such Participant for such Limitation Year, the Annual
Additions under this Plan and the additions under such other plans shall be
reduced on a pro rata basis and allocated, reallocated, or returned in
accordance with applicable plan provisions regarding Annual Additions in excess
of Maximum Annual Additions.
IV-3
<PAGE> 27
(d) In the case of a Participant who also participated in a
defined benefit plan of the Employer or a Controlled Entity (as defined in
Paragraph (d) above), the Employer shall reduce the Annual Additions credited to
the Accounts of such Participant under this Plan pursuant to the provisions of
Paragraph (b) to the extent necessary to prevent the limitation set forth in
section 415(e) of the Code from being exceeded. Notwithstanding the foregoing,
the provisions of this Paragraph shall apply only if such defined benefit plan
does not provide for a reduction of benefits thereunder to ensure that the
limitation set forth in section 415(e) of the Code is not exceeded. Further,
this Paragraph shall not apply for Limitation Years beginning after December 31,
1999.
(e) If the limitations set forth in this Section would not
otherwise be met for any Limitation Year, the Compensation deferral elections
pursuant to Section 3.1 of affected Participants may be reduced by the Committee
on a temporary and prospective basis in such manner as the Committee shall
determine.
IV-4
<PAGE> 28
V.
INVESTMENT FUNDS
5.1 INVESTMENT OF ACCOUNTS.
(a) Each Participant shall designate, in accordance with the
procedures established from time to time by the Committee, the manner in which
the amounts allocated to his Accounts shall be invested from among the
Investment Funds made available from time to time by the Committee. A
Participant may designate one of such Investment Funds for all the amounts
allocated to his Accounts or he may split the investment of the amounts
allocated to his Accounts between such Investment Funds in such increments as
the Committee may prescribe. If a Participant fails to make a designation, then
his Accounts shall be invested in the Investment Fund or Funds designated by the
Committee from time to time in a uniform and nondiscriminatory manner.
(b) A Participant may change his investment designation for
future contributions to be allocated to his Accounts. Any such change shall be
made in accordance with the procedures established by the Committee, and the
frequency of such changes may be limited by the Committee.
(c) A Participant may elect to convert his investment
designation with respect to the amounts already allocated to his Accounts. Any
such conversion shall be made in accordance with the procedures established by
the Committee, and the frequency of such conversions may be limited by the
Committee.
5.2 RESTRICTION ON ACQUISITION OF COMPANY STOCK. Notwithstanding any
other provision hereof, it is specifically provided that the Trustee shall not
purchase Company Stock or other Company securities during any period in which
such purchase is, in the opinion of counsel for the Company or the Committee,
restricted by any law or regulation applicable thereto. During such period,
amounts that would otherwise be invested in Company Stock or other Company
securities pursuant to an investment designation shall be invested in such other
assets as the Trustee may in its discretion determine, or the Trustee may hold
such amounts uninvested for a reasonable period pending the purchase of such
stock or securities.
5.3 VOTING OF COMPANY STOCK. To the extent permitted by section 404(a)
of the Act, at each annual meeting and special meeting of the shareholders of
the Company, a Participant may direct the voting of the number of whole shares
of Company Stock attributable to his Accounts as of the record date for such
meeting in accordance with the provisions of the Trust Agreement.
5.4 STOCK RIGHTS, STOCK SPLITS, AND STOCK DIVIDENDS. Company Stock
received by the Trustee by reason of a stock split, stock dividend, or
recapitalization shall be appropriately allocated to the Accounts of each
affected Participant.
V-1
<PAGE> 29
VI.
RETIREMENT BENEFITS
6.1 RETIREMENT BENEFITS. A Participant who terminates his employment on
or after his Normal Retirement Date shall be entitled to a retirement benefit,
payable at the time and in the form provided in Article X, equal to the value of
his Accounts on his Benefit Commencement Date. Any contribution allocable to a
Participant's Accounts after his Benefit Commencement Date shall be distributed,
if his benefit was paid in a lump sum, or used to increase his payments, if his
benefit is being paid on a periodic basis, as soon as administratively feasible
after the date that such contribution is paid to the Trust Fund.
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<PAGE> 30
VII.
DISABILITY BENEFITS
7.1 DISABILITY BENEFITS. In the event a Participant's employment is
terminated, and such Participant is totally and permanently disabled, as
determined pursuant to Section 7.2, such Participant shall be entitled to a
disability benefit, payable at the time and in the form provided in Article X,
equal to the value of his Accounts on his Benefit Commencement Date. Any
contribution allocable to a Participant's Accounts after his Benefit
Commencement Date shall be distributed, if his benefit was paid in a lump sum,
or used to increase his payments, if his benefit is being paid on a periodic
basis, as soon as administratively feasible after the date that such
contribution is paid to the Trust Fund.
7.2 TOTAL AND PERMANENT DISABILITY DETERMINED. A Participant shall be
considered totally and permanently disabled if the Committee determines, based
on a written medical opinion (unless waived by the Committee as unnecessary),
that such Participant is permanently incapable of performing his job for
physical or mental reasons.
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<PAGE> 31
VIII.
SEVERANCE BENEFITS AND DETERMINATION OF VESTED INTEREST
8.1 NO BENEFITS UNLESS HEREIN SET FORTH. Except as set forth in this
Article, upon termination of employment of a Participant prior to his Normal
Retirement Date for any reason other than total and permanent disability (as
defined in Section 7.2) or death, such Participant shall acquire no right to any
benefit from the Plan or the Trust Fund.
8.2 SEVERANCE BENEFIT. Each Participant whose employment is terminated
prior to his Normal Retirement Date for any reason other than total and
permanent disability (as defined in Section 7.2) or death shall be entitled to a
severance benefit, payable at the time and in the form provided in Article X,
equal to his Vested Interest in the value of his Accounts on his Benefit
Commencement Date. A Participant's Vested Interest in any contribution allocable
to his Accounts after his Benefit Commencement Date shall be distributed, if his
benefit was paid in a lump sum, or used to increase his payments, if his benefit
is being paid on a periodic basis, as soon as administratively feasible after
the date that such contribution is paid to the Trust Fund.
8.3 DETERMINATION OF VESTED INTEREST.
(a) A Participant shall have a 100% Vested Interest in his
After-Tax Account, Before-Tax Account, Employer Discretionary Account, Employer
Matching Account, and Rollover Contribution Account at all times.
(b) A Participant's Vested Interest in his Employer
Contribution Account shall be determined by such Participant's years of Vesting
Service in accordance with the following schedule:
<TABLE>
<CAPTION>
YEARS OF VESTING SERVICE VESTED INTEREST
------------------------ ---------------
<S> <C>
Less than 2 years 0%
2 years 50%
3 years 75%
4 years or more 100%
</TABLE>
(c) Paragraph (b) above notwithstanding, a Participant shall
have a 100% Vested Interest in his Employer Contribution Account (1) upon the
attainment of his Normal Retirement Date while employed by the Employer or a
Controlled Entity, (2) upon the termination of his employment with the Employer
at a time when he is totally and permanently disabled (as defined in Section
7.2), (3) upon the death of such Participant while an Employee, or (4) if such
Participant is an affected Participant, the occurrence of an event described in,
under the conditions set forth in, Section 17.2.
VIII-1
<PAGE> 32
8.4 CREDITING OF VESTING SERVICE.
(a) For the period preceding the Effective Date, subject to
the provisions of Section 8.5, an individual shall be credited with Vesting
Service in an amount equal to all service credited to him for vesting purposes
under the Plan as it existed on the day prior to the Effective Date.
(b) For the Plan Year beginning with the Effective Date and
all Plan Years thereafter, subject to the provisions of Section 8.5, 1,000 or
more Hours of Service during any Plan Year shall constitute one year of Vesting
Service.
8.5 FORFEITURE OF VESTING SERVICE.
(a) In the case of a Participant who terminates employment
with the Employer at a time when he has a Vested Interest of less than 100% in
his Employer Contribution Account and then incurs five or more consecutive
One-Year Breaks-in-Service, such Participant's years of Vesting Service
completed after such One-Year Breaks-in-Service shall be disregarded for
purposes of determining such Participant's Vested Interest in any Plan benefits
derived from Employer Contributions on his behalf before such One-Year
Breaks-in-Service, but his years of Vesting Service completed before such
One-Year Breaks-in-Service shall not be disregarded in determining any Plan
benefits derived from Employer Contributions on his behalf after such One-Year
Breaks-in- Service.
(b) A Participant who terminates employment with the Employer
at a time when he has a 100% Vested Interest shall not forfeit any of his
Vesting Service for purposes of determining any Plan benefits.
8.6 FORFEITURES OF NONVESTED ACCOUNT BALANCE.
(a) With respect to a Participant who terminates employment
with the Employer with a Vested Interest in his Employer Contribution Account
that is less than 100% and either is not entitled to a distribution from the
Plan or receives a distribution from the Plan of the balance of his Vested
Interest in his Accounts in the form of a lump sum distribution, the nonvested
portion of such terminated Participant's Employer Contribution Account as of his
Benefit Commencement Date shall become a forfeiture as of his Benefit
Commencement Date (or as of his date of termination of employment if no amount
is payable from the Trust Fund on behalf of such Participant with such
Participant being considered to have received a distribution of zero dollars on
his date of termination of employment).
(b) With respect to a Participant who terminates employment
with the Employer with a Vested Interest in his Employer Contribution Account
less than 100% and to whom the forfeiture provisions of Paragraph (a) above (or
Section 8.8 below) have not yet applied, the nonvested portion of his Employer
Contribution Account shall be forfeited as of the earlier of (1) the last day of
the Plan Year during which the terminated Participant incurs his fifth
consecutive One-Year Break-in-Service or (2) the date of the terminated
Participant's death.
VIII-2
<PAGE> 33
8.7 RESTORATION OF FORFEITED ACCOUNT BALANCE. In the event that the
nonvested portion of a terminated Participant's Employer Contribution Account
becomes a forfeiture pursuant to Section 8.6, the terminated Participant shall,
upon subsequent reemployment with the Employer prior to incurring five
consecutive One-Year Breaks-in-Service, have the forfeited amount restored to
such Participant's Employer Contribution Account, unadjusted by any subsequent
gains or losses of the Trust Fund; provided, however, that such restoration
shall be made only if such Participant repays in cash an amount equal to the
amount so distributed to him pursuant to Section 8.6 within five years from the
date the Participant is reemployed. A reemployed Participant who was not
entitled to a distribution from the Plan on his date of termination of
employment shall be considered to have repaid a distribution of zero dollars on
the date of his reemployment. Any such restoration shall be made as soon as
administratively feasible following the date of repayment. Notwithstanding
anything to the contrary in the Plan, forfeited amounts to be restored by the
Employer pursuant to this Section shall be charged against and deducted from
forfeitures for the Plan Year in which such amounts are restored that would
otherwise be available to be applied pursuant to Section 4.3. If such
forfeitures otherwise available are not sufficient to provide such restoration,
the portion of such restoration not provided by forfeitures shall be charged
against and deducted from Employer Discretionary Contributions otherwise
available for allocation to other Participants in accordance with Section
4.2(d), and any additional amount needed to restore such forfeited amounts shall
be provided by an additional Employer Discretionary Contribution (which shall be
made without regard to current or accumulated earnings and profits).
