<PAGE>
- ------------------------------------------------------------------
Registration No. _______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
-------------
DRESSER INDUSTRIES, INC.
(Exact name of Registrant as specified in its Charter)
Delaware 75-0813641
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2001 Ross Avenue
Dallas, Texas 75201
(Address principal executive offices including zip code)
-------------
The M.W. Kellogg Company Savings and Investment Plan
(Full title of the plan)
-------------
Rebecca R. Morris
Vice President-Corporate Counsel and Secretary
Dresser Industries, Inc.
2001 Ross Avenue
Dallas, Texas 75201
(Name and address of agent for service)
(214) 740-6000
(Telephone number, including area code, of agent for service)
-------------
<TABLE>
- --------------------------------------------------------------------------------------------------------------
Amount to be Proposed maximum Proposed maximum Amount of
registered offering price aggregate offering registration fee
Title of securities to be registered (2) per share (3) price (3) (2)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock ($.25 par value) (1) 1 $48.21875 $48.21875 $0.01
- --------------------------------------------------------------------------------------------------------------
</TABLE>
(1) This registration statement covers shares of Common Stock
of Dresser Industries, Inc. which may be offered or sold
pursuant to The M.W. Kellogg Company Savings and
Investment Plan (the "Plan"). In addition, pursuant to
Rule 416(c) under the Securities Act of 1933, this
registration statement also covers an indeterminate amount
of interests to be offered or sold pursuant to the
employee benefit plans described herein. Pursuant to Rule
457(h)(2), no separate registration fee is required with
respect to the interests in the plans. This registration
statement also relates to an indeterminate number of
shares of Common Stock that may be issued upon stock
splits, stock dividends or similar transactions in
accordance with Rule 416.
<PAGE>
(2) This registration statement is also deemed, pursuant to
Instruction E to Form S-8, to relate to 100,000 shares
previously registered on Form S-8 (No. 2-81536) in
connection with the Dresser Industries, Inc. Stock
Purchase Plan, with respect to which a registration fee of
$412.50 has been paid.
(3) Computed on the basis of the average of the high and low
prices for Common Stock on April 9, 1998, which is used as
the estimated offering price solely for the purpose of
determining the registration fee in accordance with Rule
457(c) under the Securities Act of 1933.
EXPLANATORY STATEMENT
A total of 2,000,000 shares of common stock of Dresser Industries,
Inc. (the "Company") were registered by Registration Statement on
Form S-8, file No. 2-81536, to be issued in connection with the
Dresser Industries, Inc. Stock Purchase Plan (the "SPP"). On March
19, 1998, the M.W. Kellogg Company Plan Administrative Committee
approved offering an investment option for investing in Company
stock to the participants of The M.W. Kellogg Company Savings and
Investment Plan (the "Plan"). The Plan is intended to qualify as
an employee savings plan under Section 401(k) of the Internal
Revenue Code of 1986, as amended from time to time. Approximately
one million (1,000,000) shares of common stock of the Company which
were registered in connection with the SPP have not been issued
under the SPP and, pursuant to Instruction E to Form S-8 and the
telephonic interpretation of the Securities and Exchange Commission
set forth at answers no. 89 and 90 in Section G- Securities Act
Forms of the Division of Corporation Finance's Manual of Publicly
Available Telephone Interpretations (July 1997), 100,000 are
carried forward to, and deemed covered by, the Registration
Statement of Form S-8 filed on or about the date hereof in
connection with the Plan.
PART II
Item 3. Incorporation of Documents by Reference.
The following documents, which have been filed by the Company (File
No. 1-4003) with the Commission, are incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for its
fiscal year ended October 31, 1997;
2. The Company's Quarterly Report on Form 10-Q for the
period ended January 31, 1998;
3. The description of the Common Stock contained in
Exhibit 1 to the Registration Statement on Form 8-A
filed by the Company with the Commission August 30,
1990, as amended by Amendment No. 1 on Form 8 filed
with the Commission on October 3, 1990; and
4. The description of the Dresser Stock Purchase
Rights contained in Exhibit 1 to the Registration
Statement on Form 8-A filed by the Company with the
Commission August 30, 1990, as amended by Amendment
No. 1 on Form 8 filed with the Commission on
October 3, 1990.
All documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this registration statement
and prior to the filing of a 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 herein
by reference and to be a part hereof from the date of filing of such
documents.
Any statement contained in a document incorporated by reference
herein shall be deemed to be modified or superseded for purposes hereof to
the extent that a statement contained herein (or in any other subsequently
filed document which also is incorporated by reference herein) modifies or
supersedes such statement. Any statement so modified or superseded shall not
be deemed to constitute a part hereof except as so modified or superseded.
Item 4. Description of Securities
Not Applicable.
Item 5. Interests of Named Experts and Counsel
Not Applicable.
<PAGE>
Item 6. Indemnification of Directors and Officers
Pursuant to Section 145 of the Delaware General Corporation Law (the
"DGCL"), a corporation may indemnify any person who is or was a party or is
threatened to be made a party to any action, suit, or proceeding (other than
an action by or in the right of the corporation) by reason of the fact that
he is or was a director, officer, employee or agent of the corporation or is
or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust
or other enterprise against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement, actually and reasonably incurred by him
in connection with such action, suit or proceeding 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 proceeding,
had no reasonable cause to believe his conduct was unlawful. In an action by
or in the right of the Company, a corporation may indemnify any such person
against expenses actually and reasonably incurred by him in connection with
the defense or settlement of such action 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, except that no indemnification shall be made in respect
of any claim or issue as to which such person is adjudged to be liable to the
corporation unless and only to the extent that the Delaware Court of Chancery
or the court in which such action was brought shall determine that, despite
the adjudication of liability but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for such
expenses, which the court shall deem proper. Indemnification, unless ordered
by the court, shall be made by the corporation only as authorized in the
specific case upon a determination that indemnification of such person is
proper in the circumstances because he has met the applicable standard of
conduct. Such determination shall be made, with respect to a person who is a
director or officer at the time of such determination, (i) by a majority vote
of the directors who are not parties to such action, suit or proceeding, even
though less than a quorum, or (ii) by a committee of such directors
designated by majority vote of such directors, even though less than a
quorum, or (iii) if there are no such directors, or if such directors so
direct, by independent legal counsel in a written opinion, or (iv) by the
stockholders. To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
such matter, Section 145 requires that the corporation indemnify him against
expenses actually and reasonably incurred by him in his defense. Further,
expenses may be paid by the corporation in advance of final disposition of
the matter upon receipt of an undertaking by or on behalf of such director,
officer, employee or agent to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified. Such indemnification
and advancement of expenses is not deemed exclusive of any other right to
which a director or officer might be entitled under any by-law, agreement,
vote of stockholders or disinterested directors or otherwise. Section 145
also empowers a corporation to purchase and maintain insurance on behalf of
any person who might be indemnified thereunder whether or not the corporation
would have the power to indemnify him against such liability under such
Section.
The Company's Restated Certificate of Incorporation, as amended,
provides for indemnification of certain persons including directors and
officers to the fullest extent permitted under Section 145 of the DGCL.
Insurance is maintained by the Company covering certain expenses,
liability or losses which may be incurred by reason of his being a director
or officer of the Company or a subsidiary corporation, partnership, joint
venture, trust or other enterprise.
Item 7. Exemption from Registration Claimed
Not Applicable.
Item 8. Exhibits (1)
4.1 Restated Certificate of Incorporation of Registrant
and amendments thereto. (Incorporated by reference
to Exhibit 3(i) to Registrant's Form 10-Q/A for the
Quarter ended April 30, 1996).
4.2 By-Laws, as amended of Registrant. (Incorporated
by reference to Exhibit 3.2 to Registrant's Form
10-K/A for the year ended 1997).
4.3 Rights Agreement dated August 16, 1990, between
Registrant and Harris Trust Company of New York as
Rights Agent. (Incorporated by reference to
Exhibit 1 to Registration Statement on Form 8-A
filed on August 30, 1990 as amended by Amendment
No. 1 on Form 8 filed on October 3, 1990).
* 4.4 Form of The M.W. Kellogg Company Savings and
Investment Plan as amended.
<PAGE>
* 23 Consent of Price Waterhouse LLP.
24 Power of Attorney. (Incorporated by reference to
Exhibit 24 to Registrant's Registration Statement
No. 333-39931 on Form S-8.)
- --------------------
* Filed Herewith
An opinion of counsel as to the legality of the securities being
registered is not required since Company common stock issued pursuant to the
Plan under this Registration Statement will be issued through open market
purchases and not original issue securities as the Plan is currently stated.
(1) In lieu of an opinion concerning compliance with the
requirements of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA") and an Internal Revenue
Service ("IRS") determination letter that the Plan is
qualified under Section 401 of the Internal Revenue Code
of 1986, as amended, the Registrant has submitted the M. W.
Kellogg Company Savings and Investment Plan (the "Plan")
and will submit any amendments thereto to the IRS in a
timely manner and will make all changes required by the
IRS in order to maintain the qualified status of the Plan.
Item 9. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers
or sales are being made of the securities
registered hereby, 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 this 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; and
(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 by the Registrant pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any
liability under the Securities Act of
1933, each such post-effective amendment
shall be deemed to be a new registration
statement relating to the securities
offered therein, and the offering of such
securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the
securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that,
for purposes of determining any liability under the
Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange
Act of 1934 (and, where applicable, each filing of
an employee benefit plan's annual report pursuant
to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new
registration statement relating to the securities
offered therein, and the offering of such
securities at that time shall be deemed to be the
initial bona fide offering thereof.
<PAGE>
(c) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted
to directors, officers or 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 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 by the Securities Act
and will be governed by the final adjudication of
such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has
duly caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of
Dallas, State of Texas, on the 16th day of April, 1998.
DRESSER INDUSTRIES, INC.
By: /s/ KENNETH J. KOTARA
--------------------------
Kenneth J. Kotara,
Controller
Pursuant to the requirements of the Securities Exchange Act of
1933, this registration statement has been signed below by the
following persons on behalf of the Registrant and in the capacities
indicated on April 16, 1998.
SIGNATURE TITLE
*WILLIAM E. BRADFORD Chairman of the Board, Chief
- ---------------------------------- Executive Officer and Director
(William E. Bradford, Director) (Principal Executive Officer)
/s/GEORGE H. JUETTEN Senior Vice President and Chief
- ---------------------------------- Financial Officer
(George H. Juetten) (Principal Financial Officer)
/s/KENNETH J. KOTARA Controller
- ---------------------------------- (Principal Accounting Officer)
(Kenneth J. Kotara)
*SAMUEL B. CASEY, JR *J. LANDIS MARTIN
- ----------------------------------- ----------------------------
(Samuel B. Casey, Jr., Director) (J. Landis Martin, Director)
*LAWRENCE S. EAGLEBURGER *LIONEL H. OLMER
- ----------------------------------- -----------------------------------
(Lawrence S. Eagleburger, Director) (Lionel H. Olmer, Director)
*SYLVIA A. EARLE, PH.D. *JAY A. PRECOURT
- ----------------------------------- -----------------------------------
(Sylvia A. Earle, Ph.D., Director) (Jay A. Precourt, Director)
*RAWLES FULGHAM *DONALD C. VAUGHN
- ----------------------------------- -----------------------------------
(Rawles Fulgham, Director) (Donald C. Vaughn, Director)
*JOHN A. GAVIN *RICHARD W. VIESER
- ----------------------------------- -----------------------------------
(John A. Gavin, Director) (Richard W. Vieser, Director)
*RAY L. HUNT
- -----------------------------------
(Ray L. Hunt, Director)
*By: /s/Alice (Ande) Hinds
-------------------------------
Alice (Ande) Hinds
(Attorney-In-Fact)
The Plan. Pursuant to the requirements of the Securities Act of 1933, the
Plan has duly caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized, on the 16th day of April, 1998.
The M.W. Kellogg Company Savings
and Investment Plan
By: /s/ Thomas E. Giles
--------------------------
Thomas E. Giles
M.W. Kellogg Company Plan
Administrative Committee
<PAGE>
INDEX TO EXHIBITS (1)
Exhibit No. Description
- ----------- -----------
4.1 Restated Certificate of Incorporation of Registrant
and amendments thereto. (Incorporated by reference
to Exhibit 3(i) to Registrant's Form 10-Q/A for the
Quarter ended April 30, 1996).
4.2 By-Laws, as amended of Registrant. (Incorporated
by reference to Exhibit 3.2 to Registrant's Form
10-K/A for the year ended 1997).
4.3 Rights Agreement dated August 16, 1990, between
Registrant and Harris Trust Company of New York as
Rights Agent. (Incorporated by reference to
Exhibit 1 to Registration Statement on Form 8-A
filed on August 30, 1990 as amended by Amendment
No. 1 on Form 8 filed on October 3, 1990).
* 4.4 Form of The M.W. Kellogg Company Savings and
Investment Plan as amended.
* 23 Consent of Price Waterhouse LLP.
24 Power of Attorney. (Incorporated by reference to
Exhibit 24 to Registrant's Registration Statement
No. 333-39931 on Form S-8).
- ---------------------
*Filed Herewith
An opinion of counsel as to the legality of the securities being
registered is not required since Company common stock issued pursuant to the
Plan under this Registration Statement will be issued through open market
purchases and not original issue securities as the Plan is currently stated.
(1) In lieu of an opinion concerning compliance with the
requirements of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA") and an Internal
Revenue Service ("IRS") determination letter that the
Plans are qualified under Section 401 of the Internal
Revenue Code of 1986, as amended, the Registrant
has submitted the M.W. Kellogg Company Savings and
Investment Plan (the "Plan") and will submit any
amendments thereto to the IRS in a timely manner and
will make all changes required by the IRS in order to
maintain the qualified status of the Plan.
<PAGE>
THE M. W. KELLOGG COMPANY
SAVINGS AND INVESTMENT PLAN
(As Amended and Restated Effective January 1, 1989)
<PAGE>
THE M. W. KELLOGG COMPANY
SAVINGS AND INVESTMENT PLAN
(As Amended and Restated Effective January 1, 1989)
I N D E X
<TABLE>
Page
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<S> <C>
SECTION I DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Account. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Affiliate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
After-Tax Contribution Account . . . . . . . . . . . . . . . . . . . . . 3
After-Tax Contributions. . . . . . . . . . . . . . . . . . . . . . . . . 3
Anniversary Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Basic Savings Contributions. . . . . . . . . . . . . . . . . . . . . . . 3
Beneficiary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Eligible Employee. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Employer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Employer Contribution. . . . . . . . . . . . . . . . . . . . . . . . . . 5
Employer Contribution Account. . . . . . . . . . . . . . . . . . . . . . 5
Entry Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Forfeiture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Income of the Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . 5
Investment Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
IRA Account. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Limited Matching Member. . . . . . . . . . . . . . . . . . . . . . . . . 5
Matching Member. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Member . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Non-Matching Member. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Plan Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Plan Year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(i)
<PAGE>
Page
----
Pre-Tax Contribution Account . . . . . . . . . . . . . . . . . . . . . . 6
Pre-Tax Contributions. . . . . . . . . . . . . . . . . . . . . . . . . . 6
Prior Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Rollover Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Rollover Amount. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Savings Contributions. . . . . . . . . . . . . . . . . . . . . . . . . . 7
Service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Total and Permanent Disability . . . . . . . . . . . . . . . . . . . . . 7
Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Trust Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Valuation Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Vesting Computation Period . . . . . . . . . . . . . . . . . . . . . . . 7
Vesting Service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Year of Service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION II ADMINISTRATION OF THE PLAN. . . . . . . . . . . . . . . . . . . . . 9
Section:
2.1 Allocation of Responsibility Among Fiduciaries for
Plan and Trust Administration. . . . . . . . . . . . . . . . . . . . . 9
2.2 Appointment of Committee . . . . . . . . . . . . . . . . . . . . . . . . 9
2.3 Records and Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.4 Other Committee Powers and Duties. . . . . . . . . . . . . . . . . . . . 10
2.5 Rules and Decisions. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.6 Committee Procedure. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.7 Authorization of Benefit Payments. . . . . . . . . . . . . . . . . . . . 11
2.8 Payment of Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.9 Application and Forms for Benefits . . . . . . . . . . . . . . . . . . . 11
2.10 Committee Liability. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.11 Quarterly Statements . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.12 Annual Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.13 Funding Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.14 Allocation and Delegation of Committee Responsibilities. . . . . . . . . 13
SECTION III PARTICIPATION AND SERVICE . . . . . . . . . . . . . . . . . . . . . 14
Section:
3.1 Eligibility for Participation as a Member. . . . . . . . . . . . . . . . 14
3.2 Eligibility for Participation as a Matching Member . . . . . . . . . . . 14
3.3 Eligibility for Participation as a Non-Matching Member . . . . . . . . . 14
3.4 Notification of Eligible Employees . . . . . . . . . . . . . . . . . . . 14
3.5 Applications by Employees. . . . . . . . . . . . . . . . . . . . . . . . 14
3.6 Service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(ii)
<PAGE>
Page
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3.7 Break In Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.8 Participation and Service Upon Re-Employment Before a
Break In Service . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.9 Participation and Service Upon Re-Employment After a
Break In Service . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.10 Transferred Members. . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION IV CONTRIBUTIONS AND FORFEITURES . . . . . . . . . . . . . . . . . . . 19
Section:
4.1 Savings Contributions. . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.2 Employer Contributions . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.3 Employer Contributions and Pre-Tax Contributions to be
Tax Deductible . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.4 Suspension of Contributions. . . . . . . . . . . . . . . . . . . . . . . 23
4.5 Delivery to Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.6 Application of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.7 Rollover Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.8 Disposition of Forfeitures . . . . . . . . . . . . . . . . . . . . . . . 24
4.9 Contributions Generally Irrevocable. . . . . . . . . . . . . . . . . . . 24
SECTION V MEMBER ACCOUNTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section:
5.1 Individual Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.2 Account Adjustments. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.3 Valuation of Trust Fund. . . . . . . . . . . . . . . . . . . . . . . . . 26
5.4 Recognition of Different Investment Funds. . . . . . . . . . . . . . . . 26
SECTION VI WITHDRAWALS AND LOANS . . . . . . . . . . . . . . . . . . . . . . . 28
Section:
6.1 Non-Hardship Withdrawals . . . . . . . . . . . . . . . . . . . . . . . . 28
6.2 Withdrawal from Account on or After Age 59 1/2 . . . . . . . . . . . . . 29
6.3 Hardship Withdrawals . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.4 Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.5 Withdrawals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION VII MEMBERS' BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section:
7.1 Retirement of Members. . . . . . . . . . . . . . . . . . . . . . . . . . 33
7.2 Disability of Members. . . . . . . . . . . . . . . . . . . . . . . . . . 33
7.3 Death of Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
7.4 Other Termination of Service . . . . . . . . . . . . . . . . . . . . . . 33
7.5 Reinstatement of Forfeitures upon Distribution Repayment . . . . . . . . 35
7.6 Valuation Date Determinative of Member's Rights. . . . . . . . . . . . . 35
(iii)
<PAGE>
Page
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SECTION VIII PAYMENT OF BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . 36
Section:
8.1 Payment of Benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . 36
8.2 Distribution Upon Death. . . . . . . . . . . . . . . . . . . . . . . . . 37
8.3 Required Minimum Distributions . . . . . . . . . . . . . . . . . . . . . 38
8.4 Presenting Claims for Benefits . . . . . . . . . . . . . . . . . . . . . 38
8.5 Claims Review Procedure. . . . . . . . . . . . . . . . . . . . . . . . . 39
8.6 Disputed Benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
8.7 Member's Right to Transfer Eligible Rollover Distribution. . . . . . . . 40
SECTION IX TRUST AGREEMENT; INVESTMENT FUNDS;
INVESTMENT DIRECTIONS. . . . . . . . . . . . . . . . . . . . . . . . . 41
Section:
9.1 Trust Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
9.2 Investment Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
9.3 Investment Directions of Members . . . . . . . . . . . . . . . . . . . . 42
9.4 Change of Investment Directions. . . . . . . . . . . . . . . . . . . . . 43
9.5 Benefits Paid Solely from Trust Fund . . . . . . . . . . . . . . . . . . 43
9.6 Committee Directions to Trustee. . . . . . . . . . . . . . . . . . . . . 43
9.7 Authority to Designate Investment Manager. . . . . . . . . . . . . . . . 43
9.8 Liquidation of Fund D. . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION X ADOPTION OF PLAN BY OTHER ORGANIZATIONS;
SEPARATION OF THE TRUST FUND; AMENDMENT
AND TERMINATION OF THE PLAN; DISCONTINUANCE
OF CONTRIBUTIONS TO THE TRUST FUND . . . . . . . . . . . . . . . . . . . 45
Section:
10.1 Adoptive Instrument. . . . . . . . . . . . . . . . . . . . . . . . . . . 45
10.2 Separation of the Trust Fund . . . . . . . . . . . . . . . . . . . . . . 45
10.3 Voluntary Separation . . . . . . . . . . . . . . . . . . . . . . . . . . 45
10.4 Amendment of the Plan. . . . . . . . . . . . . . . . . . . . . . . . . . 46
10.5 Termination of the Plan. . . . . . . . . . . . . . . . . . . . . . . . . 46
10.6 Liquidation and Distribution of Trust Fund Upon Termination. . . . . . . 47
10.7 Effect of Termination or Discontinuance of Contributions . . . . . . . . 47
10.8 Merger of Plan with Another Plan . . . . . . . . . . . . . . . . . . . . 47
10.9 Consolidation or Merger with Another Employer. . . . . . . . . . . . . . 48
SECTION XI MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . . . . . . 49
Section:
11.1 Terms of Employment. . . . . . . . . . . . . . . . . . . . . . . . . . . 49
11.2 Controlling Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
11.3 Invalidity of Particular Provisions. . . . . . . . . . . . . . . . . . . 49
11.4 Non-Alienation of Benefits . . . . . . . . . . . . . . . . . . . . . . . 49
(iv)
<PAGE>
Page
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11.5 Payments in Satisfaction of Claims of Members. . . . . . . . . . . . . . 49
11.6 Payments Due Minors and Incompetents . . . . . . . . . . . . . . . . . . 50
11.7 Impossibility of Diversion of Trust Fund . . . . . . . . . . . . . . . . 50
11.8 Evidence Furnished Conclusive. . . . . . . . . . . . . . . . . . . . . . 50
11.9 Copy Available to Members. . . . . . . . . . . . . . . . . . . . . . . . 50
11.10 Unclaimed Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
11.11 Headings for Convenience Only . . . . . . . . . . . . . . . . . . . . . 51
11.12 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION XII LIMITATIONS ON BENEFITS . . . . . . . . . . . . . . . . . . . . . . 52
Section:
I. Single Defined Contribution Plan . . . . . . . . . . . . . . . . . . . . 52
II. Two or More Defined Contribution Plans . . . . . . . . . . . . . . . . . 53
III. Defined Contribution Plan and Defined Benefit Plan . . . . . . . . . . . 54
IV. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION XIII TOP-HEAVY PLAN REQUIREMENTS . . . . . . . . . . . . . . . . . . . . 59
Section:
13.1 General Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
13.2 Vesting Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
13.3 Minimum Contribution Provisions. . . . . . . . . . . . . . . . . . . . . 59
13.4 Limitation on Compensation . . . . . . . . . . . . . . . . . . . . . . . 60
13.5 Limitation on Contributions. . . . . . . . . . . . . . . . . . . . . . . 60
13.6 Coordination with Other Plans. . . . . . . . . . . . . . . . . . . . . . 61
13.7 Distributions to Certain Key Employees . . . . . . . . . . . . . . . . . 61
13.8 Determination of Top-Heavy Status. . . . . . . . . . . . . . . . . . . . 61
SECTION XIV TESTING OF CONTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . 67
Section:
14.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
14.2 Actual Deferral Percentage . . . . . . . . . . . . . . . . . . . . . . . 68
14.3 Actual Deferral Percentage Limits. . . . . . . . . . . . . . . . . . . . 69
14.4 Reduction of Pre-Tax Contribution Rates by Leveling Method . . . . . . . 70
14.5 Increase in Pre-Tax Contribution Rates . . . . . . . . . . . . . . . . . 70
14.6 Excess Pre-Tax Contributions . . . . . . . . . . . . . . . . . . . . . . 70
14.7 Aggregation of Family Members in Determining the
Actual Deferral Ratio. . . . . . . . . . . . . . . . . . . . . . . . . 71
14.8 Contribution Percentage. . . . . . . . . . . . . . . . . . . . . . . . . 72
14.9 Contribution Percentage Limits . . . . . . . . . . . . . . . . . . . . . 73
14.10 Treatment of Excess Aggregate Contributions. . . . . . . . . . . . . . . 74
14.11 Aggregation of Family Members in Determining the
Actual Contribution Ratio. . . . . . . . . . . . . . . . . . . . . . . . 74
</TABLE>
(v)
<PAGE>
THE M. W. KELLOGG COMPANY
SAVINGS AND INVESTMENT PLAN
(As Amended and Restated Effective January 1, 1989)
RECITALS
The M. W. Kellogg Company Savings and Investment Plan was
established effective January 1, 1973 as the Pullman Inc. Employees' Personal
Savings and Investment Plan. The name of the plan was subsequently changed
to the M. W. Kellogg Company Employees' Savings and Investment Plan.
