As filed with the Securities and Exchange Commission on December 21, 1994.
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
Registration Statement Under The Securities Act of 1933
COMPASS BANCSHARES, INC.
--------------------------------------------------
(Exact Name of Issuer as Specified in Its Charter)
DELAWARE 63-0593897
- ------------------------ ---------------------------------
(State of Incorporation) (IRS Employer Identification No.)
15 South 20th Street
Birmingham, Alabama 35233
----------------------------------------
(Address of Principal Executive Offices)
COMPASS BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
-----------------------------
(Full Title of the Plan)
Jerry W. Powell, Esquire
General Counsel and Secretary
15 South 20th Street, Birmingham, Alabama 35233
------------------------------------------------
(Name and Address of Agent for Service)
(205) 933-3645
-------------------------------------------------------------
(Telephone Number, including area code, of Agent for Service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Maximum Proposed Maximum Amount
Title of Securities Amount Being Offering Price Aggregate of
Being Registered Registered Per Share (1) Offering Price (1) Registration Fee
- ------------------- -------------- ---------------- ------------------ ----------------
<S> <C> <C> <C> <C>
Common Stock
$2.00 par value(2) 819,465(3) $22.00 $18,028,230.00 $6,216.63
</TABLE>
(1) Pursuant to Rule 457 under the Securities Act of 1933, as amended, the
offering price is estimated solely for the purpose of determining the
registration fee and is based on the average of the bid and asked prices
of the common stock of Compass Bancshares, Inc. on December 16, 1994.
(2) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
as amended, this Registration Statement also covers an indeterminate amount
of interests to be offered or sold pursuant to the employee benefit plan
described herein.
(3) Pursuant to Rule 416 of the Securities Act of 1933, as amended, the
number of shares of securities registered on this Registration Statement will
be increased as a result of future stock splits, stock dividends or similar
transactions.
<PAGE>
PART I
EXPLANATORY NOTE
----------------
Compass Bancshares, Inc. (the "Registrant") is filing this Registration
Statement on Form S-8 in order to register 819,465 shares of common stock,
$2.00 par value per share (the "Stock"), to be offered or sold pursuant to the
terms and conditions of the Compass Bancshares, Inc. Employee Stock Ownership
Plan (the "Plan").
A prospectus meeting the requirements of Part I of Form S-8 and containing
the statement required by Item 2 of Form S-8 has been prepared. Such
prospectus is not included in this Registration Statement but will be delivered
to all participants in the Plan pursuant to Rule 428(b)(1) under the Securities
Act of 1933, as amended (the "Securities Act").
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
--------------------------------------------------
Item 3. Incorporation of Documents by Reference.
The following documents filed by the Registrant and the Plan with the
Securities and Exchange Commission (the "Commission") are incorporated herein
by reference and made a part hereof:
(a) The Registrant's annual report on Form 10-K for the fiscal year
ended December 31, 1993. (File No. 0-6032);
(b) The Plan's Annual Report on Form 11-K for the fiscal year ended
December 31, 1993 (File No. 0-6032);
(c) All other reports filed by the Registrant pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), since the end of the fiscal year covered by the annual report
referred to in clause (a) above; and
(d) The description of the Registrant's common stock contained in
its Proxy Statement dated April 6, 1982, relating to the Annual Meeting held on
May 17, 1982, as updated by any amendment or report filed for the purpose of
updating such description (File No. 0-6032).
Each document or report subsequently filed by the Registrant with the
Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act,
after the date hereof and prior to the termination of the offering of the Stock
shall be deemed to be incorporated by reference herein and to be a part hereof
from the date of filing of such document.
Any statement contained herein, or in a document all or a portion of
which is incorporated or deemed to be incorporated by reference herein, shall
be deemed to be modified or superseded for purposes of this Registration
Statement to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interest of Named Experts and Counsel.
No applicable.
Item 6. Indemnification of Directors and Officers.
Section 17 of Article V of the By-Laws of the Company provides in
part as follows:
Without limitation, the Corporation shall indemnify any person who
was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suite or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he is or was a
director, officer, employee or agent of the Corporation, or is or was serving
at the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding to the full extent permitted by the General
Corporation Law of Delaware, upon such determination having been made as to his
good faith and conduct as is required by said General Corporation Law.
Expenses incurred in defending a civil or criminal action, suit or proceeding
shall be paid by the Corporation in advance of the final disposition of such
action, suit or proceeding to the extent, if any, authorized by the Board of
Directors in accordance with the provisions of said General Corporation Law,
upon receipt of any undertaking by or on behalf of the director, officer,
employee or agent to repay such amount unless it shall ultimately be determined
that he is entitled to be indemnified by the Corporation.
Under Section 145 of the Delaware General Corporation Law, directors and
officers of Delaware corporations are entitled to indemnification consistent
with the Corporation's Certificate of Incorporation, By-Laws, resolutions and
other proper action under the circumstances set forth therein.
In addition, Article 8 of the Registrant's Restated Certificate of
Incorporation provides as follows:
No director shall be personally liable to the Corporation
or its stockholders for monetary damages for any breach of fiduciary
duty of such directors as a director, except (i) for breach of the
director's duty of loyalty to the Corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) pursuant
to Section 174 of the Delaware General Corporation Law, or (iv) for
any transaction from which the director derived an improper personal
benefit. No amendment to repeal this Article 8 shall apply to or
have any effect on the liability or alleged liability of any director
of the Corporation for or with respect to any acts or omissions of
such director occurring prior to such amendment to repeal.
This provision is authorized by 1986 amendments to the Delaware General
Corporation Law, Section 102(b)(7).
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling
the Corporation pursuant to the foregoing provisions, or otherwise, the
Registrant has been informed that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable. In the event that a claim for indemnification
against such liabilities (other than by the controlling person of the
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the Corporation will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question of whether such indemnification by it
is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The following exhibits are filed herewith or incorporated by
reference herein as part of this Registration Statement:
Sequential
Exhibit Description
---------- -----------
4(a) Restated Certificate of Incorporation of
the Registrant dated May 17, 1982 (Filed
with the December 11, 1982 Form 10-K of
the Registrant and incorporated herein by
reference (File No. 0-6032)).
4(b) Certificate of Amendment to Restated
Certificate of Incorporation of Registrant
dated May 20, 1986 (Filed as Exhibit 4(b)
to Registration Statement on Form S-8,
Registration No. 33-39095, and
incorporated herein by reference (File No.
0-6032)).
4(c) Certificate of Amendment to Restated
Certificate of Incorporation of the
Registrant dated May 15, 1987 (Filed as
Exhibit 3.1.2 to the Registrant's Post-
Effective Amendment No. 1 to Registration
Statement on Form S-4, Registration No. 33-
10797, and incorporated herein by
reference (File No. 0-6032)).
4(d) Certificate of Amendment to Restated
Certificate of Incorporation of the
Registrant dated November 8, 1993 (Filed
as Exhibit 3(d) to the Registrant's
Registration Statement on Form S-4,
Registration No. 33-51919, and
incorporated herein by reference (File No.
0-6032)).
4(e) Certificate of Amendment to Restated
Certificate of Incorporation of the
Registrant dated September 19, 1994 (Filed
as Exhibit 3.5 to the Registrant's
Registration Statement on Form S-4,
Registration No. 33-55899, and
incorporated herein by reference (File No.
0-6032)).
4(f) Bylaws of the Registrant (Amended and
Restated as of March 15, 1982) (Filed with
the December 31, 1982 10-K of the
Registrant and incorporated herein by
reference (File No. 0-6032)).
4(g) Compass Bancshares, Inc. Employee Stock
Ownership Plan
23 Consent of KPMG Peat Marwick.
24 Power of Attorney of the Officers and
Directors of the Registrant and certified
copies of the Resolutions of the
Registrant's Board of Directors
authorizing such signatures.
Item 9. Undertakings.
a. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement to
include any material information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any material change to
such information in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report pursuant
to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section 15(d) of
the Exchange Act) that is incorporated by reference in the Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(5) To deliver or cause to be delivered with the prospectus to
each employee to whom the prospectus is sent or given a copy of the
Registrant's annual report to stockholders for its last fiscal year, unless
such employee otherwise has received a copy of such report, in which case the
Registrant shall state in the prospectus that it will promptly furnish, without
charge, a copy of such report on written request of the employee. If the last
fiscal year of the Registrant has ended within 120 days prior to the use of the
prospectus, the annual report of the Registrant for the proceeding fiscal year
may be so delivered, but within such 120 day period the annual report for the
last fiscal year will be furnished to each such employee.
(6) To transmit or cause to be transmitted to all employees
participating in the Plan who do not otherwise receive such material as
stockholders of the Registrant at the time and in the manner such material is
sent to its stockholders, copies of all reports, proxy statements and other
communications distributed to its stockholders generally.
(7) To submit the Plan and any amendment thereto to the
Internal Revenue Service in a timely manner and to make any changes required by
the Internal Revenue Service in order to qualify the plan under Section 401 of
the Internal Revenue Code.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Birmingham, State of Alabama, on
December 19, 1994.
COMPASS BANCSHARES, INC.
By: /s/ D. Paul Jones, Jr.
------------------------------------
D. Paul Jones, Jr.
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE
--------- -----
/s/ D. Paul Jones, Jr.* Director, Chairman and Chief
- ---------------------------- Executive Officer
D. Paul Jones, Jr. (Principal Executive Officer)
/s/ Michael A. Bean* Chief Accounting Officer
- ----------------------------
Michael A. Bean
/s/ Garrett R. Hegel* Chief Financial Officer
- ----------------------------
Garrett R. Hegel
/s/ Harry B. Brock, Jr.* Director
- ----------------------------
Harry B. Brock, Jr.
/s/Stanley M. Brock* Director
- ----------------------------
Stanley M. Brock
/s/Charles W. Daniel* Director
- ----------------------------
Charles W. Daniel
/s/William Eugene Davenport* Director
- ----------------------------
William Eugene Davenport
/s/Garry Neil Drummond, Sr.* Director
- ----------------------------
Garry Neil Drummond, Sr.
/s/Marshall Durbin, Jr.* Director
- ----------------------------
Marshall Durbin, Jr.
/s/ Tranum Fitzpatrick* Director
- ----------------------------
Tranum Fitzpatrick
/s/ Thomas E. Jernigan* Director
- ----------------------------
Thomas E. Jernigan
/s/ G. W. "Red" Leach, Jr.* Director
- ----------------------------
G. W. "Red" Leach, Jr.
/s/ Goodwin L. Myrick* Director
- ----------------------------
Goodwin L. Myrick
/s/ John S. Stein* Director
- ----------------------------
John S. Stein
The Plan. Pursuant to the requirements of the Securities Act of 1933, the
Registrant, as the administrator of the Plan, has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Birmingham, State of Alabama, on December 19, 1994.
COMPASS BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
By: COMPASS BANCSHARES, INC.
------------------------
Its: Sponsor and Administrator
-------------------------
By: /s/ D. Paul Jones, Jr.*
-----------------------
Its: President
---------
*The undersigned, acting pursuant to a power of attorney, has signed this
registration statement for and on behalf of the persons indicated above as such
persons' true and lawful attorney-in-fact and in their names, places and
steads, in the capacities indicated above and on the date indicated below.
/s/ Jerry W. Powell
-------------------
By: Jerry W. Powell
---------------
Attorney-in-fact
Date: December 19, 1994
<PAGE>
INDEX TO EXHIBITS
-----------------
Exhibit Description Page
------- ----------- ----
4(a) Restated Certificate of
Incorporation of the
Registrant dated May 17,
1982 (Filed with the
December 11, 1982 Form 10-K
of the Registrant and
incorporated herein by
reference (File No. 0-
6032)).
4(b) Certificate of Amendment to
Restated Certificate of
Incorporation of Registrant
dated May 20, 1986 (Filed
as Exhibit 4(b) to
Registration Statement on
Form S-8, Registration No.
33-39095, and incorporated
herein by reference (File
No. 0-6032)).
4(c) Certificate of Amendment to
Restated Certificate of
Incorporation of the
Registrant dated May 15,
1987 (Filed as Exhibit
3.1.2 to the Registrant's
Post-Effective Amendment
No. 1 to Registration
Statement on Form S-4,
Registration No. 33-10797,
and incorporated herein by
reference (File No. 0-
6032)).
4(d) Certificate of Amendment to
Restated Certificate of
Incorporation of the
Registrant dated November
8, 1993 (Filed as Exhibit
3(d) to the Registrant's
Registration Statement on
Form S-4, Registration No.
33-51919, and incorporated
herein by reference (File
No. 0-6032)).
4(e) Certificate of Amendment to
Restated Certificate of
Incorporation of the
Registrant dated September
19, 1994 (Filed as Exhibit
3.5 to the Registrant's
Registration Statement on
Form S-4, Registration No.
33-55899, and incorporated
herein by reference (File
No. 0-6032)).
4(f) Bylaws of the Registrant
(Amended and Restated as of
March 15, 1982) (Filed with
the December 31, 1982 10-K
of the Registrant and
incorporated herein by
reference (File No. 0-
6032)).
4(g) Compass Bancshares, Inc.
Employee Stock Ownership
Plan
23 Consent of KPMG Peat
Marwick.
24 Power of Attorney of the
Officers and Directors of
the Registrant and
certified copies of the
Resolutions of the
Registrant's Board of
Directors authorizing such
signatures.
EXHIBIT 4(g)
Compass Bancshares, Inc.
Employee Stock Ownership Plan
<PAGE>
COMPASS BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
As Amended and Restated
as of
January 1, 1989
COMPASS BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
As Amended and Restated as of January 1, 1989
TABLE OF CONTENTS
PAGE
----
ARTICLE I
PURPOSE
-------
Section 1.1 Nature of Plan.......................................... 1
Section 1.2 Purpose and Effect of Restatement of Plan............... 1
ARTICLE II
DEFINITIONS
-----------
Section 2.1 Account................................................. 2
Section 2.2 Accrued Benefit......................................... 2
Section 2.3 Adjustment Date......................................... 2
Section 2.4 Adopting Company........................................ 2
Section 2.5 Anniversary Date........................................ 3
Section 2.6 Annual Additions........................................ 3
Section 2.7 Authorized Leave of Absence............................. 3
Section 2.8 Beneficiary............................................. 3
Section 2.9 Board................................................... 3
Section 2.10 Company................................................. 3
Section 2.11 Company Stock........................................... 3
Section 2.12 Compensation............................................ 3
Section 2.13 Date of Employment...................................... 5
Section 2.14 Deferred Compensation................................... 6
Section 2.15 Defined Benefit Plan Fraction........................... 6
Section 2.16 Defined Contribution Plan Fraction...................... 6
Section 2.17 Disability Retirement Date.............................. 6
Section 2.18 Elective Employer Contribution.......................... 6
Section 2.19 Eligible Employee....................................... 6
Section 2.20 Employee................................................ 6
Section 2.21 Employee Contribution Account........................... 7
Section 2.22 Employer................................................ 7
Section 2.23 Employer Contribution Account........................... 7
Section 2.24 Employer Matching Contribution.......................... 7
Section 2.25 Employer Non-Matching Contribution...................... 7
Section 2.26 Enrollment Date......................................... 7
Section 2.27 ERISA................................................... 7
Section 2.28 Family Member........................................... 8
Section 2.29 Five Percent Owner...................................... 8
Section 2.30 Forfeiture.............................................. 8
Section 2.31 Highly Compensated Eligible Employee.................... 8
Section 2.32 Hour of Service......................................... 10
Section 2.33 Independent Purchasing Agent............................ 11
Section 2.34 Internal Revenue Code................................... 11
Section 2.35 Investment Fund......................................... 12
Section 2.36 Investment Manager...................................... 12
Section 2.37 Leased Employee......................................... 12
Section 2.38 Limitation Year......................................... 13
Section 2.39 Named Fiduciary......................................... 13
Section 2.40 Non-Elective Employer Contribution...................... 13
Section 2.41 Non-Highly Compensated Employee......................... 13
Section 2.42 Normal Retirement Age................................... 13
Section 2.43 Normal Retirement Date.................................. 13
Section 2.44 One-Year Break in Service............................... 13
Section 2.45 Participant............................................. 14
Section 2.46 Plan.................................................... 14
Section 2.47 Plan Administrator...................................... 14
Section 2.48 Plan Year............................................... 14
Section 2.49 Retirement Committee.................................... 14
Section 2.50 Rollover Contribution................................... 15
Section 2.51 Separation from Service................................. 15
Section 2.52 Trust or Trust Fund..................................... 15
Section 2.53 Trustee................................................. 15
Section 2.54 Year of Benefit Service................................. 15
Section 2.55 Year of Participation Service........................... 15
Section 2.56 Year of Vesting Service................................. 16
ARTICLE III
PARTICIPATION
-------------
Section 3.1 Eligibility to Participate.............................. 17
Section 3.2 Participation upon Re-Employment........................ 17
Section 3.3 Cessation of Participation.............................. 17
ARTICLE IV
EMPLOYER CONTRIBUTIONS
----------------------
Section 4.1 Contribution Formula.................................... 18
Section 4.2 Participant's Salary Reduction Election................. 18
Section 4.3 Amount of Employer Contributions........................ 21
Section 4.4 Amendment or Termination With Respect to Contribution... 22
Section 4.5 Limitation on Amount to be Contributed.................. 23
Section 4.6 Time of Payment of Contribution......................... 23
Section 4.7 Time of Payment of Elective Employer Contribution....... 23
Section 4.8 Permanent Discontinuance of Contribution................ 23
Section 4.9 Rollover Amount from Other Plans........................ 24
ARTICLE V
INVESTMENT OF CONTRIBUTIONS
---------------------------
Section 5.1 Investment Funds........................................ 26
Section 5.2 Investment Directions by Participants................... 30
Section 5.3 Reinvestment of Fund Earnings........................... 30
Section 5.4 Change of Investment Directions for Future
Contributions........................................... 31
Section 5.5 Change of Investment Directions for Existing Employee
Contribution Account Funds.............................. 31
ARTICLE VI
ALLOCATIONS AND ADJUSTMENTS
---------------------------
Section 6.1 Employer Contribution and Forfeiture Allocation......... 32
Section 6.2 Participant Accounts.................................... 34
Section 6.3 Account Adjustments..................................... 34
Section 6.4 Adjustment of Contributions............................. 37
Section 6.5 Maximum Annual Additions................................ 38
Section 6.6 Adjustment for Excess Annual Additions.................. 44
Section 6.7 Limitation on Before-Tax Contributions.................. 46
(a) Average Actual Deferral Percentage................. 46
(b) Definitions........................................ 47
(i) Actual Deferral Percentage................... 47
(ii) Average Actual Deferral Percentage........... 47
(iii) Compensation................................. 47
(iv) Qualified Employer Deferral Contributions.... 47
(v) Eligible Participant......................... 47
(c) Special Rules...................................... 48
(d) Distribution of Excess Contributions............... 49
(i) In General................................... 49
(ii) Determination of Income...................... 50
(iii) Maximum Distribution Amount.................. 50
(iv) Accounting for Excess Contributions.......... 52
Section 6.8 Limitations on Employee After-Tax Contributions and
Employer Matching Contributions......................... 52
(a) Contribution Percentage............................ 52
(b) Definitions........................................ 53
(i) Average Contribution Percentage.............. 53
(ii) Contribution Percentage...................... 53
(iii) Eligible Participant......................... 53
(c) Special Rules...................................... 54
(d) Distribution of Excess Aggregate Contributions..... 55
(i) In General................................... 55
(ii) Excess Aggregate Contributions............... 55
(iii) Determination of Income...................... 55
(iv) Maximum Distribution Amount.................. 56
ARTICLE VII
DETERMINATION OF BENEFITS
-------------------------
Section 7.1 Normal Retirement Benefit............................... 57
Section 7.2 Delayed Retirement Benefit.............................. 57
Section 7.3 Total and Permanent Disability Benefit.................. 58
Section 7.4 Death Benefit........................................... 58
Section 7.5 Employment Termination Benefit.......................... 58
Section 7.6 Definition of Year of Vesting Service................... 59
Section 7.7 Determination of Years of Vesting Service - Breaks in
Service................................................. 59
Section 7.8 Forfeitures............................................. 61
ARTICLE VIII
DISTRIBUTION OF BENEFITS
------------------------
Section 8.1 Time of Payment of Benefits............................. 62
Section 8.2 Method of Payment....................................... 64
Section 8.3 Designation of Beneficiary.............................. 67
Section 8.4 Distributions to which Qualified Joint and Survivor and
Pre-Retirement Survivor Annuities Apply................. 68
(a) Qualified Joint and Survivor Annuity............... 68
(b) Pre-Retirement Survivor Annuity.................... 70
Section 8.5 Direct Rollovers........................................ 73
Section 8.6 Claim and Review Procedure.............................. 74
Section 8.7 No Assignment of Benefits............................... 75
Section 8.8 Medium of Payment....................................... 77
Section 8.9 Rights and Options on Distributed Shares of Company
Stock................................................... 77
Section 8.10 Unclaimed Account Procedure............................. 78
Section 8.11 Execution of Receipts and Releases...................... 79
Section 8.12 Financial Hardship Distribution from Employee
Contribution Account.................................... 79
Section 8.13 Payment in the event of Legal Disability................ 83
Section 8.14 Disclosure to Participants.............................. 83
ARTICLE IX
TRUST
-----
Section 9.1 Contributions Paid to Trust............................. 84
Section 9.2 Return of Contribution.................................. 86
Section 9.3 Benefits Payable by the Trust........................... 86
Section 9.4 Funding Policy.......................................... 86
Section 9.5 Reports by Trustee...................................... 86
Section 9.6 Investment Direction.................................... 87
Section 9.7 Independent Purchasing Agent............................ 89
Section 9.8 Voting Company Stock.................................... 91
Section 9.9 Response to Tender or Exchange Offer.................... 92
ARTICLE X
ADMINISTRATION OF THE PLAN
--------------------------
Section 10.1 Retirement Committee.................................... 93
Section 10.2 Plan Administrator...................................... 94
Section 10.3 Allocation of Responsibilities.......................... 94
Section 10.4 Duties of Retirement Committee.......................... 95
Section 10.5 Rules and Regulations for the Plan...................... 96
Section 10.6 Retirement Committee Internal Procedures................ 96
Section 10.7 Authorization of Benefit Payments....................... 97
Section 10.8 Application and Forms for Benefits...................... 97
Section 10.9 Assistants and Representatives.......................... 97
Section 10.10 Multiple Fiduciary Capacities........................... 98
Section 10.11 Discretionary Acts...................................... 98
Section 10.12 Plan Administrative Expenses............................ 98
Section 10.13 Trustee's Expenses...................................... 99
ARTICLE XI
TOP HEAVY PROVISIONS
--------------------
Section 11.1 Definitions............................................. 99
(a) Aggregate Account.................................. 99
(b) Aggregation Group.................................. 101
(c) Defined Benefit Plan............................... 101
(d) Defined Contribution Plan.......................... 101
(e) Determination Date................................. 102
(f) Key Employee....................................... 102
(g) Non-Key Employee................................... 103
(h) Permissive Aggregation Group....................... 103
(i) Present Value of Accrued Benefit................... 103
(j) Required Aggregation Group......................... 104
(k) Top Heavy Group.................................... 104
(l) Top Heavy Plan Year................................ 104
Section 11.2 Top Heavy Determination................................. 104
Section 11.3 Requirements............................................ 105
(a) Minimum Vesting.................................... 105
(b) Minimum Allocation................................. 107
(c) Compensation Definition............................ 109
ARTICLE XII
AMENDMENTS AND ACTIONS BY EMPLOYER
----------------------------------
Section 12.1 Amendments.............................................. 110
Section 12.2 Amendment of Vesting Schedule........................... 110
ARTICLE XIII
SUCCESSOR EMPLOYER AND MERGER OR CONSOLIDATION OF PLAN
------------------------------------------------------
Section 13.1 Successor Employer...................................... 111
Section 13.2 Merger of Plan.......................................... 111
ARTICLE XIV
PLAN TERMINATION
----------------
Section 14.1 Right to Terminate...................................... 111
Section 14.2 Partial Termination..................................... 112
Section 14.3 Liquidation of the Trust................................ 112
ARTICLE XV
MISCELLANEOUS
-------------
Section 15.1 Employment Status....................................... 113
Section 15.2 Titles.................................................. 113
Section 15.3 Gender and Number of Words.............................. 113
Section 15.4 Severability............................................ 113
Section 15.5 Notice.................................................. 113
Section 15.6 Waiver of Notice........................................ 113
Section 15.7 Applicable Law.......................................... 114
<PAGE>
COMPASS BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
as Amended and Restated
as of January 1, 1989
ARTICLE I
PURPOSE
-------
Section 1.1 Nature of Plan. The Plan and the Trust were created and
shall be maintained to enable eligible employees of Compass Bancshares, Inc.
and its affiliated companies to share in the growth and prosperity of the
Compass Bancshares, Inc. banking system and to provide such employees with an
opportunity to accumulate capital for their future economic security. A
primary purpose of the Plan is to enable such Participants to acquire a
proprietary interest in Compass Bancshares, Inc. Consequently, Employer
contributions made to the Trust will be primarily (up to 100%) vested in
Compass Bancshares, Inc. stock. However, the Plan will not acquire Employer
stock on a leveraged basis. The Plan and the Trust are intended to meet the
requirements of Sections 401(a), 401(k) and 501(a) of the Internal Revenue
Code of 1986, as amended, and the requirements of the Employee Retirement
Income Security Act of 1974, so that the Plan will be a qualified stock bonus
plan and the Trust will be exempt from taxation. An additional purpose of the
Plan is to encourage Employee thrift and to create a competitive compensation
program for long service Employees through the establishment of a formal plan
under which contributions by Participants are made by means of salary
reduction elections and are supplemented by Employer Matching Contributions.
