CENTRAL AND SOUTH WEST CORPORATION
RETIREMENT SAVINGS PLAN
(As Amended and Restated Effective
July 1, 1997)
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FIRST AMENDMENT
TO
CENTRAL AND SOUTH WEST CORPORATION
RETIREMENT SAVINGS PLAN
Central and South West Corporation, a Delaware corporation, adopts
the following amendment to the Central and South West Corporation Retirement
Savings Plan (the "Plan").
1. Section 1.1(30) of the Plan is amended by placing a period at the
end of the phrase "Code section 415(d)" therein and deleting the remainder of
the sentence.
2. Sections 7.2 and 7.6 of the Plan are each amended by replacing the
term "termination of employment" with the term "separation from service" each
time it appears therein.
3. Section 7.7(1)iii is amended by revising the first parenthetical
phrase therein to read as follows:
(or a Participant who has attained age 55 and separated from
service)
Executed at Dallas, Texas, this 24 day of August, 1999, but effective
January 1, 1997.
CENTRAL AND SOUTH WEST CORPORATION
By /s/ Venita McCellon-Allen
Name: Venita McCellon-Allen
Title: Senior Vice President,
Corporate Development
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TABLE OF CONTENTS
Page
ARTICLE 1 - DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 1
(1) Account . . . . . . . . . . . . . . . . . . . . . . . . 1
(2) Account Balance . . . . . . . . . . . . . . . . . . . . 1
(3) Administrator or Plan Administrator . . . . . . . . . . 1
(4) After-Tax Deposits . . . . . . . . . . . . . . . . . . . 1
(5) Before-Tax Deposits . . . . . . . . . . . . . . . . . . 1
(6) Beneficiary . . . . . . . . . . . . . . . . . . . . . . 1
(7) Benefits Advisory Committee . . . . . . . . . . . . . . 2
(8) Benefits Appeals Committee . . . . . . . . . . . . . . . 2
(9) Board of Directors . . . . . . . . . . . . . . . . . . . 2
(10) Code . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(11) Company . . . . . . . . . . . . . . . . . . . . . . . . 2
(12) Company Contribution or Contribution . . . . . . . . . . 2
(13) Company Stock . . . . . . . . . . . . . . . . . . . . . 2
(14) Compensation . . . . . . . . . . . . . . . . . . . . . . 2
(15) Compensation Reduction and Deferral Authorization . . . 3
(16) Controlled Group . . . . . . . . . . . . . . . . . . . . 3
(17) Controlled Group Member . . . . . . . . . . . . . . . . 3
(18) Deferral Percentage . . . . . . . . . . . . . . . . . . 3
(19) Deposits . . . . . . . . . . . . . . . . . . . . . . . . 3
(20) Disabled . . . . . . . . . . . . . . . . . . . . . . . . 3
(21) Employee . . . . . . . . . . . . . . . . . . . . . . . . 3
(22) Employer . . . . . . . . . . . . . . . . . . . . . . . . 3
(23) ERISA . . . . . . . . . . . . . . . . . . . . . . . . . 4
(24) ESOP . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(25) ESOP Account Balance . . . . . . . . . . . . . . . . . . 4
(26) Fiduciary . . . . . . . . . . . . . . . . . . . . . . . 4
(27) Former BREMCO Employee . . . . . . . . . . . . . . . . . 4
(28) Former TEX/CON Employee . . . . . . . . . . . . . . . . 4
(29) Hardship . . . . . . . . . . . . . . . . . . . . . . . . 4
(30) Highly Compensated Employee . . . . . . . . . . . . . . 4
(31) Home Loan . . . . . . . . . . . . . . . . . . . . . . . 4
(32) Hour of Service . . . . . . . . . . . . . . . . . . . . 4
(33) Investment Committee . . . . . . . . . . . . . . . . . . 6
(34) Investment Options . . . . . . . . . . . . . . . . . . . 6
(35) Investment Policy Committee . . . . . . . . . . . . . . 6
(36) Loan . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(37) Loan Valuation Date . . . . . . . . . . . . . . . . . . 6
(38) Named Fiduciaries . . . . . . . . . . . . . . . . . . . 6
(39) Non-Highly Compensated Employee . . . . . . . . . . . . 6
(40) Outstanding Loan Balance . . . . . . . . . . . . . . . . 7
(41) Participant . . . . . . . . . . . . . . . . . . . . . . 7
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(42) Plan . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(43) Plan Year . . . . . . . . . . . . . . . . . . . . . . . 7
(44) Qualified Plan . . . . . . . . . . . . . . . . . . . . . 7
(45) Rollover Contribution . . . . . . . . . . . . . . . . . 7