Effective January 1, 1984, the sponsor of the plan became Kellogg Rust Inc.,
and the plan became known as the Kellogg Rust Inc. Savings and Investment
Plan.
The plan was amended effective June 1, 1986 and further amended
effective November 1, 1986, to reflect the change in its name to The M. W.
Kellogg Company Savings and Investment Plan, as well as the change in the
name of its sponsor to The M. W. Kellogg Company, the transfer of assets
attributable to participants employed by Rust International Corporation to
the Rust International Corporation Savings and Investment Plan, the
distribution of The Henley Group, Inc. to shareholders of Allied-Signal Inc.,
and certain other changes to the plan.
Effective, January 11, 1988, the Company became a wholly-owned
subsidiary of Dresser Industries, Inc. and, thus, ceased to be affiliated
with The Henley Group, Inc., and coinciding with or following such date
effected certain changes to the plan.
Effective as of January 1, 1989, the Board of Directors of the
Company authorized the amendment, restatement and continuation of The M. W.
Kellogg Company Savings and Investment Plan as in effect immediately prior to
such date (the "Prior Plan") in the form of this Plan (the "Plan") to comply
with the provisions of the Tax Reform Act of 1986 and to make certain other
changes therein.
The Company established The M. W. Kellogg Company Savings and
Investment Plan Trust Agreement, effective June 1, 1988 with Merrill Lynch
Trust Company ("Merrill Lynch") as Trustee.
Effective January 1, 1993, the Company terminated Merrill Lynch as
Trustee and the Trust related to the Plan, appointed Vanguard Fiduciary Trust
Company ("Vanguard") as Trustee of the Plan, and adopted the Agreement of the
Trust between the Company and Vanguard.
The purpose of the Plan is to encourage eligible employees to
further financial independence by affording them an opportunity to make
systematic contributions to the Plan, supplemented by contributions made by
the participating employers out of their profits.
The Plan, as set forth herein, is an uninterrupted continuation of
the Prior Plan. The Plan and its related Trust, which is intended to form a
part of the Plan, are intended to meet the requirements of Sections 401(a),
401(k), 401(m) and 501(a) of the Internal Revenue Code of
<PAGE>
1986, as well as the requirements 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 Member who terminates
Service on or after January 1, 1989. The rights and benefits, if any, of a
former Employee shall be determined in accordance with the provisions of the
plan in effect on the date his employment terminated.
NOW, THEREFORE, The M. W. Kellogg Company hereby amends, restates in
its entirety and continues The M. W. Kellogg Company Savings and Investment
Plan, a profit-sharing plan within the meaning of Code Section 401(a)(27),
effective as of January 1, 1989, as follows:
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<PAGE>
SECTION I
DEFINITIONS
As used in this Plan, the following words and phrases shall have
the following meanings unless the context clearly requires a different
meaning:
ACCOUNT: Collectively, the accounts maintained for each Member
pursuant to Section 5.1, including accounts provided for under the Prior Plan.
AFFILIATE: A corporation or other trade or business, other than an
Employer, 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), other than an Employer,
which, together with the Company, is a member of an "affiliated service
group" within the meaning of Section 414(m) of the Code; and any other
entity, other than an Employer, required to be aggregated with the Company
pursuant to regulations under Section 414(o) of the Code.
AFTER-TAX CONTRIBUTION ACCOUNT: The separate account maintained
for a Member to record his After-Tax Contributions to the Plan and
adjustments relating thereto.
AFTER-TAX CONTRIBUTIONS: The amount contributed by a Member
pursuant to Section 4.1. Such amount may include After-Tax Matched
Contributions and/or After-Tax Unmatched Contributions.
ANNIVERSARY DATE: The Effective Date or the January 1 of each year
after the Effective Date.
BASIC SAVINGS CONTRIBUTIONS: Each Matching Member's first 6% of
Savings Contributions, regardless of whether such contributions are Pre-Tax
or After-Tax Contributions.
BENEFICIARY: A Member's spouse, or such other natural person or
persons, or the trustee of an inter vivos trust for the benefit of natural
persons, who become entitled to benefits hereunder on account of a Member's
death.
BOARD OF DIRECTORS: The Board of Directors of the Company.
CODE: The Internal Revenue Code of 1986, as now in effect or
hereafter amended.
COMMITTEE: The Administrative Committee appointed by the Company
to act as administrator of the Plan and to perform the duties described in
Section II.
COMPANY: The M. W. Kellogg Company, a Delaware corporation, its
predecessors and successors.
-3-
<PAGE>
COMPENSATION: The total of all amounts paid by Employer to or for
the benefit of an Eligible Employee or Member for services rendered or labor
performed while an Eligible Employee or Member in the form of base pay,
overtime, the Incentive Compensation Bonus, extended work-week and shift
differential payments, and interim travel pay, and including amounts deferred
by such Member pursuant to an option authorized by Section 125 and/or Section
401(k) of the Code under a plan adopted by such Employer, but excluding
contributions to any other deferred compensation program (including this
Plan), stock options, restricted stock and any other form of extraordinary
remuneration, including, but not limited to, all bonuses except the Incentive
Compensation Bonus, overseas or cost-of-living allowances. Notwithstanding
anything herein to the contrary, effective January 1, 1989, in no event shall
the annual Compensation taken into account under the Plan for any Employee
exceed $200,000 prior to January 1, 1994, or $150,000 on or after January 1,
1994, or such other dollar amount as may be prescribed by the Secretary of
the Treasury or his delegate pursuant to Section 401(a)(17) of the Code. For
purposes of applying the applicable 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 $200,000 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.
CONTRIBUTION: Any amount contributed to the Trust Fund pursuant to
the provisions of this Plan by an Employer or by a Member out of his
Compensation.
ERISA: Public Law No. 93-406, the Employee Retirement Income
Security Act of 1974, as now in effect or hereafter amended.
EFFECTIVE DATE: January 1, 1989.
ELIGIBLE EMPLOYEE: Any salaried Employee of an Employer who, on or
after the Effective Date, is not a "leased employee" with respect to the
employing Employer within the meaning of Section 414(n)(2) of the Code, whose
terms of employment are not subject to a collective bargaining agreement that
does not expressly provide for participation in the Plan, and who is not
classified by the employing Employer as a "Project Employee", i.e. employed
in connection with one or more specific projects and on the basis that
employment shall terminate no later than the completion of the project(s), or
a "Temporary Employee", i.e. employed for a specified period and on the basis
that employment shall terminate no later than the expiration of the period.
EMPLOYEE: Any person who, on or after the Effective Date, is an
employee of an Employer or Affiliate, receiving remuneration from the
Employer or Affiliate for personal services (or would be receiving such
remuneration except for an authorized leave of absence) rendered in such
capacity. The term "Employee" shall also include any person who is a "leased
-4-
<PAGE>
employee" with respect to an Employer or Affiliate within the meaning of
Section 414(n)(2) of the Code, to the extent required by Section 414(n) of
the Code.
EMPLOYER: The Company and any eligible organization which shall
adopt this Plan pursuant to the provisions of Section X.
EMPLOYER CONTRIBUTION: Contributions made by the Employer on
behalf of Matching Members pursuant to Section 4.2 of the Plan.
EMPLOYER CONTRIBUTION ACCOUNT: The account maintained for a
Matching Member to record his share of the Employer Contributions and
adjustments relating thereto.
ENTRY DATE: Prior to January 1, 1993, the first day of each
calendar month. From and after January 1, 1993, the first day of the Pay
Cycle.
FORFEITURE: The portion of a Matching Member's Employer
Contribution Account which is forfeited because of termination of employment
with all Employers and Affiliates before full vesting pursuant to Section 7.4
and which occurs on the earlier of
(a) the distribution of the entire vested portion of the
Matching Member's Account, or
(b) the last day of the Plan Year in which the Matching Member
incurs five consecutive one-year Breaks in Service.
INCOME OF THE TRUST FUND: The net gain or loss of the Trust Fund
from investments, as reflected by interest payments, dividends, realized and
unrealized gains and losses on securities and other investment transactions
and expenses paid from the Trust Fund.
INVESTMENT FUND: Any of the investment funds comprising the Trust
Fund, as described in Section 9.2.
IRA ACCOUNT: The individual account of a Member consisting of his
deductible participant contributions made under the Prior Plan, together with
any income or loss allocated thereto.
LIMITED MATCHING MEMBER: A Limited Matching Member is a highly
compensated employee who is participating in The M. W. Kellogg Company
Savings and Investment Plan and in The Annual Incentive Plan for Selected
Employees of The M. W. Kellogg Company and/or The Long-Term Performance Plan
for Selected Employees of The M. W. Kellogg Company (both non-qualified plans
sponsored by Dresser Industries, Inc.) as of January 11, 1988.
-5-
<PAGE>
MATCHING MEMBER: An Eligible Employee who has met the eligibility
requirements for participation pursuant to the provisions of Section 3.2 and
who is making contributions to the Plan.
MEMBER: An Eligible Employee who, pursuant to the provisions of
Section III, has met the eligibility requirements for participation in this
Plan as a Matching Member or Non-Matching Member and is participating in the
Plan or a former Eligible Employee entitled to benefits under the Plan.
NON-MATCHING MEMBER: An Eligible Employee who has met the
eligibility requirements for participation in the Plan pursuant to Section
3.3 and who is making contributions to the Plan.
PAY CYCLE: The biweekly pay period for each Employee that ends at
midnight on the Friday prior to the Thursday on which Employees receive
payment from the Employer.
PLAN: The M. W. Kellogg Company Savings and Investment Plan set
forth herein, and as hereafter amended from time to time.
PLAN QUARTER: Each calendar quarter during the Plan Year.
PLAN YEAR: The fiscal year of the Plan beginning on January 1 of
each calendar year and ending on December 31.
PRE-TAX CONTRIBUTION ACCOUNT: The separate account maintained for
a Member to record his Pre-Tax Contributions to the Plan and adjustments
relating thereto.
PRE-TAX CONTRIBUTIONS: The amount contributed pursuant to the
Member's deferral election by the Employer in accordance with Section 4.1.
PRIOR PLAN: The M. W. Kellogg Company Savings and Investment Plan
as in effect on December 31, 1988, prior to its amendment, restatement and
continuation in the form of this Plan.
ROLLOVER ACCOUNT: The account maintained to record a Rollover
Amount and adjustments relating thereto.
ROLLOVER AMOUNT: An amount transferred by an Eligible Employee to
the Plan that meets the requirements of Section 402(a)(5) of the Code.
SAVINGS CONTRIBUTIONS: A Member's Pre-Tax and/or After-Tax
Contributions to the Plan under Section 4.1 of the Plan.
SERVICE: For purposes of determining an Eligible Employee's
eligibility to participate in the Plan under Section III and for determining
a Matching Member's vested
-6-
<PAGE>
percentage in his Employer Contribution Account under Section 7.4, such
Employee's or Member's period of employment with Employers and Affiliates,
determined in accordance with Section 3.6.
TOTAL AND PERMANENT DISABILITY: A Member shall be considered
totally and permanently disabled if the Member (i) is under a physician's
care for an illness or accidental injury, (ii) is not engaged in any
occupation, (iii) is not working for compensation or profit except approved
rehabilitative employment, and (iv) for the first 24 months following the
illness or injury the Member is unable to perform the essential duties of his
job as a result of the illness or injury; provided however, that once a
Member has received long-term disability benefits for 24 months, such Member
must be unable to perform the essential duties of any job for which the
Member is or may reasonably become qualified in order to be considered
totally and permanently disabled.
TRUST: The Trust created by and under the Trust Agreement.
TRUST AGREEMENT: The Trust Agreement provided for in Section IX,
as amended from time to time.
TRUST FUND: The Investment Funds held by the Trustee under the
Trust Agreement, together with all income, profits or increments thereon.
TRUSTEE: The trustee under the Trust Agreement.
VALUATION DATE: The last business day of each fiscal month during
the Plan Year and more frequent dates as determined by the Committee or
Trustee. From and after January 1, 1993, and to the extent that Plan assets
are invested in the Investment Funds and such Investment Funds are
specifically credited or earmarked to Member's separate accounts under the
Plan and in accordance with the directed investment provisions of Section
9.3, the term "Valuation Date" shall mean each day that the New York Stock
Exchange is open for business unless the Committee determines, with respect
to any such Investment Fund, to require the Valuation Date to be applied less
frequently. The last business day of December of each Plan Year shall be the
"Annual Valuation Date."
VESTING COMPUTATION PERIOD: The 12 consecutive month period
beginning on January 1 and ending on December 31. The Vesting Computation
Period shall apply equally to all Members.
VESTING SERVICE: The period of a Member's employment considered in
the determination of his eligibility for benefits under the Plan.
YEAR OF SERVICE: As applied to an Employee, completion of a 12
consecutive month period of Service that commences on the date the Employee
first completes one Hour of Service (or an anniversary of such date).
-7-
<PAGE>
Words used in this Plan and in the Trust Agreement 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.
-8-
<PAGE>
SECTION II
ADMINISTRATION OF THE PLAN
2.1 ALLOCATION OF RESPONSIBILITY AMONG FIDUCIARIES FOR PLAN AND TRUST
ADMINISTRATION: Each Employer, the Board of Directors of the Company, the
Committee and the Trustee (hereinafter collectively referred to as the
"Fiduciaries") shall have only those specific powers, duties,
responsibilities and obligations as are specifically given them under this
Plan or the Trust Agreement. In general, each Employer shall have the sole
responsibility for making the contributions provided for under Sections 4.1
and 4.2. The Board of Directors of the Company shall have the sole authority
to appoint and remove the Trustee and the members of the Committee, and to
amend or terminate, in whole or in part, this Plan or the Trust Agreement.
The Committee shall have the sole responsibility for the administration of
this Plan and the sole authority to appoint or remove any Investment Manager
which may be provided for under the Trust Agreement. The Trustee shall have
the sole responsibility for the administration of the Trust and shall have
exclusive authority and discretion to manage and control the Trust Fund,
except to the extent that the authority to manage, acquire and dispose of
assets of the Trust Fund is delegated to an Investment Manager, all as more
specifically provided in the Trust Agreement. 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 Agreement, 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 Agreement, and is not required under this Plan or the Trust
Agreement to inquire into the propriety of any such direction, information or
action. It is intended under this Plan and the Trust Agreement that each
Fiduciary shall be responsible for the proper exercise of its own powers,
duties, responsibilities and obligations under this Plan and the Trust
Agreement 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.
2.2 APPOINTMENT OF COMMITTEE: The Plan shall be administered by an
Administrative Committee consisting of at least three persons who shall be
appointed by and serve at the pleasure of the Board of Directors of the
Company. All usual and reasonable expenses of the Committee may be paid in
whole or in part by the Company, and any expenses not paid by the Company
shall be paid by the Trustee out of the Trust Fund. The members of the
Committee shall not receive compensation with respect to their services for
the Committee. The Company shall pay the premiums on any bond secured for
the performance of the duties of the Committee members described hereunder
and shall be entitled to reimbursement by other Employers for their
proportionate shares thereof.
2.3 RECORDS AND REPORTS: The Committee shall exercise such authority and
responsibility as it deems appropriate in order to comply with ERISA and any
governmental regulations issued thereunder relating to records of Members'
Service, Account balances and the percentage of such Account balances which are
non-forfeitable under the Plan, and notifications to Members. The Committee
shall file or cause to be filed with the appropriate office of the
-9-
<PAGE>
Internal Revenue Service and the Department of Labor all reports, returns,
notices and other information required of plan administrators under ERISA,
including, but not limited to, the summary plan description, annual reports
and amendments thereto. The Committee shall make available to Members 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 ERISA.