Section 1.2 Purpose and Effect of Restatement of Plan. The Plan is
being amended and restated as of January 1, 1989 (except where otherwise
provided), in order to comply with the requirements of the Internal Revenue
Code of 1986, as amended. The terms of the Plan prior to this amendment and
restatement shall generally remain in force, to the extent they do not
conflict with the amendment and restatement and for purposes of the treatment
of transactions occurring prior to January 1, 1989. This amendment and
restatement shall not be applicable to former Participants or Beneficiaries of
former Participants whose employment with the Employer terminated prior to
January 1, 1989.
ARTICLE II
DEFINITIONS
-----------
The following words and phrases, when used herein, shall have the
following meanings:
Section 2.1 Account shall mean one of several bookkeeping accounts
maintained to record a Participant's interest in the Plan.
Section 2.2 Accrued Benefit shall mean the amount standing in a
Participant's Account as of any date derived from Employer contributions and
Employee contributions, if any.
Section 2.3 Adjustment Date means the last day of March, June,
September and December of each Plan Year or such other date or dates as
determined by the Plan Administrator, including a daily basis (each regular
business day) if the Plan Administrator shall authorize and implement a daily
valuation system.
Section 2.4 Adopting Company shall mean any corporation affiliated, as
defined in Section 407(d)(7) of ERISA, with the Company, and which is
authorized by the Board to adopt the Plan and which adopts the Plan. The term
shall also include any corporation into which an Adopting Company may be
merged or consolidated or by which it may be succeeded, which is authorized by
the Board to adopt or continue the Plan and which adopts or continues the
Plan.
Section 2.5 Anniversary Date shall mean the 31st day of December of
each year.
Section 2.6 Annual Additions shall have the meaning set forth in
Section 6.5(a).
Section 2.7 Authorized Leave of Absence shall mean an approved absence
from the employ of an Employer under the Employer's personnel practices. An
absence due to service in the Armed Forces of the United States shall be
considered an Authorized Leave of Absence provided the Employee returns to
employment with the Employer with re-employment rights protected by law.
Section 2.8 Beneficiary shall mean a person or persons designated by a
Participant in accordance with the provisions of Section 8.3 to receive any
benefits which shall be payable under this Plan upon or after the death of the
Participant.
Section 2.9 Board shall mean the Board of Directors of the Company.
Section 2.10 Company shall mean Compass Bancshares, Inc., a Delaware
corporation, and any successor, purchaser, or transferee of the operating
assets and business of Compass Bancshares, Inc., which elects to continue the
Plan.
Section 2.11 Company Stock shall mean shares of common stock which are
issued by the Company.
Section 2.12 Compensation shall mean with respect to any Participant,
such Participant's base salary or wages paid or accrued by the Employer during
the period involved but excluding overtime, bonuses, incentive pay and other
extraordinary remuneration but including commissions up to such amount as will
not exceed $20,000 for Plan Years ending on or before December 31, 1993 and
$22,000 for Plan Years thereafter when commissions are combined with base
salary or wages. The term "commissions" shall include those monies earned
from sales by sales persons who devote the majority of their time to the sale
of bank products for which a commission schedule has been approved in advance.
The term "commissions" shall not include special incentives or promotional
programs such as referral fees, awards for outstanding achievement, and annual
incentive bonuses. "Base salary," in the case of sales persons, shall be
based on draw pay. Amounts contributed by the Employer under this Plan and
under any other employee benefit plan and any other fringe benefits shall not
be considered as Compensation except for contributions through a salary
reduction agreement under Section 401(k) of the Internal Revenue Code pursuant
to Section 4.2 of this Plan and under the cafeteria plan under Section 125 of
the Internal Revenue Code. If a Participant receives such included
compensation from more than one Employer in a calendar year, the amounts of
all such included compensation shall be added together to determine the
Participant's Compensation for the year. Compensation in excess of $200,000
shall be disregarded. Such amount shall be adjusted at the same time and in
such manner as permitted under Section 415(d) of the Internal Revenue Code.
For Plan Years beginning on or after January 1, 1994, Compensation in excess
of the OBRA '93 compensation limit shall be disregarded. The OBRA '93 annual
compensation limit is $150,000, as adjusted by the Commissioner for increases
in the cost of living in accordance with Section 401(a)(17)(B) of the Internal
Revenue Code. The cost-of-living adjustment in effect for a calendar year
applies to any period, not exceeding 12 months, over which compensation is
determined (determination period) beginning in such calendar year. If a
determination period consists of fewer than 12 months, the OBRA '93 annual
compensation limit will be multiplied by a fraction, the numerator of which is
the number of months in the determination period, and the denominator of which
is 12. For a Participant's initial year of participation, Compensation shall
be recognized as of the Employee's effective date of participation. In
applying this limitation, the family group of a Highly Compensated Participant
who is subject to the Family Member aggregation rules of Code Section
414(q)(6) because such Participant is either a "five percent owner" of the
Employer or one of the ten (10) Highly Compensated Employees paid the greatest
Section 415 compensation during the year, shall be treated as a single
Participant, except that for this purpose Family Members shall include only
the affected Participant's spouse and any lineal descendants who have not
attained age nineteen (19) before the close of the year. If, as a result of
the application of such rules, the adjusted compensation limitation is
exceeded, then the limitation shall be prorated among the affected Family
Members in proportion to each such Family Member's Compensation prior to the
application of this limitation, or in accordance with any other method
permitted by regulation.
Section 2.13 Date of Employment for Employees having no prior service
with the Employer, shall mean the first date for which the Employee is
credited with an Hour of Service and for all other Employees shall mean the
first date for which the Employee is credited with an Hour of Service and
which follows the last Plan Year in which the Employee has a One-Year Break in
Service.
Section 2.14 Deferred Compensation shall mean with respect to that
portion of such Participant's total compensation paid by the Employer for a
Plan Year that such Participant has elected to defer pursuant to Section 4.2.
Section 2.15 Defined Benefit Plan Fraction shall have the meaning set
forth in Section 6.5(b).
Section 2.16 Defined Contribution Plan Fraction shall have the meaning
set forth in Section 6.5(b).
Section 2.17 Disability Retirement Date shall mean the first day of the
calendar month following a determination by a Participant's Employer that the
Participant has a physical and/or mental disability of such a nature that it
prevents the Participant from engaging in or performing the principal duties
of his customary employment or occupation on a continuing and sustained basis
and that results in the granting of long-term disability benefits under the
long-term disability benefit plan of the Employer if the Participant is a
participant in the Employer's long-term disability benefit plan.
Section 2.18 Elective Employer Contribution shall mean a contribution
made pursuant to Section 4.2 excluding any amounts distributed as excess
annual additions pursuant to Section 6.6.
Section 2.19 Eligible Employee shall mean any Employee who has met the
eligibility requirements of Article III and is eligible to make salary
deferrals under Section 4.2.
Section 2.20 Employee shall mean any person employed by an Employer.
The term "Employee" excludes any person who is employed as an independent
contractor and any person who is a "leased employee" within the meaning of
Section 414(n)(2) and Section 414(o)(2) of the Internal Revenue Code.
Section 2.21 Employee Contribution Account shall mean the account of a
Participant consisting of his share of the Elective Employer Contributions
(salary reduction contributions), together with any investment gains or losses
allocated to it.
Section 2.22 Employer shall mean Compass Bancshares, Inc., or any
corporation into which the Employer may be merged or consolidated or to which
may be made a transfer of substantially all of its assets, and any Adopting
Employer which may adopt the Plan pursuant to the terms hereof.
Section 2.23 Employer Contribution Account shall mean the account of a
Participant consisting of his share of Non-Elective Employer Contributions,
together with any investment gains or losses allocated to it.
Section 2.24 Employer Matching Contribution shall mean a contribution
made pursuant to Section 4.3(a).
Section 2.25 Employer Non-Matching Contribution shall mean a
contribution made pursuant to Section 4.3(b).
Section 2.26 Enrollment Date shall mean the first day of each pay
period.
Section 2.27 ERISA shall mean the Employee Retirement Income Security
Act of 1974, as amended from time to time.
Section 2.28 Family Member shall mean with respect to an affected
Participant, such Participant's spouse, lineal descendants and ascendants and
their spouses, as described in Section 414(q)(6)(B) of the Internal Revenue
Code.
Section 2.29 Five Percent Owner shall mean any Employee who owns or is
considered to own under Section 318 of the Internal Revenue Code, more than 5%
of the outstanding stock of the Company or stock possessing more than 5% of
the total combined voting power of all stock of the Company.
Section 2.30 Forfeiture shall mean the portions of a Participant's
Accounts which are forfeited pursuant to Section 7.8.
Section 2.31 Highly Compensated Eligible Employee shall mean any highly
compensated active Employees and highly compensated former Employees as
defined in Section 414(q) of the Internal Revenue Code and the regulations
thereunder.
Generally, a highly compensated active Employee includes any Employee who
performs service for the Employer during the determination year and who,
during the look-back year: (i) received compensation from the Employer in
excess of $75,000 (as adjusted pursuant to Section 415(d) of the Internal
Revenue Code); (ii) received compensation from the Employer in excess of
$50,000 (as adjusted pursuant to Section 415(d) of the Internal Revenue Code)
and was a member of the top-paid group for such year; or (iii) was an officer
of the Employer and received compensation during such year that is greater
than 50 percent of the dollar limitation in effect under Section 415(b)(1)(A)
of the Internal Revenue Code. The term Highly Compensated Employee also
includes: (i) Employees who are both described in the preceding sentence if
the term "determination year" is substituted for the term "look-back year" and
the Employee is one of the 100 Employees who received the most compensation
from the Employer during the determination year; and (ii) Employees who are
Five Percent Owners at any time during the look-back year or determination
year.
If no officer has satisfied the compensation requirement of (iii) above
during either a determination year or look-back year, Employees in the top-
paid group, the top 100 Employees, the number of Employees treated as officers
and the compensation that is considered, will be made in accordance with
Section 414(q) of the Internal Revenue Code and the regulations thereunder.
A highly compensated former Employee includes any Employee who separated
from service (or was deemed to have separated) prior to the determination
year, performs no service for the Employer during the determination year, and
was a highly compensated active Employee for either the separation year or any
determination year ending on or after the Employee's 55th birthday.
If an Employee is, during a determination year or look-back year, a
Family Member of either a Five Percent Owner who is an active or former
Employee or a Highly Compensated Employee who is one of the 10 most Highly
Compensated Employees ranked on the basis of compensation paid by the Employer
during such year, then the Family Member and the Five Percent Owner or top-ten
Highly Compensated Employee shall be aggregated. In such case, the Family
Member and the Five Percent Owner or top-ten Highly Compensated Employee shall
be treated as a single Employee receiving compensation and Plan contributions
or benefits equal to the sum of such compensation and contributions or
benefits of the Family Member and the Five Percent Owner or top-ten Highly
Compensated Employee.
For this purpose, the determination year shall be the Plan Year. The
look-back year shall be the twelve-month period immediately preceding the
determination year.
For purposes of this Section, "compensation" shall mean compensation as
defined in Section 415(c)(3) of the Internal Revenue Code and shall include
amounts that would otherwise be excluded from a Participant's gross income by
reason of Internal Revenue Code Sections 125, 402(a)(8), 402(h)(1)(B), and
403(b). In determining who is a Highly Compensated Employee, all Employers
that are required to be aggregated under Sections 414(b), (c), (m) or (o)
shall be considered and Leased Employees shall be considered Employees unless
such Leased Employees are covered by a plan described in Internal Revenue Code
Section 414(n)(5) and are not covered by a qualified plan of the Employer.
Section 2.32 Hour of Service shall mean each hour for which an Employee
is paid, or entitled to payment, by an Employer for the performance of duties
during the applicable computation period. Hours of Service credited for the
performance of duties shall be credited to the Employee for the computation
period or periods in which the duties were performed. Hours of Service shall
include each hour for which back pay, irrespective of mitigation of damages,
has been either awarded or agreed to by the Employer. Hours of Service for
back pay shall be credited to the Employee for the computation period or
periods to which the award or agreement pertains rather than the computation
period in which the award, agreement or payment is made. Hour of service, in
addition, shall include each hour for which an Employee is paid, or entitled
to payment, by an Employer for reasons (such as vacations, holidays, sickness,
disability, layoff and other paid periods) other than the performance of
duties during the applicable computation period and shall be counted in the
computation period in which either payment is actually made or amounts payable
to the Employee become due. For purposes of determining Hours of Service for
payments for reasons other than the performance of duties, the payments
received shall be divided by the lesser of (a) the Employee's most recent
hourly rate of compensation for the performance of duties, or (b) the
Employee's average hourly rate of compensation for the performance of duties
for the most recent computation period in which the Employee completed more
than 500 Hours of Service. Hours of Service for Employees whose compensation
is not determined on the basis of certain amounts for each hour of work or
other paid period, may be determined using an alternative method under which
an Employee shall be credited with forty-five (45) Hours of Service for each
week in which the Employee would be credited with one Hour of Service under
the basic method of crediting one hour for each hour of work or other paid
periods. Hours of Service shall be credited at the rate of forty (40) hours
for each week during which an Employee (regardless of his compensation method)
is on Authorized Leave of Absence. Anything herein to the contrary
notwithstanding, however, Hours of Service shall not be credited more than
once for any period of time.
Section 2.33 Independent Purchasing Agent shall have the meaning set
forth in Section 9.7.
Section 2.34 Internal Revenue Code shall mean the Internal Revenue Code
of 1986, as amended or replaced from time to time.
Section 2.35 Investment Fund shall mean any one of the funds described
in Section 5.1 which constitutes part of the Trust Fund.
Section 2.36 Investment Manager shall have the meaning set forth in
Section 9.6.
Section 2.37 Leased Employee shall mean any person (other than an
Employee of the recipient) who pursuant to an agreement between the recipient
and any other person ("leasing organization") has performed services for the
recipient (or for the recipient and related persons determined in accordance
with Internal Revenue Code Section 414(n)(6)) on a substantially full time
basis for a period of at least one year, and such services are of a type
historically performed by employees in the business field of the recipient
Employer. Contributions or benefits provided a Leased Employee by the leasing
organization which are attributable to services performed for the recipient
Employer shall be treated as provided by the recipient Employer. A Leased
Employee shall not be considered an Employee of the recipient if:
(1) such employee is covered by a money purchase pension plan
providing:
(A) a non-integrated employer contribution rate of at least 10%
of compensation, as defined in Internal Revenue Code Section 415(c)(3), but
including amounts contributed pursuant to a salary reduction agreement which
are excludable from the employee's gross income under Internal Revenue Code
Sections 125, 402(a)(8), 402(h) or 403(b);
(B) immediate participation; and
(C) full and immediate vesting.
(2) Leased Employees do not constitute more than 20% of the
recipient's non-highly compensated work force.
Section 2.38 Limitation Year shall mean the period used to calculate
the limitations imposed on benefits and contributions by Section 415 of the
Internal Revenue Code and shall be the same period as the Plan Year.
Section 2.39 Named Fiduciary shall have the meaning set forth in
Section 402(a) of ERISA.
Section 2.40 Non-Elective Employer Contribution shall mean a
contribution by the Employer made pursuant to Section 4.3(b).
Section 2.41 Non-Highly Compensated Employee shall mean an Employee of
the Employer which is neither a Highly Compensated Employee nor a Family
Member.
Section 2.42 Normal Retirement Age shall mean age sixty-five (65).
Section 2.43 Normal Retirement Date shall mean the first day of the
month coinciding with or next following the date a Participant attains sixty-
five (65) years of age.
Section 2.44 One-Year Break in Service shall mean a Plan Year in which
an Employee is credited with 500 or fewer Hours of Service. Solely for
purposes of determining whether a One-Year Break in Service for participation
and vesting purposes has occurred in a computation period, an Employee who is
absent from work for maternity or paternity reasons shall receive credit for
the hours of service which would otherwise have been credited to such Employee
but for such absence, or in any case in which such hours cannot be determined,
eight (8) hours of service per day of such absence. For purposes of this
paragraph, an absence from work for maternity or paternity reasons means an
absence (1) by reason of the pregnancy of the Employee, (2) by reason of a
birth of a child of the Employee, (3) by reason of the placement of a child
with the Employee in connection with the adoption of such child by such
Employee, or (4) for purposes of caring for such child for a period beginning
immediately following such birth or placement. The Hours of Service credited
under this paragraph shall be credited (1) in the computation period in which
the absence begins if the crediting is necessary to prevent a One-Year Break
in Service in that period, or (2) in all other cases, in the following
computation period. The total Hours of Service required to be credited under
this paragraph shall not exceed 501.
Section 2.45 Participant shall mean an Employee who participates in the
Plan, having met the eligibility requirements set forth in Article III.
Section 2.46 Plan shall mean the Compass Bancshares, Inc. Employee
Stock Ownership Plan as set forth herein and as hereafter amended from time to
time, which plan prior to November 8, 1993, was known as the "Central
Bancshares of the South, Inc. Employee Stock Ownership Plan."
Section 2.47 Plan Administrator shall mean the Company as set forth in
Section 2.10 hereof.
Section 2.48 Plan Year shall mean the twelve (12) consecutive month
period ending December 31 of each calendar year.
Section 2.49 Retirement Committee shall mean the persons described in
and appointed pursuant to the provisions of Section 10.1.
Section 2.50 Rollover Contribution shall mean a rollover amount or a
rollover contribution, as those terms are defined in and made pursuant to
Section 402(a)(5), Section 403(a)(4), Section 408(d)(3) or Section
409(b)(3)(C) of the Internal Revenue Code before January 1, 1993 and as
defined in Section 402(c) of the Internal Revenue Code thereafter and made
pursuant to Section 4.9.
Section 2.51 Separation from Service shall mean termination of
employment with an Employer or Affiliated Employer for any reason; provided,
however, that no Separation from Service shall be deemed to occur upon an
Employee's transfer from the employ of one Employer or Affiliated Employer to
another Employer or Affiliated Employer.
Section 2.52 Trust or Trust Fund shall mean the fund and trust known as
the Compass Bancshares, Inc. Employee Stock Ownership Trust, maintained and
held by the Trustee in accordance with the terms of the trust agreement which
constitutes a part of this Plan.
Section 2.53 Trustee shall mean the person or persons, corporate or
individual, appointed from time to time, by the Board of Directors of the
Company to administer and hold the Trust.
Section 2.54 Year of Benefit Service shall mean a Plan Year for which a
Participant is credited with 1,000 or more Hours of Service and is employed by
an Employer on the last day of the Plan Year.
Section 2.55 Year of Participation Service shall mean (a) the twelve
(12) month period beginning on an Employee's Date of Employment if, in that
twelve (12) month period, the Employee is credited with 1,000 or more Hours of
Service, or (b) the first Plan Year beginning after his Date of Employment in
which he is credited with 1,000 or more Hours of Service. For the purpose of
calculating an Employee's Year of Participation Service, all service with the
Employer and any corporation which is, with the Employer, a member of a
controlled group of corporations (as defined in Section 414(b) of the Internal
Revenue Code) and any trade or business (whether or not incorporated) which
is, with the Employer, under common control (as defined in Section 414(c) of
the Internal Revenue Code); any organization (whether or not incorporated)
which is a member of an affiliated service group (as defined in Section 414(m)
of the Internal Revenue Code) which includes the Employer; and any other
entity required to be aggregated with the Employer pursuant to regulations
under Section 414(o) of the Internal Revenue Code shall be treated as service
with the Employer. In the case of a Participant who does not have any vested
interest in his Account balance derived from Employer contributions, Years of
Service before a period of consecutive One-Year Breaks in Service will not be
taken into account in computing eligibility service if the number of
consecutive One-Year Breaks in Service in such period equals or exceeds the
greater of five (5) or the aggregate number of Years of Service. Such
aggregate number of Years of Service will not include any Years of Service
disregarded under the preceding sentence by reason of prior One-Year Breaks in
Service.
