<PAGE> 1
As filed with the Securities and Exchange Commission on June 30, 1999
Registration No. 33-10169
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------
POST-EFFECTIVE AMENDMENT NO. 2 TO
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
(Registration No. 33-10169)
----------------------------
CLECO HOLDING CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
LOUISIANA 72-1445282
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
2030 DONAHUE FERRY ROAD
PINEVILLE, LOUISIANA 71360-5226
(318) 484-7400
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
----------------------------
CLECO CORPORATION
401(k) SAVINGS AND INVESTMENT PLAN
(Full Title of Plan)
DAVID M. EPPLER COPY TO:
PRESIDENT AND CHIEF OPERATING OFFICER ALAN C. WOLF
CLECO CORPORATION PHELPS DUNBAR, L.L.P.
2030 DONAHUE FERRY ROAD 400 POYDRAS STREET
PINEVILLE, LOUISIANA 71360 NEW ORLEANS, LOUISIANA 70130-3245
(318) 484-7400 (504) 566-1311
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service)
----------------------------
This Post-Effective Amendment No. 2 to the Registration Statement on Form S-8
(Registration No. 33-10169) is being filed pursuant to Rule 414(d) under the
Securities Act of 1933, as amended, by the Registrant, Cleco Holding
Corporation, as successor to Cleco Corporation. The Registrant hereby expressly
adopts the Registration Statement as its own registration statement for all
purposes of the Securities Act of 1933, as amended, and the Securities Exchange
Act of 1934, as amended, and hereby sets forth any additional information
necessary to reflect any material changes made in connection with or resulting
from the succession, or necessary to keep this Registration Statement from being
misleading in any material respect.
Pursuant to Rule 429 under the Securities Act of 1933, as amended, the
Prospectus referenced herein also relates to the participations in the Plan and
the securities covered by the Registrant's earlier Post-Effective Amendment No.
1 to Registration Statement on Form S-8 (Registration No. 33-44663).
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ADOPTION OF PREDECESSOR ISSUER'S REGISTRATION STATEMENT
Effective July 1, 1999, Cleco Holding Corporation (the "Registrant")
will become the successor issuer of Cleco Corporation ("Cleco") pursuant to the
Plan of Reorganization and Share Exchange Agreement referenced as Exhibit 2
hereto and, pursuant to Rule 414(d) under the Securities Act of 1933, as
amended, the Registrant hereby expressly adopts Cleco's Registration Statement
on Form S-8 (Registration No. 33-10169), including all amendments thereto, as
Registrant's own registration statement for all purposes of the Securities Act
of 1933, as amended, and the Securities Exchange Act of 1934, as amended.
Subsequent to the reorganization, shares of the Registrant's common
stock will be substituted for Cleco's common stock issuable under the Cleco
Corporation 401(k) Savings and Investment Plan to which this Registration
Statement relates. Cleco shall continue to be the sponsor of the Plan, and the
Plan shall continue to be known as the Cleco Corporation 401(k) Savings and
Investment Plan.
The applicable registration fees were paid at the time of the original
filing of this Registration Statement.
PART I
INFORMATION REQUIRED IN SECTION 10(a) PROSPECTUS
*ITEM 1. PLAN INFORMATION.
*ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
*The information required by Part I of Form S-8 to be contained in the Section
10(a) prospectus is omitted from this Post-Effective Amendment No. 2 to
Registration Statement in accordance with Rule 428 under the Securities Act of
1933 and the Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents have been filed by Registrant or Cleco with the
Securities and Exchange Commission (the "Commission") and are hereby
incorporated by reference in this Post-Effective Amendment No. 2 to Registration
Statement:
(1) Cleco's Annual Report on Form 10-K for the year ended December 31,
1998;
(2) All other reports filed pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 since December 31, 1998;
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(3) The Annual Report on Form 11-K dated July 13, 1998 for the Cleco
Corporation 401(k) Savings and Investment Plan for the fiscal year ended
December 31, 1997; and
(4) The description of the Registrant's common stock, $2.00 par value
contained in the Registration Statement on Form S-4 filed on February 2, 1999,
as amended (Commission File No. 333-71643) by Cleco.
In addition, all documents filed with the Commission by the Registrant
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934 on or after the date of this Post-Effective Amendment No. 2 to Registration
Statement and prior to the post-effective amendment which indicates that all
securities offered hereby have been sold, or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference in this
Post-Effective Amendment No. 2 to Registration Statement and to be a part hereof
from the date of filing such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 83 of the Business Corporation Law of the State of Louisiana
(the "LBCL") provides that a corporation may indemnify any person against whom
an action, suit or proceeding is brought or threatened (by reason of the fact
that he is or was a director, officer, employee or agent of the corporation or
was serving at the request of the corporation as a director, officer, employee
or agent of another business, corporation, partnership or other enterprise)
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred in connection with any such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. In the case of actions by
or in the right of the corporation, the indemnity is limited to expenses
(including attorneys' fees and amounts paid in settlement not exceeding, in the
judgment of the board of directors, the estimated expense of litigating the
action to conclusion) actually and reasonably incurred in connection with a
defense or settlement; provided that no indemnity may be made in respect of any
matter in which the person shall have been adjudged by a court of competent
jurisdiction, after exhaustion of all appeals therefrom, to be liable for
willful or intentional misconduct in performance of his duty to the corporation,
unless and only to the extent that the court determines upon application that
such person is fairly and reasonably entitled to such indemnity. To the extent a
person has been successful on the merits or otherwise in defense of any action,
suit or proceeding or in defense of any claim, issue or matter therein, the
statute provides that he shall be indemnified
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against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection therewith. Section 83 also provides for, among other things,
procedures for indemnification, advancement of expenses, non-exclusivity of the
provisions of Section 83 with respect to indemnification and advancement of
expenses, and insurance (including self-insurance) with respect to liabilities
incurred by directors, officers and others.
Article IV of the Bylaws of the Registrant (the "Bylaws") provides that
the Registrant shall indemnify any person who was or is, or is threatened to be
made, a party to or otherwise involved in any pending or completed action, suit,
arbitration, alternate dispute resolution mechanism, investigation,
administrative hearing or other proceeding, whether civil, criminal,
administrative or investigative (any such threatened, pending or completed
proceeding being hereinafter called a "Proceeding"), by reason of the fact that
he is or was a director, officer, employee or agent of the Registrant or is or
was serving at the request of the Registrant as a director, officer, employee or
agent of another business, foreign or nonprofit corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise, to the fullest extent
permitted by applicable law, from and against expenses, including attorneys'
fees, judgments, fines, ERISA excise taxes or amounts paid or to be paid in
settlement, liability and loss, actually and reasonably incurred by him or on
his behalf or suffered in connection with such Proceeding or any claim, issue or
matter therein; provided, however, that, subject to certain exceptions set forth
therein, the Registrant shall indemnify any such person in connection with a
Proceeding initiated by such person only if such Proceeding was authorized by
the Registrant's board of directors.
Article IV of the Bylaws further provides that (i) the Registrant shall
from time to time pay, in advance of final disposition, all expenses (as therein
defined) incurred by or on behalf of any person claiming indemnity thereunder in
respect of any Proceeding, (ii) the right to indemnification provided therein is
a contract right; (iii) any such indemnification may continue as to any person
who has ceased to be a director, officer, employee or agent and may inure to the
benefit of the heirs, executors and legal representatives of such person; and
(iv) the rights of indemnification and to receive advancement of expenses
contemplated by Article IV of the Bylaws are not exclusive of any other rights
to which any person may at any time be otherwise entitled, provided that such
other indemnification may not apply to a person's willful or intentional
misconduct. The Bylaws set forth certain procedural and evidentiary standards
applicable to the enforcement of a claim thereunder.
The Bylaws also provide that the Registrant may procure or maintain
insurance or other similar arrangements, at its expense, to protect itself and
any director, officer, employee or agent of the Registrant or other corporation,
partnership, joint venture, trust or other enterprise against any expense,
liability or loss asserted against or incurred by such person, whether or not
the Registrant would have the power to indemnify such person against such
expense or liability. The Registrant has two insurance policies covering
liabilities not in excess of an aggregate of $85 million incurred by officers
and directors of the Registrant in their capacity as such and not in excess of
$25 million incurred by officers, directors and certain other employees of the
Registrant in connection with the administration of the Registrant's employee
benefit plans.
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Section 24(C)(4) of the LBCL provides that a corporation may eliminate
or limit the liability of a director or officer to the corporation or its
shareholders for monetary damages for breach of fiduciary duty, except for
liability (i) for any breach of the director's or officer's duty of loyalty to
the corporation or its shareholders; (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law;
(iii) under Section 92(D) of the LBCL (relating to unlawful dividends and
unlawful stock repurchases and redemptions); and (iv) for any transaction from
which the director or officer derived an improper personal benefit. Section 7 of
Article 7 of the Registrant's Articles of Incorporation (the "Articles") is
consistent with the provisions of Section 24(C)(4) of the LBCL. If the LBCL is
subsequently amended to authorize further elimination or limitation of a
director's or officer's liability, the Articles provide that such liability will
be eliminated or limited to the fullest extent permitted by law.
The foregoing discussion of the Registrant's Bylaws, Articles and the
LBCL is not intended to be exhaustive and is qualified in its entirety by each
of such documents and such statute.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
See Exhibit Index.
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers of shares are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective Registration Statement; and
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(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(4) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in this 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) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 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 Securities
Act of 1933 and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Post-Effective Amendment No. 2 to Registration
Statement on Form S-8, Commission File Number 33-10169, to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Eureka,
State of California, on June 19, 1999.
CLECO HOLDING CORPORATION
By: /s/ Gregory L. Nesbitt
---------------------------------
Gregory L. Nesbitt
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on June 19, 1999.
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SIGNATURE TITLE
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/s/ Gregory L. Nesbitt Chairman, Chief Executive Officer and Sole
- -------------------------------- Director
Gregory L. Nesbitt
/s/ David M. Eppler President and Chief Operating Officer
- --------------------------------
David M. Eppler
/s/ Thomas J. Howlin Senior Vice President - Financial Services
- -------------------------------- and Chief Financial Officer and Principal
Thomas J. Howlin Accounting Officer
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The Plan. Pursuant to the requirements of the Securities Act of 1933,
the Plan Administrator has duly caused this Post-Effective Amendment No. 2 to
Registration Statement on Form S-8, Commission File Number 33-10169, to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Pineville, State of Louisiana, on June 17, 1999.
CLECO CORPORATION
401(k) SAVINGS AND INVESTMENT PLAN
CLECO CORPORATION,
as Plan Administrator
By: /s/ Catherine C. Powell
--------------------------
Catherine C. Powell
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POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Gregory L. Nesbitt, David M. Eppler and Thomas J. Howlin, and each of them, with
full power to act without the others, such person's true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign one or more registration statements and any amendments
thereto and one or more amendments to existing registration statements of Cleco
Corporation (to be renamed Cleco Utility Group Inc. upon the implementation of
the holding company structure) and one or more further amendments thereto to be
filed with the Securities and Exchange Commission to register under the
Securities Act of 1933, as amended, shares of Cleco Holding Corporation's (to be
renamed Cleco Corporation upon the implementation of the holding company
structure) common stock ($2.00 par value) and preferred stock ($100 par value)
to be offered and sold under the Cleco Corporation 401(k) Savings and Investment
Plan, most recently amended and restated effective as of January 1, 1994, and
shares of Cleco Holding Corporation's common stock to be offered and sold under
the 1990 Long-Term Incentive Compensation Plan, amended and restated effective
as of April 24, 1998, each of which Cleco Holding Corporation may assume
pursuant to the Plan of Reorganization and Share Exchange Agreement to be
executed by Cleco Corporation and Cleco Holding Corporation, and to file the
same, with exhibits and schedules thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing necessary or desirable to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have executed this instrument, this
19th day of June, 1999.
SIGNATURE TITLE
/s/ Gregory L. Nesbitt Chairman, Chief Executive Officer and Sole
- -------------------------------- Director
Gregory L. Nesbitt
/s/ David M. Eppler President and Chief Operating Officer
- --------------------------------
David M. Eppler
/s/ Thomas J. Howlin Senior Vice President - Financial Services
- -------------------------------- and Chief Financial Officer and
Thomas J. Howlin Principal Accounting Officer
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INDEX TO EXHIBITS
The exhibits designated by an asterisk are filed with this
Post-Effective Amendment No. 2 to the Registration Statement. The exhibits not
so designated have been previously filed with the Commission and are
incorporated herein by reference.
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EXHIBIT
NUMBER DESCRIPTION
<S> <C>
2 Plan of Reorganization and Share Exchange Agreement (filed as
Exhibit C to the Proxy Statement and Prospectus included in
Cleco's Registration Statement on Form S-4 filed on February 2,
1999, as amended, and incorporated herein by reference,
Commission File No. 333-71643).
3.1 Articles of Incorporation of Registrant, effective July 1, 1999
(filed as Exhibit A to the Proxy Statement and Prospectus
included in Cleco's Registration Statement on Form S-4 filed on
February 2, 1999, as amended, and incorporated herein by
reference, Commission File No. 333-71643).
3.2 By-laws of Registrant, effective as of July 1, 1999 (filed as
Exhibit 3(d) to Cleco's Registration Statement on Form S-4
filed on February 2, 1999, as amended, and incorporated herein
by reference, Commission File No. 333-71643).
*4.3 Cleco Corporation 401(k) Savings and Investment Plan, as
amended and restated effective as of January 1, 1994 (the
"Plan").
*4.4 First Amendment to the Plan, dated October 1, 1997.
*4.5 Second Amendment to the Plan, dated July 13, 1998.
*4.6 Third Amendment to the Plan, dated February 15, 1999.
4.7 Cleco Corporation 401(k) Savings and Investment Plan Stock
Trust Agreement, dated as of August 1, 1997, between UMB Bank,
N.A. and Cleco (listed as Exhibit 10(m) to Cleco's Registration
Statement on Form S-4 filed on February 2, 1999, as amended,
and incorporated herein by reference, Commission File No.
333-71643).
4.8 First Amendment, effective January 1, 1999, to Cleco
Corporation 401(k) Savings and Investment Plan Stock Trust
Agreement, between UMB Bank, N.A. and Cleco (listed as Exhibit
10(m) to Cleco's Registration Statement on Form S-4 filed on
February 2, 1999, as amended, and incorporated herein by
reference, Commission File No. 333-71643).
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*5 Opinion of Phelps Dunbar, L.L.P. as to the legality of the
securities being registered.
23.1 Consents of PricewaterhouseCoopers LLP, filed as an exhibit to
Cleco's Form 10-K for the year ended December 31, 1998, and the
Plan's Form 11-K for the year ended December 31, 1997, both
incorporated herein by reference.
*23.2 Consent of Phelps Dunbar, L.L.P. (included in Exhibit 5).
*24 Powers of Attorney (included on the Signature Page attached
hereto).
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CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
401(k) SAVINGS AND INVESTMENT PLAN
(As Amended and Restated Effective January 1, 1994)
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CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
401(k) SAVINGS AND INVESTMENT PLAN
(As Amended and Restated Effective January 1, 1994)
I N D E X
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ARTICLE I DEFINITIONS........................................................................... 3
Section:
1.1 Accounts.............................................................................. 3
1.2 Administrator......................................................................... 3
1.3 Affiliate............................................................................. 3
1.4 After-Tax Contributions............................................................... 3
1.5 After-Tax Contribution Account........................................................ 3
1.6 Anniversary Date...................................................................... 3
1.7 Beneficiary........................................................................... 3
1.8 Code.................................................................................. 3
1.9 Company............................................................................... 3
1.10 Company Stock......................................................................... 3
1.11 Committee............................................................................. 4
1.13 Contribution.......................................................................... 5
1.14 Defined Benefit Plan.................................................................. 5
1.15 Effective Date........................................................................ 5
1.16 Employee.............................................................................. 5
1.17 Employer.............................................................................. 6
1.18 Employer Matching Contribution........................................................ 6
1.19 Employer Matching Contribution Account................................................ 6
1.20 Entry Date............................................................................ 6
1.21 ERISA................................................................................. 6
1.22 ESOP Account.......................................................................... 6
1.23 ESOP Contributions.................................................................... 6
1.24 ESOP Fund............................................................................. 6
1.25 ESOP Trust............................................................................ 6
1.26 ESOP Trustee.......................................................................... 6
1.27 Exempt Loan........................................................................... 6
1.28 Financed Stock........................................................................ 6
1.29 Fiduciaries........................................................................... 6
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1.30 Hour of Service....................................................................... 7
1.31 Investment Fund....................................................................... 8
1.32 Investment Manager.................................................................... 8
1.33 Leased Employee....................................................................... 8
1.34 Original Plan......................................................................... 8
1.35 Participant........................................................................... 8
1.36 Plan.................................................................................. 8
1.37 Plan Year............................................................................. 9
1.38 Pre-Tax Contributions................................................................. 9
1.39 Pre-Tax Contribution Account.......................................................... 9
1.40 Prior Plan............................................................................ 9
1.41 Retirement............................................................................ 9
1.42 Retirement Date....................................................................... 9
1.43 Rollover Account...................................................................... 9
1.44 Rollover Contribution................................................................. 9
1.45 Savings Trust......................................................................... 9
1.46 Savings Trustee....................................................................... 9
1.47 Service............................................................................... 9
1.48 Stock Suspense Account................................................................ 10
1.49 Superseded Plan....................................................................... 10
1.50 Trust Agreements...................................................................... 10
1.51 Trust Funds........................................................................... 10
1.52 Trustees.............................................................................. 10
1.53 Valuation Date........................................................................ 10
1.54 Vesting Computation Period............................................................ 10
1.55 Vesting Service....................................................................... 10
ARTICLE II ADMINISTRATION OF THE PLAN............................................................ 11
Section:
2.1 Appointment of Committee.............................................................. 11
2.2 Records of Committee.................................................................. 11
2.3 Committee Action...................................................................... 11
2.4 Committee Disqualification............................................................ 11
2.5 Committee Compensation and Expenses................................................... 11
2.6 Committee Liability................................................................... 12
2.7 Committee Determinations.............................................................. 12
2.8 Information from Employer............................................................. 13
2.9 Uniform Administration................................................................ 13
2.10 Reporting Responsibilities............................................................ 14
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2.11 Disclosure Responsibilities........................................................... 14
2.12 Annual Statements..................................................................... 14
2.13 Allocation of Responsibility Among Fiduciaries for Plan and Trust
Administration..................................................................... 14
2.14 Annual Audit.......................................................................... 15
2.15 Presenting Claims for Benefits........................................................ 15
2.16 Claims Review Procedure............................................................... 16
2.17 Disputed Benefits..................................................................... 17
ARTICLE III PARTICIPATION IN THE PLAN............................................................. 18
Section:
3.1 Eligibility of Employees.............................................................. 18
3.2 Employee Information.................................................................. 18
3.3 Notification of Eligible Employees.................................................... 18
3.4 Application by Participants........................................................... 18
3.5 Authorized Absences................................................................... 19
3.6 Vesting Service....................................................................... 20
3.7 Break In Service...................................................................... 20
3.8 Participation and Vesting upon Re-Employment.......................................... 20
3.9 Transfers............................................................................. 21
ARTICLE IV CONTRIBUTIONS TO THE PLAN............................................................. 23
Section:
4.1 Employer Contributions................................................................ 23
4.2 Pre-Tax Contributions................................................................. 23
4.3 Actual Deferral Percentage............................................................ 24
4.4 Actual Deferral Percentage Limits..................................................... 25
4.5 Reduction of Pre-Tax Contribution Rates by Leveling Method............................ 27
4.6 Increase in Pre-Tax Contribution Rates................................................ 27
4.7 Excess Pre-Tax Contributions.......................................................... 27
4.8 Aggregation of Family Members in Determining the
Actual Deferral Ratio.............................................................. 28
4.9 Contribution Percentage and ESOP Percentage........................................... 29
4.10 Contribution Percentage and ESOP Percentage Limits.................................... 31
4.11 Treatment of Excess Aggregate Contributions or ESOP Contributions..................... 32
4.12 Aggregation of Family Members in Determining the
Actual Contribution Ratio.......................................................... 33
4.13 Multiple Use of Alternative Limitation................................................ 34
4.14 ESOP Contributions, Employer Matching Contributions and
Pre-Tax Contributions To Be Tax-Deductible......................................... 34
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4.15 Maximum Allocations................................................................... 34
4.16 Refunds to Employer................................................................... 34
ARTICLE V PARTICIPANTS' ACCOUNTS................................................................ 35
Section:
5.1 Trust Accounts........................................................................ 35
5.2 Valuation of Trust Funds.............................................................. 35
5.3 Allocation to Accounts................................................................ 36
5.4 Treatment of Company Stock Purchased with an Exempt Loan.............................. 39
5.5 Maximum Annual Additions.............................................................. 40
5.6 Borrowings to Purchase Company Stock; Certain Conditions Applicable
to Such Company Stock.............................................................. 48
ARTICLE VI PARTICIPANTS' BENEFITS................................................................ 51
Section:
6.1 Termination of Service................................................................ 51
6.2 Disability of Participants............................................................ 51
6.3 Death of Participants................................................................. 51
6.4 Retirement of Participants on or After Retirement Date................................ 52
6.5 In-Service Distributions.............................................................. 52
6.6 Payments of Benefits.................................................................. 52
6.7 Participation Rights Determined as of Valuation Date
Preceding Termination of Employment................................................ 54
6.8 Disposition of Forfeitures............................................................ 55
6.9 Required Minimum Distributions........................................................ 55
6.10 Unclaimed Benefits.................................................................... 55
6.11 ESOP Allocations...................................................................... 56
6.12 Right to Transfer Eligible Rollover Distribution...................................... 56
ARTICLE VII WITHDRAWALS AND LOANS................................................................. 57
Section:
7.1 Withdrawal of Pre-Tax Contribution Account on or
After Age 59-1/2................................................................... 57
7.2 Withdrawal of After-Tax Contributions................................................. 57
7.3 Conditions of Withdrawals of After-Tax Contributions.................................. 57
7.4 Hardship Withdrawals from Pre-Tax Contribution Account................................ 57
7.5 Loans................................................................................. 59
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(iv)
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ARTICLE VIII INVESTMENT DIRECTIONS................................................................. 61
Section:
8.1 Investment of Trust Funds............................................................. 61
8.2 Diversification Election.............................................................. 66
8.3 Voting of Company Stock; Exercise of Other Rights..................................... 67
ARTICLE IX TRUST AGREEMENT AND TRUST FUND........................................................ 69
Section:
9.1 Trust Agreement....................................................................... 69
9.2 Benefits Paid Solely from Trust Funds................................................. 69
9.3 Committee Directions to Trustees...................................................... 69
9.4 Trustees' Reliance on Committee Instructions.......................................... 69
9.5 Authority of Trustees in Absence of Instructions
from the Committee................................................................. 69
9.6 Compliance with Exchange Act Rule 10(b)(18)........................................... 70
ARTICLE X ADOPTION OF PLAN BY OTHER CORPORATIONS,
AMENDMENT AND TERMINATION OF THE PLAN, AND
DISCONTINUANCE OF CONTRIBUTIONS TO THE TRUST
FUNDS................................................................................. 71
Section:
10.1 Adoption by Employers................................................................. 71
10.2 Continuous Service.................................................................... 71
10.3 Amendment of the Plan................................................................. 72
10.4 Termination of the Plan............................................................... 72
10.5 Distribution of Trust Funds on Termination............................................ 73
10.6 Effect of Discontinuance of Contributions............................................. 73
10.7 Merger of Plan with Another Plan...................................................... 73
ARTICLE XI TOP-HEAVY PLAN REQUIREMENTS........................................................... 75
Section:
11.1 General Rule.......................................................................... 75
11.2 Vesting Provisions.................................................................... 75
11.3 Minimum Contribution Provisions....................................................... 75
11.4 Limitation on Contributions........................................................... 76
11.5 Coordination with Other Plans......................................................... 77
11.6 Distributions to Certain Key Employees................................................ 77
11.7 Determination of Top-Heavy Status..................................................... 77
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(v)
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ARTICLE XII MISCELLANEOUS PROVISIONS.............................................................. 82
Section:
12.1 Terms of Employment................................................................... 82
12.2 Controlling Law....................................................................... 82
12.3 Invalidity of Particular Provisions................................................... 82
12.4 Non-Alienability of Rights of Participants............................................ 82
12.5 Payments in Satisfaction of Claims of Participants.................................... 83
12.6 Payments Due Minors and Incompetents.................................................. 83
12.7 Acceptance of Terms and Conditions of Plan by Participants............................ 83
12.8 Impossibility of Diversion of Trust Fund.............................................. 83
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(vi)
<PAGE> 8
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
401(k) SAVINGS AND INVESTMENT PLAN
(As Amended and Restated Effective January 1, 1994)
Recitals
Central Louisiana Electric Company, Inc. (the "Company"), a
Louisiana corporation with its principal place of business in Pineville,
Louisiana, established the Central Louisiana Electric Company, Inc. 401(k)
Savings and Investment Plan (the "Original Plan"), effective January 1, 1985,
for the benefit of its eligible Employees. The Company retained the right to
amend such Savings Plan under Section 12.1 thereof. Effective January 1, 1989,
the Original Plan was amended to comply with the provisions of the Tax Reform
Act of 1986 and to make certain other changes therein (the "Superseded Plan").
Effective April 2, 1991, the Board of Directors of the Company
authorized the amendment and restatement of the Superseded Plan (the "Prior
Plan") to include an employee stock ownership plan which is a stock bonus plan
intended to qualify under Sections 401(a) and 4975(e)(7) of the Internal Revenue
Code of 1986, as amended (the "Code"), and as such is designed to invest
primarily in Company Stock.
Effective January 1, 1994, the Board of Directors of the
Company authorized the amendment, restatement and continuation of the Prior Plan
in the form set forth herein (the "Plan").
The Central Louisiana Electric Company 401(k) Savings and
Investment Trust, as established effective January 1, 1985 and as amended and
restated effective January 1, 1989 by Trust Agreement with Merrill Lynch Trust
Company as trustee thereof and thereafter amended, is intended to continue in
effect and to form a part of this Plan. The Central Louisiana Electric Company,
Inc. 401(k) Savings and Investment Plan ESOP Trust, as established effective
April 2, 1991 by Trust Agreement with State Street Bank and Trust Company, a
Massachusetts trust company, as trustee thereof and thereafter amended is also
intended to form a part of this Plan. The Plan and Trust Agreements are also
intended to meet the requirements of Sections 401(a), 401(k) and 501(a) of the
Code, and of the Employee Retirement Income Security Act of 1974, as either may
be amended from time to time.
The provisions of this Plan shall apply to a Participant who
continues his Service after the Effective Date. Except as otherwise set forth
herein, the rights and benefits, if any, of a former Participant who terminated
his Service prior to the Effective Date shall be determined under the provisions
of the Prior Plan in effect on the date his Service terminated.
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NOW, THEREFORE, Central Louisiana Electric Company, Inc.
hereby amends, restates in its entirety and continues the Central Louisiana
Electric Company, Inc. 401(k) Savings and Investment Plan, effective January 1,
1994, as follows:
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ARTICLE I
DEFINITIONS
As used in the Plan, the following words and phrases shall
have the following meanings unless the context clearly requires a different
meaning:
2 Accounts: The accounts maintained for a Participant pursuant to Section
5.1.
2.1 Administrator: The Company or, at the Company's election pursuant
to Section 2.1, an Employee Benefits Committee.
2.2 Affiliate: A corporation or other trade or business which, together
with the Company, is "under common control" within the meaning of Section 414(b)
or (c), as modified by Section 415(h) of the Code; any organization (whether or
not incorporated) which is a member of an "affiliated service group" (within the
meaning of Section 414(m) of the Code) which includes the Company; and any other
entity required to be aggregated with the Company pursuant to regulations under
Section 414(o) of the Code.
2.3 After-Tax Contributions: Any amount contributed prior to January 1,
1989 by a Participant to the Plan from his Compensation as After-Tax
Contributions pursuant to the Original Plan.
2.4 After-Tax Contribution Account: The account or accounts maintained
for each Participant who made After-Tax Contributions to the Original Plan to
reflect his After-Tax Contributions and adjustments relating thereto.
2.5 Anniversary Date: January 1.
2.6 Beneficiary: Such natural person or persons, or the trustee of an
inter vivos trust for the benefit of natural persons, entitled to receive a
Participant's death benefits under the Plan, as provided in Section 6.3 hereof.
2.7 Code: The Internal Revenue Code of 1986, as amended from time to
time.
2.8 Company: Central Louisiana Electric Company, Inc., a Louisiana
corporation, or a successor to Central Louisiana Electric Company, Inc. in the
ownership of substantially all of its assets.