8.8 SPECIAL FORMULA FOR DETERMINING VESTED INTEREST FOR PARTIAL
ACCOUNTS. With respect to a Participant whose Vested Interest in his Employer
Contribution Account is less than 100% and who makes a withdrawal from or
receives a termination distribution from his Employer Contribution Account other
than a lump sum distribution, any amount remaining in his Employer Contribution
Account shall continue to be maintained as a separate account. At any relevant
time, such Participant's nonforfeitable portion of his separate account shall be
determined in accordance with the following formula:
X=P(AB + (R X D)) - (R X D)
For purposes of applying the formula: X is the nonforfeitable portion of such
separate account at the relevant time; P is the Participant's Vested Interest in
his Employer Contribution Account at the relevant time; AB is the balance of
such separate account at the relevant time; R is the ratio of the balance of
such separate account at the relevant time to the balance of such separate
account after the withdrawal or distribution; and D is the amount of the
withdrawal or distribution. For all other purposes of the Plan, a Participant's
separate account shall be treated as an Employer Contribution Account. Upon his
incurring five consecutive One-Year Breaks-in-Service, the forfeitable portion
of a Participant's separate account and Employer Contribution Account shall be
forfeited as of the end of the Plan Year during which the Participant incurred
his fifth such consecutive One-Year Break-in-Service if not forfeited earlier
pursuant to the provisions of Section 8.6.
VIII-3
<PAGE> 34
IX.
DEATH BENEFITS
9.1 DEATH BENEFITS. Upon the death of a Participant while an Employee,
the Participant's designated beneficiary shall be entitled to a death benefit,
payable at the time and in the form provided in Article X, equal to the value of
the Participant's Accounts on his Benefit Commencement Date. Any contribution
allocable to a Participant's Accounts after his Benefit Commencement Date shall
be distributed, if the death benefit was paid in a lump sum, or used to increase
payments, if the death benefit is being paid on a periodic basis, as soon as
administratively feasible after the date that such contribution is paid to the
Trust Fund.
9.2 DESIGNATION OF BENEFICIARIES.
(a) Each Participant shall have the right to designate the
beneficiary or beneficiaries to receive payment of his benefit in the event of
his death. Each such designation shall be made by executing the beneficiary
designation form prescribed by the Committee and filing such form with the
Committee. Any such designation may be changed at any time by such Participant
by execution of a new designation in accordance with this Section.
Notwithstanding the foregoing, if a Participant who is married on the date of
his death designates an individual or entity other than his surviving spouse as
his beneficiary, such designation shall not be effective unless (1) such spouse
has consented thereto in writing and such consent (A) acknowledges the effect of
such specific designation, (B) either consents to the specific designated
beneficiary (which designation may not subsequently be changed by the
Participant without spousal consent) or expressly permits such designation by
the Participant without the requirement of further consent by the spouse, and
(C) is witnessed by a Plan representative (other than the Participant) or a
notary public or (2) the consent of such spouse cannot be obtained because such
spouse cannot be located or because of other circumstances described by
applicable Treasury regulations. Any such consent by such surviving spouse shall
be irrevocable.
(b) If no beneficiary designation is on file with the
Committee at the time of the death of the Participant or if such designation is
not effective for any reason as determined by the Committee, the designated
beneficiary or beneficiaries to receive such death benefit shall be as follows:
(1) If a Participant leaves a surviving spouse, his
designated beneficiary shall be such surviving spouse;
(2) If a Participant leaves no surviving spouse, his
designated beneficiary shall be (A) such Participant's executor or
administrator or (B) his heirs at law if there is no administration of
such Participant's estate.
(c) Notwithstanding the preceding provisions of this Section
and to the extent not prohibited by state or federal law, if a Participant is
divorced from his spouse and at the time of his
IX-1
<PAGE> 35
death is not remarried to the person from whom he was divorced, any designation
of such divorced spouse as his beneficiary under the Plan filed prior to the
divorce shall be null and void unless the contrary is expressly stated in
writing filed with the Committee by the Participant. The interest of such
divorced spouse failing hereunder shall vest in the persons specified in
Paragraph (b) above as if such divorced spouse did not survive the Participant.
IX-2
<PAGE> 36
X.
TIME AND FORM OF PAYMENT OF BENEFITS
10.1 DETERMINATION OF BENEFIT COMMENCEMENT DATE.
(a) Subject to the provisions of the remaining Paragraphs of
this Section, a Participant's Benefit Commencement Date shall be the date that
is as soon as administratively feasible after the date the Participant or his
beneficiary becomes entitled to a benefit pursuant to Article VI, VII, VIII, or
IX.
(b) Unless (1) the Participant has attained age sixty-five or
died, (2) the Participant consents to a distribution pursuant to Paragraph (a)
within the ninety-day period ending on the date payment of his benefit hereunder
is to commence pursuant to Paragraph (a), or (3) the Participant's Vested
Interest in his Accounts is not in excess of $5,000, the Participant's Benefit
Commencement Date shall be deferred to the date which is as soon as
administratively feasible after the earlier of the date the Participant attains
age sixty-five or the Participant's date of death, or such earlier date as the
Participant may elect by written notice to the Committee prior to such date. No
less than thirty days (unless such thirty-day period is waived by an affirmative
election in accordance with applicable Treasury regulations) and no more than
ninety days before his Benefit Commencement Date, the Committee shall inform the
Participant of his right to defer his Benefit Commencement Date and shall
describe the Participant's Direct Rollover election rights pursuant to Section
10.3 below.
(c) A Participant's Benefit Commencement Date shall in no
event be later than the sixtieth day following the close of the Plan Year during
which such Participant attains, or would have attained, his Normal Retirement
Date or, if later, terminates his employment with the Employer or a Controlled
Entity.
(d) A Participant's Benefit Commencement Date shall be in
compliance with the provisions of section 401(a)(9) of the Code and applicable
Treasury regulations thereunder and shall in no event be later than:
(1) For Participants attaining age seventy and
one-half before January 1, 1999, April 1 of the calendar year following
the calendar year in which such Participant attains the age of seventy
and one-half;
(2) For Participants attaining age seventy and
one-half after December 31, 1998, April 1 of the calendar year
following the later of (A) the calendar year in which such Participant
attains the age of seventy and one-half or (B) the calendar year in
which such Participant terminates his employment with the Employer
(provided, however, that clause (B) of this sentence shall not apply in
the case of a Participant who is a "five-percent owner" (as defined in
section 416 of the Code) with respect to the Plan Year ending in the
calendar year in which such Participant attains the age of seventy and
one-half); and
X-1
<PAGE> 37
(3) In the case of a benefit payable pursuant to
Article IX, the last day of the five-year period following the death of
such Participant.
The provisions of this Section notwithstanding, a Participant may not elect to
defer the receipt of his benefit hereunder to the extent that such deferral
creates a death benefit that is more than incidental within the meaning of
section 401(a)(9)(G) of the Code and applicable Treasury regulations thereunder.
(e) Subject to the provisions of Paragraph (d), a
Participant's Benefit Commencement Date shall not occur unless the Article VI,
VII, VIII, or IX event entitling the Participant (or his beneficiary) to a
benefit constitutes a distributable event described in section 401(k)(2)(B) of
the Code and shall not occur while the Participant is employed by the Employer
or any Controlled Entity (irrespective of whether the Participant has become
entitled to a distribution of his benefit pursuant to Article VI, VII, VIII, or
IX).
(f) Paragraphs (a), (b), and (c) above notwithstanding, but
subject to the provisions of Paragraph (d) above, a Participant, other than a
Participant whose Vested Interest in his Accounts is not in excess of $5,000,
and the beneficiary of such a Participant who dies prior to his Benefit
Commencement Date must file a claim for benefits in the manner prescribed by the
Committee before payment of his benefits will commence.
10.2 FORM OF PAYMENT AND PAYEE.
(a) Subject to the provisions of Paragraph (b) below, a
Participant's benefit shall be provided from the balance of such Participant's
Accounts under the Plan and shall be paid in cash in one lump sum on the
Participant's Benefit Commencement Date. Except as provided in Section 19.4, the
Participant's benefit shall be paid to the Participant unless the Participant
has died prior to his Benefit Commencement Date, in which case the Participant's
benefit shall be paid to his beneficiary designated in accordance with the
provisions of Section 9.2.
(b) Benefits shall be paid (or transferred pursuant to Section
10.3) in cash except that a Participant (or his designated beneficiary or legal
representative in the case of a deceased Participant) may elect to have the
portion of his Accounts invested in Company Stock paid (or transferred pursuant
to Section 10.3) in full shares of Company Stock with any balance (including
fractional shares of Company Stock) to be paid or transferred in cash.
10.3 DIRECT ROLLOVER ELECTION. 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 Committee, to have all or any portion of an Eligible Rollover
Distribution (other than any portion attributable to the offset of an
outstanding loan balance of such Participant pursuant to the Plan's loan
procedure) paid directly to an Eligible Retirement Plan specified by the
Distributee in a Direct Rollover. Prior to any Direct Rollover pursuant to this
Section, the Committee may require the Distributee to furnish the Committee with
a statement from the plan, account, or annuity to which the benefit is to be
transferred verifying that such plan, account, or annuity is, or is intended to
be, an Eligible Retirement Plan.
X-2
<PAGE> 38
10.4 UNCLAIMED BENEFITS. In the case of a benefit payable on behalf of
a Participant, if the Committee is unable to locate the Participant or
beneficiary to whom such benefit is payable, upon the Committee's determination
thereof, such benefit shall be forfeited. Notwithstanding the foregoing, if
subsequent to any such forfeiture the Participant or beneficiary to whom such
benefit is payable makes a valid claim for such benefit, such forfeited benefit
shall be restored to the Plan in the manner provided in Section 8.7.