Section 2.56 Year of Vesting Service shall have the meaning set forth
in Sections 7.6 and 7.7.
ARTICLE III
PARTICIPATION
-------------
Section 3.1 Eligibility to Participate. Each Employee shall be
eligible to participate in this Plan on the earlier of the January 1st or the
July 1st following the date on which such Employee has completed one Year of
Participation Service, provided such Employee is still employed by an Employer
on such January 1st or July 1st.
Section 3.2 Participation upon Re-Employment. A former Participant
who incurs one or more One-Year Breaks in Service and who had a vested
interest in his Accounts shall be eligible to participate in the Plan
immediately upon returning to the employ of an Employer. A former Participant
who did not have a vested interest in any portion of his Account balance
derived from Employer contributions at the time of termination of service will
be considered a new Employee, for eligibility purposes, if the number of
consecutive One-Year Breaks in Service equals or exceeds the greater of five
or the aggregate number of Years of Service before such One-Year Break in
Service. If such former Participant's Years of Service before termination of
service may not be disregarded pursuant to the preceding sentence, such former
Participant shall participate immediately upon re-employment.
Section 3.3 Cessation of Participation. A Participant ceases to be a
Participant when all assets in his Accounts have been distributed or
forfeited.
ARTICLE IV
EMPLOYER CONTRIBUTIONS
----------------------
Section 4.1 Contribution Formula. The Employer shall contribute to
the Plan as follows:
(a) The amount of the total salary reduction elections of all
Participants made pursuant to Section 4.2, which amount shall be deemed the
Elective Employer Contribution, plus
(b) If approved by the Employer in its sole discretion prior to the
beginning of the Plan Year in accordance with Section 4.3 (a), a matching
contribution equal to the percentage determined by the Employer, plus
(c) A discretionary amount determined each year by the Employer
pursuant to Section 4.3(b), which amount shall be a Non-Elective Employer
Contribution.
Section 4.2 Participant's Salary Reduction Election.
(a) Each Participant may elect to defer his Compensation in any
whole percentage amount which percentage is not less than 1% nor more than 10%
of his Compensation with respect to such payroll period by filing an election
for payroll deduction for such amount for this purpose. Any election filed by
an Employee prior to the date on which he first becomes a Participant (and
elects to reduce his salary) shall be effective as of the first payroll period
ending after such election is filed. The amount by which Compensation is
reduced shall be that Participant's Deferred Compensation and shall be treated
as an Elective Employer Contribution and allocated to the Participant's
Employee Contribution Account. Any salary deferral election made by a
Participant under this Section shall be irrevocable for the Plan Year, or
portion thereof, for which it is to be effective, except that (1) any such
election may be amended prior to the first day of a payroll period upon thirty
(30) day's written notice (to be effective as of the first day of a payroll
period) to change the whole deferral percentage amount applicable to
Compensation payable for the remaining portion of the Plan Year and (2) a
Participant may elect at any time to completely discontinue deferrals of
Compensation payable during the remainder of the Plan Year upon thirty (30)
day's written notice (to be effective as of the first day of a payroll
period).
(b) A Participant who has not elected to defer his Compensation may
later elect to defer his Compensation. Such election may be made prior to the
first day of a payroll period upon thirty (30) day's written notice (to be
effective as of the first day of the payroll period).
(c) The balance in each Participant's Employee Contribution Account
shall be nonforfeitable at all times and shall not be subject to forfeitures
for any reason.
(d) A Participant may not make withdrawals from his Employee
Contribution Account except in the event of disability, death, retirement,
Separation from Service, proven hardship as described in Section 8.11 or
termination of the Plan without the establishment or existence of a "successor
plan" as defined in Treasury Regulation 1.401(k)-1(d)(3), or in the event of
the sale of a subsidiary or the sale of substantially all of the assets of a
trade or business but only if the conditions and circumstances described in
Section 401(k)(10) of the Internal Revenue Code and the regulations thereunder
are satisfied.
(e) No Participant shall be permitted to defer Compensation to the
Trust during any calendar year which combined with all elective deferrals of
the Participant under all plans, contracts or arrangements with the Employer
are in excess of the dollar limitation in effect under Section 402(g) of the
Internal Revenue Code for the taxable year.
(f) Notwithstanding any other provision of the Plan, Excess
Deferral Amounts and income allocable thereto shall be distributed no later
than April 15, 1988, and each April 15 thereafter to Participants who claim
such Allocable Excess Deferral Amounts for the preceding calendar year. The
"Excess Deferral Amount" shall mean the amount of Deferred Compensation for a
calendar year that the Participant allocates to this Plan pursuant to the
claim procedure set forth in this Section 4.2.
The Participant's claim shall be in writing; shall be submitted to the
Employer no later than March 1; shall specify the Participant's Excess
Deferral Amount for the preceding calendar year; and shall be accompanied by
the Participant's written statement that if such amounts are not distributed,
such Excess Deferral Amount, when added to amounts deferred under other plans
or arrangements described in Sections 401(k), 408(k) or 403(b) of the Internal
Revenue Code, exceeds the limit imposed on the Participant by Section 402(g)
of the Internal Revenue Code for the year in which the deferral occurred.
The Excess Deferral Amount distributed to a Participant with respect to a
calendar year shall be adjusted for income and, if there is a loss allocable
to the Excess Deferral, shall in no event be less than the lesser of the
Participant's Account under the Plan or the Participant's Deferred
Compensation for the Plan Year.
(g) At the Normal Retirement Date, or such other date when the
Participant shall be entitled to receive benefits, the fair market value of
the Participant's Employee Contribution Account shall be used to provide
additional benefits to the Participant pursuant to Article VIII.
(h) In any case, where any of the foregoing provisions of this
Section 4.2 are not in conformity with regulations of the Department of the
Treasury that are from time to time promulgated, the nonconforming provisions
may be amended retroactively to assure conformity.
Section 4.3 Amount of Employer Contributions.
(a) Employer Matching Contribution. The Employer shall contribute
to the Plan a matching contribution known as the Employer Matching
Contribution in such amount, if any, as shall be specified by the Board of
Directors of the Employer or of the Company, provided, however, such Employer
Matching Contribution shall not exceed a percentage in excess of 100% of the
first 6% of Employee salary reductions. The amount of the Employer Matching
Contribution shall be determined and communicated to all Employees before the
beginning of each Plan Year.
(b) Employer Non-Matching Contributions. In addition to or in lieu
of the Employer Matching Contribution, the Employer may make an additional
contribution in such amount as determined in the sole discretion of the Board
of Directors of the Employer or of the Company. The amount of an Employer's
Non-Matching Contribution shall be established by resolution of the Board of
Directors and the substance of the resolution will be communicated to the
Participants.
All Employer Contributions, including Employer Matching
Contributions, Employer Non-Matching Contributions, and Qualified Non-
Elective Contributions shall be invested in Fund M - Employer Company Stock
Fund without regard to the investment direction of any Participant in respect
of contributions made on his behalf. Employer contributions will be paid in
cash, shares of the Company Stock or other property as the Company's Board of
Directors may from time to time determine. Shares of Company Stock and other
property will be valued at fair market value.
In 1994 the Employer shall make a special one-time contribution in
the amount of $75,597.69 on behalf of Non-Highly Compensated Employees who
were participants in the Plan on June 30, 1992. Notwithstanding the regular
allocation provisions applicable to Employer Non-Matching Contributions set
forth in Section 6.1(b)(ii) this special contribution shall be allocated to
these Non-Highly Compensated Employees' accounts in Company Stock (Fund A and
Fund M) in an amount equal to the over-allocation occurring on June 30, 1992
as a result of an over crediting to such Employees of shares of Company Stock.
The purpose of this special contribution is to reconcile the assets of the
Trust with the account statements of these Non-Highly Compensated Employees.
Section 4.4 Amendment or Termination With Respect to Contribution.
Each Employer intends to make annual contributions to the Trust during the
continuation of the Plan subject to the limitations set out herein; provided,
however, that the Employer undertakes no binding obligation to make payments
of any nature to the Trust, and that this instrument shall not be construed as
any contractual liability on the part of an Employer so to do. Each Employer
expressly reserves the right to discontinue contributions to the Trust at any
time prior to the close of any Plan Year.
Section 4.5 Limitation on Amount to be Contributed. Each Employer
shall be limited to the making of a contribution for a Plan Year which shall
not be in excess of the maximum amount which the Employer is permitted to
deduct as an expense for that Plan Year for federal income tax purposes.
Section 4.6 Time of Payment of Contribution. Each Employer shall make
payment of its contribution for any Plan Year on the date or dates designated
by the Company; provided, however, that the total amount of all contributions
for any Plan Year shall be made in full on or before the time prescribed by
law for filing of the federal income tax return of the Employer, including
extensions. Employer Matching Contributions shall be remitted to the Trustee
as soon as practicable.
Section 4.7 Time of Payment of Elective Employer Contribution. The
Employer shall pay to the Trustee its Elective Employer Contribution to the
Plan for each Plan Year within thirty (30) days after the payroll period for
which such contributions were withheld if practicable and in no event later
than thirty (30) days after the end of the Plan Year.
Section 4.8 Permanent Discontinuance of Contribution. In the event an
Employer should permanently discontinue making contributions to the Plan for
any reason, all sums allocated to its Participants will vest irrevocably in
them and will be distributed as the Retirement Committee shall decide. In no
event will all or any portion of the contribution made by an Employer under
this Plan revest in the Employer in the event that contributions should be
permanently discontinued.
Section 4.9 Rollover Amount from Other Plans. An Employee eligible to
participate in the Plan, regardless of whether he has satisfied the
participation requirements of Article III or regardless of whether he has
elected to make salary reduction contributions hereunder, may rollover to the
Trust Fund amounts from other qualified plans provided that the trust fund
from which the funds are transferred permits the rollover to be made and the
rollover will not jeopardize the tax exempt status of the Plan and Trust or
create adverse tax consequences for the Employer.
For purposes of this Section, the term "qualified plan" shall mean any
tax qualified plan under Code Section 401(a). The term "amounts transferred
from other qualified plans" shall mean: (i) amounts rolled to the Plan
directly from another qualified plan; (ii) distributions received by an
Employee from another qualified plan which are eligible for tax free rollover
to a qualified plan and which are deposited by the Employee to this Plan
within sixty (60) days following his receipt thereof; (iii) amounts rolled to
this Plan from a conduit individual retirement account provided that the
conduit individual retirement account has no assets other than assets which
(A) were previously distributed to the Employee by another qualified plan as a
distribution, (B) were eligible for tax-free rollover to a qualified plan and
(C) were deposited in such conduit individual retirement account within sixty
(60) days of receipt thereof and earnings on said assets; and (iv) amounts
distributed to the Employee from a conduit individual retirement account
meeting the requirements of clause (iii) above, and deposited by the Employee
with this Plan within sixty (60) days of his receipt thereof from such conduit
individual retirement account.
Trustee to trustee transfers will be permitted only in the discretion of
the Retirement Committee. The Retirement Committee shall develop such
procedures, and may require information from an Employee desiring to make such
a rollover, as it deems necessary or desirable to determine that the proposed
rollover will meet the requirements of this Section. Upon approval by the
Retirement Committee, the amount rolled over shall be deposited in the Trust
Fund and shall be credited to a Rollover Contribution Account. Such account
shall be one hundred percent (100%) vested in the Employee, shall share in
allocations of income and loss and appreciation and depreciation. Upon
termination of employment, the total amount of the Employee's Rollover
Contribution Account shall be distributed in accordance with Article VIII
below.
Upon such a rollover by an Employee who is otherwise eligible to
participate in the Plan but who has not yet completed the participation
requirements of Section 3.1, or who has elected not to make salary reduction
contributions hereunder, his Rollover Contribution Account shall represent his
sole interest in the Plan until he becomes a Participant.
The Retirement Committee shall develop such procedures, and may require
information from an Employee desiring to make such a transfer, as it deems
necessary or desirable to determine that the proposed transfer will meet the
requirements of this Section. Upon approval by the Retirement Committee, the
amount transferred shall be deposited in the Trust Fund and shall be credited
to the Employee's Employee Contribution Account. Such funds shall be one
hundred percent (100%) vested in the Employee. The Employee shall thereafter
be entitled to direct the funds in the manner and subject to the conditions
and restrictions as apply to all Participants with respect to their Employee
Contribution Accounts in Article V. The rollover amount shall share in
allocations of income and loss and appreciation and depreciation in accordance
with Section 6.3, but shall not share in Employer Matching or Employer
Discretionary Contribution allocations. Upon termination of employment, the
rollover amount held in the Employee Contribution Account shall be distributed
in accordance with Article VIII below.
Upon such a transfer by an Employee who is otherwise eligible to
participate in the Plan but who has not yet completed the participation
requirements of Section 3.1, or who has elected not to make salary reduction
contributions hereunder, his rollover contribution to his Employee
Contribution Account shall represent his sole interest in the Plan until he
becomes a Participant. Regardless of any language to the contrary, the Plan
will not accept trustee to trustee transfers from a money purchase pension
plan or defined benefit pension plan.
ARTICLE V
INVESTMENT OF CONTRIBUTIONS
---------------------------
Section 5.1 Investment Funds. Elective Employer Contributions which
are paid to the Trustee shall be added to such one or more of Fund A -
Employee Company Stock Fund, Fund B - Employee Equity Fund, Fund C - Employee
Guaranteed Income Contract Fund, or Fund D - Employee Money Market Fund, in
such proportions and amounts as may be determined in accordance with this
Article V. All Employer Contributions (both Employer Matching Contributions
and Employer Non-Matching Contributions) shall be added to Fund M. The
Accounts of all Participants derived from Employer contributions made prior to
April 1, 1986, shall be held in Fund M. The Investment Funds are:
(a) Fund A - Employee Company Stock Fund shall be invested exclusively
in Company Stock.
(b) Fund B - Employee Equity Fund shall be invested in such common or
capital stock, such convertible bonds, convertible notes, debentures or
preferred stocks as are convertible into common or capital stocks, such
debentures accompanied by warrants to purchase common or capital stocks, and
such other types of equity investments as may be purchased by the Trustee in
its discretion, including investments by the Trustee through the medium of any
commingled trust funds for collective investment in securities of the types
referred to in this paragraph (b) established and maintained by the Trustee
for the investment of funds of trusts of employee benefit plans, which trusts
are exempt from tax under Section 501(a) of the Internal Revenue Code, by
reason of qualifying under Section 401(a) of the Internal Revenue Code, and
shall also include short-term obligations of the United States and other
investments of a short-term nature, including commercial paper, purchased and
held by the Trustee pending the selection and purchase of other investments of
the type described in this paragraph (b), provided, however, that no
securities issued by, or convertible into securities of the Company shall be
purchased for the Fund B - Employee Equity Fund. It is not intended by this
proviso, however, to prohibit the transfer by the Trustee of assets of the
Fund B - Employee Equity Fund to any commingled trust fund maintained by the
Trustee which holds securities issued by or convertible into securities of the
Company or any subsidiary or affiliate of the Company. The Company may appoint
an Investment Manager pursuant to Section 9.6 to manage all or part of Fund B.
(c) Fund C - Employee Guaranteed Income Contract Fund shall be invested
in guaranteed income contracts entered into with an insurance company. An
investment in Fund C guarantees a return of the amount contributed to Fund C,
plus interest. Income will be credited as of each Adjustment Date to each
Employee Contribution Account existing under Fund C. Interest rates earned on
investments in Fund C will be guaranteed for certain time periods and
renegotiated periodically.
(d) Effective as of July 1, 1991, Fund D - Employee Money Market Fund
shall be invested in money market instruments, including but not limited to
certificates of deposit, demand and time deposits, bankers' acceptances and
other instruments of domestic and foreign banks and other deposit
institutions; short-term credit facilities such as demand notes; asset-backed
securities; marketable obligations issued or guaranteed by the U. S.
Government, its agencies or instrumentalities; corporate debt obligations,
including variable rate demand notes; commercial paper; and instruments
(including repurchase agreements) secured by such obligations purchased by the
Trustee in its discretion. The Fund's investments may be credit enhanced by a
guaranty, letter of credit or insurance, and the Fund may acquire securities
subject to puts and standby commitments to purchase securities at their
principal amount within a fixed period. The Fund may also purchase
participation interests from financial institutions to acquire a fractional
interest in debt obligations and to increase return the Fund may engage in the
lending of portfolio securities. In addition to or in lieu of the foregoing
types of direct investment instruments and investment transactions, the Fund
may also consist of investments by the Trustee through the medium of any
commingled trust funds for collective investment in instruments and
transactions of the types referred to in this paragraph (d) established and
maintained by the Trustee for the investment of funds of trusts of employee
benefit plans, which trusts are exempt from tax under Section 501(a) of the
Internal Revenue Code by reason of qualifying under Section 401(a) of the
Internal Revenue Code, and investments by the Trustee in any open-end or
closed-end management type investment company or investment trust registered
under the Investment Company Act of 1940, as from time to time amended,
including proprietary mutual funds of the Trustee for which funds the Trustee
may serve as investment advisor, which invest in the instruments and engage in
the transactions of the type referred to in this paragraph (d), as the Trustee
in its discretion may choose for the Accounts of Participants selecting this
investment medium.
(e) Fund M - Employer Company Stock Fund shall be invested exclusively
in Company Stock.
(f) Other Funds. Funds other than those established above may
subsequently be established and maintained hereunder, pursuant to the
directions of the Retirement Committee. In addition, Funds initially or
subsequently established hereunder may, pursuant to directions of the
Retirement Committee, be withdrawn from time to time. In the event that a
Fund is added or an existing Fund is withdrawn, the Participants shall be
permitted to make a special one-time Fund Transfer to the new Fund or from a
terminated Fund in accordance with procedures established by the Retirement
Committee.
Section 5.2 Investment Directions by Participants. Each Participant
shall direct, at the time he elects to participate in the Plan, that the
Elective Employer Contributions made on his behalf be invested in one of the
following ways:
(a) entirely in Fund A - Employee Company Stock Fund;
(b) entirely in Fund B - Employee Equity Fund;
(c) entirely in Fund C - Employee Guaranteed Income Contract Fund;
(d) entirely in Fund D - Employee Money Market Fund;
(e) in one or more funds (a), (b) (c), and (d), provided the election is
a multiple of 25% as to any one fund or such other minimum percentage amount
as shall be specified by the Retirement Committee.
Section 5.3 Reinvestment of Fund Earnings. Dividends and other
distributions received by the Trustee with respect to Company Stock held in
both Fund A - Employee Company Stock Fund and Fund M - Employer Company Stock
Fund shall be invested in Company Stock. Interest and other distributions
received by the Trustee with respect to the Fund C - Employee Guaranteed
Income Contract Fund shall be reinvested in Fund C. Dividends, interest and
other distributions received by the Trustee with respect to the Fund B -
Employee Equity Fund shall be invested in Fund B. Interest and other
distributions received by the Trustee with respect to the Fund D - Employee
Money Market Fund shall be reinvested in Fund D.
Section 5.4 Change of Investment Directions for Future Contributions.
Any investment direction given by a Participant shall continue in effect until
changed by the Participant. A Participant may change his investment direction
as to the future Elective Employer Contributions made on his behalf once in
each Plan Year for Plan Years ending on or before December 31, 1993 and
thereafter twice each Plan Year by giving at least thirty (30) days (or such
lesser number of days as the Retirement Committee may specify) prior written
notice directing that such contributions, beginning January 1 or beginning
July 1, 1994 (or as soon as administratively possible), as of July 1, after
receipt of such notice by his Employer, be invested in one of the other ways
specified in Section 5.1 provided the election is a whole percentage as to any
one Investment Fund. The Retirement Committee shall be authorized to permit
more frequent changes in investment directions to be effective on such dates
as it shall specify, including on a daily basis (each regular business day) if
a daily valuation system shall be implemented. A new investment direction
shall be on a form to be provided for the purpose and shall be signed by the
Participant and delivered to his Employer, provided, however, the Retirement
Committee is authorized to implement a voice system for making investment
electives.
Section 5.5 Change of Investment Directions for Existing Employee
Contribution Account Funds. Once in each Plan Year for Plan Years ending on
or before December 31, 1993 and thereafter twice each Plan Year a Participant
(or his Beneficiary in the event of the death of a Participant) may direct, in
accordance with the provisions of this Section 5.5, that all of his interest
in the Investment Funds attributable to the Elective Employer Contributions
made on his behalf, or 25% or 50% or 75% of such total amount, to the credit
of his Account as of January 1 and beginning on July 1, 1994 (or as soon as
administratively possible), as of July 1, in the Investment Funds specified in
Section 5.1 be reduced to cash as of such date and such cash be invested by
the Trustee as of such date in any other type of investment specified in
Section 5.1 which the Participant (or his Beneficiary in the event of the
death of a Participant) shall designate, provided the election is a whole
percentage as to any one Investment Fund. Direction shall be given in writing
at least thirty (30) days (or such lesser number of days as the Retirement
Committee may specify) prior to such date and shall be on a form to be
provided by the Retirement Committee for the purpose. The form shall be
signed by the Participant (or his Beneficiary in the event of the death of a
Participant) and delivered to his Employer. The Retirement Committee shall be
authorized to permit more frequent changes in investment directions to be
effective on such dates as it shall specify, including on a daily basis (each
regular business day) if a daily valuation system shall be implemented. The
Retirement Committee is further authorized to implement a voice system for
making investment changes.
ARTICLE VI
ALLOCATIONS AND ADJUSTMENTS
---------------------------
Section 6.1 Employer Contribution and Forfeiture Allocation. As of
each Adjustment Date, the Elective Employer Contributions and Employer
Matching Contributions, and as of the Anniversary Date the Employer's Non-
Matching Contributions and Forfeitures attributable to the Employer's Non-
Matching Contributions, shall be allocated to the Employee and Employer
Contribution Accounts of Participants as follows:
(a) Elective Employer Contribution: The Elective Employer Contribution
(salary reduction) shall be allocated to each Participant's Employee
Contribution Account in an amount equal to each such Participant's Deferred
Compensation.