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<PAGE> 11
2.9 Company Stock: Stock of the Company which shall meet one of the
following requirements:
(a) Such stock may be common stock of the Company readily
tradable on an established securities market;
(b) If there is no such readily tradable common stock, then
the term "Company Stock" shall mean common stock issued by the Company
having a combination of voting power and dividend rights equal to or in
excess of (i) the class of common stock of the Company having the
greatest voting power and (ii) the class of common stock of the Company
having the greatest dividend rights;
(c) "Company Stock" may be noncallable preferred stock that is
convertible at any time into stock that meets the requirements of the
applicable of subparagraph (a) or (b) above and if such conversion is
at a conversion price which (as of the date of the acquisition of such
stock by the Plan) is reasonable. For purposes of this subparagraph,
preferred stock shall be treated as noncallable if, after the call,
there will be a reasonable opportunity for a conversion which meets the
requirements of this subparagraph.
2.10 Committee: The Employee Benefits Committee appointed by the Board
of Directors of the Company pursuant to Section 2.1.
2.11 Compensation: The total compensation actually paid to the
respective Participants by the Employer during the applicable payroll period,
including salaries, wages, commissions, overtime pay and any other payments of
compensation which would be subject to tax under Section 3401(a) of the Code,
determined without regard to any dollar limitations under Section 3121(a)(1) of
the Code. The Compensation of a Participant shall also include any amount which
is not currently includable in the Participant's gross income by reason of the
application of Sections 125, 402(a)(8), 402(h)(1)(B) or 403(b) of the Code. The
Compensation of the respective Participants as reflected by the books and
records of the Employer shall be conclusive. Notwithstanding anything herein to
the contrary, effective January 1, 1989, in no event shall the Compensation
taken into account under the Plan for any Participant during a given Plan Year
exceed $200,000 or such other dollar amount as may be prescribed by the
Secretary of the Treasury or his delegate under Section 401(a)(17) of the Code.
In addition to other applicable limitations set forth in the
Plan, and notwithstanding any other provision of the Plan to the contrary, for
Plan Years beginning on or after January 1, 1994, the Compensation of each
Employee taken into account under the Plan shall not exceed $150,000,
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<PAGE> 12
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 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 Plan Years beginning on or after January 1, 1994, any
reference in this Plan to the limitation under section 401(a)(17) of the Code
shall mean the Compensation limit set forth in this provision.
If Compensation for any prior determination period is taken
into account in determining an Employee's benefits accruing in the current Plan
Year, the Compensation for that prior determination period is subject to the
Compensation limit in effect for that prior determination period. For this
purpose, for determination periods beginning before the first day of the first
Plan Year beginning on or after January 1, 1994, the Compensation limit is
$150,000. For purposes of applying the $150,000 limit on Compensation, the
family unit of an Employee who either is a 5% owner or is both a highly
compensated employee and one of the ten most highly compensated employees will
be treated as a single Employee with one Compensation, and the $150,000 limit
will be allocated among the members of the family unit in proportion to the
total Compensation of each member of the family unit. For this purpose, a family
unit consists of the Employee who is a 5% owner or one of the ten most highly
compensated employees, the Employee's spouse, and the Employee's lineal
descendants who have not attained age 19 before the close of the year.
2.12 Contribution: Any amount contributed to the Trust Fund pursuant to
the provisions of this Plan by the Employer or by a Participant from his
Compensation, including ESOP Contributions, Employer Matching Contributions,
Pre-Tax Basic Contributions or Pre-Tax Excess Contributions.
2.13 Defined Benefit Plan: Any defined benefit plan (as defined in
Section 415(k) of the Code) maintained by the Company or by any Affiliate.
2.14 Effective Date: January 1, 1994.
2.15 Employee: Any person employed by an Employer and any person
employed by an Affiliate, including but not limited to (a) all directors and
officers of an Employer except any such person who is not regularly and
principally employed by such Employer and (b) any Leased Employee (as defined in
Section 414 of the Code, subject to Section 414(n)(5) and as defined in Section
1.32 of this Plan) performing services for an Employer except any such person
who is covered by a money purchase pension plan that is provided by the leasing
organization and requires a non-integrated
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<PAGE> 13
employer contribution rate of at least ten percent (10%) of compensation,
immediate participation and full and immediate vesting.
2.16 Employer: The Company, its successors and any eligible
organization that shall adopt this Plan pursuant to the provisions of Article X,
and the successors, if any, to such organization.
2.17 Employer Matching Contribution: Any amount, with the exception of
ESOP Contributions, contributed to the Trust Fund by the Employer pursuant to
Section 4.1.
2.18 Employer Matching Contribution Account: The account maintained for
each Participant to reflect the Employer Matching Contributions to the Plan or
to the Prior Plan for each Participant prior to the Effective Date, and any
adjustments thereto made pursuant to the provisions of the Plan.
2.19 Entry Date: The Effective Date and the first day of each calendar
quarter thereafter.
2.20 ERISA: Public Law No. 93-406, the Employee Retirement Income
Security Act of 1974, as amended from time to time.
2.21 ESOP Account: The account maintained for each Participant to
reflect the interest in the ESOP Fund allocated to each Participant.
2.22 ESOP Contributions: The Employer Contributions to the ESOP Trust
for the purpose of repayment of an Exempt Loan, as described in Section 4.1.
2.23 ESOP Fund: The investment fund held by the ESOP Trustee which
shall be primarily invested and reinvested in shares of Company Stock.
2.24 ESOP Trust: The Central Louisiana Electric Company 401(k) Savings
and Investment Plan ESOP Trust established effective April 2, 1991.
2.25 ESOP Trustee: State Street Bank and Trust Company, a Massachusetts
trust company.
2.26 Exempt Loan: Any loan or other extension of credit that is used to
finance the purchase of Company Stock by the Trustee and that meets the
requirements of Section 5.6.
2.27 Financed Stock: Company Stock acquired with the proceeds of an
Exempt Loan.
2.28 Fiduciaries: The Employer, the Committee, the ESOP Trustee, the
Savings Trustee and any other person designated as a Fiduciary with respect to
the Plan or the Trust Agreements, but
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<PAGE> 14
only with respect to the specific responsibilities of each as described in
Section 2.13 hereof. Any person or group of persons may serve in more than one
fiduciary capacity with respect to the Plan.
2.29 Hour of Service: An Employee shall be credited with an Hour of
Service as follows:
(a) An Hour of Service shall be credited to an Employee for
each hour for which an Employee is directly paid, or entitled to
payment, by the Employer or an Affiliate for the performance of duties
during the applicable computation period. Such hours shall be credited
to the Employee for the computation period or periods in which the
duties were performed.
(b) An Hour of Service shall be credited to an Employee for
each hour for which back pay, irrespective of mitigation of damages,
has been either awarded or agreed to by the Employer or an Affiliate.
These hours shall be credited to the Employee for the computation
period or periods to which the award or agreement pertains rather than
the computation period in which the award, agreement, or payment is
made. Hours of Service shall not be credited to an Employee under both
paragraphs (a) and (b) of this Section.
(c) In addition to Hours of Service credited in paragraphs (a)
and (b) of this Section, an Hour of Service shall be credited to an
Employee for each hour for which such Employee is directly or
indirectly paid, or entitled to such payment by the Employer or an
Affiliate for reasons (such as vacation, sickness or disability) other
than for the performance of duties during the applicable computation
period. For purposes of this paragraph (c), irrespective of whether
such hours have accrued in other computation periods, such hours shall
be counted in the computation period in which either payment is
actually made or amounts payable to the Employee come due. For purposes
of this paragraph (c), Hours of Service shall be determined by dividing
the payments received or due for reasons other than the performance of
duties by the lesser of (i) the Employee's most recent hourly rates of
compensation for the performance of duties or (ii) 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 five hundred (500) Hours of Service.
(d) The number of Hours of Service which are credited for
reasons other than the performance of duties for the Employer in
determining a Break In Service shall be determined in accordance with
Sections 2530.200b-2(b) and (c) of Title 29, Chapter XXV of the Code of
Federal Regulations.
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<PAGE> 15
Hours of Service will be credited for employment with other members of an
affiliated service group (under Section 414(m)), a controlled group of
corporations (under Section 414(b)) or a group of trades or businesses under
common control (under Section 414(c)), of which the adopting Employer is a
member. Notwithstanding anything in this Plan to the contrary, Hours of Service
shall not be credited for employment with the Employer or an Affiliate before it
becomes or after it ceases to be a member of an affiliated service group, a
controlled group of corporations or a group of trades or businesses under common
control or for any period when such Employer or Affiliate does not maintain this
Plan.
Solely for purposes of determining whether a Break In Service,
as defined in Section 3.7, for participation and vesting purposes has occurred
in a computation period for any Plan Year beginning after December 31, 1984, an
individual 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 individual 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 (i) by reason of the pregnancy of the individual, (ii)
by reason of the birth of a child of the individual, (iii) by reason of the
placement of a child with the individual in connection with the adoption of such
child by such individual or (iv) 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
Break In Service in that period or (2) in all other cases, in the following
computation period.
2.30 Investment Fund: One (1) of the five (5) Investment Funds held
under the Trust Fund, as described in Section 8.1.
2.31 Investment Manager: The Investment Manager, if any, appointed
under the Trust Agreements, as such term is defined by Section 3(38) of ERISA.
2.32 Leased Employee: Any individual (other than an Employee of the
recipient Employer) who, pursuant to an agreement between the Employer and any
other person (the "leasing organization"), has performed services for the
Employer (or for the Employer and "related persons" determined in accordance
with Code Section 414(n)(6)) on a substantially full-time basis for a period of
at least one year, which services are of a type historically performed in the
business field of the recipient Employer.
2.33 Original Plan: The Central Louisiana Electric Company 401(k)
Savings and Investment Plan as established effective January 1, 1985.
2.34 Participant: An eligible Employee who, pursuant to the provisions
of Article III hereof, has elected to participate in the Plan, and who at any
relevant time is either making, or has
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<PAGE> 16
made, Pre-Tax Basic Contributions and for whom contribution accounts continue to
be held under the Plan.
2.35 Plan: The Plan set forth herein, intended to constitute a
profit-sharing plan under Section 401(a)(27) of the Code and an employee stock
ownership plan under Section 4975(e)(7) of the Code, including all subsequent
amendments hereto.
2.36 Plan Year: Each fiscal year commencing January 1 and ending
December 31 of each calendar year.
2.37 Pre-Tax Contributions: Any amount deferred by a Participant from
his Compensation as "Pre-Tax Basic Contributions" and "Pre-Tax Excess
Contributions" pursuant to Section 4.2.
2.38 Pre-Tax Contribution Account: The account or accounts maintained
for each Participant to reflect his Pre-Tax Basic Contributions and Pre-Tax
Excess Contributions to the Plan, and any adjustments thereto made pursuant to
the provisions of the Plan.
2.39 Prior Plan: The Central Louisiana Electric Company, Inc. 401(k)
Savings and Investment Plan, as amended and restated effective April 2, 1991 and
as thereafter amended and in effect on the date immediately preceding the
Effective Date.
2.40 Retirement: Termination of employment on or after the Retirement
Date of a Participant.
2.41 Retirement Date: With respect to Employees employed prior to
January 1, 1988, the term "Retirement Date" shall mean the first day of the
calendar month coincident with or next following the sixty-fifth (65th) birthday
of a Participant; and, with respect to Employees hired on or after January 1,
1988, such term shall mean the later of (i) the Participant's attainment of age
sixty-five (65) or (ii) the Participant's completion of five (5) years of
Vesting Service.
2.42 Rollover Account: The account maintained for each Employee who has
made a contribution to the Trust Fund of amounts distributed to him from a plan
that is qualified under Sections 401(a) and 501(a) of the Code or an individual
retirement account in accordance with the provisions of Section 5.3.
2.43 Rollover Contribution: Any amount contributed by a Participant to
his Rollover Account.
2.44 Savings Trust: Central Louisiana Electric Company 401(k) Savings
and Investment Plan Trust as established effective January 1, 1985 and amended
and restated effective January 1, 1989, and thereafter amended.
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<PAGE> 17
2.45 Savings Trustee: Merrill Lynch Trust Company.
2.46 Service: Active employment as an Employee of an Employer except
that if active employment shall be interrupted by authorized absences of the
kinds described in Section 3.5, such interruption of active employment shall not
be considered as an interruption of Service.
2.47 Stock Suspense Account: The suspense account maintained by the
ESOP Trustee in accordance with Section 5.1, and to which will be credited all
shares of Financed Stock prior to the allocation of such shares to the ESOP
Accounts in accordance with Section 5.3.
2.48 Superseded Plan: The Central Louisiana Electric Company 401(k)
Savings and Investment Plan as amended and restated by the Company on January 1,
1989.
2.49 Trust Agreements: The Central Louisiana Electric Company 401(k)
Savings and Investment Plan Trust Agreement, as established effective January 1,
1985 and as amended and restated effective January 1, 1989, as either may be
amended from time to time, and thereafter amended (the "Savings Trust"), and the
Central Louisiana Electric Company, Inc. 401(k) Savings and Investment Plan ESOP
Trust Agreement (the "ESOP Trust") as established effective April 2, 1991.
2.50 Trust Funds: All contributions of Employers and Participants, and
the investments and reinvestments thereof, held by the Trustees under the Trust
Agreements, together with all income, profits or increments thereon.
2.51 Trustees: Collectively, the ESOP Trustee and the Savings Trustee.
2.52 Valuation Date: The last business day of each calendar quarter
during the Plan Year or any such date as may be designated by the Administrator
and any other date on which the value of the assets of the Trust Fund is
determined by the Trustees pursuant to Section 5.2. The last business day of
each calendar quarter shall be the "quarterly Valuation Date," and the last day
of December of each Plan Year shall be the "annual Valuation Date."
2.53 Vesting Computation Period: The twelve (12) consecutive month
period beginning January 1 and ending December 31.
2.54 Vesting Service: The period of a Participant's employment
considered in the determination of his eligibility for benefits under Section
3.6 of the Plan.
Words used in this Plan and in the Trust Agreements in the
singular shall include the plural and in the plural the singular, and the gender
of words used shall be construed to include whichever may be appropriate under
any particular circumstances of the masculine, feminine or neuter genders.
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<PAGE> 18
ARTICLE II
ADMINISTRATION OF THE PLAN
3 Appointment of Committee: The Company shall serve as Administrator of
the Plan, unless, in its sole discretion, the Board of Directors of the Company
shall appoint an Employee Benefits Committee (the "Committee" herein) of not
less than three (3) persons, who may be Employees of the Company, to perform the
administrative duties set forth herein. If so appointed, the Committee shall be
the administrator of the Plan for the purposes of ERISA. Each member of the
Committee shall serve for such term as the Board of Directors of the Company may
designate or until his death, resignation or removal by the Board. The Board of
Directors of the Company shall promptly appoint successors to fill any vacancies
in the Committee.
3.1 Records of Committee: The Committee shall keep appropriate records
of its proceedings and the administration of the Plan. In its sole discretion,
the Committee may appoint one or more recordkeepers to record information
relating to the administration of the Plan. The Committee shall make available
to Participants and their Beneficiaries for examination, during business hours,
such records of the Plan as pertain to the examining person and such documents
relating to the Plan as are required by any applicable disclosure acts.
3.2 Committee Action: The Committee may act through the concurrence of
a majority of its members expressed either at a meeting of the Committee, or in
writing without a meeting. Concurrence of a member of the Committee may be by
telegram or letter. Any member of the Committee, or the Secretary or Assistant
Secretary of the Committee (who need not be members of the Committee), may
execute on behalf of the Committee any certificate or other written instrument
evidencing or carrying out any action approved by the Committee. The Committee
may delegate any of its rights, powers and duties to any one or more of its
members. The Chairman of the Committee shall be agent of the Plan and the
Committee for the service of legal process at the principal office of the
Company in Pineville, Louisiana.
3.3 Committee Disqualification: A member of the Committee who may be a
Participant shall not vote on any question relating specifically to himself.
3.4 Committee Compensation and Expenses: The members of the Committee
shall serve without bond (unless otherwise required by law) and without
compensation for their services as such. The Committee may select and authorize
the Trustees to suitably compensate such attorneys, agents and representatives
as it may deem necessary or advisable to the performance of its duties. Expenses
of the Committee that shall arise in connection with the administration of the
Plan shall be paid by the Company, or if not paid by the Company, by the
Trustees out of the Trust Funds.
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<PAGE> 19
3.5 Committee Liability: Except to the extent that such liability is
created by ERISA, no member of the Committee shall be liable for any act or
omission of any other member of the Committee, nor for any act or omission on
his own part except for his gross negligence or willful misconduct, nor for the
exercise of any power or discretion in the performance of any duty assumed by
him hereunder. The Company shall indemnify and hold harmless each member of the
Committee from any and all claims, losses, damages, expenses (including counsel
fees approved by the Committee) and liabilities (including any amounts paid in
settlement with the Committee's approval, but excluding any excise tax assessed
against any member or members of the Committee pursuant to the provisions of
Section 4975 of the Code) arising from any act or omission of such member in
connection with duties and responsibilities under the Plan, except where the
same is judicially determined to be due to the gross negligence or willful
misconduct of such member.
3.6 Committee Determinations: The Committee, on behalf of the
Participants and their Beneficiaries, shall enforce this Plan in accordance with
its terms, and shall have all powers necessary for the accomplishment of that
purpose, including, but not by way of limitation, the following powers:
(a) To employ such agents and assistants, such counsel (who
may be of counsel to the Company) and such clerical, medical,
accounting and investment services as the Committee may require in
carrying out the provisions of the Plan.
(b) To authorize one or more of their number, or any agent, to
make payment, or to execute or deliver any instrument, on behalf of the
Committee, except that all requisitions for funds from, and requests,
directions, notifications, certifications and instructions to, the
Trustees or to the Company shall be signed either by a member of the
Committee or by the Secretary or Assistant Secretary of the Committee.
(c) To determine from the records of the Company the
considered Compensation, Service and other pertinent facts regarding
Employees and Participants for the purpose of the Plan.
(d) To construe and interpret the Plan, decide all questions
of eligibility and determine the amount, manner and time of payment of
any benefits hereunder.
(e) To prescribe forms and procedures to be followed by
Employees for participation in the Plan, by Participants or
Beneficiaries filing applications for benefits, by Participants
applying for withdrawals, and for other occurrences in the
administration of the Plan.
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(f) To prepare and distribute, in such manner as the Committee
determines to be appropriate, information explaining the Plan.
(g) To furnish the Company and the Participants, upon request,
such annual reports with respect to the administration of the Plan as
are reasonable and appropriate.
(h) To certify to the Trustees the amount and kind of benefits
payable to Participants and their Beneficiaries.
(i) To authorize all disbursements by the Trustees from the
Trust Fund by a written authorization signed either by a member of the
Committee or by the Secretary or Assistant Secretary of the Committee;
provided, however, that disbursements for ordinary expenses incurred in
the administration of the Trust Fund need not be authorized by the
Committee.
(j) To interpret and construe all terms, provisions,
conditions and limitations of this Plan and to reconcile any
inconsistency or supply any omitted detail that may appear in this Plan
in such manner and to such extent, consistent with the general terms of
this Plan, as the Committee shall deem necessary and proper to
effectuate the Plan for the greatest benefit of all parties interested
in the Plan.
(k) To make and enforce such rules and regulations for the
administration of the Plan as are not inconsistent with the terms set
forth herein.
(l) In addition to all other powers herein granted, and in
general consistent with provisions hereof, the Committee shall have all
other rights and powers reasonably necessary to supervise and control
the administration of this Plan including the right to administer the
Plan in a manner reasonably calculated to comply with any changes in or
modifications to all relevant law as may be made from time to time.
3.7 Information from Employer: To enable the Committee to perform its
functions, the Employer shall supply full and timely information to the
Committee of all matters relating to the dates of employment of its Employees
for purposes of determining eligibility of Employees to participate hereunder,
the Compensation of all Participants, their Retirement, death or other cause for
termination of employment, and such other pertinent facts as the Committee may
require; and the Committee shall advise the Trustees of such of the foregoing
facts as may be pertinent to the Trustees' administration of the Trust Fund.
3.8 Uniform Administration: Whenever in the administration of the Plan,
any action is required by the Employer or the Committee, including, but not by
way of limitation, action with
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<PAGE> 21
respect to eligibility of Employees, Contributions and benefits, such action
shall be uniform in nature as applied to all persons similarly situated, and no
action shall be taken which will discriminate in favor of Participants who are
officers or shareholders of the Employer, highly compensated Employees or
persons whose principal duties consist of supervising the work of others.
3.9 Reporting Responsibilities: As Administrator of the Plan under
ERISA, the Committee shall file with the appropriate office of the Internal
Revenue Service or the Department of Labor all reports, returns and notices
required under ERISA, including, but not limited to, the summary Plan
description, annual reports and amendments thereof to be filed with the
Department of Labor, and requests for determination letters, annual reports and
registration statements required by Section 6057(a) of the Code.
3.10 Disclosure Responsibilities: The Committee shall make available to
each Participant and Beneficiary such records, documents and other data as may
be required under ERISA, and Participants or Beneficiaries shall have the right
to examine such records at reasonable times during business hours. Nothing
contained in this Plan shall give any Participant or Beneficiary the right to
examine any data or records reflecting the Compensation paid to, or relating to
any Account of, any other Participant or Beneficiary, except as may be required
under ERISA.
3.11 Annual Statements: As soon as practicable after each annual
(December 31) Valuation Date or such other date as may be designated by the
Administrator, the Committee shall prepare and deliver to each Participant a
written statement reflecting as of that Valuation Date:
(a) Such information applicable to contributions by and for
each such Participant and the increase or decrease thereof as a
consequence of valuation adjustments as may be pertinent in the
premises.
(b) The balance in his Account as of that annual Valuation
Date.
3.12 Allocation of Responsibility Among Fiduciaries for Plan and Trust
Administration: The Fiduciaries shall have only those specific powers, duties,
responsibilities and obligations as are specifically given them under this Plan
or the Trust Agreements. In general, the Employer shall have the sole
responsibility for making the Contributions provided for under Sections 4.1, 4.2
and 4.3. The Company shall have the sole authority to appoint and remove the
Trustees and members of the Committee. The Company may amend or terminate, in
whole or in part, this Plan or the Trust Agreements. The Committee shall have
the sole responsibility for the administration of the Plan and the sole
authority to appoint and remove any Investment Manager which may be provided for
under the Savings Trust. The Trustees shall have the sole responsibility for the
administration of the Trust Fund and shall have exclusive authority and
discretion to manage and control the assets held under the Trust Fund except to
the extent that the authority to manage, acquire and dispose of the assets of
the Trust Fund is delegated to an Investment Manager or, in the case of assets
maintained in the
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ESOP fund, is exercised by the Committee or a Participant, all as specifically
provided in the Trust Agreements. Each Fiduciary warrants that any directions
given, information furnished or action taken by it shall be in accordance with
the provisions of the Plan or the Trust Agreements, as the case may be,
authorizing or providing for such direction, information or action. Furthermore,
each Fiduciary may rely upon any such direction, information or action of
another Fiduciary as being proper under this Plan or the Trust Agreements, and
is not required under this Plan or the Trust Agreements to inquire into the
propriety of any such direction, information or action. It is intended under
this Plan and the Trust Agreements that each Fiduciary shall be responsible for
the proper exercise of its own powers, duties, responsibilities and obligations
under this Plan and the Trust Agreements and shall not be responsible for any
act or failure to act of another Fiduciary. No Fiduciary guarantees the Trust
Fund in any manner against investment loss or depreciation in asset value.
3.13 Annual Audit: The Committee shall engage, on behalf of all
Participants, an independent Certified Public Accountant who shall conduct an
annual examination of any financial statements of the Plan and Trust Fund and of
other books and records of the Plan and Trust Fund as the Certified Public
Accountant may deem necessary to enable him to form and provide a written
opinion as to whether the financial statements and related schedules required to
be filed with the Department of Labor or furnished to each Participant are
presented fairly and in conformity with generally accepted accounting principles
applied on a basis consistent with that of the preceding Plan Year. If, however,
the statements required to be submitted as part of the reports to the Department
of Labor are prepared by a bank or similar institution or insurance carrier
regulated and supervised and subject to periodic examination by a state or
federal agency and if such statements are, in fact, made a part of the annual
report to the Department of Labor and no such audit is required by ERISA, then
the audit required by the foregoing provisions of this Section shall be optional
with the Committee.
3.14 Presenting Claims for Benefits: Any Participant or any other
person claiming under any deceased Participant may submit written application to
the Committee for the payment of any benefit asserted to be due him under the
Plan. Such application shall set forth the nature of the claim and such other
information as the Committee may reasonably request. Promptly upon the receipt
of any application required by this Section, the Committee shall determine
whether or not the Participant or Beneficiary involved is entitled to a benefit
hereunder and, if so, the amount thereof and shall notify the applicant of its
findings.
If a claim is wholly or partially denied, the Committee shall
so notify the applicant within ninety (90) days after receipt of the application
by the Committee, unless special circumstances require an extension of time for
processing the application. If such an extension of time for processing is
required, written notice of the extension shall be furnished to the applicant
prior to the end of the initial ninety-day period. In no event shall such
extension exceed a period of ninety (90) days from the end of such initial
period. The extension notice shall indicate the special circumstances requiring
an extension of time and the date by which the Committee expects to render its
final
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decision. Notice of the Committee's decision to deny a claim in whole or in part
shall be set forth in a manner calculated to be understood by the applicant and
shall contain the following:
(i) the specific reason or reasons for the denial,
(ii) specific reference to the pertinent Plan provisions on
which the denial is based,
(iii) a description of any additional material or information
necessary for the applicant to perfect the claim and an explanation of
why such material or information is necessary, and
(iv) an explanation of the claims review procedures set forth
in Section 2.16 hereof.
If notice of denial is not furnished, and if the claim is not granted within the
period of time set forth above, the claim shall be deemed denied for purposes of
proceeding to the review stage described in Section 2.16.
3.15 Claims Review Procedure: If an application filed by a Participant
or Beneficiary under Section 2.15 above shall result in a denial by the
Committee of the benefit applied for, either in whole or in part, such applicant
shall have the right, to be exercised by written request filed with the
Committee within sixty (60) days after receipt of notice of the denial of his
application or, if no such notice has been given, within sixty (60) days after
the application is deemed denied under Section 2.15, for the review of his
application and of his entitlement to the benefit for which he applied. Such
request for review may contain such additional information and comments as the
applicant may wish to present. Within sixty (60) days after receipt of any such
request for review, the Committee shall reconsider the application in light of
such additional information and comments as the applicant may have presented,
and if the applicant shall have so requested, shall afford the applicant a
hearing before the Committee. The Committee shall also permit the applicant or
his designated representative to review pertinent documents in its possession,
including copies of the Plan document and information provided by the Employer
relating to the applicant's entitlement to such benefit. The Committee shall
make a final determination with respect to the applicant's application for
review as soon as practicable, and in any event not later than sixty (60) days
after receipt of the aforesaid request for review, except that under special
circumstances, such as the necessity for holding a hearing, such sixty-day
period may be extended to the extent necessary, but in no event beyond the
expiration of one hundred twenty (120) days after receipt by the Committee of
such request. If such an extension of time for review is required because of
special circumstances, written notice of the extension shall be furnished to the
applicant prior to the commencement of the extension. Notice of such final
determination of the Committee shall be furnished to the applicant in writing,
in a manner calculated to be understood by him, and shall set forth the specific
reasons for
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<PAGE> 24
the decision and specific references to the pertinent provisions of the Plan
upon which the decision is based. If the decision on review is not furnished
within the time period set forth above, the claim shall be deemed denied on
review.
3.16 Disputed Benefits: If any dispute shall arise between a
Participant or other person claiming under a Participant and the Committee after
review of a claim for benefits, or in the event any dispute shall develop as to
the person to whom the payment of any benefit under the Plan shall be made, the
Trustee may withhold the payment of all or any part of the benefits payable
hereunder to the Participant or other person claiming under the Participant
until such dispute has been resolved by a court of competent jurisdiction or
settled by the parties involved.
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ARTICLE III
PARTICIPATION IN THE PLAN
4 Eligibility of Employees: An Employee eligible under the Prior Plan
immediately preceding the Effective Date shall continue to be eligible to
participate in this Plan in accordance with the provisions of this Plan. An
Employee who is not ineligible on the first day of the Plan Year in which the
Plan is adopted by an Employer either as a new plan or as an amendment of an
existing plan for which he was eligible shall become a Participant on that day.
Each of (i) an Employee who is included in a unit of employees covered by a
collective bargaining agreement, in the negotiation of which retirement benefit
payments to be made thereunder for such Employee were specifically addressed;
(ii) an Employee who is a non-resident alien and who receives no earned income
from the Employer which constitutes income from sources within the United
States; and (iii) any Employee who is a Leased Employee (as defined in Section
414(n)) shall be ineligible to participate in this Plan. Each Employee who is
not ineligible shall be eligible to participate in the Plan as of the Entry Date
next following his completion of one year of Service and attainment of age
eighteen (18).