(46) Rules . . . . . . . . . . . . . . . . . . . . . . . . . 7
(47) Spouse . . . . . . . . . . . . . . . . . . . . . . . . . 7
(48) Transfer Contribution . . . . . . . . . . . . . . . . . 7
(49) Trust Agreement . . . . . . . . . . . . . . . . . . . . 8
(50) Trust Fund . . . . . . . . . . . . . . . . . . . . . . . 8
(51) Trustee . . . . . . . . . . . . . . . . . . . . . . . . 8
(52) Valuation Date . . . . . . . . . . . . . . . . . . . . . 8
(53) Vested Interest . . . . . . . . . . . . . . . . . . . . 8
(54) Year of Service . . . . . . . . . . . . . . . . . . . . 8
1.2 Construction . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE 2 - PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . . . 9
2.1 Eligibility to Participate . . . . . . . . . . . . . . . . . . 9
2.2 Commencement of Participation . . . . . . . . . . . . . . . . 10
2.3 Duration of Participation and Eligibility for Contributions . 10
2.4 Reemployment Provisions . . . . . . . . . . . . . . . . . . . 10
2.5 Veterans' Reemployment Rights . . . . . . . . . . . . . . . . 10
ARTICLE 3 - PARTICIPANT DEPOSITS . . . . . . . . . . . . . . . . . . . . 11
3.1 Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.2 After-Tax Deposits . . . . . . . . . . . . . . . . . . . . . . 11
3.3 Before-Tax Deposits . . . . . . . . . . . . . . . . . . . . . 11
3.4 Changes in Participant Deposits . . . . . . . . . . . . . . . 12
3.5 Suspension of Deposits . . . . . . . . . . . . . . . . . . . . 12
3.6 Payments to Trustee . . . . . . . . . . . . . . . . . . . . . 13
3.7 Limitation on Deposit . . . . . . . . . . . . . . . . . . . . 13
ARTICLE 4 - COMPANY CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . 13
4.1 Amount of Company Contributions . . . . . . . . . . . . . . . 13
4.2 Transfer of Company Contributions to Trustee . . . . . . . . . 14
4.3 Reduction of Company Contributions . . . . . . . . . . . . . . 14
4.4 Return of Contributions to Employers . . . . . . . . . . . . . 14
4.5 Provision Pursuant to Code Section 415(c) . . . . . . . . . . 15
4.6 Provision Pursuant to Code Section 415(e) . . . . . . . . . . 15
4.7 Other Code Section 415 Provisions . . . . . . . . . . . . . . 18
ARTICLE 5 - INVESTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.1 Investment Options . . . . . . . . . . . . . . . . . . . . . . 18
5.2 Account . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.3 Investment of Accounts . . . . . . . . . . . . . . . . . . . . 19
5.4 Change of Investment Option . . . . . . . . . . . . . . . . . 19
5.5 Investment Direction Procedures . . . . . . . . . . . . . . . 19
5.6 Valuation of Investment Options . . . . . . . . . . . . . . . 19
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5.7 Purchase or Sale of Company Stock . . . . . . . . . . . . . . 21
5.8 Registration of Company Stock . . . . . . . . . . . . . . . . 21
ARTICLE 6 - VESTING OF DEPOSITS AND CONTRIBUTIONS . . . . . . . . . . . . 21
6.1 Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.2 Contributions . . . . . . . . . . . . . . . . . . . . . . . . 21
6.3 Rollover and Transfer Contributions . . . . . . . . . . . . . 22
ARTICLE 7 - DISTRIBUTIONS AND WITHDRAWALS . . . . . . . . . . . . . . . . 22
7.1 Distributions Only as Provided . . . . . . . . . . . . . . . . 22
7.2 Distributions on Termination of Employment . . . . . . . . . . 22
7.3 Distributions on Death or Disability . . . . . . . . . . . . . 25
7.4 Valuation Upon Distribution . . . . . . . . . . . . . . . . . 25
7.5 Rules Relating to Annuities . . . . . . . . . . . . . . . . . 25
7.6 Timing of Distribution . . . . . . . . . . . . . . . . . . . . 26
7.7 Withdrawal of Accounts . . . . . . . . . . . . . . . . . . . . 28
7.8 Direct Rollovers . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE 8 - ADMINISTRATION OF THE PLAN AND TRUST AGREEMENT . . . . . . . 31
8.1 Responsibility for Administration . . . . . . . . . . . . . . 31
8.2 Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.3 Statement of Accounts . . . . . . . . . . . . . . . . . . . . 31
8.4 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.5 The Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . 31
8.6 No Guarantee Against Loss . . . . . . . . . . . . . . . . . . 32