(b) Employer Contributions:
(i) Matching Contribution: There shall be allocated to each
Participant's Employer Contribution Account as of each Adjustment Date a
matching contribution based on that percentage specified by the Employer
pursuant to Section 4.3(a). Forfeitures attributable to Employer Matching
Contributions shall be applied to reduce the Employer's Matching
Contributions.
(ii) Employer Non-Matching Contribution and Certain Forfeitures: If
the Employer chooses to make any Employer Non-Matching Contributions, these
additional Employer contributions and all Forfeitures attributable to Employer
Non-Matching Contributions (including all Employer Contributions made prior to
April 1, 1986) shall be allocated to the Employer Contribution Accounts of
Participants, whether or not they elected to make salary reduction
contributions that year, who are credited with a Year of Benefit Service for
the Plan Year in the proportion that each such Participant's Compensation for
the Plan Year bears to the total of all such Participant's Compensation for
the Plan Year. Forfeitures shall be allocated as if all Participants,
regardless of their Employer, were employed by a single employer who
maintained the Plan.
Each Participant will be furnished quarterly (or on such more
frequent basis as authorized by the Retirement Committee) a statement of his
Accounts. It shall reflect all Elective Employer Contributions and Non-
Elective Employer Contributions and the earnings and/or losses thereon.
Section 6.2 Participant Accounts. The Plan Administrator shall
account separately for each Investment Fund in respect of Elective Employer
Contributions and Non-Elective Employer Contributions. A Participant's
Accounts shall show the balance standing to his credit. The Retirement
Committee shall establish accounting procedures for the purpose of debiting
and crediting such Accounts to reflect transactions occurring between and as
of the Adjustment Dates, and shall maintain adequate records for debiting the
vested portion of Fund M - Employer Company Stock Fund, and the average cost
basis of shares of Company Stock credited to the respective Participants' Fund
A - Employee Company Stock Fund and Fund M - Employer Company Stock Fund. The
Plan Administrator shall account separately for Employer Matching
Contributions and Employer Non-Matching Contributions. The maintenance of
Accounts shall be for accounting purposes only and a segregation of the assets
of the Trust Fund to each Account shall not be required.
Section 6.3 Account Adjustments. A Participant's Account in respect
of his interest in Fund B - Employee Equity Fund, Fund C - Employee Guaranteed
Income Contract Fund, and Fund D - Employee Money Market Fund shall be
expressed in dollars. A Participant's Account as of each Adjustment Date in
respect of his interest in Fund B - Employee Equity Fund, Fund C - Employee
Guaranteed Income Contract Fund, and Fund D - Employee Money Market Fund shall
be credited or charged, as the case may be, as soon as practicable after each
Adjustment Date with the contributions, income, gains, appreciation, losses,
depreciation, expenses and other transactions for the quarterly period during
which such credit or charge accrued. Such credits or charges to a
Participant's Account shall be made in such proportions and by such method or
formula as shall be deemed by the Retirement Committee to be necessary or
appropriate to account for each Participant's proportionate beneficial
interest in the Trust Fund in respect of his interest in Fund B - Employee
Equity Fund, Fund C - Employee Guaranteed Income Contract Fund, and Fund D -
Employee Money Market Fund as of the applicable Adjustment Date. Investments
of Fund B - Employee Equity Fund, Fund C - Employee Guaranteed Income Contract
Fund and Fund D - Employee Money Market Fund shall be valued at their fair
market values as of each Adjustment Date as determined by the Trustee and such
valuation shall conclusively establish such value.
Fund A - Employee Company Stock Fund of each Participant shall be an
Account credited as of each Adjustment Date with his shares of Company Stock
(including fractional shares) purchased for his Account and shall be credited
with stock dividends on Company Stock held in his Fund A. A Participant's
Account in respect of his interest in Fund A - Employee Company Stock Fund,
shall be represented by shares of Company Stock (and fractions of shares
carried to four decimal places). The Fund M - Employer Company Stock Account
of each Participant shall be an Account credited as of each Adjustment Date
with his allocated share of Company Stock (including fractional shares)
purchased and paid for by the Trust or contributed in kind by an Employer as a
result of Employer Matching Contributions and with stock dividends on Company
Stock held in Fund M derived from Employer Matching Contributions, and as of
each Anniversary Date (or each Adjustment Date if so directed by the Plan
Administrator) with his allocated share of Company Stock (including fractional
shares) purchased and paid for by the Trust or contributed in kind by an
Employer as the result of Employer Non-Matching Contributions, with
Forfeitures of Company Stock attributable to Employer Non-Matching
Contributions and with stock dividends on Company Stock held in Fund M derived
from Employer Non-Matching Contributions. A Participant's Account in respect
of his interest in Fund M - Employer Company Stock Fund, shall be represented
by shares of Company Stock (and fractions of shares carried to four decimal
places). As soon as practicable after each Adjustment Date, each
Participant's Account shall be adjusted as of such Adjustment Date to reflect
any increase or any decrease (resulting from contributions, earnings,
withdrawals and expenses charged to the Participant's Account) in respect of
Fund A and Fund M attributable to Employer Matching Contributions in the
number of shares credited to his Account for the period during which such
increase or decrease occurred. As soon as practicable after each Anniversary
Date (or Adjustment Date if so directed by the Plan Administrator), each
Participant's Account shall be adjusted as of such Anniversary Date (or
Adjustment Date if so directed by the Plan Administrator) to reflect any
increase or decrease (resulting from contributions, earnings, withdrawals,
forfeitures and expenses charged to the Participant's Account) in respect of
Fund M attributable to Employer Non-Matching Contributions. Such credits or
charges to a Participant's Account shall be made in such proportions and by
such method or formula as shall be deemed by the Retirement Committee to be
necessary or appropriate to account for each Participant's proportionate
beneficial interest in the Trust Fund in respect of his interest in Fund A and
Fund M attributable to Employer Matching Contributions as of the Adjustment
Date and in respect of his interest in Fund M attributable to Employer Non-
Matching Contributions and Forfeitures derived from Employer Non-Matching
Contributions as of each Anniversary Date (or Adjustment Date if so directed
by the Plan Administrator).
Subject to the provisions of Section 7.5, in the event a Participant or
Beneficiary requests payment of his Plan benefit, the Accounts of the
Participant or Beneficiary will not be increased or decreased to reflect
earnings after the date payment is requested and benefits shall be based upon
the value of the Employee Contribution Account and the Employer Contribution
Account attributable to Employer Matching Contributions as of the preceding
Adjustment Date (or the processing date in the event a daily valuation system
shall be implemented) and the value of the Employer Contribution Account
attributable to Employer Non-Matching Contributions as of the preceding
Anniversary Date (or Adjustment Date if so directed by the Plan Administrator
or the processing date in the event a daily valuation system shall be
implemented).
The Retirement Committee shall be authorized to permit more frequent
allocations of earnings and losses than is hereinbefore provided to be
effective on such dates as it shall specify, including on a daily basis (each
regular business day) if a daily valuation system shall be implemented.
Section 6.4 Adjustment of Contributions. Notwithstanding any other
provision contained herein to the contrary, contributions hereunder and the
allocation of such contributions shall comply with the provisions of this
Article, and, in the event of noncompliance, the Retirement Committee shall
have the right to make the adjustments described in this Article or such
Contributions shall be subject to refund as provided herein.
Section 6.5 Maximum Annual Additions.
(a) The total Annual Additions (as defined below) allocated to the
Account of any Participant for any Plan Year shall not exceed the lesser of
the following amounts;
(i) twenty-five percent (25%) of the Participant's compensation
within the meaning of Section 415(c)(3) of the Internal Revenue Code for the
Limitation Year; or
(ii) the Defined Contribution Dollar Limitation.
(b) Defined Contribution Dollar Limitation shall mean $30,000 or, if
greater, one-fourth of the defined benefit dollar limitation set forth in
Section 415(b)(1) of the Internal Revenue Code as in effect for the Limitation
Year.
(c) Special Rules. The compensation limitation referred to in
subparagraph (a) above shall not apply to:
(i) Any contribution for medical benefits (within the meaning of
Section 419A(f)(2) of the Internal Revenue Code) after Separation from Service
which is otherwise treated as an Annual Addition,
(ii) Any amount otherwise treated as an Annual Addition under
Section 415(1)(1) of the Internal Revenue Code.
(d) In addition, in the case of a Participant who is also a participant
in one or more defined benefit plans or one or more defined contribution plans
maintained by an Employer, the contributions to the Plan shall be limited to
the extent necessary to prevent the sum of Fractions A and B below, computed
as of the end of the Plan Year, from exceeding 1.0.
Fraction A
(numerator) Projected annual benefit of the Participant under all of the
Employer's pension plans (determined as of the close of the Plan Year).
(denominator) The lesser of (1) the product of 1.25 multiplied by the
dollar limitation in effect for the Limitation Year under Section
415(b)(1)(A), as adjusted pursuant to Section 415(d)(1) of the Internal
Revenue Code, or (2) 1.4 multiplied by 100% of the Participant's "average
compensation for his high 3 years" (as said term is defined under Section
415(b)(3) of the Internal Revenue Code).
Fraction B
(numerator) The sum of all Annual Additions to the Accounts of the
Participant under the Plan for the current and all prior Limitation Years and
the Annual Additions attributable to all welfare benefit funds, as defined in
Section 419(e) of the Internal Revenue Code, maintained by the Employer,
(denominator) The sum of the lesser of the following amounts determined
for such Plan Year and for each prior Plan Year in which the Participant has a
Year of Service: (1) 1.25 multiplied by the dollar limitation in effect
under Section 415(c)(1)(A) of the Internal Revenue Code, as adjusted pursuant
to Section 415(d)(1) of the Internal Revenue Code, or (2) 1.4 multiplied by
25% of the Participant's compensation for the year.
(A) For purposes of the Plan, "Annual Addition" shall mean the
amount allocated to a Participant's Account during the Limitation Year that
constitutes:
(i) Employer Contributions,
(ii) Participant Contributions,
(iii) Forfeitures, and
(iv) Amounts described in Sections 415(1)(1) and 419(A)(d)(2)
of the Internal Revenue Code.
Contributions do not fail to be Annual Additions merely because they are
Excess Deferrals, Excess Contributions or Excess Aggregate Contributions or
merely because Excess Contributions or Excess Aggregate Contributions are
corrected through distributions. Excess Deferrals that are distributed in
accordance with Treasury Regulation, Section 1.402(g)-1(e)(2) or (3) are not
Annual Additions.
(B) The terms "Plan" and "Employer's pension plan" also include,
respectively (i) this Plan and any other defined contribution plan (as defined
in Section 415(k) of the Internal Revenue Code), and (ii) any other qualified
pension plan in which the Participant participates (in accruing benefits)
maintained by the Employer.
(C) For purposes of this Section 6.5, wherever the term
"compensation" is used, it shall mean:
A Participant's earned income, wages, salaries, and fees for
professional services and other amounts received for personal services
actually rendered in the course of employment with the Employer (including,
but not limited to, commissions, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums, tips, and bonuses),
and excluding reimbursements or other expense allowances, fringe benefits
(cash and non-cash), moving expenses and welfare benefits. Compensation shall
include elective contributions made by the Employer on behalf of Employees and
excludable from gross income under Sections 125, 402(a)(8), 402(h) or 403(b).
The term "compensation" does not include the following:
(i) Employer contributions to a plan of deferred compensation
which are not includible in the Participant's gross income for the taxable
year in which contributed, or Employer contributions under a simplified
employee pension plan to the extent such contributions are deductible by the
Participant, or any distributions from a plan of deferred compensation;
(ii) Amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property) held by the Participant
either becomes freely transferable or is no longer subject to a substantial
risk of forfeiture;
(iii) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option; and
(iv) Other amounts which received special tax benefits, or
contributions made by the Employer (whether or not under a salary reduction
agreement) towards the purchase of an annuity described in Section 403(b) of
the Code (whether or not the amounts are actually excludable from the gross
income of the Participant).
For purposes of applying the limitations of this Section 6.5,
compensation for a Limitation Year is the compensation actually paid or
includible in gross income during such year.
For Limitation Years ending before January 1, 1994, Compensation for
purposes of this Section 6.5 shall be limited to $200,000 (unless adjusted in
the same manner permitted under Section 415(d) of the Internal Revenue Code)
and thereafter to $150,000 (unless adjusted in the same manner permitted in
Section 415(d) of the Internal Revenue Code).
(D) Notwithstanding the foregoing, for any "Limitation Year" in
which the Plan is a Top-Heavy Plan, 1.0 shall be substituted for 1.25 unless
the extra minimum allocation is being provided. However, for any "Limitation
Year" in which the Plan is a Super Top-Heavy Plan, 1.0 shall be substituted
for 1.25 in any event.
(e) For the purpose of this Section 6.5, all qualified defined benefit
plans, whether or not terminated, ever maintained by the Employer shall be
treated as one defined benefit plan and all qualified defined contribution
plans (including voluntary employee contribution accounts in a deferred
benefit plan and key employee accounts under a welfare benefit plan described
in Section 419 of the Internal Revenue Code, as well as Employer contributions
allocated to an IRA), whether or not terminated, ever maintained by the
Employer shall be treated as one defined contribution plan.
(f) If the sum of Fraction A and B shall exceed 1.0 in any Limitation
Year for any Participant in the Plan, the Plan Administrator shall adjust the
numerator of Fraction A so that the sum of both fractions shall not exceed 1.0
in any Limitation Year for such Participant by reducing benefits of the
Participant in the defined benefit plan which are projected but not accrued.
In no event will such reduction be made to a benefit level which is less than
the level of his accrued benefit as of the end of the prior Plan Year.
If the limitations are still exceeded after making the above adjustment,
the Participant's Annual Addition under this Plan shall be reduced, first, by
reducing any Elective Employer Contributions not eligible for an Employer
Matching Contribution, and next any Elective Employer Contributions along with
any Employer Matching Contributions to be made on the basis of such Elective
Employer Contributions, the excess Elective Employer Contributions to be
returned to the Participant to the extent permitted by the Internal Revenue
Code and regulations and the excess Employer Matching Contributions to be
applied against subsequent Employer Matching Contributions to be made under
the Plan.
(g) For the purpose of this Section 6.5, if an Employer is a member of a
controlled group of corporations, trades or businesses under common control
(as defined by Internal Revenue Code Section 1563(a) or Internal Revenue Code
Sections 414(b) and (c) as modified by Internal Revenue Code Sections 415(g)
and (h), or is a member of an affiliated service group (as defined by Internal
Revenue Code Section 414(m)), or required to be aggregated pursuant to
Internal Revenue Code Section 414(o), all Employees of such Employer shall be
considered to be employed by a single Employer.
Section 6.6 Adjustment for Excess Annual Additions. If as a result of
the allocation of forfeitures, a reasonable error in estimating a
Participant's annual Compensation, or other facts and circumstances to which
Section 1.415-6(b)(6) of the Treasury Regulations, as amended, or as replaced
from time to time, shall be applicable, the "Annual Addition" to a
Participant's Account shall exceed the maximum provided in Section 6.5, the
Plan Administrator shall treat the excess as follows:
(a) If the Participant shall have made an Employee after-tax
contribution to the Plan, the Plan Administrator shall, pursuant to the
provisions of Section 1.415-6(b)(6)(iv) of the Treasury Regulations, return
such contribution to the extent the return reduces the excess amount in the
Participant's Account.
(b) If the amounts required to be returned to the Participant pursuant
to (a) above shall not fully eliminate the excess amounts in the Participant's
Account, the excess amount shall, pursuant to Section 1.415-6(b)(6)(iii) of
the Treasury Regulations, be held unallocated in a suspense account and be
used to reduce future Employer Contributions under the Plan for the next
Limitation Year and for each succeeding Limitation Year, as is necessary for
the Participant. If the Plan no longer covers the Participant as of the end
of a Limitation Year, the excess amount in the suspense account shall be
allocated and reallocated in the next Plan Year to all of the Participants in
the Plan before any Employer Contributions and Employee after-tax
contributions (if any) that would constitute "Annual Additions" to the Plan
for that year. Furthermore, the excess amount in the suspense account must be
used to reduce Employer Contributions for the next Plan Year (and succeeding
Plan Years, as necessary) for all of the Participants in the Plan. In no
event shall any excess amounts in the suspense accounts be distributed to a
Participant or a former Participant.
(c) Notwithstanding paragraphs (a) and (b) above of this Section 6.6,
Elective Employer Contributions may be distributed to the Participant to the
extent necessary to eliminate excess Annual Additions. The distributed
amounts shall be disregarded for purposes of Section 402(g), as well as for
purposes of the actual deferral percentage test of Section 401(k)(3) of the
Internal Revenue Code and the actual contribution percentage test of Section
401(m)(2) of the Internal Revenue Code. Amounts distributed under this
paragraph shall include earnings attributable to such contributions.
Section 6.7 Limitation on Before-Tax Contributions. The provisions of
this Section shall apply for Plan Years beginning on or after January 1, 1987.
(a) Average Actual Deferral Percentage.
(i) The Average Actual Deferral Percentage for Eligible
Participants who are Highly Compensated Employees for the Plan Year shall not
exceed the Average Actual Deferral Percentage for Eligible Participants who
are Non-Highly Compensated Employees for the Plan Year multiplied by 1.25; or
(ii) the Average Actual Deferral Percentage for Eligible
Participants who are Highly Compensated Employees for the Plan Year shall not
exceed the Average Actual Deferral Percentage for Eligible Participants who
are Non-Highly Compensated Employees for the Plan Year multiplied by 2,
provided that the Average Actual Deferral Percentage for Eligible Participants
who are Highly Compensated Employees does not exceed the Average Actual
Deferral Percentage for Eligible Participants who are Non-Highly Compensated
Employees by more than two (2) percentage points.
(iii) For Plan Years beginning after December 31, 1988, in order to
prevent the multiple use of the alternative method in (ii) above and in
Internal Revenue Code Section 401(m)(9)(A), any Highly Compensated Employees
eligible to make a salary deferral election and to receive Employer Matching
Contributions under this Plan shall have his Actual Deferral Percentage
reduced pursuant to Treasury Regulations Section 1.401(m)-2, the provisions of
which are hereby incorporated by reference.
(b) Definitions. For purposes of this Article VI, the following
definitions shall be used:
(i) Actual Deferral Percentage shall mean the ratio (expressed as a
percentage) of the Elective Employer Contributions and Qualified Employer
Deferral Contributions on behalf of the Eligible Participant for the Plan Year
to the Eligible Participant's Compensation for the Plan Year.
(ii) Average Actual Deferral Percentage shall mean the average
(expressed as a percentage) of the Actual Deferral Percentage of the Eligible
Participants in a group for the Plan Year, calculated to the nearest hundredth
of a percentage point.
(iii) Compensation shall mean compensation as defined in Section
414(s) of the Internal Revenue Code for the period of the Plan Year during
which the Employee was an Eligible Participant.
(iv) Qualified Employer Deferral Contributions shall mean Qualified
Non-Elective Contributions taken into account under the terms of the Plan in
determining the Actual Deferral Percentage.
(v) Eligible Participant shall mean any Employee of the Employer
who is otherwise authorized under the terms of Article IV to make a salary
reduction election or to have Qualified Employer Deferral Contributions
allocated to his Account for the Plan Year.
(c) Special Rules.
(i) For purposes of this Section 6.7, the Actual Deferral
Percentage for any Eligible Participant who is a Highly Compensated Employee
for the Plan Year and who is eligible to make a salary reduction election or
to have Qualified Employer Deferral Contributions allocated to his Account
under two or more plans or arrangements described in Section 401(k) of the
Internal Revenue Code that are maintained by the Employer or an Affiliated
Employer shall be determined as if all such salary reduction contributions and
Qualified Employer Deferral Contributions were made under a single
arrangement.
For the purposes of Internal Revenue Code Sections 401(a)(4), 410(b)
and 401(k), if two or more plans which include cash or deferred arrangements
are considered one plan for the purposes of Internal Revenue Code Section
401(a)(4) or 410(b) (other than Internal Revenue Code Section
410(b)(2)(A)(ii)), the cash or deferred arrangements included in such plans
shall be treated as one arrangement. In addition, two or more cash or
deferred arrangements may be considered as a single arrangement for purposes
of determining whether or not such arrangements satisfy Internal Revenue Code
Sections 401(a)(4), 410(b) and 401(k). In such a case, the cash or deferred
arrangements included in such plans and the plans including such arrangements
shall be treated as one arrangement and as one plan for purposes of this
Section and Internal Revenue Code Sections 401(a)(4), 410(b) and 401(k). For
Plan Years beginning after December 31, 1989, plans may be aggregated under
this paragraph only if they have the same plan year.
(ii) For purposes of determining the Actual Deferral Percentage of a
Participant who is a Highly Compensated Employee, the salary reduction
contributions, Qualified Employer Deferral Contributions and Compensation of
such Participant shall include the salary reduction contributions, Qualified
Employer Deferral Contributions and Compensation of Family Members, and such
Family Members shall be disregarded in determining the Actual Deferral
Percentage for Participants who are Non-Highly Compensated Employees.
(iii) The determination and treatment of the salary reduction
contributions, Qualified Non-Elective Contributions and Actual Deferral
Percentage of any Participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
(d) Distribution of Excess Contributions.
(i) In General. Notwithstanding any other provision of the Plan,
Excess Contributions and income allocable thereto shall be distributed no
later than the last day of each Plan Year to Participants on whose behalf such
Excess Contributions were made for the preceding Plan Year. "Excess
Contributions" shall mean the excess of salary reduction contributions made on
behalf of Highly Compensated Participants for the Plan Year over the maximum
amount of such contributions permitted under paragraph (a) of this Section
6.7. The Employer may if it so chooses prevent Excess Contributions from
being made during the Plan Year by limiting the amount of salary reduction
contributions made during the Plan Year on behalf of Highly Compensated
Participants.
(ii) Determination of Income. The income allocable to Excess
Contributions for the Plan Year shall be determined by multiplying income
allocable to the Participant's salary reduction contributions and Qualified
Employer Deferral Contributions for the Plan Year by a fraction, the numerator
of which is the Excess Contribution on behalf of the Participant for the Plan
Year and the denominator of which is the sum of the Participant's account
balances attributable to salary reduction contributions and Qualified Employer
Deferral Contributions as of the beginning of the Plan Year plus the
Participant's salary reduction contributions and Qualified Employer Deferral
Contributions for the Plan Year.