Notwithstanding any provision in this Plan to the contrary, an
Employee who makes a contribution to a Rollover Account as provided in Section
5.3 of this Plan shall become a Participant as of the date of such contribution
even if he or she had not previously become a Participant. Such an Employee
shall be a Participant only for the purposes of such Rollover Contribution and
shall not be eligible to make other contributions or to share in contributions
made by an Employer until he or she has fulfilled all remaining requirements for
eligibility.
4.1 Employee Information: The Committee shall maintain records which
shall reflect as to each Employee his date of birth, all dates reflecting when
he entered into or left the employment of any Employer, and his years of Vesting
Service. The Employer shall make available to the Committee all such information
as may be required by the Committee for the purposes of maintaining such
information as to each Employee.
4.2 Notification of Eligible Employees: The Committee shall notify each
Employee included for the first time in any list of eligible Employees that he
is eligible to participate in the Plan.
4.3 Application by Participants: Each Employee who shall become
eligible to participate in the Plan and who shall desire to become a Participant
shall execute and file with the Committee an application in such form as may be
prescribed by the Committee, in which the Participant shall elect to make
Pre-Tax Contributions which total no more than sixteen percent (16%) of his
Compensation, and shall designate the amount, if any, of his Pre-Tax Basic
Contribution and Pre-Tax Excess Contribution, as contemplated under Section 4.2
hereof, and his choice of investment options under Section 8.1 hereof.
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4.4 Authorized Absences: Authorized Absences shall have the following
meaning and consequences:
(a) The following shall be "Authorized Absences":
(1) Absence without pay of an Employee due to
membership in the Armed Forces of the United States (but if
such absence is not pursuant to orders issued by the Armed
Forces of the United States, only if with the consent of the
Employer).
(2) Absence due to an authorized leave of absence
without pay granted by the Employer in a nondiscriminatory
manner in order that all Employees under similar circumstances
shall be treated alike.
(3) An absence otherwise recognized as an "Authorized
Absence" shall not be so recognized (i) under (1) above unless
such Employee shall apply for reinstatement in the employment
of Employer within ninety (90) days after discharge or release
to inactive duty, as the case may be, or (ii) under (2) above
unless within ten (10) days after the expiration date thereof
such Employee shall apply for reinstatement in the employment
of the Employer.
(b) The years of Vesting Service of an Employee immediately
after his re-employment following an Authorized Absence shall be
determined as if he had been a Participant in the Plan (but only to the
extent such Employee may have otherwise been eligible to participate in
the Plan, and, if eligible, was a Participant making Contributions to
the Plan immediately prior to the inception of his Authorized Absence)
during his Authorized Absence. If, however, an Employee, following his
re-employment after an Authorized Absence, thereafter terminates his
employment (other than as a consequence of Retirement, death,
disability or subsequent Authorized Absence) before completion of one
(1) year of Service, or fails to apply for re-employment as specified
under (a)(3), the commencement date of his Authorized Absence will be
treated as having marked the termination of the employment of such
Employee for all purposes of the Plan (including specifically but
without limitation his years of Vesting Service); provided that for
valuation purposes only, the distributions from the Plan to which such
an Employee may then be entitled shall be determined by reference to
the value of his Pre-Tax Contribution Account, his After-Tax
Contribution Account, his Employer Matching Contribution Account and
his ESOP Account as of the last immediately preceding Valuation Date.
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(c) Solely for the purpose of determining the eligibility of
an Employee to participate in the Plan immediately following the
resumption of his employment after expiration of his Authorized
Absence, the employment status of such Employee prior to his Authorized
Absence shall be considered as continuing throughout his Authorized
Absence.
4.5 Vesting Service: A Participant shall be credited with one (1) and
only one (1) year of Vesting Service for each Vesting Computation Period in
which such Participant completes at least one thousand (1,000) Hours of Service
for an Employer or an Affiliate. A Participant will not be credited with a year
of Vesting Service with respect to a Vesting Computation Period if the
Participant completes less than one thousand (1,000) Hours of Service for the
Employer or an Affiliate during such Vesting Computation Period.
4.6 Break In Service: A Vesting Computation Period during which a
Participant completes five hundred (500) Hours of Service or less for an
Employer or an Affiliate shall constitute a Break In Service. Upon incurring a
Break In Service, an Employee's or former Employee's rights and benefits under
this Plan shall be determined as provided in Section 3.8.
In the case of a Participant who incurs a Break In Service and
is not again employed by the Employer, such Participant's Vesting Service shall
consist of such Service which is properly credited to the Participant prior to
the Vesting Computation Period in which such Break In Service occurred.
4.7 Participation and Vesting upon Re-Employment: Participation in the
Plan shall cease at the close of the Plan Year during which termination of
Service occurs. Termination of Service may result from Retirement, death or
voluntary or involuntary termination of employment with the Employer and its
Affiliates, if any, unauthorized absence, or by failure to return to active
employment with the Employer by the date on which an Authorized Absence expired.
Upon the re-employment of any person before he has a Break In Service, he shall
participate in the Plan as of the date of his re-employment or, if later, as of
the Entry Date next following the date he meets the requirements of Section 3.1,
and he may be entitled to a new Employer Matching Contribution Account and ESOP
Account if he had received no distribution by reason of his prior termination of
Service. Upon the re-employment after a Break In Service of any person who had
previously been employed by the Employer, the following rules shall apply in
determining his Participation in the Plan and his Vesting Service under Sections
3.1 and 3.6:
(a) Participation: If the re-employed Employee was not a
Participant in the Plan during his prior period of Service, he shall
commence participation in the Plan when he meets the requirements of
Section 3.1. If the re-employed Employee was a Participant in the Plan
during his prior period of Service, he shall recommence participation
in the Plan on the date of his re-employment and he shall be entitled
to
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the allocations to his Employer Matching Contribution Account and ESOP
Account as provided in Section 5.3.
(b) Vesting: In the case of a Participant whose prior Service
terminated with entitlement to a distribution from his Employer
Matching Contribution Account or his ESOP Account under any provision
of Article VI, any Vesting Service attributable to his prior period of
employment shall be reinstated as of the date of his re-employment and
his Employer Matching Contribution Account and his ESOP Account shall
be restored, less any distributions therefrom to the Participant. In
the case of a Participant whose prior employment terminated without
entitlement to a distribution from his Employer Matching Contribution
Account or ESOP Account under Article VI, any Vesting Service
attributable to his prior period of employment shall be reinstated as
of the date of his recommencement of participation, and his Employer
Matching Contribution Account and ESOP Account shall be restored.
4.8 Transfers:
(a) For the purposes of determining eligibility to participate
in the Plan and Service under this Article III, a Participant shall
receive Vesting Service and Hours of Service for employment with an
Affiliate after it became an Affiliate, provided that all such
employment is determined in accordance with the re-employment
provisions of Section 3.8.
If an individual is transferred to eligible employment covered
by this Plan from employment with an Employer or Affiliate not covered
by the Plan, he shall be eligible to participate in this Plan as of the
date of his transfer, provided he would otherwise meet the requirements
of Section 3.1, or else on the following Entry Date. In addition, if
such transferred Participant had an account in a qualified defined
contribution plan maintained by such Affiliate, such account shall be
transferred to the Trust Fund under this Plan if the transfer is
permitted by the terms of said plan and if the Committee determines
that the transferred account will not fail to satisfy Section 401(a) or
411(d)(6) of the Code. Any transferred account shall be subject to the
provisions of this Plan; provided, however, that the vesting provisions
of the transferor plan shall continue to apply.
(b) If a Participant is transferred to employment with an
Employer or Affiliate which is not eligible employment covered by the
Plan, his participation in the Plan shall be suspended, provided,
however, that during the period of his employment in such ineligible
position:
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(i) Subject to the re-employment provisions of
Section 3.8, Service for vesting purposes shall continue to
accrue,
(ii) He shall cease to have any right to make
Contributions pursuant to Sections 4.2 and 4.3,
(iii) His Employer Matching Contribution Account and
ESOP Account shall receive no Employer Matching Contribution
or ESOP Contribution allocations under Section 4.1,
(iv) He shall continue to participate in income
allocations of the earnings and/or losses of the Trust Fund
pursuant to Section 5.3,
(v) No distribution event shall be deemed to have
occurred under Section 6.1, and
(vi) The loan privileges under Article VII and the
provisions of Article VIII shall continue to apply.
In addition, the Plan Administrator may, at its discretion,
authorize the transfer of his Accounts under this Plan to the Trust
Fund funding the qualified defined contribution plan, if any, of the
Affiliate to which the Participant was transferred. In such event, the
provisions of the transferee plan shall govern.
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ARTICLE IV
CONTRIBUTIONS TO THE PLAN
5 Employer Contributions: For each Plan Year during which an Exempt Loan
is outstanding, the Employer shall make an ESOP Contribution to the ESOP Trust
in such amount and at such times as shall be determined by the Company.
The Employer shall also make an Employer Matching Contribution
(subject to adjustments for forfeitures and limitations on annual additions as
elsewhere specified in the Plan) in the amount, if any, necessary to result in a
total allocation under Article V to each Participant's Employer Matching and
ESOP Accounts of not less than sixty-six and two-thirds percent (66-2/3%) of the
total of his Pre-Tax Basic Contribution for the Plan Year. Further, the Employer
shall make an additional ESOP Contribution and/or Employer Matching
Contribution, if necessary, to make the allocation required under Section
5.3(e)(ii) with respect to dividends used to repay an Exempt Loan.
To the extent specified in Section 5.3(e)(iii), any amounts
attributable to forfeitures will be applied to reduce, to the extent of such
forfeitures, the Employer Matching Contributions required to be made next
following the determination of any such forfeiture amounts.
In the event that a forfeiture arising under Section 6.1 is
reinstated under Section 6.7 because of the return to employment of the
terminated Participant, or in the event that a forfeiture arising under Section
6.10 is reinstated in accordance with the provisions of Section 6.10 because of
an appropriate claim of forfeited unclaimed benefit by the Participant,
Beneficiary or other distributee, the Employer shall contribute, within a
reasonable time following such re-employment or claim, an amount equal to the
forfeiture to be reinstated.
5.1 Pre-Tax Contributions: Each Participant who has elected to defer a
portion of his salary as a Pre-Tax Basic Contribution to the Plan pursuant to
Section 3.4 shall defer as his Pre-Tax Basic Contribution to the Trust Fund one
percent (1%), two percent (2%), three percent (3%), four percent (4%), five
percent (5%) or six percent (6%), as he may designate, of his Compensation. In
addition, the Participant may elect to defer any whole percent, up to a maximum
of ten percent (10%) of his Compensation, as a Pre-Tax Excess Contribution. Each
Participant's Pre-Tax Basic Contribution and Pre-Tax Excess Contribution, if
any, shall be contributed to the Trust Fund by the Employer as soon as
practicable. A Participant's Pre-Tax Contributions shall not exceed a maximum
contribution of $9,240 (as adjusted by the Secretary of the Treasury) for each
calendar year. In the event a Participant's Pre-Tax Contributions exceed the
applicable limit described in the preceding sentence, or in the event the
Participant submits a written claim to the Committee, at the time and in the
manner prescribed by the Committee, specifying an amount of Pre-Tax
Contributions that will exceed the applicable limit of Section 402(g) of the
Code when added to the amounts deferred by the
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Participant in other plans or arrangements, such excess (the "Excess
Deferrals"), plus any income and minus any loss allocable to such amount, shall
be returned to the Participant by the April 15 of the following year. Each
Participant's Pre-Tax Contribution Account shall be fully vested and
nonforfeitable at all times.
Each Participant shall give the Committee written notification
at least fifteen (15) days prior to enrollment (or on the date of enrollment if
participation commences immediately upon re-employment) of the amount he elects
to defer as a Pre-Tax Basic Contribution and as a Pre-Tax Excess Contribution
until the Committee may authorize the discontinuance of the Pre-Tax
Contributions according to uniform, nondiscriminatory policies which may be
developed by the Committee. Each such election shall continue in effect during
subsequent Plan Years unless the Participant shall notify the Committee in
writing of his election to change or discontinue his Pre-Tax Basic Contribution
or his Pre-Tax Excess Contribution.
A Participant may change the amount of his Pre-Tax Basic
Contribution and/or Pre-Tax Excess Contribution at any time during the Plan Year
by directing the Committee in writing at least fifteen (15) days prior to such
date to change the rate of the Contribution(s). A Participant may discontinue
his Pre-Tax Basic Contribution and/or Pre-Tax Excess Contribution at any time
during the Plan Year by directing the Committee in writing at least fifteen (15)
days in advance of such date to discontinue the deferral of his Compensation.
5.2 Actual Deferral Percentage: The Actual Deferral Percentage for a
specified group of Employees for a Plan Year shall be the average of the ratios
(calculated separately for each Employee in such group) of:
(a) The amount of Pre-Tax Contributions actually paid to the
Plan on behalf of each such Employee for such Plan Year, over
(b) The Employee's Compensation (as defined in Section
5.5(d)(6)) for such Plan Year. Notwithstanding any provision in this
Plan to the contrary, an Employer may, to the extent permitted by the
Code and applicable regulations, elect to include as Compensation
pre-tax or after-tax contributions made under this Plan or any other
plan of the Employer.
An eligible Employee for the purpose of computing the Actual
Deferral Percentage is defined in Treasury Regulation Section 1.401(k)-1(g)(4).
The Actual Deferral Percentage of an eligible Employee who makes no Pre-Tax
Contributions is zero.
The individual ratios and Actual Deferral Percentages shall be
calculated to the nearest one-hundredth (1/100) of one percent (1%) of an
Employee's Compensation.
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5.3 Actual Deferral Percentage Limits: The Actual Deferral Percentage
for the eligible Highly Compensated Employees for any Plan Year shall not exceed
the greater of (a) or (b), as follows:
(a) The Actual Deferral Percentage of Compensation for the
eligible non-Highly Compensated Employees times 1.25, or
(b) The lesser of (i) the Actual Deferral Percentage of
Compensation for the eligible non-Highly Compensated Employees times
2.0 or (ii) the Actual Deferral Percentage of Compensation for the
eligible non-Highly Compensated Employees plus 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.
"Highly Compensated Employee" shall mean any Employee and any
employee of an Affiliate who is a highly compensated employee under
Section 414(q) of the Code, including any Employee and any employee of
an Affiliate who, during the current Plan Year or prior Plan Year,
(i) was at any time a five percent (5%) owner; or
(ii) received Compensation (as defined in Section
5.5(d)(6)) in excess of $75,000 (or such other amount as
determined by the Secretary of the Treasury which reflects
cost-of-living increases in accordance with the provisions of
Code Section 414(q)(1)); or
(iii) received Compensation (as defined in Section
5.5(d)(6)) in excess of $50,000 (or such other amount as
determined by the Secretary of the Treasury which reflects
cost-of-living increases in accordance with the provisions of
Code Section 414(q)(1)) and was in the "top-paid group" (the
top twenty percent (20%) of payroll, excluding Employees
described in Code Section 414(q)(8) and applicable
regulations) for the Plan Year; or
(iv) was an officer receiving Compensation (as
defined in Section 5.5(d)(6)) exceeding fifty percent (50%) of
the dollar limit in Section 415(b)(1)(A) of the Code. The
number of officers shall be limited to 50 employees (or, if
lesser, the greater of three (3) employees or 10% of the
employees).
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If for any year no officer of the Employer is described in
subparagraph (iv) above, the highest paid officer of the Employer for
such year shall be treated as described in such paragraph.
In determining an Employee's status as a Highly Compensated
Employee within the meaning of Section 414(q), the entities set forth
in Treasury Regulation Section 1.414(q)-1T Q&A-6(a)(1) through (4) must
be taken into account as a single employer.
For purposes of determining whether an individual is a Highly
Compensated Employee for the current Plan Year, an Employee who meets
the definition of Highly Compensated Employee set forth in this Section
by virtue of subparagraph (ii), (iii) or (iv) for the current Plan Year
(but not for the prior Plan Year) shall not be treated as a Highly
Compensated Employee unless such individual is a member of the group
consisting of the one hundred (100) individuals who were paid the
greatest Compensation (as defined in Section 5.5(d)(6)) during the
current Plan Year.
In determining the Actual Deferral Percentage of an Employee
who is a five percent (5%) owner or one of the ten (10) most Highly
Compensated Employees and who has a Family Member who is an Employee,
any remuneration paid to the Family Member for services rendered to an
Employer or an Affiliate and any contributions made on behalf of or by
such Family Member shall be attributed to such Highly Compensated
Employee. Family Members, with respect to Highly Compensated Employees,
shall be disregarded as separate Employees in determining the Actual
Deferral Percentage both for Employees who are non-Highly Compensated
Employees and for Employees who are Highly Compensated Employees.
"Family Member" means the spouse and the lineal ascendants and
descendants (and spouses of such ascendants and descendants) of any
Employee or former Employee.
The Actual Deferral Percentage for any Highly Compensated
Employee who is eligible to have deferred contributions allocated to
his account under one or more plans described in Section 401(k) of the
Code that are maintained by an Employer or an Affiliate in addition to
this Plan shall be determined as if all such contributions were made to
this Plan. For purposes of determining whether the Actual Deferral
Percentage limits of this Section are satisfied, all Pre-Tax
Contributions that are made under two or more plans that are aggregated
for purposes of Code Section 401(a)(4) or 410(b) (other than Code
Section 410(b)(2)(A)(ii)) are to be treated as made under a single
plan, and if two or more plans are permissively aggregated for purposes
of Code Section 401(k), the aggregated plans must also satisfy Code
Sections 401(a)(4) and 410(b) as though they were a single plan.
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5.4 Reduction of Pre-Tax Contribution Rates by Leveling Method: If, on
the basis of the Pre-Tax Contribution rates elected by Participants for any Plan
Year, the Committee determines, in its sole discretion, that neither of the
tests contained in (a) or (b) of Section 4.4 will be satisfied, the Committee
may reduce the Pre-Tax Contribution rate of any Participant who is among the
eligible Highly Compensated Employees to the extent necessary to reduce the
overall Actual Deferral Percentage for eligible Highly Compensated Employees to
a level which will satisfy either (a) or (b) of Section 4.4. The reductions in
Pre-Tax Contribution rates shall be made in a manner so that the Actual Deferral
Percentage of the affected Participants who elected the highest Actual Deferral
Percentage shall be first lowered to the level of the affected Participants who
elected the next to the highest Actual Deferral Percentage. If further overall
reductions are required to achieve compliance with (a) or (b) of Section 4.4,
both of the above-described groups of Participants will be lowered to the level
of Participants with the next highest Actual Deferral Percentage, and so on,
until sufficient total reductions in Pre-Tax Contribution rates have occurred to
achieve compliance with (a) or (b) of Section 4.4.
5.5 Increase in Pre-Tax Contribution Rates: If a Participant's Pre-Tax
Contribution is reduced below the level necessary to satisfy either (a) or (b)
of Section 4.5 for the Plan Year, such Participant may be eligible to increase
his Pre-Tax Contribution rate for the remainder of the Plan Year to a level not
in excess of that level which will satisfy the greater of (a) or (b) of Section
4.4. Such an increase in the Pre-Tax Contribution rate shall be made by
Participants on a uniform and nondiscriminatory basis, pursuant to such rules
and procedures as the Committee may prescribe.
5.6 Excess Pre-Tax Contributions: As soon as possible following the end
of the Plan Year, the Committee shall determine whether either of the tests
contained in Section 4.4 were satisfied as of the end of the Plan Year, and any
excess Pre-Tax Contributions, plus any income and minus any loss attributable
thereto, of those Participants who are among the Highly Compensated Employees
shall be distributed to such Participants and shall be considered as taxable
income to such Participants. In the event of excess Pre-Tax Contributions
attributable to a Highly Compensated Employee whose actual deferral ratio is
determined under the rules of family aggregation, the actual deferral ratio
shall be reduced using the leveling method set forth below, and the excess
Pre-Tax Contributions to be distributed thereby shall be allocated among the
Family Members in proportion to the Pre-Tax Contribution of each Family Member
that is combined to determine the actual deferral ratio. The amount of any
Pre-Tax Contributions to be distributed to a Participant shall be reduced by
Excess Deferrals previously distributed to him pursuant to Section 4.2 for the
taxable year ending in the same Plan Year. Such income shall include the
allocable gain or loss for (i) the Plan Year and (ii) the period between the end
of the Plan Year and the date of distribution.
An eligible Employee for the purpose of computing the Actual
Deferral Percentage is defined in Treasury Regulation Section 1.401(k)-1(g)(4).
The Actual Deferral Percentage of an eligible Employee who makes no Pre-Tax
Contributions is zero.
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The amount of any excess Pre-Tax Contributions to be
distributed to a Participant shall be reduced by Excess Deferrals previously
distributed to him pursuant to Section 4.2 for the taxable year ending in the
same Plan Year. All excess Pre-Tax Contributions shall be returned to the
Participants no later than the last day of the following Plan Year. The excess
Pre-Tax Contributions, if any, of each Participant who is among the Highly
Compensated Employees shall be determined by computing the maximum Actual
Deferral Percentage which each such Participant may defer under (a) or (b) of
Section 4.4 and then reducing the Actual Deferral Percentage of some or all of
such Participants who elected an Actual Deferral Percentage in excess of such
maximum by an amount of sufficient size to reduce the overall Actual Deferral
Percentage for eligible Participants who are among the Highly Compensated
Employees to a level which satisfies either (a) or (b) of Section 4.4. The
excess Pre-Tax Contributions, if any, of each Participant shall be determined in
such a manner that the Actual Deferral Percentage of such Participants who
elected the highest Actual Deferral Percentage shall be first lowered to the
level of such Participants who elected the next to the highest Actual Deferral
Percentage. If further overall reductions are required to achieve compliance
with (a) or (b) of Section 4.4, both of the above-described groups of
Participants will be lowered to the level of Participants with the next highest
Actual Deferral Percentages, and so on, until sufficient total reductions have
occurred to achieve compliance with (a) or (b) of Section 4.4.
The income or loss attributable to the Participant's excess
Pre-Tax Contributions for the Plan Year shall be determined by multiplying the
income or loss attributable to the Participant's Pre-Tax Contribution Account
balance for the Plan Year by a fraction, the numerator of which is the excess
Pre-Tax Contribution and the denominator of which is the Participant's total
Pre-Tax Contribution Account balance. Unless the Committee elects otherwise, the
income or loss attributable to the Participant's excess Pre-Tax Contributions
for the period between the end of the Plan Year and the date of distribution
shall be determined using the safe harbor method set forth in Treasury
Regulations to Section 401(k) of the Code, and shall be equal to ten percent
(10%) of the allocable income or loss for the Plan Year, calculated as set forth
immediately above, multiplied by the number of calendar months that have elapsed
since the end of such Plan Year. A calendar month shall be deemed to have
elapsed and shall be counted as a full month for this purpose if the
distribution of excess Pre-Tax Contributions is made after the fifteenth (15th)
day of that month; otherwise, such distribution shall be treated as having been
made on the last day of the preceding month. Excess Pre-Tax Contributions shall
be treated as Annual Additions under Section 5.5 of the Plan.
5.7 Aggregation of Family Members in Determining the Actual Deferral
Ratio:
(a) Calculation of Actual Deferral Ratios: If an eligible
Highly Compensated Employee is subject to the family aggregation rules
of Section 414(q)(6) of the Code because such Employee is either a five
percent (5%) owner or one of the ten (10) most Highly Compensated
Employees, the combined actual deferral ratio of this family group
(which is treated as one Highly Compensated
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Employee) shall be determined by combining the Pre-Tax Contributions
and the Compensation for all the eligible Family Members.
Pre-Tax Contributions and Compensation of all Family Members
are disregarded for purposes of determining the actual deferral
percentage for the group of non-Highly Compensated Employees, except to
the extent taken into account in paragraph (a) above.
(b) Aggregation of Family Groups: If an Employee is required
to be aggregated as a Family Member of more than one family group, all
eligible Employees who are Family Members of those groups that include
the Employee are aggregated as one family group in accordance with
paragraph (a) above.
(c) Excess Pre-Tax Contributions of Family Members: In the
event that it becomes necessary to determine and correct the excess
Pre-Tax Contributions of a Highly Compensated Employee whose actual
deferral ratio is determined under the rules of Section 414(q)(6) of
the Code and this Section 4.8, the actual deferral ratio calculated in
paragraph (a) above shall be reduced using the leveling method set
forth in Section 4.5, and the excess Pre-Tax Contributions to be
distributed thereby shall be allocated among the Family Members in
proportion to the Pre-Tax Contribution of each Family Member that is
combined to determine the actual deferral ratio.
5.8 Contribution Percentage and ESOP Percentage:
(a) Contribution Percentage. The Contribution Percentage for a
specified group of Employees for a Plan Year shall be the average of
the ratios (calculated separately for each Employee in such group) of:
(i) The total of the Employer Matching Contributions
(the "Aggregate Contributions") paid under the Plan on behalf
of each such Employee for such Plan Year, to
(ii) The Employee's Compensation (as defined in
Section 5.5(d)(6)) for such Plan Year.
In computing the Contribution Percentage, the Employer may elect to
take into account after-tax and pre-tax contributions made under this
Plan or any other plan of the Employer to the extent that the following
requirements are satisfied:
(1) the amount of non-elective contributions,
including those qualified non-elective contributions treated
as Employer
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Matching Contributions for purposes of calculating the
Contribution Percentage, satisfies the requirements of
Section 401(a)(4) of the Code;
(2) the amount of non-elective contributions,
excluding those qualified non-elective contributions treated
as employer Matching Contributions for purposes of calculating
the Contribution Percentage and those qualified non-elective
contributions treated as elective contributions under Section
1.401(k)-1(b)(5) for purposes of calculating the Actual
Deferral Percentage, satisfies the requirements of Section
401(a)(4) of the Code;
(3) the elective contributions, including those
treated as Matching Contributions for purposes of calculating
the Contribution Percentage, satisfy the requirements of
Section 401(k)(3) of the Code;
(4) the qualified non-elective contributions are
allocated to the Employee under the Plan as of a date within
the Plan Year and the elective contributions satisfy Section
1.401(k)-1(b)(i) for the Plan Year; and, if applicable, the
Plan and the plans to which the qualified non-elective
contributions and elective contributions are made, are or
could be aggregated for purposes of Section 410(b).
A Participant's Contribution Percentage shall be determined after
determining the Participant's Excess Deferrals, if any, pursuant to
Section 4.2, and after determining the Participant's excess Pre-Tax
Contributions pursuant to Section 4.7.
(b) ESOP Percentage. The ESOP Percentage for a specified group
of Employees for a Plan Year shall be the average of the ratios
(calculated separately for each Employee in such group) of:
(i) The total of the ESOP Contributions paid under
the Plan on behalf of each such Employee for such Plan Year,
to
(ii) The Employee's Compensation (as defined in
Section 5.5(d)(6)) for such Plan Year.
A Participant's ESOP Percentage shall be determined after determining
the Participant's Excess Deferrals, if any, pursuant to Section 4.2,
and after determining the Participant's excess Pre-Tax Contributions
pursuant to Section 4.7.
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An eligible Employee for purposes of computing the
Contribution Percentage is defined in Treasury Regulation Section
1.401(m)-1(f)(4). The Contribution Percentage will be zero for an
eligible Employee who received no allocation of Aggregate
Contributions.
5.9 Contribution Percentage and ESOP Percentage Limits: Each of the
Contribution Percentage and ESOP Percentage (with respect to each, the
"Applicable Percentage") for the eligible Employees for any Plan Year who are
Highly Compensated Employees shall not exceed the greater of (a) or (b), as
follows:
(a) The Applicable Percentage for the eligible Employees who
are not Highly Compensated Employees times 1.25, or
(b) The lesser of (i) the Applicable Percentage for the
eligible Employees who are not Highly Compensated Employees times two
(2) or (ii) the Applicable Percentage for the eligible Employees who
are not Highly Compensated Employees plus 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.
In determining the Applicable Percentage of an Employee who is
a five percent (5%) owner or one of the ten (10) most Highly
Compensated Employees and who has a Family Member who is an Employee,
any remuneration paid to the Family Member for services rendered to an
Employer or an Affiliate and any contributions made on behalf of or by
such Family Member shall be attributed to such Highly Compensated
Employee. Family Members, with respect to Highly Compensated Employees,
shall be disregarded as separate Employees in determining the
Applicable Percentage both for Employees who are non-Highly Compensated
Employees and for Employees who are Highly Compensated Employees.