10.5 CLAIMS REVIEW.
(a) In any case in which a claim for Plan benefits of a
Participant or beneficiary is denied or modified, the Committee shall furnish
written notice to the claimant within ninety days (or within 180 days if
additional information requested by the Committee necessitates an extension of
the ninety-day period and the claimant is informed of such extension in writing
within the original ninety-day period), which notice shall:
(1) State the specific reason or reasons for the
denial or modification;
(2) Provide specific reference to pertinent Plan
provisions on which the denial or modification is based;
(3) Provide a description of any additional material
or information necessary for the Participant, his beneficiary, or
representative to perfect the claim and an explanation of why such
material or information is necessary; and
(4) Explain the Plan's claim review procedure
described in Paragraph (b) below.
(b) In the event a claim for Plan benefits is denied or
modified, if the Participant, his beneficiary, or a representative of such
Participant or beneficiary desires to have such denial or modification reviewed,
he must, within sixty days following receipt of the notice of such denial or
modification, submit a written request for review by the Committee of its
initial decision. In connection with such request, the Participant, his
beneficiary, or the representative of such Participant or beneficiary may review
any pertinent documents upon which such denial or modification was based and may
submit issues and comments in writing. Within sixty days following such request
for review the Committee shall, after providing a full and fair review, render
its final decision in writing to the Participant, his beneficiary or the
representative of such Participant or beneficiary stating specific reasons for
such decision and making specific references to pertinent Plan provisions upon
which the decision is based. If special circumstances require an extension of
such sixty-day period, the Committee's decision shall be rendered as soon as
possible, but not later than 120 days after receipt of the request for review.
If an extension of time for review is required, written notice of the extension
shall be furnished to the Participant, beneficiary, or the representative of
such Participant or beneficiary prior to the commencement of the extension
period.
X-3
<PAGE> 39
XI.
IN-SERVICE WITHDRAWALS
11.1 IN-SERVICE WITHDRAWALS.
(a) A Participant may withdraw from his After-Tax Account
and/or Rollover Contribution Account any or all amounts held in such Accounts.
(b) A Participant who has attained age fifty-nine and one-half
and who has made all available withdrawals pursuant to Paragraph (a) above may
withdraw from his Before-Tax Account an amount not exceeding the then value of
such Account.
(c) A Participant who has a financial hardship, as determined
by the Committee, and who has made all available withdrawals pursuant to the
Paragraphs above and pursuant to the provisions of any other plans of the
Employer and any Controlled Entities of which he is a member and who has
obtained all available loans pursuant to Article XII and pursuant to the
provisions of any other plans of the Employer and any Controlled Entities of
which he is a member may withdraw from his Employer Contribution Account, his
Employer Discretionary Account, his Rollover Contribution Account, and his
Before-Tax Account amounts not to exceed the lesser of (1) such Participant's
Vested Interest in such Accounts or (2) the amount determined by the Committee
as being available for withdrawal pursuant to this Paragraph. A Participant who
makes a withdrawal under this Paragraph may not make Before-Tax Contributions to
the Plan for a period of twelve months following the date of such withdrawal.
Such withdrawal shall come, first, from the Participant's Rollover Contribution
Account, second, from his Employer Discretionary Account, third, from his Vested
Interest in his Employer Contribution Account and, finally, from his Before- Tax
Account. For purposes of this Paragraph, financial hardship shall mean the
immediate and heavy financial needs of the Participant. A withdrawal based upon
financial hardship pursuant to this Paragraph shall not exceed the amount
required to meet the immediate financial need created by the hardship and not
reasonably available from other resources of the Participant. The amount
required to meet the immediate financial need may include any amounts necessary
to pay any federal income taxes reasonably anticipated to result from the
distribution. The determination of the existence of a Participant's financial
hardship and the amount required to be distributed to meet the need created by
the hardship shall be made by the Committee. The decision of the Committee shall
be final and binding, provided that all Participants similarly situated shall be
treated in a uniform and nondiscriminatory manner. A withdrawal shall be deemed
to be made on account of an immediate and heavy financial need of a Participant
if the withdrawal is for:
(1) Expenses for medical care described in section
213(d) of the Code previously incurred by the Participant, the
Participant's spouse, or any dependents of the Participant (as defined
in section 152 of the Code) or necessary for those persons to obtain
medical care described in section 213(d) of the Code and not reimbursed
or reimbursable by insurance;
XI-1
<PAGE> 40
(2) Costs directly related to the purchase of a
principal residence of the Participant (excluding mortgage payments);
(3) Payment of tuition and related educational fees,
and room and board expenses, for the next twelve months of
post-secondary education for the Participant or the Participant's
spouse, children, or dependents (as defined in section 152 of the
Code);
(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; or
(5) Such other financial needs that the Commissioner
of Internal Revenue may deem to be immediate and heavy financial needs
through the publication of revenue rulings, notices, and other
documents of general applicability.
The above notwithstanding, (1) withdrawals under this Paragraph from a
Participant's Before-Tax Account shall be limited to the sum of the
Participant's Before-Tax Contributions to the Plan, plus income allocable
thereto and credited to the Participant's Before-Tax Account as of December 31,
1988, less any previous withdrawals of such amounts, and (2) Employer Matching
Contributions used to satisfy the restrictions set forth in Section 3.1(f) in
this Plan or a predecessor plan shall not be subject to withdrawal. A
Participant who makes a withdrawal from his Before-Tax Account under this
Paragraph may not make elective contributions or employee contributions to the
Plan or any other qualified or nonqualified plan of the Employer or any
Controlled Entity for a period of twelve months following the date of such
withdrawal. Further, such Participant may not make elective contributions under
the Plan or any other plan maintained by the Employer or any Controlled Entity
for such Participant's taxable year immediately following the taxable year of
the withdrawal in excess of the applicable limit set forth in Section 3.1(d) for
such next taxable year less the amount of such Participant's elective
contributions for the taxable year of the withdrawal.
11.2 RESTRICTION ON IN-SERVICE WITHDRAWALS.
(a) All withdrawals pursuant to this Article shall be made in
accordance with procedures established by the Committee.
(b) Notwithstanding the provisions of this Article, no
withdrawal shall be made from an Account to the extent such Account has been
pledged to secure a loan from the Plan.
(c) If a Participant's Account from which a withdrawal is made
is invested in more than one Investment Fund, the withdrawal shall be made in
sequence starting with the most conservative Investment Fund and ending with the
most aggressive as determined by the Committee.
(d) All withdrawals under this Article shall be paid in cash.
XI-2
<PAGE> 41
(e) Any withdrawal hereunder, other than withdrawals from
Before-Tax Accounts pursuant to Section 11.1(c) on or after January 1, 2000,
shall be subject to the Direct Rollover election described in Section 10.3.
(f) This Article shall not be applicable to a Participant
following termination of employment and the amounts in such Participant's
Accounts shall be distributable only in accordance with the provisions of
Article X.
XI-3
<PAGE> 42
XII.
LOANS
12.1 ELIGIBILITY FOR LOAN. Upon application by (1) any Participant who
is an Employee or (2) any Participant no longer employed by the Employer, a
beneficiary of a deceased Participant or an alternate payee under a qualified
domestic relations order, as defined in section 414(p)(8) of the Code, who
retains an Account balance under the Plan and who is a party-in-interest, as
that term is defined in section 3(14) of the Act, as to the Plan (an individual
who is eligible to apply for a loan under this Article being hereinafter
referred to as a "Participant" for purposes of this Article), the Committee may
in its discretion direct the Trustee to make a loan or loans to such
Participant. Such loans shall be made pursuant to the provisions of the
Committee's written loan procedure, which procedure is hereby incorporated by
reference as a part of the Plan.
12.2 MAXIMUM LOAN.
(a) A loan to a Participant may not exceed 50% of the then
value of such Participant's Vested Interest in his Accounts.
(b) Paragraph (a) above to the contrary notwithstanding, the
amount of a loan made to a Participant under this Article shall not exceed an
amount equal to the difference between:
(1) The lesser of $50,000 (reduced by the excess, if
any, of (A) the highest outstanding balance of loans from the Plan
during the one-year period ending on the day before the date on which
the loan is made over (B) the outstanding balance of loans from the
Plan on the date on which the loan is made) or one-half of the present
value of the Participant's total nonforfeitable accrued benefit under
all qualified plans of the Employer or a Controlled Entity; minus
(2) The total outstanding loan balance of the
Participant under all other loans from all qualified plans of the
Employer or a Controlled Entity.
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XIII.
ADMINISTRATION OF THE PLAN
13.1 APPOINTMENT OF COMMITTEE. For purposes of the Act, the Company
shall be the Plan "administrator" and shall be the "named fiduciary" with
respect to the general administration of the Plan (except as to the investment
of the assets of the Trust Fund). To carry out the duties of the Company in the
administration of the Plan, the Committee shall be appointed by the Directors
and shall consist of one or more persons. Any individual, whether or not an
Employee, is eligible to become a member of the Committee. Each member of the
Committee shall, before entering upon the performance of his duties, qualify by
signing a consent to serve as a member of the Committee under and pursuant to
the Plan and by filing such consent with the records of the Committee.
13.2 TERM, VACANCIES, RESIGNATION, AND REMOVAL. Each member of the
Committee shall serve until he resigns, dies, or is removed by the Directors. At
any time during his term of office, a member of the Committee may resign by
giving written notice to the Directors and the Committee, such resignation to
become effective upon the appointment of a substitute member or, if earlier, the
lapse of thirty days after such notice is given as herein provided. At any time
during his term of office, and for any reason, a member of the Committee may be
removed by the Directors with or without cause, and the Directors may in their
discretion fill any vacancy that may result therefrom. Any member of the
Committee who is an Employee shall automatically cease to be a member of the
Committee as of the date he ceases to be employed by the Employer or a
Controlled Entity.
13.3 OFFICERS, RECORDS, AND PROCEDURES. The Committee may select
officers and may appoint a secretary who need not be a member of the Committee.
The Committee shall keep appropriate records of its proceedings and the
administration of the Plan and shall make available for examination during
business hours to any Participant or beneficiary such records as pertain to that
individual's interest in the Plan. The Committee shall designate the person or
persons who shall be authorized to sign for the Committee and, upon such
designation, the signature of such person or persons shall bind the Committee.
13.4 MEETINGS. The Committee shall hold meetings upon such notice and
at such time and place as it may from time to time determine. Notice to a member
shall not be required if waived in writing by that member. A majority of the
members of the Committee duly appointed shall constitute a quorum for the
transaction of business. All resolutions or other actions taken by the Committee
at any meeting where a quorum is present shall be by vote of a majority of those
present at such meeting and entitled to vote. Resolutions may be adopted or
other action taken without a meeting upon written consent signed by all of the
members of the Committee.