8.7 Payment of Benefits . . . . . . . . . . . . . . . . . . . . . 32
8.8 Requirement of Written Action . . . . . . . . . . . . . . . . 32
8.9 Correction of Participants' Accounts . . . . . . . . . . . . . 32
ARTICLE 9 - CLAIMS PROCEDURES . . . . . . . . . . . . . . . . . . . . . . 33
9.1 Method of Filing Claim . . . . . . . . . . . . . . . . . . . . 33
9.2 Review Procedure . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE 10 - FIDUCIARY RESPONSIBILITY . . . . . . . . . . . . . . . . . . 34
10.1 Immunities . . . . . . . . . . . . . . . . . . . . . . . . . 34
10.2 Allocation and Delegation of Fiduciary Responsibilities . . . 34
ARTICLE 11 - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . 35
11.1 Spendthrift Provisions . . . . . . . . . . . . . . . . . . . 35
11.2 Facility of Payment . . . . . . . . . . . . . . . . . . . . . 35
11.3 No Enlargement of Employment Rights . . . . . . . . . . . . . 36
11.4 Merger or Transfer of Assets . . . . . . . . . . . . . . . . 36
11.5 Severability Provision . . . . . . . . . . . . . . . . . . . 36
ARTICLE 12 - EMPLOYERS . . . . . . . . . . . . . . . . . . . . . . . . . 36
12.1 Adoption by Other Corporations . . . . . . . . . . . . . . . 36
12.2 Contribution of Employers . . . . . . . . . . . . . . . . . . 36
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12.3 Withdrawal of Employer . . . . . . . . . . . . . . . . . . . 37
ARTICLE 13 - AMENDMENT OR TERMINATION . . . . . . . . . . . . . . . . . . 37
13.1 Right to Amend or Terminate . . . . . . . . . . . . . . . . . 37
13.2 Procedure for Termination or Amendment . . . . . . . . . . . 38
13.3 Distribution Upon Termination . . . . . . . . . . . . . . . . 38
13.4 Adverse Modification . . . . . . . . . . . . . . . . . . . . 38
13.5 Subsidiary Cessation . . . . . . . . . . . . . . . . . . . . 39
13.6 Provision Pursuant to Code Section 411(d)(3) . . . . . . . . 39
ARTICLE 14 - TOP-HEAVY PLAN REQUIREMENTS . . . . . . . . . . . . . . . . 39
14.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 39
14.2 Top-Heavy Determination . . . . . . . . . . . . . . . . . . . 40
14.3 Top-Heavy Requirements . . . . . . . . . . . . . . . . . . . 40
14.4 Super Top-Heavy Requirements . . . . . . . . . . . . . . . . 41
14.5 Benefit Accrual Requirements . . . . . . . . . . . . . . . . 42
ARTICLE 15 - LIMITATIONS ON BEFORE-TAX DEPOSITS AND CONTRIBUTIONS . . . . 43
15.1 Average Deferral Percentage . . . . . . . . . . . . . . . . . 43
15.2 Average Contribution Percentage . . . . . . . . . . . . . . . 43
15.3 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 43
15.4 Special Rules . . . . . . . . . . . . . . . . . . . . . . . . 45
15.5 Multiple Use of Alternative Limitation . . . . . . . . . . . 45
ARTICLE 16 - DISTRIBUTION OF EXCESS CONTRIBUTIONS
AND EXCESS AGGREGATE CONTRIBUTIONS . . . . . . . . . . . . 45
16.1 Reduction of Excess Contributions . . . . . . . . . . . . . . 45
16.2 Reduction of Excess Aggregate Contributions . . . . . . . . . 46
16.3 Determination of Income or Loss . . . . . . . . . . . . . . . 47
16.4 Timing of Distributions . . . . . . . . . . . . . . . . . . . 47
ARTICLE 17 - LOANS TO PARTICIPANTS . . . . . . . . . . . . . . . . . . . 47
17.1 Eligibility for Borrowing . . . . . . . . . . . . . . . . . . 47
17.2 Amount of Loans . . . . . . . . . . . . . . . . . . . . . . . 47
17.3 Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . 48
17.4 Term of Loan . . . . . . . . . . . . . . . . . . . . . . . . 48
17.5 Disbursement and Security . . . . . . . . . . . . . . . . . . 49
17.6 Repayment of Loans . . . . . . . . . . . . . . . . . . . . . 49
17.7 Defaults and Remedies . . . . . . . . . . . . . . . . . . . . 50
17.8 Loan Rules . . . . . . . . . . . . . . . . . . . . . . . . . 51
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CENTRAL AND SOUTH WEST CORPORATION
RETIREMENT SAVINGS PLAN
Central and South West Corporation, a Delaware corporation, hereby
amends and restates the thrift plan known as the Central and South West
Corporation Thrift Plus, generally effective as of July 1, 1997, and
redesignates the thrift plan as the Central and South West Corporation
Retirement Savings Plan (the "Plan").