2.4 OTHER COMMITTEE POWERS AND DUTIES: The Committee shall have such
powers as may be necessary to discharge its duties hereunder, including, but
not by way of limitation, the following powers and duties:
(a) To construe and interpret the Plan, reconcile any
inconsistency or supply any omitted detail consistent with the general
terms of this Plan, decide all questions of eligibility and determine
the amount, manner and time of payment of any benefits hereunder;
(b) To prescribe procedures to be followed by Members or
Beneficiaries filing applications for benefits;
(c) To receive from the Employers and from Employees such
information as shall be necessary for the proper administration of the
Plan;
(d) To prepare and distribute, in such manner as the Committee
determines to be appropriate, information explaining the Plan;
(e) To furnish the Employers, upon request, such annual reports
with respect to the administration of the Plan as are reasonable and
appropriate;
(f) To select additional and/or delete Investment Funds pursuant
to Section 9.2;
(g) To receive and review reports of the financial condition,
and of the receipts and disbursements, of the Trust Fund from the
Trustee and any Investment Manager, and to transmit such reports,
along with its findings and recommendations surrounding the investment
performance of the Trust Fund, to the Board of Directors; and
(h) To appoint or employ individuals to assist in the
administration of the Plan and any other agents it deems advisable,
including legal and actuarial counsel.
2.5 RULES AND DECISIONS: The Committee may adopt such rules for the
administration of the Plan as it deems necessary, desirable or appropriate.
All rules and decisions of the Committee shall be uniformly and consistently
applied to all Employees in similar circumstances. The judgment of the
Committee and each member thereof on any question arising hereunder shall
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be binding, final and conclusive on all parties concerned. When making a
determination or calculation, the Committee shall be entitled to rely upon
information furnished by a Member or Beneficiary, an Employer, the legal
counsel of an Employer or the Trustee.
2.6 COMMITTEE PROCEDURE: The Committee may act at a meeting or in writing
without a meeting. The Committee shall elect one of its members as chairman,
appoint a secretary, who may or may not be a member of the Committee, and
shall advise the Trustee of such actions in writing. The secretary of the
Committee shall keep a record of all meetings and forward all necessary
communications to the Employers or the Trustee. The Committee may adopt such
bylaws and regulations as it deems desirable for the conduct of its affairs.
All decisions of the Committee shall be made by the vote of the majority
including actions in writing taken without a meeting. A dissenting Committee
member who, within a reasonable time after he has knowledge of any action or
failure to act by the majority, registers his dissent in writing delivered to
the other Committee members, the Employer and the Trustee shall not be
responsible for any such action or failure to act. The Committee shall
designate one of its members as agent of the Plan and of the Committee for
service of legal process at the principal office of the Committee at The M.
W. Kellogg Company, Kellogg Tower, 601 Jefferson Ave., Houston, Texas 77002.
2.7 AUTHORIZATION OF BENEFIT PAYMENTS: The Committee shall issue
directions to the Trustee concerning all benefits which are to be paid from
the Trust Fund pursuant to the provisions of the Plan, and warrants that all
such directions are in accordance with this Plan. The Committee shall keep
on file, in such manner as it may deem convenient or proper, all reports from
the Trustee.
2.8 PAYMENT OF EXPENSES: All expenses incident to the administration,
termination or protection of the Plan and Trust, including, but not limited
to, legal, accounting, Investment Manager and Trustee fees, shall be paid by
the Company, which may require reimbursement from the other Employers for
their proportionate shares, or, if not paid by the Company, shall be paid by
the Trustee from the Trust Fund and, until paid, shall constitute a first and
prior claim and lien against the Trust Fund.
2.9 APPLICATION AND FORMS FOR BENEFITS: The Committee may require an
Eligible Employee or Member to complete and file with the Committee an
application for a benefit and all other forms approved by the Committee, and
to furnish all pertinent information requested by the Committee. The
Committee may rely on such information so furnished it, including the
Eligible Employee's or Member's current mailing address.
2.10 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 own 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
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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 when the same is judicially
determined to be due to the gross negligence or willful misconduct of such
member.
2.11 QUARTERLY STATEMENTS: As soon as practicable after each Plan Quarter,
the Committee shall prepare and deliver to each Member a written statement
showing as of that Plan Quarter just completed:
(a) The balance in his Account in the Trust Fund for the Plan
Quarter;
(b) The amount of Employer Contributions allocated to his
Employer Contribution Account and the amount of his Contributions for
the Plan Quarter;
(c) The adjustments to his Account to reflect his share of
income and expenses of the Trust Fund and appreciation or depreciation
in Trust Fund assets for the Plan Quarter;
(d) The new balance in his Account for the Plan Quarter
Valuation Date; and
(e) Such information as the Committee deems appropriate to
advise him of his relative interests in each Investment Fund.
2.12 ANNUAL AUDIT: The Committee shall engage, on behalf of all Members,
an independent Certified Public Accountant who shall conduct an annual
examination of any financial statements of this Plan and Trust and of other
books and records of this Plan and Trust 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 Member 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 certified by the preparer as
accurate 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.
2.13 FUNDING POLICY: The Committee shall, at a meeting duly called for such
purpose, establish a funding policy and method consistent with the objectives
of the Plan and the requirements of Title I of ERISA. The Committee shall
meet at least annually to review such funding policy and method. In
establishing and reviewing such funding policy and method, the Committee
shall endeavor to determine the Plan's short-term and long-term objectives
and
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financial needs, taking into account the need for liquidity to pay benefits
and the need for investment growth. All actions of the Committee taken
pursuant to this Section and the reasons therefor shall be recorded in the
minutes of meetings of the Committee and shall be communicated to the
Trustee, any Investment Manager who may be managing a portion or all of the
Trust Fund in accordance with the provisions of the Trust Agreement, and to
the Board of Directors.
2.14 ALLOCATION AND DELEGATION OF COMMITTEE RESPONSIBILITIES: Upon the
approval of a majority of the members of the Committee, the Committee may (i)
allocate among any of the members of the Committee any of the
responsibilities of the Committee under the Plan and Trust Agreement and/or
(ii) designate any person, firm or corporation that is not a member of the
Committee to carry out any of the responsibilities of the Committee under the
Plan and/or Trust Agreement. Any such allocation or designation shall be
made pursuant to a written instrument executed by a majority of the members
of the Committee.
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SECTION III
PARTICIPATION AND SERVICE
3.1 ELIGIBILITY FOR PARTICIPATION AS A MEMBER: An Eligible Employee
participating under the Prior Plan immediately preceding January 1, 1989
shall continue to participate as a Member in accordance with the provisions
of this Plan. Effective January 1, 1989, each other Eligible Employee shall
be eligible to commence participation as a Member once such Eligible Employee
meets the eligibility requirements for participation as a Matching Member
pursuant to Section 3.2 below or for participation as a Non-Matching Member
pursuant to Section 3.3 below.
3.2 ELIGIBILITY FOR PARTICIPATION AS A MATCHING MEMBER: Effective January
1, 1989, each other Eligible Employee shall be eligible to commence
participation as a Matching Member on the Entry Date coincident with or next
following the date he is both an Eligible Employee and is credited with at
least one Year of Service, provided, he remains an Eligible Employee on such
Entry Date. Each Matching Member shall be eligible to make Contributions to
the Plan pursuant to Section 4.1(A).
3.3 ELIGIBILITY FOR PARTICIPATION AS A NON-MATCHING MEMBER: Any Eligible
Employee who commences employment with the Company prior to December 30,
1990, shall, prior to becoming a Matching Member under Section 3.2, be
eligible to commence participation as a Non-Matching Member on the Entry Date
coincident with or next following the date he is an Eligible Employee,
provided he remains an Eligible Employee on such Entry Date. Each
Non-Matching Member shall be eligible to make Contributions to the Plan
pursuant to Section 4.1(B). Any Eligible Employee who commences employment
with the Company from and after January 1, 1991, will not be eligible to
commence participation as a Member in the Plan until such Eligible Employee
is eligible to commence participation in the Plan as a Matching Member
pursuant to Section 3.2 of the Plan.
3.4 NOTIFICATION OF ELIGIBLE EMPLOYEES: The Committee, which shall be the
sole judge of the eligibility of an Eligible Employee to participate under
the Plan, shall notify each Eligible Employee of his initial eligibility to
participate in the Plan as a Member.
3.5 APPLICATIONS BY EMPLOYEES: Each Eligible Employee who shall become
eligible to become a Member under the Plan, and who shall desire so to become
a Member, shall execute and file with the Committee an application to become
a Member in such form as may be prescribed by the Committee. In each such
application, the applicant shall (i) designate the amount of his
Contributions to the Plan, (ii) agree to be bound by the terms and conditions
of the Plan, and (iii) authorize Compensation deferrals or deductions for his
Contributions.
3.6 SERVICE: An Eligible Employee's or Member's period of Service shall
be determined in accordance with the following:
(a) SERVICE PRIOR TO THE EFFECTIVE DATE: An Eligible Employee's
or Member's last period of continuous employment with an Employer or
Affiliate
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prior to the Effective Date shall be counted as Service to
the same extent and in the same manner as was computed under the
provisions of the Prior Plan.
(b) SERVICE AFTER THE EFFECTIVE DATE: From and after the
Effective Date, the term Service shall mean all of an Eligible
Employee's or Member's years, months and days of active employment
with an Employer or an Affiliate, including periods includable under
Sections 3.8(b) and 3.9(b) and periods of absence:
(i) Due to accident or sickness so long as the person
is continued on the employment rolls of the Employer or
Affiliate and remains eligible to return to work upon his
recovery;
(ii) In the service of 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 or Affiliate) but only if,
and then only to the extent that, applicable federal law
requires such military service to be counted as Service
hereunder and only if the person has complied with all
prerequisites of such federal law; and
(iii) Due to an authorized leave of absence granted
by the Employer or Affiliate for any other purpose approved
by the Board of Directors in accordance with established
practices of the Employer or Affiliate, consistently applied
in a non-discriminatory manner in order that all employees
under similar circumstances shall be treated alike, provided
that each such person shall, immediately upon the expiration
of such leave, apply for reinstatement in the employment of
the Employer or Affiliate;
excluding, however, periods which may be disregarded under the
re-employment provisions of Section 3.9(b).
An Eligible Employee's or Member's Service shall commence (or
recommence) on the date he first performs an "hour of service" within
the meaning of Department of Labor Regulation Section
2530.200b-2(a)(1) for an Employer or Affiliate. Unless a period of
Service can be disregarded under the re-employment provisions of
Section 3.9(b), all periods of Service shall be aggregated so that a
one year period of Service shall be completed as of the date the
Eligible Employee or Member completes 12 months of Service (30 days
shall be deemed to be a month in the case of the aggregation of
fractional months), or 365 days of Service.
Hours of Service and Service will be credited for employment with
other members of an affiliated service group (under Code
Section 414(m)), a
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controlled group of corporations (under Code Section 414(b)), or
a group of trades or businesses under common control (under Code
Section 414(c)), of which the Employer is a member.
(c) TERMINATION OF SERVICE: A period of Service of an Eligible
Employee or Member shall terminate on the date of the first to occur
of (i) his retirement or death, (ii) his resignation or discharge,
(iii) his deemed date of termination of employment pursuant to his
failure to return to work upon the expiration of such an authorized
leave of absence, or (iv) one year from the date the Eligible Employee
or Member is absent from active employment for any reason other than
retirement, resignation, discharge, authorized leave of absence or
death. For purposes of clause (iii) immediately above, an Eligible
Employee's or Member's deemed date of termination shall be the earlier
of (A) the expiration date of such authorized leave of absence and
(B) one year from the date such authorized leave of absence commenced.
3.7 BREAK IN SERVICE: For purposes of the Plan, a "Break In Service"
shall occur upon the expiration of the 12 consecutive month period next
following an Eligible Employee's or Member's termination of Service (as
determined in accordance with the provisions of Section 3.6(c) hereof),
unless such Eligible Employee or Member sooner recommences Service with an
Employer or an Affiliate. In the event an Eligible Employee or Member
recommences Service with an Employer or Affiliate prior to incurring a Break
In Service, the period of his interim absence shall constitute Service for
all purposes of the Plan, as provided in Section 3.8 below.
Solely for purposes of determining whether a Break In Service has
occurred, the Service of an individual who is absent from work for maternity
or paternity reasons shall not terminate until the expiration of two years
after the date such absence commenced. For purposes of this paragraph, an
absence from work for maternity or paternity reasons means an absence (a) by
reason of the pregnancy of the individual, (b) by reason of the birth of a
child of the individual, (c) by reason of the placement of a child with the
individual in connection with the adoption of such child by such individual,
or (d) for purposes of caring for such child for a period beginning
immediately following such birth or placement.
3.8 PARTICIPATION AND SERVICE UPON RE-EMPLOYMENT BEFORE A BREAK IN
SERVICE: Upon the re-employment before a Break In Service of any person who
had previously been employed by an Employer or Affiliate on or after the
Effective Date, the following rules shall apply in determining his
eligibility for participation under Sections 3.1, 3.2 and 3.3 and his Service
under Section 3.6:
(a) PARTICIPATION: If the re-employed person was not a Member
during his prior period of Service, he must meet the requirements of
Section 3.1 for participation in the Plan as if he were a new Eligible
Employee; provided, however, that his prior period of Service plus the
period of Service credited during his interim absence shall be
considered in
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determining whether he meets such requirements. If the re-employed
person was a Member in the Plan during his prior period of Service,
he shall be entitled to recommence participation as of the date of
his re-employment.
(b) SERVICE: Any Service attributable to his prior period of
Service shall be reinstated as of the date of his re-employment, and
the period of his interim absence shall also constitute Service for
purposes of Section 7.4.
3.9 PARTICIPATION AND SERVICE UPON RE-EMPLOYMENT AFTER A BREAK IN
SERVICE: Upon the re-employment after a Break In Service of any person who
had previously been employed by an Employer or Affiliate on or after the
Effective Date, the following rules shall apply in determining his
eligibility for participation under Section 3.1 and his Service under Section
3.6:
(a) PARTICIPATION: If an Eligible Employee (whether or not
previously a Member) is rehired after cancellation of pre-break
Service as determined in accordance with subparagraph (b) below, he
must meet the requirements of Section 3.1 for participation in the
Plan as if he were a new Eligible Employee. If an Eligible Employee
is rehired prior to cancellation of his pre-break Service as
determined in accordance with subparagraph (b) below, he shall be
eligible to commence or recommence participation as of the date of his
re-employment, if he previously was a Member, or on the first Entry
Date after his re-employment as of which he has completed the
requirements of Section 3.1. If the re-employed person was a Member
in the Plan during his prior period of Service, he shall be entitled
to recommence participation as of the date of his re-employment.
(b) SERVICE: If the re-employed person was not a Member during
his prior period of Service, or was a Member whose prior Service
terminated without entitlement to a distribution from his Employer
Contribution Account under Section VII, any Service attributable to
his prior period of employment shall be reinstated as of the date of
his recommencement of participation only if the number of consecutive
days of Break In Service (determined by reference to successive days
following his termination of Service date) is less than the greater of
1,825 or the aggregate number of his days of pre-break Service. If
the re-employed person was a Member whose prior Service terminated
with entitlement to a distribution from his Employer Contribution
Account under Section VII, all Service attributable to his prior
period of employment shall be reinstated upon his recommencing
participation in the Plan.
3.10 TRANSFERRED MEMBERS: If a Member is transferred to an Affiliate,
or to an employment classification with an Employer which is not covered by
this Plan, his participation shall be suspended until he is subsequently
re-employed by an Employer in an employment classification covered by the
Plan; provided, however, that during such suspension period (i) such Member
shall be credited with Service in accordance with Section 3.6, (ii) he shall
not be entitled
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or required to make Savings Contributions under Section 4.1, (iii) his
Employer Contribution Account shall receive no Employer Contribution except
to the extent provided in Section 4.2, and (iv) his Account shall continue to
share proportionately in Income of the Trust Fund as provided in Section 5.2.
If an individual is transferred from an employment classification with an
Employer that is not covered by the Plan to an employment classification that
is so covered, or from an Affiliate to an employment classification with an
Employer that is so covered, his period of Service prior to the date of
transfer shall be considered for purposes of determining his eligibility to
become a Member under Section 3.1 and for purposes of vesting under Section
7.4.
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SECTION IV
CONTRIBUTIONS AND FORFEITURES
4.1 SAVINGS CONTRIBUTIONS.
A. MATCHING MEMBERS: Each Matching Member may designate at
least 2% but not more than 16% of his Compensation as Savings
Contributions as described herein.
PRE-TAX CONTRIBUTIONS: Each Matching Member who elects
to make Pre-Tax Contributions for a Plan Year shall
initially elect to defer a portion of his Compensation in
whole percentages of not less than 1% and not more than 16%
of his Compensation; provided, however, that Pre-Tax
Contributions and After-Tax Contributions under this
Section 4.1(A) shall total, in the aggregate, at least 2%
but not more than 16% of the Matching Member's Compensation.
Each such election shall be made pursuant to the provisions
of Section 3.5 and shall continue in effect during
subsequent Plan Years unless the Matching Member shall
provide notification in the manner prescribed by the
Committee of his election to discontinue or otherwise change
his Pre-Tax Contributions. A Matching Member may change the
percentage of his Compensation designated by him as his
Pre-Tax Contributions and such change shall be effective
(i) prior to January 1, 1993 as of the first day of the Plan
Quarter, and (ii) from and after January 1, 1993, as of the
Employee's Pay Cycle that begins after the change has been
processed.
A Matching Member's Pre-Tax Contributions shall not
exceed a maximum of $7,000 (as adjusted by the Secretary of
the Treasury to account for cost-of-living increases for
each calendar year). In the event a Matching Member's
Pre-Tax Contributions exceed the applicable $7,000 limit, or
in the event the Matching Member 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 amounts deferred by the Matching
Member in other plans or arrangements, such excess (the
"Excess Deferrals"), plus any income and minus any loss
attributable thereto, shall be returned to the Matching
Member by the April 15 of the following year. Such income
shall include the allocable gain or loss for the Plan Year
in which the Excess Deferral occurred. The amount of any
Excess Deferrals to be distributed to a Matching Member for
a taxable year shall be
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reduced by excess Pre-Tax Contributions previously distributed
pursuant to Section XIV for the Plan Year beginning in such
taxable year. The income or loss attributable to the Matching
Member's Excess Deferral for the Plan Year shall be determined
by multiplying the income or loss attributable to the Matching
Member's Pre-Tax Contribution Account balance for the Plan
Year (or relevant portion thereof) by a fraction, the
numerator of which is the Excess Deferral and the denominator
of which is the Matching Member's total Pre-Tax Contribution
Account balance as of the Valuation Date next preceding the
date of return of the Excess Deferral. Each Matching Member's
Pre-Tax Contributions shall be contributed to the Trust Fund
by the Employer. Each Matching Member's Pre-Tax Contribution
Accounts shall be fully vested and non-forfeitable at all times.
AFTER-TAX CONTRIBUTIONS: Any Matching Member
regardless of whether he has elected to defer any percentage
of his Compensation in the form of a Pre-Tax Contribution to
the Plan may elect to make an After-Tax Contribution in
whole percentages of not less than 1% of his Compensation;
provided, however, that the Pre-Tax Contributions and
After-Tax Contributions of a Matching Member under this
Section 4.1(A) shall total, in the aggregate, at least 2%
but not more than 16% of the Matching Member's Compensation.
Any After-Tax Contribution election shall be made pursuant
to the provisions of Section 3.5, and shall continue in
effect during subsequent Plan Years unless the Matching
Member shall provide notification in the manner prescribed
by the Committee of his election to discontinue or otherwise
change his After-Tax Contributions. A Matching Member may
change the percentage of his Compensation designated by him
as his After-Tax Contributions, and such change shall be
effective (i) prior to January 1, 1993, as of the first day
of the Plan Quarter, and (ii) from and after January 1,
1993, as of the Employee's Pay Cycle that begins after such
change has been processed. Each Matching Member's After-Tax
Contribution Accounts shall be fully vested and
non-forfeitable at all times.
B. NON-MATCHING MEMBERS: Each Non-Matching Member may
designate at least 2% but not more than 10% of his Compensation as
Savings Contributions as described herein.