13.5 SELF-INTEREST OF MEMBERS. No member of the Committee shall have
any right to vote or decide upon any matter relating solely to himself under the
Plan or to vote in any case in which his individual right to claim any benefit
under the Plan is particularly involved. In any case in which a Committee member
is so disqualified to act and the remaining members cannot agree, the Directors
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shall appoint a temporary substitute member to exercise all the powers of the
disqualified member concerning the matter in which he is disqualified.
13.6 COMPENSATION AND BONDING. The members of the Committee shall not
receive compensation with respect to their services for the Committee. To the
extent required by the Act or other applicable law, or required by the Company,
members of the Committee shall furnish bond or security for the performance of
their duties hereunder.
13.7 COMMITTEE POWERS AND DUTIES. The Committee shall supervise the
administration and enforcement of the Plan according to the terms and provisions
hereof and shall have all powers necessary to accomplish these purposes,
including, but not by way of limitation, the right, power, authority, and duty:
(a) To make rules, regulations, and bylaws for the
administration of the Plan that are not inconsistent with the terms and
provisions hereof, provided such rules, regulations, and bylaws are
evidenced in writing and copies thereof are delivered to the Trustee
and to the Company, and to enforce the terms of the Plan and the rules
and regulations promulgated thereunder by the Committee;
(b) To construe in its discretion all terms, provisions,
conditions, and limitations of the Plan, and, in all cases, the
construction necessary for the Plan to qualify under the applicable
provisions of the Code shall control;
(c) To correct any defect or to supply any omission or to
reconcile any inconsistency that may appear in the Plan in such manner
and to such extent as it shall deem expedient in its discretion to
effectuate the purposes of the Plan;
(d) To employ and compensate such accountants, attorneys,
investment advisors, and other agents, employees, and independent
contractors as the Committee may deem necessary or advisable for the
proper and efficient administration of the Plan;
(e) To determine in its discretion all questions relating to
eligibility;
(f) To make a determination in its discretion as to the right
of any person to a benefit under the Plan and to prescribe procedures
to be followed by distributees in obtaining benefits hereunder;
(g) To prepare, file, and distribute, in such manner as the
Committee determines to be appropriate, such information and material
as is required by the reporting and disclosure requirements of the Act;
(h) To furnish the Employer any information necessary for the
preparation of such Employer's tax return or other information that the
Committee determines in its discretion is necessary for a legitimate
purpose;
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(i) To require and obtain from the Employer and the
Participants any information or data that the Committee determines is
necessary for the proper administration of the Plan;
(j) To instruct the Trustee as to the loans to Participants
pursuant to the provisions of Article XII;
(k) To establish or designate Investment Funds as investment
options as provided in Article V;
(l) To appoint investment managers pursuant to Section 15.5;
(m) To instruct the Trustee as to the voting of shares of
Company Stock and as to the response to a tender or exchange offer for
shares of Company Stock held in the Trust Fund to the extent timely
direction as to such voting or response is not received from the
Participant to whose Accounts such shares are allocated; and
(n) To receive and review reports from the Trustee and from
investment managers as to the financial condition of the Trust Fund,
including its receipts and disbursements.
13.8 EMPLOYER TO SUPPLY INFORMATION. The Employer shall supply full and
timely information to the Committee, including, but not limited to, information
relating to each Participant's Compensation, age, retirement, death, or other
cause of termination of employment and such other pertinent facts as the
Committee may require. The Employer shall advise the Trustee of such of the
foregoing facts as are deemed necessary for the Trustee to carry out the
Trustee's duties under the Plan. When making a determination in connection with
the Plan, the Committee shall be entitled to rely upon the aforesaid information
furnished by the Employer.
13.9 INDEMNIFICATION. The Company shall indemnify and hold harmless
each member of the Committee and each Employee who is a delegate of the
Committee against any and all expenses and liabilities arising out of his
administrative functions or fiduciary responsibilities, including any expenses
and liabilities that are caused by or result from an act or omission
constituting the negligence of such individual in the performance of such
functions or responsibilities, but excluding expenses and liabilities that are
caused by or result from such individual's own gross negligence or willful
misconduct. Expenses against which such individual shall be indemnified
hereunder shall include, without limitation, the amounts of any settlement or
judgment, costs, counsel fees, and related charges reasonably incurred in
connection with a claim asserted or a proceeding brought or settlement thereof.
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XIV.
TRUSTEE AND ADMINISTRATION OF TRUST FUND
14.1 APPOINTMENT, RESIGNATION, REMOVAL, AND REPLACEMENT OF TRUSTEE. The
Trustee
shall be appointed, removed, and replaced by and in the sole discretion of the
Directors. The Trustee shall be the "named fiduciary" with respect to investment
of the Trust Fund's assets.
14.2 TRUST AGREEMENT. As of the Effective Date, the Trustee is Chase
Manhattan Bank, and the Trust Agreement is contained in Article X of Twentieth
Century Defined Contribution Master Plan (basic plan document #03). The
Directors intend to replace Chase Manhattan Bank, as Trustee, with UMB Bank,
N.A. and to enter into a separate Trust Agreement with such successor Trustee.
Such separate Trust Agreement shall replace Article X of Twentieth Century
Defined Contribution Master Plan (basic plan document #03) as the Trust
Agreement upon execution by the parties thereto. The administration of the
assets of the Plan and the duties, obligations, and responsibilities of the
Trustee shall be governed by the Trust Agreement. The Trust Agreement may be
amended from time to time as the Company deems advisable in order to effectuate
the purposes of the Plan. The Trust Agreement is incorporated herein by
reference and thereby made a part of the Plan.
14.3 PAYMENT OF EXPENSES. All expenses incident to the administration
of the Plan and Trust, including but not limited to, legal, accounting, Trustee
fees, direct expenses of the Employer and the Committee in the administration of
the Plan, and the cost of furnishing any bond or security required of the
Committee shall be paid by the Trustee from the Trust Fund, and, until paid,
shall constitute a claim against the Trust Fund which is paramount to the claims
of Participants and beneficiaries; provided, however, that (a) the obligation of
the Trustee to pay such expenses from the Trust Fund shall cease to exist to the
extent such expenses are paid by the Employer and (b) in the event the Trustee's
compensation is to be paid, pursuant to this Section, from the Trust Fund, any
individual serving as Trustee who already receives full-time pay from an
employer or an association of employers whose employees are participants in the
Plan, or from an employee organization whose members are participants in the
Plan, shall not receive any additional compensation for serving as Trustee. This
Section shall be deemed to be a part of any contract to provide for expenses of
Plan and Trust administration, whether or not the signatory to such contract is,
as a matter of convenience, the Employer.
14.4 TRUST FUND PROPERTY. All income, profits, recoveries,
contributions, forfeitures, and any and all moneys, securities, and properties
of any kind at any time received or held by the Trustee hereunder shall be held
for investment purposes as a commingled Trust Fund. The Committee shall maintain
Accounts in the name of each Participant, but the maintenance of an Account
designated as the Account of a Participant shall not mean that such Participant
shall have a greater or lesser interest than that due him by operation of the
Plan and shall not be considered as segregating any funds or property from any
other funds or property contained in the commingled fund. No Participant shall
have any title to any specific asset in the Trust Fund.
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14.5 DISTRIBUTIONS FROM PARTICIPANTS' ACCOUNTS. Distributions from a
Participant's Accounts shall be made by the Trustee only if, when, and in the
amount and manner directed in writing by the Committee. Any distribution made to
a Participant or for his benefit shall be debited to such Participant's Account
or Accounts. All distributions hereunder shall be made in cash except as
otherwise specifically provided herein.
14.6 PAYMENTS SOLELY FROM TRUST FUND. All benefits payable under the
Plan shall be paid or provided for solely from the Trust Fund, and neither the
Employer nor the Trustee assumes any liability or responsibility for the
adequacy thereof. The Committee or the Trustee may require execution and
delivery of such instruments as are deemed necessary to assure proper payment of
any benefits.
14.7 NO BENEFITS TO THE EMPLOYER. No part of the corpus or income of
the Trust Fund shall be used for any purpose other than the exclusive purpose of
providing benefits for the Participants and their beneficiaries and of defraying
reasonable expenses of administering the Plan. Anything to the contrary herein
notwithstanding, the Plan shall not be construed to vest any rights in the
Employer other than those specifically given hereunder.
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XV.
FIDUCIARY PROVISIONS
15.1 ARTICLE CONTROLS. This Article shall control over any contrary,
inconsistent or ambiguous provisions contained in the Plan.
15.2 GENERAL ALLOCATION OF FIDUCIARY DUTIES. Each fiduciary with
respect to the Plan shall have only those specific powers, duties,
responsibilities and obligations as are specifically given him under the Plan.
The Directors shall have the sole authority to appoint and remove the Trustee
and members of the Committee. Except as otherwise specifically provided herein,
the Company and the Committee shall have the sole responsibility for the
administration of the Plan, which responsibility is specifically described
herein. Except as otherwise specifically provided herein and in the Trust
Agreement, the Trustee shall have the sole responsibility for the
administration, investment, and management of the assets held under the Plan. It
is intended under the Plan that each fiduciary shall be responsible for the
proper exercise of his own powers, duties, responsibilities, and obligations
hereunder and shall not be responsible for any act or failure to act of another
fiduciary except to the extent provided by law or as specifically provided
herein.
15.3 FIDUCIARY DUTY. Each fiduciary under the Plan, including, but not
limited to, the Company and the Trustee as "named fiduciaries," shall discharge
his duties and responsibilities with respect to the Plan:
(a) Solely in the interest of the Participants, for the
exclusive purpose of providing benefits to Participants and their
beneficiaries and of defraying reasonable expenses of administering the
Plan;
(b) With the care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent man acting in a like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims;
(c) By diversifying the investments of the Plan so as to
minimize the risk of large losses, unless under the circumstances it is
prudent not to do so; and
(d) In accordance with the documents and instruments governing
the Plan insofar as such documents and instruments are consistent with
applicable law.
No fiduciary shall cause the Plan or Trust Fund to enter into a "prohibited
transaction" as provided in section 4975 of the Code or section 406 of the Act.
15.4 DELEGATION AND ALLOCATION OF FIDUCIARY DUTIES. The Committee may
appoint subcommittees, individuals or any other agents as it deems advisable and
may delegate to any of such appointees any or all of the powers and duties of
the Committee. Such appointment and delegation must specify in writing the
powers or duties being delegated, and must be accepted in
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writing by the delegatee. Upon such appointment, delegation and acceptance, the
delegating Committee members shall have no liability for the acts or omissions
of any such delegatee, as long as the delegating Committee members do not
violate any fiduciary responsibility in making or continuing such delegation.