(iii) Maximum Distribution Amount. The Excess Contributions
which would otherwise be distributed to the Participant shall be adjusted for
income for the Plan Year for which the Excess Contribution was made and shall
be reduced, in accordance with regulations, by the amount of Excess Deferrals
distributed to the Participant; shall, if there is a loss allocable to the
Excess Contributions, in no event be less than the lesser of the Participant's
Employee Contribution Account under the Plan or the Participant's salary
reduction contributions and Qualified Employer Deferral Contributions for the
Plan Year.
On or before the fifteenth day of the third month following the end
of each Plan Year, the Highly Compensated Participant having the highest
Actual Deferral Percentage shall have his portion of Excess Contributions
distributed to him until one of the tests set forth in paragraph (a) of this
Section 6.7 is satisfied, or until his Actual Deferral Percentage equals the
Actual Deferral Percentage of the Highly Compensated Participant having the
second highest Actual Deferral Percentage. This process shall continue until
one of the tests set forth in paragraph (a) of this Section 6.7 is satisfied.
For each Highly Compensated Participant, the amount of Excess Contributions is
equal to the total of salary reduction contributions and other contributions
on behalf of such Highly Compensated Participant (determined prior to the
application of this paragraph) taken into account for the Actual Deferral
Percentage test minus the amount determined by multiplying the Highly
Compensated Participant's Actual Deferral Percentage (determined after
application of this paragraph) by his Compensation. However, in determining
the amount of Excess Contributions to be distributed with respect to an
affected Highly Compensated Participant as determined herein, such amount
shall be reduced by any Excess Contributions previously distributed to such
affected Highly Compensated Participant for his taxable year ending with or
within such Plan Year.
The determination and correction of Excess Contributions of a Highly
Compensated Participant whose Actual Deferral Percentage is determined under
the family aggregation rules shall be accomplished by having the Actual
Deferral Percentage reduced in accordance with Treasury Regulation Section
1.401(k)-1(f)(5), and the Excess Contributions for the family unit shall be
allocated among the Family Members in proportion to the salary reduction
contributions of each Family Member that was combined to determine the Actual
Deferral Percentage.
(iv) Accounting for Excess Contributions. Amounts distributed under
this paragraph (d) shall first be treated as distributions from the
Participant's salary reduction contributions that were not eligible for an
Employer Matching Contribution, next simultaneously from his salary reduction
contributions that qualified for an Employer Matching Contribution and from
his Employer Matching Contribution Account to the extent the Employer Matching
Contributions related to the Participant's salary reduction contributions and
shall be treated as distributed from the Participant's Qualified Employer
Deferral Contribution Account only to the extent such Excess Contributions
exceed the balance in the Participant's Employee Contribution Account.
Section 6.8 Limitations on Employee After-Tax Contributions and
Employer Matching Contributions. The provisions of this Section shall apply
for Plan Years beginning on or after January 1, 1987.
(a) Contribution Percentage.
(i) The Average Contribution Percentage for Eligible Participants
who are Highly Compensated Employees for the Plan Year shall not exceed the
Average Contribution Percentage for Eligible Participants who are Non-Highly
Compensated Employees for the Plan Year multiplied by 1.25; or
(ii) The Average Contribution Percentage for Eligible Participants
who are Highly Compensated Employees for the Plan Year shall not exceed the
Average Contribution Percentage for Eligible Participants who are Non-Highly
Compensated Employees for the Plan Year multiplied by 2, provided that the
Average Contribution Percentage for Eligible Participants who are Highly
Compensated Employees does not exceed the Average Contribution Percentage for
Eligible Participants who are Non-Highly Compensated Employees by more than
two (2) percentage points or such lesser amount as the Secretary of the
Treasury shall prescribe to prevent the multiple use of this alternative
limitation with respect to any Highly Compensated Employee.
(b) Definitions. For purposes of this Article VI the following
definitions shall apply.
(i) Average Contribution Percentage shall mean the average
(expressed as a percentage) of the Contribution Percentages of the Eligible
Participants in a group, calculated to the nearest hundredth of a percentage
point.
(ii) Contribution Percentage shall mean the ratio (expressed as a
percentage), of the sum of the Employee After-Tax Contributions and Employer
Matching Contributions under the Plan on behalf of the Eligible Participant
for the Plan Year to the Eligible Participant's compensation for the Plan Year
as defined in Section 6.7(b)(iii).
(iii) Eligible Participant shall mean any Employee of the
Employer who is otherwise authorized under the terms of Article IV to have
Employer Matching Contributions allocated to his Account for the Plan Year.
(c) Special Rules.
(i) For purposes of this Section 6.8, the Contribution Percentage
for any Eligible Participant who is a Highly Compensated Employee for the Plan
Year and who is eligible to receive Employer Matching Contributions or
Qualified Non-Elective Contributions or have salary reduction contributions
allocated to his Account under two or more plans described in Section 401(a)
of the Internal Revenue Code or arrangements described in Section 401(m) of
the Internal Revenue Code that are maintained by the Employer or an affiliated
employer shall be determined as if all such contributions were made under a
single plan.
(ii) In the event that this Plan satisfies the requirements of
Section 410(b) (other than the average benefits test) of the Internal Revenue
Code only if aggregated with one or more other plans, or if one or more other
plans satisfy the requirements of Section 410(b) of the Internal Revenue Code
only if aggregated with this Plan, then this Section 6.8 shall be applied by
determining the Contribution Percentages of Eligible Participants as if all
such plans were a single plan.
(iii) For purposes of determining the Contribution Percentage of
an Eligible Participant who is a Highly Compensated Employee, the Employer
Matching Contributions and compensation of such Participant shall include the
compensation of Family Members, and such Family Members shall be disregarded
in determining the Contribution Percentage for Eligible Participants who are
Non-Highly Compensated Employees.
(d) Distribution of Excess Aggregate Contributions
(i) In General. Excess Aggregate Contributions and income
allocable thereto shall be distributed no later than the last day of each Plan
Year to Participants to whose Accounts Employer Matching Contributions were
allocated for the preceding Plan Year after making any adjustments under
Section 6.5 and Section 6.7.
(ii) Excess Aggregate Contributions. "Excess Aggregate
Contributions" shall mean the amount described in Section 401(m)(6)(B) of the
Internal Revenue Code and Proposed Treasury Regulations 1.401(m)-1(e)(2). It
shall mean for a Highly Compensated Employee the total of Employee After-Tax
Contributions and Employer Matching Contributions and other contributions
taken into account for the Average Contribution Percentage Test on behalf of
Highly Compensated Participants for such Plan Year, over the maximum amount of
such contributions permitted under the limitations of paragraph (a) of this
Section 6.8. The Employer if it so chooses may prevent Excess Aggregate
Contributions from being made by limiting the amount of Employer Matching
Contributions made on behalf of Highly Compensated Employees during the Plan
Year.
(iii) Determination of Income. The income allocable to Excess
Aggregate Contributions for the Plan Year shall be determined by multiplying
the income allocable to the Participant's Employer Matching Contributions for
the Plan Year by a fraction, the numerator of which is the Excess Aggregate
Contributions on behalf of the Participant for the Plan Year and the
denominator of which is the sum of the Participant's Account balances
attributable to Employer Matching Contributions as of the beginning of the
Plan Year plus Employer Matching Contributions for the Plan Year.
(iv) Maximum Distribution Amount. The Excess Aggregate
Contributions to be distributed to a Participant shall be adjusted for the
income for the Plan Year for which the Excess Aggregate Contribution was made
and, if there is a loss allocable to the Excess Aggregate Contribution, shall
in no event be less than the lesser of the Participant's Account under the
Plan or the Participant's Employer Matching Contributions for the Plan Year.
In the event that the Average Contribution Percentage for the Highly
Compensated Participant group exceeds the Average Contribution Percentage for
the Non-Highly Compensated Participant group pursuant to paragraph (a) of this
Section 6.8, the Plan Administrator (on or before the fifteenth day of the
third month following the end of the Plan Year, but in no event later than the
close of the following Plan Year) shall direct the Trustee to distribute to
the Highly Compensated Participant having the highest Average Contribution
Percentage, his portion of Excess Aggregate Contributions (and income
allocable to such contributions) until either one of the tests set forth in
paragraph (a) of this Section 6.8 is satisfied, or until his Average
Contribution Percentage equals the Average Contribution Percentage of the
Highly Compensated Participant having the second highest Average Contribution
Percentage. The distribution of Excess Aggregate Contributions shall be made
first from Employer Matching Contributions distributed pursuant to Section 6.7
and secondly from remaining Employer Matching Contributions. This process
shall continue until one of the tests set forth in paragraph (a) of this
Section 6.8 is satisfied.
The determination and correction of Excess Aggregate Contributions
of a Highly Compensated Participant whose Average Contributions Percentage is
determined under the family aggregation rules shall be accomplished by having
the Average Contribution Percentage reduced and the Excess Aggregate
Contributions for the family unit allocated among the Family Members in
proportion to the contributions of each Family Member that have been combined
to determine the group Average Contribution Percentage.
ARTICLE VII
DETERMINATION OF BENEFITS
-------------------------
Section 7.1 Normal Retirement Benefit. Each Participant's Accounts
shall vest fully on his Normal Retirement Age. The Participant's benefit
shall equal his Accounts on the Adjustment Date next following his Normal
Retirement Age, or should a Participant retire on an Adjustment Date, his
Accounts as of such date.
Section 7.2 Delayed Retirement Benefit. A Participant may elect to
remain in the employ of the Employer beyond his Normal Retirement Age. The
Participant shall be eligible to retire on his delayed retirement date, which
shall be the date on which he actually retires. A Participant retiring on his
delayed retirement date shall be entitled to receive a benefit equal to his
Accounts on the Adjustment Date next following his delayed retirement date, or
should a Participant retire on an Adjustment Date, his Accounts as of such
date.
Section 7.3 Total and Permanent Disability Benefit. Each
Participant's Accounts shall vest fully on his Disability Retirement Date.
The Participant's benefit shall equal his Accounts on the Adjustment Date next
following his Disability Retirement Date, or should a Participant retire on an
Adjustment Date, his Accounts as of such date.
Section 7.4 Death Benefit. Upon the death of a Participant while in
the employ of the Employer or while on Authorized Leave of Absence, his
Accounts shall fully vest and his Beneficiary shall be entitled to a benefit
equal to his Accounts on the Adjustment Date next following the date of his
death, or should a Participant die on an Adjustment Date, his Accounts as of
such date.
Section 7.5 Employment Termination Benefit. If a Participant's
employment with the Employer is terminated, voluntarily or involuntarily,
other than by normal retirement, delayed retirement, disability retirement or
death, or if a Participant incurs a One-Year Break in Service, he shall be
entitled to an employment termination benefit which shall be an amount equal
to (A) the entire balance to the credit of the Participant in his Employee
Contribution Account as it existed on the Adjustment Date next following his
termination of employment, plus (B) the entire balance to the credit of the
Participant in his Employee Contribution Account attributable to Employer
Matching Contributions as it existed on the Adjustment Date next following his
termination of employment (or as of the date of termination of employment if
such date coincides with an Adjustment Date and as of the processing date in
the event a daily valuation system is implemented), plus (C) a percentage of
his Employer Contribution Account attributable to Employer Non-Matching
Contributions as it existed on the Anniversary Date (or Adjustment Date if the
Retirement Committee elects to value such Account as of each Adjustment Date)
immediately preceding his termination of employment (or a percentage of such
Account as of the date of termination of employment if such date coincides
with an Anniversary Date), based on his Years of Vesting Service according to
the vesting schedule below:
Vesting Schedule
----------------
Years of Vesting Service Nonforfeitable Percentage
------------------------ -------------------------
1 0
2 0
3 0
4 0
5 100
Section 7.6 Definition of Year of Vesting Service. Each Participant
shall receive one Year of Vesting Service for each Plan Year of employment for
which he is credited with 1,000 or more Hours of Service. In the event a
Participant's first Year of Participation Service overlaps two Plan Years and
the Participant is not credited with 1,000 Hours of Service in both of the
Plan Years, the Year of Participation Service shall also be considered a Year
of Vesting Service ending on December 31st of the second Plan Year.
Section 7.7 Determination of Years of Vesting Service - Breaks in
Service.
(a) For the purpose of calculating an Employee's Years of Vesting
Service, all service with the Employer and any corporation which is, with the
Employer, a member of a controlled group of corporations (as defined in
Section 414(b) of the Internal Revenue Code); any trade or business (whether
or not incorporated) which is, with the Employer, under common control (as
defined in Section 414(c) of the Internal Revenue Code); any organization
(whether or not incorporated) which is a member of an affiliated service group
(as defined in Section 414(m) of the Internal Revenue Code) which includes the
Employer; and any other entity required to be aggregated with the Employer
pursuant to regulations under Section 414(o) of the Internal Revenue Code
shall be treated as service with the Employer.
(b) If any former Participant is reemployed after a One-Year Break in
Service has occurred, Years of Vesting Service shall include Years of Vesting
Service prior to his One-Year Break in Service subject to the following rules:
(i) If a former Participant has a One-Year Break in Service, his
pre-break and post-break service shall be used for computing Years of Vesting
Service only after he has been employed for one (1) Year of Service following
the date of his re-employment with the Employer and after completion of such
one Year of Service he shall participate in the Plan retroactively from his
date of reemployment;
(ii) Each non-vested former Participant shall lose credits otherwise
allowable under (i) above if his consecutive One-Year Breaks in Service equal
or exceed the greater of (A) five (5) or (B) the aggregate number of his pre-
break Years of Service;
(iii) After five (5) consecutive One-Year Breaks in Service, a
former Participant's prior vested Account balance attributable to pre-break
service shall not be increased as a result of post-break service.
Separate accounts will be maintained for the Participant's pre-break and post-
break Employer derived account balances. Both accounts will share in earnings
and losses of the Trust Fund.
Section 7.8 Forfeitures. The portion of a Participant's Accounts
which are not vested shall be forfeited upon the earlier of the following:
(a) the distribution of the entire vested portion of a terminated
Participant's accounts, or
(b) the last day of the Plan Year in which the Participant incurs five
(5) consecutive One Year Breaks in Service.
In the case of a terminated Participant whose vested benefit is zero, such
terminated participant shall be deemed to have received a distribution of his
vested benefit upon his termination of employment. If the Participant
receives a distribution (or was deemed to have received as a distribution)
pursuant to this Section which is less than the value of his Employer
Contribution Account and resumes employment covered under the Plan, the
Participant's Employer Contribution Account will be restored to the amount on
the date of distribution if the Participant repays (or restoration occurs upon
reemployment in the case of a deemed distribution) in cash to the Plan the
full amount of the distribution on or before the earlier of five (5) years
after the date on which the Participant is subsequently reemployed by the
Employer or the close of the first period in which the Participant incurs five
(5) consecutive Breaks in Service following the date of distribution. The
amount repaid shall be allocated to the Participant's Accounts among the
Investment Funds in the same proportions in which he received the
distribution. The amount allocated to Funds A and M shall be applied as
promptly as possible by the Trustee to the purchase of the maximum number of
shares of Company Stock which can be purchased with such amount. The source
for the reinstatement shall first be any Forfeitures occurring during the Plan
Year. If such source is insufficient, then the Employer shall contribute an
amount which is sufficient to restore any forfeited Accounts. Upon the
reemployment of a Participant with no vested benefit upon termination, the
Participant shall be deemed to have repaid his distribution and will be fully
restored if he is reemployed before incurring five (5) consecutive Breaks in
Service.
ARTICLE VIII
DISTRIBUTION OF BENEFITS
------------------------
Section 8.1 Time of Payment of Benefits. The distribution of benefits
to a Participant or Beneficiary shall begin as soon as reasonably practicable
after the later of the close of the Plan Year in which the Participant attains
age sixty-five (65) or the Plan Year in which his employment with an Employer
is terminated. The Retirement Committee may cause such benefits to be paid on
such earlier date or dates following such termination as it may deem
advisable.
Notwithstanding any provision above to the contrary, distribution of the
entire interest of each Participant shall commence no later than April 1 of
the calendar year following the calendar year during which the Participant
attains age seventy and one-half (70-1/2). Such distributions shall be made
in accordance with regulations prescribed by the Secretary of the Treasury
over the life of such Participant or over the lives of such Participant and
his designated Beneficiary, or in accordance with such regulations over a
period not extending beyond the life expectancy of the Participant or the life
expectancy of the Participant and his designated Beneficiary. If the
Participant's designated Beneficiary is other than his spouse, the actuarial
value of the benefits payable to the Participant shall be more than fifty
percent (50%) of the actual value of the benefits payable to the Participant
and his designated Beneficiary. The determination of distributions that must
be made hereunder and the minimum payment to be made to the Participant in the
year in which benefits must commence and in all years thereafter, shall be
made in accordance with requirements of Section 401(a)(9) of the Internal
Revenue Code and the regulations thereunder, including the minimum
distribution incidental benefit requirements of the regulations (including
Treasury Regulation 1.401(a)(9)-2), the provisions of which are incorporated
herein by reference.
If a Participant dies before the distribution of his interest has begun
in accordance with the immediately preceding paragraph of this Section 8.1,
the Participant's interest must be distributed within five (5) years of the
Participant's death; provided, however, if any portion of the Participant's
interest is payable to (or for the benefit of) a designated Beneficiary, such
portion may be distributed over the life of such Beneficiary or a period not
exceeding the life expectancy of the Beneficiary. Distributions must begin not
later than one (1) year after the Participant's death or such later date as
prescribed by Treasury regulations unless the Beneficiary is the surviving
spouse, in which case distributions are not required to begin earlier than on
the date the Participant would have attained age seventy and one-half (70-
1/2). If, however, distributions have commenced to the Participant before the
Participant's death, distributions to his Beneficiary must be made at least as
rapidly as under the method of distribution in effect prior to the
Participant's death.
Section 8.2 Method of Payment. In the event of a Participant's
termination of employment for any reason including but not limited to the
Participant's retirement, disability or death, the benefits provided hereunder
shall be payable in a single distribution consisting of cash in respect of his
interest in Fund B - Employee Equity Fund, Fund C - Employee Guaranteed Income
Contract Fund, and Fund D Employee Money Market Fund and consisting of whole
shares of Company Stock, cash, or a combination of both (with a cash
adjustment for any fractional share) in respect of his interest in Fund A -
Employee Company Stock Fund and Fund M - Employer Company Stock Fund provided,
however, that the Retirement Committee shall notify the Participant of his
right to demand distribution of his interest in Fund A and Fund M entirely in
cash. If the distribution of the Participant's interest in Fund A and Fund M
is to be made in cash, the amount of the cash distribution shall be based upon
the fair market value of the Company Stock at the time the distribution
becomes payable or as close in time thereto as it administratively
practicable.
Notwithstanding the preceding provisions of this Section 8.2, the
Participant (or his Beneficiary in the event of the death of the Participant)
shall have the option to elect to receive an amount equal to his Accrued
Benefit as of December 31, 1986, if any, in monthly installments not to exceed
180, as the Participant (or his Beneficiary in the event of the death of the
Participant) shall determine in the form of cash in respect of his interest in
Fund B - Employee Equity Fund, Fund C - Employee Guaranteed Income Contract
Fund, and Fund D - Employee Money Market Fund, whole shares of Company Stock
(with a cash adjustment for any fractional share) in respect of his interest
in Fund A - Employee Company Stock Fund and Fund M - Employer Company Stock
Fund; provided, however, that the Retirement Committee shall notify the
Participant of his right to demand a distribution of his interest in Fund A
and Fund M entirely in cash.
The amount of cash and/or the number of shares of Company Stock in each
installment shall be equal to the proportionate value on each Adjustment Date
immediately preceding payment of the balance then to the credit of the
Participant in his Account with respect to each Fund in which he had an
interest eligible for installment payments determined by dividing the amount
credited to his Account as of such Adjustment Date by the number of payments
remaining to be made.
If a Participant who is receiving installment payments shall establish to
the satisfaction of the Retirement Committee in accordance with principles and
procedures established by the Retirement Committee which are applicable to all
persons similarly situated that a financial emergency exists in his affairs,
such as illness or accident to the Participant or a member of his immediate
family or other similar contingency, the Retirement Committee may, in its
discretion, for the purpose of alleviating such emergency, accelerate the time
of payment of some or all of the remaining installments.
If a Participant dies before receiving all of the amount to the credit of
his Account in accordance with this Section 8.2, the amount remaining to the
credit of his Account at his death shall be distributed to his Beneficiary as
soon as practicable in accordance with Section 8.3.
If the value of the Participant's balance in his Account derived from
Employer contributions exceeds $3,500 or has ever exceeded such amount at the
time of any distribution, the Participant must consent to any distribution
from such account balance. With regard to this required consent:
(a) The Participant must be informed of his right to defer receipt of
the distribution. If a Participant fails to consent, it shall be deemed an
election to defer the commencement of payment of any benefit. However, any
election to defer the receipt of benefits shall not apply with respect to
distributions which are required under Section 8.1.
(b) Notice of the rights specified under this paragraph shall be
provided no less than 30 days and no more than 90 days before the first day on
which all events have occurred which entitle the Participant to such benefit.
(c) Written consent of the Participant to the distribution must not be
made before the Participant receives the notice and must not be made more than
90 days before the first day on which all events have occurred which entitle
the Participant to such benefit.
(d) No consent shall be valid if a significant detriment is imposed
under the Plan on any Participant who does not consent to the distribution.
(e) If a distribution is one to which Sections 401(a)(11) and 417 of the
Internal Revenue Code do not apply, such distribution may commence less than
30 days after the notice required under Section 1.411(a)-11(c) of the Income
Tax Regulations is given, provided that:
(i) the Plan Administrator clearly informs the Participant that the
Participant has a right to a period of at least 30 days after receiving the
notice to consider the decision of whether or not to elect a distribution
(and, if applicable, a particular distribution option), and
(ii) the Participant, after receiving the notice, affirmatively
elects a distribution.
Section 8.3 Designation of Beneficiary. Each Participant shall
designate a Beneficiary or Beneficiaries to whom his Plan benefits are to be
paid if the Participant dies before receipt of all such benefits. Each
Beneficiary designation shall be in a form prescribed by the Retirement
Committee and will be effective only when filed with the Retirement Committee.
A Participant may designate a different Beneficiary at any time by delivering
a new written designation to the Retirement Committee. The last effective
designation received by the Retirement Committee shall supersede all prior
designations. A designation of a Beneficiary shall be effective only if the
Beneficiary survives the Participant. If a Participant fails to designate a
Beneficiary, or if no designated Beneficiary survives the Participant, the
Participant shall be deemed to have designated the following Beneficiaries (if
then living) in the following order of priority: (1) spouse, (2) children,
including adopted children, in equal shares, (3) parents, in equal shares, and
(4) Participant's estate.