PRE-TAX CONTRIBUTIONS: Each Non-Matching Member who
elects to make Pre-Tax Contributions for a Plan Year shall
initially elect to defer a portion of his Compensation in
whole percentages of not less than 1% and not more than 10%
of his Compensation;
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provided, however, that Pre-Tax Contributions and After-Tax
Contributions under this Section 4.1(B) shall total, in the
aggregate, at least 2% but not more than 10% of the Non-Matching
Member's Compensation. Each such election shall be made pursuant
to the provisions of Section 3.5 and shall continue in effect
during subsequent Plan Years unless the Non-Matching Member
shall notify the Committee in writing of his election to
discontinue or otherwise change his Pre-Tax Contributions.
A Non-Matching Member may change the percentage of his
Compensation designated by him as his Pre-Tax Contributions
and such change shall be effective as of the first day of
the Plan Quarter that begins after the change has been
processed.
A Non-Matching Member's Pre-Tax Contributions shall not
exceed a maximum of $7,000 (as adjusted by the Secretary of
the Treasury to account for cost-of-living increases for
each calendar year). In the event a Non-Matching Member's
Pre-Tax Contributions exceed the applicable $7,000 limit, or
in the event the Matching Member 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 amounts deferred by the Non-Matching
Member in other plans or arrangements, such excess (the
"Excess Deferrals"), plus any income and minus any loss
attributable thereto, shall be returned to the Non-Matching
Member by the April 15 of the following year. Such income
shall include the allocable gain or loss for the Plan Year
in which the Excess Deferral occurred. The amount of any
Excess Deferrals to be distributed to a Non-Matching Member
for a taxable year shall be reduced by excess Pre-Tax
Contributions previously distributed pursuant to Section XIV
for the Plan Year beginning in such taxable year. The
income or loss attributable to the Matching Member's Excess
Deferral for the Plan Year shall be determined by
multiplying the income or loss attributable to the Non-
Matching Member's Pre-Tax Contribution Account balance for
the Plan Year (or relevant portion thereof) by a fraction,
the numerator of which is the Excess Deferral and the
denominator of which is the Non-Matching Member's total
Pre-Tax Contribution Account balance as of the Valuation
Date next preceding the date of return of the Excess
Deferral. Each Non-Matching Member's Pre-Tax Contributions
shall be contributed to the Trust Fund by the Employer.
Each Non-Matching Member's Pre-Tax Contribution Accounts
shall be fully vested and non-forfeitable at all times.
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AFTER-TAX CONTRIBUTIONS: Any Non-Matching Member
regardless of whether he has elected to defer any percentage
of his Compensation in the form of a Pre-Tax Contribution to
the Plan may elect to make an After-Tax Contribution of up
to 10% of his Compensation; provided, however, that the
Pre-Tax Contributions and After-Tax Contributions of a
Non-Matching Member under this Section 4.1(B) shall total, in
the aggregate, at least 2% but not more than 10% of the
Non-Matching Member's Compensation. Any After-Tax Contribution
election shall be made pursuant to the provisions of
Section 3.5, and shall continue in effect during subsequent
Plan Years unless the Non-Matching Member shall notify the
Committee in writing of his election to discontinue or
otherwise change his After-Tax Contributions. A Non-Matching
Member may change the percentage of his Compensation designated
by him as his After-Tax Contributions, and such change shall be
effective as of the first day of the Plan Quarter that begins
after such change has been processed. Each Non-Matching Member's
After-Tax Contribution Accounts shall be fully vested and
non-forfeitable at all times.
4.2 EMPLOYER CONTRIBUTIONS: As of each Pay Cycle, each Employer shall
make an Employer Contribution to the Trust Fund on behalf of its Matching
Members who are not Limited Matching Members in an amount equal to 75% of
such Matching Member's Basic Savings Contributions each payroll period.
Limited Matching Members shall receive an Employer Contribution each
bi-weekly payroll period equal to 0.1% of such Limited Matching Member's
Basic Savings Contributions for that payroll period. Prior to January 1,
1992, the Matching Member shall elect the amount of Pre-Tax and/or After-Tax
Contributions to be matched by the Employer. From and after January 1, 1992,
the Employer shall first apply the Employer Contribution to the Member's
Pre-Tax Contributions to the Plan. A Contribution shall be deemed to be made
on account of a Plan Year if (i) the Employer claims such amount as a
deduction on its Federal income tax return for such Plan Year or (ii) the
Employer designates such amount in writing to the Trustee as payment on
account of such Plan Year. All Contributions of the Employer shall be paid
to the Trustee, and payment shall be made not later than the time prescribed
by law for filing the Federal income tax return of the Employer, including
any extension which has been granted for the filing of such tax return. The
Trustee shall hold all such Employer Contributions subject to the provisions
of this Plan and Trust, and no part of such Contributions shall be used for,
or diverted to, any other purpose. Non-Matching Members shall not be
eligible to receive Employer Contributions.
In the case of the reinstatement of any amounts forfeited pursuant
to the unclaimed benefit provisions of Section 11.10 or pursuant to the
distribution repayment provisions of Section 7.4, the Employer shall also
contribute, within a reasonable time after a claim is filed under Section
11.10 or after a distribution is repaid under Section 7.4, an amount
sufficient to reinstate such amount after application of Forfeitures. All
such Employer Contributions shall be transmitted to the Trustee as soon as
practicable after such Contributions are made.
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4.3 EMPLOYER CONTRIBUTIONS AND PRE-TAX CONTRIBUTIONS TO BE TAX
DEDUCTIBLE: Employer 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 Employer 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.
4.4 SUSPENSION OF CONTRIBUTIONS: Prior to January 1, 1993, any Member
may, by written direction in the manner prescribed by the Committee, suspend
his Pre-Tax Contributions and/or After-Tax Contributions for a period of not
less than a calendar quarter. A Member may resume his Contributions at the
beginning of any Plan Quarter following a full calendar quarter during which
such Contributions were suspended. From and after January 1, 1993, a Member
may, in the manner prescribed by the Committee, suspend his Pre-Tax
Contributions and/or After-Tax Contributions for a period of not less than a
Pay Cycle. A Member may resume his Contributions as of the last day of any
Pay Cycle following suspension of contributions. In the event a Member
suspends his Pre-Tax Contributions and/or After-Tax Contributions, such
Member shall not be eligible for Employer Contributions during said
suspension period.
4.5 DELIVERY TO TRUSTEE: Each Employer shall, not less frequently than
monthly, pay the Contributions to the Trustee.
4.6 APPLICATION OF FUNDS: The Trustee shall hold or apply the
Contributions so received by it subject to the provisions of the Plan; and no
part thereof (except as otherwise provided in the Trust Agreement) shall be
used for any purpose other than the exclusive use of the Members or their
Beneficiaries.
4.7 ROLLOVER AMOUNTS: Any Eligible Employee may file with the
Committee a written request that the Trustee accept a Rollover Amount from
such Eligible Employee. The Committee, in its sole and absolute discretion,
shall determine whether such Eligible Employee shall be permitted to
contribute a Rollover Amount to the Trust Fund. The Committee shall develop
such procedures and may require such information from the Eligible Employee
desiring to make such a transfer as it deems necessary or desirable to
determine that the proposed transfer will meet the requirements of this
Section. Upon approval by the Committee, the amount transferred shall be
deposited in the Trust Fund and shall be credited to a separate Rollover
Account. Such account shall at all times be 100% vested in the Eligible
Employee and shall share in the Income of the Trust Fund in accordance with
Section 5.2. Upon termination of the Eligible Employee's employment with all
Employer and Affiliates, the total amount of the Rollover Account shall be
distributed in accordance with Section VIII.
Upon such a transfer by an Eligible Employee who is otherwise
eligible to participate in the Plan but who has not yet completed the
participation requirements of Section 3.1, his Rollover Account shall
represent his sole interest in the Plan until he becomes a Member. In all
respects, the Rollover Account shall be treated as a regular account under
this
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Plan and shall be subject to the investment directions of the Eligible
Employee and the change thereof as otherwise permitted herein.
4.8 DISPOSITION OF FORFEITURES: If a Member terminates Service without
being entitled to receive a distribution from his Employer Contribution
Account, he shall be deemed to have received a distribution from that account
as of the date of his termination of employment with all Employers and
Affiliates. A Member's Forfeiture, if any, shall first be applied to the
Employer Contribution Account of a re-employed Member for whom a
reinstatement of prior Forfeitures is required pursuant to Section 7.4
hereof, and second shall be applied to reinstate the Account of a previous
Member pursuant to the unclaimed benefit provisions of Section 11.10 hereof.
To the extent that Forfeitures for any Plan Year exceed the amounts required
for such purposes they will be applied to reduce Employer Contributions for
the Plan Year.
4.9 CONTRIBUTIONS GENERALLY IRREVOCABLE: All Employer Contributions to
the Trust Fund shall be irrevocable and shall be used to pay benefits or to
pay expenses of the Plan and Trust Fund; provided, however, that upon the
Employer's request, a Contribution which was made by a mistake of fact or
conditioned upon initial qualification of the Plan and Trust Fund under
Sections 401(a) and 501(a) of the Code, or upon the deductibility of the
Contribution under Section 404 of the Code, shall be returned to the Employer
within one year after the payment of the Contribution, the denial of initial
qualification or the disallowance of the deduction (to the extent
disallowed), whichever is applicable.
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SECTION V
MEMBER ACCOUNTS
5.1 INDIVIDUAL ACCOUNTS: The Committee shall create and maintain
adequate records to disclose the interest in the Trust Fund and in its
component Investment Funds of each Member, former Member and Beneficiary.
Such records shall be in the form of individual Accounts and credits and
charges shall be made to such Accounts in the manner herein described. A
Member may have up to five separate Accounts, an Employer Contribution
Account, a Pre-Tax Contribution Account, an After-Tax Contribution Account,
an IRA Account and a Rollover Account. Any Member who transfers from one
Employer to another Employer, or who is simultaneously employed by two or
more Employers, may have individual Accounts with each such Employer. The
maintenance of individual Accounts is only for accounting purposes, and a
segregation of the assets of the Trust Fund 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.
5.2 ACCOUNT ADJUSTMENTS: The Accounts of Members, former Members and
Beneficiaries shall be adjusted in accordance with the following:
(a) INCOME OF THE TRUST FUND: As of each Valuation Date, the
Trustee shall determine the fair market value of the assets of the
respective Investment Funds in the Trust Fund and the net income (or
net loss) of each Investment Fund. As soon as is practicable after
each Plan Quarter, the Trustee shall deliver to the Committee a
written statement of such determination.
The net income (or net loss) of each Investment Fund shall be
ascertained by the Trustee and shall be determined on the accrual
basis of accounting; provided, however, that such net income (or net
loss) shall include any net increase or net decrease in the value of
the assets of such Fund since the next preceding Valuation Date to the
extent not otherwise accrued.
As of each Valuation Date, the Committee shall adjust the
Accounts of each Member by allocating the net income (or net loss) of
the Investment Funds, separately and respectively, among the Accounts
of the Members who had such Accounts on the next preceding Valuation
Date, and each such Account shall be credited (or debited) with that
portion of such net income (or net loss) which the value of each such
Account on such preceding Valuation Date was of the value of all such
Accounts on such date; provided, however, that the value of such
Accounts as of the next preceding Valuation Date shall reflect any
error adjustments made thereto since the next preceding Valuation
Date. With respect to each Member whose employment is terminated for
any reason, so long as there is any balance in one or more of his
Accounts, such Account or Accounts shall continue to receive
allocations pursuant to this
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<PAGE>
Paragraph. Dividends on shares of stock in Fund D shall be allocated
to a special sub-account in Fund D.
(b) EMPLOYER CONTRIBUTIONS: As of each Valuation Date, the
Trustee shall allocate the Employer Contribution among the Employer
Contribution Accounts of Matching Members who are Eligible Members.
(c) PRE-TAX CONTRIBUTIONS: As of each Valuation Date, the
Trustee shall allocate to each respective Member's Pre-Tax
Contribution Account his Pre-Tax Contributions to the Plan.
(d) AFTER-TAX CONTRIBUTIONS: As of each Valuation Date, the
Trustee shall allocate to each respective Member's After-Tax
Contribution Account his After-Tax Contributions to the Plan.
(e) FORFEITURES: As of each Valuation Date, Forfeitures which
have arisen (valued as of the Valuation Date on which they were
forfeited) shall be credited to the obligation of the Employer to
effect Employer Contributions.
5.3 VALUATION OF TRUST FUND: A valuation of the Trust Fund 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 valuation, the assets of the Trust Fund shall be valued
at the respective current market values, and the amount of any obligations
for which the Trust Fund may be liable, as shown on the books of the Trustee,
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 Trust
Fund, and of making any such valuation, the Trustee shall account for the
transactions of the Trust Fund on a modified cash basis. Any amount
withdrawn from Fund D shall be equal to the Member's pro rata share of the
aggregate net proceeds of all sales of stock made by the Trustee to effect
withdrawals made during a period determined by the Committee.
5.4 RECOGNITION OF DIFFERENT INVESTMENT FUNDS: As provided in Section IX,
Investment Funds shall be established and each Member shall direct, within the
limitations set forth in Section 9.3, what portion of the balance in his
Employer Contribution Account, Pre-Tax Contribution Account, After-Tax
Contribution Account, IRA Account and Rollover Account, if any, shall be
deposited in each Investment Fund. Consequently, when appropriate, a Member
shall have an Employer Contribution Account, Pre-Tax Contribution Account,
After-Tax Contribution Account, IRA Account and Rollover Account in each such
Investment Fund and the allocations described in Section 5.2 shall be adjusted
in such manner as is appropriate to recognize the existence of the Investment
Funds. Because Members have a choice of Investment Funds, any reference in this
Plan to an Employer Contribution Account, Pre-Tax Contribution Account,
After-Tax Contribution Account, IRA Account or Rollover Account shall be deemed
to mean and include all accounts of a like nature which are maintained for the
Member under each Investment Fund.
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<PAGE>
SECTION VI
WITHDRAWALS AND LOANS
6.1 NON-HARDSHIP WITHDRAWALS:
(A) AFTER-TAX: Upon application to the Committee, a Member may
elect to withdraw from his After-Tax Contribution Accounts in the
Plan. Any such withdrawal shall be paid in cash as soon as is
practicable after the Valuation Date coincident with or next following
the date such withdrawal request is received by the Committee. Any
amount withdrawn from Fund D shall be equal to the Member's pro rata
share of the aggregate net proceeds of all sales of stock made by the
Trustee to effect withdrawals made during a period determined by the
Committee. If such a withdrawal is made and any portion of such
withdrawal consists of After-Tax Contributions (i) to which Employer
Contributions are based and (ii) which have been in the Member's
Account for less than 24 months, such Member may not again make any
contributions until at least six months have elapsed since such
withdrawal, but, except as provided immediately above, there shall be
no penalty imposed with respect to such Member's Plan participation by
reason of any such withdrawal.
(B) IRA ACCOUNT: Upon application to the Committee, a Member
may elect to withdraw up to the total of his IRA Account in the Plan.
Any such withdrawal shall be paid in cash as soon as is practicable
after the Valuation Date coincident with or next following the date
such withdrawal request is received by the Committee. Any amount
withdrawn from Fund D shall be equal to the Member's pro rata share of
the aggregate net proceeds of all sales of stock made by the Trustee
to effect withdrawals made during a period determined by the
Committee. If such a withdrawal is made, such Member may not again
make another withdrawal until at least 12 months have elapsed since
such withdrawal, but there shall no penalty imposed with respect to
such Member's Plan participation by reason of any such withdrawal.
The amount of withdrawal pursuant to the provisions of this
Section 6.1(B) shall be made only from such Member's IRA Account.
(C) ROLLOVER ACCOUNT: Upon application to the Committee, a
Member may elect to withdraw up to the total of his Rollover Account
in the Plan. Any such withdrawal shall be paid in cash as soon as is
practicable after the Valuation Date coincident with or next following
the date such withdrawal request is received by the Committee. Any
amount withdrawn from Fund D shall be equal to the Member's pro rata
share of the aggregate net proceeds of all sales of stock made by the
Trustee to effect withdrawals made during a period determined by the
Committee. If such a withdrawal is made, such Member may not again
make another withdrawal until at least 12 months have elapsed since
such withdrawal, but there shall be no penalty imposed with
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respect to such Member's Plan participation by reason of any
such withdrawal. The amount of withdrawal pursuant to the provisions
of this Section 6.1(C) shall be made only from such Member's Rollover
Account.
6.2 WITHDRAWAL FROM ACCOUNT ON OR AFTER AGE 59 1/2: Once each
twelve-month period, a Member who has attained age 59 1/2 may elect, by
following such 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 the vested portion of his Account. If a
benefit distribution under the Plan is made to a Member before he attains age
59 1/2, the Member shall be advised by the Committee that an additional
income tax may be imposed equal to 10% of the portion of the amount so
received which is included in his gross income for such taxable year and
which is attributable to benefits accrued while he was a Member.
6.3 HARDSHIP WITHDRAWALS: A Member may at any time file with the
Committee an appropriate written request for a hardship withdrawal from his
Pre-Tax Contribution Accounts. The amount distributable shall be reduced by
the amount of any previous distributions on account of hardship. The amount
may include all of the Income allocable to the Member's Pre-Tax Contributions
Accounts; provided however, a Member may not withdraw any Income of the Trust
Fund allocated to his Pre-Tax Contribution Accounts 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
written representation by the Member 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
of the Member. A Member must first have taken all distributions, other than
hardship distributions, and non-taxable loans otherwise available under this
Plan and all employee plans maintained by the Employer unless the financial
need of the Member cannot reasonably be relieved by first taking such
distributions and/or loans.
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; provided however, the amount may
include any amounts necessary to pay any federal, state, or local income
taxes or penalties reasonably anticipated to result from the distribution.
The hardship withdrawal shall be made in cash as soon as practicable after
the Member submits and the Committee approves the hardship request and the
dollar amount withdrawn shall be determined by reference to the value of his
Account as of the latest Valuation Date immediately preceding the date of
withdrawal. Any amount withdrawn from Fund D shall be equal to the Member's
pro rata share of the aggregate net proceeds of all sales of stock made by
the Trustee to effect such withdrawals made during a period determined by the
Committee. A Member who receives a hardship withdrawal shall be prohibited
from making Pre-Tax and After-Tax Contributions for the 12 consecutive months
following the date of distribution and in addition, the dollar limitation on
the Pre-Tax Contributions described in Section 4.1 shall be reduced in the
year following the hardship withdrawal by the amount of the Pre-Tax
Contributions made by the Member in the Plan Year during which the withdrawal
was made.
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<PAGE>
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) expenses for medical care previously incurred by the Member
or the Member's spouse and any dependents (as defined in Section 152
of the Code), or necessary for these persons to obtain medical care
described in Section 213(d) of the Code;
(b) costs directly related to the purchase of a principal
residence for the Member (excluding mortgage payments),
(c) payment for tuition and related educational fees for the
next 12 months of post-secondary education for the Member or the
Member's spouse, children or dependents as defined in Section 152 of
the Code; or
(d) payments necessary to prevent the eviction of the Member
from his principal residence or foreclosure on the mortgage of the
Member's principal residence.
6.4 LOANS: Prior to October 19, 1989, loans may be made under the
terms and conditions set forth in the Prior Plan. Effective October 19,
1989, a Member who is an Employee and, to the extent not resulting in
discrimination prohibited by Section 401(a)(4) of the Code, any other Member
or any Beneficiary (including an "alternate payee" within the meaning of
ERISA Section 206(d)(3)(K)) who is a "party in interest" with respect to the
Plan within the meaning of ERISA Section 3(14) and who must be eligible to
obtain a Plan loan in order for the exemption set forth in 29 C.F.R. Section
2550.408b-1 to apply to the Plan, (hereinafter "Borrower"), may make
application in the manner prescribed by the Committee to borrow from the
Pre-Tax Contribution Accounts, After-Tax Contribution Accounts, Rollover
Account and IRA Account, if any, and the vested portion of the Employer
Contribution Account, maintained by or for the Borrower in the Trust Fund,
and the Committee or the Trustee 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 or (ii) 50% of the present
value of the Borrower's vested Account
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<PAGE>
balance under the Plan. In no event shall a loan of less than
$1,000 be made to a Borrower. Prior to January 1, 1993, a Borrower
may not have more than one loan outstanding at a time under this
Plan. From and after January 1, 1993, a Borrower may not have more
than two loans outstanding at a time under this Plan.