15.5 INVESTMENT MANAGER. The Committee may, in its sole discretion,
appoint an "investment manager," with power to manage, acquire or dispose of any
asset of the Plan and to direct the Trustee in this regard, so long as:
(a) The investment manager is (1) registered as an investment
adviser under the Investment Advisers Act of 1940, (2) not registered
as an investment adviser under such act by reason of paragraph (1) of
section 203A(a) of such act, is registered as an investment adviser
under the laws of the state (referred to in such paragraph (1)) in
which it maintains its principal office and place of business, and, at
the time it last filed the registration form most recently filed by it
with such state in order to maintain its registration under the laws of
such state, also filed a copy of such form with the Secretary of Labor,
(3) a bank, as defined in the Investment Advisers Act of 1940, or (4)
an insurance company qualified to do business under the laws of more
than one state; and
(b) Such investment manager acknowledges in writing that he is
a fiduciary with respect to the Plan.
Upon such appointment, the Committee shall not be liable for the acts of the
investment manager, as long as the Committee members do not violate any
fiduciary responsibility in making or continuing such appointment. The Trustee
shall follow the directions of such investment manager and shall not be liable
for the acts or omissions of such investment manager. The investment manager may
be removed by the Committee at any time and within the Committee's sole
discretion.
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XVI.
AMENDMENTS
16.1 RIGHT TO AMEND. Subject to Section 16.2 and any other limitations
contained in the Act or the Code, the Directors may from time to time amend, in
whole or in part, any or all of the provisions of the Plan on behalf of the
Company and all Employers. Specifically, but not by way of limitation, the
Directors may make any amendment necessary to acquire and maintain a qualified
status for the Plan under the Code, whether or not retroactive; provided,
however, that amendments to the Plan which do not have a significant cost impact
on the Employer and amendments necessary to acquire and maintain a qualified
status for the Plan under the Code, whether or not retroactive, may be made by
the Committee.
16.2 LIMITATION ON AMENDMENTS. No amendment of the Plan shall be made
that would vest in the Employer, directly or indirectly, any interest in or
control of the Trust Fund. No amendment shall be made that would vary the Plan's
exclusive purpose of providing benefits to Participants and their beneficiaries
and of defraying reasonable expenses of administering the Plan or that would
permit the diversion of any part of the Trust Fund from that exclusive purpose.
No amendment shall be made that would reduce any then nonforfeitable interest of
a Participant. No amendment shall increase the duties or responsibilities of the
Trustee unless the Trustee consents thereto in writing.
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XVII.
DISCONTINUANCE OF CONTRIBUTIONS, TERMINATION,
PARTIAL TERMINATION, AND MERGER OR CONSOLIDATION
17.1 RIGHT TO DISCONTINUE CONTRIBUTIONS, TERMINATE, OR PARTIALLY
TERMINATE. The Employer has established the Plan with the bona fide intention
and expectation that from year to year it will be able to, and will deem it
advisable to, make its contributions as herein provided. However, the Directors
realize that circumstances not now foreseen, or circumstances beyond its
control, may make it either impossible or inadvisable for the Employer to
continue to make its contributions to the Plan. Therefore, the Directors shall
have the power to discontinue contributions to the Plan, terminate the Plan, or
partially terminate the Plan at any time hereafter. Each member of the Committee
and the Trustee shall be notified of such discontinuance, termination, or
partial termination.
17.2 PROCEDURE IN THE EVENT OF DISCONTINUANCE OF CONTRIBUTIONS,
TERMINATION, OR PARTIAL TERMINATION.
(a) If the Plan is amended so as to permanently discontinue
Employer Contributions, or if Employer Contributions are in fact permanently
discontinued, the Vested Interest of each affected Participant shall be 100%,
effective as of the date of discontinuance. In case of such discontinuance, the
Committee shall remain in existence and all other provisions of the Plan that
are necessary, in the opinion of the Committee, for equitable operation of the
Plan shall remain in force.
(b) If the Plan is terminated or partially terminated, the
Vested Interest of each affected Participant shall be 100%, effective as of the
termination date or partial termination date, as applicable. Unless the Plan is
otherwise amended prior to dissolution of the Company, the Plan shall terminate
as of the date of dissolution of the Company.
(c) Upon discontinuance of contributions, termination, or
partial termination, any previously unallocated contributions, forfeitures, and
net income (or net loss) shall be allocated among the Accounts of the
Participants on such date of discontinuance, termination, or partial termination
according to the provisions of Article IV. Thereafter, the net income (or net
loss) shall continue to be allocated to the Accounts of the Participants until
the balances of the Accounts are distributed.
(d) In the case of a termination or partial termination of the
Plan, and in the absence of a Plan amendment to the contrary, the Trustee shall
pay the balance of the Accounts of a Participant for whom the Plan is so
terminated, or who is affected by such partial termination, to such Participant,
subject to the time of payment, form of payment, and consent provisions of
Article X.
17.3 MERGER, CONSOLIDATION, OR TRANSFER. This Plan and Trust Fund may
not merge or consolidate with, or transfer its assets or liabilities to, any
other plan, unless immediately thereafter
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each Participant would, in the event such other plan terminated, be entitled to
a benefit which is equal to or greater than the benefit to which he would have
been entitled if the Plan were terminated immediately before the merger,
consolidation, or transfer.
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XVIII.
PARTICIPATING EMPLOYERS
18.1 DESIGNATION OF OTHER EMPLOYERS.
(a) The Committee may designate any entity or organization
eligible by law to participate in the Plan and the Trust as an Employer by
written instrument delivered to the Secretary of the Company, the Trustee, and
the designated Employer. Such written instrument shall specify the effective
date of such designated participation, may incorporate specific provisions
relating to the operation of the Plan that apply to the designated Employer only
and shall become, as to such designated Employer and its Employees, a part of
the Plan.
(b) Each designated Employer shall be conclusively presumed to
have consented to its designation and to have agreed to be bound by the terms of
the Plan and Trust Agreement and any and all amendments thereto upon its
submission of information to the Committee required by the terms of or with
respect to the Plan or upon making a contribution to the Trust Fund pursuant to
the terms of the Plan; provided, however, that the terms of the Plan may be
modified so as to increase the obligations of an Employer only with the consent
of such Employer, which consent shall be conclusively presumed to have been
given by such Employer upon its submission of any information to the Committee
required by the terms of or with respect to the Plan or upon making a
contribution to the Trust Fund pursuant to the terms of the Plan following
notice of such modification.
(c) The provisions of the Plan and the Trust Agreement shall
apply separately and equally to each Employer and its Employees in the same
manner as is expressly provided for the Company and its Employees, except that
the power to appoint or otherwise affect the Committee or the Trustee and the
power to amend or terminate the Plan and Trust Agreement shall be exercised by
the Directors, or by the Committee, if applicable, alone and, in the case of
Employers which are Controlled Entities, Employer Discretionary Contributions to
be allocated pursuant to Section 4.2(d) shall be allocated on an aggregate basis
among the Participants employed by all Employers; provided, however, that each
Employer shall contribute to the Trust Fund its share of the total Employer
Discretionary Contribution for a Plan Year based on the Participants in its
employ during such Plan Year.
(d) Transfer of employment among Employers shall not be
considered a termination of employment hereunder, and an Hour of Service with
one shall be considered as an Hour of Service with all others.
(e) Any Employer may, by appropriate action of its Board of
Directors or noncorporate counterpart that is communicated in writing to the
Secretary of the Company, the Trustee, and to the Committee, terminate its
participation in the Plan and the Trust. Moreover, the Committee may, in its
discretion, terminate an Employer's Plan and Trust participation at any time
XVIII-1
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by written instrument delivered to the Secretary of the Company, the Trustee,
and the designated Employer.
18.2 SINGLE PLAN. For purposes of the Code and the Act, the Plan as
adopted by the Employers shall constitute a single plan rather than a separate
plan of each Employer. All assets in the Trust Fund shall be available to pay
benefits to all Participants and their beneficiaries.
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XIX.
MISCELLANEOUS PROVISIONS
19.1 NOT CONTRACT OF EMPLOYMENT. The adoption and maintenance of the
Plan shall not be deemed to be a contract between the Employer and any person or
to be consideration for the employment of any person. Nothing herein contained
shall be deemed to give any person the right to be retained in the employ of the
Employer or to restrict the right of the Employer to discharge any person at any
time nor shall the Plan be deemed to give the Employer the right to require any
person to remain in the employ of the Employer or to restrict any person's right
to terminate his employment at any time.
19.2 ALIENATION OF INTEREST FORBIDDEN. Except as otherwise provided
with respect to "qualified domestic relations orders" and certain judgments and
settlements pursuant to section 206(d) of the Act and sections 401(a)(13) and
414(p) of the Code and except as otherwise provided under other applicable law,
no right or interest of any kind in any benefit shall be transferable or
assignable by any Participant or any beneficiary or be subject to anticipation,
adjustment, alienation, encumbrance, garnishment, attachment, execution, or levy
of any kind. Plan provisions to the contrary notwithstanding, the Committee
shall comply with the terms and provisions of any "qualified domestic relations
order," including an order that requires distributions to an alternate payee
prior to a Participant's "earliest retirement age" as such term is defined in
section 206(d)(3)(E)(ii) of the Act and section 414(p)(4)(B) of the Code, and
shall establish appropriate procedures to effect the same.
19.3 UNIFORMED SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT
REQUIREMENTS. Notwithstanding any provision of the Plan to the contrary,
contributions, benefits and service credit with respect to qualified military
service will be provided in accordance with section 414(u) of the Code.
19.4 PAYMENTS TO MINORS AND INCOMPETENTS. If a Participant or
beneficiary entitled to receive a benefit under the Plan is a minor or is
determined by the Committee in its discretion to be incompetent or is adjudged
by a court of competent jurisdiction to be legally incapable of giving valid
receipt and discharge for a benefit provided under the Plan, the Committee may
pay such benefit to the duly appointed guardian or conservator of such
Participant or beneficiary for the account of such Participant or beneficiary.
If no guardian or conservator has been appointed for such Participant or
beneficiary, the Committee may pay such benefit to any third party who is
determined by the Committee, in its sole discretion, to be authorized to receive
such benefit for the account of such Participant or beneficiary. Such payment
shall operate as a full discharge of all liabilities and obligations of the
Committee, the Trustee, the Employer, and any fiduciary of the Plan with respect
to such benefit.
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19.5 ACQUISITION AND HOLDING OF COMPANY STOCK. The Plan is specifically
authorized to acquire and hold up to 100% of its assets in Company Stock so long
as Company Stock is a "qualifying employer security," as such term is defined in
Section 407(d)(5) of the Act.