Except as otherwise provided in the Plan, the provisions of the Plan as
amended and restated herein will apply to each Participant who completes an
Hour of Service with an Employer after June 30, 1997. However, a
Participant's benefit which is protected from being decreased or eliminated
in any respect under Code section 411(d) (6), and the Participant's vested
interest in such benefit, will not be less under the terms of the Plan set
forth below than under the terms of the Plan in effect on June 30, 1997.
The Plan is a defined benefit contribution plan with a cash or deferred
feature intended to qualify under Code sections 401(a) and 401(k), and the
trust previously established pursuant to the Plan is an employees' trust
intended to constitute a tax-exempt organization under Code section 501(a).
The Plan is also intended to satisfy the requirements of ERISA section
404(c). Words and phrases with initial capital letters used generally
throughout the Plan are defined in Article 1.
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ARTICLE 1 - DEFINITIONS
1.1 Definitions: The following terms when used herein with
initial capital letters, unless the context clearly indicates otherwise,
shall have the following respective meanings:
(1) Account: The account provided for in Section 5.2.
(2) Account Balance: The value of a Participant's Account as
determined under the applicable provisions of Article 5 as of the Valuation
Date coinciding with or next succeeding the event or circumstance requiring
the valuation unless some other date shall be specifically provided.
(3) Administrator or Plan Administrator: The Administrator of the
Plan, as defined in ERISA section 3 (16) (A) and Code section 414(g), shall
be the Company, which may delegate all or any part of its powers, duties and
authorities in such capacity (without ceasing to be the Administrator of the
Plan) as hereinafter provided.
(4) After-Tax Deposits: Deposits to the Plan made by a
Participant (other than Before-Tax Deposits) through payroll deductions as
provided for in Section 3.2.
(5) Before-Tax Deposits: Deposits to the Plan made pursuant to a
Participant's Compensation Reduction and Deferral Authorization as provided
for in Section 3.3
(6) Beneficiary: A Participant's Spouse or, such person or
persons other than, or in addition to, this Spouse as may be designated by a
Participant as his death beneficiary under the Plan. Such a designation may
be made, revoked or changed only in accordance with rules and procedures
adopted from time to time by the Benefits Advisory Committee and by an
instrument which is signed by the Participant, which includes his Spouse's
written consent (in the manner described below) to the action to be taken
pursuant to such instrument (unless such action results in the Spouse being
named as the Participant's sole Beneficiary). A Spouse's consent required by
this subsection shall be signed by the Spouse, shall acknowledge the effect
of such consent, shall be witnessed by a notary public and shall be effective
only with respect to such Spouse. At any time when all the persons
designated by the Participant as his Beneficiary have ceased to exist or a
Participant has died without designating a Beneficiary, the Participant's
Beneficiary shall be his Spouse, if he has one or if he has no Spouse, his
then living children (who will share equally in any benefit payable under the
Plan), and if he has no surviving children, his surviving parent or parents,
and if he has no surviving parents, his estate. For purposes of this
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Section, a Participant's children include his natural children, stepchildren,
foster children and legally adopted children.
(7) Benefits Advisory Committee: The committee having certain
powers and authority with respect to the management and control of the Plan
as constituted in accordance with the Rules.