The Contribution Percentage for any Highly Compensated
Employee for any Plan Year who is eligible to have matching employer
contributions made on his behalf or to make after-tax contributions
under one or more plans described in Section 401(a) of the Code that
are maintained by an Employer or an Affiliate in addition to this Plan
shall be determined as if all such contributions were made to this
Plan.
In the event that this Plan must be combined with one or more
other plans in order to satisfy the requirements of Code Section
410(b), then the Contribution Percentage shall be determined as if all
such plans were a single plan. If two or more plans are permissively
aggregated for the purposes of Code Section 410(b) (other
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than the average benefit percentage test), then the Contribution
Percentage shall be determined as if all such plans were a single plan.
5.10 Treatment of Excess Aggregate Contributions or ESOP Contributions:
If neither of the tests described above in Section 4.10 are satisfied with
respect to either Aggregate Contributions or ESOP Contributions, the excess
Aggregate Contributions or ESOP Contributions (as applicable), plus any income
and minus any loss attributable thereto, shall be forfeited, or if not
forfeitable, shall be distributed no later than the last day of the Plan Year
following the Plan Year in which such excess Aggregate Contributions or ESOP
Contributions (as applicable) were made. Such income shall include the allocable
gain or loss (i) for the Plan Year and (ii) the period between the end of the
Plan Year and the date of distribution. The income or loss attributable to the
Participant's excess Aggregate Contributions or ESOP Contributions (as
applicable) for the Plan Year shall be determined by multiplying the income or
loss attributable to the Participant's Account for the Plan Year by a fraction,
the numerator of which is the excess Aggregate Contribution or ESOP
Contributions (as applicable), and the denominator of which is the Participant's
total Account balance. Unless the Committee elects otherwise, the income or loss
attributable to the Participant's excess Aggregate Contributions or ESOP
Contributions (as applicable) for the period between the end of the Plan Year
and the date of distribution shall be determined using the safe harbor method
set forth in Treasury Regulations to Code Section 401(m), and shall be equal to
ten percent (10%) of the allocable income or loss for the Plan Year (as
calculated immediately above) multiplied by the number of calendar months that
have elapsed since the end of the Plan Year. A calendar month shall be deemed to
have elapsed and a full month shall be counted for this purpose if the
distribution of excess Aggregate Contributions or ESOP Contributions (as
applicable) is made after the fifteenth (15th) day of that month; otherwise,
such distribution shall be treated as having been made on the last day of the
preceding month. Excess Aggregate Contributions or ESOP Contributions shall be
treated as Annual Additions under Section 5.5 of the Plan.
The excess Aggregate Contributions or ESOP Contributions (as
applicable), if any, of each Participant who is among the Highly Compensated
Employees shall be determined by computing the maximum Contribution Percentage
under (a) or (b) of Section 4.10 and then reducing the Contribution Percentage
of some or all of such Participants whose Contribution Percentage exceeds the
maximum by an amount of sufficient size to reduce the overall Contribution
Percentage for eligible Participants who are among the Highly Compensated
Employees to a level which satisfies either (a) or (b) of Section 4.10. The
excess Aggregate Contributions or ESOP Contributions (as applicable), if any, of
each Participant shall be determined in such a manner that the Contribution
Percentage of such Participants who have the highest actual contribution ratio
under Section 4.9 shall be first lowered to the level of such Participants with
the next to the highest actual contribution ratio under Section 4.9. If further
overall reductions are required to achieve compliance with (a) or (b) of Section
4.10, both of the above-described groups of Participants will be lowered to the
level of Participants with the next highest actual contribution ratio under
Section 4.9, and so on, until sufficient total reductions have occurred to
achieve compliance with (a) or (b) of Section 4.10. For
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each Participant who is a Highly Compensated Employee, the amount of excess
Aggregate Contributions or ESOP Contributions (as applicable) is equal to the
total Employer Contributions on behalf of the Participant (determined prior to
the application of this paragraph) minus the amount determined by multiplying
the Participant's actual contribution ratio (determined after application of
this paragraph) by his Compensation used in determining such ratio. The
individual ratios and Contribution Percentages shall be calculated to the
nearest one-hundredth (1/100) of one percent (1%) of the Employee's Compensation
as such term is used in paragraph (b) of Section 4.10.
5.11 Aggregation of Family Members in Determining the Actual
Contribution Ratio:
(a) Calculation of Actual Contribution Ratio: If an eligible
Highly Compensated Employee is subject to the family aggregation rules
of Section 414(q)(6) of the Code because such Employee is either a five
percent (5%) owner or one of the ten (10) most Highly Compensated
Employees, the combined actual contribution ratio for the family group
(which is treated as one Highly Compensated Employee) shall be
determined by combining the Employer Contributions not taken into
account in applying the Actual Deferral Percentage test and
Compensation of all the eligible Family Members.
The Employer Contributions and Compensation of all Family
Members are disregarded for purposes of determining the Contribution
Percentage for the group of Highly Compensated Employees and the group
of non-Highly Compensated Employees except to the extent taken into
account in paragraph (a) of this Section.
(b) Aggregation of Family Groups: If an Employee is required
to be aggregated as a Family Member of more than one family group, all
eligible Employees or Family Members of those groups that include the
Employee shall be aggregated as one family group in accordance with
paragraph (a) above.
(c) Excess Aggregate Contributions of Family Members: In the
event that it becomes necessary to determine and correct the excess
Aggregate Contributions of a Highly Compensated Employee whose actual
contribution ratio is determined under the rules of Code Section
414(q)(6) and this Section 4.12, the actual contribution ratio shall be
reduced as required under Section 4.11, and the excess Aggregate
Contributions to be forfeited or distributed thereby should be
allocated among the Family Members in proportion to the Employer
Contributions of each Family Member that are combined to determine the
actual contribution ratio.
5.12 Multiple Use of Alternative Limitation: The rules set forth in
Treasury Regulation Section 1.401(m)-2(b) for determination of multiple use of
the alternative methods of compliance with respect to Sections 4.4(b) and
4.10(b) are hereby incorporated into the Plan. If a multiple use
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of the alternative limitation occurs with respect to two or more plans or
arrangements maintained by an Employer, it shall be treated as an excess
Aggregate Contribution and must be corrected by reducing the actual contribution
ratio of Highly Compensated Employees eligible both to make elective
contributions to receive matching contributions under the 401(k) arrangement or
to make contributions under the 401(m) plan. Such reduction shall be by the
leveling process set forth in Section 4.11.
5.13 ESOP Contributions, Employer Matching Contributions and Pre-Tax
Contributions To Be Tax-Deductible: ESOP Contributions, Employer Matching
Contributions and Pre-Tax Contributions shall not be made in excess of the
amount deductible under applicable Federal law now or hereafter in effect
limiting the allowable deduction for contributions to profit-sharing plans. The
ESOP Contributions, Employer Matching Contributions and Pre-Tax Contributions to
this Plan when taken together with all other contributions made by the Employer
to other qualified retirement plans shall not exceed the maximum amount
deductible under Section 404 of the Code.
5.14 Maximum Allocations: Notwithstanding the above, the total Annual
Additions made to the Account of any Participant shall not exceed the limits
prescribed in Section 5.5.
5.15 Refunds to Employer: Once Contributions are made to the Plan by
the Employer on behalf of the Participants, they are not refundable to the
Employer unless a Contribution:
(a) Was made by mistake of fact; or
(b) Was made conditioned upon the contribution's being allowed
as a deduction and such deduction was disallowed.
Any Contribution made by the Employer during any Plan Year in excess of the
amount deductible or any Contribution attributable to a good faith mistake of
fact shall be refunded to the Employer. The amount which may be returned to the
Employer is the excess of the amount contributed over the amount that would have
been contributed had there not occurred a mistake of fact or the excess of the
amount contributed over the amount deductible, as applicable. A Contribution
made by reason of a mistake of fact may be refunded only within one (1) year
following the date of payment. Any Contribution to be refunded because it was
not deductible under Section 404 of the Code may be refunded only within one (1)
year following the date the deduction was disallowed. Earnings attributable to
any such excess Contribution may not be withdrawn, but losses attributable
thereto must reduce the amount to be returned. In no event may a refund be due
which would cause the Account balance of any Participant to be reduced to less
than the Participant's Account balance would have been had the mistaken amount,
or the amount determined to be non-deductible, not been contributed.
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ARTICLE V
PARTICIPANTS' ACCOUNTS
6 Trust Accounts: The Committee shall create and maintain adequate
records to reflect all transactions of the Trust Fund and to disclose the
interest in the Trust Fund of each Participant (whether on active or inactive
status), former Participant and Beneficiary.
(a) Accounts for Participants: Such accounts shall be
maintained for each Participant as may be appropriate from time to time
to reflect his interest in the ESOP Fund and each Investment Fund in
which he may be participating at any time as contemplated under Section
8.1. The interest in each Investment Fund attributable to the
Contributions made by or on behalf of each Participant shall be
reflected in a Pre-Tax Contribution Account and/or an After-Tax
Contribution Account for each Participant. The interest of each
Participant attributable to the Employer Matching Contributions made to
the Plan or the Prior Plan shall be reflected in an Employer Matching
Contribution Account for each Participant. The interest in each
Investment Fund that is attributable to a rollover of funds previously
held on the Employee's behalf in an individual retirement account or a
plan qualified under Sections 401(a) and 501(a) of the Code shall be
held in a Rollover Account. The interest in the ESOP Fund of each
Participant shall be reflected in an ESOP Account for each Participant
as described in Section 5.3.
(b) Stock Suspense Account: There shall also be established
and maintained under the ESOP Trust a suspense account to be known as
the Stock Suspense Account.
(c) Rights in Trust Funds: The maintenance of individual
Accounts is only for accounting purposes, and a segregation of the
assets of the Trust Funds to each Account shall not be required.
Distribution and withdrawals made from an Account shall be charged to
the Account as of the date paid.
6.1 Valuation of Trust Funds: A valuation of the Trust Funds shall be
made as of each Valuation Date and on any other date during the Plan Year that
the Committee deems a valuation to be advisable. Any such interim valuation
shall be exercised on a uniform and nondiscriminatory basis. For the purposes of
each such valuation, the assets of each Investment Fund shall be valued at their
respective current market values, and the amount of any obligations for which
the Investment Fund may be liable, as shown on the books of the Trustees, shall
be deducted from the total value of the assets. For the purposes of maintenance
of books of account in respect of properties comprising the
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Trust Funds, and of making any such valuation, the Trustees shall account for
the transactions of the Trust Funds on a cash basis. The current market value
shall, for the purposes hereof, be determined as follows:
(a) Where the properties are securities which are listed on a
securities exchange, or which are actively traded over the counter, the
value shall be the last recorded bid and asked prices, whichever shall
be the later. In the event transactions regarding such property are
recorded over more than one such exchange, the Trustees may select the
exchange to be used for purposes hereof. Recorded information regarding
any such securities published in The Wall Street Journal or any other
publication deemed appropriate may be relied upon by the Trustee. If no
transactions involving any such securities have been recorded within
ten (10) days prior to the particular Valuation Date, such securities
shall be valued as provided in paragraph (b) below.
(b) Where paragraph (a) hereof shall be inapplicable in the
valuation of any properties, the Trustees shall obtain from at least
two (2) qualified persons an opinion as to the value of such properties
as of the close of business on the particular Valuation Date. The
average of such estimates shall be used.
6.2 Allocation to Accounts:
(a) Pre-Tax and After-Tax Contributions: Pre-Tax Contributions
pursuant to Section 4.2 received in the Trust Fund since the preceding
Valuation Date shall be credited to the respective Accounts of the
Participants and invested in the Investment Funds in accordance with
their instructions pursuant to Section 8.1.
(b) ESOP Accounts: The ESOP Account of each Participant shall
be credited with his allocable portion of (i) the Company Stock
investment in the ESOP Fund purchased and paid for by the ESOP Trust
(other than Financed Stock) or contributed in kind by the Employer,
(ii) forfeitures from the ESOP Fund and (iii) subject to the further
provisions of this Section 5.3(b), the Company Stock investment in the
ESOP Fund expected to be released from the Stock Suspense Account. Such
credit shall be made in the ratio that the sum of each Participant's
Pre-Tax Basic Contribution for the period bears to the total Pre-Tax
Basic Contributions of all Participants for the period. Credits made
pursuant to this Section 5.3(b) shall be made as of each quarterly
Valuation Date (or such other date as the Administrator may designate)
in an amount not to exceed sixty-six and two-thirds percent (66-2/3%)
of the total of each Participant's Pre-Tax Basic Contributions, and all
amounts not otherwise allocated hereunder during the Plan Year on the
quarterly Valuation Dates shall be allocated in full on the annual
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Valuation Date or such other date as the Administrator may designate.
It is contemplated that, from time to time, a tentative allocation from
the Stock Suspense Account may be made over the course of the Plan
Year; however, the final allocation from the Stock Suspense Account
shall take place only on the Annual Valuation Date. No Participant
shall be entitled to claim any right, title or interest in amounts
tentatively allocated from the Stock Suspense Account until the final
allocation has taken place on the Annual Valuation Date.
(c) Stock Suspense Account: The Stock Suspense Account shall
be credited as of each Valuation Date with the number of shares of
Financed Stock purchased by the ESOP Trustee since the preceding
Valuation Date. In addition, the Stock Suspense Account shall be
credited with all ESOP Contributions for the Plan Year which are to be
used to repay Exempt Loans. The Stock Suspense Account shall be debited
with amounts used to repay Exempt Loans and with the number of shares
of Financed Stock that are to be released from such Account in
accordance with the provisions of Section 5.4(b).
(d) Rollover Account: Any Employee who is a Participant, or
who would be a Participant but for a failure to satisfy the eligibility
requirements of Section 3.1 may, with the approval of the
Administrator, make a contribution to a Rollover Account under the
Plan. Such an Account shall be in cash or in other property acceptable
to the Administrator other than qualified voluntary employee
contributions, as defined in Section 219 of the Code ("QVEC"), and
shall be a contribution attributable to:
1) a "qualified total distribution" (as defined in
Section 402(a)(5) of the Code) distributed to the contributing
Employee under Section 402(a)(5) from a plan that is qualified
under Sections 401(a) and 501(a) of the Code (a "Qualified
Plan") or distributed to the Employee under Section 402(a)(4)
from an "employee annuity" as referred to in that Section; or
2) a payout or distribution to the Employee referred
to in Section 408(d)(3) from an "individual retirement
account" or an "individual retirement annuity" described,
respectively, in Section 408(a) or Section 408(b) consisting
exclusively of amounts attributable to "qualified total
distributions" (as defined in Section 402(a)(5)) from a
Qualified Plan other than the amounts attributable to a
distribution from a Qualified Plan under which the Employee
was at any time an "employee" (as defined in Section
401(c)(1)). The Trustee may condition acceptance of a
contribution intended to be a contribution to a Rollover
Account upon receipt of such documents as it may require. In
the event that an Employee makes a contribution pursuant to
this Section 5.3(d)
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intended to be a contribution to a Rollover Account but which
the Administrator later concludes did not qualify as a
contribution to a Rollover Account, the Trustee shall
distribute to the Employee as soon as practicable after that
conclusion is reached the entire Account Balance in his or her
Rollover Account deriving from such contribution determined as
of the Valuation Date coincident with or immediately following
such discovery. Rollovers of QVEC contributions will not be
permitted.
(e) Allocation Procedures: The Accounts of Participants,
former Participants and Beneficiaries shall be adjusted in accordance
with the following:
(i) Earnings of the Investment Fund: The earnings (or
loss) of the Investment Fund since the preceding Valuation
Date (including the appreciation or depreciation in value of
the assets of the Investment Fund) shall be allocated to the
Accounts of Participants (other than a terminated
Participant's Accounts which have become current obligations
of the Investment Fund) in proportion to the balances in such
Accounts on the preceding Valuation Date, but after first
reducing each such Account balance by any distribution from
such Account since the preceding Valuation Date.
(ii) Income and Appreciation in Value of Stock
Suspense Account and ESOP Accounts in the Trust Fund: The
income (including stock (in kind) dividends with respect to
Company Stock) of the ESOP Fund shall be allocated in
proportion to the balances, as of the preceding Valuation
Date, in the Stock Suspense Account and the ESOP Accounts but
after first reducing each such Account balance by any
distributions or charges from such Accounts since the
preceding Valuation Date. Notwithstanding anything to the
contrary in the Plan, if and to the extent that dividends
credited to Participants' ESOP Accounts are used to amortize
an Exempt Loan pursuant to Section 5.6, an interest in the
ESOP Fund with a fair market value not less than the amount of
such dividends must be allocated to the Participants' ESOP
Accounts (resulting from the release of Financed Stock
attributable to such use of dividends to amortize the Exempt
Loan) for the year of payment of such dividends to the Plan,
and the Company shall make such additional Employer Matching
Contributions as are necessary to accomplish such result. Any
dividends credited to the Stock Suspense Account with respect
to Financed Stock shall be used first to repay current
principal and then to repay current interest with respect to
such loan.
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(iii) Forfeitures: As of each Valuation Date, any
amounts in the Employer Matching Contribution Accounts which
have become forfeitures since the preceding Valuation Date
shall first be made available to reinstate previously
forfeited Account balances of former Participants, if any, in
accordance with Section 6.7 and previous Participants who have
unclaimed benefits, if any, in accordance with Section 6.10.
The remaining forfeitures from the Employer Matching
Contribution Accounts and all forfeitures from the ESOP
Accounts, if any, shall be used to reduce Employer Matching
Contributions as specified under Section 4.1.
6.3 Treatment of Company Stock Purchased with an Exempt Loan:
(a) Financed Stock: Any Company Stock purchased by the ESOP
Trust with the proceeds of an Exempt Loan shall be credited initially
to the Stock Suspense Account.
(b) Allocation from Stock Suspense Account to ESOP Accounts:
At each Valuation Date, and on any special Valuation Date if directed
by the Committee, there shall be released an interest in the ESOP Fund
equal in value to the product of the number of shares of Financed Stock
not previously released that are held in the Stock Suspense Account
multiplied by the ratio of (i) the amount of principal and interest
paid under the Exempt Loan subsequent to the last Valuation Date to
(ii) the sum of the amount determined in clause (i) plus the total of
all principal and interest to be paid for future years, assuming if the
interest rate is variable that the interest rate in future years will
be the same as that currently in effect. The Company Stock investment
in the ESOP Fund released pursuant to the preceding sentence shall be
allocated to the Participants' ESOP Accounts in accordance with the
provisions of Section 5.3(b).
(c) Payments on Exempt Loans: As of each Valuation Date,
installment payments, including principal and interest, made by the
ESOP Trustee since the last preceding Valuation Date under Exempt Loans
will be debited to the Stock Suspense Account and to Participants' ESOP
Accounts under the provisions of Section 5.3 hereof.
For purposes of determining payments on Exempt Loans, payment
of principal and interest shall be accounted for substantially in
accordance with the following: All income ("specified income")
allocable to the Stock Suspense Account that is attributable to
collateral for the Exempt Loan or to ESOP Contributions shall be used,
before any ESOP Contributions are so used, to pay principal amounts due
under such
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Exempt Loan; ESOP Contributions shall be first applied to repay
interest under such Exempt Loan with any excess ESOP Contribution used
to fund current principal requirements not otherwise funded by the
specified income; if the specified income exceeds the amount necessary
to pay principal due on Exempt Loans for the Plan Year, then such
excess amount shall be first used to pay interest currently due with
respect to the Exempt Loans and any remaining amount of income may, at
the direction of the Committee, shall be used to prepay principal due
on Exempt Loans in succeeding periods. In the event that there are
insufficient funds available to make payments of principal or interest
on Exempt Loans when due, the Committee may direct the ESOP Trustee to
sell any Financed Stock which has not yet been allocated to ESOP
Accounts or the Committee may direct the Trustee to obtain a new Exempt
Loan in an amount sufficient to make such payments.
6.4 Maximum Annual Additions: Notwithstanding anything contained herein
to the contrary, the total Annual Additions made to the Account of a Participant
for any Plan Year commencing on or after the Effective Date shall be subject to
the following limitations:
(a) Single Defined Contribution Plan
1. If an Employer does not maintain any other qualified plan,
the amount of Annual Additions which may be allocated under this Plan
on a Participant's behalf for a Limitation Year shall not exceed the
lesser of the Maximum Permissible Amount or any other limitation
contained in this Plan.
2. Prior to the determination of the Participant's actual
Compensation for a Limitation Year, the Maximum Permissible Amount may
be determined on the basis of the Participant's estimated annual
Compensation for such Limitation Year. Such estimated annual
Compensation shall be determined on a reasonable
basis and shall be uniformly determined for all Participants similarly
situated. Any Employer contributions (including allocation of
forfeitures) based on estimated annual Compensation shall be reduced by
any Excess Amounts carried over from prior years.
3. As soon as is administratively feasible after the end of
the Limitation Year, the Maximum Permissible Amount for such Limitation
Year shall be determined on the basis of the Participant's actual
Compensation for such Limitation Year.
4. If there is an Excess Amount with respect to a Participant
for the Limitation Year, such Excess Amount shall be disposed of as
follows:
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A. If any such Excess Amounts shall then remain, the
Participant's Pre-Tax Contributions shall be returned to him
to the extent such returned Contributions would reduce the
Excess Amount.
B. There shall be a reduction of the Employer
Matching Contributions allocated to the Participant, and the
amount of the reduction of the Employer Matching Contributions
for such Participant shall be reallocated out of the Employer
Matching Contribution Account of such Participant and shall be
held in a suspense account which shall be applied as a part of
(and to reduce to such extent what would otherwise be) the
Employer Matching Contributions for all Participants required
to be made to the Plan during the next subsequent calendar
month or months. No portion of such Excess Amount may be
distributed to Participants or former Participants. If a
suspense account is in existence at any time during the
Limitation Year pursuant to this Paragraph B, such suspense
account shall not participate in the allocation of investment
gains or losses of the Trust Fund.
C. If any such Excess Amount shall then remain, the
Excess Amount of the Participant's Pre-Tax Contributions, as
defined in Section 4.2, shall be used to reduce Pre-Tax
Contributions for the next Limitation Year (and succeeding
Limitation Years, as necessary) for that Participant if that
Participant is eligible to participate in the Plan as of the
end of the next and succeeding Limitation Years. However, if
that Participant is not eligible to participate in the Plan as
of the end of the Limitation Year, then the Excess Amounts
must be held unallocated in a suspense account and applied in
the next subsequent calendar month or months as a part of (and
to reduce to such extent what would otherwise be) the Employer
Matching Contribution for all Participants required to be made
to the Plan. No portion of such Excess Amount may be
distributed to Participants or former Participants. If a
suspense account is in existence at any time during the
Limitation Year pursuant to this paragraph C, such suspense
account shall not participate in the allocation of investment
gains or losses of the Trust Fund.
(b) Two or More Defined Contribution Plans
1. If, in addition to this Plan, the Employer maintains any
other qualified defined contribution plan, the amount of Annual
Additions which may be allocated
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under this Plan on a Participant's behalf for a Limitation Year shall
not exceed the lesser of:
A. the Maximum Permissible Amount, reduced by the sum
of any Annual Additions allocated to the Participant's
accounts for the same Limitation Year under such other defined
contribution plan or plans; or
B. any other limitation contained in this Plan.
2. Prior to the determination of the Participant's actual
Compensation for the Limitation Year, the amount referred to in
paragraph 1.A. above may be determined on the basis of the
Participant's estimated annual Compensation for such Limitation Year.
Such estimated annual Compensation shall be determined on a reasonable
basis and shall be uniformly determined for all Participants similarly
situated. Any Employer Contribution (including allocation of
forfeitures) based on estimated annual Compensation shall be reduced by
any Excess Amounts carried over from prior years.
3. As soon as is administratively feasible after the end of
the Limitation Year, the amounts referred to in paragraph 1.A. above
shall be determined on the basis of the Participant's actual
Compensation for such Limitation Year.
4. If a Participant's Annual Additions under this Plan and all
such other defined contribution plans result in an Excess Amount, such
Excess Amount shall be deemed to consist of the amounts last allocated.
5. If an Excess Amount was allocated to a Participant on an
allocation date of this Plan which coincides with an allocation date of
another plan, the Excess Amount attributed to this Plan will be the
product of:
A. the total Excess Amount allocated as of such date
(including any amount which would have been allocated but for
the limitations of Section 415 of the Code); times
B. the ratio of (i) the amount allocated to the
Participant as of such date under this Plan, divided by (ii)
the total amount allocated as of such date under all qualified
defined contribution plans (determined without regard to the
limitations of Section 415 of the Code).
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6. Any Excess Amounts attributed to this Plan shall be
disposed of as provided in paragraph (a) above.
(c) Defined Contribution Plan and Defined Benefit Plan
1. General Rule. If the Employer maintains one or more defined
contribution plans and one or more defined benefit plans, the sum of
the "defined contribution plan fraction" and the "defined benefit plan
fraction" as defined below, cannot exceed 1.0 for any Limitation Year.
For purposes of this paragraph (c) of Section 5.5, employee
contributions to a qualified defined benefit plan are treated as a
separate defined contribution plan, and all defined contribution plans
of an Employer are to be treated as one defined contribution plan and
all defined benefit plans of an Employer are to be treated as one
defined benefit plan, whether or not such plans have been terminated.
2. If the sum of the defined contribution plan fraction and
defined benefit plan fraction exceeds 1.0, the Annual Additions of the
defined contribution plan or plans will be reduced so that the sum of
the fractions will not exceed 1.0. If additional reductions are
required for the sum of the fractions to equal 1.0, the reductions will
then be made first to the annual benefit of the defined benefit plans.
3. Defined Contribution Fraction
A. General Rule. The defined contribution fraction
for any year is (i) divided by (ii), where (i) and (ii) are:
(i) the numerator: the sum of the actual
Annual Additions to the Participant's account at the
close of the Limitation Year; and
(ii) the denominator: the sum of the lesser
of the following amounts determined for such year and
for each prior year of service of the Employee:
a. 1.25 times the dollar limitation
in effect for each such year (without regard
to the special dollar limitations for
employee stock ownership plans), or
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b. 1.4 times 25% of the
Participant's Compensation for each such
year.
B. Special Adjustment to Defined Contribution Plan
Fraction. The numerator of the Defined Contribution Plan
Fraction of any Participant in a defined contribution plan
maintained by the Company on December 31, 1982 shall be
reduced by an amount required to decrease the combined factors
of such Participant to 1.0, as of December 31, 1982. The
amount to be subtracted is the product of (i) the excess of
the sum of the fractions over 1.0 and (ii) the denominator of
the Defined Contribution Plan Fraction, as computed through
the Limitation Year ending December 31, 1982.
If the Employee was a Participant as of the end of
the first day of the first Limitation Year beginning after
December 31, 1986, in one or more defined contribution plans
maintained by the Employer which were in existence on May 6,
1986, the numerator of this fraction will be adjusted if the
sum of this fraction and the defined benefit fraction would
otherwise exceed 1.0 under the terms of this Plan. Under the
adjustment, an amount equal to the product of (1) the excess
of the sum of the fractions over 1.0 times (2) the denominator
of this fraction, will be permanently subtracted from the
numerator of this fraction. The adjustment is calculated using
the fractions as they would be computed as of the end of the
last Limitation Year beginning before January 1, 1987, and
disregarding any changes in the terms and conditions of the
Plan made after May 5, 1986, but using the Code Section 415
limitation applicable to the first Limitation Year beginning
on or after January 1, 1987.
The Annual Addition for any Limitation Year beginning
before January 1, 1987, shall not be recomputed to treat all
employee contributions as Annual Additions.
4. Defined Benefit Plan Fraction
A. General Rule. The defined benefit plan fraction
for any year is (i) divided by (ii), where:
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(i) is the projected annual benefit of the
Participant under the Plan (determined as of the
close of the Limitation Year), and
(ii) is the lesser of
a. 1.25 times the dollar
limitation (adjusted, if necessary) for
such year, or
b. 1.4 times 100% of the
Participant's Average Compensation
for the high 3 years (adjusted, if
necessary).
B. Special Rule for Certain Accrued Benefits on
December 31, 1982. In the case of an individual who before
January 1, 1983 was a participant in a defined benefit plan
maintained by the Company whose current accrued benefit under
such plan on December 31, 1982 exceeded the limitation of
Section 415(b) of the Code, as amended by the Tax Equity and
Fiscal Responsibility Act of 1982, then, for purposes of
subsections (b) and (c) of Section 415 of the Code, the
maximum permissible amount under the limitation described in
subsection (b) of Section 415 with respect to such individual
shall be equal to the current accrued benefit under such plan;
and for purposes hereof, the term "current accrued benefit"
shall be defined as provided in Section 415(b)(2) of the Code.