19.6 PARTICIPANT'S ADDRESS. It shall be the affirmative duty of each
Participant to inform the Committee of, and to keep on file with the Committee,
his current mailing address and the current mailing address of his designated
beneficiary. If a Participant fails to keep the Committee informed of his
current mailing address and the current mailing address of his designated
beneficiary, neither the Committee, the Trustee, the Employer, nor any fiduciary
under the Plan shall be responsible for any late or lost payment of a benefit or
for failure of any notice to be provided timely under the terms of the Plan.
19.7 SEVERABILITY. If any provision of this Plan shall be held illegal
or invalid for any reason, said illegality or invalidity shall not affect the
remaining provisions hereof. In such case, each provision shall be fully
severable and the Plan shall be construed and enforced as if said illegal or
invalid provision had never been included herein.
19.8 JURISDICTION. The situs of the Plan hereby created is Texas. All
provisions of the Plan shall be construed in accordance with the laws of Texas
except to the extent preempted by federal law.
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XX.
TOP-HEAVY STATUS
20.1 ARTICLE CONTROLS. Any Plan provisions to the contrary
notwithstanding, the provisions of this Article shall control to the extent
required to cause the Plan to comply with the requirements imposed under section
416 of the Code.
20.2 DEFINITIONS. For purposes of this Article, the following terms and
phrases shall have these respective meanings:
(a) ACCOUNT BALANCE: As of any Valuation Date, the aggregate
amount credited to an individual's account or accounts under a
qualified defined contribution plan maintained by the Employer or a
Controlled Entity (excluding employee contributions that were
deductible within the meaning of section 219 of the Code and rollover
or transfer contributions made after December 31, 1983, by or on behalf
of such individual to such plan from another qualified plan sponsored
by an entity other than the Employer or a Controlled Entity), increased
by (1) the aggregate distributions made to such individual from such
plan during a five-year period ending on the Determination Date and (2)
the amount of any contributions due as of the Determination Date
immediately following such Valuation Date.
(b) ACCRUED BENEFIT: As of any Valuation Date, the present
value (computed on the basis of the Assumptions) of the cumulative
accrued benefit (excluding the portion thereof that is attributable to
employee contributions that were deductible pursuant to section 219 of
the Code, to rollover or transfer contributions made after December 31,
1983, by or on behalf of such individual to such plan from another
qualified plan sponsored by an entity other than the Employer or a
Controlled Entity, to proportional subsidies or to ancillary benefits)
of an individual under a qualified defined benefit plan maintained by
the Employer or a Controlled Entity increased by (1) the aggregate
distributions made to such individual from such plan during a five-year
period ending on the Determination Date and (2) the estimated benefit
accrued by such individual between such Valuation Date and the
Determination Date immediately following such Valuation Date. Solely
for the purpose of determining top-heavy status, the Accrued Benefit of
an individual shall be determined under (1) the method, if any, that
uniformly applies for accrual purposes under all qualified defined
benefit plans maintained by the Employer and the Controlled Entities or
(2) if there is no such method, as if such benefit accrued not more
rapidly than under the slowest accrual rate permitted under section
411(b)(1)(C) of the Code.
(c) AGGREGATION GROUP: The group of qualified plans maintained
by the Employer and each Controlled Entity consisting of (1) each plan
in which a Key Employee participates and each other plan that enables a
plan in which a Key Employee participates to meet the requirements of
section 401(a)(4) or 410 of the Code or (2) each plan in which a Key
Employee participates, each other plan that enables a plan in which a
Key Employee participates to meet the requirements of section 401(a)(4)
or 410 of the Code and any other
XX-1
<PAGE> 58
plan that the Employer elects to include as a part of such group;
provided, however, that the Employer may elect to include a plan in
such group only if the group will continue to meet the requirements of
sections 401(a)(4) and 410 of the Code with such plan being taken into
account.
(d) ASSUMPTIONS: The interest rate and mortality assumptions
specified for top-heavy status determination purposes in any defined
benefit plan included in the Aggregation Group which includes the Plan.
(e) DETERMINATION DATE: For the first Plan Year of any plan,
the last day of such Plan Year and for each subsequent Plan Year of
such plan, the last day of the preceding Plan Year.
(f) KEY EMPLOYEE: A "key employee" as defined in section
416(i) of the Code and the Treasury regulations thereunder.
(g) PLAN YEAR: With respect to any plan, the annual accounting
period used by such plan for annual reporting purposes.
(h) REMUNERATION: 415 Compensation as defined in Section
4.5(a)(2).
(i) VALUATION DATE: With respect to any Plan Year of any
defined contribution plan, the most recent date within the twelve-month
period ending on a Determination Date as of which the trust fund
established under such plan was valued and the net income (or loss)
thereof allocated to participants' accounts. With respect to any Plan
Year of any defined benefit plan, the most recent date within a
twelve-month period ending on a Determination Date as of which the plan
assets were valued for purposes of computing plan costs for purposes of
the requirements imposed under section 412 of the Code.
20.3 TOP-HEAVY STATUS.
(a) The Plan shall be deemed to be top-heavy for a Plan Year
if, as of the Determination Date for such Plan Year, (1) the sum of Account
Balances of Participants who are Key Employees exceeds 60% of the sum of Account
Balances of all Participants unless an Aggregation Group including the Plan is
not top-heavy or (2) an Aggregation Group including the Plan is top-heavy. An
Aggregation Group shall be deemed to be top-heavy as of a Determination Date if
the sum (computed in accordance with section 416(g)(2)(B) of the Code and the
Treasury regulations promulgated thereunder) of (1) the Account Balances of Key
Employees under all defined contribution plans included in the Aggregation Group
and (2) the Accrued Benefits of Key Employees under all defined benefit plans
included in the Aggregation Group exceeds 60% of the sum of the Account Balances
and the Accrued Benefits of all individuals under such plans. Notwithstanding
the foregoing, the Account Balances and Accrued Benefits of individuals who are
not Key Employees in any Plan Year but who were Key Employees in any prior Plan
Year shall not be considered in determining the top-heavy status of the Plan for
such Plan Year. Further, notwithstanding the foregoing, the Account Balances and
Accrued Benefits of individuals who have
XX-2
<PAGE> 59
not performed services for the Employer or any Controlled Entity at any time
during the five-year period ending on the applicable Determination Date shall
not be considered.
(b) If the Plan is determined to be top-heavy for a Plan Year,
the Employer shall contribute to the Plan for such Plan Year on behalf of each
Participant who is not a Key Employee and who has not terminated his employment
as of the last day of such Plan Year an amount equal to:
(1) The lesser of (A) 3% of such Participant's
Remuneration for such Plan Year or (B) a percent of such Participant's
Remuneration for such Plan Year equal to the greatest percent
determined by dividing for each Key Employee the amounts allocated to
such Key Employee's Before-Tax Account and Employer Contribution
Account for such Plan Year by such Key Employee's Remuneration; reduced
by
(2) The amount of Employer Discretionary
Contributions allocated to such Participant's Accounts for such Plan
Year.
The minimum contribution required to be made for a Plan Year pursuant to this
Paragraph for a Participant employed on the last day of such Plan Year shall be
made regardless of whether such Participant is otherwise ineligible to receive
an allocation of the Employer's contributions for such Plan Year.
Notwithstanding the foregoing, if the Plan is deemed to be top-heavy for a Plan
Year, the Employer's contribution for such Plan Year pursuant to this Paragraph
shall be increased by substituting "4%" in lieu of "3%" in Clause (1) hereof to
the extent that the Directors determine to so increase such contribution to
comply with the provisions of section 416(h)(2) of the Code. Notwithstanding the
foregoing, no contribution shall be made pursuant to this Paragraph for a Plan
Year with respect to a Participant who is a participant in another defined
contribution plan sponsored by the Employer or a Controlled Entity if such
Participant receives under such other defined contribution plan (for the plan
year of such plan ending with or within the Plan Year of the Plan) a
contribution which is equal to or greater than the minimum contribution required
by section 416(c)(2) of the Code. Notwithstanding the foregoing, no contribution
shall be made pursuant to this Paragraph for a Plan Year with respect to a
Participant who is a participant in a defined benefit plan sponsored by the
Employer or a Controlled Entity if such Participant accrues under such defined
benefit plan (for the plan year of such plan ending with or within the Plan Year
of this Plan) a benefit that is at least equal to the benefit described in
section 416(c)(1) of the Code. If the preceding sentence is not applicable, the
requirements of this Paragraph shall be met by providing a minimum benefit under
such defined benefit plan which, when considered with the benefit provided under
the Plan as an offset, is at least equal to the benefit described in section
416(c)(1) of the Code.
20.4 TERMINATION OF TOP-HEAVY STATUS. If the Plan has been deemed to be
top-heavy for one or more Plan Years and thereafter ceases to be top-heavy, the
provisions of this Article shall cease to apply to the Plan effective as of the
Determination Date on which it is determined no longer to be top-heavy.
XX-3
<PAGE> 60
20.5 EFFECT OF ARTICLE. Notwithstanding anything contained herein to
the contrary, the provisions of this Article shall automatically become
inoperative and of no effect to the extent not required by the Code or the Act.
XX-4
<PAGE> 61
EXECUTED this day of , 19 .
---- ----------- -----
NATIONAL TANK COMPANY
By:
--------------------------------
<PAGE> 62
APPENDIX A
This Appendix A shall apply to the Grandfathered Accounts of
Participants in lieu of certain otherwise applicable provisions of the Plan. To
the extent the provisions of this Appendix A conflict with other provisions of
the Plan, this Appendix A shall control with respect to the Grandfathered
Accounts of Participants.
1. DEFINITIONS. For purposes of this Appendix A, the following
definitions shall apply:
(a) ANNUITY STARTING DATE: With respect to each Cynara Plan Participant
or a beneficiary of a Cynara Plan Participant, the first day of the
first period for which an amount is payable to such Cynara Plan
Participant or beneficiary from the Trust Fund as an annuity or in any
other form.
(b) CYNARA PLAN PARTICIPANT: A Participant in the Cynara Plan on
December 31, 1998.
(c) ELIGIBLE SURVIVING SPOUSE: (1) In the case of a Cynara Plan
Participant who is living on his Annuity Starting Date, the spouse to
whom the deceased Cynara Plan Participant was married on his Annuity
Starting Date and (2) in the case of an Cynara Plan Participant who
dies before his Annuity Starting Date, the spouse to whom the deceased
Cynara Plan Participant was married on the date of his death.
(d) GRANDFATHERED ACCOUNTS: The portion of a Cynara Plan Participant's
Accounts that were transferred to the Plan from the Cynara Plan,
including net income (or net loss) credited thereto after such
transfer.
2. DEATH BENEFITS. The following Article IX shall apply with respect to
the Grandfathered Accounts of Cynara Plan Participants in lieu of Article IX of
the Plan.