Notwithstanding the provisions of the first paragraph of this Section
8.3, a Participant with a surviving spouse shall have his Plan benefit payable
to his surviving spouse unless the spouse consents in writing to the
designation of another Beneficiary and the spouse's consent acknowledges the
effect of the election and is witnessed by a Plan representative or a notary
public in a manner as required by Section 205(c)(2)(A) of ERISA unless such
consent was unnecessary because such spouse could not be located (or because
of such other circumstances as may be prescribed by Treasury regulations).
Section 8.4 Distributions to which Qualified Joint and Survivor and
Pre-Retirement Survivor Annuities Apply. Notwithstanding anything herein to
the contrary, in the event, with respect to any Participant, the Plan is a
direct or indirect transferee, after December 31, 1984, of any defined benefit
plan or defined contribution plan which is subject to the funding standards of
Section 412 of the Code, then, the provisions of Paragraph (a) below with
respect to Qualified Joint and survivor Annuities and Paragraph (b) below with
respect to Pre-Retirement Survivor Annuities shall apply only with respect to
the separate accounts of such Participant to which funds have been transferred
from such defined benefit plan or defined contribution plan subject to the
funding standards of Section 412.
(a) Qualified Joint and Survivor Annuity.
(1) In the event the provisions of Section 8.4 apply to a
Participant, each such Participant who is credited with at least one (1) Hour
of Service on or after August 23, 1984 and who is entitled to receive payment
of his vested Accrued Benefit for any reason other than death, shall receive
payment of his Accrued Benefit as follows:
(A) In the case of a Participant who has been married
throughout the twelve-month period ending with the earlier of: (1) the
annuity starting date, or (2) the date of his death, benefits shall be payable
in the form of a Qualified Joint and Survivor Annuity unless a Participant and
his spouse duly elect to waive the Qualified Joint and Survivor Annuity
pursuant to Subsection (C) hereinbelow. In such event, benefits shall be
payable in an optional form as selected from the options in Section 8.2.
(B) In the case of a Participant to whom Subparagraph (A) does
not apply, benefits shall be payable in the form of a life annuity unless a
Participant duly elects to waive the life annuity. In such event, benefits
shall be payable under Section 8.2.
(2) The Administrator shall provide the Participant within a
reasonable period of time before the Annuity Starting Date (and consistent
with Treasury regulations), a written explanation of: (i) the terms and
conditions of a Qualified Joint and Survivor Annuity, (ii) the Participant's
right to make and the effect of an election to waive the Qualified Joint and
Survivor Annuity form of benefits, (iii) the right of the Participant's spouse
concerning the Qualified Joint and Survivor Annuity and the right to consent
to any election to waive the Qualified Joint and Survivor Annuity, and (iv)
the right of the Participant to revoke such an election, and the effect of a
revocation.
(3) An election to waive the Qualified Joint and survivor Annuity
shall be made by the Participant, in writing during the ninety (90) day period
ending on the Annuity Starting Date and must be consented to by the
Participant's spouse. Such spouse's consent must acknowledge the effect of
such election and be witnessed by a Plan representative or a notary public.
Such consent shall not be required if it is established to the satisfaction of
the Administrator that the required consent cannot be obtained because there
is no spouse or the spouse cannot be located, or other circumstances that may
be prescribed by Treasury Regulations. Any such election and consent may be
revoked by the Participant, in writing, without the consent of the spouse at
any time before commencement of benefits. Any new election must comply with
the requirements of this Section. A former spouse's waiver shall not be
binding on a new spouse.
(b) Pre-Retirement Survivor Annuity.
(1) In the event the provisions of Section 8.4 apply to a
Participant, upon the death of such a Participant who is credited with at
least one (1) Hour of Service on or after August 23, 1984, payment of his
vested Accrued Benefit shall be made as follows:
(A) If a Participant who has been married throughout the
twelve-month period ending on the date of his death dies prior to the
commencement of payment of any benefits, benefits shall be payable in the form
of a Pre-Retirement Survivor Annuity unless the Participant and his spouse
duly elect to waive the Pre-Retirement Survivor Annuity pursuant to paragraph
(4) hereinbelow. Payment of such benefits must commence by the date the
Participant would have attained the "Earliest Retirement Date" under the Plan,
unless the surviving spouse elects a later date. For purposes of this
Section, the Earliest Retirement Date under the Plan shall mean the first date
on which a Participant may retire under the terms of the Plan.
(B) If a Participant to whom subsection (i) does not apply
dies prior to the commencement of payment of any benefits, or in the case of a
Participant who makes an election as set forth in paragraph (4), benefits
shall be payable under Section 8.2.
(C) Upon the death of a former Participant who was receiving
payments from the Trustee at the time of his death, payments may continue in
accordance with the option selected, or may be made to the Beneficiary under
any other option which provides for payments which are at least as rapid as
under the method of distribution as of the date of the Participant's death.
(2) The Administrator shall provide each Participant, within the
period beginning on the first day of the Plan Year in which the Participant
attains age thirty-two (32) and ending with the close of the Plan Year in
which the Participant attains age thirty-five (35), a written explanation of a
Pre-Retirement Survivor Annuity in which terms and in such manner as would be
comparable to the explanation provided pursuant to Paragraph (a) above.
(3) If a Participant enters the Plan after the first day of the
Plan Year in which he attains age thirty-two (32), the Administrator shall
provide notice no later than the close of the second Plan Year following the
Participant's entry into the Plan.
(4) An election to waive the Pre-Retirement Survivor Annuity must
be made by the Participant, in writing, and consented to by the spouse in the
same manner as provided for in Paragraph (a) above, and must also include any
designated Beneficiaries, if other than the surviving spouse of the
Participant. Such election must be made during the period which begins on the
first day of the Plan Year in which the Participant attains age thirty-five
(35) and ends on the date of the Participant's death. In the event a Vested
Participant terminates employment prior to the beginning of the Plan Year in
which he attains age thirty-five (35), the election period shall begin on the
date of his separation from service.
(c) For purposes of this Section 8.4 the following definitions shall
apply:
(1) "Annuity Starting Date" shall mean the first day of the first
period for which an amount is received as an annuity.
(2) "Pre-Retirement Survivor Annuity" shall mean an annuity payable
to a surviving spouse of a Participant which shall be equal to the amount
which would be payable as a survivor annuity under the qualified Joint and
Survivor Annuity Provisions of the Plan if:
(a) in the case of a Participant who dies after the earliest
retirement date, such Participant had retired with an immediate Qualified
Joint and Survivor Annuity on the day before the Participant's death; or
(b) in the case of a Participant who dies on or before the
earliest retirement date, such Participant had: (a) terminated employment on
the date of his death, (b) survived to the earliest retirement date, (c)
retired with an immediate Qualified Joint and Survivor Annuity at the earliest
retirement date, and (d) died on the day after the day on which said
Participant would have attained the earliest retirement date.
(c) Earliest retirement date shall mean the earliest date on
which a Participant may elect to receive retirement benefits under the terms
of this Plan.
(3) "Qualified Joint and Survivor Annuity" shall mean an annuity
for the life of the Participant with a survivor annuity for the life of his
spouse which is the actuarial equivalent of one-half (1/2) of the
Participant's vested Accrued Benefit.
Section 8.5 Direct Rollovers.
(a) This Section applies to distributions made on or after January 1,
1993. Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a distributee's election under this Section, a distributee may
elect, at the time and in the manner prescribed by the Plan Administrator, to
have any portion of an eligible rollover distribution paid directly to an
eligible retirement plan specified by the distributee in a direct rollover.
(b) Definitions.
(i) Eligible rollover distribution: An eligible rollover distribution
is any distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not include:
any distribution that is one of a series of substantially equal periodic
payments (not less frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or joint life expectancies)
of the distributee and the distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution to the extent such
distribution is required under Section 401(a)(9) of the Internal Revenue Code;
and the portion of any distribution that is not includible in gross income
(determined without regard to the exclusion for net unrealized appreciation
with respect to employer securities).
(ii) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in Section 408(a) of the Internal
Revenue Code, an individual retirement annuity described in Section 408(b) of
the Internal Revenue Code, an annuity plan described in Section 403(a) of the
Internal Revenue Code, or a qualified trust described in Section 401(a) of the
Internal Revenue Code that accepts the distributee's eligible rollover
distribution. However, in the case of an eligible rollover distribution to
the surviving spouse, an eligible retirement plan is an individual retirement
account or individual retirement annuity.
(iii) Distributee: A distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's surviving spouse
and the Employee's or former Employee's spouse or former spouse who is the
alternate payee under a qualified domestic relations order, as defined in
Section 414(p) of the Internal Revenue Code, are distributees with regard to
the interest of the spouse or former spouse.
(iv) Direct rollover: A direct rollover is a payment by the Plan to the
eligible retirement plan specified by the distributee.
Section 8.6 Claim and Review Procedure. Upon termination of
employment or the death of the Participant, the Participant or his Beneficiary
or representative shall make application to the Retirement Committee
requesting distribution of benefits due and, to the extent permitted, the
manner of payment. The Retirement Committee shall accept, reject or modify
such request and shall notify the applicant in writing setting forth the
response of the Retirement Committee, and in the case of the denial or
modification, the Retirement Committee shall:
(a) state the specific reason or reasons for the denial,
(b) provide specific reference to pertinent Plan provisions on which the
denial is based,
(c) provide a description of any additional material or information
necessary for the applicant or his representative to perfect the claim and an
explanation of why such material or information is necessary, and
(d) explain the Plan's claim review procedure as contained herein. In
the event the request is rejected or modified, the applicant or his
representative, if they wish to appeal the decision, shall, within sixty (60)
days following receipt by the applicant or his representative of such
rejection or modification, submit a written request for review by the
Retirement Committee of its initial decision. The applicant or his
representative may review all pertinent documents and may submit issues and
comments in writing. Within sixty (60) days following such request for
review, the Retirement Committee shall render its final decision in writing to
the applicant or his representative stating specific reasons for such decision
and containing a specific reference to the pertinent Plan provisions upon
which the decision is based.
Section 8.7 No Assignment of Benefits. The right of any Participant
or Beneficiary to any benefit or payment under the Plan or Trust or to any
Account maintained as provided by the Plan shall not be subjected to voluntary
or involuntary transfer, alienation or assignment, and to the fullest extent
permitted by law, shall not be subject to attachment, execution, garnishment,
sequestration or other legal or equitable process. The preceding sentence
shall also apply to the creation, assignment, or recognition of a right to any
benefit payable with respect to a Participant pursuant to a domestic relations
order, unless such order is determined to be a qualified domestic relations
order, as defined in Section 414(p) of the Internal Revenue Code, or any
domestic relations order entered before January 1, 1985. The Plan
Administrator shall establish a written procedure to determine the qualified
status of domestic relations orders and to administer distributions under
qualified orders. To the extent provided under such qualified domestic
relations orders, a former spouse of a Participant shall be treated as the
spouse or surviving spouse for all purposes under the Plan.
If the Participant's Account under the Plan shall become subject to any
"domestic relations order" which (1) is a "qualified domestic relations order"
satisfying the requirements of Section 414(p) of the Internal Revenue Code and
(2) requires the immediate distribution in a single lump sum of the entire
portion of the Participant's Account required to be segregated for the benefit
of an Alternate Payee, then the entire interest of such Alternate Payee shall
be distributed in a single lump sum within ninety (90) days following the
Employer's notification to the Participant and the Alternate Payee that the
domestic relations order is qualified under Section 414(p) of the Internal
Revenue Code, or as soon as practicable thereafter. Such distribution to an
Alternate Payee shall be made even if the Participant has not separated from
the service of the Employer. Any other distribution pursuant to a qualified
domestic relations order shall not be made earlier than the Participant's
termination of service, or his attainment of age fifty (50), if earlier, and
only in a manner permitted under the Plan.
For purposes of this Section 8.7, "Alternate Payee" shall mean any
spouse, former spouse, child or other dependent of a Participant who is
recognized by a domestic relations order as having a right to receive all or a
portion of the benefits payable under the Plan with respect to such
Participant.
Section 8.8 Medium of Payment. Distribution of benefits in respect of
a Participant's interest in Fund B - Employee Equity Fund, Fund C - Employee
Guaranteed Income Contract Fund, and Fund D - Employee Money Market Fund shall
be made in cash. Distribution of benefits in respect of a Participant's
interest in Fund A - Employee Company Stock Fund and Fund M - Employer Company
Stock Fund will be made entirely in whole shares of Company Stock (except that
the value of any fractional shares will be paid in cash); provided, however,
that the Retirement Committee shall notify the Participant of his right to
demand distribution of his interest in Fund A and Fund M entirely in cash.
The Trustee will make distributions from the Trust only on instructions from
the Retirement Committee and neither the Company nor the Trustee shall be
required to register Company Stock in order to distribute the Company Stock.
Company Stock to be distributed shall be subject to such restrictions
(executed by legends on certificates, stop transfer orders and other
commercially reasonable means) and each Participant or Beneficiary shall be
required to execute such investment letter or other documents as may, in the
opinion of counsel to the Company, be required to distribute the Company Stock
without registration under any applicable federal or state securities laws.
Section 8.9 Rights and Options on Distributed Shares of Company Stock.
(a) Shares of Company Stock distributed by the Trustee may, as
determined by the Company or the Retirement Committee, be subject to a "right
of first refusal." Such a "right" shall provide that prior to any subsequent
transfer, the shares must first be offered by written offer at fair market
value to the Trust, and then, if refused by the Trust, to the Company. A bona
fide written offer received from a prospective buyer shall be deemed to be the
fair market value of such shares for this purpose. The Trust or Company, as
the case may be, may accept the offer at any time during a period not
exceeding thirty (30) days after receipt of such offer.
(b) In the discretion of the Company, exercised in a uniform,
nondiscriminatory manner, a Participant may be granted at the time that shares
of Company Stock are distributed to him, an option to "put" the shares, or any
part of them, to the Trust and/or the Company. A "put" option shall provide
that, for a period of up to twelve (12) months after such shares are
distributed to a Participant or Beneficiary, he shall have the right to have
the Trust and/or Company (as the "put" may specify) purchase such shares at
their fair market value as of the time the "put" option is exercised. The
terms of payment for the purchase of such shares of stock shall be set forth
in the "put" and may be either in a lump sum or in installments (with interest
on the unpaid principal balance), as determined by the Company.
Section 8.10 Unclaimed Account Procedure. Neither the Trustee nor the
Retirement Committee shall be obliged to search for, or ascertain the
whereabouts of, any Participant or Beneficiary. The Retirement Committee, by
certified or registered mail addressed to his last known address of record
with the Retirement Committee or the Employer, shall notify any Participant or
Beneficiary that he is entitled to a distribution under this Plan, and the
notice shall quote the provisions of this Section. If the Participant fails
to claim his benefits or make his whereabouts known in writing to the
Retirement Committee within a reasonable period of time and the Retirement
Committee does not know the whereabouts of the Participant or his Beneficiary,
the Retirement Committee shall then notify the Social Security Administration
of the Participant's (or Beneficiary's) failure to claim the distribution to
which he is entitled. The Retirement Committee shall request the Social
Security Administration to notify the Participant (or Beneficiary) pursuant to
the procedures it has established for this purpose. If the Participant or
Beneficiary fails to claim his benefits or make his whereabouts known in
writing to the Retirement Committee after such a diligent effort to ascertain
his whereabouts, the amount so distributable shall be treated as a forfeiture
pursuant to the Plan. In the event a Participant or Beneficiary is located
subsequent to his benefit being reallocated, such benefit shall be restored.
Section 8.11 Execution of Receipts and Releases. Any payment to any
Participant, or to his legal representative or Beneficiary, in accordance with
the provisions of the Plan, shall to the extent thereof be in full
satisfaction of all claims hereunder against the Plan and Trust. The
Retirement Committee may require such Participant, legal representative, or
Beneficiary, as a condition precedent to such payment, to execute a receipt
and release therefor in such form as it shall determine.
Section 8.12 Financial Hardship Distribution from Employee Contribution
Account.
(a) In the event the Plan Administrator determines that a Participant
has a financial hardship, the Plan Administrator shall direct the Trustee to
distribute to the Participant, in one lump-sum, all or part of the
Participant's Employee Contribution Account that is attributable to the
Participant's Elective Employer Contributions and the income allocable to such
contributions that has been credited to the Participant's Employee
Contribution Account as of December 31, 1988.
(b) The Plan Administrator shall not allow a financial hardship
distribution to be made to a Participant unless the requirements of Section
8.12(b)(1), (2) and (3) are satisfied.
(1) The Participant applies in writing for the distribution and submits
written documentation to the Plan Administrator indicating that his or her
requested distribution is necessary to satisfy a financial need arising from:
(i) Internal Revenue Code Section 213(d) medical expenses
previously incurred by the Participant, or the Participant's spouse, or
Internal Revenue Code Section 152 dependents or necessary for these persons to
obtain medical care described in Internal Revenue Code Section 213(d).
(ii) the purchase (excluding mortgage payments), but not the repair,
remodel, refinance, or lease of the Participant's principal residence.
(iii) the payment of tuition and related educational fees (but not
payments for books or room and board) for the next twelve months of post-
secondary education for the Participant, the Participant's spouse, or the
Participant's children, or Internal Revenue Code Section 152 dependents.
(iv) the Participant's need to prevent the eviction from his
principal residence or the foreclosure on the mortgage of the Participant's
principal residence; or
(v) such other events that the Commissioner of the Internal Revenue
Service specifies, through the publication of revenue rulings, notices and
other documents of general availability, as giving rise to an immediate and
heavy financial need.
(2) The Participant's hardship distribution:
(i) must be in an amount not exceeding the amount of the need
arising under Section 8.11(b)(1) above, including amounts necessary to pay any
federal, state or local income tax or penalties reasonably anticipated to
result from the distribution and not reasonably available from other resources
of the Participant. For this purpose, the Participant's resources shall be
deemed to include those assets of his spouse and minor children that are
reasonably available to the Participant;
(ii) cannot be made until the Participant has obtained all
distributions, other than hardship distributions, and all nontaxable loans
that are currently available under all qualified and nonqualified plans of the
Employer;
(iii) shall result in the Participant being suspended from making
Elective Employer Contributions or after-tax contributions to the Plan and all
other plans maintained by the Employer for the twelve-month period beginning
on the date the Participant receives a distribution pursuant to this Section
8.12; and
(iv) shall result in the reduction of Participant's maximum Elective
Employer Contributions to the Plan (and all other plans maintained by
Employer) for the Participant's tax year following the tax year in which the
Participant receives a distribution under this Section 8.11, to an amount
equal to the Internal Revenue Code Section limit for such following tax year
less the amount of the Participant's Elective Employer Contributions for the
tax year in which the Participant receives a distribution from the Plan
pursuant to this Section 8.12.
(3) The Participant's hardship distribution is made in an amount not
exceeding the amount of the need arising under paragraph (b)(1)(i)-(v) above,
and the distribution satisfies such other conditions as the Commissioner of
the Internal Revenue Service specifies, through the publication of revenue
rulings, notices, and other documents of general availability, as necessary to
cause a hardship distribution to be deemed to satisfy the Participant's
immediate and heavy financial need.
(c) A distribution may be treated as necessary to satisfy a financial
need if the Plan Administrator relies upon the Participant's written
representation (unless the Plan Administrator has actual knowledge to the
contrary) that the need cannot be relieved:
(i) Through reimbursement or compensation by insurance or
otherwise;
(ii) By liquidation of the Participant's assets, to the extent such
liquidation would not itself cause an immediate and heavy financial need;
(iii) By cessation of salary reduction contributions; or
(iv) By other distributions or non-taxable loans from the Plan or
any other qualified retirement plan, or by borrowing from commercial sources
on reasonable commercial terms.
Section 8.13 Payment in the event of Legal Disability. Payments to any
Participant or Beneficiary shall be made to the recipient entitled thereto in
person or upon his personal receipt, in form satisfactory to the Retirement
Committee, except when the recipient entitled thereto shall be under a legal
disability, or, in the sole judgment of the Retirement Committee, shall
otherwise be unable to apply such payment in furtherance of his own interest
and advantage. The Retirement Committee may, in such event, in its sole
discretion, direct all or any portion of such payments to be made in any one
or more of the following ways:
(a) To such person directly;
(b) To the guardian of his person or conservator of his estate;
(c) To a relative or friend of such person, to be expended for his
benefit; or
(d) To a custodian for such person under any Uniform Gifts to Minors
Act.
The decision of the Retirement Committee, in each case, will be final,
binding, and conclusive upon all persons ever interested hereunder. The
Retirement Committee shall not be obliged to see to the proper application or
expenditure of any payment so made. Any payment made pursuant to the power
herein conferred upon the Retirement Committee shall operate as a complete
discharge of all obligations of the Trustee and the Retirement Committee, to
the extent of the distributions so made.
Section 8.14 Disclosure to Participants. The following information
will be provided to Participants:
(a) Quarterly Reports - As of each Adjustment Date, the Retirement
Committee shall furnish a quarterly report to each Participant setting forth
the balances, if any, credited to his Employee and Employer Contribution
Accounts including a statement of his interests in Funds A, B, C, D, and M.
(b) Summary Plan Description - Each Participant shall be furnished
with a Summary Plan Description of the Plan, as required by ERISA, which shall
be updated from time to time as required by ERISA and Department of Labor
regulations thereunder.
(c) Summary Annual Report - Within nine (9) months after the end of
each Plan Year, or such later date permitted by regulations of the Department
of Labor, each Participant shall be furnished with the summary annual report
of the Plan as required by ERISA in the form prescribed by regulations of the
Department of Labor.
(d) Additional Disclosure - The Committee shall make available for
examination by any Participant copies of the Plan, the Trust Agreement and the
last annual report of the Plan filed (on Form 5500) with the Internal Revenue
Service. Upon written request of any Participant, the Retirement Committee
shall furnish copies of such documents, and may make a reasonable charge to
cover the cost of furnishing such copies as provided in the regulations of the
Department of Labor.