Notwithstanding the above, if the Participant was a
participant as of the first day of the first Limitation Year
beginning after December 31, 1986, in one or more defined
benefit plans maintained by the Employer which were in
existence on May 6, 1986, the denominator of this fraction
will not be less than 125 percent of the sum of the annual
benefits under such plans which the participant had accrued as
of the close of the last Limitation Year beginning before
January 1, 1987, disregarding any changes in the terms and
conditions of the Plan after May 5, 1986. The preceding
sentence applies only if the defined benefit plans
individually and in the aggregate satisfied the requirements
of Code Section 415 for all Limitation Years beginning before
January 1, 1987.
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(d) Definitions
1. Employer: The Employer that adopts this Plan. In the case
of a group of employers which constitutes a controlled group of
corporations (as defined in Section 414(b) of the Code as modified by
Section 415(h)) or which constitutes trades and businesses (whether or
not incorporated) which are under common control (as defined in Section
414(c) as modified by Section 415(h)) or an affiliated service group
(as defined in Section 414(m)), all such employers shall be considered
a single Employer for purposes of applying the limitations of this
Section.
2. Annual Additions: With respect to each Plan Year
(Limitation Year), the total of the Employer Matching Contributions,
ESOP Contributions (except to the extent hereinafter provided), Pre-Tax
Contributions, forfeitures and amounts described in Sections 415(l)(1)
and 419(d)(2) of the Code, which are allocated to the Participant's
Account; excluding, however, any amounts contributed to reinstate an
amount forfeited or an unclaimed benefit. Unless more than one-third of
the ESOP Contributions made by the Employer are allocated to Highly
Compensated Employees (as such term is defined in Section 4.4 hereof),
Annual Additions shall not include (i) forfeitures of Financed Stock or
(ii) ESOP Contributions used to pay interest on the Exempt Loan and
charged against the Participant's Account.
3. Excess Amount: The excess of the Participant's Annual
Additions for the Limitation Year over the Maximum Permissible Amount.
4. Limitation Year: A twelve (12) consecutive month period
ending on December 31.
5. Maximum Permissible Amount: For a Limitation Year, the
Maximum Permissible Amount with respect to any Participant shall be the
lesser of:
A. $30,000 (or, if greater, one-fourth (1/4) of the defined
benefit dollar limitation set forth in Section 415(b)(1) of
the Code as in effect for the Limitation Year), or
B. 25% of the Participant's Compensation for the Limitation
Year.
6. Compensation: For purposes of applying the limitations of
Code Section 415, Compensation shall include the Participant's wages,
salaries, fees
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for professional service and other amounts received (without regard to
whether or not an amount is paid in cash) for personal services
actually rendered in the course of employment with an Employer
maintaining the Plan to the extent that the amounts are includable in
gross income (including, but not limited to, commissions paid salesmen,
compensation for services on the basis of a percentage of profits,
commissions on insurance premiums, tips, bonuses, fringe benefits,
reimbursements, and expense allowances) and shall exclude the
following:
(1)(A) contributions made by the Employer to a plan
of deferred compensation to the extent that, before the
application of the Code Section 415 limitations to the Plan,
the contributions are not includable in the gross income of
the Employee for the taxable year in which contributed, (B)
Employer contributions made on behalf of an Employee to a
simplified employee pension plan described in Code Section
408(k) to the extent such contributions are excludable from
the Employee's gross income, (C) any distributions from a plan
of deferred compensation regardless of whether such amounts
are includable in the gross income of the Employee when
distributed except any amounts received by an Employee
pursuant to an unfunded non-qualified plan to the extent such
amounts are includable in the gross income of the Employee;
(2) amounts realized from the exercise of a
non-qualified stock option or when restricted stock (or
property) held by an Employee either becomes freely
transferable or is no longer subject to a substantial risk of
forfeiture;
(3) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option;
and
(4) other amounts which receive special tax benefits,
such as premiums for group life insurance (but only to the
extent that the premiums are not includable in the gross
income of the Employee), or contributions made by the Employer
(whether or not under a salary reduction agreement) towards
the purchase of any annuity contract described in Code Section
403(b) (whether or not the contributions are excludable from
the gross income of the Employee).
For the purposes of this Section, the determination
of Compensation shall be made by not including amounts that would
otherwise be excluded from a Member's gross income by reason of the
application of Code Sections 125, 402(a)(8),
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402(h)(1)(B) and, in the case of Employer contributions made pursuant
to a salary reduction agreement, Code Section 403(b). For "limitation
years" beginning after December 31, 1988, Compensation shall be limited
to $200,000 (unless adjusted in the same manner as permitted under Code
Section 415(d)). Notwithstanding anything to the contrary, the
definition 415 Compensation shall include any and all items which may
be included under Code Sections 415(c)(3).
7. Average Compensation: The average Compensation during a
Participant's high three (3) years of Service, which period is the
three (3) consecutive calendar years (or, the actual number of
consecutive years of employment for those Employees who are employed
for less than three (3) consecutive years with the Employer) during
which the Participant had the greatest aggregate Compensation from the
Employer.
8. Annual Benefit: A benefit payable annually in the form of a
straight life annuity (with no ancillary benefits) under a plan to
which Employees do not contribute and under which no rollover
contributions are made.
6.5 Borrowings to Purchase Company Stock; Certain Conditions Applicable
to Such Company Stock: It is the express purpose of this Plan and the ESOP Trust
Agreement to invest substantial sums in Company Stock for the benefit of
Participants in the Plan. Pursuant to this purpose, it is contemplated that the
ESOP Trustee will from time to time borrow funds either through installment
purchase contract, loan agreement or other instrument of indebtedness in order
to purchase Company Stock (with such indebtedness qualifying as an "Exempt Loan"
within the ambit of Section 54.4975-7(b)(1)(iii) of the Treasury Regulations).
Such loans shall be primarily for the benefit of Participants and their
Beneficiaries within the meaning of Treasury Regulation Section 54.4975-7(b)(3).
In addition to other provisions of the Plan as may be applicable from time to
time, the provisions of this Section 5.6 shall be specifically applicable to
indebtedness incurred to purchase Company Stock and Company Stock purchased with
loan proceeds.
(a) Use of Proceeds: All proceeds of such an Exempt Loan shall
be used within a reasonable time after receipt by the ESOP Trustee only
for any or all of the following purposes: to purchase Company Stock, to
repay obligations incurred under the loan agreement or to repay a prior
Exempt Loan.
(b) Non Recourse Loans Only: Any loan must be without recourse
as against the Plan and the Trust Fund.
(c) Collateral: The only assets of the Plan and Trust Fund
that may be given as collateral for a loan are shares of Company Stock
acquired with the proceeds of the loan and
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those shares of Company Stock that were used as collateral on a prior
Exempt Loan repaid with the proceeds of the current Exempt Loan.
(d) Creditors' Rights to Assets: No person entitled to payment
under the loan agreement shall have any right to assets of the Plan or
Trust Fund other than collateral given for the loan, contributions
(other than contributions of Company Stock) that are made under the
Plan to meet the Plan's obligations under the loan and earnings
attributable to such collateral and the investment of such
contributions.
(e) Transfers upon Default: In the event of default of the
Exempt Loan, the value of Plan assets transferred in satisfaction of
the loan must not exceed the amount of default. If the lender is a
"disqualified person," the loan must provide for a transfer of Plan
assets upon default only upon and to the extent of failure of the Plan
to meet the payment schedule of the loan.
(f) Interest: The interest rate of any loan described herein
must not be in excess of a reasonable rate of interest. In determining
what is a reasonable rate of interest, all relevant factors will be
considered including the amount and duration of the loan, the security
and guarantee (if any) involved, the credit standing of the Plan and
Trust Fund and the guarantor (if any), and the interest rate prevailing
for comparable loans. A variable interest rate is permissible if
determined to be reasonable.
(g) Release from Collateral or Suspense: The instrument
evidencing indebtedness shall provide for release from collateral or
suspense in accordance with the provisions of Section 5.4(b) of the
Plan.
(h) Limitation on Restrictions on Company Stock: No Company
Stock acquired with the proceeds of a loan described herein may be
subject to a put, call, or other option, or buy-sell or similar
arrangement while held by and when distributed from the Plan or its
related Trust Fund, whether or not the Plan is then an "ESOP" within
the ambit of Section 54.4975-7(b)(1) of the Treasury Regulations,
unless specifically required or permitted by such regulations.
(i) Limitations on Payments: The payments made during any Plan
Year with respect to a loan described herein may not exceed an amount
equal to the sum of the ESOP Contributions and any earnings received
during or previous to the current Plan Year on Company Stock purchased
with such loan less payments previously made with respect to such loan;
provided, however, that payment may in any event be made from the
proceeds of the sale of any Company Stock which was purchased with the
loan and which has not yet been allocated to Participants' ESOP
Accounts in the event of default, or in the event of termination of the
Trust Fund, to the extent provided in Section 5.3(c) or Section 10.5,
or
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under other circumstances determined appropriate by the Committee. The
ESOP Contributions and earnings described herein must be accounted for
separately on the books of account of the Plan and ESOP Trust until any
Exempt Loan is repaid, as is provided in the other provisions of
Article V of this Plan.
(j) Certain Rights with Respect to Financed Stock: Any
Financed Stock, if it is not publicly traded when distributed or is
subject to a trading limitation when distributed, must be subject to a
put option. The put option is to be exercisable only by the
Participant, the Participant's donees or by a person (including an
estate or its distributee) to whom the Company Stock passes by reason
of a Participant's death. The put option must permit the Participant to
put the Company Stock to the Employer. The put option must be
exercisable during the sixty (60) consecutive days beginning on the
date that the Company Stock subject to the put option is distributed by
the Plan, and for another sixty (60) consecutive days during the Plan
Year next following the Plan Year in which the shares were distributed.
The put option may be exercised by the holder's notifying the Employer
in writing that the put option is being exercised. The period during
which a put option is exercisable does not include any period when a
distributee is unable to exercise it because the party bound by the put
option is prohibited from honoring it by applicable Federal or State
law. The price at which the put option is exercisable is the fair
market value of the Company Stock on the date of the transaction
determined in good faith based on all relevant factors. In the
discretion of the Committee, either (i) payment under a put option will
be in cash within thirty (30) days after the put option is exercised or
(ii) if the payment in respect of a put option is to repurchase Company
Stock which is distributed as part of a total distribution, the amount
to be paid may be paid in substantially equal periodic payments not
less frequently than annually over a period beginning not later than
thirty (30) days after the exercise of the put option and not exceeding
five (5) years provided that there is adequate security provided and a
reasonable interest paid on unpaid amounts. For purposes of the
preceding sentence, a total distribution means the distribution within
one (1) taxable year to the recipient of the balance of the credit of
the recipient's Account. The provisions described in this subparagraph
(j) are nonterminable even if the exempt loan is repaid or the Plan
ceases to be an ESOP.
(k) Term of Exempt Loans: Any Exempt Loan made by the Plan or
Trust Fund for the purpose of purchasing Company Stock must be for a
specific term and may not be payable on the demand of any person,
except in the case of default.
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ARTICLE VI
PARTICIPANTS' BENEFITS
7 Termination of Service: In the event of termination of Service of any
Participant for any reason other than disability, Retirement on or after
Retirement Date, or death, a Participant shall, subject to the further
provisions of the Plan, be entitled to receive one hundred percent (100%) of the
value in his Pre-Tax Contribution Account and After-Tax Contribution Account and
Rollover Account, plus one hundred percent (100%) of the value of his Employer
Matching Contribution Account and ESOP Account.
7.1 Disability of Participants: If the Committee shall find and advise
the Trustee that the employment of a Participant who has been terminated as a
consequence of such Participant's having become totally and permanently disabled
and entitled to receive disability benefits under the provisions of the
Company's Long Term Disability Plan, as adopted effective June 1, 1987 and as
amended from time to time, such Participant shall become entitled to receive the
entire interest in his Pre-Tax Contribution Account, his After-Tax Contribution
Account, his Rollover Account, his Employer Matching Contribution Account and
his ESOP Account. Disability hereunder shall not include any disability
sustained in the course of, or as a consequence of, military service, or
occupational hazard arising out of and in the course of employment by any person
other than an Employer, or the commission of any criminal offense.
7.2 Death of Participants: In the event of the death of any
Participant, the entire amount in the Accounts of such Participant after receipt
by the Committee of acceptable proof of death shall be payable as follows:
(a) The Participant's Account shall be distributed to the
Participant's surviving spouse, but if there is no surviving spouse, or
if the surviving spouse has already consented by a qualified election
pursuant to Section 6.3(b), to the Beneficiary or Beneficiaries
designated by the Participant in a written designation filed with his
Employer, or if no such designation shall have been so filed, or if no
designated Beneficiary survives the Participant or can be located by
the Committee, then to the duly appointed executor or administrator of
the Participant's estate; or if no administration of the estate of such
decedent is necessary, then to the Beneficiary entitled thereto under
the last will of such deceased Participant; or if such decedent left no
will, to the legal heirs of such decedent determined in accordance with
the laws of intestate succession of the state of the decedent's
domicile. No designation of any Beneficiary other than the
Participant's surviving spouse shall be effective unless in writing and
received by the Participant's Employer, and in no event shall it be
effective as of a date prior to such receipt. The former spouse of a
Participant shall be treated
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as a surviving spouse to the extent provided under a qualified domestic
relations order as described in Section 414(p) of the Code.
(b) The Participant's spouse may waive the right to be the
Participant's sole Beneficiary and consent to the Beneficiary
designation made by the Participant. The waiver must be in writing and
the spouse must acknowledge the effect of the waiver. The spouse's
waiver must be witnessed by a Plan representative or a notary public.
The Beneficiary designated by the Participant may not be changed
without the spouse's consent, unless the consent of the spouse permits
designation of Beneficiaries by the Participant without any requirement
of further consent by the spouse. The Participant may file a waiver
without the spouse's consent if it is established to the satisfaction
of the Committee that such written consent may not be obtained because
there is no spouse or the spouse may not be located. Any consent under
this Section 6.3(b) will be valid only with respect to the spouse who
signs the consent. Additionally, a revocation of a prior spousal waiver
may be made by a Participant without the consent of the spouse at any
time before the distribution of the Account. The number of revocations
shall not be limited.
7.3 Retirement of Participants on or After Retirement Date: A
Participant's interest in the full balance of his Account shall be fully vested
and nonforfeitable upon reaching his Retirement Date. Any Participant who
terminates his Service on or after his Retirement Date shall attain a fully
vested nonforfeitable interest in the entire amount of his Account and shall be
entitled to receive the entire amount of his Account upon the termination of his
Service.
7.4 In-Service Distributions: Cash dividends paid with respect to
shares of Company Stock in a Participant's ESOP Account may be distributed at
least annually in the discretion of the Committee. Otherwise, except to the
extent that distribution of a Participant's Account is required prior to
termination of his employment under Section 6.9 hereof (in the case of a
Participant whose required beginning date occurs prior to his termination of
employment) or under Section 10.5 hereof relating to termination of the Plan, or
at the election of the Participant under Article VII hereof relating to certain
withdrawals and loans, no distribution or withdrawal of any benefits under the
Plan shall be permitted prior to the Participant's termination of employment.
7.5 Payments of Benefits: Upon a Participant's entitlement to payment
of benefits under either Section 6.1, 6.2 or 6.4, he shall file with the
Committee his written election on such form or forms, and subject to such
conditions, as the Committee shall provide. His election shall specify whether
he wishes payments of his benefits to be made as of such entitlement or to be
deferred to the extent provided below. If payments become due for any reason
other than Retirement, death or Disability, and if the amounts due from the
Participant's Accounts are in excess of $3,500, payment of such amounts shall be
deferred to the extent provided below unless the Participant, and his spouse,
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if applicable, consent to earlier payment. If consent to such earlier payment is
given, such payment shall be made as soon as practicable.
In the case of a distribution under Section 6.3 on account of
the Participant's death, the Committee shall pay the entire amount in the
Participant's Accounts to his surviving spouse, of if there is no surviving
spouse, or if the surviving spouse gives her consent as provided in Section 6.3,
to a Beneficiary other than the surviving spouse designated by the Participant
in accordance with Section 6.3. Payments to a Participant's surviving spouse
and/or Beneficiary shall commence as soon as practicable after a Participant's
death.
Unless a Participant who is entitled to a distribution elects
to defer distribution of such benefits to a later date, payment of benefits
under this Plan shall be made or shall commence no later than the sixtieth day
after the later of (a) the end of the Plan Year of his sixty-fifth (65th)
birthday or (b) the end of the Plan Year in which his employment terminates. A
Participant may elect to defer receipt of his benefits, but such benefits must
commence no later than April 1 following the calendar year in which the
Participant attains age seventy and one-half (70 1/2).
A Participant or his designated Beneficiaries (but only by his
designated Beneficiaries in the event of the death of a Participant without
having made such an election), may elect that the benefits payable to the
Participant and/or Beneficiary be paid in one of, or in any combination of, the
following methods:
(a) As a distribution in kind of the shares held for his
Account in the Common Stock Fund and the ESOP Fund. A Participant shall
be entitled to receive a whole number of shares of Company Common Stock
held in such Common Stock Fund and the ESOP Fund as of the Valuation
Date specified in Section 6.7 measured by a fraction the numerator of
which shall be (i) the value in the Common Stock Fund held in his
Pre-Tax Contribution Account and/or his After-Tax Contribution Account
as of such Valuation Date, plus (ii) the vested portion of the value in
the Common Stock Fund held in his Employer Matching Contribution
Account and the vested portion of the value in the ESOP Fund held in
his ESOP Account as of such Valuation Date, and the denominator of
which shall be the total value in the Common Stock Fund and the ESOP
Fund held in the Pre-Tax Contribution Accounts, After-Tax Contribution
Accounts, Employer Matching Contribution Accounts and ESOP Accounts for
all Participants as of such Valuation Date. The amount of any
fractional shares shall be distributed in cash.
(b) As a lump-sum distribution in cash, equal to (a) the value
of the Participant's Account invested in funds other than the Common
Stock Fund or the ESOP Fund plus (b) the amount equal to the number of
shares in the Common Stock Fund or ESOP Fund (determined pursuant to
Section 6.6(a) above), multiplied by the
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fair market value of such shares. No lump-sum distribution may be paid
to the Participant unless he has elected such distribution on an
election form provided by the Committee.
(c) If the Participant's termination entitles him or her to
payment of benefits under Section 6.2, 6.3 or 6.4, as installments
payable in cash over a period certain not extending beyond ten (10)
years. If the Participant's entire interest under the Plan is to be
distributed in other than a lump sum, the installment to be distributed
shall be in a series of substantially equal periodic monthly,
quarterly, semi-annual or annual installments over a fixed period of
time not to exceed the lesser of 10 years or the life expectancy of the
Participant, or the joint life and last survivor expectancy of the
Participant and his or her Beneficiary, whichever is applicable, as
determined by the Participant at the time of termination. Installments
are to begin following the date of termination. The amount of the first
installment shall be a fraction of the Participant's Account as of the
Valuation Date, the numerator of which is one (1) and the denominator
of which is the total number of installments not in excess of ten (10)
years to be made. The amount of each subsequent installment shall be a
portion of the Participant's Account as of such Valuation Date, the
numerator of which is one (1) and the denominator of which is the
remaining number of unpaid installments. For this purpose, life
expectancy (or joint life and last survivor expectancy) is to be
computed by the use of the return multiples contained in section 1.72-9
of the Treasury Regulations under the Code. For purposes of this
computation, a Participant's life expectancy, or joint life and last
survivor expectancy of the Participant and his or her spouse, as
applicable, may be recalculated no more frequently than annually, but
the life expectancy of a non-spouse Beneficiary may not be
recalculated. If the Participant's spouse is not his or her designated
Beneficiary, the method of distribution must assure that at least 50%
of the present value of the amount available for distribution when
distributions commence is paid within the life expectancy of the
Participant. Notwithstanding any provision of this Plan to the
contrary, all distributions will be made in accordance with the
regulations under Section 401(a)(9), including the minimum distribution
incidental benefit requirements of Prop. Treas. Reg. 1.401(a)(9)-2.
7.6 Participation Rights Determined as of Valuation Date Preceding
Termination of Employment: In the case of any Participant whose employment shall
be terminated for any reason, no further credits or charges arising from any
source shall be made to the Accounts of any such terminating Participant after
the credits or charges made as of the Valuation Date immediately preceding his
termination of employment, except for
(a) Pre-Tax Contributions, and Employer Matching Contributions
and ESOP Contributions made subsequent to such Valuation Date.
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(b) Withdrawals or distributions made subsequent to such
Valuation Date.
(c) Such subsequent adjustments to the values in the Accounts
of such Participant up to the Valuation Date coinciding with or
preceding the distribution to the Participant.
7.7 Disposition of Forfeitures: Upon termination of employment of a
Participant to which the forfeiture provisions of Section 6.1 are applicable,
such Participant shall forfeit the non-vested portion of his Employer Matching
Contribution Account and his ESOP Account; provided, however, that if such
Participant returns to the employment of the Employer, any amounts so forfeited
shall be reinstated to the Participant's Employer Matching Contribution Account
or ESOP Account as of the close of the Plan Year during which such Participant
returns to the employment of the Employer. In the event previously forfeited
amounts are reinstated in a Participant's Employer Matching Contribution Account
and ESOP Account upon his return to employment, such Participant's vested
interest in his reinstated Employer Matching Contribution Account and ESOP
Account at any subsequent relevant time shall be the amount X determined by the
formula: X = P(AB + D) - D. For purposes of applying the formula: P is the
vested percentage under Section 6.1 at such relevant time; AB is the account
balance at such relevant time; and D is the amount of the prior distribution to
the Participant.
7.8 Required Minimum Distributions: Notwithstanding any provision of
this Plan to the contrary, any benefits to which a Participant is entitled shall
commence not later than the April 1 following the calendar year in which the
Participant attains age seventy and one-half (70-1/2), whether or not his
employment had terminated in such year. Such distribution shall be at least
equal to the required minimum distributions under the Code, however any
installment distributions pursuant to this Section 6.9 to Participants who have
not terminated employment shall be made over a period not to exceed ten (10)
years.
7.9 Unclaimed Benefits: If at, after or during the time when a benefit
hereunder is payable to any Participant, Beneficiary or other distributee, the
Committee, upon request of the Trustee or at its own instance, shall mail by
registered or certified mail to such distributee, at his last known address a
written demand for his present address or for satisfactory evidence of his
continued life, or both, and if such distributee shall fail to furnish the same
to the Committee within two (2) years from mailing of such demand, then the
Committee may, in its sole discretion, determine that such Participant,
Beneficiary or other distributee has forfeited his right to such benefit and may
declare such benefit, or any unpaid portion thereof, terminated as if the death
of the distributee (with no surviving Beneficiary) had occurred on the later of
the date of the last payment made thereon, or the date such Participant,
Beneficiary or other distributee first became entitled to receive benefit
payments. Any such forfeited benefit shall be applied as a part of (and to
reduce to such extent) the Employer Contributions required to be made next
following the date such forfeiture is declared to be forfeited by the Committee.
Notwithstanding the provisions of this Section 6.10, any such
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forfeited benefit shall be reinstated if a claim for the same is made by the
Participant, Beneficiary or other distributee at any time thereafter. The
reinstatement shall be made by a mandatory contribution by the Company,
allocated solely to such reinstatement.
7.10 ESOP Allocations: In the event that a Participant terminates
employment after his allocable portion of the Company Stock investment in the
ESOP Fund has been credited to his ESOP Account pursuant to Section 5.3(b), but
before such amount has been allocated to his ESOP Account, the Committee shall
direct the ESOP Trustee to release such allocable portion of the Company Stock
to the Participant in a manner consistent with the applicable distribution
requirements under this Article VI.
6.12 Right to Transfer Eligible Rollover Distribution: A "Distributee"
may elect, at the time and in the manner prescribed by the Committee, to have
any portion of an "Eligible Rollover Distribution" paid directly to an "Eligible
Retirement Plan" specified by the Distributee in a "Direct Rollover". The
Committee may impose any restrictions that are permitted under applicable
authorities on the right to transfer an Eligible Rollover Distribution.
For purposes of this Section, the capitalized words have the
following meanings:
(a) "Eligible Rollover Distribution" means 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 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 Code; and the portion of any
distribution that is not includable in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to
Employer securities).
(b) "Eligible Retirement Plan" means an individual retirement
account described in section 408(a) of the Code, an individual
retirement annuity described in section 408(b) of the Code, an annuity
plan described in section 403(a) of the Code, or a qualified trust
described in section 401(a) of the Code, that accepts the Distributee's
Eligible Rollover Distribution. However, in the case of an Eligible
Rollover Distribution to the surviving spouse, an Eligible Retirement
Plan is an individual retirement account or individual retirement
annuity.
(c) "Distributee" 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
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domestic relations order, as defined in section 414(p) of the Code, are
Distributees with regard to the interest of the spouse or former
spouse.
(d) "Direct Rollover" means a payment by the Plan to the
Eligible Retirement Plan specified by the Distributee.
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ARTICLE VII
WITHDRAWALS AND LOANS
8 Withdrawal of Pre-Tax Contribution Account on or After Age 59-1/2: A
Participant who has attained age fifty-nine and one-half (59-1/2) may elect, by
giving sixty (60) days' written notice to the Committee and by following such
other rules and procedures as may be prescribed from time to time by the
Committee on a uniform and nondiscriminatory basis, to withdraw the entire
amount or any portion of his Pre-Tax Contribution Account.
8.1 Withdrawal of After-Tax Contributions: Pursuant to written notice
to the Committee given on or before the fifteenth (15th) day of the preceding
month and subject to the conditions of Section 7.3, each Participant may elect
to withdraw as of the last day of any month of any Plan Year, an amount
specified by the Participant which may be attributable to his After-Tax
Contributions under the Original Plan determined as of the Valuation Date
immediately preceding such withdrawal date.
8.2 Conditions of Withdrawals of After-Tax Contributions: No
Participant shall be permitted to make more than two (2) withdrawals from his
After-Tax Contribution Account within any twelve-month period; provided,
however, that no Participant shall be permitted to withdraw from his After-Tax
Contribution Account less than $500, or the balance of his Account, if less than
$500. Except as provided under Article VI and Sections 7.1 and 7.4 hereof, no
withdrawals shall be permitted from a Participant's Pre-Tax Contribution
Account, Employer Matching Contribution Account or ESOP Account.
8.3 Hardship Withdrawals from Pre-Tax Contribution Account: A
Participant may at any time file with the Committee an appropriate written
request for a hardship withdrawal in either a dollar amount or a percentage
figure from his Pre-Tax Contribution Account. Notwithstanding the foregoing,
however, no Participant may withdraw any Income of the Trust Fund allocated to
his Pre-Tax Contribution Account on or after January 1, 1989. The approval or
disapproval of such request shall be made within the sole discretion of the
Committee except that the Committee shall not approve any such request for a
withdrawal unless it has been presented a certification by the Participant that
he is facing a hardship creating an immediate and substantial financial need and
that the resources necessary to satisfy that financial need are not reasonably
available from other sources available to the Participant. A Participant must
first withdraw any available amount credited to his After-Tax Contribution
Account, Employer Matching Contribution Account and Rollover Account, if any, in
order to be permitted to make a hardship withdrawal from his Pre-Tax
Contribution Account and must have taken all distributions and loans otherwise
available under this Plan and all employee plans maintained by the Participant's
Employer. The amount of the hardship withdrawal shall be limited to that amount
which the Committee determines to be required to meet the immediate financial
need created by the hardship, including anticipated federal and state income
taxes and
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penalties resulting from the distribution. The hardship withdrawal shall be made
in cash as soon as practicable after the Participant submits the hardship
request and the dollar amount withdrawn shall be determined by reference to the
value of the Pre-Tax Contribution Account as of the Valuation Date immediately
preceding the date of withdrawal, plus the net dollar amount of his Pre-Tax
Contributions for the Plan Quarter within which the withdrawal occurs.
A Participant who receives a hardship withdrawal shall be
prohibited from making pre-tax contributions to this Plan and any other plan
maintained by the Employer (except "welfare plans" as defined in Section 3(1) of
ERISA) for the twelve (12) consecutive months following the date of
distribution. In addition, the dollar limitation on the Pre-Tax Contributions
described in Section 4.2 shall be reduced (but not below zero) in the Plan Year
following the hardship withdrawal by the amount of Pre-Tax Contributions made by
the Participant in the Plan Year during which the withdrawal was made. The
following standards (or such other standards as may be acceptable under Treasury
Regulations issued pursuant to Section 401(k) of the Code) shall be applied on a
uniform and non-discriminatory basis in determining the existence of such a
hardship:
(a) A financial need shall be considered immediate if it must
be satisfied in substantial part within a period of twelve (12) months
from the date on which the Participant certifies his eligibility for a
hardship withdrawal.