(b) The loan shall be for a term not to exceed four and one-half
years, unless the loan is used to acquire any dwelling unit which
within a reasonable time is to be used as a principal residence of the
Borrower. A loan for the purchase of a principal residence shall be
for a term not to exceed ten years. The loan 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 receiving
compensation from the Employer 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 21
days following the bi-weekly due date, the Committee shall give
written notice to the Borrower sent to his last known address. If
such installment payment is not made within 90 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 50% of the present value of the Borrower's vested Account
balance under the Plan as determined immediately after the loan is
extended. 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
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<PAGE>
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 the
manner prescribed by the Committee, shall specify the amount of the
loan and shall be consented to by the Borrower's spouse, if any. If a
Borrower's request for a loan is approved, the Trustee shall make the
loan in a lump-sum payment of cash to the Borrower. The cash for such
payment shall be obtained by liquidating the vested interests in the
Investment Fund or Funds that are credited to the Account of the
Borrower and in the order designated by the Borrower.
(g) A loan to a Borrower shall be considered an investment of
the separate Account(s) of the Borrower from which the loan is made.
All loan repayments shall be credited pro rata to such separate
Account(s) and reinvested exclusively in shares of one or more of the
Investment Funds in accordance with Section 9.3.
6.5 WITHDRAWALS: Notwithstanding anything to the contrary, Members will
not be entitled to any withdrawals or distributions under this Section VI from
any and all Accounts for the period commencing on or about January 1, 1993
through March 17, 1993.
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SECTION VII
MEMBERS' BENEFITS
7.1 RETIREMENT OF MEMBERS: Any Member whose employment with all
Employers and Affiliates terminates on or after he has attained age 65 shall
have a fully vested and non-forfeitable right to receive the entire amount of
his Account. Payment of benefits due under this Section shall be made in
accordance with Section 8.1.
7.2 DISABILITY OF MEMBERS: If the Committee shall find and advise the
Trustee that a Member's termination of employment with all Employers and
Affiliates has terminated because of Total and Permanent Disability, then
such Member shall have a fully vested and non-forfeitable right to receive
the entire amount of his Account. The "entire amount" in such Member's
Account shall include any Savings Contributions, Rollover Amounts, prior IRA
contributions, Employer Contributions and Forfeiture allocations to be made
as of the end of the Plan Year in which termination of Service occurs.
Payment of benefits due under this Section shall be made in accordance with
Section 8.1.
7.3 DEATH OF MEMBERS: In the event of the termination of a Member's
employment with all Employers and Affiliates by death, and after receipt by
the Committee of acceptable proof of death, the Member shall have a fully
vested and non-forfeitable benefit, and the Member's Beneficiary shall have
the right to receive the entire amount of the deceased Member's Account.
Payment of benefits due under this Section shall be made in accordance with
Section 8.2.
7.4 OTHER TERMINATION OF SERVICE: In the event of termination of a
Member's employment with all Employers and Affiliates for any reason other
than retirement on or after his attainment of age 65, disability or death,
the Member shall, subject to the further provisions of this Plan, be entitled
to receive the entire amount of his Pre-Tax Contribution Accounts, After-Tax
Contribution Accounts, Rollover Account, and IRA Account plus an amount equal
to the vested percentage of his Employer Contribution Account, as set forth
below:
(a) From and after January 1, 1987, the vested percentage shall
be determined, based upon the Member's Years of Service, in accordance
with the following schedule:
<TABLE>
<CAPTION>
Years of Service Vested Percentage
---------------- -----------------
<S> <C>
Less than 3 years 0%
3 years 20%
4 years 40%
5 years 60%
6 years 80%
7 or more years 100%
</TABLE>
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<PAGE>
(b) In the event the Member became a Member prior to January 1,
1987, and the schedule in this subsection (b) would produce a greater
vested percentage than that produced by subsection (a) above, then
notwithstanding subsection (a) above, the vested percentage shall be
determined, based upon the Member's Years of Participation in the
Plan, in accordance with the following schedule:
<TABLE>
<CAPTION>
Years of
Participation in the Plan Vested Percentage
------------------------- -----------------
<S> <C>
1 year 20%
2 years 40%
3 years 60%
4 years 80%
5 years 100%
</TABLE>
For purposes of the foregoing schedule, a Member's Years of
Participation in the Plan shall consist of those periods for which the
Member was credited with Years of Service and throughout which the
Member made Savings Contributions. Notwithstanding the foregoing, the
vested portion of the Employer Contribution Account of a Member who
terminates Service on or after January 1, 1987 shall in no event be
less than the vested portion such Member would have received if the
provisions of the Prior Plan in effect immediately prior to the
Effective Date had continued without change.
Any portion of the Employer Contribution Account of a terminated
Member in excess of the vested portion specified above shall be a Forfeiture
which shall be disposed of as provided in Section 4.8. Payment of benefits
due under this Section shall be made in accordance with Section 8.1; provided
however that no distributions under this Section VII will be allocated under
the Plan for the period commencing on or about January 1, 1993 through March
17, 1993.
7.5 REINSTATEMENT OF FORFEITURES UPON DISTRIBUTION REPAYMENT: If a
Member's employment with all Employers and Affiliates terminates and
thereafter such Member recommences such employment before incurring five
consecutive one-year Breaks In Service, any amounts forfeited from the prior
Employer Contribution Account of such Member upon the prior termination of
his employment with all Employers and Affiliates (without any adjustment to
such amounts for intervening gains or losses) shall be reinstated to his new
Employer Contribution Account (as provided in Section 4.8 hereof) within a
reasonable time after repayment by the Member of the amount of any
distribution made with respect to the prior termination of employment. Such
reinstatement shall be made part of funds otherwise available for allocation
as Forfeitures for the Plan Year during which such repayment is made and, if
such Forfeitures are insufficient to reinstate such amounts, the Employer
shall make the contribution required under Section 4.2. Such repayment must
be made before the earlier of (i) the date five years after the date of
recommencement of Service or (ii) the conclusion of five consecutive one-year
Breaks In Service. Upon receipt by the Trustee, amounts repaid by the Member
pursuant hereto shall be
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credited to a subaccount within his Employer Contribution Account known as
his "Restoration Account." A Member shall always be fully vested and have a
non-forfeitable right in his Restoration Account.
7.6 VALUATION DATE DETERMINATIVE OF MEMBER'S RIGHTS: The amount to
which a Member is entitled upon his retirement, disability, death or other
termination of service shall be valued as of the Valuation Date determined as
follows:
(a) In the case of any Member whose Service is terminated due to
his retirement on or after his attainment of age sixty-five,
disability or death, the amount to which such Member or his
Beneficiary is entitled upon such termination of Service shall be
determined as of the last Valuation Date preceding his termination of
Service.
(b) In the case of any Member whose Service is terminated for any
reason other than retirement on or after his attainment of age sixty-five,
disability or death, the amount to which such Member is entitled upon such
termination of Service shall be valued as of the last Valuation Date
preceding the Distribution Date as defined in Section 8.1.
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SECTION VIII
PAYMENT OF BENEFITS
8.1 PAYMENT OF BENEFITS: Upon a Member's entitlement to payment of
benefits under Section 7.1, 7.2 or 7.4, he shall file with the Committee his
written election on such form or forms, and subject to such conditions, as the
Committee shall provide. The Committee shall direct the Trustee to distribute
the Member's benefits according to the Member's election; provided that the
Committee shall direct that a lump-sum payment be made without the consent of
the Member if the distribution is equal to or less than $3,500. If the amount
to which a terminated Member is entitled is in excess of $3,500, no distribution
shall be made prior to the Member's attainment of age 65 without the Member's
consent and the consent of his spouse, if any. If such consent is withheld,
distribution of the amount to which the terminated Member is entitled shall be
made to such Member (or in the event of his death, to his Beneficiary) after the
Member's attainment of age 65 or the date of his death, if earlier. A Member
who withholds consent to an immediate distribution may at any time subsequently
elect, in the form and manner prescribed by the Committee, to receive payment of
benefits.
The amount which a Member, former Member or Beneficiary is entitled to
receive at any time and from time to time may be paid in cash or in securities,
or in any combination thereof, provided no discrimination in value results
therefrom.
The earliest date that payment of a Member's benefits may commence,
herein referred to as such Member's "Distribution Date," is the day following
the date the Member files his election with respect to payment of benefits with
the Committee. Following the valuation described in Section 7.6, payment of a
Member's benefits shall be made or commence as soon as administratively
feasible. Unless the Member elects to defer a distribution to a later date,
distributions must be made or commence no later than 60 days following the close
of the Plan Year in which the last of the following events occur (i) termination
of the Member's employment with all Employers and Affiliates, (ii) the 10th
anniversary of the year in which the Member commenced participation in the Plan
or (iii) attainment of age 65. Subject to the preceding provisions of this
Section, the Committee may direct the Trustee to distribute the Member's
benefits as follows:
(a) All amounts payable in respect of any such Member may be
distributed in a single, lump-sum cash distribution; except that,
unless the Member elects otherwise, those contributions invested in
Fund D shall be distributed in whole shares of stock plus cash for
fractional shares. Distributions of ten or less shares of stock shall
be paid in a single lump-sum distribution. Distributions from Fund D
shall be based on the proceeds from liquidating the Fund D assets held
in the Member's Account.
(b) Should any former Member die prior to the payment to him of
all or any portion of his vested Account, then such remaining portion
shall be payable to the person or persons and in a manner provided in
Section 7.3 as
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soon as administratively feasible after the death of such Member.
Should any such Beneficiary die prior to the payment to him of
any portion of the Member's Account, but after becoming entitled
to such payment, then such remaining portion shall be paid in
a lump sum to the estate of such Beneficiary as soon as
administratively feasible after his death.
8.2 DISTRIBUTION UPON DEATH: In the event of the death of any Member, the
Member's Account will be distributed as follows:
(a) A Member may file with the Committee a written designation,
in the form prescribed by the Committee, of the Beneficiary or
Beneficiaries to receive any portion of his Account upon his death,
and the Member may at any time change or cancel any such designation
by filing a written request in the form prescribed by the Committee.
No such designation of Beneficiary shall be effective if the Member
has a spouse, unless the spouse is designated as the Beneficiary or
unless the spouse consents to the designation of another person as
Beneficiary or the absence of the spouse's consent is permitted
herein. The Member's spouse may waive the right to be the Member's
sole Beneficiary and consent to the Beneficiary designation made by
the Member. The waiver must (i) be in writing; (ii) designate a
specific alternate Beneficiary and a form of benefit which may not be
changed without spousal consent (or must expressly permit designation
by the Member without further consent of the spouse);
(iii) acknowledge the effect of the waiver; and (iv) be witnessed by a
Plan representative or a notary public. The spouse's consent to a
Beneficiary designation shall not be required 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 8.2(a) will be valid only with respect
to the spouse who signs the consent. Additionally, a revocation of a
prior spousal consent may be made by a Member without the consent of
the spouse at any time before the distribution of the benefit under
the Plan. The number of revocations shall not be limited.
(b) In the event of the death of any Member, the entire amount
in the Account of such Member shall be distributed to the Member's
spouse, or if there is no spouse, or the spouse has consented pursuant
to Section 8.2(a), then to the Beneficiary designated by him as
provided in the preceding paragraph (a); or, in the absence of an
effective designation or if no designated Beneficiary survives the
Member, then to the duly appointed and qualified executor or
administrator of the Member's estate; or, if no administration of the
estate of such decedent is necessary, then to the Beneficiary entitled
thereto under the last will and testament of such deceased Member; 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.
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(c) If the Committee shall be in doubt as to the right of any
Beneficiary designated by a deceased Member to take the interest of
such decedent, the Committee may direct the Trustee to distribute the
amount in the Account in question to the estate of such Member, in
which event the Trustee, the Employer, the Committee, and any other
person in any manner connected with the Plan, shall have no further
liability in respect of the assets.
8.3 REQUIRED MINIMUM DISTRIBUTIONS: Notwithstanding any provision herein
to the contrary, the distribution of a Participant's benefits shall be made in
accordance with the requirements of Code Section 401(a)(9), including the
incidental death benefit requirements of Code Section 401(a)(9)(G), and the
Treasury Regulations thereunder (including Proposed Regulation Section
1.401(a)(9)-2).
8.4 PRESENTING CLAIMS FOR BENEFITS: Any Member or the Beneficiary of any
deceased Member 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 Member or
Beneficiary involved is entitled to a benefit hereunder and, if so, the amount
thereof and shall notify the claimant of its findings.
If a claim is wholly or partially denied, the Committee shall so
notify the claimant within 90 days after receipt of the claim by the Committee,
unless special circumstances require an extension of time for processing the
claim. If such an extension of time for processing is required, written notice
of the extension shall be furnished to the claimant prior to the end of the
initial ninety-day period. In no event shall such extension exceed a period of
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 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 claimant 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 claimant to perfect the claim and an explanation of
why such material or information is necessary, and
(iv) an explanation of the claims review procedure set forth in
Section 8.5 hereof.
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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 8.5.
8.5 CLAIMS REVIEW PROCEDURE: If an application filed by a Member or
Beneficiary under Section 8.4 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 application filed with the Committee
within 60 days after receipt of notice of the denial of his application or, if
no such notice has been given, within 60 days after the application is deemed
denied under Section 8.4, to request the review of his application and of his
entitlement to the benefit applied for. Such request for review may contain
such additional information and comments as the applicant may wish to present.
Within 60 days after receipt of any such request for review, the Committee shall
reconsider the application for the benefit 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 or his designated
representative 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 Company 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
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 120 days after receipt by the Committee of such request for
review. 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 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.
8.6 DISPUTED BENEFITS: If any dispute still exists between a Member or a
Beneficiary and the Committee after a review of the claim or in the event any
uncertainty shall develop as to the person to whom payment of any benefit
hereunder shall be made, the Trustee may withhold the payment of all or any part
of the benefits payable hereunder to the Member or Beneficiary until such
dispute has been resolved by a court of competent jurisdiction or settled by the
parties involved.
8.7 MEMBER'S RIGHT TO TRANSFER ELIGIBLE ROLLOVER DISTRIBUTION. This
Section applies to distributions made on or after January 1, 1993.
Notwithstanding any provision of the Plan to the contrary that would otherwise
limit a distributee's election under this Section, a distributee may elect, at
the time and in the manner prescribed by the plan administrator, to have any
portion of an eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a direct rollover.
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Eligible rollover distribution: An eligible rollover distribution is
any distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not
include: any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or joint life expectancies)
of the distributee and the distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution to the extent such
distribution is required under Section 401(a)(9) of the Code; and the portion of
any distribution that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to employer
securities).
Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in Section 408(a) of the Code, an
individual retirement annuity described in Section 408(b) of the Code, an
annuity plan described in Section 403(a) of the Code, or a qualified trust
described in Section 401(a) of the Code, that accepts the distributee's eligible
rollover distribution. However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible retirement plan is an
individual retirement account or individual retirement annuity.
Distributee: A distributee includes an employee or former employee.
In addition, the employee's or former employee's surviving spouse and the
employee's or former employee's spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as defined in Section 414(p)
of the Code, are distributees with regard to the interest of the spouse or
former spouse.
Direct rollover: A direct rollover is a payment by the plan to the
eligible retirement plan specified by the distributee.
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SECTION IX
TRUST AGREEMENT; INVESTMENT
FUNDS; INVESTMENT DIRECTIONS
9.1 TRUST AGREEMENT: The Company shall enter into a Trust Agreement with
a Trustee providing for the administration of the Trust Fund established in
connection with this Plan by the Trustee, or by a successor trustee. The
Provisions of such Trust Agreement are incorporated herein by references as
fully as if set out herein. The Trustee shall be subject to direction by the
Committee or shall have such discretion with respect to management and control
of Plan assets as specified by the Committee.
9.2 INVESTMENT FUNDS: Prior to January 1, 1993, and in accordance with
Member investment directions the Trustee shall maintain the Trust Fund in four
separate Investment Funds for investment purposes, to-wit:
FUND A--FIXED INCOME FUND: Amounts invested in Fund A shall be
invested and reinvested principally in one or more fixed income
investments, including (without limitation) group annuity or other
contracts providing guaranteed rates of return, preferred stocks,
corporate, municipal or Government bonds, debentures, notes,
certificates or other similar evidences of indebtedness, commercial
paper, Government guaranteed paper, certificates of deposit or savings
accounts, and the Trustee's short-term investment fund.
FUND B--EQUITY INCOME FUND: Amounts invested in Fund B shall be
invested and reinvested primarily in whichever of the following is
designated by the Investment Committee, (a) a passively managed,
diversified fund of capital, common or other form of equity stock with
the objective of simulating the performance of the Standard & Poor's
Composite Index of 500 stocks and which, pending the selection and
purchase of investments of the type so described, may be invested in
the Trustee's short-term investment fund, or (b) an actively managed,
diversified fund of capital, common or other form of equity stock and
which, pending the selection and purchase of investments of the type
so described, may be invested in the Trustee's short-term investment
fund.
FUND C--BALANCED FUND: Fund C shall be invested and reinvested
principally in capital, common or other form of equity stock, or
securities convertible into stock, of corporations, and in one or more
fixed income investments, including (without limitation) group annuity
or other contracts providing guaranteed rates of return, preferred
stocks, corporate, municipal or Government bonds, debentures, notes,
certificates or other similar evidences of indebtedness, commercial
paper, Government guaranteed paper, certificates of deposit or savings
accounts.
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FUND D--FROZEN STOCK FUND: From and after January 12, 1988, no
Savings Contributions or Employer Contributions shall be invested in
Fund D. From and after January 11, 1988, all amounts constituting
income of Fund D shall be reinvested in Fund D. The Committee may
establish separate subfunds which shall be held as part of Fund D and
are invested in securities of Allied-Signal Inc. or may be invested in
such other securities which may be received on account of
distributions related to Henley Stock or in the Trustee's short-term
investment fund. Any dividends paid on such stock held in Fund D
shall be invested in the Trustee's short-term investment fund.
Effective on or about September 1, 1992, Fund D was terminated and all
of its assets liquidated in accordance with the provisions of
Section 9.8.
From and after January 1, 1993 and except as provided in Section VI
with respect to Plan loans, all contributions to the Trust that are allocated to
any separate Account of a Member shall be divided by the Trustee and invested in
shares of one or more of the Investment Funds, including but not limited to a
money market fund, as the Committee designates as available for Member's
selection and as may be revised from time to time by the Committee on Exhibit A
attached hereto.
Contributions shall be invested in shares of the Investment Funds
pursuant to the directions of the Members given in accordance with the
provisions of Sections 9.3 and 9.4 as certified to the Trustee by the Committee.
Except as otherwise provided herein, interest, dividends and other income and
all profits and gains produced by each such Investment Fund shall be paid into
such Investment Fund, and such interest, dividends and other income or profits
and gains, without distinction between principal and income, may be invested and
reinvested but only in the property hereinabove specified for the particular
Investment Fund.
9.3 INVESTMENT DIRECTIONS OF MEMBERS: Prior to January 1, 1993, each
Member may, by written notice to the Committee in the manner prescribed by it,
direct that the total of the Contributions allocable to his Pre-Tax
Contribution, After-Tax Contribution, Employer Contribution, IRA and Rollover
Accounts and the earnings and additions thereon, be invested in such percentages
(in increments of 25% of the total of such Accounts) as he may designate among
the Fixed Income Fund, the Equity Income Fund and the Balanced Fund. In the
event a Member fails to direct the manner of investing his Accounts as provided
herein, his Accounts shall be invested only in the Fixed Income Fund. From and
after January 1, 1993, each Member may direct that the total of the
Contributions allocable to his Pre-Tax Contribution, After-Tax Contribution,
Employer Contribution, IRA and Rollover Accounts and the earnings and additions
thereon, be invested in such percentages (in increments of 1% of the total of
such Accounts) as such Member may designate among the Investment Funds. In the
event a Member fails to direct the manner of investing his Accounts as provided
herein, his Account shall be invested only in a fixed income fund.