ARTICLE IX
TRUST
-----
Section 9.1 Contributions Paid to Trust. All contributions under this
Plan shall be paid to the Trustee and deposited in the Trust. As soon as
practicable after the receipt of funds applicable to the purchase of Company
Stock, the Trustee shall purchase Company Stock, or cause Company Stock to be
purchased. Such Company Stock may be purchased on the open market or by
private purchase (including private purchases directly from the Company);
provided that no private purchase may be made at any price greater than the
last sale price or highest current independent bid price, whichever is higher,
for Company Stock on the stock exchange, plus an amount equal to the
commission payable in a stock exchange transaction, and further provided that
if such private purchase shall be a purchase of Company Stock directly from
the Company, no commission shall be paid with respect thereto. The Trustee
may hold in cash, and may temporarily invest in short-term United States
obligations, commercial paper, or certificates of deposit, funds applicable to
the purchase of Company Stock pending investment of such funds in such Company
Stock.
As soon as practicable after the receipt of funds applicable to the
purchase of securities for the Fund B - Employee Equity Fund, the Trustee
shall purchase such securities, or cause such securities to be purchased, on
the open market or by private purchase.
As soon as practicable after the receipt of funds applicable to
investment in the Fund C - Employee Guaranteed Income Contract Fund, the
Trustee shall invest such funds with an insurance company.
As soon as practicable after the receipt of funds applicable to
investment in the Fund D - Employee Money Market Fund, the Trustee shall
invest in such securities.
All assets of the Trust, including investment income, shall be retained
for the exclusive benefit of Participants, former Participants, and
Beneficiaries and shall be used to pay benefits to such persons, or to pay
administrative expenses of the Plan to the extent not paid by an Employer, and
no part of the Trust shall revert to or inure to the benefit of an Employer.
Section 9.2 Return of Contribution. Notwithstanding anything herein
to the contrary, upon an Employer's request, a contribution which was made by
a mistake of fact shall be returned to the Employer within one year after the
payment of the contribution.
Section 9.3 Benefits Payable by the Trust. No Employee or Beneficiary
shall have any right to, or interest in, any assets of the Trust Fund upon
termination of his employment or otherwise, except as provided in this Plan.
All benefits payable under the Plan shall be paid or provided solely from the
Trust and no Employer assumes a liability or responsibility therefor.
Section 9.4 Funding Policy. The Retirement Committee shall establish
and communicate to the Trustee, the Company, and Investment Manager, if any, a
funding policy and method which shall be consistent with the objectives of the
Plan and the requirements of ERISA.
Section 9.5 Reports by Trustee. Within sixty (60) days after the end
of each Plan Year or the removal or resignation of the Trustee, and as of any
other date specified by the Retirement Committee, the Trustee shall file a
report with the Retirement Committee. This report shall show all purchases,
sales, receipts, disbursements, and other transactions effected by the Trustee
during the year or period for which the report is filed, and shall contain an
exact description, the cost as shown on the Trustee's books, and the market
value as of the end of such period of every item held in the Trust and the
amount and nature of every obligation owed by the Trust.
Section 9.6 Investment Direction.
(a) The Company may direct, by written notice to the Trustee, the
segregation of any portion or portions of the Trust Fund constituting Fund B -
Employee Equity Fund, Fund C - Employee Guaranteed Income Contract Fund, and
Fund D - Employee Money Market Fund in an investment account or investments
accounts and in such event may direct investment or appoint an Investment
Manager to direct the investment and reinvestment of any such investment
account. Any such Investment Manager shall either (i) be registered as an
investment adviser under the Investment Advisers Act of 1940; (ii) be a bank,
as defined in that Act; or (iii) be an insurance company qualified to perform
investment management services under the laws of more than one state. If
investment of the Trust Fund is to be directed in whole or in part by an
Investment Manager, the Company shall deliver to the Trustee a copy of the
instruments appointing the Investment Manager and evidencing the Investment
Manager's acceptance of such appointment, an acknowledgement in writing by the
Investment Manager that it is a fiduciary of the Plan, and, if applicable, a
certificate evidencing the Investment Manager's current registration under
said Act. The Trustee shall be fully protected in relying upon such
instruments and certificate until otherwise notified in writing by the
Company.
(b) The Trustee shall follow the directions of the Company, its agent,
or Investment Manager regarding the investment and reinvestment of the Trust
Fund, or such portion thereof as shall be under management by the Company or
an Investment Manager. The Trustee shall be under no duty or obligation to
review any investment to be acquired, held or disposed of pursuant to such
directions nor to make any recommendations with respect to the disposition or
continued retention of any such investment. The Trustee shall have no
liability or responsibility for acting or not acting pursuant to the direction
of, or failing to act in the absence of any direction from, the Company or
Investment Manager, unless the Trustee knows that by such action or failure to
act it would be itself committing a breach of fiduciary duty or participating
in a breach of fiduciary duty by the Company or Investment Manager. The
Company hereby agrees to indemnify the Trustee and hold it harmless from and
against any claim or liability which may be asserted against the Trustee by
reason of its acting or not acting pursuant to any direction or refraining
from acting pursuant to any direction from the Company or an Investment
Manager or failing to act in the absence of any such direction.
(c) An Investment Manager, at any time and from time to time, may issue
orders for the purchase or sale of securities directly to a broker, and in
order to facilitate such transaction, the Trustee upon request shall execute
and deliver appropriate trading authorizations. Written notification of the
issuance of each such order shall be given promptly to the Trustee by the
Investment Manager, and the execution of each such order shall be confirmed by
written advice to the Trustee by the broker. Such notification shall be
authority for the Trustee to pay for securities purchased against receipt
thereof and to deliver securities sold against payment thereof, as the case
may be.
(d) In the event that an Investment Manager should resign or be removed
by the Company, the Trustee, after written notification of such resignation or
removal, shall manage the investment of the portions of the Trust Fund
previously managed by the Investment Manager unless and until it is notified
that the Company will direct investment or it is notified of the appointment
of another Investment Manager with respect thereto.
(e) The accounts, books and records of the Trustee shall reflect the
segregation of any portion or portions of the Trust Fund with respect to which
investments are directed by an Investment Manager or the Company in a separate
account or accounts.
Section 9.7 Independent Purchasing Agent.
(a) The Company may, by written notice to the Trustee, appoint an
Independent Purchasing Agent to direct the investment and reinvestment of Fund
A - Employee Company Stock Fund and Fund M - Employer Company Stock Fund or
any portion of such Funds in Company Stock. The Independent Purchasing Agent
shall be deemed an "investment manager" as defined in Section 3(38) of ERISA.
Any such Independent Purchasing Agent shall either (i) be registered as an
investment adviser under the Investment Advisers Act of 1940; (ii) be a bank,
as defined in that Act; or (iii) be an insurance company qualified to perform
investment management services under the laws of more than one state. If
investment of Fund A and Fund M is to be directed in whole or in part by an
Independent Purchasing Agent, the Company shall deliver to the Trustee a copy
of the instruments appointing the Independent Purchasing Agent and evidencing
the Independent Purchasing Agent's acceptance of such appointment, an
acknowledgment by the Independent Purchasing Agent that it is a fiduciary of
the Plan, and, if applicable, a certificate evidencing the Independent
Purchasing Agent's current registration under said Act. The Trustee shall be
fully protected in relying upon such instruments and certificate until
otherwise notified in writing by the Company.
(b) The Trustee shall follow the directions of the Independent
Purchasing Agent regarding the investment and reinvestment of Fund A and Fund
M in Company Stock. The Trustee shall be under no duty or obligation to
review such directions of the Independent Purchasing Agent nor to make any
recommendations with respect to the disposition or continued retention of any
such investment. The Trustee shall have no liability or responsibility for
acting or not acting pursuant to the direction of, or failing to act in the
absence of any direction from, the Independent Purchasing Agent, unless the
Trustee knows that by such action or failure to act it would be itself
committing a breach of fiduciary duty by or participating in a breach of
fiduciary duty the Company or the Independent Purchasing Agent. The Company
hereby agrees to indemnify the Trustee and hold it harmless from and against
any claim or liability which may be asserted against the Trustee by reason of
its acting pursuant to any direction or refraining from acting pursuant to any
direction from the Independent Purchasing Agent or failing to act in the
absence of any such direction.
(c) An Independent Purchasing Agent, at any time and from time to time,
may issue orders for the purchase or sale of securities directly to a broker,
and in order to facilitate such transaction, the Trustee upon request shall
execute and deliver appropriate trading authorizations. Written notification
of the issuance of each such order shall be given promptly to the Trustee by
the Independent Purchasing Agent, and the execution of each such order shall
be confirmed by written notice to the Trustee by the broker. Such
notification shall be authority for the Trustee to pay for securities
purchased against receipt thereof and to deliver securities sold against
payment therefor, as the case may be.
(d) In the event that an Independent Purchasing Agent should resign or
be removed by the Company, the Trustee, after notice of such resignation or
removal, shall manage the portion of the Trust Fund previously managed by the
Independent Purchasing Agent unless and until it is notified of the
appointment of another Independent Purchasing Agent with respect thereto.
(e) The accounts, books and records of the Trustee shall reflect the
segregation of any portion or portions of the Trust Fund with respect to which
investments are directed by an Independent Purchasing Agent in a separate
account or accounts.
Section 9.8 Voting Company Stock. (a) Each Participant, and the
Beneficiary of a deceased Participant, shall have the right, with respect to
shares of Company Stock allocated to his Account, to direct the Trustee in
writing as to the manner of voting such Company Stock at any annual or special
meeting of the shareholders of the Company. The Trustee shall send each
Participant or Beneficiary a copy of the proxy solicitation material for the
meeting, together with a form requesting confidential instructions to the
Trustee on how to vote the Company Stock allocated to his Account. The
Trustee shall vote such Company Stock as so instructed. The instructions
received by the Trustee shall be held in strict confidence and shall not be
divulged to anyone. In the absence of timely instructions from the
Participant or his Beneficiary on how to vote the Company Stock allocated to
his Account, the Trustee will not vote such Company Stock.
(b) Any shares of Company Stock that are not allocated to a
Participant's Account shall be voted by the Trustee or not voted in the same
proportion as it casts the votes and refrains from voting Company Stock
allocated to the Accounts of Participants.
Section 9.9 Response to Tender or Exchange Offer. (a) Each
Participant, and the Beneficiary of a deceased Participant, shall have the
right, with respect to shares of Company Stock allocated to his Account, to
direct the Trustee in writing as to the manner in which to respond to a tender
or exchange offer with respect to Company Stock. In the event of a tender or
exchange offer for Company Stock, the Trustee shall inform each Participant or
Beneficiary of the offer and shall send them all information distributed to
shareholders of the Company in connection with the offer, together with a form
requesting confidential instructions to the Trustee on how to respond to the
offer with respect to shares of Company Stock allocated to his Account. The
Trustee shall respond to such offer as so instructed. A Participant or
Beneficiary's instructions shall remain in force until superseded in writing.
The instructions received by the Trustee shall be held in strict confidence
and shall not be divulged to anyone; provided, however, that the Trustee shall
advise the Company, upon request, of the total number of shares not subject to
instructions to tender or exchange. If the Trustee shall not receive timely
instructions from a Participant or Beneficiary regarding how to respond to any
tender or exchange offer with respect to shares of Company Stock allocated to
his Account, the Trustee shall have no discretion in such matter and shall not
tender or exchange the shares of Company Stock allocated to such Account.
(b) The Trustee shall respond to a tender or exchange offer with respect
to shares of Company Stock that are not allocated to a Participant's Account
in the same proportion as it responds with respect to all shares of Company
Stock allocated to the Accounts of Participants, including allocated shares
with respect to which no instructions are received.
ARTICLE X
ADMINISTRATION OF THE PLAN
--------------------------
Section 10.1 Retirement Committee. A Retirement Committee consisting
of from three to nine persons shall be appointed by and serve at the pleasure
of the Company. The Retirement Committee shall be the Named Fiduciary with
respect to the management and operation of the Plan. All usual and reasonable
expenses of the Retirement Committee shall be paid by the Company. Any
members of the Retirement Committee who are Employees shall not receive
compensation for their services on the Retirement Committee. The Retirement
Committee shall have the powers, duties and responsibilities given to it in
this Plan, together with such other powers, duties and responsibilities
delegated to it by the Board. The members of the Retirement Committee shall
serve without compensation for their services hereunder. To the extent
permitted by ERISA, the Company shall indemnify the members of the Retirement
Committee for and hold them harmless against any and all liabilities, losses,
costs or expenses (including reasonable legal fees and expenses) of whatsoever
kind and nature which may be imposed on, incurred by or asserted against a
Retirement Committee member at any time by reason of service on the Retirement
Committee, provided that the same did not arise on account of the dishonesty,
gross negligence or willful misconduct of such Retirement Committee member.
Section 10.2 Plan Administrator. The Company shall be the Plan
Administrator. The Plan Administrator shall be a Named Fiduciary responsible
for the performance of all reporting and disclosure obligations under ERISA.
The Plan Administrator shall be the designated agent for service of legal
process.
Section 10.3 Allocation of Responsibilities. The Retirement Committee,
the Plan Administrator, the Company, each Employer, any Investment Manager,
any Independent Purchasing Agent, and the Trustee each shall be a Named
Fiduciary of the Plan. Each fiduciary shall have only those specific powers,
duties, responsibilities and obligations as are specifically given to it under
the Plan and Trust. Each fiduciary shall be responsible for the proper
exercise of its own powers, duties and responsibilities and obligations under
the Plan and Trust, but shall not be responsible for any act or failure to act
of another fiduciary. Each fiduciary may rely upon any direction, information
or action of another fiduciary as being proper under the Plan and the Trust,
and no fiduciary is required to inquire into the propriety of any such
direction, information or action. Responsibility shall be allocated among the
Named Fiduciaries as follows:
(a) The Trustee shall be responsible for the management and investment
of the Trust Fund directed by the Company, any Investment Manager, or
Independent Purchasing Agent appointed by the Company, as a named fiduciary.
(b) The Company shall be responsible for all functions assigned or
reserved to it under the Plan and the Trust, including the right to remove or
replace the Trustee, to appoint additional fiduciaries, to amend the Plan and
the Trust, to direct investment, and to appoint an Investment Manager.
(c) Each Employer shall be responsible for determining Authorized Leaves
of Absence and eligibility for retirement of a Disability Retirement Date.
(d) The Plan Administrator shall be responsible for all reporting and
disclosure.
(e) The Retirement Committee shall be responsible for the management,
operation and administration of the Plan, and shall have all powers necessary
to accomplish that purpose. The Retirement Committee's duties include those
described in Section 10.4.
(f) The Investment Manager shall be responsible for functions described
in Section 9.6.
(g) The Independent Purchasing Agent shall be responsible for functions
described in Section 9.7.
Section 10.4 Duties of Retirement Committee. The Retirement Committee
shall:
(a) construe and interpret the Plan, decide all questions of eligibility
and determine the amount and manner of payment of any benefits hereunder;
(b) Determine whether any amount is included in a Participant's
Compensation;
(c) Prescribe procedures to be followed by Participants or Beneficiaries
in filing applications for benefits;
(d) Receive from any Employer and from the Participants such information
as shall be necessary for the proper administration of the Plan;
(e) Furnish any Employer, upon request, such annual reports with respect
to the administration of the Plan as are reasonable and appropriate;
(f) Receive from the Trustee, review, and keep on file (as it deems
convenient or required) reports of the financial condition and of the receipts
and disbursements of the Trust Fund;
(g) Establish a funding policy for the Plan and Trust; and
(h) Determine the time of distribution of benefits.
The Retirement Committee shall have no power to add to, subtract from or
modify any of the terms of the Plan, or to change or add to any benefits
provided by the Plan, or to waive or fail to apply any requirements of
eligibility for a benefit under the Plan.
Section 10.5 Rules and Regulations for the Plan. The Retirement
Committee may adopt such rules as it deems necessary, desirable or
appropriate. When making a determination or calculation, the Retirement
Committee shall be entitled to rely upon information furnished by a
Participant or Beneficiary, an Employer, representatives of an Employer, or
the Trustee.
Section 10.6 Retirement Committee Internal Procedures. The Retirement
Committee may act at a meeting or in writing without a meeting. The
Retirement Committee shall elect one of its members as chairman, appoint a
secretary, who may or may not be a Retirement Committee member, and advise the
Trustee of such actions in writing. The secretary shall keep a record of all
meetings and forward all necessary communications to the Employers and the
Trustee. The Retirement Committee may adopt such by-laws or regulations as it
deems desirable for the conduct of its affairs. All decisions of the
Retirement Committee shall be made by the vote of the majority, including
actions in writing taken without a meeting. A dissenting Retirement Committee
member who, within a reasonable time after he has knowledge of any action or
failure to act by the majority, registers his dissent in writing delivered to
the other Retirement Committee members, the Employers, and the Trustee, shall
not be responsible for any such action or failure to act.
Section 10.7 Authorization of Benefit Payments. The Retirement
Committee shall issue directions to the Trustee concerning all benefits which
are to be paid from the Trust Fund pursuant to the provisions of the Plan.
Section 10.8 Application and Forms for Benefits. The Retirement
Committee may require a Participant to complete and file with the Retirement
Committee an application for a benefit and all other forms approved by the
Retirement Committee, and to furnish all pertinent information requested by
the Retirement Committee. The Retirement Committee may rely upon all such
information so furnished it, including the Participant's current mailing
address.
Section 10.9 Assistants and Representatives. The Retirement Committee,
the Plan Administrator, the Trustee, the Company and any Employer may appoint
such assistants or representatives, including counsel (who may be counsel for
the Company), as they deem necessary for the effective exercise of their
duties in administering the Plan and the Trust. The Retirement Committee, the
Plan Administrator, the Trustee, the Company and any Employer may rely on an
opinion of such counsel and may delegate to such assistants and
representatives any powers and duties, both ministerial and discretionary, as
they deem expedient or appropriate.
Section 10.10 Multiple Fiduciary Capacities. Any person (individual or
entity) or group of persons may serve in more than one fiduciary capacity with
respect to the Plan.
Section 10.11 Discretionary Acts. No act taken or omitted in the
exercise of any discretionary responsibility by the Retirement Committee, the
Plan Administrator, the Trustee, the Company or any Employer shall thereafter
affect the right or power of the aforesaid parties to exercise said
discretionary authority in a different manner in the same or similar
circumstances.
Section 10.12 Plan Administrative Expenses. The expenses of
administering the Plan, including (i) the fees and expenses of any employee
and of the Trustee for the performance of their duties under the Plan and
Trust, (ii) the expenses incurred by the members of the Retirement Committee,
by the Investment Manager and by the Independent Purchasing Agent in the
performance of their duties under the Plan (including reasonable compensation
for any legal counsel, certified public accountants, consultants, and agents
and cost of services rendered in respect of the Plan), and (iii) all other
proper charges and disbursements of the Trustee or the members of the
Retirement Committee, the Investment Manager and an Independent Purchasing
Agent (including settlements of claims or legal actions approved by counsel to
the Plan) may be paid out of the Trust Fund, and allocated to and deducted
from the Accounts of Participants by the Retirement Committee, if the Company
does not pay such expenses directly.
Section 10.13 Trustee's Expenses. Brokerage fees, transfer taxes and
any other expenses incident to the purchase or sale of securities by the
Trustee may be deemed to be part of the cost of such securities, or deducted
in computing the proceeds therefrom, as the case may be, if the Company does
not pay such expenses directly.
ARTICLE XI
TOP HEAVY PROVISIONS
--------------------
Section 11.1 Definitions. As used in this Article, the following terms
shall have the meanings hereinafter set forth:
(a) Aggregate Account: A Participant's Aggregate Account as of the
Determination Date is the sum of:
(i) his account balance as of the most recent Valuation Date
occurring within a twelve (12) month period ending on the Determination Date;
(ii) an adjustment for any Contributions due as of the Determination
Date. Such adjustment shall be the amount of any Contributions actually made
after the Valuation Date but before the Determination Date, except for the
first Plan Year when such adjustment shall also reflect the amount of any
Contributions made after the Determination Date that are allocated as of a
date in that first Plan Year;
(iii) any Plan distributions made within the Plan Year that includes
the Determination Date or within the four (4) preceding Plan Years (to include
any distributions under a terminated plan which if it had not been terminated
would have been required to have been included in an Aggregation Group).
However, in the case of distributions made after the Valuation Date and prior
to the Determination Date, such distributions are not included as
distributions for top heavy purposes to the extent that such distributions are
already included in the Participant's Aggregate Account balance as of the
Valuation Date. Notwithstanding anything herein to the contrary, all
distributions, including distributions made prior to January 1, 1984, and
distributions under a terminated plan which if it had not been terminated
would have been required to be included in an Aggregation Group will be
counted;
(iv) any Participant Contributions, whether voluntary or mandatory.
However, amounts attributable to tax deductible qualified deductible employee
contributions shall not be considered to be a part of the Participant's
Aggregate Account balance;
(v) with respect to unrelated rollovers and plan-to-plan transfers
(ones which are both initiated by the Employee and made from a plan maintained
by one employer to a plan maintained by another employer), if this Plan
provides for rollovers or plan-to-plan transfers, it shall always consider
such rollover or plan-to-plan transfers as a distribution for the purpose of
this Section. If this Plan is the plan accepting such rollovers or plan-to-
plan transfers, it shall not consider such rollovers or plan-to-plan transfers
accepted after December 31, 1983 as part of the Participant's Aggregate
Account balance. However, rollovers or plan-to-plan transfers accepted prior
to January 1, 1984 shall be considered as part of the Participant's Aggregate
Account balance;
(vi) with respect to related rollovers and plan-to-plan transfers
(ones either not initiated by the Employee or made to a plan maintained by the
same employer), if this Plan provides the rollover or plan-to-plan transfer,
it shall not be counted as a distribution for purposes of this Section. If
this Plan is the plan accepting such rollover or plan-to-plan transfers as
part of the Participant's Aggregate Account balance, irrespective of the date
on which such rollover or plan-to-plan transfer is accepted; and
(vii) for the purpose of determining whether two employers are to be
treated as the same employer in (v) and (vi) above, all employers aggregated
under Section 414(b), (c) or (m) of the Internal Revenue Code are treated as
the same employer.
(b) Aggregation Group: Either a Required Aggregation Group or a
Permissive Aggregation Group as hereinafter defined. Only those plans of the
Employer in which the Determination Dates fall within the same calendar year
shall be aggregated in order to determine whether such plans are Top Heavy
Plans.
(c) Defined Benefit Plan: Any plan established and qualified under
Internal Revenue Code Sections 401 or 403, except to the extent that it is, or
is treated as, a Defined Contribution Plan.
(d) Defined Contribution Plan: This Plan and any other plan which is
established and qualified under Internal Revenue Code Sections 401 or 403,
which provides for an individual account for each Participant therein and for
benefits based solely on the amount contributed to each Participant's
Account(s) and any income and expenses or gains or losses (both realized and
unrealized) which may be allocated to such account.