(b) To be considered a hardship for purposes of this Section,
the event giving rise to the need for funds must relate to financial
hardship resulting from:
(1) expenses previously incurred for medical care
(described in Code Section 213(d)) or expenses that are
necessary to incur in order to obtain medical care (as
evidenced by a written estimate thereof) for the Participant,
the Participant's spouse or the Participant's dependents (as
defined in Code Section 152);
(2) purchase (excluding mortgage payments) of a
principal residence for the Participant;
(3) payment for tuition for the next twelve (12)
months of post-secondary education for the Participant or the
Participant's spouse, children or dependents (as defined in
Code Section 152); or
(4) the need to prevent the eviction of the
Participant from his principal residence or foreclosure on the
mortgage of the Participant's principal residence.
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A person shall be considered to be economically dependent on
the Participant if the Participant certifies that he reasonably expects to be
entitled to claim that person as a dependent for federal income tax purposes for
a calendar year coinciding with the Plan Year in which the certification of
hardship is made.
8.4 Loans: From and after October 1, 1989, any Participant, Beneficiary
or alternate payee or any former Participant who is a "party in interest" (as
defined in Section 3(14) of ERISA) (hereinafter "Borrower") may make application
to the Committee to borrow from his Pre-Tax Contribution Account, his Rollover
Account or his Employer Matching Contribution Account (to the extent that the
Account contains Employer Matching Contributions) in the Trust Fund, and the
Committee in its sole discretion may permit such a loan. Loans shall be granted
in a uniform and nondiscriminatory manner on terms and conditions determined by
the Committee which shall not result in more favorable treatment of highly
compensated employees and shall be set forth in written procedures promulgated
by the Committee in accordance with applicable governmental regulations. All
such loans shall also be subject to the following terms and conditions:
(a) The amount of the loan when added to the amount of any
outstanding loan or loans to the Borrower from any other plan of the
Employer or an Affiliate which is qualified under Code Section 401(a)
shall not exceed the lesser of (i) $50,000, reduced by the excess, if
any, of the highest outstanding balance of loans from all such plans
during the one-year period ending on the day before the date on which
such loan was made over the outstanding balance of loans from the Plan
on the date on which such loan was made, provided, however, that such
amount shall not exceed fifty percent (50%) of the vested value of the
Borrower's Account balance, excluding any amounts attributable to the
Borrower's ESOP Account or (ii) fifty percent (50%) of the present
value of Borrower's vested Account balance under the Plan, excluding
any amounts attributable to the Borrower's ESOP Account. In no event
shall a loan of less than $1000 be made to a Borrower.
(b) The loan shall be for a term not to exceed five (5) years
and shall be evidenced by a note signed by the Borrower. The loan shall
be payable in periodic installments and shall bear interest at a
reasonable rate which shall be determined by the Committee on a uniform
and consistent basis and set forth in the procedures in accordance with
applicable governmental regulations. Payments by a Borrower who is an
Employee will be made by means of payroll deduction from the Borrower's
compensation. If the Borrower is not receiving compensation from the
Employer, the loan repayment shall be made in accordance with the terms
and procedures established by the Committee. A Borrower may repay an
outstanding loan in full at any time.
(c) In the event an installment payment is not paid within
seven (7) days following the monthly due date, the Committee shall give
written notice to the
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Borrower sent to his last known address. If such installment payment is
not made within thirty (30) days thereafter, the Committee shall
proceed with foreclosure in order to collect the full remaining loan
balance or shall make such other arrangements with the Borrower as the
Committee deems appropriate. Foreclosures need not be effected until
occurrence of a distributable event under the terms of the Plan and no
rights against the Borrower or the security shall be deemed waived by
the Plan as a result of such delay.
(d) The unpaid balance of the loan, together with interest
thereon, shall become due and payable upon the date of distribution of
the Account and the Trustee shall first satisfy the indebtedness from
the amount payable to the Borrower or to the Borrower's Beneficiary
before making any payments to the Borrower or to the Beneficiary.
(e) Any loan to a Borrower under the Plan shall be adequately
secured. Such security shall include a pledge of a portion of the
Borrower's right, title and interest in the Trust Fund which shall not
exceed fifty percent (50%) of the present value of the Borrower's
vested Account balance under the Plan as determined immediately after
the loan is extended, but excluding any amounts attributable to the
Borrower's ESOP Account. Such pledge shall be evidenced by the
execution of a promissory note by the Borrower which shall grant the
security interest and provide that, in the event of any default by the
Borrower on a loan repayment, the Committee shall be authorized to take
any and all appropriate lawful actions necessary to enforce collection
of the unpaid loan.
(f) A request by a Borrower for a loan shall be made in
writing to the Committee and shall specify the amount of the loan. If a
Borrower's request for a loan is approved by the Committee, the
Committee shall furnish the Trustee with written instructions directing
the Trustee to make the loan in a lump-sum payment of cash to the
Borrower. The cash for such payment shall be obtained by redeeming
proportionately as of the date of payment the Investment Fund or Funds,
or portions thereof, that are credited to the Pre-Tax Contribution
Account, Rollover Account and Employer Matching Contribution Account of
such Borrower.
(g) A loan to a Borrower shall be considered an investment of
the Accounts of the Borrower from which the loan is made. All loan
repayments shall be credited pro rata to such Pre-Tax Contribution
Account and reinvested exclusively in shares of one or more of the
Investment Funds in accordance with Section 8.1.
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(h) Only one loan may be outstanding for a Borrower at any
given time. The Borrower must wait at least thirty (30) days after
completing payments on a loan before he may borrow again from his
Accounts.
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ARTICLE VIII
INVESTMENT DIRECTIONS
9 Investment of Trust Funds:
(a) Investment Funds: Except as provided in Article VII with
respect to Plan loans and as provided below with respect to the ESOP Fund, the
Trust Fund shall be divided into five (5) separate investment funds, these five
(5) funds being more particularly described in their respective Prospectuses (as
filed with the Securities and Exchange Commission) as follows:
(1) The Common Stock Fund shall be invested and reinvested in
the Common Stock of the Company.
(2) The Merrill Lynch Capital Fund, Inc. (the "Capital Fund")
shall be invested and reinvested in equity, debt and convertible
securities.
Most of the Capital Fund's equity portfolio is in the
common stocks of larger market capitalization, quality companies.
Sometimes, to reduce risk and to achieve the highest total investment
return, the Capital Fund may invest in other securities:
o Non-convertible, long-term debt securities, including
"deep discount" corporate debt securities of
investment grade.
o Convertible securities - fixed income issues which
give the owner the option of a later exchange for
common stock.
o Cash or money-market securities to produce interest
income h during periods of defensive investment.
The Capital Fund may invest up to 25% of its total assets in
securities of foreign issuers. The Capital Fund from time to time lends
securities (but no more than 20% of its total assets) from its
portfolio to approved borrowers and receives therefor collateral in
cash or securities issued or guaranteed by the United States Government
which are maintained at all times in an amount equal to at least 100%
of the current market value of the loaned securities. The Capital Fund
may from time to time write (i.e., sell) covered call options on its
portfolio securities and enter into closing purchase transactions with
respect to certain of such options.
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The Capital Fund may not invest in the securities of any one
issuer (other than the United States government, its agencies or
instrumentalities) if, immediately after and as a result of such
investment, the acquisition cost of the holdings of the Capital Fund in
the securities of such issuer exceeds 5% of the Capital Fund's total
assets. The Capital Fund may not invest in the securities of any single
issuer if, immediately after and as a result of such investment, the
Capital Fund owns more than 10% of the outstanding securities, or more
than 10% of the outstanding voting securities, of such issuer. In
addition, the Capital Fund may not concentrate its investments in any
particular industry; provided that if it is deemed appropriate for the
attainment of the Capital Fund's investment objective, up to 25% of its
total assets (taken at acquisition cost at the time of each investment)
may be invested in any one industry.
The Investment Advisor to the Capital Fund is Merrill Lynch
Asset Management, Inc.
(3) The Merrill Lynch Basic Value Fund, Inc. (the "Basic Value
Fund") shall be invested and reinvested in equities, primarily common
stock and, to a lesser extent, securities convertible into common
stock. The Basic Value Fund also may invest in preferred stocks and
non-convertible debt securities and utilize covered call options with
respect to portfolio securities. It reserves the right as a defensive
measure to hold other types of securities, including government and
money market securities, repurchase agreements or cash, in such
proportions as, in the opinion of management, prevailing market or
economic conditions warrant. The Basic Value Fund may invest up to 10%
of its total assets, taken at market value at the time of acquisition,
in the securities of foreign issuers.
The Basic Value Fund may not invest in securities of
any one issuer (other than the United States or its agencies or
instrumentalities), if immediately after and as a result of such
investment more than 5% of the total assets of the Basic Value Fund
taken at market value would be invested in the securities of such
issuer, or more than 10% of the outstanding securities, or more than
10% of the outstanding voting securities, of such issuer would be owned
by the Basic Value Fund. In addition, the Basic Value Fund may not
invest more than 25% of its total assets (taken at market value at the
time of each investment) in the securities of issuers in any particular
industry.
The Investment Advisor to the fund is Fund Asset
Management, Inc.
(4) The Merrill Lynch Ready Assets Trust (the "Ready Assets
Trust") is a no-load money market fund that shall be invested and
reinvested in the following types of money market securities:
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o United States government securities: marketable
securities issued by or guaranteed as to principal
and interest by the United States government and
supported by the full faith and credit of the United
States.
o United States government agency securities: debt
securities issued by government sponsored
enterprises, federal agencies and certain
international institutions which are not direct
obligations of the United States but involve
government sponsorship or guarantees by government
agencies or enterprises.
o Bank money instruments: obligations of commercial
banks or savings and loan associations such as
certificates of deposit, including variable rate
certificates of deposit and bankers' acceptances. The
obligations of commercial banks may be issued by
United States banks, foreign branches or subsidiaries
of United States banks ("Eurodollar" obligations) or
United States branches or subsidiaries of foreign
banks ("Yankeedollar" obligations).
o Short-term corporate debt instruments: commercial
paper (including variable amount master demand
notes), which refers to short-term, unsecured
promissory notes issued by corporations to finance
short-term credit needs and non-convertible corporate
debt securities (e.g., bonds and debentures) with no
more than two years remaining to maturity at the date
of settlement.
In addition, the Ready Assets Trust may invest or engage in
the following types of investments:
o Repurchase agreements, purchase and sale contracts:
The Ready Assets Trust may invest in the money market
securities described above pursuant to repurchase
agreements or purchase and sales contracts.
Repurchase agreements and purchase and sale contracts
may be entered into only with a member bank of the
Federal Reserve System or a primary dealer in United
States government securities.
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o Reverse repurchase agreements: The Ready Assets Trust
may enter into reverse repurchase agreements which
involve the sale of money market securities held by
the Ready Assets Trust, with an agreement to
repurchase the securities and agreed on price, date
and interest payment. During the time a reverse
repurchase agreement is outstanding, the Ready Assets
Trust will maintain a segregated custodial account
containing United States government or other
appropriate high-grade debt securities having a value
equal to the repurchase price.
o Lending of portfolio securities: The Ready Assets
Trust may lend portfolio securities (with a value not
in excess of 20% of its total assets) to brokers,
dealers and financial institutions and receive
collateral in cash or securities issued or guaranteed
by the United States government which will be
maintained at all times in an amount equal to at
least 100% of the current market value of the loaned
securities.
The Ready Assets Trust may not purchase any securities other
than (i) money market and (ii) other securities described above. In
addition, the Ready Assets Trust may not invest more than 20% of its
total assets (taken at market value at the time of each investment) in
the securities of issuers of any particular industry (other than United
States government securities, government agency securities or bank
money instruments). The Ready Assets Trust may not invest more than 5%
of its total assets (taken at market value at the time of each
investment) in the securities (other than United States government or
government agency securities) of any one issuer (including repurchase
agreements and purchase and sale contracts with any one bank) except
that up to 25% of the value of the Ready Assets Trust's total assets
may be invested without regard to such securities of an issuer except
that this restriction shall not apply to United States government or
government agency securities, bank money instruments, repurchase
agreements and purchase and sale contracts. The Ready Assets Trust may
not enter into repurchase agreements or purchase and sale contracts if,
as a result, more than 10% of the Ready Assets Trust's net assets
(taken at market value at the time of each investment) would be subject
to repurchase agreements or purchase and sale contracts maturing in
more than 7 days. The Ready Assets Trust may not borrow amounts in
excess of 20% of its total assets taken at market value, and then only
from banks as a temporary measure for extraordinary or emergency
purposes. The Ready Assets Trust will not borrow to increase income but
only to meet redemption requests which might otherwise require untimely
dispositions of portfolio securities. The Ready Assets Trust will not
purchase securities while
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borrowings in excess of 20% of its total assets are outstanding except
to honor prior commitments.
The Manager of the Ready Assets Trust is Merrill Lynch Asset
Management, Inc. The Manager also serves as Investment Advisor.
(5) The Merrill Lynch Federal Securities Trust (the "Federal
Securities Trust") is a mutual fund that shall be invested and
reinvested in marketable securities issued or guaranteed by the United
States government, by various agencies of the United States government
and by various instrumentalities which have been established or
sponsored by the United States government. The Federal Securities Trust
will invest in obligations issued by these instrumentalities where the
Federal Securities Trust is satisfied that the credit risk with respect
to the issuers is minimal. In addition, the Federal Securities Trust
may invest up to 5% of its assets in obligations issued or guaranteed
by the International Bank for Reconstruction and Development, an
international organization of which the United States is a member
country. The Federal Securities Trust has authority to invest in all
government securities. The Federal Securities Trust may seek to
increase its return through the use of options on the underlying
securities and may hedge all or a portion of its portfolio investments
against fluctuations in interest rates through the use of options,
interest rate futures and options on interest rate futures. The Federal
Securities Trust may write covered call options and covered put options
on United States government securities in the Federal Securities
Trust's portfolio. In addition, the Federal Securities Trust may also
write straddles (combinations of covered puts and calls on the same
underlying security). The Federal Securities Trust may write call
options with respect to securities it owns which give the holder of the
option the right to buy the underlying security covered by the option
from the Federal Securities Trust at the stated exercise price until
the option expires. The Federal Securities Trust also may write put
options which give the holder of the option the right to sell the
underlying security to the Federal Securities Trust at the stated
exercise price. The Federal Securities Trust may purchase and sell
interest rate futures contracts ("futures contracts"). The Federal
Securities Trust may purchase and write call and put options on futures
contracts. The Federal Securities Trust may purchase United States
government securities on a when-issued basis, and it may purchase or
sell United States government securities for delayed delivery. The
Federal Securities Trust may invest in United States government
securities purchase pursuant to repurchase agreements or purchase and
sale contracts. Repurchase agreements and purchase and sale contracts
may be entered into only with a member bank of the Federal Reserve
System or a primary dealer in United States government securities. The
Federal Securities Trust may lend portfolio securities, with a value
not in excess of 33-1/3% of its total assets, to brokers, dealers and
financial institutions and receive collateral
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in cash or United States government securities which will be maintained
at all times in an amount equal to at least 100% of the current market
value of the loaned securities.
Fund Asset Management, Inc. serves as the Manager and
Investment Advisor for the Federal Securities Trust.
(b) Investment Directions: The Participant shall have the
right to direct the Committee to instruct the Savings Trustee to invest his
Pre-Tax Contributions and contributions to his Rollover Account and the earnings
and accretions thereon, in any of the five (5) Investment Funds.
Each Participant shall elect an investment option at the time
he begins participating in the Plan. Through notice to the Committee in the
manner prescribed by the Committee on any day on which the Company is open for
regular business, a Participant may change his instructions with respect to the
investment of his Pre-Tax Contributions, After-Tax Contributions, Employer
Matching Contributions and Rollover Contributions in the Trust Fund. A
Participant who desires to change his instructions in this manner may direct
that the funds in his Future Pre-Tax Accounts be transferred (in no more than
ten percent (10%) increments) among the Investment Funds.
Except as otherwise expressly provided herein, interest,
dividends and other income and all profits and gains produced by each Investment
Fund shall be paid in such Investment Fund, and such interest, dividends and
other income, and profits or gains without distinction between principal and
income, shall be invested and reinvested, but only in property of the class
hereinabove specified for the particular Investment Fund. However, the Committee
may direct that dividends paid with respect to shares in the ESOP Fund be
distributed on an annual basis or more frequently in order that the deduction
under Code Section 404(k) be available to the Company, in which event income
that constitutes dividends on shares of Company Stock in the ESOP Fund shall not
be invested in Company Stock but shall be temporarily invested in cash
equivalents until distribution to Participants. In making payments in respect of
Exempt Loans, the Trustee shall utilize income and ESOP Contributions as is
specified in Section 5.3 hereof; namely, that income shall be first used to fund
principal payments and ESOP Contributions shall be first used to fund interest
payments. All purchases of Company Stock shall be made at prices which, in the
judgment of the Trustee, do not exceed the fair market value of such Company
Stock. Pending such investment or application of cash, the ESOP Trustee may
retain cash uninvested without liability for interest if it is prudent to do so,
or may invest all or any part thereof in Treasury Bills, commercial paper, or
like holdings.
9.1 Diversification Election: Effective January 1, 1992, each qualified
Participant (as defined herein) may elect within ninety (90) days after the
close of each Plan Year in the qualified election period (as defined herein) to
direct the change of the investment of at least (a) twenty-five percent (25%) of
the total number of shares of Company Stock allocated to the Participant's ESOP
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Account (to the extent such portion exceeds the amount to which a prior election
to diversify under this Section 8.2 applies) minus (b) the number of shares of
Company Stock previously distributed, transferred or diversified, in which event
such shares shall be sold and the proceeds invested, at the election of the
Participant, in the Capital Fund, the Basic Value Fund and/or the Ready Assets
Trust, as defined in Section 8.1. In the Plan Year of the election period in
which the Participant may make his final election, the percentage shall be fifty
percent (50%) instead of twenty-five percent (25%). A qualified Participant is
any Participant who has completed at least ten years of participation in the
Plan and the Prior Plan and who has attained age fifty-five (55). The qualified
election period means the six (6) Plan Year-period beginning with the first Plan
Year in which the Participant first became a qualified Participant.
9.2 Voting of Company Stock; Exercise of Other Rights:
(a) Voting rights with respect to shares of Company
Stock in the ESOP Fund allocated to the ESOP Accounts of
Participants and shares in the Company Stock Fund allocated to
the Accounts of Participants shall be voted by the Trustees in
such manner as may be directed by the respective Participants,
with fractional shares being voted on a combined basis to the
extent possible to reflect the direction of the voting
Participants. If the Trustees shall not receive timely
instruction from a Participant, the Trustees shall not vote
any shares of Company Stock with respect to which such
Participant has the right of direction and the Trustee shall
have no discretion in the matter. The Trustees shall vote
shares of Company Stock held in the Stock Suspense Account in
the same proportion as directed shares are voted, giving
effect to all affirmative directions by Participants,
including directions to vote for or against, to abstain or to
withhold the vote, and the Trustees shall have no discretion
in such matter. In determining such proportions, the actions
of the Trustees shall be governed by the terms of the Trust
Agreements.
(b) In the event that there is a tender offer or
exchange offer for outstanding shares of Company Stock, rights
with respect to the tender offer or exchange offer shall be as
with respect to voting rights described in Section 8.3(a)
above. Rights with respect to a tender offer or exchange offer
with respect to shares of Company Stock in the ESOP Fund
allocated to the ESOP Accounts of Participants and shares in
the Company Stock Fund allocated to the Accounts of
Participants shall be voted by the Trustees in such manner as
may be directed by the respective Participants, with
fractional shares being voted on a combined basis to the
extent possible to reflect the direction of the voting
Participants. If the Trustees shall not receive timely
instruction from a Participant as to the manner in which to
respond to such a
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tender offer, the Trustees shall not tender or exchange any
shares of Company Stock with respect to which such Participant
has the right to direction, and the Trustees shall have no
discretion in such matter. With respect to shares of Company
Stock held in the Stock Suspense Account and fractional shares
of Company Stock allocated to Participants' ESOP Accounts and
Employer Matching Contribution Accounts, the Trustees shall
exercise rights in connection with a tender offer or exchange
offer for the shares of Company Stock in the same proportion
as the Participants vote, tender or exchange shares of Company
Stock with respect to shares allocated to the Participants'
ESOP Accounts and Employer Matching Contribution Accounts, and
the Trustees shall have no discretion in such matter. In
determining such proportions, the actions of the Trustees
shall be governed by the terms of the Trust Agreements.
(c) Solicitation of exercise of Participants' voting
rights by management of the Company and others under a proxy
or consent provision applicable to all holders of Company
Stock shall be permitted. Solicitation of exercise of
Participant tender or exchange offer rights by management of
the Company and others shall be permitted. The Trustees shall
notify Participants of each occasion for the exercise of
voting rights or rights with respect to a tender offer or
exchange offer within a reasonable time before such rights are
to be exercised. Such notification shall include all
information distributed to shareholders by the Company
regarding the exercise of such rights. Copies of Company
written communications to Participants relating to each
opportunity for Participant exercise of rights under this
Section 8.3 shall be promptly furnished to the Trustees. The
instructions received by the Trustees from Participants shall
be held by the Trustees in confidence and shall not be
divulged or released to any person, including the Committee or
officers or employees of the Company or its Affiliates. In the
event any shares of Company Stock held in the Stock Suspense
Account are tendered or exchanged pursuant to this Section
8.3, the proceeds shall at the direction of the Board of
Directors of the Company either (i) if and to the extent the
proceeds are attributable to unallocated Company Stock be used
to repay installment purchase or other indebtedness used to
purchase the Company Stock to which such proceeds are
attributable or (ii) be reinvested in Company Stock within
ninety (90) days, or within such longer period as may be
approved by the Commissioner of Internal Revenue.
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ARTICLE IX
TRUST AGREEMENT AND TRUST FUND
10 Trust Agreement: The Trust Agreements include the Savings Trust (as
defined in Article I), and the ESOP Trust (as defined in Article I), as either
may be amended from time to time. The provisions of such Trust Agreements are
herein incorporated by reference as fully as if set out herein, and the assets
held under said Trust Agreements on behalf of this Plan shall constitute the
Trust Funds.
10.1 Benefits Paid Solely from Trust Funds: All of the benefits
provided to be paid under Article VI hereof shall be paid by the Trustees out of
the Trust Funds to be administered under such Trust Agreements. Neither the
Employer nor the Trustees shall be responsible or liable in any manner for
payment of any such benefits, and all Participants hereunder shall look solely
to such Trust Funds and to the adequacy thereof for the payment of any such
benefits of any nature or kind which may at any time be payable hereunder.
10.2 Committee Directions to Trustees: The Trustees shall make only
such payments out of the Trust Funds as may be directed by the Committee. The
Trustees shall not be required to determine or make any investigation to
determine the identity or mailing address of any person entitled to any payments
out of the Trust Funds and shall have discharged its obligation in that respect
when it shall have sent checks or other papers by ordinary mail to such persons
and addresses as may be certified to it by the Committee.
10.3 Trustees' Reliance on Committee Instructions: In any case where
the Trustees shall be required hereunder to act upon instructions to be received
from the Committee, the Trustee shall be protected in relying on any such
instructions which shall be in writing and signed by any member of, or Secretary
of, the Committee, and the Trustee shall be protected in relying upon the
authority to act of any person certified to it by the Company as a member of, or
Secretary of, the Committee until a successor to any such person shall be
certified to the Trustees by the Company.
10.4 Authority of Trustees in Absence of Instructions from the
Committee: If at any time the Committee shall be incapable for any reason of
giving any directions, instructions or authorizations to the Trustees as are
herein provided for and as may be required incident to the administration of
this Plan, the Trustees may act and shall be completely protected and without
liability in so acting without such directions, instructions and authorizations
as it in its sole discretion deems appropriate and advisable under the
circumstances for the carrying out of the provisions of this Plan. In the event
of termination of this Plan for any reason, the Committee shall be authorized to
give all such instructions to the Trustees, and the Trustees shall be protected
in relying on all such instructions, as may be necessary to make payment to any
persons then interested in the Trust Funds
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of all such amounts as are specified herein to be paid under Section 10.3 hereof
upon the termination of this Plan and the Trust Agreements.
10.5 Compliance with Exchange Act Rule 10(b)(18): At any time that the
Trustees make open market purchases of Company Stock, the Trustees will either
(i) be an "agent independent of the issuer" as that term is defined in Rule
10(b)(18) promulgated pursuant to the Securities and Exchange Act of 1934, as
amended (the "Exchange Act") or (ii) make such open market purchases in
accordance with the provisions, and subject to the restrictions, of Rule
10(b)(18) of the Exchange Act.
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ARTICLE X
ADOPTION OF PLAN BY OTHER CORPORATIONS,
AMENDMENT AND TERMINATION OF THE PLAN, AND
DISCONTINUANCE OF CONTRIBUTIONS TO THE TRUST FUNDS
11 Adoption by Employers: Every Employer which shall have adopted the Plan
shall thereby become a participating Employer whose eligible Employees, subject
to the Plan provisions, shall make and receive Contributions and have
established for them Accounts under the Plan. Any corporation or other
organization with employees, now in existence or hereafter formed or acquired
which is not already an Employer under this Plan and which is otherwise legally
eligible may, with the approval of the Company by action of its Board of
Directors, adopt and become an Employer by executing and delivering to the
Company and the Trustees an adoptive instrument specifying the classification of
its Employees who shall be eligible to participate in the Plan and evidencing
the terms of the Plan with respect to its eligible Employees. The adoptive
instrument may contain such changes and amendments in the terms and provisions
of the Plan as adopted by such Employer as may be desired by such Employer and
acceptable to the Company. Any such Affiliate which shall adopt this Plan shall
designate the Company as its agent to act for it in all transactions affecting
the administration of the Plan and shall designate the Committee to act for such
corporation and its Participants in the same manner in which the Committee may
act for the Company and its Participants hereunder. The adoptive instrument
shall specify the effective date of such adoption of the Plan and shall become,
as to such corporation and its Employees, as part of this Plan. Upon an
Employer's liquidation, bankruptcy, insolvency, sale, consolidation or merger to
or with another organization that is not an Employer hereunder, in which such
Employer is not the surviving company, all obligations of that Employer
hereunder and under the Trust Agreements shall terminate automatically, and the
Trust Fund assets attributable to the Employees of such Employer shall be held
or distributed as herein provided unless, with the approval of the Company, the
successor to that Employer assumes the duties and responsibilities of such
Employer, by adopting this Plan and the Trust Agreements, or by establishment of
a separate plan and trust to which the assets of the Trust Funds held on behalf
of the Employees of such Employer shall be transferred with the consent and
agreement of that Employer. Upon the consolidation or merger of two or more of
the Employers under this Plan with each other, the surviving Employer or
organization shall automatically succeed to all the rights and duties under the
Plan and Trust Agreements of the Employers involved.
11.1 Continuous Service: The following special provisions shall apply
to all Employers:
(a) An Employee shall be considered in continuous Service
while regularly employed simultaneously or successively by one or more
Employers.
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(b) The transfer of a Participant from one Employer to another
Employer shall not be deemed a termination of Service.
11.2 Amendment of the Plan: The Company shall have the right to amend
or modify this Plan and the Trust Agreements (with the consent of the applicable
Trustee) at any time and from time to time to any extent that it may deem
advisable. Any such amendment or modification shall be set out in an instrument
in writing duly authorized by the Board of Directors of the Company and executed
by the Company. Upon delivery by the Company of such an instrument amending the
Plan to the Trustees and to each other Employer, this Plan shall be deemed to
have been amended or modified in the manner and to the extent and effective as
of the date therein set forth, and thereupon any and all Participants whether or
not they shall have become such prior to such amendment or modification shall be
bound thereby. No such amendment or modification shall, however, increase the
duties or responsibilities of the Trustees without their consent thereto in
writing, or have the effect of transferring to or vesting in any Employer any
interest or ownership in any properties of the Trust Funds, or of permitting the
same to be used for or diverted to purposes other than for the exclusive benefit
of the Participants and their Beneficiaries. No such amendment shall decrease
the Account of any Participant or shall decrease any Participant's vested
interest in his Account. No amendment shall directly or indirectly reduce a
Participant's non-forfeitable vested percentage in his benefits under Section
6.1 of this Plan unless each Participant having not less than three (3) years of
Service is permitted to elect to have his non-forfeitable vested percentage in
his benefits computed under the provisions of Section 6.1 without regard to the
amendment. Such election shall be available during an election period which
shall begin on the date such amendment is adopted and shall end on the latest of
(i) the date sixty (60) days after such amendment is adopted, (ii) the date
sixty (60) days after such amendment is effective or (iii) the date sixty (60)
days after such Participant is issued written notice of the amendment by the
Committee or the Employer. Notwithstanding anything herein to the contrary, the
Plan or the Trust Agreements may be amended in such manner as may be required at
any time to make it conform to the requirements of the Code or of any United
States statutes with respect to employees' trusts, or of any amendment thereto,
or of any regulations or rulings issued pursuant thereto, and no such amendment
shall be considered prejudicial to any then existing rights of any Participant
or his Beneficiary under the Plan. The Committee shall deliver a copy of each
such amendment to every Affiliate having theretofore adopted the Plan, and every
Affiliate having theretofore adopted the Plan shall be deemed to have approved
and accepted each such amendment except for any particular Affiliate which, with
the express consent of the Company set forth thereupon, shall execute an
instrument effective as of the date of such amendment setting forth variations
in, or negating the effect of, such amendment as applicable to the participation
in the Plan of such Affiliate.