9.4 CHANGE OF INVESTMENT DIRECTIONS: Each Member may, by at least 15
days' written notice to the Committee in the manner prescribed by it and subject
to any restrictions or conditions which may be established by the Committee,
direct once each Plan Quarter, effective
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as of the first day of the next Plan Quarter, that the investment of his
future Pre-Tax Contributions, After-Tax Contributions and Employer
Contributions be changed from one authorized option to another authorized
option available under Section 9.3. Further, each Member may authorize the
transfer of existing Account balances once each Plan Quarter among the
available Investment Funds (in 25% increments) effective as of the first day
of any Plan Quarter. From and after January 1, 1993, each Member may, in the
manner prescribed by the Committee and subject to any restrictions or
conditions which may be established by the Committee, direct the investment
of his future Pre-Tax Contributions, After-Tax Contributions or Employer
Contributions be changed from one authorized option to another authorized
option available under Section 9.3. Further, each Member may authorize the
daily transfer of existing Account balances among the available Investment
Funds in 1% increments or in flat dollar amounts.
9.5 BENEFITS PAID SOLELY FROM TRUST FUND: All of the benefits provided to
be paid under Section VIII shall be paid by the Trustee out of the Trust Fund to
be administered under such Trust Agreement. No fiduciary shall be responsible
or liable in any manner for payment of any such benefits, and all Members
hereunder shall look solely to such Trust Fund 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.
9.6 COMMITTEE DIRECTIONS TO TRUSTEE: The Trustee shall make only such
distributions and payments out of the Trust Fund as may be directed by the
Committee. The Trustee shall not be required to determine or make any
investigation to determine the identity or mailing address of any person
entitled to any distributions and payments out of the Trust Fund and shall have
discharged its obligation in that respect when it shall have sent certificates
and checks or other papers by ordinary mail to such persons and addresses as may
be certified to it by the Committee.
9.7 AUTHORITY TO DESIGNATE INVESTMENT MANAGER: The Committee may appoint
an investment manager or managers to manage (including the power to acquire and
dispose of) any assets of the Trust Fund in accordance with the terms of the
Trust Agreement and ERISA.
9.8 LIQUIDATION OF FUND D: A Member may, by written notice to the
Committee in the manner prescribed by it, request that the Trustee liquidate, on
a weekly basis, all or any part of the Member's investment in Fund D (other than
the Special Dividend Fund which is a part of Fund D) and invest the proceeds in
the Fixed Income Fund, the Equity Income Fund and/or the Balanced Fund in
accordance with the provisions of Section 9.3.
By similar notice, a Member's investment assets in the Special
Dividend Fund (which is a part of Fund D) may also be liquidated, in whole but
not in part, on a weekly basis and the proceeds of such liquidation shall be
invested in accordance with the provisions of Section 9.3.
In the event that, pursuant to the terms of the Trust Agreement and
notwithstanding any provision of the Plan to the contrary, Fund D is to be
terminated by the Investment Committee under the Trust Agreement, and all of its
assets liquidated, the Committee shall give advanced notice of such action to
provide each Member who has an investment in Fund D a
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reasonable opportunity to request the Trustee, in the manner provided above,
to liquidate such investment before the liquidation of Fund D assets pursuant
to its termination commences. While the liquidation of Fund D assets pursuant
to its termination is in process, the Committee may suspend the ability of
Members, with respect to their investments in Fund D, to receive
distributions or withdrawals, elect transfers to other Investment Funds or,
otherwise, to effect Plan transactions, provided, that promptly following the
completion of the liquidation, such suspension shall be discontinued.
Effective on or about September 1, 1992, the Committee terminated Fund D and
liquidated all of the assets in accordance with this Section 9.8.
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SECTION X
ADOPTION OF PLAN BY OTHER ORGANIZATIONS;
SEPARATION OF THE TRUST FUND; AMENDMENT
AND TERMINATION OF THE PLAN;
DISCONTINUANCE OF CONTRIBUTIONS TO THE TRUST FUND
10.1 ADOPTIVE INSTRUMENT: 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 the Board of Directors, adopt and
become an Employer under this Plan by executing and delivering to the Company
and the Trustee an adoptive instrument specifying the classification of its
Employees who are to be eligible to participate in the Plan and by agreeing to
be bound as an Employer by all the terms of the Plan with respect to its
eligible Employees. The adoptive instrument may contain such changes and
variations in the terms of the Plan as may be acceptable to the Company. Any
such approved organizations 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
Employer and its Members in the same manner in which the Committee may act for
the Company and its Members hereunder. The adoptive instrument shall specify
the effective date of such adoption of the Plan and shall become, as to such
adopting Employer and its Employees, a part of this Plan. Such Employer shall
also forthwith obtain a favorable determination letter from the appropriate
District Director of the Internal Revenue with respect to its participation in
the Plan. The Company may, in its absolute discretion, terminate an adopting
Employer's participation at any time when in its judgment such adopting Employer
fails or refuses to discharge its obligations under the Plan.
10.2 SEPARATION OF THE TRUST FUND: A separation of the Trust Fund as to
the interest therein of the Members of any particular Employer may be made by an
Employer at any time. In such event, the Trustee shall set apart that portion
of the Trust Fund which shall be allocated to such Members pursuant to a
valuation and allocation of the Trust Fund made in accordance with the
procedures set forth in Sections 5.2 and 5.4, but as of the date when such
separation of the Trust Fund shall be effective. Such portion may in the
Trustee's discretion be set apart in cash or in kind out of the properties of
the Trust Fund. That portion of the Trust Fund so set apart shall continue to
be held by the Trustee as though such Employer had entered into the Trust
Agreement as a separate trust agreement with the Trustee. Such Employer may in
such event designate a new trustee of its selection to act as trustee under such
separate trust agreement. Such Employer shall thereupon be deemed to have
adopted the Plan as its own separate plan, and shall subsequently have all such
powers of amendment or modification of such plan as are reserved herein to the
Company.
10.3 VOLUNTARY SEPARATION: If any Employer shall desire to separate its
interest in the Trust Fund, it may request such a separation in a notice in
writing to the Company and the Trustee. Such separation shall then be made only
with the consent of the Company and shall be accomplished in the manner set
forth in Section 10.2.
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10.4 AMENDMENT OF THE PLAN: The Company shall have the right to amend or
modify this Plan and (with the consent of the Trustee) the Trust Agreement 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 and executed by the Company. The Company
shall promptly deliver to each other Employer any amendment to this Plan or the
Trust Agreement. No such amendment or modification shall, however, increase the
duties or responsibilities of the Trustee without its 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 Fund, or of permitting the
same to be used for or diverted to purposes other than for the exclusive benefit
of the Members and their Beneficiaries. No such amendment shall decrease the
Account of any Member or shall decrease any Member's vested interest in his
Account. Notwithstanding anything herein to the contrary, the Plan or the Trust
Agreement may be amended in such manner as may be required at any time to make
it conform to the requirements of the Internal Revenue 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 Member or his
Beneficiary under the Plan.
10.5 TERMINATION OF THE PLAN: In accordance with the procedures set forth
in this Section 10.6, the Company or any other Employer, with the consent of the
Company, may effect a termination of the Plan as to such particular Employer
under the following circumstances:
(a) The Plan may be terminated by the delivery to the Trustee of
an instrument in writing approved and authorized by the board of
directors of such Employer. In such event, termination of the Plan
shall be effective as of any subsequent date specified in such
instrument.
(b) Except as otherwise provided in Section 10.9, the Plan shall
terminate effective at the expiration of 60 days following the merger
into another corporation or dissolution of any Employer, or following
any final legal adjudication of any Employer as a bankrupt or an
insolvent, unless within such time a successor organization approved
by the Company shall deliver to the Trustee a written instrument
certifying that such organization (i) has become the Employer of more
than 50% of those Employees of such Employer who are then Members
under this Plan and (ii) has adopted the Plan as to its Employees. In
any such event the interest in the Plan of any Member whose employment
may not be continued by the successor shall be fully vested as of the
date of termination of his Service, and shall be payable in cash or in
kind within six months from the date of termination of his Service.
10.6 LIQUIDATION AND DISTRIBUTION OF TRUST FUND UPON TERMINATION: In the
event a complete termination of the Plan in respect of any Employer shall occur,
a separation of the Trust Fund in respect of the affected Members of such
Employer shall be made as of the effective date of such termination of the Plan
in accordance with the procedure set forth in Section 10.2. Following
separation of the Trust Fund in respect of the Members of any Employer as to
whom
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the Plan has been terminated, the assets and properties of the Trust Fund so
set apart, other than common stock of the Company, shall be reduced to cash
as soon as may be expeditious under the circumstances. Any administrative
costs or expenses incurred incident to the final liquidation of such separate
trust funds shall be paid by the Employer, except that in the case of
bankruptcy or insolvency of such Employer any such costs shall be charged
against the Trust Fund. Following such partial reduction of such Trust Fund
to cash, the Accounts of the Members shall then be valued as provided in
Sections 5.2 and 5.4 and shall be fully vested, whereupon each such Member
shall become entitled to receive the entire amount in his Account in cash
and/or common stock, as directed by the Committee. The terminating Employer
shall promptly advise the appropriate District Director of Internal Revenue
of such complete termination and shall direct the Trustee to delay the final
distribution to its affected Members until the District Director shall advise
in writing that such termination does not adversely affect the previously
qualified status of the Plan or the exemption from tax of the Trust under
Section 401(a) or 501(a) of the Code.
10.7 EFFECT OF TERMINATION OR DISCONTINUANCE OF CONTRIBUTIONS: If any
Employer shall terminate the Plan as to its Employees, then all amounts credited
to the Accounts of the Members of such Employer with respect to whom the Plan
has terminated shall become fully vested and non-forfeitable. If any Employer
shall completely discontinue its Contributions to the Trust Fund or suspend its
Contributions to the Trust Fund under such circumstances as to constitute a
complete discontinuance of Contributions within the meaning of
Section 1.401-6(c) of the regulations under the Code, then all amounts credited
to the Accounts of the Members of such Employer shall become fully vested and
non-forfeitable, and throughout any such period of discontinuance of
Contributions by an Employer all other provisions of the Plan shall continue in
full force and effect with respect to such Employer other than the provisions
for Contributions by such Employer.
10.8 MERGER OF PLAN WITH ANOTHER PLAN: In the event 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 Members of this Plan, the assets of the Trust Fund applicable
to such Members shall be transferred to the other trust fund only if:
(a) Each Member 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);
(b) Resolutions of the board of directors of the Employer under
this Plan, or of any new or successor employer of the affected
Members, shall authorize such transfer of assets, and, in the case of
the new or successor employer of the affected Members, its resolutions
shall include an assumption of liabilities with respect to such
Members' inclusion in the new employer's plan; and
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(c) Such other plan and trust are qualified under
Sections 401(a) and 501(a) of the Code.
10.9 CONSOLIDATION OR MERGER WITH ANOTHER EMPLOYER: Notwithstanding any
provision of this Section X to the contrary, upon the consolidation or merger of
two or more 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 of the Employers involved, and their shares of the Trust Fund
shall, subject to the provisions of Section 10.8, be merged and thereafter be
allocable to the surviving Employer or organization for its Employees and their
Beneficiaries.
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SECTION XI
MISCELLANEOUS PROVISIONS
11.1 TERMS OF EMPLOYMENT: The adoption and maintenance of the provisions
of this Plan shall not be deemed to constitute a contract between any Employer
and 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 an Employer or to
interfere with the right of an Employer to discharge an Employee at any time,
nor shall it be deemed to give to an 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.
11.2 CONTROLLING LAW: Subject to the provisions of ERISA, this Plan shall
be construed, regulated and administered under the laws of the State of Texas.
11.3 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.
11.4 NON-ALIENATION OF BENEFITS: No benefit which shall be payable out of
the Trust Fund to any person (including a Member or beneficiary) shall be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance or charge, and any attempt to anticipate, alienate, sell,
transfer, assign, pledge, encumber or charge the same shall be void; and no such
benefit shall in any manner be liable for, or subject to, the death, contracts,
liabilities, engagements or torts of any such person, nor shall it be subject to
attachment or legal process for or against such person, and the same shall not
be recognized by the Trustee, except to the extent as may be required by law.
This provision shall not apply to a "qualified domestic relations
order" defined in Code Section 414(p), and those other domestic relations orders
permitted to be so treated by the Administrator under the provisions of the
Retirement Equity Act of 1984. To the extent provided under a "qualified
domestic relations order," a former spouse of a Member shall be treated as the
spouse or surviving spouse for all purposes of the Plan. If the Committee
receives a qualified domestic relations order with respect to a Member, the
Committee shall authorize the immediate distribution of the amount assigned to
the Member's former spouse, to the extent permitted by law, from the Member's
Account unless the former spouse elects not to receive an immediate
distribution.
11.5 PAYMENTS IN SATISFACTION OF CLAIMS OF MEMBERS: Any payment or
distribution to any Member or his legal representative or any Beneficiary in
accordance with the provisions of this Plan shall be in full satisfaction of all
claims under the Plan against the Trust Fund, the Trustee and the Employer. The
Trustee may require that any distributee execute and deliver to
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the Trustee a receipt and a full and complete release as a condition
precedent to any payment or distribution under the Plan.
11.6 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 the power
to cause the payments becoming due such person to be made to another for the
benefit of such minor or incompetent, without the Committee or the Trustee being
responsible to see to the application of such payment. To the extent permitted
by ERISA, payments made pursuant to such power shall operate as a complete
discharge of the Committee, the Trustee and the Employer.
11.7 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 Member or their Beneficiaries or for the payment of
expenses of the Plan. No part of the Trust Fund shall ever directly or
indirectly revert to any Employer.
11.8 EVIDENCE FURNISHED CONCLUSIVE: The Employer, the Committee and any
person involved in the administration of the Plan or management of the Trust
Fund shall be entitled to rely upon any certification, statement, or
representation made or evidence furnished by a Member or Beneficiary with
respect to facts required to be determined under any of the provisions of the
Plan, and shall not be liable on account of the payment of any monies or the
doing of any act or failure to act in reliance thereon. Any such certification,
statement, representation, or evidence, upon being duly made or furnished, shall
be conclusively binding upon such Member or Beneficiary but not upon the
Employer, the Member or any other person involved in the administration of the
Plan or management of the Trust Fund. Nothing herein contained shall be
construed to prevent any of such parties from contesting any such certification,
statement, representation, or evidence or to relieve the Member or Beneficiary
from the duty of submitting satisfactory proof of such fact.
11.9 COPY AVAILABLE TO MEMBERS: A copy of the Plan, and of any and all
future amendments thereto, shall be provided to the Committee and shall be
available to Members and, in the event of the death of a Member, to his
Beneficiary, for inspection at the offices of his Employer during the regular
office hours of the Employer.
11.10 UNCLAIMED BENEFITS: If at, after or during the time when a benefit
hereunder is payable to any Member, 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 Member, Beneficiary or other distributee at
his last known address a written demand for his then address or for satisfactory
evidence of his continued life, or both, and if such Member, Beneficiary or
distributee shall fail to furnish the same to the Committee within two years
from the mailing of such demand, then the Committee may, in its sole discretion,
determine that such Member, 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 date of the last payment made thereon, or on
the date
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such Member, Beneficiary or distributee first became entitled to receive
benefit payments, whichever is later; provided, however, that such forfeited
benefit shall be reinstated if a claim for the same is made by the Member,
Beneficiary or other distributee at any time thereafter. Such reinstatement
shall be made out of the funds otherwise available for allocation as
Forfeitures for the Plan Year during which such claim was filed with the
Committee (as provided in Section 4.8); and, if Forfeitures for the Plan Year
are insufficient to reinstate such amounts, Employer shall make the
Contribution required under Section 4.2 hereof.
11.11 HEADINGS FOR CONVENIENCE ONLY: The headings and subheadings herein
are inserted for convenience of reference only and are not to be used in
construing this instrument or any provision thereof.
11.12 SUCCESSORS AND ASSIGNS: This agreement shall bind and inure to the
benefit of the successors and assigns of the Employers.
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SECTION XII
LIMITATIONS ON BENEFITS
Notwithstanding any provision of this Plan to the contrary, the total
Annual Additions made to the Account of a Member for any Plan Year shall be
subject to the following limitations:
I. 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 Member'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 Member's actual
Compensation for a Limitation Year, the Maximum Permissible Amount may
be determined on the basis of the Member'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 Members 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 Member's actual
Compensation for such Limitation Year.
4. If there is an Excess Amount with respect to a Member for
the Limitation Year, any nondeductible voluntary employee
contributions, to the extent they would reduce the Excess Amount, will
be returned to the Member. Then, Excess Amounts will be treated as a
forfeiture and shall be applied as a credit to subsequent Employer
Contributions or reallocated to other Members to the extent such
allocations do not exceed the Maximum Permissible Amount all as
provided in Section 12(IV)(4). Any Excess Amounts that cannot be
allocated will be held in a suspense account. All amounts in the
suspense account must be allocated and reallocated to the Member's
accounts (subject to the limitations of Section 415) in succeeding
Limitation Years before any Employer contribution and nondeductible
Employee contribution which would constitute Annual Additions may be
made to the Plan.
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If a suspense account is in existence at any time during the
Limitation Year pursuant to this Section, it will participate in the
allocation of the Trust's investment gains and losses.
II. 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 under this Plan on a Member'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 Member'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 Member's actual
Compensation for the Limitation Year, the amount referred to in
Section 1(A) above, may be determined on the basis of the Member'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 Members 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 Section 1(A) above shall
be determined on the basis of the Member's actual Compensation for
such Limitation Year.
4. If a Member'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 Member 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
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B. the ratio of (A) the amount allocated to the
Member as of such date under this Plan, divided by (B) 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).
6. Any Excess Amounts attributed to this Plan shall be disposed
of as provided in Section 12(I)(4).
III. 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 Section, employee contributions to a qualified
defined benefit plan are treated as a separate defined contribution
plan. For purposes of this Section, 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.
If the sum of the defined contribution plan fraction and defined
benefit plan fraction exceeds 1.0, the Annual Benefit of the defined
benefit plans will be reduced so that the sum of the fractions will
not exceed 1.0. In no event will the Annual Benefit be decreased
below the amount of the accrued benefit to date. If additional
reductions are required for the sum of the fractions to equal 1.0, the
reductions will then be made to the Annual Additions of the defined
contribution plans.
2. Defined Contribution Plan Fraction
A. GENERAL RULE: The defined contribution plan
fraction for any year is 1 divided by 2, where:
1 is the sum of the actual Annual Additions
to the Member's account at the close of the
Limitation Year, and
2 is 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
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(without regard to the special dollar
limitations for employee stock ownership
plans), or
b. 1.4 times 25% of the Member's
Compensation for each such year.
B. If the Employee was a participant as 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 plans 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.
3. Defined Benefit Plan Fraction
A. GENERAL RULE: The defined benefit plan fraction
for any year is 1 divided by 2, where:
1 is the projected Annual Benefit of the
Member under the Plan (determined as of the close
of the Limitation Year), and
2 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 Member's
Average Compensation for the high three
years (adjusted, if necessary).
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B. Notwithstanding the above, if the Employee 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% of the sum of the Annual Benefits
under such plans which the Employee 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 plans 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 as in effect for all Limitation Years
beginning before January 1, 1987.
IV. DEFINITIONS
1. EMPLOYER: The Company and any other Employer that adopts
this Plan. In the case of a group of employers which constitutes a
controlled group of corporations (as defined in Code Section 414(b) as
modified by Section 415(h)) or which constitutes trades and businesses
(whether or not incorporated) which are under common control (as
defined in Code Section 414(c) as modified by Section 415(h)) or an
affiliated service group (as defined in Code Section 414(m)), all such
employers shall be considered a single Employer for purposes of
applying the limitations of these sections.
2. EXCESS AMOUNT: The excess of the Member's Annual Additions
for the Limitation Year over the Maximum Permissible Amount.
3. LIMITATION YEAR: A 12 consecutive month period ending on
December 31.
4. MAXIMUM PERMISSIBLE AMOUNT: For a Limitation Year, the
Maximum Permissible Amount with respect to any Member shall be the
lesser of:
A. $30,000 (or, if greater, 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 Member's Compensation for the
Limitation Year.