IX.
DEATH BENEFITS
Upon the death of a Cynara Plan Participant while an Employee, the
Cynara Plan Participant's designated beneficiary shall be entitled to a death
benefit, payable at the time and in the form provided in Article X, equal to the
value of the Cynara Plan Participant's Grandfathered Accounts on the Cynara Plan
Participant's Annuity Starting Date. Any contribution allocable to a Cynara Plan
Participant's Grandfathered Accounts after his Annuity Starting Date shall be
distributed, if his benefit was paid in a lump sum, or used to increase his
payments, if his benefit is being paid on a periodic basis, as soon as
administratively feasible after the date that such contribution is paid to the
Trust Fund.
Appendix A-1
<PAGE> 63
3. TIME AND MANNER OF PAYMENT OF BENEFITS. The following Sections
10.1A, 10.1B, 10.2A, 10.2B, and 10.2C shall apply with respect to the
Grandfathered Accounts of the Cynara Plan Participants in lieu of Sections 10.1
and 10.2 of the Plan:
10.1A DETERMINATION OF ANNUITY STARTING DATE.
(a) Subject to the provisions of the remaining Paragraphs of
this Section, a Cynara Plan Participant's Annuity Starting Date shall be the
date that is as soon as administratively feasible after the date the Cynara Plan
Participant or his beneficiary becomes entitled to a benefit pursuant to Article
VI, VII, VII, or IX, but in any event a Cynara Plan Participant's benefit
hereunder shall commence no earlier than the expiration of the seven-day period
that begins the day after the information required to be furnished pursuant to
Section 10.1B(c) has been furnished to the Cynara Plan Participant.
(b) Unless a Cynara Plan Participant (1) has attained age
sixty-five, (2) has died (A) without leaving an Eligible Surviving Spouse or (B)
with an election in effect, pursuant to Section 10.2A(b), not to receive the
standard death benefit set forth in Section 10.2A(a) or (3) consents to a
distribution pursuant to Paragraph (a) (and, if such Cynara Plan Participant has
an Eligible Surviving Spouse, unless such Eligible Surviving Spouse consents
(with such consent being irrevocable) in accordance with the requirements of
section 417 of the Code and applicable Treasury Regulations thereunder) within
the ninety-day period ending on the date payment of his benefit hereunder is to
commence pursuant to Paragraph (a), his Annuity Starting Date shall be deferred
to the date which is as soon as administratively feasible after the date the
Cynara Plan Participant attains (or would have attained) age sixty-two, or such
earlier date as the Cynara Plan Participant (with the consent of his Eligible
Surviving Spouse, if applicable) may elect prior to such date. Consent of the
Cynara Plan Participant's Eligible Surviving Spouse under this Paragraph shall
not be required if the Cynara Plan Participant's benefit is to be paid in the
form of the standard benefit described in Section 10.1B(a). The Committee shall
furnish information pertinent to his consent to each Cynara Plan Participant no
less than thirty days (unless such thirty-day period is waived by an affirmative
election in accordance with applicable Treasury Regulations) and no more than
ninety days before his Annuity Starting Date, and the furnished information
shall include a general description of the material features of, and an
explanation of the relative values of, the alternative forms of benefit
available under the Plan and must inform the Cynara Plan Participant of his
right to defer his Annuity Starting Date and of his transfer right pursuant to
Section 10.3, if applicable. In the case of a married Cynara Plan Participant
who dies before his Annuity Starting Date without electing not to receive the
standard death benefit set forth in Section 10.2A(a), the consent and election
set forth in this Paragraph may be made by his Eligible Surviving Spouse.
(c) A Cynara Plan Participant's Annuity Starting Date shall in
no event be later than the sixtieth day following the close of the Plan Year
during which such Cynara Plan Participant attains, or would have attained, his
Normal Retirement Date or, if later, terminates his employment with the Employer
or a Controlled Entity.
Appendix A-2
<PAGE> 64
(d) A Cynara Plan Participant's Annuity Starting Date shall be
in compliance with the provisions of section 401(a)(9) of the Code and
applicable Treasury regulations thereunder and shall in no event be later than:
(1) For Cynara Plan Participants attaining age
seventy and one-half before January 1, 1999, April 1 of the
calendar year following the calendar year in which such Cynara
Plan Participant attains the age of seventy and one-half;
(2) For Cynara Plan Participants attaining age
seventy and one-half after December 31, 1998, April 1 of the
calendar year following the later of (A) the calendar year in
which such Cynara Plan Participant attains the age of seventy
and one-half or (B) the calendar year in which such Cynara
Plan Participant terminates his employment with the Employer
(provided, however, that clause (B) of this sentence shall not
apply in the case of a Cynara Plan Participant who is a "five-
percent owner" (as defined in section 416 of the Code) with
respect to the Plan Year ending in the calendar year in which
such Cynara Plan Participant attains the age of seventy and
one-half); and
(3) In the case of a benefit payable pursuant to
Article IX, (A) if payable to other than the Cynara Plan
Participant's spouse, the last day of the one-year period
following the death of such Cynara Plan Participant or (B) if
payable to the Cynara Plan Participant's spouse, after the
date upon which such Cynara Plan Participant would have
attained the age of seventy and one-half, unless such
surviving spouse dies before payments commence, in which case
the Annuity Starting Date may not be deferred beyond the last
day of the one-year period following the death of such
surviving spouse.
The provisions of this Section notwithstanding, a Cynara Plan Participant may
not elect to defer the receipt of his benefit hereunder to the extent that such
deferral creates a death benefit that is more than incidental within the meaning
of section 401(a)(9)(G) of the Code and applicable Treasury regulations
thereunder. Further, in determining compliance with the provisions of section
401(a)(9) of the Code, the life expectancies of the Cynara Plan Participant and
the Cynara Plan Participant's spouse shall not be recalculated.
(e) Subject to the provisions of Paragraph (d), a Cynara Plan
Participant's Annuity Starting Date shall not occur unless the Article VI, VII,
VIII or IX event entitling the Cynara Plan Participant (or his beneficiary) to a
benefit constitutes a distributable event described in section 401(k)(2)(B) of
the Code and shall not occur while the Cynara Plan Participant is employed by
the Employer or any Controlled Entity (irrespective of whether the Cynara Plan
Participant has become entitled to a distribution of his benefit pursuant to
Article VI, VII, VIII or IX).
(f) Paragraphs (a), (b), and (c) above notwithstanding, but
subject to the provisions of Paragraph (d) above, a Cynara Plan Participant,
other than a Cynara Plan Participant whose Vested Interest in his Accounts is
not in excess of $5,000, and the beneficiary of such a
Appendix A-3
<PAGE> 65
Cynara Plan Participant who dies prior to his Benefit Commencement Date must
file a claim for benefits in the manner prescribed by the Committee before
payment of his benefits will commence.
10.1B STANDARD AND ALTERNATIVE BENEFITS FOR CYNARA PLAN
PARTICIPANTS.
(a) For purposes of Article VI, VII or VIII, the standard
benefit for any Cynara Plan Participant who is married on his Annuity Starting
Date shall be a joint and survivor annuity. Such joint and survivor annuity
shall be a commercial annuity which is payable for the life of the Cynara Plan
Participant with a survivor annuity for the life of the Cynara Plan
Participant's Eligible Surviving Spouse which shall be one-half of the amount of
the annuity payable during the joint lives of the Cynara Plan Participant and
the Cynara Plan Participant's Eligible Surviving Spouse. The standard benefit
for any Cynara Plan Participant who is not married on his Annuity Starting Date
shall be a commercial annuity which is payable for the life of the Cynara Plan
Participant.
(b) Any Cynara Plan Participant who would otherwise receive
the standard benefit may elect not to take his benefit in such form by executing
the form prescribed by the Committee for such election during the election
period described in Paragraph (c) below. Any election may be revoked and
subsequent elections may be made or revoked at any time during such election
period. Notwithstanding the foregoing, an election by a married Cynara Plan
Participant not to receive the standard benefit as provided in Paragraph (a)
above shall not be effective unless (1) the Eligible Surviving Spouse has
consented thereto in writing (including consent to the specific designated
beneficiary to receive payments following the Cynara Plan Participant's death or
to the specific benefit form elected, which designation or election may not
subsequently be changed by the Cynara Plan Participant without spousal consent)
and such consent acknowledges the effect of such election and is witnessed by a
Plan representative (other than the Cynara Plan Participant) or a notary public
or (2) such consent of such spouse may not be obtained because the Eligible
Surviving Spouse cannot be located or because of other circumstances described
by applicable Treasury Regulations. Any such consent by such Eligible Surviving
Spouse shall be irrevocable.
(c) The Committee shall furnish certain information, pertinent
to the Paragraph (b) election, to each Cynara Plan Participant no less than
thirty days (unless such thirty- day period is waived by an affirmative election
in accordance with applicable Treasury Regulations) and no more than ninety days
before his Annuity Starting Date. The furnished information shall include an
explanation of (1) the terms and conditions of the standard benefit, (2) the
Cynara Plan Participant's right to elect to waive the standard benefit and the
effect of such election, (3) the rights of the Cynara Plan Participant's
Eligible Surviving Spouse, if any, (4) the right to revoke such election and the
effect of such revocation, (5) a general description of the eligibility
conditions and other material features of the alternative forms of benefit
available pursuant to Paragraph (d) below, and (6) sufficient additional
information to explain the relative values of such alternative forms of benefit.
The period of time during which a Cynara Plan Participant may make or revoke
such election shall be the ninety-day period ending on such Cynara Plan
Participant's Annuity Starting Date, provided that such election may also be
revoked at any time prior to the expiration of the seven-day period that begins
the day after the information required to be furnished pursuant to this
Paragraph has been furnished to the Cynara Plan Participant.
Appendix A-4
<PAGE> 66
(d) For purposes of Article VI, VII, or VIII, the benefit for
any Cynara Plan Participant who has elected not to receive the standard benefit
shall be paid in one or more of the following alternative forms to be selected
by the Cynara Plan Participant or, in the absence of such selection, in a single
lump sum cash payment (notwithstanding the provisions of Section 10.2C(a));
provided, however, that the period and method of payment of any such form shall
be in compliance with the provisions of section 401(a)(9) of the Code and
applicable Treasury Regulations thereunder:
(1) A lump sum.
(2) A commercial annuity contract providing for
periodic payments for any term certain to such Cynara Plan
Participant or, in the event of such Cynara Plan Participant's
death before the end of such term certain, to his designated
beneficiary.
(3) A commercial annuity contract providing a single
life annuity for the life of such Cynara Plan Participant.