(8) Benefits Appeals Committee: The committee having certain
powers and authority with respect to the review of claims under the Plan as
constituted in accordance with the Rules.
(9) Board of Directors: The Board of Directors of the Company.
(10) Code: The Internal Revenue Code of 1986, as it has been and
may be amended from time to time, and any successor United States taxing or
revenue law.
(11) Company: Central and South West Corporation, a Delaware
corporation.
(12) Company Contribution or Contribution: A contribution to the
Trust Fund made by the Employers.
(13) Company Stock: Common stock of the Company.
(14) Compensation: The remuneration paid to an Employee by an
Employer as base pay (as hereinafter defined), overtime, shift differential
pay and bonuses, excluding, however, any such remuneration paid to the
Employee before he becomes a Participant. For purposes of this Section,
"base pay" means the Employee's regular compensation and commission income,
exclusive of bonuses, overtime, expense allowances and other extraordinary
remuneration. Compensation is calculated before taking into account the
amount of any salary reduction contributions pursuant to a cash or deferred
arrangement meeting the requirements of Code section 401(k) or a cafeteria
plan meeting the requirements of Code section 125.
Notwithstanding any other provision of the Plan, for purposes of
Code section 415, the term "Compensation" means (a) for Plan Years ending
before January 1, 1998, an Employee's total compensation for a Plan Year paid
by the Employers as reported on Form W-2 to be filed with the Internal
Revenue Service and (b) for Plan Years beginning after December 31, 1997,
such total compensation plus the amount of any salary reduction contributions
pursuant to a cash or deferred arrangement meeting the requirements of Code
section 401(k) or a cafeteria plan meeting the requirements of Code section
125.
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An Employee's annual Compensation for all purposes of the Plan
shall be limited to $150, 000, as adjusted in regulations prescribed by the
Secretary of the Treasury. This limitation will be satisfied with respect to
a Participant's Deposits for a Plan Year if the amount of such Deposits does
not exceed 15% of the Participant's Compensation for the Plan Year not in
excess of $150,000, adjusted in regulations prescribed by the Secretary of
the Treasury, notwithstanding the fact that the Deposits elected by the
Participant are administered as a percentage of his Compensation before
applying the foregoing dollar limitation or are contributed to the Plan after
the Participant's Compensation for the Plan Year exceeds such dollar
limitation.
(15) Compensation Reduction and Deferral Authorization: A
Participant's authorization to an Employer to have the Employer contribute a
designated percentage of the Participant's Compensation to the Plan as a
Before-Tax Deposit in accordance with Section 3.3.
(16) Controlled Group: The Company and any and all other
corporations, trades, and/or businesses the employees of which together with
Employees of the Company are required by Code sections 414(b), (c), or (m) to
be treated as if they were employed by a single employer.
(17) Controlled Group Member: Each corporation or unincorporated
trade or business that is or was a member of the Controlled Group, but only
during such period as it is or was a member of the Controlled Group.
(18) Deferral Percentage: A specified percentage by which a
Participant authorizes the reduction of his Compensation (subject to
limitation under applicable provisions of the Plan).
(19) Deposits: After-Tax Deposits pursuant to Section 3.2 and/or
Before-Tax Deposits pursuant to Section 3.3.
(20) Disabled: An Employee shall be Disabled for purposes of the
Plan if he has incurred a disability within the meaning of any long term
disability plan maintained by a Controlled Group Member in which the Employee
is eligible to participate and the Employee is eligible to receive such
disability plan benefits or would be eligible to receive such disability plan
benefits if he had been a participant in such disability plan.
(21) Employee: A person who is employed on either a full-time or
part-time basis on the active payroll by any Controlled Group Member if their
relationship is, for federal income tax purposes, that of employer and
employee.
(22) Employer: The Company and any other member of the Controlled
Group which adopts the Plan pursuant to Article 12 hereof. However, in the
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case of any entity which adopts the Plan and which ceases to exist or
withdraws or is eliminated from the Plan, it shall not thereafter be an
Employer.
(23) ERISA: The Employee Retirement Income Security Act of 1974,
as it has been and may be amended from time to time.
(24) ESOP: The Central and South West Corporation Employees'
Stock Ownership Plan previously terminated with the approval of the Board of
Directors.
(25) ESOP Account Balance: The portion of a Participant's benefit
under the ESOP that the Participant elected to have transferred to the Plan.