11.3 Termination of the Plan: The Plan may be terminated pursuant to
the provisions of, and as of any subsequent date specified in, an instrument in
writing executed by the Company, and approved and authorized by the Board of
Directors of the Company, and which said instrument shall be delivered to the
Trustee.
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11.4 Distribution of Trust Funds on Termination: In the event of a
termination of the Plan by the Company, the assets and properties of the Trust
Funds shall be valued and allocated as provided in Sections 5.2 and 5.3, and
each Participant shall be fully vested in all amounts attributable to his
Employer Matching Contribution Account, his Rollover Account and his ESOP
Account, and thereafter each such Participant shall become entitled to
distributions in respect of his Accounts in the Plan in the manner as provided
in Sections 6.6(a) and 6.6(b) herein. In the event the Plan is terminated with
respect to all Employers, any Company Stock held in the Suspense Stock Account
shall be sold to the extent necessary to pay the outstanding principal balance
and any accrued interest on any installment purchase contracts and/or loan
obligations of the Trust Funds incurred for the purpose of directly or
indirectly funding the purchase of such Stock, and any such installment purchase
contracts and/or loan obligations shall be paid in full prior to distribution of
the assets of the Trust Funds to Participants; provided, however, that the Board
of Directors of the Company may authorize distribution of Trust Fund assets
prior to satisfaction of installment purchase contracts and/or loan obligations
but only if under applicable federal law such assets or income attributable
thereto cannot be used to repay such installment purchase contracts or loan
obligations. Notwithstanding the foregoing, a Participant shall not be entitled
to receive a distribution as a result of the termination of the Plan if the
Company establishes or maintains a successor plan within the period ending 12
months after distribution of all assets from the Plan.
11.5 Effect of Discontinuance of Contributions: If the Company shall
discontinue its Contributions to the Trust Funds, or suspend its Contributions
to the Trust Funds under such circumstances so as to constitute a discontinuance
of Contributions within the purview of the reasoning of Treasury Regulations
Section 1.401-6(c), then all amounts theretofore credited to the Accounts of the
Participants shall become fully vested, and throughout any such period of
discontinuance of Contributions all other provisions of the Plan shall continue
in full force and effect other than the provisions for Contributions by an
Employer or Participants and the forfeiture provisions of Section 6.1.
11.6 Merger of Plan with Another Plan: In the case of any merger or
consolidation of the Plan with, or transfer in whole or in part of the assets
and liabilities of the Trust Fund to another trust fund held under, any other
plan of deferred compensation maintained or to be established for the benefit of
all or some of the Participants of this Plan, the assets of the Trust Funds
applicable to such Participants shall be transferred to the other trust fund
only if:
(a) Each Participant would (if either this Plan or the other
plan then terminated) receive a benefit immediately after the merger,
consolidation or transfer which is equal to or greater than the benefit
he would have been entitled to receive immediately before the merger,
consolidation or transfer (if this Plan had then terminated);
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(b) Resolutions of the Board of Directors of the Employer
under this Plan, and of any new or successor employer of the affected
Participants, shall authorize such transfer of assets; and, in the case
of the new or successor employer of the affected Participants, its
resolutions shall include an assumption of liabilities with respect to
such Participants' inclusion in the new employer's plan; and
(c) Such other plan and trust are qualified under Sections
401(a) and 501(a) of the Code.
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ARTICLE XI
TOP-HEAVY PLAN REQUIREMENTS
12 General Rule: For any Plan Year for which this Plan is a Top-Heavy
Plan, as defined in Section 11.7, and despite any other provisions of this Plan
to the contrary, this Plan shall be subject to the provisions of this Article
XI.
12.1 Vesting Provisions: Each Participant who has completed an Hour of
Service after the Plan becomes top heavy and while the Plan is top heavy and who
has completed the Vesting Service specified in the following table shall be
vested in his Account under this Plan at least as rapidly as is provided in the
following schedule:
<TABLE>
<CAPTION>
Vesting Service Vested Percent
<S> <C>
Less than 2 years 0%
2 but less than 3 years 20%
3 but less than 4 years 40%
4 but less than 5 years 60%
5 but less than 6 years 80%
6 years or more 100%
</TABLE>
If an Account becomes vested by reason of the application of the preceding
schedule, it may not therefore be forfeited by reason of re-employment after
retirement pursuant to a suspension of benefits provision, by reason of
withdrawal of any mandatory employee contributions to which employer
contributions were keyed, or for any other reason. If the Plan subsequently
ceases to be top heavy, the preceding schedule shall continue to apply with
respect to any Participant who had at least three (3) years of service (as
defined in Treasury Regulation Section 1.411(a)-8(b)(3)) as of the close of the
last year that the Plan was top heavy. For all other Participants, the
non-forfeitable percentage of their Accounts provided in the preceding schedule
prior to the date the Plan ceases to be top heavy shall not be reduced, but
future increases shall be made only in accordance with Section 6.1.
12.2 Minimum Contribution Provisions: Each Participant who (i) is a
Non-Key Employee, as defined in Section 11.8 and (ii) is employed on the last
day of the Plan Year (regardless of whether or not such Participant has
completed one thousand (1,000) Hours of Service) will be entitled to have
contributions and forfeitures allocated to his Account of not less than three
percent (3%) (the "Minimum Contribution Percentage") of the Participant's
Compensation. This minimum allocation percentage shall be provided without
taking Pre-Tax Contributions of Non-Key Employees into account. A Non-Key
Employee may not fail to receive a Minimum Contribution Percentage because of a
failure to receive a specified minimum amount of Compensation or a failure to
make mandatory
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employee or elective contributions. This Minimum Contribution Percentage will be
reduced for any Plan Year to the percentage at which contributions (including
forfeitures) are made or are required to be made under the Plan for the Plan
Year for the Key Employee for whom such percentage is the highest for such Plan
Year. For this purpose, the percentage with respect to a Key Employee will be
determined by dividing the contributions (including forfeitures) made for such
Key Employee by his total compensation (as defined in Section 415 of the Code).
Such amount shall be adjusted automatically for each Plan Year to the amount
prescribed by the Secretary of the Treasury or his delegate pursuant to
regulations for the calendar year in which such Plan Year commences.
Contributions considered under the first paragraph of this
Section 11.3 will include Employer contributions under this Plan and under all
other defined contribution plans required to be included in an Aggregation Group
(as defined in Section 11.7 below), but will not include Employer contributions
under any plan required to be included in such aggregation group if the plan
enables a defined benefit plan required to be included in such group to meet the
requirements of the Code prohibiting discrimination as to contributions in favor
of employees who are officers, shareholders, or the highly compensated or
prescribing the minimum participation standards. If the highest rate allocated
to a Key Employee for a year in which the Plan is top heavy is less than three
percent (3%), amounts contributed as a result of a salary reduction agreement
must be included in determining contributions made on behalf of Key Employees.
Employer Contributions made on behalf of Non-Key Employees
that are taken into account to satisfy the Minimum Contribution Percentage shall
not be treated as Employer Matching Contributions for purposes of determining
the Actual Contribution Percentage under Article IV and must meet the
nondiscrimination requirements of Section 401(a)(4) without regard to Section
401(m).
12.3 Limitation on Contributions: In the event that the Company, other
Employer or an Affiliate (hereinafter in this Article collectively referred to
as a "Considered Company") also maintains a defined benefit plan providing
benefits on behalf of Participants in this Plan, one of the two following
provisions will apply:
(a) If for the Plan Year this Plan would not be a Top-Heavy
Plan if "ninety percent (90%)" were substituted for "sixty percent
(60%)" in Section 11.7, then the percentage of three percent (3%) used
in Section 11.3 is changed to four percent (4%).
(b) If for the Plan Year this Plan would continue to be a
Top-Heavy Plan if "ninety percent (90%)" were substituted for "sixty
percent (60%)," in Section 11.7, then the denominator of both the
defined contribution plan fraction and the defined benefit plan
fraction will be calculated as set forth in Section 5.5 for the
limitation year ending in such Plan Year by substituting "one (1.0)"
for "one and twenty-five
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hundredths (1.25)" in each place such figure appears. This subsection
(b) will not apply for such Plan Year with respect to any individual
for whom there are no (i) Employer contributions, Forfeitures or
voluntary non-deductible contributions allocated to such individual or
(ii) accruals earned under the defined benefit plan. Furthermore, the
transitional rule set forth in Section 415(e)(6)(B)(i) of the Code
shall be applied by substituting "Forty-One Thousand Five Hundred
Dollars ($41,500)" for "Fifty-One Thousand Eight Hundred Seventy-Five
Dollars ($51,875)" where it appears therein.
12.4 Coordination with Other Plans: If another defined contribution or
defined benefit plan maintained by a Considered Company provides contributions
or benefits on behalf of a Participant in this Plan, the other plan will be
treated as part of this Plan pursuant to applicable principles prescribed by
U.S. Treasury Regulations or applicable IRS rulings (such as Revenue Ruling
81-202 or any successor ruling) to determine whether this Plan satisfies the
requirements of Sections 11.2 and 11.3 and to avoid inappropriate omissions or
inappropriate duplication of minimum contributions. The determination will be
made by the Plan Administrator upon the advice of counsel.
In the event a Participant is covered by a defined benefit
plan which is top-heavy pursuant to Section 416 of the Code, a comparability
analysis (as prescribed by Revenue Ruling 81-202 or any successor ruling) shall
be performed in order to establish that the plans are providing benefits at
least equal to the defined benefit minimum.
12.5 Distributions to Certain Key Employees: Notwithstanding any other
provision of this Plan, the entire interest in this Plan of each Participant who
is a Key Employee, by reason of clause (iii) of subparagraph (c) of Section 11.7
in the calendar year in which the Participant attains age seventy and one-half
(70-1/2), shall commence to be distributed to such Participant not later than
the April 1 following such calendar year.
12.6 Determination of Top-Heavy Status: The Plan will be a Top-Heavy
Plan for any Plan Year if, as of the Determination Date, the aggregate of the
Accounts under the Plan for Participants (including former Participants) who are
Key Employees exceeds sixty percent (60%) of the aggregate of the Accounts of
all Participants, excluding former Key Employees, or if this Plan is required to
be in an Aggregation Group in any such Plan Year in which such Group is a
Top-Heavy Group. In determining Top-Heavy status if an individual has not
performed one Hour of Service for any Considered Company at any time during the
five-year period ending on the Determination Date, any accrued benefit for such
individual and the aggregate Accounts of such individual shall not be taken into
account.
For purposes of this Section, the capitalized words have the
following meanings:
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(a) "Aggregation Group" means the group of plans, if any, that
includes both the group of plans required to be aggregated and the
group of plans permitted to be aggregated. The group of plans required
to be aggregated (the "required aggregation group") includes:
(i) Each plan of a Considered Company in which a Key
Employee is a participant, and
(ii) Each other plan, including collectively
bargained plans, of a Considered Company which enables a plan
in which a Key Employee is a participant to meet the
requirements of the Code prohibiting discrimination as to
contributions or benefits in favor of employees who are
officers, shareholders or the highly compensated or
prescribing minimum participation standards.
The group of plans that are permitted to be aggregated (the "permissive
aggregation group") includes the required aggregation group plus one or
more plans of a Considered Company that is not part of the required
aggregation group and that the Considered Company certifies as a plan
within the permissive aggregation group. Such plan or plans may be
added to the permissive aggregation group only if, after the addition,
the aggregation group as a whole continues not to discriminate as to
contributions or benefits in favor of officers, shareholders or the
highly compensated and to meet the minimum participation standards
under the Code.
(b) "Determination Date" means for any Plan Year the last day
of the immediately preceding Plan Year.
(c) "Key Employee" means any employee or former employee under
this Plan who, at any time during the Plan Year in question or during
any of the four preceding Plan Years, is or was one of the following:
(i) An officer of a Considered Company having an
annual Compensation greater than fifty percent (50%) of the
amount in effect under Section 415(b)(1)(A) of the Internal
Revenue Code for any such Plan Year. Whether an individual is
an officer shall be determined by the Considered Company on
the basis of all the facts and circumstances, such as an
individual's authority, duties and term of office, not on the
mere fact that the individual has the title of an officer. For
any such Plan Year, officers considered to be Key Employees
will be no more than the fewer of:
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(A) Fifty (50) employees; or
(B) Ten percent (10%) of the employees or,
if greater than ten percent (10%), three (3)
employees.
For this purpose, the highest paid officers shall be
selected.
(ii) One of the ten (10) Employees owning (or
considered as owning, within the meaning of the constructive
ownership rules of Section 416(i)(1)(B) of the Code) the
largest interests in the Considered Company. An employee who
has some ownership interest is considered to be one of the top
ten (10) owners unless at least ten (10) other employees own a
greater interest than that employee. However, an employee will
not be considered a top ten (10) owner for a Plan Year if the
employee earns less than the maximum dollar limitation on
annual additions to a Participant's account in a defined
contribution plan under the Code, as in effect for the
calendar year in which the Determination Date falls.
(iii) Any person who owns (or is considered as
owning, within the meaning of the constructive ownership rules
of Section 416(i)(1)(B) of the Code) more than five percent
(5%) of the outstanding stock of a Considered Company or stock
possessing more than five percent (5%) of the combined voting
power of all stock of the Considered Company.
(iv) Any person who has an annual Compensation from
the Considered Company of more than One Hundred Fifty Thousand
Dollars ($150,000) and who owns (or is considered as owning
within the meaning of the constructive ownership rules of
Section 416(i)(1)(B) of the Code) more than one percent (1%)
of the outstanding stock of the Considered Company or stock
possessing more than one percent (1%) of the total combined
voting power of all stock of the Considered Company.
For purposes of this subsection, annual Compensation includes all items
includable as Compensation within the meaning of Section 11.7(k) and
further includes the amount otherwise excludable from an employee's
gross income by reason of Section 125, 402(e)(3) or 402(h)(1)(B) of the
Code.
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For purposes of this subsection (c), a Beneficiary of a Key Employee
shall be treated as a Key Employee. For purposes of parts (iii) and
(iv), each Considered Company is treated separately in determining
ownership percentages; but all such Considered Companies shall be
considered a single employer in determining the amount of compensation.
(d) "Non-Key Employee" means any employee (and any Beneficiary
of an employee) who is not a Key Employee.
(e) "Top-Heavy Group" means the Aggregation Group, if as of
the applicable Determination Date, the sum of the present value of the
cumulative accrued benefits for Key Employees under all defined benefit
plans included in the Aggregation Group plus the aggregate of the
accounts of Key Employees under all defined contribution plans included
in the Aggregation Group exceeds sixty percent (60%) of the sum of the
present value of the cumulative accrued benefits for all employees,
excluding former Key Employees as provided in paragraph (i) below,
under all such defined benefit plans plus the aggregate accounts for
all employees, excluding former Key Employees as provided in paragraph
(i) below, under all such defined contribution plans. In determining
Top-Heavy status, if an individual has not performed one (1) Hour of
Service for any Considered Company at any time during the five-year
period ending on the Determination Date, any accrued benefit for such
individual and the aggregate accounts of such individual shall not be
taken into account. If the Aggregation Group that is a Top-Heavy Group
is a required aggregation group, each plan in the group will be a
Top-Heavy Plan. If the Aggregation Group that is a Top-Heavy Group is a
permissive aggregation group, only those plans that are part of the
required aggregation group will be treated as Top-Heavy Plans. If the
Aggregation Group is not a Top-Heavy Group, no plan within such group
will be a Top-Heavy Plan.
In determining whether this Plan constitutes a Top-Heavy Plan, the
Committee (or its agent) will make the following adjustments:
(f) When more than one plan is aggregated, the Committee shall
determine separately for each plan as of each plan's Determination Date
the present value of the accrued benefits (for this purpose using the
actuarial assumptions set forth in the applicable plan) or account
balance. The results shall then be aggregated by adding the results of
each plan as of the Determination Dates for such plans that fall within
the same calendar year.
(g) In determining the present value of the cumulative accrued
benefit or the amount of the account of any employee, such present
value or account will include
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the amount in dollar value of the aggregate distributions made to such
employee under the applicable plan during the five-year period ending
on the Determination Date unless reflected in the value of the accrued
benefit or account balance as of the most recent Valuation Date. The
amounts will include distributions to employees representing the entire
amount credited to their accounts under the applicable plan.
(h) Further, in making such determination, such present value
or such account shall include any rollover contribution (or similar
transfer), as follows:
(i) If the rollover contribution (or similar
transfer) is initiated by the employee and made to or from a
plan maintained by another Considered Company, the plan
providing the distribution shall include such distribution in
the present value or such account; the plan accepting the
distribution shall not include such distribution in the
present value or such account unless the plan accepted it
before December 31, 1983.
(ii) If the rollover contribution (or similar
transfer) is not initiated by the employee or made from a plan
maintained by another Considered Company, the plan accepting
the distribution shall include such distribution in the
present value or such account, whether the plan accepted the
distribution before or after December 31, 1983; the plan
making the distribution shall not include the distribution in
the present value or such account.
(i) In any case where an individual is a Non-Key Employee with
respect to an applicable plan but was a Key Employee with respect to
such plan for any prior Plan Year, any accrued benefit and any account
of such employee will be altogether disregarded. For this purpose, to
the extent that a Key Employee is deemed to be a Key Employee if he or
she met the definition of Key Employee within any of the four preceding
Plan Years, this provision will apply following the end of such period
of time.
(j) "Valuation Date" means for purposes for determining the
present value of an accrued benefit as of the Determination Date the
date determined as of the most recent valuation date which is within a
twelve-month period ending on the Determination Date. For the first
plan year of a plan, the accrued benefit for a current employee shall
be determined either (i) as if the individual terminated service as of
the Determination
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Date or (ii) as if the individual terminated service as of the
valuation date, but taking into account the estimated accrued benefit
as of the Determination Date. The Valuation Date shall be determined in
accordance with the principles set forth in Q.&A. T-25 of Treasury
Regulations Section 1.416-1.
(k) For purposes of this Section, "Compensation" shall have
the meaning given to it in Section 5.5(d)(6) of the Plan.
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ARTICLE XII
MISCELLANEOUS PROVISIONS
13 Terms of Employment: The adoption and maintenance of the provisions of
this Plan shall not be deemed to constitute a contract between the Employer and
any Employee, or to be a consideration for, or an inducement or condition of,
the employment of any person. Nothing herein contained shall be deemed to give
to any Employee the right to be retained in the employ of the Employer or to
interfere with the right of the Employer to discharge any Employee at any time,
nor shall it be deemed to give the Employer the right to require any Employee to
remain in its employ, nor shall it interfere with any Employee's right to
terminate his employment at any time.
13.1 Controlling Law: This Plan shall be construed, regulated and
administered under the laws of the State of Louisiana, the Savings Trust shall
be construed, regulated and administered under the laws of the State of New
Jersey, and the ESOP Trust shall be construed, regulated and administered under
the laws of the Commonwealth of Massachusetts, all subject, however, to such
determinations under the Plan as may be governed by ERISA, and related
provisions of the Code.
13.2 Invalidity of Particular Provisions: In the event any provision of
this Plan shall be held illegal or invalid for any reason, said illegality or
invalidity shall not affect the remaining provisions of this Plan but shall be
fully severable, and this Plan shall be construed and enforced as if said
illegal or invalid provisions had never been inserted herein.
13.3 Non-Alienability of Rights of Participants: No interest, right or
claim in or to the part of the Trust Fund, attributable to the Pre-Tax
Contribution Account, the After-Tax Contribution Account, the Employer Matching
Contribution Account, the Rollover Account or the ESOP Account of any
Participant, or any distribution of benefits therefrom, shall be assignable,
transferable or subject to sale, mortgage, pledge, hypothecation, commutation,
anticipation, garnishment, attachment, execution, claim or levy of any kind,
voluntary or involuntary (excluding a levy for taxes filed upon the Plan by the
Internal Revenue Service), including without limitation any claim asserted by a
spouse or former spouse of any Participant, and the Trustees shall not recognize
any attempt to assign, transfer, sell, mortgage, pledge, hypothecate, commute or
anticipate the same. 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 Code. The Committee shall establish a written procedure to be used
to determine the qualified status of such orders and to administer distributions
under such orders. Further, to the extent provided under the qualified domestic
relations order a former spouse of a Participant shall be treated as a spouse
for all purposes of the Plan. If the Committee receives a qualified domestic
relations order with respect to a Participant, the Committee may authorize the
immediate distribution of the amount assigned to the
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Participant's former spouse, to the extent permitted by law, from the
Participant's Pre-Tax Contribution Account, After-Tax Contribution Account,
Rollover Account and the vested portion of his Employer Matching Contribution
Account and ESOP Account.
13.4 Payments in Satisfaction of Claims of Participants: Any
distribution to any Participant or his Beneficiary or legal representative, in
accordance with the provisions of the Plan, of the interest in the Trust Fund
attributable to his Pre-Tax Contribution Account and/or After-Tax Contribution
Account, his Rollover Account and the vested portion of his Employer Matching
Contribution Account and ESOP Account, shall be in full satisfaction of all
claims under the Plan against the Trust Fund, the Trustee, the Company and the
Employer. The Trustee may require that any distributee execute and deliver to
the Trustee a receipt and a full and complete release of the Employer as a
condition precedent to any payment or distribution under the Plan.
13.5 Payments Due Minors and Incompetents: If the Committee determines
that any person to whom a payment is due hereunder is a minor or is incompetent
by reason of physical or mental disability, the Committee shall have power to
cause the payments becoming due such person to be made to the guardian of the
minor or the guardian of the estate of the incompetent, without the Committee or
the Trustee being responsible to see to the application of such payment.
Payments made pursuant to such power shall operate as a complete discharge of
the Committee, the Trustee and the Employer.
13.6 Acceptance of Terms and Conditions of Plan by Participants: Each
Participant, through execution of the application required under the terms of
the Plan as a condition of participation herein, for himself, his heirs,
executors, administrators, legal representatives and assigns, approves and
agrees to be bound by the provisions of this Plan and the Trust Agreement and
any subsequent amendments thereto, and all actions of the Committee and the
Trustee hereunder. In consideration of the adoption of this Plan by the
Employer, and the Contributions of the Employer to the Trust Fund, each
Participant agrees by the execution of his application to participate herein to
release and hold harmless to the extent permitted by ERISA the Employer, the
Committee and the Trustee from any liability for any act whatsoever, past,
present or future, performed in good faith in such respective capacities
pursuant to the provisions of this Plan or the Trust Agreement.
13.7 Impossibility of Diversion of Trust Fund: Notwithstanding any
provision herein to the contrary, no part of the corpus or the income of the
Trust Fund shall ever be used for or diverted to purposes other than for the
exclusive benefit of the Participants or their Beneficiaries or for the payment
of expenses of the Plan. No part of the Trust Fund shall ever revert to the
Employer.
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IN WITNESS WHEREOF, CENTRAL LOUISIANA ELECTRIC
COMPANY, INC. has executed these presents as evidenced by the signatures affixed
hereto of its officers hereunto duly authorized, and by its corporate seal being
affixed hereto, in a number of copies, all of which shall constitute but one and
the same instrument, which may be sufficiently evidenced by any such executed
copy hereof, this ______ day of _______________, 1994, effective as of January
1, 1994.
CENTRAL LOUISIANA ELECTRIC
COMPANY, INC.
By
------------------------------
Vice President
ATTEST:
- -------------------------------
Secretary
(SEAL)
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THE STATE OF LOUISIANA )
PARISH )
- --------------
BEFORE ME, the undersigned authority, on this day personally
appeared ______________________________, _____________________________ of
CENTRAL LOUISIANA ELECTRIC COMPANY, INC., known to me to be the person and
officer whose name is subscribed to the foregoing instrument, and acknowledged
to me that he executed the same as the act of the said CENTRAL LOUISIANA
ELECTRIC COMPANY, INC., a corporation, and that he executed the same as the act
and deed of said corporation for the purposes and consideration therein
expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this the _____ day of
_________________, 1994.
------------------------------------
Notary Public, State of Louisiana
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CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
401(k) SAVINGS AND INVESTMENT PLAN
(As Amended and Restated Effective January 1, 1994)
FIRST AMENDMENT
Central Louisiana Electric Company, Inc., a Louisiana corporation (the
"Company"), having established the Central Louisiana Electric Company, Inc.
401(k) Savings and Investment Plan, as amended and restated effective January 1,
1994 (the "Plan"), and having reserved the right to amend the Plan under Section
10.03 thereof, does hereby amend the Plan, effective as of August 1, 1997, or as
otherwise herein provided, as follows:
14. The fourth paragraph in the Plan's Recitals is amended to read as
follows:
The Central Louisiana Electric Company 401(k) Savings and
Investment Trust established effective January 1, 1985, as amended and
restated effective August 1, 1997, by Trust Agreement with UMB Bank,
N.A., as trustee thereof, is intended to continue to effect and to form
a part of this Plan. The Central Louisiana Electric Company 401(k)
Savings and Investment Plan ESOP Trust, which was established effective
April 2, 1991, and which was combined with the Central Louisiana
Electric Company 401(k) Savings and Investment Trust pursuant to an
amendment and restatement effective August 1, 1997, is also intended to
form a part of this Plan. The Plan and Trust Agreement are also
intended to meet the requirements of Sections 401(a), 401(k), and
501(a) of the Code, and of the Employee Retirement Income Security Act
of 1974, as either may be amended from time to time.
15. The last two sentences of the fourth paragraph in Section 1.12 are
deleted.
16. Section 1.20 is amended to read as follows:
1.20 Entry Date: The Effective Date and any other day during
the calendar year.
17. Section 1.25 is amended to read as follows:
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1.25 ESOP Trust: The Central Louisiana Electric Company 401(k)
Savings and Investment Plan ESOP Trust established effective April 2,
1991, as amended and restated and combined with the Savings Trust
effective August 1, 1997, and as thereafter may be amended.
18. Section 1.26 is amended to read as follows:
1.26 ESOP Trustee: UMB Bank, N.A., a national banking
association having its principal place of business at Kansas City,
Missouri.
19. Section 1.31 is amended to read as follows:
1.31 Investment Fund: One (1) of the Investment Funds
established and held under the Trust Fund, as described in Section 8.1.
20. Section 1.45 is amended to read as follows:
1.45 Savings Trust: Central Louisiana Electric Company 401(k)
Savings and Investment Plan Trust as established effective January 1,
1985, as amended and restated effective August 1, 1997, and as
thereafter may be amended.
21. Section 1.46 is amended to read as follows:
1.46 Savings Trustee: UMB Bank, N.A., a national banking
association having its principal place of business at Kansas City,
Missouri.
22. Section 1.53 is amended to read as follows:
1.53 Valuation Date: Each business day of the Plan Year. The
last business day of each calendar quarter shall be the "quarterly
Valuation Date," and the last day of December of each Plan Year shall
be the "annual Valuation Date."
23. The last sentence of the first paragraph of Section 3.1 is amended
to read as follows:
Each Employee who is not ineligible shall be eligible to participate in
the Plan as of the Entry Date which coincides with his date of hire.
24. Section 3.4 is amended to read as follows:
3.4 Application by Participants: Each Employee who shall
become eligible to participate in the Plan and who shall desire to
become a Participant shall complete
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an application in such form as may be prescribed by the Committee and
in accordance with administrative procedures established by the
Committee, in which the Participant shall elect to make Pre-Tax
Contributions which total no more than sixteen percent (16%) of his
Compensation, and shall designate the amount, if any, of his Pre-Tax
Basic Contribution and Pre-Tax Excess Contribution, as contemplated
under Section 4.2 hereof, and his choice of investment options under
Section 8.1 hereof. Pre-Tax Contributions will begin as soon as
administratively practicable after the application is filed.
25. The last five words in existing paragraph (b) of Section 3.5 are
deleted, and the following new language is inserted at the end of that
paragraph:
"Valuation Date which coincides with the date of distribution."
26. The third sentence in Section 3.8 is amended to read as follows:
Upon the re-employment of any person before he has a Break In Service,
he shall participant in the Plan as of the date of his re-employment
(if he is not ineligible), and he may be entitled to a new Employer
Matching Contribution Account and ESOP Account if he had received no
distribution by reason of his prior termination of Service.