5. COMPENSATION: For purposes of determining compliance with
the limitations of Code Section 415, Compensation shall mean a
Member's earned income, wages, salaries, fees for professional
services and other amounts received for personal services actually
rendered in the course of employment
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with an Employer maintaining the Plan, including, but not limited
to, commissions paid salesmen, compensation for services based on a
percentage of profits, commissions on insurance premiums, tips and
bonuses, and excluding the following:
(a) Employer contributions to a plan of a deferred
compensation to the extent contributions are not included in
gross income of the Employee for the taxable year in which
contributed, or on behalf of an Employee to a simplified
employee pension plan to the extent such contributions are
deductible under Code Section 219(b)(2), and any
distributions from a plan of deferred compensation whether
or not includable in the gross income of the Employee when
distributed (however, any amounts received by an Employee
pursuant to an unfunded non-qualified plan may be considered
as compensation in the year such amounts are included in the
gross income of the Employee);
(b) amounts realized from the exercise of a
non-qualified stock option, or when restricted stock (or
property) held by an Employee becomes freely transferable or
is no longer subject to a substantial risk of forfeiture;
(c) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option; and
(d) other amounts which receive special tax benefits,
or contributions made by an Employer (whether or not under a
salary reduction agreement) towards the purchase of an
annuity contract described in Code Section 403(b) (whether
or not the contributions are excludable from the gross
income of the Employee).
For purposes of applying the limitations in this Section, amounts
included as compensation are those actually paid or made available to
a Member within the Limitation Year. For Limitation Years beginning
after December 31, 1988, Compensation shall be limited to $200,000
prior to January 1, 1994, or $150,000 on or after January 1, 1994
(unless adjusted in the same manner as permitted under Code Section
415(d)). Notwithstanding anything to the contrary in the definition,
compensation shall include any and all items which may be includable
in Compensation under Section 415(c)(3) of the Code.
6. AVERAGE COMPENSATION: The average Compensation during a
Member's high three years of service, which period is the three
consecutive calendar years (or, the actual number of consecutive years
of employment for those employees who are employed for less than three
consecutive years with
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the Employer) during which the Employee had the greatest aggregate
Compensation from the Employer.
7. 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.
8. ANNUAL ADDITIONS: With respect to each Limitation Year, the
total of the Employer Contributions, Pre-Tax Contributions, After-Tax
Contributions, and Forfeitures and amounts described in Code
Sections 415(1) and 419A(d)(2) which are allocated to a Member's
Account.
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SECTION XIII
TOP-HEAVY PLAN REQUIREMENTS
13.1 GENERAL RULE: For any Plan Year for which this Plan is a Top-Heavy
Plan, as defined in Section 13.8, despite any other provisions of this Plan to
the contrary, this Plan shall be subject to the provisions of this Section XIII.
13.2 VESTING PROVISIONS: Each Member 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>
VESTING SERVICE VESTED PERCENTAGE
--------------- -----------------
<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 thereafter 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 Member who had at least three years of service (as defined in
Treasury Regulation Section 1.411(a)-8T(b)(3)) as of the close of the last year
that the Plan was top heavy. For all other Members, the vested percentage
provided in the preceding schedule prior to the date the Plan ceases to be top
heavy shall not be reduced.
13.3 MINIMUM CONTRIBUTION PROVISIONS: Each Member who (i) is a Non-Key
Employee, as defined in Section 13.8 and (ii) is employed on the last day of the
Plan Year will be entitled to have contributions and forfeitures allocated to
his account of not less than 3% (the "Minimum Contribution Percentage") of the
Member's Compensation. This minimum allocation shall be provided without taking
Pre-Tax Contributions 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 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
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his total compensation (as defined in Section 415 of the Code) not in excess
of $200,000 prior to January 1, 1994, or $150,000 on or after January 1,
1994, for the Plan Year.
Such amount will be adjusted in the same manner as the amount set
forth in Section 13.4 below.
Contributions considered under the first paragraph of this
Section 13.3 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 13.8 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 then 3%,
amounts contributed as a result of a salary reduction agreement must be included
in determining contributions made on behalf of Key Employees.
Contributions considered under this Section will not include any
contributions under the Social Security Act or any other federal or state law.
13.4 LIMITATION ON COMPENSATION: The annual compensation of a Member taken
into account under this Section XIII and under Section I for purposes of
computing benefits under this Plan shall not exceed $200,000 prior to January 1,
1994, or $150,000 on or after January 1, 1994. 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.
13.5 LIMITATION ON CONTRIBUTIONS: In the event that the Company, another
Employer or an Affiliate (hereinafter in this Section collectively referred to
as a "Considered Company") also maintains a defined benefit plan providing
benefits on behalf of Members in this Plan, one of the two following provisions
will apply:
(a) If for the Plan Year this would not be a Top-Heavy Plan if
"90%" were substituted for "60%" in Section 13.8, then the percentage
of 3% used in Section 13.3 is changed to 4%.
(b) If for the Plan Year this Plan would continue to be a
Top-Heavy Plan if "90%" were substituted for "60%," in Section 13.8,
then the denominator of both the defined contribution plan fraction
and the defined benefit plan fraction shall be calculated as set forth
in Section 12(III) for the limitation year ending in such Plan Year by
substituting "one (1.0)" for "one and twenty-five 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
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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.
13.6 COORDINATION WITH OTHER PLANS: If another defined benefit plan
maintained by a Considered Company provides contributions or benefits on behalf
of a Member in this Plan, such other plan shall be treated as a 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 13.3 and 13.4 and to avoid inappropriate omissions or inappropriate
duplication of minimum contributions. The determination shall be made by the
Committee upon the advice of counsel. In the event a Member 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.
13.7 DISTRIBUTIONS TO CERTAIN KEY EMPLOYEES: Notwithstanding any other
provision of this Plan to the contrary, the entire interest in this Plan of each
Member who is a five-percent owner (as described in Section 416(i)(1)(A) of the
Code determined with respect to the Plan Year ending in the calendar year in
which such individual attains age 70 1/2) shall be distributed to such Member
not later than the first day of April following the calendar year in which such
individual attains age 70 1/2.
13.8 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 (determined as of the Valuation Date) for Members
(including former Members) who are Key Employees exceeds 60% of the aggregate of
the accounts of all Members, excluding former Key Employees, or if this Plan is
required to be in an Aggregation Group, 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:
(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, including collectively bargained
plans, and
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(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. However, for the first Plan Year
of this Plan, Determination Date means the last day of that 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 50% of the amount in effect
under Section 12(IV)(5)(A) of this Plan 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:
(A) 50 Employees; or
(B) 10% of the Employees or, if greater than
10%, three Employees.
For this purpose, the highest paid officers shall be
selected.
(ii) One of the ten 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
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Considered Company. An Employee who has some ownership interest
is considered to be one of the top ten owners unless at
least ten other Employees own a greater interest than
that Employee. However, an Employee will not be considered
a top ten owner for a Plan Year if the Employee earns less
than the maximum dollar limitation on annual additions to
a Member'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 5% of
the outstanding stock of a Considered Company or stock
possessing more than 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 $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 1% of the outstanding stock of the
Considered Company or stock possessing more than 1% of the
total combined voting power of all stock of the Considered
Company. For purposes of this subsection, compensation
means all items includable as compensation for purposes of
applying the limitations on annual additions to a Member's
account in a defined contribution plan and the maximum
benefit payable under a defined benefit plan under the Code.
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 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
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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
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 (for this purpose using the actuarial assumptions set forth in
the applicable pension plan) 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 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 a Considered Company, the plan providing the
distribution shall include such distribution in the present
value of such account; the plan accepting the distribution
shall not include such distribution in the present value of
such account unless the plan accepted it before December 31,
1983.
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(ii) If the rollover contribution (or similar
transfer) is not initiated by the Employee or made from a
plan maintained by a Considered Company, the plan accepting
the distribution shall include such distribution in the
present value of such account, whether the plan accepted the
distribution before or after December 31, 1983; the plan
making the distribution shall not include the distribution
in the present value of such account.
(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 shall be altogether disregarded. For this purpose,
to the extent that a Key Employee is deemed to be a Key Employee if he
or she met the definition of Key Employee within any of the four
preceding Plan Years, this provision shall apply following the end of
such period of time.
(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 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 XIII, "Compensation" shall have
the meaning given to it in Section 12(IV)(5).
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SECTION XIV
TESTING OF CONTRIBUTIONS
14.1 DEFINITIONS: For purposes of this Section XIV, the capitalized
words have the following meanings:
A. "After-Tax Contributions" shall mean those contributions
defined in Section I.
B. "Compensation" shall mean the Employee's total Compensation
for services rendered to an Employer during the Plan Year and, unless
the Committee elects otherwise, the Employee's Pre-Tax Contributions
for the Plan Year and any amounts not currently included in the
Employee's gross income by reason of the application of Section 125 of
the Code.
C. "Employer Contributions" shall mean the amounts contributed
to the Trust Fund by the Employer pursuant to Section 4.2.
D. "Family Member" shall mean the spouse and the lineal
ascendants and descendants (and spouses of such ascendants and
descendants) of any Employee or former Employee.
E. "Highly Compensated Employee" shall mean any Employee who is
a highly compensated Employee under Section 414(q) of the Code during
the current Plan Year or, if so elected by the Employer, the prior
Plan Year,
(i) was at any time a 5% owner; or
(ii) received Compensation (as defined in
Section 12(IV)(5) or which reasonably approximates the
definition of Compensation in Section 12(IV)(5)) 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)(B)); or
(iii) received Compensation (as defined in
Section 12(IV)(5) or which reasonably approximates the
definition of Compensation in Section 12(IV)(5)) 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)(C)) and was in the "top-paid group" (the top 20%
of payroll excluding Employees described in Code
Section 414(q)(8) and applicable regulations) for the Plan
Year; or
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(iv) was an officer receiving Compensation (as
defined in Section 12(IV)(5) or which reasonably
approximates the definition of Compensation in Section
12(IV)(5)) exceeding 150% of the defined contribution plan
dollar limit in Section 12(IV)(5). The number of officers
shall be limited to 50 Employees (or, if lesser, the greater
of three (3) Employees or 10% of the Employees).
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
Section 14.1(E) above by virtue of subparagraphs (i), (ii) 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 100 individuals who were paid
the greatest compensation (as defined in Section 12(IV)(5) or which
reasonably approximates the definition of Compensation in Section
12(IV)(5)) during the current Plan Year.
A former Employee shall be treated as a Highly Compensated
Employee if (1) such former Employee was a Highly Compensated Employee
when he separated from Service or (2) such former Employee was a
Highly Compensated Employee in Service at any time after attaining age
55. Any former Employee who separated from Service before January 1,
1987 will be treated as a Highly Compensated Employee only if the
former Employee was a 5% owner or received Compensation (as defined in
Section 12(IV)(5) or which reasonably approximates the definition of
Compensation in Section 12(IV)(5)) in excess of $50,000 during (i) the
Employee's separation year (or the year preceding such separation
year) or (ii) any year ending on or after the former Employee's 55th
birthday (or the last year ending before his 55th birthday).
F. "Pre-Tax Contributions" shall mean the amounts contributed
to the Trust Fund out of a Member's Compensation pursuant to Section
4.1(A).
14.2 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 which relate
to Compensation that either would have been received by the Employee
in such Plan Year (but for the deferral election) or are attributable
to services performed by the Employee in the Plan Year and would have
been received by the Employee within 2 1/2 months after the close of
the Plan Year (but for the deferral election), over
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(b) The Employee's Compensation for such Plan Year.
The individual ratios and Actual Deferral Percentages shall be calculated to
the nearest 1/100 of 1% of an Employee's Compensation.
14.3 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 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 Actual Deferral Percentage of an Employee who is
a 5% owner or one of the ten 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 Members who are non-Highly Compensated
Employees and for Members who are Highly Compensated Employees.
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 Section 14.3 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.
14.4 REDUCTION OF PRE-TAX CONTRIBUTION RATES BY LEVELING METHOD: If on
the basis of the Pre-Tax Contribution rates elected by Members for any Plan
Year, the Committee determines, in its sole discretion, that neither of the
tests contained in (a) or (b) of Section 14.3 will be satisfied, the
Committee may reduce the Pre-Tax Contribution rate of any Member 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
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either (a) or (b) of Section 14.3. The reductions in Pre-Tax Contribution
rates shall be made in a manner so that the Actual Deferral Percentage of the
affected Members who elected the highest Actual Deferral Percentage shall be
first lowered to the level of the affected Members 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 14.3, both of the
above-described groups of Members will be lowered to the level of Members
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 14.3.
14.5 INCREASE IN PRE-TAX CONTRIBUTION RATES: If a Member's Pre-Tax
Contribution rate is reduced below the level necessary to satisfy either (a)
or (b) of Section 14.3 for the Plan Year, such Member 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 14.3. Such an increase in the Pre-Tax Contribution rate shall
be made by Members on a uniform and non-discriminatory basis, pursuant to
such rules and procedures as the Committee may prescribe.
14.6 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 14.3 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 Members who are among the Highly
Compensated Employees shall be distributed to the affected Members as of the
end of such Plan Year. Such income shall include the allocable gain or loss
for the Plan Year.
The amount of any excess Pre-Tax Contributions to be distributed
shall be reduced by Excess Deferrals previously distributed to a Member
pursuant to Section 4.1 for the taxable year ending in the same Plan Year.
All excess Pre-Tax Contributions shall be returned to the Members no later
than the last day of the following Plan Year. The excess Pre-Tax
Contributions, if any, of each Member who is among the Highly Compensated
Employees shall be determined by computing the maximum Actual Deferral
Percentage which each such Member may defer under (a) or (b) of Section 14.3
and then reducing the Actual Deferral Percentage of some or all of such
Members 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 Members who are among the Highly Compensated
Employees to a level which satisfies either (a) or (b) of Section 14.3. The
excess Pre-Tax Contributions, if any, of each Member shall be determined in
such a manner that the Actual Deferral Percentage of such Members who elected
the highest Actual Deferral Percentage shall be first lowered to the level of
such Members 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 14.3, both of the above-described groups of Members will be
lowered to the level of Members 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 14.3.
The income or loss attributable to the Member's excess Pre-Tax
Contributions for the Plan Year shall be determined by multiplying the income
or loss attributable to the Member's
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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 Member's total Pre-Tax Contribution Account balance. Excess
Pre-Tax Contributions shall be treated as Annual Additions under Section XII
of the Plan.
14.7 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 5%
owner or one of the ten most Highly Compensated Employees, the
combined actual deferral ratio for the family group (which is treated
as one Highly Compensated Employee) shall be the greater of:
(1) The actual deferral ratio determined by combining
the Pre-Tax Contributions and Compensation of all the
eligible Family Members who are highly compensated without
regard to family aggregation, and
(2) The actual deferral ratio determined by combining
the Pre-Tax Contributions and Compensation of all the
eligible Family Members.
If the amount determined under (1) exceeds the amount determined under (2),
an actual deferral ratio for the eligible Family Members who are not Highly
Compensated Employees without regard to family aggregation shall also be
calculated in the event it should become necessary to correct excess Pre-Tax
Contributions of these Family Members.
The 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
paragraphs (A)(1) and (A)(2) above.
C. EXCESS PRE-TAX CONTRIBUTIONS OF FAMILY MEMBERS: The
determination and correction of 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 14.7
is accomplished as follows: If the actual deferral ratio of the
Highly Compensated Employee is determined under paragraph (A)(2)
above, then the Pre-Tax Contribution
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rate is reduced for the affected Member using the leveling method
set forth in Section 14.4 and the excess Pre-Tax Contributions to
be distributed thereby shall be allocated among the Family Members
in proportion to the Pre-Tax Contributions of each Family Member
that were combined to determine the actual deferral ratio of the
Highly Compensated Employee under paragraph (A)(2). If the actual
deferral ratio of the Highly Compensated Employee is determined under
paragraph (A)(1) above, then the Pre-Tax Contribution rate is reduced
using the leveling method set forth in Section 14.4 in two steps.
First, the Actual Deferral Percentage for the affected Member is
reduced as required under Sections 14.3, 14.4 and 14.6, but not below
the actual deferral ratio determined for the group of eligible Family
Members who are not Highly Compensated Employees without regard to
family aggregation. The amount of excess Pre-Tax Contributions is
determined by taking into account the Pre-Tax Contributions of the
Family Members whose contributions were combined to determine the
actual deferral ratio of the Highly Compensated Employee under
paragraph (A)(1), and shall be allocated among such Family Members
in proportion to each such Family Member's Pre-Tax Contributions.
Second, if further reduction is required, excess Pre-Tax Contributions
resulting from this reduction are determined by taking into account the
Pre-Tax Contributions of all the eligible Family Members and are
allocated among such Family Members in proportion to the Pre-Tax
Contributions of each Family Member.
14.8 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:
(a) The total of the After-Tax Contributions and Employer
Contributions (the "Aggregate Contributions") paid under the Plan on
behalf of each Employee for such Plan Year which are made on account
of the Employee's Contributions for the Plan Year, are allocated to
the Employee's Employer Contribution Account and After-Tax
Contribution Account during such Plan Year and are paid to the Trust
no later than the end of the next following Plan Year, to
(b) The Employee's Compensation for such Plan Year.
To the extent permitted by the Code and applicable regulations, the Employer
may elect to take into account, in computing the Contribution Percentage,
pre-tax contributions made under this Plan or any other plan of the Employer.
A Member's Contribution Percentage shall be determined after determining the
Member's Excess Deferrals, if any, pursuant to Section 4.1, and after
determining the Member's excess Pre-Tax Contributions pursuant to Section
14.6.
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14.9 CONTRIBUTION PERCENTAGE LIMITS: The Contribution 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 Contribution Percentage for the eligible Employees who
are not Highly Compensated Employees times 1.25, or
(b) The lesser of (i) the Contribution Percentage for the
eligible Employees who are not Highly Compensated Employees times 2.0
or (ii) the Contribution Percentage for the eligible Employees who are
not Highly Compensated Employees plus two 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 Contribution Percentage of an Employee who is a 5% owner
or one of the ten 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 to 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
Contribution Percentage both for Members who are non-Highly Compensated
Employees and for Members 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.
14.10 TREATMENT OF EXCESS AGGREGATE CONTRIBUTIONS: If neither of the
tests described in (a) or (b) of Section 14.9 are satisfied, the excess
Aggregate Contributions, 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 were made. Such income shall include the
allocable gain or loss for the Plan Year. The income or loss attributable to
the Member's excess Aggregate Contributions for the Plan Year shall be
determined by multiplying the income or loss attributable to the Member's
Employer Contribution Account and After-Tax Contribution Account for the Plan
Year by a fraction, the numerator of which is the excess Aggregate
Contribution, and the denominator of which is the Member's total Employer
Contribution Account and After-Tax Contribution Account balance. Excess
Aggregate Contributions shall be treated as Annual Additions under Section
XII of the Plan.
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The excess Aggregate Contributions, if any, of each Member who is
among the Highly Compensated Employees shall be determined by computing the
maximum Contribution Percentage under (a) or (b) of Section 14.9 and then
reducing the Contribution Percentage of some or all of such Members whose
Contribution Percentage exceeds the maximum by an amount of sufficient size
to reduce the overall Contribution Percentage for eligible Members who are
among the Highly Compensated Employees to a level which satisfies either (a)
or (b) of Section 14.9. The excess Aggregate Contributions, if any, of each
Member shall be determined in such a manner that the Contribution Percentage
of such Members who have the highest actual contribution ratio under Section
14.8 shall be first lowered to the level of such Members with the next to the
highest actual contribution ratio under Section 14.8. If further overall
reductions are required to achieve compliance with (a) or (b) of Section
14.9, both of the above-described groups of Members will be lowered to the
level of Members with the next highest actual contribution ratio under
Section 14.8, and so on, until sufficient total reductions have occurred to
achieve compliance with (a) or (b) of Section 14.9. For each Member who is a
Highly Compensated Employee, the amount of excess Aggregate Contributions is
equal to the total Employer Contributions and After-Tax Contributions on
behalf of the Member (determined prior to the application of this paragraph)
minus the amount determined by multiplying the Member'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 1/100 of 1% of the Employee's
Compensation.
14.11 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 5%
owner or one of the ten most Highly Compensated Employees, the
combined actual contribution ratio for the family group (which is
treated as one Highly Compensated Employee) shall be the greater of:
(1) The actual contribution ratio determined by
combining the Employer Contributions, After-Tax
Contributions and Compensation of all the eligible Family
Members who are highly compensated without regard to family
aggregation, and
(2) The actual contribution ratio determined by
combining the Employer Contributions, After-Tax
Contributions and Compensation of all the eligible Family
Members.
If the amount determined under (1) exceeds the amount determined under (2),
an actual contribution ratio for the group of eligible Family Members who are
not highly compensated without regard to family aggregation shall also be
calculated in the event it should become necessary to correct excess
Aggregate Contributions of these Family Members.