(26) Fiduciary: Any person, including the Named Fiduciaries, who
is a "fiduciary" as defined by Section 3(21) of ERISA.
(27) Former BREMCO Employee: A person who was formerly employed
by Bossier Rural Electric Membership Cooperative Inc. and who became an
Employee on July 1, 1993, as a result of the acquisition of such Cooperative
by Southwestern Electric Power Company.
(28) Former TEX/CON Employee: A person who was formerly employed
by TEX/CON Oil and Gas Company and who became an Employee in connection with
the purchase of all of the shares of the common stock of Lear Petroleum
Corporation by Transok, Inc.
(29) Hardship: The conditions in respect of a Participant
described in Section 7.7(2).
(30) Highly Compensated Employee: For Plan Years beginning after
December 31, 1996, an Employee who was a 5-percent owner at any time during
the Plan Year or the preceding Plan Year or who for the preceding Plan Year
had Compensation (as defined in Section 15.3(6)) in excess of $80,000 (as
adjusted pursuant to Code section 415(d)) and, if the Company elects, was in
the top-paid group for the preceding Plan Year.
(31) Home Loan: A Loan used for the initial purchase of any
dwelling unit which, within a reasonable period of time, is to be used
(determined at the time the Loan is made) as the principal residence of the
Participant.
(32) Hour of Service: "Hour of Service" shall mean, with respect
to an Employee:
(a) Each hour for which the Employee is paid, or entitled to
payment for the performance of duties for a Controlled Group Member;
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(b) Each hour for which an Employee is paid, or entitled to
payment, by a Controlled Group Member on account of a period of time
during which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation, holiday,
illness, incapacity (including disability), layoff, jury duty, military
duty or leave of absence, up to a maximum of 501 hours for any
continuous period;
(c) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by a Controlled Group Member;
(d) Hours of Service under paragraphs (b) and (c) above shall be
determined and credited in accordance with Subparagraphs (b) and (c) of
Department of Labor Regulation Section 2530.200b-2 or any successor
regulation thereto; and
(e) If an Employee is absent from work for any period by reason of
the pregnancy of the Employee, by reason of the birth of a child of the
Employee, by reason of the placement of a child with the Employee, or
for purposes of caring for a child for a period beginning immediately
following the birth or placement of that child, the Employee will be
credited with Hours of Service (solely for the purpose of determining
whether he has a one-year break in service under the Plan) equal to (i)
the number of Hours of Service which otherwise would normally have been
credited to him but for his absence, or (ii) if the number of Hours of
Service under clause (i) is not determinable, 8 Hours of Service per
normal workday of the absence, provided, however, that the total number
of Hours of Service credited to an Employee under this subsection (e) by
reason of any pregnancy, birth or placement will not exceed 501 Hours of
Service. Hours of Service will not be credited to an Employee under
this subsection (d) unless the Employee furnishes to the Plan
Administrator such timely information as the Plan Administrator may
reasonably require to establish that the Employee's absence from work is
for a reason specified in this subsection (e) and the number of days for
which there was such an absence.
(f) With respect to any period of time ending prior to September
27, 1991, the Hours of Service with respect to an Employee who is a
Former TEX/CON Employee shall be determined, solely for the purpose of
determining his Years of Service for purposes of Section 2.1 and Section
6.2(l), as if the term "Controlled Group" was defined to include TEX/CON
Oil and Gas Company, BP Exploration Inc., Lear Petroleum Corporation,
any entity in which Lear Petroleum Corporation beneficially owns,
directly or indirectly, more than 50% of either the equity interests or
the voting control, and any Affiliate of any of the foregoing. Solely
for purposes of the immediately preceding sentence, the term "Affiliate"
shall mean any entity that directly, or indirectly through one or more
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intermediaries, controls or is controlled by or is under common control
with the entity specified.
(g) With respect to any period of time ending prior to July 1,
1993, the Hours of Service with respect to an Employee who is a Former
BREMCO Employee shall be determined, solely for the purpose of
determining his Years of Service for purposes of Sections 2.1 and
6.2(l), as if the term "Controlled Group" included Bossier Rural
Electric Membership Cooperative Inc. and any Affiliate of such
Cooperative. Solely for purposes of the immediately preceding sentence,
the term "Affiliate" shall mean any entity that directly, or indirectly
through one or more intermediaries, controls or is controlled by or is
under common control with Bossier Rural Electric Membership Cooperative
Inc.