27. The first sentence in paragraph (a) of Section 3.8 is amended to
read as follows:
If the re-employed Employee was not a Participant in the Plan during
his prior period of Service, he shall commence participation in the
Plan on his date of re-employment (if he is not ineligible).
28. The first sentence in the second paragraph of paragraph (a) in
Section 3.9 is amended to read as follows: If an individual is transferred to
eligible employment covered by this Plan from employment with an Employer or
Affiliate not covered by the Plan, he shall be eligible to participate in this
Plan as of the date of his transfer.
29. The second and third paragraphs of Section 4.2 are amended to read
as follows:
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Each Participant shall notify the Committee of the amount he
elects to defer as a Pre-Tax Basic Contribution and as a Pre-Tax Excess
Contribution, in accordance with administrative procedures established
by the Committee, until such time as the Committee may authorize the
discontinuance of the Pre-Tax Contributions according to uniform,
nondiscriminatory policies which may be developed by the Committee.
Each such election shall continue in effect during subsequent Plan
Years unless the Participant shall notify the Committee of his election
to change or discontinue his Pre-Tax Basic Contribution or his Pre-Tax
Excess Contribution in accordance with administrative procedures
established by the Committee.
A Participant may change the amount of his Pre-Tax Basic
Contribution and/or Pre-Tax Excess Contribution at any time during the
Plan Year by directing the Committee, in accordance with administrative
procedures established by the Committee, to change the rate of the
Contribution(s). A Participant may discontinue his Pre-Tax Basic
Contribution and/or Pre-Tax Excess Contribution at any time during the
Plan Year by directing the Committee, in accordance with administrative
procedures established by the Committee, to discontinue the deferral of
his Compensation.
30. The following new paragraph is added at the end of Section 4.2:
The Committee may, as a part of the administrative procedures
it establishes and in lieu of written procedures contemplated in this
Plan, authorize use of an "automated response unit" which generates
written acknowledgments of transactions.
31. Section 4.4 is amended to read as follows:
4.4 Actual Deferral Percentage Limits: The Actual Deferral
Percentage for the eligible Highly Compensated Employees for any Plan
Year shall not exceed the greater of (a) or (b), as follows:
(a) The Actual Deferral Percentage of Compensation
for the eligible non-Highly Compensated Employees times 1.25,
or
(b) The lesser of (i) the Actual Deferral Percentage
of Compensation for the eligible non-Highly Compensated
Employees times 2.0 or (ii) the Actual Deferral Percentage of
Compensation for the eligible non-Highly Compensated Employees
plus two (2) percentages points or such lesser amount as the
Secretary of Treasury shall prescribe to prevent the multiple
use of this alternative limitation with respect to any Highly
Compensated Employee.
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"Highly Compensated Employee" shall mean any Employee
and any employee of an Affiliate who is a highly compensated
employee under Section 414(q) of the Code, including any
Employee and any employee of an Affiliate who
(i) during the current Plan Year or prior
Plan Year, was at any time a five percent (5%) owner;
or
(ii) received Compensation (as defined in
Section 5.5(d)(6)) during the prior Plan Year in
excess of $80,000 (or such other amount as determined
by the Secretary of the Treasury which reflects
cost-of-living increases in accordance with the
provisions of Code Section 414(q)(1), and if the
Employer so elects, the Employee was in the "top-paid
group" (top twenty percent (20%) of payroll, ranked
by Compensation) for such Plan Year, excluding
Employees described in Code Section 414(q) and
applicable regulations.
The Actual Deferral Percentage for any Highly
Compensated Employee who is eligible to have deferred
contributions allocated to his account under one or more plans
described in Section 401(k) of the Code that are maintained by
an Employer or an Affiliate in addition to this Plan shall be
determined as if all such contributions were made to this
Plan. For purposes of determining whether the Actual Deferral
Percentage limits of this Section are satisfied, all Pre-Tax
Contributions that are made under two or more plans that are
aggregated for purposes of Code Section 401(a)(4) or 410(b)
(other than Code Section 410(b)(2)(A)(ii)) are to be treated
as made under a single plan, and if two or more plans are
permissively aggregated for purposes of Code Section 401(k),
the aggregated plans must also satisfy Code Sections 401(a)(4)
and 410(b) as though they were a single plan.
32. Section 4.5 is amended to read as follows:
4.5 Reduction of Pre-Tax Contribution Rates: If, on the basis
of the Pre-Tax Contribution rates elected by Participants for any Plan
Year, the Committee determines, in its sole discretion, that neither of
the tests contained in (a) or (b) of Section 4.4 will be satisfied, the
Committee may reduce the Pre-Tax Contribution rate of any Participant
who is among the eligible Highly Compensated Employees to the extent
necessary to reduce the overall Actual Deferral Percentage for eligible
Highly Compensated Employees to a level which will satisfy either (a)
or (b) of Section 4.4. The reductions in Pre-Tax Contribution rates may
be made proportionately or in the order provided in Section 4.7.
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33. The last three sentences in the first paragraph of Section 4.7 are
deleted.
34. The last two sentences in the third paragraph of Section 4.7 are
deleted and the following sentences are inserted in their place:
Excess Pre-Tax Contributions shall be adjusted in the following manner:
The Highly Compensated Employee having the largest amount of Pre-Tax
Contributions shall have his portion of excess Pre-Tax Contributions
distributed to him until one of the tests in (a) or (b) of Section 4.4
is satisfied, or until his Pre-Tax Contributions equal the Pre-Tax
Contributions of the Highly Compensated Employee having the second
largest amount of Pre-Tax Contributions. This process shall continue
until sufficient total reductions have occurred to achieve compliance
with (a) or (b) of Section 4.4.
35. The second and third sentences in the fourth paragraph of Section
4.7 are deleted.
36. Section 4.8 is deleted in its entirety.
37. The second full paragraph in Section 4.10 (the paragraph
immediately following paragraph (b)) is deleted.
38. Section 4.11 is amended to read as follows:
4.11 Treatment of Excess Aggregate Contributions or ESOP
Contributions: If neither of the tests described above in Section 4.10
is satisfied with respect to either Aggregate Contributions or ESOP
Contributions, the excess Aggregate Contributions or ESOP Contributions
(as applicable), plus any income and minus any loss attributable
thereto, shall be forfeited, or if not forfeitable, shall be
distributed no later than the last day of the Plan Year following the
Plan Year in which such excess Aggregate Contributions or ESOP
Contributions (as applicable) were made. The income and loss
attributable to the Participant's excess Aggregate Contributions or
ESOP Contributions (as applicable) for the Plan Year shall be
determined by multiplying the income or loss attributable to the
Participant's Account for the Plan Year by a fraction, the numerator of
which is the excess Aggregate Contribution or ESOP Contributions (as
applicable), and the denominator of which is the Participant's total
Account balance. Excess Aggregate Contributions or ESOP Contributions
shall be treated as Annual Additions under Section 5.5 of the Plan.
The excess Aggregate Contributions or ESOP Contributions (as
applicable), if any, of each Participant who is among the Highly
Compensated Employees shall be
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determined by computing the maximum Contribution Percentage under (a)
or (b) of Section 4.10 and then reducing the Contribution Percentage of
some or all of such Participants whose Contribution Percentage exceeds
the maximum by an amount of sufficient size to reduce the overall
Contribution Percentage for eligible Participants who are among the
Highly Compensated Employees to a level which satisfies (a) or (b) of
Section 4.10. Excess Aggregate Contributions or ESOP Contributions (as
applicable) shall be adjusted in the following manner: The Highly
Compensated Employee having the largest amount of Aggregate
Contributions or ESOP Contributions (as applicable) shall have his
vested portion of the excess Aggregate Contributions or ESOP
Contributions (as applicable), plus any income and minus any loss
attributable thereto, distributed to him and, if forfeitable, shall
forfeit such non-vested excess Aggregate Contributions or ESOP
Contributions (as applicable), plus any income and minus any loss
attributable thereto, until one of the tests in (a) or (b) of Section
4.10 is satisfied, or until his remaining amount equals the amount of
Aggregate Contributions or ESOP Contributions (as applicable) of the
Highly Compensated Employee having the second largest amount. This
process shall continue until sufficient total reductions have occurred
to achieve compliance with (a) or (b) of Section 4.10. For each
Participant who is a Highly Compensated Employee, the amount of excess
Aggregate Contributions or ESOP Contributions (as applicable) is equal
to the total Employer Contributions on behalf of the Participant
(determined prior to the application of this paragraph) minus the
amount determined by multiplying the Participant's actual contribution
ratio (determined after application of this paragraph) by his
Compensation used in determining such ratio. The individual ratios and
Contribution Percentages shall be calculated to the nearest
one-hundredth (1/100) of one percent (1%) of the Employee's
Compensation as such term is used in paragraph (b) of Section 4.10.
39. Section 4.12 is deleted in its entirety.
40. The first sentence of Section 5.2 is amended to read as follows:
A valuation of the Trust Funds shall be made as of each Valuation Date.
41. The second sentence of Section 5.2 is deleted.
42. The first two sentences of paragraph (d) of Section 5.3 (preceding
the colon) are amended to read as follows:
Any Employee who is a Participant, or who would be a Participant but
for a failure to satisfy the participation requirements of Article III
may, with the approval of the
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Administrator, make a contribution to a Rollover Account under the
Plan. Such an Account shall be in cash and shall be a contribution
attributable to:
43. Subparagraph (a)(4)(A) of Section 5.5 is amended to read as
follows:
If any such Excess Amounts shall then remain, the Participant's Pre-Tax
Contributions, and any earnings attributable thereto, shall be returned
to him to the extent such returned Contributions would reduce the
Excess Amount.
44. The first sentence to the last paragraph of Section 6.6 (identified
as paragraph (c)) is amended to read as follows:
As installments payable in cash over a period certain not extending
beyond ten (10) years.
45. Section 6.9 is amended to read as follows:
6.9 Required Minimum Distributions: Notwithstanding any
provision of this Plan to the contrary, any benefits to which a
Participant is entitled shall commence no later than the April 1
following the later of (a) the calendar year in which the Participant
attains age seventy and one-half (70-1/2), or (b) the calendar year in
which the Participant retires; provided, however, that in the case of a
Participant who is a "five percent owner" (as defined in Section
401(a)(9) of the Code), benefits shall commence no later than the April
1 following the calendar year in which the Participant attains age
seventy and one-half (70- 1/2). Such distribution shall be at least
equal to the required minimum distributions under the Code; however,
any installment distributions pursuant to this Section 6.9 to
Participants who have not terminated employment shall be made over a
period not to exceed ten (10) years. For purposes of this Section 6.9,
the life expectancy of a Participant and/or a Participant's spouse
shall not be redetermined annually.
46. Section 7.1 is amended to read as follows:
7.1 Withdrawal of Pre-Tax Contribution Account on or After Age
59-1/2: A Participant who has attained age fifty-nine and one-half
(59-1/2) may elect, by giving notice in accordance with administrative
procedures established by the Committee and following such other rules
and procedures as may be prescribed from time to time by the Committee
on a uniform and nondiscriminatory basis, to withdraw the entire amount
of his After-Tax Contribution Account, his Rollover Account, or his
Pre-Tax Contribution Account.
47. Section 7.2 is amended to read as follows:
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7.2 Withdrawal of After-Tax Contributions and Rollover
Account: Pursuant to notice given in accordance with administrative
procedures established by the Committee and subject to the conditions
of Section 7.3, each Participant may elect to withdraw as of any
business day during the Plan Year, an amount specified by the
Participant which may be attributable to (a) his After-Tax
Contributions under the Original Plan, or (b) his Rollover Account,
determined as of the Valuation Date which coincides with such
withdrawal date.
48. Section 7.3 is amended to read as follows:
7.3 Conditions of Withdrawals of After-Tax Contributions and
Rollover Account: In making a withdrawal pursuant to Section 7.2, no
Participant shall be permitted to withdraw less than $500, or the
combined balance of his After-Tax Contribution Account and his Rollover
Account, if their combined total is less than $500. Except as provided
under Article VI and Sections 7.1 and 7.4 hereof, no withdrawals shall
be permitted from a Participant's Pre-Tax Contribution Account,
Employer Matching Contribution Account, or ESOP Account.
49. Section 7.4 is amended to read as follows:
7.4 Hardship Withdrawals from Pre-Tax Contribution Account: A
Participant may at any time, in accordance with administrative
procedures established by the Committee, make a request for a hardship
withdrawal in either a dollar amount or a percentage figure from his
Pre-Tax Contribution Account. Notwithstanding the foregoing,
however, no Participant may withdraw any Income of the Trust Fund
allocated to his Pre-Tax Contribution Account on or after January 1,
1989. The approval or disapproval of such request shall be made within
the sole discretion of the Committee, except that no such request for a
withdrawal shall be approved unless the Participant has certified in
writing that he is facing a hardship creating an immediate and
substantial financial need and that the resources necessary to satisfy
that financial need are not reasonably available from other sources
available to the Participant. The amount of the hardship withdrawal
shall be limited to that amount which is required to meet the immediate
financial need created by the hardship, including anticipated federal
and state income taxes and penalties resulting from the distribution.
The hardship withdrawal shall be made in cash as soon as practicable
after the Participant submits the hardship request, and the dollar
amount withdrawn shall be determined by reference to the value of the
Pre-Tax Contribution Account as of the Valuation Date coincident with
the date of the withdrawal.
A Participant who receives a hardship withdrawal shall be
prohibited from making pre-tax contributions to this Plan and any other
plan maintained by the Employer (except "welfare plans" as defined in
Section 3(1) of ERISA) for the twelve (12) consecutive months following
the date of distribution. The following standards (or such other
standards as may be acceptable under Treasury Regulations issued
pursuant to Section 401(k) of the Code) shall
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be applied on a uniform and non-discriminatory basis in determining the
existence of such a hardship:
(a) A financial need shall be considered immediate if
it must be satisfied in substantial part within a period of
twelve (12) months from the date on which the Participant
certifies his eligibility for a hardship withdrawal.
(b) To be considered a hardship for purposes of this
Section, the event giving rise to the need for funds must
relate to financial hardship resulting from:
(1) expenses previously incurred for medical
care (described in Code Section 213(d)) or expenses
that are necessary to incur in order to obtain
medical care (as evidenced by a written estimate
thereof) for the Participant, the Participant's
spouse, or the Participant's dependents (as defined
in Code Section 152);
(2) purchase (excluding mortgage payments)
of a principal residence for the Participant;
(3) payment for tuition for the next twelve
(12) months of post-secondary education for the
Participant or the Participant's spouse, children or
dependents (as defined in Code Section 152);
(4) the need to prevent the eviction of the
Participant from his principal residence or
foreclosure on the mortgage of the Participant's
principal residence; or
(5) payment for funeral expenses for the
Participant's spouse or the Participant's dependents
(as defined in Code Section 152).
A person shall be considered to be economically dependent on
the Participant if the Participant certifies that he reasonably expects
to be entitled to claim that person as a dependent for federal income
tax purposes for a calendar year coinciding with the Plan Year in which
the certification of hardship is made.
50. The first sentence of Section 7.5 is amended to read as follows:
From and after October 1, 1989, any Participant who is a "party in
interest" (as defined in Section 3(14) of ERISA) (hereinafter
"Borrower") may make application, in accordance with administrative
procedures established by the Committee, to borrow from his Pre-Tax
Contribution Account, his Rollover Account, or his Employer Matching
Contribution
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Account (to the extent that the Account contains Employer matching
Contributions) in the Trust Fund, and the Committee in its sole
discretion may permit such a loan.
51. Paragraph (f) of Section 7.5 is amended to read as follows:
(f) A request by a Borrower for a loan shall be made in
accordance with administrative procedures established by the Committee
and shall specify the amount of the loan. If a Borrower's request for a
loan is approved, the loan shall be made in a lump-sum payment of cash
to the Borrower. The cash for such payment shall be obtained by
redeeming proportionately as of the date of payment the Investment Fund
or Funds, or portions thereof, that are credited to the Pre-Tax
Contribution Account, Rollover Account, and Employer Matching
Contribution Account of such Borrower; provided, however, that,
effective October 1, 1997, no withdrawals shall be made from the Common
Stock Fund prior to the full depletion of all other Funds.
52. Paragraph (h) of Section 7.5 is amended to read as follows:
(h) Only one loan may be outstanding for a Borrower at any
given time.
53. Section 8.1 is amended to read as follows:
8.1 Investment of Trust Funds:
(a) Investment Funds: Except as provided in Article VII with
respect to Plan loans and as provided below with respect to the ESOP
Fund, the Trust Fund shall be invested in separate Investment Funds
chosen and established by the Committee. The Committee may adjust the
number and types of Investment Funds to be established or discontinued
as it deems advisable. One such Investment Fund, however, shall be the
Common Stock Fund, which shall be invested and reinvested in the Common
Stock of the Company. The Trustee, the Committee, or a recordkeeper
designated by the Committee shall maintain records for each
Participant's After-Tax Contribution Account, Employer Matching
Contribution Account, Pre-Tax Contribution Account, and Rollover
Account, if any, that reflect the value of each Participant's share of
the Investment Funds.
(b) Investment Directions: The Participant shall have the
right to direct the Committee to instruct the Savings Trustee to invest
his Pre-Tax Contributions and contributions to his Rollover Account and
the earnings and accretions thereon in any of the Investment Funds
established by the Committee.
Each Participant shall elect an investment option at the time
he begins participating in the Plan. Through notice to the Committee
given pursuant to administrative procedures
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established by the Committee, a Participant may change his instructions
with respect to the investment of his Pre-Tax Contributions, After-Tax
Contributions, Employer Matching Contributions, and Rollover
Contributions to the Trust Fund. A participant who desires to change
his instructions in this manner may direct that the funds in his Future
Pre-Tax Accounts be transferred (in no more than one percent (1%)
increments) among the Investment Funds.
All earnings realized to the Trust Fund (including, but not
limited to, dividends, capital gains, and interest) on an Investment
Fund that are not reflected in the value of a share in that Investment
Fund will be allocated to Participants' accounts. They will be
allocated to a Participant's account in the same proportion the
Participant's share of the Investment Fund (disregarding the earnings
to be allocated) bears to the total value of the Investment Fund
(disregarding the earnings to be allocated), both to be determined as
of the date the earnings are realized. Notwithstanding the foregoing,
the Committee may direct that dividends paid with respect to shares in
the ESOP Fund be distributed on an annual basis or more frequently in
order that the deduction under Code Section 404(k) be available to the
Company, in which event income that constitutes dividends on shares of
Company Stock in the ESOP Fund shall not be invested in Company Stock
but shall be temporarily invested in cash equivalents until
distribution to Participants. In making payments in respect to Exempt
Loans, the Trustee shall utilize income and ESOP Contributions as is
specified in Section 5.3 hereof; namely, that income shall be first
used to fund principal payments and ESOP Contributions shall be first
used to fund interest payments. All purchases of Company Stock shall be
made at prices which, in the judgment of the Trustee, do not exceed the
fair market value of such Company Stock. Pending such investment or
application of cash, the ESOP Trustee may retain cash uninvested
without liability for interest if it is prudent to do so, or may invest
all or any part thereof in Treasury Bills, commercial paper, and like
holdings.
54. The first sentence in Section 8.2 is amended to read as follows:
Effective January 1, 1992, each qualified Participant (as defined
herein) may elect within ninety (90) days after the close of each Plan
Year in the qualified election period (as defined herein) to direct the
change of the investment of at least twenty-five percent (25%) of the
total number of shares of Company Stock allocated to the Participant's
ESOP Account at the time of such election.
55. The first sentence of paragraph (g) of Section 11.7 is amended to
read as follows:
In determining the present value of the cumulative accrued benefit or
the amount of the account of any employee, such present value or
account will include the amount in dollar value of the aggregate
distributions made to such employee under the applicable plan during
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the five-year period ending on the Determination Date, unless already
reflected in the value of the accrued benefit or account balance as of
the date the determination is made.
56. The first sentence of paragraph (j) of Section 11.7 is amended to
read as follows:
"Valuation Date" means, for purposes of determining the present value
of an accrued benefit as of the Determination Date, the Determination
Date.
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IN WITNESS WHEREOF, Central Louisiana Electric Company, Inc., has
caused these presents to be executed by its duly authorized officers in a number
of copies, all of which shall constitute one and the same instrument, which may
be sufficiently evidence by any executed copy hereof, this ________ day of
_______________, 1997, but effective as of the dates specified herein.
CENTRAL LOUISIANA ELECTRIC
COMPANY, INC.
By
--------------------------
ATTEST:
- --------------------
Secretary
[SEAL]
UMB BANK, N.A.
TRUSTEE
By
--------------------------
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CLECO CORPORATION
401 (k) SAVINGS AND INVESTMENT PLAN
(As Amended and Restated Effective January 1, 1994)
Second Amendment
Cleco Corporation, a Louisiana corporation, having established the
Central Louisiana Electric Company, Inc. 401(k) Savings and Investment Plan, as
amended and restated effective January 1, 1994 (the "Plan") and having reserved
the right under Section 10.03 to amend the Plan, does hereby amend the Plan to
document the change in the Company's name from Central Louisiana Electric
Company, Inc., to Cleco Corporation, effective April 27, 1998, as follows:
57. The name of the Plan is hereby changed to the " Cleco Corporation
401 (k) Savings and Investment Plan."
2. Section 1.9 of the Plan is hereby amended in its entirety to read as
follows:
" 1.9 Company: Cleco Corporation, a Louisiana corporation, or
a successor to Cleco Corporation in the ownership of substantially all
of its assets."
IN WITNESS WHEREOF, Cleco Corporation has caused these presents to be
executed by its duly authorized officers in a number of copies, all of which
shall constitute one and the same instrument, which may be sufficiently
evidenced by any executed copy hereof, this ____ day of _______________, 1998,
but effective as of the date specified herein.
CLECO CORPORATION
By:
--------------------------
Attest:
- ---------------------------
Secretary
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CLECO CORPORATION
401(k) SAVINGS AND INVESTMENT PLAN
AMENDMENT NO. 3
WHEREAS, Cleco Corporation ("Cleco"), a corporation organized and existing under
the laws of the State of Louisiana, maintains the 401(k) Savings and Investment
Plan, most recently amended and restated effective as of January 1, 1994, which
plan is intended to be a qualified employee benefit plan within the meaning of
Section 401(a) of the Internal Revenue Code of 1986, as amended (the "Plan");
WHEREAS, the Board of Directors of Cleco possesses the authority to amend the
Plan, pursuant to Section 10.3 thereof;
NOW, THEREFORE, effective as of January 1, 1999, the Plan shall be amended as
follows:
I.
Section 1.10 of the Plan, entitled "Company Stock," shall be amended and
restated in its entirety as follows:
Company Stock: Stock of the Company or an Affiliate which shall
meet one of the following requirements:
(a)Such stock may be common stock of the Company or an Affiliate
which is readily tradeable on an established securities market;
(b)If there is no such readily tradeable common stock, then the
term "Company Stock" shall mean company stock issued by the
Company or an Affiliate having a combination of voting power and
dividend rights equal to or in excess of (i) the class of common
stock of the Company (or an Affiliate) having the greatest voting
power and (ii) the class of common stock of the Company (or an
Affiliate) having the greatest dividend rights;
(c)"Company Stock" may be non-callable preferred stock issued by
the Company (or an Affiliate thereof) that is convertible to any
stock that meets the requirements of the applicable subparagraph
(a) or (b) above and if such conversion is at a conversion price
which (determined as of the date of acquisition by the Plan) is
reasonable. For purposes of this subparagraph (c), preferred
stock shall be traded as non-callable if, after the call, there
is a reasonable opportunity for a conversion which meets the
requirements of this paragraph.
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II.
Section 8.3 of the Plan, entitled "Voting of Company Stock; Exercise of Other
Rights," shall be amended and restated in its entirety as follows:
(a)Voting rights with respect to shares of Company Stock in the
ESOP Fund allocated to the ESOP Accounts of Participants and
shares in the Company Stock Fund allocated to the Accounts of
Participants shall be voted by the Trustees in such manner as may
be directed by the respective Participants, with fractional
shares being voted on a combined basis to the extent possible to
reflect the direction of the voting Participants. If the Trustees
shall not receive timely instruction from a Participant, the
Trustees shall not vote any shares of Company Stock with respect
to which such Participant has the right of direction, and the
Trustee shall have no discretion in the matter. The Trustees
shall vote shares of Company Stock held in the Stock Suspense
Account in accordance with the instructions of the Administrator.
(b)In the event that there is a tender offer or exchange offer
for outstanding shares of Company Stock, rights with respect to
the tender offer or exchange offer shall be exercised by the
Trustee in accordance with the instructions of the Administrator.
(c)Solicitation of exercise of Participants' voting rights by
management of the Company and others under a proxy or consent
provision applicable to all holders of Company Stock shall be
permitted. Solicitation of exercise of Participant tender or
exchange offer rights by management of the Company and others
shall be permitted. The Trustees shall notify Participants of
each occasion for the exercise of voting rights within a
reasonable time before such rights are to be exercised. Such
notification shall include all information distributed to
shareholders by the Company regarding the exercise of such
rights. Copies of Company written communications to Participants
relating to each opportunity for Participant exercise of rights
under this Section 8.3 shall be promptly furnished to the
Trustees. The instructions received by the Trustees from
Participants shall be held by the Trustees in confidence and
shall not be divulged or released to any person, including the
Committee or officers or employees of the Company or its
Affiliates.
In the event any shares of Company Stock held in the Stock
Suspense Account are tendered or exchanged pursuant to this
Section 8.3, the proceeds shall at the direction of the
Administrator either (i) if and to the extent the proceeds are
attributable to unallocated Company Stock be used to repay
installment purchase or other indebtedness used to purchase the
Company Stock to which such proceeds are attributable, (ii) be
reinvested in Company Stock, or (iii) be invested in such other
investment as the Administrator deems appropriate.
THIS AMENDMENT NO. 3 was executed in multiple counterparts, each of which shall
be deemed an original, this ____ day of February, 1999.
CLECO CORPORATION
By:
-----------------------------------
Its:
----------------------------------
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June 29, 1999
Cleco Corporation
Cleco Holding Corporation
2030 Donahue Ferry Road
Pineville, Louisiana 71360-5226
Re: Cleco Corporation Post-Effective Amendment No. 2 to Registration Statement
on Form S-8, SEC File No. 33-10169
Ladies and Gentlemen:
We have acted as counsel to Cleco Corporation ("Cleco") and its
subsidiary, Cleco Holding Corporation (the "Company"), in connection with the
preparation of the above referenced Post-Effective Amendment No. 2 to
Registration Statement on Form S-8 filed by the Company with the Securities and
Exchange Commission (the "Commission") with respect to the issuance by the
Company of up to 400,000 shares of $2.00 par value common stock (the "Company
Shares") in connection with the assumption of such Registration Statement,
including amendments thereto, by the Company, as a successor issuer, in
accordance with Rule 414 promulgated under the Securities Act of 1933, as
amended. In so acting, we have examined and relied upon the original, or a
photostatic or certified copy, of such records of the Company, certificates of
officers of the Company and of public officials, and such other documents as we
have deemed relevant and necessary as the basis for the opinion set forth below.
In such examination, we have assumed the genuineness of all signatures
appearing on all documents, the legal capacity of all persons signing such
documents, the authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us as certified,
conformed or photostatic copies, the accuracy and completeness of all corporate
records made available to us by the Company, and the truth and accuracy of all
facts set forth in all certificates provided to or examined by us.
Based upon the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that the Company Shares have been duly
<PAGE> 2
Cleco Corporation
Cleco Holding Corporation
June 29, 1999
Page 2
authorized, and, when issued in accordance with the terms described in the
Post-Effective Amendment, will be validly issued, fully paid and nonassessable.
The foregoing opinions are limited to the laws of the State of
Louisiana and the federal laws of the United States of America. We express no
opinion as to matters governed by the laws of any other state. Furthermore, no
opinion is expressed herein as to the effect of any future acts of the parties
or changes in existing law. We undertake no responsibility to advise you of any
changes after the date hereof in the law or the facts presently in effect that
would alter the scope or substance of the opinions herein expressed.
This letter expresses our legal opinion as to the foregoing matters
based on our professional judgment at this time; it is not, however, to be
construed as a guaranty, nor is it a warranty that a court considering such
matters would not rule in a manner contrary to the opinion set forth above.
We consent to the filing of this opinion as an exhibit to the
Post-Effective Amendment and to the reference to us in the prospectus under the
caption "Legal Matters." In giving this consent, we do not admit that we are
within the category of persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended, and the General Rules and Regulations of the
Commission thereunder.
Very truly yours,
PHELPS DUNBAR, L.L.P.