(4) A commercial annuity contract providing an
annuity for the life of such Cynara Plan Participant with a
survivor annuity for the life of any beneficiary designated by
such Cynara Plan Participant which shall be 50%, 662/3%, or
100%, as elected by such Cynara Plan Participant, of the
amount of the annuity payable during the joint lives of such
Cynara Plan Participant and such beneficiary.
(5) A commercial annuity contract providing a single
life annuity for the life of such Cynara Plan Participant with
a guaranty period of one hundred twenty months. In the event
of such Cynara Plan Participant's death before the end of such
guaranty period, the remaining payments shall be made to his
designated beneficiary.
(6) A commercial annuity contract providing monthly
payments for the Cynara Plan Participant's life, with a
payment to the Cynara Plan Participant's designated
beneficiary after the Cynara Plan Participant's death equal to
the amount, if any, by which the annuity contract's net
purchase price exceeds the total payments received by the
Cynara Plan Participant during his life.
(7) A partial cash payment in addition to any of the
forms of payment described in Paragraphs (2)-(6) above.
(e) If a Cynara Plan Participant, who terminated his
employment under such circumstances that he was entitled to a benefit pursuant
to Article VI, VII or VIII, dies prior to his Annuity Starting Date, the amount
of the benefit to which he was entitled shall be paid pursuant to Section 10.2A
just as if such Cynara Plan Participant had died while employed by the Employer.
10.2A STANDARD AND ALTERNATIVE DEATH BENEFITS.
(a) For purposes of Article IX, the standard death benefit for
a deceased Cynara Plan Participant who leaves an Eligible Surviving Spouse shall
be a survivor annuity. Such survivor
Appendix A-5
<PAGE> 67
annuity shall be a commercial annuity which is payable for the life of such
Eligible Surviving Spouse.
(b) Any Cynara Plan Participant who would otherwise have his
death benefit paid in the standard survivor annuity form may elect not to have
his benefit paid in such form by executing the form prescribed by the Committee
and filing such form with the Committee, designating a primary beneficiary other
than his Eligible Surviving Spouse. Any election may be revoked and subsequent
elections may be made or revoked at any time prior to a Cynara Plan
Participant's date of death.
(c) Paragraph (b) above to the contrary notwithstanding:
(1) An election not to have the death benefit paid in
the standard survivor annuity form as provided in Paragraph
(a) above shall not be effective unless (A) the Eligible
Surviving Spouse has consented thereto in writing and such
consent (i) acknowledges the effect of such election, (ii)
either consents to the specific designated beneficiary (which
designation may not subsequently be changed by the Cynara Plan
Participant without spousal consent) or expressly permits such
designation by the Cynara Plan Participant without the
requirement of further consent by the spouse, and (iii) is
witnessed by a Plan representative (other than the Cynara Plan
Participant) or a notary public, or (B) the consent of such
spouse cannot be obtained because the Eligible Surviving
Spouse cannot be located or because of other circumstances
described by applicable Treasury Regulations. Any such consent
by such Eligible Surviving Spouse shall be irrevocable.
(2) An election not to have the death benefit paid in
the standard survivor annuity form may be made before the
first day of the Plan Year in which a Cynara Plan Participant
attains the age of thirty-five only (A) after the Cynara Plan
Participant separates from service and only with respect to
benefits accrued under the Plan before the date of such
separation, or (B) in the case of a Cynara Plan Participant
who has not separated from service, if the Cynara Plan
Participant has been furnished the information described in
Paragraph (d), with such election to become invalid upon the
first day of the Plan Year in which the Cynara Plan
Participant attains the age of thirty-five, whereupon a new
election may be made by such Cynara Plan Participant.
(d) The Committee shall furnish certain information,
pertinent to the Paragraph (b) election, to each Cynara Plan Participant within
the period beginning with the first day of the Plan Year in which he attains the
age of thirty-two (but no earlier than the date such Cynara Plan Participant
begins participation in the Plan) and ending with the latest of (1) the last day
of the Plan Year preceding the Plan Year in which the Cynara Plan Participant
attains the age of thirty-five or (2) a reasonable time after the Employee
becomes a Cynara Plan Participant. If a Cynara Plan Participant separates from
service before attaining age thirty-five, such information shall be furnished to
such Cynara Plan Participant within the period beginning one year before the
Cynara Plan Participant separates from service and ending one year after such
separation. Such information
Appendix A-6
<PAGE> 68
shall also be furnished to a Cynara Plan Participant who has not attained the
age of thirty-five or terminated employment, within a reasonable time after
written request by such Cynara Plan Participant. The furnished information shall
include an explanation of (1) the terms and conditions of the survivor annuity,
(2) the Cynara Plan Participant's right to elect to waive the survivor annuity
and the effect of such election, (3) the rights of the Cynara Plan Participant's
Eligible Surviving Spouse, (4) the right to revoke such election and the effect
of such revocation, (5) a general description of the eligibility conditions and
other material features of the alternative forms of benefit available pursuant
to Paragraph (f) below, and (6) sufficient additional information to explain the
relative value of such alternative forms of benefit.
(e) In the event a survivor annuity is to be paid to a Cynara
Plan Participant's Eligible Surviving Spouse, such Eligible Surviving Spouse may
elect to receive the benefit in one of the alternative forms set forth in
Section 10.2A(f). Within a reasonable time after written request by such
Eligible Surviving Spouse, the Committee shall provide to such Eligible
Surviving Spouse a written explanation of such survivor annuity form and the
alternative forms of payment which may be selected along with the financial
effect of each such form.
(f) For purposes of Article IX, the death benefit for a
deceased Cynara Plan Participant who is not survived by an Eligible Surviving
Spouse or who has elected not to have his death benefit paid in the standard
survivor annuity form set forth in Section 10.2A(a) shall be paid to his
designated beneficiary in one of the following alternative forms to be selected
by such beneficiary or, in the absence of such selection, in a lump sum cash
payment (notwithstanding the provisions of Section 10.2C(a)); provided, however,
that the period and method of payment of any such form shall be in compliance
with the provisions of section 401(a)(9) of the Code and applicable Treasury
Regulations thereunder:
(1) A lump sum.
(2) A commercial annuity providing periodic
installment payments for any term certain to the designated
beneficiary; provided, however, the term certain shall not
exceed the life expectancy of the beneficiary. Upon the death
of a beneficiary who is receiving installment payments under
this Paragraph, the present value of the remaining payments
shall be paid as soon as administratively feasible, in one
lump sum cash payment, to the beneficiary's executor or
administrator or to his heirs at law if there is no
administration of such beneficiary's estate.
(3) A commercial annuity in the form of a single life
annuity for the life of the designated beneficiary.
(g) If any beneficiary designated by a Cynara Plan Participant
does not survive the Cynara Plan Participant, the interest of such beneficiary
shall vest in the designated beneficiary or beneficiaries who do survive the
Cynara Plan Participant, if any, but if no designated beneficiary survives the
Cynara Plan Participant or if no beneficiary designation is on file with the
Committee at the time of the death of the Cynara Plan Participant or such
designation is not effective for any
Appendix A-7
<PAGE> 69
reason as determined by the Committee, then the designated beneficiary or
beneficiaries to receive the Cynara Plan Participant's benefit hereunder shall
be as follows:
(1) If a Cynara Plan Participant leaves an Eligible
Surviving Spouse, his designated beneficiary shall be such
Eligible Surviving Spouse;
(2) If a Cynara Plan Participant leaves no Eligible
Surviving Spouse, his designated beneficiary shall be (A) such
Cynara Plan Participant's estate or (B) his heirs at law if
there is no administration of such Cynara Plan Participant's
estate.
10.2B CASH-OUT OF BENEFIT. If a Cynara Plan Participant terminates his
employment with the Employer and his Vested Interest in his Accounts is not in
excess of $5,000, such Cynara Plan Participant's Grandfathered Accounts shall be
paid in one lump sum cash payment in lieu of any other form of benefit herein
provided pursuant to Section 10.1B, Section 10.2A or Section 10.2C(a). Any such
payment shall be made at the time specified in Section 10.1A(a) without regard
to the consent restrictions of Section 10.1A(b) and the election and spousal
consent requirement of Sections 10.1B and 10.2A except that a married Cynara
Plan Participant's death benefit shall be paid to his Eligible Surviving Spouse
unless another beneficiary has been designated pursuant to the provisions of
Section 10.2A(b). The provisions of this Section shall not be applicable to a
Cynara Plan Participant following his Annuity Starting Date.
10.2C FORM OF PAYMENT.
(a) Grandfathered Accounts shall be paid (or transferred
pursuant to Section 10.3) in cash except that a Cynara Plan Participant (or his
designated beneficiary or legal representative in the case of a deceased Cynara
Plan Participant) who elects payment in a lump sum may elect to have the portion
of his Grandfathered Accounts invested in Company Stock paid (or transferred
pursuant to Section 10.3) in full shares of Company Stock with any balance
(including fractional shares of Company Stock) to be paid or transferred in
cash.
(b) Upon the purchase and distribution of an annuity contract
to a Cynara Plan Participant or beneficiary, the Plan shall have no further
liability with respect to the amount used to purchase the annuity contract, and
such Cynara Plan Participant or beneficiary shall look solely to the company
issuing such contract for such annuity payments. All certificates for commercial
annuity benefits shall be nontransferable, except for surrender to the issuing
company, and no benefit thereunder may be sold, assigned, discounted, or pledged
(other than as collateral for a loan from the company issuing same).
Notwithstanding the foregoing, the terms of any such commercial annuity contract
shall conform with the time of payment, form of payment, and consent provisions
of Section 10.1A, Section 10.1B, and Section 10.2A.
4. IN-SERVICE WITHDRAWALS APPLICABLE TO GRANDFATHER ACCOUNTS. In
addition to the provisions of Article XI, the following provisions apply with
respect to Grandfathered Accounts transferred from the Cynara Plan:
Appendix A-8
<PAGE> 70
(a) Any withdrawal from Grandfathered Accounts by a Cynara Plan
Participant pursuant to Article XI and this Appendix A shall be subject to the
election and spousal consent requirements of Section 10.1B.
(b) A Participant who has attained age fifty-nine and one-half may
withdraw from his Grandfathered Accounts an amount not exceeding the then value
of such Accounts.
5. IN-SERVICE WITHDRAWALS APPLICABLE TO AMOUNTS FROM COMBUSTION
ENGINEERING, INC. EMPLOYEE THRIFT-INVESTMENT PLAN. In addition to the provisions
of Article XI, a Participant having a balance in the Plan attributable to the
Combustion Engineering, Inc. Employee Thrift- Investment Plan may withdraw the
portion attributable to Combustion Engineering, Inc. matching contributions.
Appendix A-9