(e) Determination Date: The last day of the preceding Plan Year or, in
the case of the first Plan Year to which this Article applies, the last day of
such Plan Year.
(f) Key Employee: Any Employee or former Employee (and his
beneficiaries) who, at any time during the Plan Year or any of the preceding
four (4) Plan Years, is or was:
(i) an officer of the Employer (as that term is defined within the
meaning of the regulations under Internal Revenue Code Section 416) having an
annual compensation greater than 50 percent of the amount in effect under
Section 415(b)(1)(A) of the Internal Revenue Code for such Plan Year; or
(ii) an owner (or one considered as owning within the meaning of
Section 318 of the Internal Revenue Code) of both more than a 1/2 percent
interest as well as one of the ten largest interests in the Employer, and
having annual compensation as defined in Section 415 of the Internal Revenue
Code greater than the dollar limit in effect under Sections 415(c)(1)(A) of
the Internal Revenue Code for the Year.
Beneficiaries of an Employee acquire the character of the Employee
who performed services for the Employer. Also, inherited benefits will retain
the character of the benefits of the Employee who performed services for the
Employer.
(iii) a Five Percent Owner; or
(iv) a "one percent owner" of the Employer having an annual
compensation from the Employer of more than $150,000. "One percent owner"
means any person who owns (or is considered as owning within the meaning of
Internal Revenue Code Section 318) more than one percent (1%) of the
outstanding stock of the Employer or stock possessing more than one percent
(1%) of the total combined voting power of all stock of the Employer. In
determining percentage ownership hereunder, employers that would otherwise be
aggregated under Internal Revenue Code Sections 414(b), (c), (m), and (o)
shall be treated as separate employers. However, in determining whether an
individual has compensation of more than $150,000, compensation from each
employer required to be aggregated under Internal Revenue Code Sections
414(b), (c), (m), and (o) shall be taken into account.
For purpose of subsection (ii) above, if two Employees have the same interest
in the Employer, the Employee having the greater annual compensation from the
Employer shall be treated as having the larger interest.
(g) Non-Key Employee: Any Employee who is not a Key Employee.
(h) Permissive Aggregation Group: This Plan and any other plan or plans
(not required to be included in a Required Aggregation Group) which the
Employer elects to include in an Aggregation Group, provided that the
resulting group, taken as a whole, continues to satisfy the provisions of
Internal Revenue Code Sections 401(a)(4) or 410. In the case of a Permissive
Aggregation Group, only a plan that is part of the Required Aggregation Group
will be considered a Top Heavy Plan if the Permissive Aggregation Group is a
Top Heavy Group. No plan in the Permissive Aggregation Group will be
considered a Top Heavy Plan if the Permissive Aggregation Group is not a Top
Heavy Group.
(i) Present Value of Accrued Benefit: A Participant's Present Value of
Accrued Benefit shall be determined under the provisions of the applicable
Defined Benefit Plan.
(j) Required Aggregation Group: In determining a Required Aggregation
Group hereunder, each plan of the Employer in which an Employee is a
Participant, and each other plan of the Employer which enables any plan in
which a Key Employee participates to meet the requirements of Internal Revenue
Code Sections 401(a)(4) or 410, will be required to be aggregated. In the
case of a Required Aggregation Group, each plan in the group will be
considered a Top Heavy Plan if the Required Aggregation Group is a Top Heavy
Group. No plan in the Required Aggregation Group will be considered a Top
Heavy Plan if the Required Aggregation Group is not a Top Heavy Group.
(k) Top Heavy Group: An Aggregation Group in which, as of the
Determination Date, the sum of:
(i) The Present Value of Accrued Benefits of Key Employees under
all Defined Benefit Plans included in the group, and
(ii) The Aggregate Accounts of Key Employees under all Defined
Contribution Plans included in the group,
exceeds sixty percent (60%) of a similar sum determined for all Participants.
(l) Top Heavy Plan Year: A Plan Year during which the Plan is a Top
Heavy Plan in accordance with Section 11.02 hereof.
Section 11.2 Top Heavy Determination.
(a) This Plan shall be a Top Heavy Plan for any Plan Year in which, as
of the Determination Date, (i) the Present Value of Accrued Benefits of Key
Employees, or (ii) the sum of the Aggregate Accounts of Key Employees under
the Plan and any plan of an Aggregation Group, exceeds sixty percent (60%) of
the Present Value of Accrued Benefits or the Aggregate Accounts of all
Participants under this Plan and any plan of an Aggregation Group. If any
Participant is a Non-Key Employee for any Plan Year, but such Participant was
a Key Employee for any prior Plan Year, such Participant's Present Value of
Accrued Benefit and/or Aggregate Account shall not be taken into account for
purposes of determining whether this Plan is a Top Heavy Plan (or whether any
Aggregation Group which includes this Plan is a Top Heavy Group).
(b) This Plan shall be a Super Top Heavy Plan for any Plan Year in
which, as of the Determination Date, (i) the Present Value of Accrued Benefits
of Key Employees or (ii) the sum of the Aggregate Accounts of Key Employees
under this Plan and any plan of an Aggregation Group, exceeds ninety percent
(90%) of the Present Value of Accrued Benefits or the Aggregate Accounts of
all Participants under this Plan and any plan of an Aggregate Group.
(c) If any individual has not performed services for the Employer at any
time during the 5-year period ending on the Determination Date, any Present
Value of Accrued Benefit or Aggregate Account of such individual shall not be
taken into account.
Section 11.3 Requirements. For any Top Heavy Plan Year, the following
requirements shall apply.
(a) Minimum Vesting. Notwithstanding the provisions of Section 7.5
hereof, for any Top Heavy Plan Year, the vested portion of any Participant's
Employer Contribution Account(s) shall be determined on the basis of the
Participant's number of years of Vesting Service according to the following
schedules (unless the Vesting Schedule contained in such Section 7.5 produces
a greater vested percentage):
Years of Vesting
Service Vested Percentage
---------------- -----------------
Less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 but less than 6 80%
6 or more 100%
If in any Plan Year, the Plan ceases to be a Top Heavy Plan the Employer may,
in its sole discretion, elect to (i) continue to apply this vesting schedule
in determining the vested portion of any Participant's account, or (ii) revert
to the vesting schedule in effect before this Plan becomes a Top Heavy Plan.
Any such reversion shall be treated as a Plan amendment pursuant to the terms
of this Plan. A Participant with at least three (3) years of Vesting Service
as of the expiration date of the election period, may elect to have his
nonforfeitable percentage computed under the Plan without regard to such
amendment. If a Participant fails to make such election, then such
Participant shall be subject to the new vesting schedule. The Participant's
election period shall commence on the adoption date of the amendment and shall
end 60 days after the latest of:
(i) the adoption date of the amendment,
(ii) the effective date of the amendment, or
(iii) the date the Participant receives written notice of the
amendment from the Employer.
(b) Minimum Allocation. For any Top Heavy Plan Year, the following
minimum annual allocation shall be provided for each Non-Key Employee:
(i) The Employer Contributions allocated to the Employer
Contribution Account(s) of each Non-Key Employee, shall be equal to at least
three percent (3%) of such Non-Key Employee's compensation. However, should
the sum of Employer Contributions allocated to the Account of each Key
Employee for such Top Heavy Plan Year be less than three percent (3%) of each
Key Employee's compensation, the sum of such Employer Contributions allocated
to the Account of each Non-Key Employee shall be equal to the largest
percentage allocated to the Account(s) of any Key Employee. If a Non-Key
Employee is a Participant in both this Plan and another Defined Contribution
Plan of the Employer, the minimum allocation described hereinabove shall only
be required in one of such plans. In addition, the minimum allocation may be
satisfied by a contribution under this Plan and not under the other plans.
Elective Employer Contributions may not be taken into account, nor
any Employer Matching Contributions necessary to satisfy the nondiscrimination
requirements of Sections 401(k) or 401(m) of the Internal Revenue Code, to
determine if the Plan meets the minimum allocation requirement.
(ii) If a Key Employee is a Participant in both a Defined
Contribution Plan and a Defined Benefit Plan that are both part of a Top Heavy
Group, neither of which plans is a Super Top Heavy Plan, the defined
contribution and the defined benefit fractions set forth in Section 6.5 hereof
shall remain unchanged provided the Employer Contribution Account(s) of each
Non-Key Employee who is a Participant receives an extra allocation (in
addition to the minimum allocation set forth above) equal to not less than one
percent (1%) of such Non-Key Employee's Compensation. In the event that a Key
Employee is a Participant in both a Defined Benefit Plan and a Defined
Contribution Plan, included in a Required Aggregation Group, either or both of
which is a Super Top Heavy Plan, Section 6.5 shall be read by substituting the
number "1.00" for the number "1.25" wherever it appears therein except such
substitution shall not have the effect of reducing any benefit accrued under a
Defined Benefit Plan prior to the first day of the Plan Year in which this
provision becomes applicable.
(iii) For purposes of this subsection, the percentage allocated to
the account of any Key Employee shall be equal to the ratio of the sum of the
Employer Contribution allocated on behalf of such Key Employee divided by the
compensation for such Key Employee. Employer Elective Contributions on behalf
of Key Employees and Employer Matching Contributions allocated to Key
Employees are treated as Employer Contributions in determining the minimum
required contribution under this Section 11.3.
(iv) For any Top Heavy Plan Year, the minimum allocations set forth
above shall be allocated to the Employer Contribution Account(s) of all Non-
Key Employees who are Participants and who are employed by the Employer on the
last day of the Plan Year, including Non-Key Employees who have (A) failed to
complete one thousand (1,000) Hours of Service during the year, or (B)
declined to make mandatory contributions (if required) to the Plan, or (C)
failed to make Employer Elective Contributions.
(v) Notwithstanding anything herein to the contrary, in any Plan
Year in which a Non-Key Employee is a Participant in both this Plan and a
Defined Benefit Plan, included in a Required Aggregation Group, and both such
plans are Top Heavy Plans, the Employer shall only be required to provide a
Non-Key Employee with either the full separate minimum defined benefit plan
benefit or the full separate defined contribution plan allocations. Therefore,
for Non-Key Employees who are participating in a Defined Benefit Plan
maintained by the Employer and in this Plan and the minimum benefits under
Internal Revenue Code Section 416(c)(2) are accruing to a Non-Key Employee
under such plan, the minimum allocations provided for above, shall not be
applicable, and 7-1/2% of Compensation shall be contributed on behalf of such
Non-key Employee under this Plan and the extra minimum contribution required
by (c)(ii) above shall be provided by this Plan.
(c) Compensation Definition. For any Year in which the Plan is a Top
Heavy Plan, for purposes of determining a minimum contribution, the $200,000
compensation limit, whether an Employee is a Key Employee, and for all other
Top Heavy purposes, "compensation" shall be based on W-2 earnings for the
taxable year ending with or within the Plan Year, except that for the purpose
of determining whether an Employee is a Key Employee with respect to Plan
Years beginning on or after January 1, 1989, the compensation to be used is
compensation as defined in Section 415(c)(3) of the Internal Revenue Code, but
including Employer Contributions pursuant to a salary reduction arrangement.
ARTICLE XII
AMENDMENTS AND ACTIONS BY EMPLOYER
----------------------------------
Section 12.1 Amendments. The Company reserves the right to amend the
Plan provided such amendment does not cause any part of the Trust to be used
for, or diverted to, any purpose other than the exclusive benefit of
Participants, former Participants or their Beneficiaries, except as may be
necessary to make the Plan comply with ERISA or the Internal Revenue Code. No
amendment to the Plan shall decrease a Participant's Account balance or
eliminate an optional form of distribution. Notwithstanding the preceding
sentence, a Participant's Account balance may be reduced to the extent
permitted under Section 412(c)(8) of the Internal Revenue Code. Furthermore,
no amendment to the Plan shall have the effect of decreasing a Participant's
vested interest determined without regard to such amendment as of the later of
the date such amendment is adopted or the date it becomes effective.
Section 12.2 Amendment of Vesting Schedule. If the Plan's vesting
schedule is amended or the Plan is amended in any way that directly or
indirectly affects the computation of a Participant's non-forfeitable
percentage, or if the Plan is deemed amended by an automatic change to or from
a Top Heavy vesting schedule, each Participant with at least three (3) years
of service with the Employer may elect within a reasonable period after the
adoption of the amendment or change, to have his non-forfeitable percentage
computed under the Plan without regard to such amendment or change. The
period during which the election may be made shall commence with the date the
amendment is adopted or deemed to be made and shall end on the latest of:
(1) 60 days after the amendment is adopted;
(2) 60 days after the amendment becomes effective; or
(3) 60 days after the Participant is issued written notice of the
amendment by the Employer or Plan Administrator.
ARTICLE XIII
SUCCESSOR EMPLOYER AND MERGER OR CONSOLIDATION OF PLAN
------------------------------------------------------
Section 13.1 Successor Employer. In the event of the dissolution,
merger, consolidation or reorganization of an Employer, provision may be made
by which the Plan and Trust will be continued by a successor.
Section 13.2 Merger of Plan. In the case of any merger of this Plan
into or consolidation of this Plan with, or transfer of assets or liabilities
of this Plan to, any other qualified pension benefit plan, each Participant
(if this Plan then terminated), must receive a benefit immediately after the
merger, consolidation, or transfer which is equal to or greater than the
benefit the Participant would have been entitled to receive immediately before
the merger, consolidation or transfer (if this Plan had then terminated).
ARTICLE XIV
PLAN TERMINATION
----------------
Section 14.1 Right to Terminate. Each Employer may terminate its
participation in the Plan at any time in accordance with the procedures set
forth in this Article XIV. In the event of the dissolution, merger,
consolidation or reorganization of the Employer, the Plan shall terminate and
the Trust shall be liquidated unless the Plan is continued by a successor to
the Employer in accordance with Section 13.1, or unless the Employer elects to
continue the Trust and make distribution to the Participants or their
Beneficiaries at times and in a manner selected by the Employer.
Section 14.2 Partial Termination. Upon termination of the Plan with
respect to a group of Participants which constitutes a partial termination of
the Plan, the Accounts of the Participants affected thereby shall vest fully
and the Trustee shall, in accordance with the directions of the Retirement
Committee, allocate and segregate for the benefit of such Participants then or
theretofore employed by the Employer with respect to which the Plan is being
terminated, the proportionate interest of such Participants in the Trust.
Section 14.3 Liquidation of the Trust. Upon termination of the Plan,
the Accounts of all Participants affected thereby shall become fully vested,
and the Retirement Committee shall direct the Trustee to distribute the assets
remaining in the Trust, after payment of any expenses properly chargeable
thereto, to Participants, former Participants and Beneficiaries in proportion
to their respective Account balances, unless the Employer elects to continue
the Trust as provided in Section 13.1.
ARTICLE XV
MISCELLANEOUS
-------------
Section 15.1 Employment Status. Nothing contained in this Plan shall
be construed as a contract of employment between an Employer and any Employee,
or as creating a right of any Employee to be continued in the employment of an
Employer, or as a limitation of the right of an Employer to discharge any of
its Employees, with or without cause.
Section 15.2 Titles. Titles of articles and sections hereof are for
general information only and this Plan shall not be construed by reference to
such titles.
Section 15.3 Gender and Number of Words. Words written in the singular
shall include the plural, words in the plural shall include the singular, the
male gender shall include the female gender, and the female gender shall
include the male gender, unless the context shall clearly and absolutely
indicate a more restrictive meaning.
Section 15.4 Severability. In the event any provision of the Plan
shall be held to be illegal or invalid for any reason, the illegality or
invalidity shall not affect the remaining provisions of the Plan, but shall be
fully severable and the Plan shall be construed and enforced as if the illegal
or invalid provision had never been included herein.
Section 15.5 Notice. Any notice required to be given herein by the
Trustee, the Employer, or the Retirement Committee, shall be deemed delivered
when (a) personally delivered, or (b) placed in the United States mail, in an
envelope addressed to the last known address of the person to whom the notice
is given.
Section 15.6 Waiver of Notice. Any person entitled to notice under the
Plan may waive the notice.
Section 15.7 Applicable Law. This Plan shall be governed by the laws
of the State of Alabama.
IN WITNESS WHEREOF, Compass Bancshares, Inc. has caused this instrument
to be executed by its duly authorized officers as of the day of
, 1994.
ATTEST: COMPASS BANCSHARES, INC.
_________________________________ By____________________________________
Its______________________________ Its__________________________________
<PAGE>
EXHIBIT 23
Consent of KPMG Peat Marwick, L.L.P.
<PAGE>
The Board of Directors
Compass Bancshares, Inc.:
We consent to the use of our reports incorporated herein by reference. Our
report refers to changes in the method of accounting for income taxes and in
the method of accounting for certain investments in debt and equity securities.
/s/ KPMG Peat Marwick, L.L.P.
Birmingham, Alabama
December 20, 1994
EXHIBIT 24
Power of Attorney of the Officers and Directors
of the Registrant and certified copies of the Resolutions
of the Registrant's Board of Directors
authorizing such signatures
<PAGE>
POWER OF ATTORNEY
WHEREAS, Compass Bancshares, Inc. (the "Company") proposes to file
registration statements and amendments thereto under the Securities Act of 1933
with respect to the issuance and sale of an additional 819,465 shares of common
stock of the Company under the Employee Stock Ownership Plan;
NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS, that the Company and the
undersigned directors and officers of the Company, individually as a director
and/or as an officer of the Company, hereby make, constitute and appoint each
of D. Paul Jones, Jr., Garrett R. Hegel, Jerry W. Powell and Daniel B. Graves
their true and lawful attorney-in-fact for each of them and in each of their
names, places and steads to sign and cause to be filed with the Securities and
Exchange Commission said registration statements and any appropriate amendments
thereto, to be accompanied by any necessary exhibits.
The Company hereby authorizes said persons or any one of them to execute
said registration statements and amendments thereto on its behalf as attorney-
in-fact for it and its authorized officers, and to file the same as aforesaid.
The undersigned directors and officers of the Company hereby authorize said
persons or any one of them to sign said registration statements on their behalf
as attorney-in-fact and to amend, or remedy any deficiencies with respect to,
said registration statements by appropriate amendment or amendments and to file
the same as aforesaid.
DONE this the 19th day of December, 1994.
COMPASS BANCSHARES, INC.
By: /s/ D. Paul Jones, Jr.
-----------------------------
D. Paul Jones, Jr.
Its Chairman, Chief Executive
Officer and Treasurer
/s/ D. Paul Jones, Jr. /s/ Garrett R. Hegel
- ------------------------------- ---------------------------------
D. Paul Jones, Jr. Garrett R. Hegel
/s/ Michael A. Bean /s/ Harry B. Brock, Jr.
- ------------------------------- ---------------------------------
Michael A. Bean Harry B. Brock, Jr.
/s/ Stanley M. Brock /s/ Charles W. Daniel
- ------------------------------- ---------------------------------
Stanley M. Brock Charles W. Daniel
/s/ Garry N. Drummond /s/ Marshall Durbin, Jr.
- ------------------------------- ---------------------------------
Garry N. Drummond Marshall Durbin, Jr.
/s/ Tranum Fitzpatrick /s/ Thomas E. Jernigan
- ------------------------------- ---------------------------------
Tranum Fitzpatrick Thomas E. Jernigan
/s/ G. W. "Red" Leach, Jr. /s/ Goodwin L. Myrick
- ------------------------------- ---------------------------------
G. W. "Red" Leach, Jr. Goodwin L. Myrick
/s/ John S. Stein
- -------------------------------
John S. Stein
<PAGE>
COMPASS BANCSHARES, INC.
CERTIFIED COPY OF PREAMBLES AND RESOLUTIONS
OF THE BOARD OF DIRECTORS
I, the undersigned, hereby certify that the following is a true and
correct copy of preambles and resolutions duly adopted at a meeting of the
Board of Directors of Compass Bancshares, Inc. (the "Corporation") on the 19th
day of December, 1994, a majority of the members of the Board of Directors
being present and constituting a quorum for the transaction of business:
WHEREAS, the Corporation heretofore established the Central
Bancshares of the South, Inc. Employee Stock Ownership Plan (the
"Plan") for the benefit of its employees and the employees of its
affiliates;
WHEREAS, the Corporation reserved the right to amend the Plan;
WHEREAS, it is in the best interests of the Corporation and its
employees that the Plan be amended and restated to comply with changes
in the Internal Revenue Code and the regulations applicable thereto;
WHEREAS, the Internal Revenue Service requires that the Plan be
amended retroactively to comply with certain changes in the Internal
Revenue Code; and
WHEREAS, the Board of Directors has determined that it is in
the best interests of the Corporation and for the purposes of carrying
out the objects of its charter to issue an additional 819,465 shares
of common stock under the Plan, in such form and with such terms as may
be deemed desirable and in the best interests of the Corporation by
the officers;
NOW, THEREFORE, BE IT RESOLVED that the Plan be amended and
restated as of January 1, 1989, in the form presented;
RESOLVED, FURTHER, that the proper officers of the Corporation
are hereby authorized to execute the amended and restated Plan and to
do and perform any and all such other acts and things as may, to any
of them, seem necessary or proper to effect the purposes and actions
set forth in the foregoing resolutions and to maintain the Plan's
status as a qualified plan under the Internal Revenue Code, including
submitting the Plan for a determination letter and adopting any
amendments required by the Internal Revenue Service as a condition of
receiving such a letter;
RESOLVED, FURTHER, the proper officers of the Corporation be
and hereby are authorized to file such applications, declarations and
statements with the Securities and Exchange Commission as they deem
necessary and as counsel may advise with respect to the issuance of an
additional 819,465 shares of common stock of the Corporation, such
authority to include a registration statement on Form S-8, together
with all necessary or appropriate amendments thereto; and
RESOLVED, FURTHER, that for the purpose of signing and filing
with the Securities and Exchange Commission a registration statement
under the Securities Act of 1933 with respect to the issuance and sale
of such common stock of this Corporation, and of amending such
Registration Statement or remedying any deficiencies with respect
thereto by appropriate amendment or amendments, the members of the
Corporation's Board of Directors and its officers are authorized to
give their several powers of attorney to D. Paul Jones, Jr., Garrett
R. Hegel, Jerry W. Powell, and Daniel B. Graves in substantially the
form of power of attorney presented to this meeting.
Dated as of the 19th day of December, 1994.
COMPASS BANCSHARES, INC.
By: /s/ Jerry W. Powell
-------------------
Jerry W. Powell
Its Secretary