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The Employer Contributions, After-Tax 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 who are Family Members of those groups that include
the Employee are aggregated as one family group in accordance with
paragraphs (A)(1) and (A)(2) above.
C. EXCESS AGGREGATE CONTRIBUTIONS OF FAMILY MEMBERS: The
determination and correction of 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 14.11 is accomplished as follows: If the actual contribution
ratio of the Highly Compensated Employee is determined under
paragraph (A)(2) above, then the actual contribution ratio is reduced
as required under Section 14.10 and the excess Aggregate Contributions
to be forfeited or distributed thereby shall be allocated among the
Family Members in proportion to the Employer Contributions and
After-Tax Contributions of each Family Member that were combined to
determine the actual contribution ratio of the Highly Compensated
Employee under paragraph (A)(2). If the actual contribution ratio of
the Highly Compensated Employee is determined under paragraph (A)(1)
above, then the actual contribution ratio is reduced as required under
Section 14.10 in two steps. First, the actual contribution ratio is
reduced as required under Section 14.10, but not below the actual
contribution ratio determined for the group of eligible Family Members
who are not Highly Compensated Employees without regard to family
aggregation. The amount of excess Aggregate Contributions is
determined by taking into account the Employer Contributions and
After-Tax Contributions of the Family Members whose contributions were
combined to determine the actual contribution ratio of the Highly
Compensated Employee under paragraph (A)(1) above, and shall be
allocated among such Family Members in proportion to each such Family
Member's Employer Contributions and After-Tax Contributions. Second,
if further reduction is required under Section 14.10, excess Aggregate
Contributions resulting from this reduction are determined by taking
into account the Employer Contributions and After-Tax Contributions of
all the eligible Family Members and are allocated among such Family
Members in proportion to the Employer Contributions and After-Tax
Contributions of each Family Member.
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IN WITNESS WHEREOF, the Company 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, but effective as of January 1, 1989.
THE M. W. KELLOGG COMPANY
By
------------------------------
David L. Bartlett
Vice President, Administration
ATTEST:
- ------------------------------
Secretary
[SEAL]
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THE STATE OF TEXAS )
)
COUNTY OF HARRIS )
BEFORE ME, the undersigned authority, on this day personally
appeared ___________________, ___________________ of THE M. W. KELLOGG
COMPANY, 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 THE M. W. KELLOGG COMPANY, a corporation, and that he was
duly authorized to perform the same 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 Texas
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EXHIBIT "A"
Attached to and made a part of
THE M. W. KELLOGG COMPANY
SAVINGS AND INVESTMENT PLAN
as Amended and Restated Effective January 1, 1989
INVESTMENT FUND OPTIONS EFFECTIVE JANUARY 1, 1993
1. The M. W. Kellogg Company Stable Investment Fund
2. Vanguard Index Trust - 500 Portfolio
3. Vanguard Wellington Fund
4. Vanguard U.S. Growth Portfolio
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THE M.W. KELLOGG COMPANY SAVINGS AND INVESTMENT PLAN
(As Amended and Restated Effective January 1, 1989)
First Amendment
The M.W. Kellogg Company, a Delaware corporation (the "Company"),
having adopted The M.W. Kellogg Company Savings and Investment Plan, as
amended and restated effective January 1, 1989 (the "Plan") and having
reserved the right under Section 10.4 to amend the Plan, does hereby amend
the Plan, as follows:
1. Article I of the Plan is hereby amended effective June 13,
1995 to change the defined term "Employer" to read as follows:
"EMPLOYER: The Company, M.W. Kellogg-Delaware Inc., The M.W. Kellogg
Technology Company, and any eligible organization which shall adopt
this Plan pursuant to the provisions of Section X."
2. Article I of the Plan is hereby amended effective June 13,
1995 to change the defined term "Eligible Employee" to read as follows:
"ELIGIBLE EMPLOYEE: Any salaried Employee of an Employer who, on or
after the Effective Date, is not a "leased employee" with respect to the
employing Employer within the meaning of Section 414(n)(2) of the Code,
whose terms of employment are not subject to a collective bargaining
agreement that does not expressly provide for participation in the Plan,
and who is not classified in the personnel files upon hire or in the
employment offer letter extended by the employing Employer as a "Project
Employee", i.e. employed in connection with one or more specific
projects and on the basis that employment shall terminate no later than
the completion of the project(s), or a "Temporary Employee", i.e.
employed for a specified assignment period and on the basis that
employment shall terminate no later than the expiration of the period."
<PAGE>
3. Section 7.4 of the Plan is hereby amended effective as of the
dates specified therein by adding the following paragraph (c) to the
penultimate paragraph thereof, as follows:
"(c) Each Eligible Employee as specified in Appendix B of the Plan
(i) who was employed in a Class 4 secretarial/clerk/staff position or
Class 3 clerical/technical position with the Employer and (ii) whose
employment was involuntarily terminated, other than for just cause,
between September 1, 1993 and April 30, 1995 by the Employer shall be
100% vested in such Employee's Account under the Plan."
4. Section 9.2 of the Plan is hereby amended, effective September
15, 1994, by adding the following two sentences to the penultimate paragraph
thereof, as follows:
"From and after September 15, 1994, no Savings Contributions or Employer
Contributions shall be invested in the portion of The M.W. Kellogg
Company Stable Investment Fund with respect to any investments in the
guaranteed income contract of Confederation Life Insurance Company (the
"Confederation Life Account"). Such Confederation Life Account shall be
segregated and maintained separately as a frozen Fund from other
Investment Funds in the Trust. Notwithstanding anything to the
contrary, Members will not be entitled to any withdrawals or
distributions from the Confederation Life Account from and after
September 15, 1994."
5. Section 14.1(E)(iv) of the Plan is hereby amended effective
January 1, 1989, to read as follows:
"(iv) was an officer receiving Compensation (as defined in
Section 12(IV)(5) exceeding 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 employees or 10% of the employees)."
6. Section 14.2 of the Plan is hereby amended, effective January
1, 1995 by adding the following paragraph at the end thereof:
"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."
7. Section 14.7 of the Plan is hereby amended, effective January
1, 1995, to read as follows:
<PAGE>
"14.7 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 5% owner or one of the ten most Highly
Compensated Employees, the combined actual deferral ratio for the
family group (which is treated as one Highly Compensated Employee)
shall be determined by combining the Pre-Tax Contributions and
Compensation of all the eligible Family Members.
The 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 14.7, the actual deferral ratio
calculated in paragraph (A) above shall be reduced using the
leveling method set forth in Section 14.4 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."
8. Section 14.8 of the Plan is hereby amended effective
January 1, 1995, by adding the following paragraph at the end thereof:
"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 of an eligible Employee who receives no
Aggregate Contributions under the Plan is zero."
<PAGE>
9. Section 14.11 of the Plan is hereby amended effective
January 1, 1995, to read as follows:
"14.11 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 5% owner or one of the ten 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, After-Tax Contributions and
Compensation of all the eligible Family Members.
The Employer Contributions, After-Tax 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 are 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 14.11, the actual contribution ratio shall be reduced
as required under Section 14.10, 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."
10. Article XIV of the Plan is amended effective January 1, 1995
by adding the following Section 14.12 to the end thereof:
<PAGE>
"14.12 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 14.3 and 14.9 are hereby incorporated into the
Plan. If a multiple use 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 14.10."
11. Appendix A of the Plan is hereby amended effective April 1,
1995 to read as follows:
"INVESTMENT FUND OPTIONS EFFECTIVE APRIL 1, 1995
1. The M. W. Kellogg Company Stable Investment Fund
2. Vanguard Money Market Reserves - Federal Portfolio
3. Vanguard Index Trust - 500 Portfolio
4. Vanguard Wellington Fund
5. Vanguard U.S. Growth Portfolio
6. Vanguard Bond Index Fund - Total Bond Market Portfolio"
12. Appendix B is hereby added effective September 1,
1993 to the end of the Plan, as follows:
<PAGE>
IN WITNESS WHEREOF, the Company has caused these presents to be
executed by its duly authorized officers and its seal to be hereunto affixed
in a number of copies each of which shall be deemed an original but all of
which shall constitute but one and the same instrument this 23rd day of
February, 1996.
THE M.W. KELLOGG COMPANY
By
------------------------------
David L. Bartlett
Vice President, Administration
ATTEST:
- -------------------------------
Assistant Secretary
<PAGE>
THE M.W. KELLOGG COMPANY SAVINGS AND INVESTMENT PLAN
(As Amended and Restated Effective January 1, 1989)
SECOND AMENDMENT
The M.W. Kellogg Company, a Delaware corporation
(the "Company"), having adopted The M.W. Kellogg Company Savings
and Investment Plan, as amended and restated effective January 1,
1989 and as thereafter amended (the "Plan") and having reserved the
right under Section 10.4 to amend the Plan, does hereby amend the
Plan effective as of the dates specified herein, as follows:
1. Article I of the Plan is hereby amended effective October 1,
1996 to change the defined term "Compensation" to read as follows:
"COMPENSATION: The total of all amounts paid by
Employer to or for the benefit of an Eligible Employee or
Member for services rendered or labor performed while an
Eligible Employee or Member in the form of base pay,
overtime, lump-sum payment of paid time off ("PTO"),
lump-sum vacation payouts, the Incentive Compensation
Bonus, the Kellogg Award, extended work-week and shift
differential payments, and interim travel pay, and
including amounts deferred by such Member pursuant to an
option authorized by Section 125 and/or Section 401(k) of
the Code under a plan adopted by such Employer, but
excluding contributions to any other deferred
compensation program (including this Plan), stock
options, restricted stock and any other form of
extraordinary remuneration, including, but not limited
to, all bonuses except the Incentive Compensation Bonus
and the Kellogg Award, overseas or cost-of-living
allowances. Notwithstanding anything herein to the
contrary, in no event shall the annual Compensation taken
into account under the Plan for any Employee exceed
$150,000 or such other dollar amount as may be prescribed
by the Secretary of the Treasury or his delegate pursuant
to Section 401(a)(17) of the Code. For purposes of
applying the applicable 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
<PAGE>
Employees, the Employee's spouse, and the Employee's lineal
descendants who have not attained age 19 before the close of the
year."
2. The first sentence of Section 6.4(f) of the Plan is
hereby amended in its entirety effective October 1, 1996 to read as
follows:
"A request by a Borrower for a loan shall be made in
the manner prescribed by the Committee and shall specify
the amount of the loan."
3. The third sentence of Section 8.1 of the Plan is
hereby amended in its entirety effective October 1, 1996 to read as
follows:
"If the amount to which a terminated Member is
entitled is in excess of $3,500, no distribution shall be
made prior to the Member's attainment of age 65 without
the Member's consent."
4. Section 16.1 of the Plan is hereby amended in its
entirety effective October 1, 1996 to read as follows:
"10.4 AMENDMENT OF THE PLAN: The Company reserves
the right to amend or modify this Plan and (with the
consent of the Trustee) the Trust Agreement at any time
and from time to time to any extent that it may deem
advisable. Any amendment or modification that would
increase or decrease the Company's contributions to the
Plan shall be set out in an instrument in writing duly
authorized by the Board of Directors and executed by the
Company. Any other amendment or modification to the Plan
shall be set out in an instrument in writing duly
authorized by the Committee and executed by the Company.
The Company shall promptly deliver to each other Employer
any amendment to this Plan or the Trust Agreement. No
such amendment or modification shall, however, increase
the duties or responsibilities of the Trustee without its
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 Fund, or of
permitting the same to be used for or diverted to
purposes other than for the exclusive benefit of the
Members and their Beneficiaries. No such amendment shall
decrease the Account of any Member or shall decrease any
Member's vested interest in his Account. Notwithstanding
anything herein to the contrary, the Plan or the Trust
Agreement may be amended in such manner as may be
required at any time to make it conform to the
requirements of the Internal Revenue 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 Member or his Beneficiary under the Plan."
<PAGE>
5. Appendix A of the Plan is hereby amended effective
July 1, 1996 to read as follows:
"INVESTMENT FUNDS EFFECTIVE JULY 1, 1996
1. Vanguard Money Market Reserves - Federal Portfolio
2. Vanguard Index Trust - 500 Portfolio
3. Vanguard Wellington Fund
4. Vanguard U.S. Growth Portfolio
5. Vanguard Bond Index Fund - Total Bond Market
Portfolio
6. Vanguard Investment Contract Trust
7. Vanguard Explorer Fund
8. Vanguard International Growth Portfolio
9. The M.W. Kellogg Company Stable Investment Fund -
closed to future contributions as of July 1, 1996."
IN WITNESS WHEREOF, the Company has caused these presents
to be executed by its duly authorized officers and its seal to be
hereunto affixed in a number of copies each of which shall be
deemed an original but all of which shall constitute but one and
the same instrument this _____ day of September, 1996.
THE M.W. KELLOGG COMPANY
By
-----------------------------
David L. Bartlett
Vice President, Human
Resources
ATTEST:
- -----------------------------
Assistant Secretary
<PAGE>
THE M.W. KELLOGG COMPANY SAVINGS AND INVESTMENT PLAN
(As Amended and Restated Effective January 1, 1989)
THIRD AMENDMENT
The M.W. Kellogg Company, a Delaware corporation
(the "Company"), having adopted The M.W. Kellogg Company Savings
and Investment Plan, as amended and restated effective January 1,
1989 and as thereafter amended (the "Plan") and having reserved the
right under Section 10.4 to amend the Plan, does hereby amend the
Plan effective as of the dates specified herein, as follows:
1. Effective January 1, 1997, the following provisions
are hereby deleted: (i) the last two sentences of the definition of
Compensation in Article I of the Plan, (ii) the second paragraph of
Section 14.3 of the Plan, (iii) Section 14.7 of the Plan, (iv) the
second and third sentences of Section 14.9 of the Plan, and (v)
Section 14.11 of the Plan.
2. Section 3.6 of the Plan is hereby amended effective
December 12, 1994, by adding the following sentence to the end
thereto:
"Notwithstanding any provision of this Plan to the
contrary, contributions, benefits and service credit with
respect to qualified military service will be provided in
accordance with Section 414(u) of the Code."
3. The second and third sentences of Section 8.1 of the
Plan are hereby amended in their entirety effective January 1,
1998, to read as follows:
"The Committee shall direct the Trustee to distribute the
Member's benefits according to the Member's election;
provided that the Committee shall direct that a lump-sum
payment be made without the consent of the Member if the
distribution is equal to or less than $3,500 ($5,000 from
and after January 1, 1998). If the amount to which a
terminated Member is entitled is in excess of $3,500
($5,000 from and after January 1, 1998), no distribution
shall be made prior to the Member's attainment of age 65
without the Member's consent."
<PAGE>
4. The first sentence of subparagraph (a) of Section
8.1 of the Plan is hereby amended in its entirety effective May 1,
1998, to read as follows:
"(a) All amounts payable in respect of any such
Member may be distributed in a single, lump-sum cash
distribution; except that, unless the Member elects
otherwise, those contributions invested in Fund D and in
the Dresser Industries, Inc. Stock Fund shall be
distributed in whole shares of stock plus cash for
fractional shares."
5. Section 8.3 of the Plan is hereby amended in its
entirety effective January 1, 1997, to read as follows:
"8.3 REQUIRED MINIMUM DISTRIBUTIONS. Effective
January 1, 1997, any benefits to which a Member is
entitled shall commence not later than the April 1
following the calendar year in which the Member attains
age 70-1/2, whether or not his Service had terminated in
such year. Such distribution shall be at least equal to
the required minimum distributions under Section
401(a)(9) of the Code and the regulations thereunder.
From and after January 1, 1999, notwithstanding any
provision of this Plan to the contrary, any benefits to
which a Member (other than a 5% owner) is entitled shall
commence not later than the April 1 of the calendar year
following the later of (i) the calendar year in which the
Member attains age 70-1/2, or (ii) the calendar year in
which the Member retires. Such distribution shall be at
least equal to the required minimum distributions under
Section 401(a)(9) of the Code and the regulations
thereunder.
Notwithstanding any provision of this Plan to
the contrary, any benefits to which a Member who is a 5%
owner is entitled shall commence not later than April 1
of the calendar year following the calendar year in which
the Member attains age 70-1/2, whether or not his Service
had terminated in such year. Such distribution shall be
at least equal to the required minimum distribution under
Section 401(a)(9) of the Code and the regulations
thereunder."
6. The third sentence of Section 10.4 of the Plan is
hereby amended in its entirety effective January 1, 1998 to read as
follows:
"Any other amendment or modification to the Plan shall be
set out in an instrument in writing duly authorized by
the Committee and executed by any appropriate officer of
the Company."
7. Section III. of Article XII of the Plan is hereby
amended effective January 1, 2000, by adding the following Section
(4) to the end thereof:
-2-
<PAGE>
"4. TERMINATION OF SECTION XII.III. From and after
January 1, 2000, the provisions of this Section XII.III
shall no longer apply."
8. The last sentence of Section IV(5) of Article XII of
the Plan is hereby amended in its entirety, effective January 1,
1998 to read as follows:
"Notwithstanding anything to the contrary in the
definition, compensation shall include any and all items
which may be includable in Compensation under Section
415(c)(3) of the Code, including, effective January 1,
1998, (i) any elective deferral (as defined in Code
Section 402(g)(3)) and (ii) any amount which is
contributed or deferred by the Employer at the election
of the Employee and which is not includible in the gross
income of the Employee by reason of Code Section 125 or
457."
9. Section 14.1(E) of the Plan is hereby amended in its
entirety effective January 1, 1997 to read as follows:
"E. 'Highly Compensated Employee' shall mean any
Employee who is a highly compensated employee under
Section 414(q) of the Code, including any Employee who,
(i) was a 5% owner during the current
Plan Year or prior Plan Year; or
(ii) received Compensation (as defined in
Section 12(IV)(5)) during the prior Plan Year
in excess of $80,000 or such other dollar
amount as may be prescribed by the Secretary
of the Treasury or his/her delegate and, if
elected by the Employer, was in the "top-paid
group" (the top 20% of payroll) for the Plan
Year excluding Employees described in Code
Section 414(q)(8).
A former Employee shall be treated as a Highly
Compensated Employee if (1) such former Employee was a
Highly Compensated Employee when he separated from
Service or (2) such former Employee was a Highly
Compensated Employee in Service at any time after
attaining age 55. Any former Employee who separated from
Service before January 1, 1987, will be treated as a
Highly Compensated Employee only if the former Employee
was a 5% owner or received Compensation (as defined in
Section 12(IV)(5) or which reasonably approximates the
definition of Compensation in Section 12(IV)(5)) in
excess of $50,000 during (i) the Employee's separation
year (or the year preceding such separation year) or (ii)
any year ending on or after the former Employee's 55th
birthday (or the last year ending before his 55th
birthday).
-3-
<PAGE>
In determining status as a Highly Compensated
Employee within the meaning of Code Section 414(q) the
entities set forth in Regulation Section 1.414(q)-1T Q&A-6(a)(1)
through (4) must be taken into account as a single employer."
10. Appendix A of the Plan is hereby amended effective
May 1, 1998 to read as follows:
"INVESTMENT FUNDS EFFECTIVE MAY 1, 1998
1. Vanguard Money Market Reserves - Prime Portfolio
2. Vanguard Index Trust - 500 Portfolio
3. Vanguard Wellington Fund
4. Vanguard U.S. Growth Portfolio
5. Vanguard Bond Index Fund - Total Bond Market
Portfolio
6. Vanguard Retirement Savings Trust
7. Vanguard Explorer Fund
8. Vanguard International Growth Portfolio
9. Vanguard Windsor II
10. Davis New York Venture Fund
11. Barr Rosenberg Small Cap Fund
12. Vanguard Index Trust - Small Capitalization Stock
Portfolio
13. Vanguard Total International Portfolio
14. Dresser Industries, Inc. Stock"
IN WITNESS WHEREOF, the Company has caused these presents
to be executed by its duly authorized officers and its seal to be
hereunto affixed in a number of copies each of which shall be
deemed an original but all of which shall constitute but one and
the same instrument this _____ day of ____________________, 1998.
THE M.W. KELLOGG COMPANY
By
-------------------------
Thomas E. Giles
ATTEST:
- -------------------------
Assistant Secretary
-4-
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of our report dated November 26, 1997,
appearing on page 27 of Dresser Industries, Inc.'s Annual Report on Form 10-K
for the year ended October 31, 1997.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Dallas, Texas
April 16, 1998