(33) Investment Committee: The committee having certain functions
and duties and powers and authority with respect to the assets of the Plan as
constituted in accordance with the Rules.
(34) Investment Options: The options provided for the investment
of Deposits, Company Contributions, Rollover Contributions and Transfer
Contributions, as determined under Section 5.1.
(35) Investment Policy Committee: The committee having certain
functions and duties and powers and authority with respect to the assets of
the Plan as constituted in accordance with the Rules.
(36) Loan: A loan to a Participant from the Plan pursuant to
Article 17.
(37) Loan Valuation Date: The Valuation Date as of which the
amount of a Loan shall be established and as of which the Loan amounts shall
be withdrawn from a Participant's Account and credited to the Outstanding
Loan Balance.
(38) Named Fiduciaries: The Named Fiduciaries under the Plan
shall be the Company and the members of each of the Investment Policy
Committee, the Investment Committee, the Benefits Advisory Committee and the
Benefits Appeals Committee in their capacity as such, each of which shall
have such powers, duties and authority as shall be specified in the Plan, the
Rules or the Trust Agreement and may delegate all or any part of such powers,
duties and authority as provided therein. Any other person may be designated
as a Named Fiduciary by the Board of Directors (and any such designation may
be terminated) as provided in the Rules.
(39) Non-Highly Compensated Employee: An Employee of the Employer
who is not a Highly Compensated Employee.
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(40) Outstanding Loan Balance: The account maintained in
accordance with Section 17.5(4) to record the balance of Loans to a
Participant outstanding from time to time.
(41) Participant: An employee or former employee who has become a
participant in the Plan in accordance with the provisions of Article 2 and
with respect to whom an Account is maintained, including, without limitation,
an Employee or former Employee who was a participant in the ESOP and who
elected, in accordance with procedures established under the ESOP, to
transfer all or any portion of his benefit under the ESOP to the Plan and who
has satisfied the eligibility requirements of Sections 2.1 and 2.2 and, if
Before-Tax Deposits are to be made, the requirements of Section 2.3.
(42) Plan: The Central and South West Corporation Retirement
Savings Plan (previously known as Central and South West Corporation Thrift
Plus), the terms and provisions of which are herein set forth, as the same
may be amended, supplemented or restated from time to time.
(43) Plan Year: The calendar year. The Plan Year is the fiscal
year on which the primary records of the Plan and the Trust Fund are to be
maintained.
(44) Qualified Plan: An employee benefit plan that is qualified
under Code section 401(a).
(45) Rollover Contribution: The transfer to the Plan by a
Participant of (i) all or part of the cash distributed to the Participant in
a distribution from a Qualified Plan that satisfies the requirements of an
Eligible Rollover Distribution set forth in Section 7.8(2) or (ii) the entire
amount distributed to the Participant from an individual retirement account
or annuity that is attributable solely to a rollover distribution from a
Qualified Plan; provided the transfer to the Plan is made within sixty days
after such distribution is received by the Participant. The Participant
shall make application for the Rollover Contribution in accordance with rules
and procedures prescribed by the Plan Administrator.
(46) Rules: The Rules of Operation and Administration of the
Central and South West Corporation Employee Benefits Program, as amended and
in effect from time to time.
(47) Spouse: The person to whom a Participant is legally married
at a specific time.
(48) Transfer Contribution: The direct transfer of assets to the
Plan on behalf of a Participant from another Qualified Plan, provided the
transfer will result in the deferral of taxation to the Participant on the
amount transferred to the Plan.
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(49) Trust Agreement: Any agreement between the Company and a
Trustee providing for the administration of the assets of the Plan.
(50) Trust Fund: The assets held by the Trustee under the
provisions of the Plan and the Trust Agreement.
(51) Trustee: Any bank that is a custodian or trustee and that is
appointed by the Board of Directors to hold and administer some or all of the
assets of the Plan pursuant to Article 8.
(52) Valuation Date: The date with respect to which the Trustee
determines the fair market value of the assets comprising the Trust Fund or
any portion thereof. The assets of the Trust Fund will be valued as of the
close of business on each day on which the New York Stock Exchange is open
for trading.
(53) Vested Interest: The entire amount of a Participant's
Account Balance which has not previously been withdrawn by him or distributed
to or for him and (a) which is derived from his Deposits, (b) which is (i)
derived from Company Contributions and (ii) is nonforfeitable pursuant to
Section 6.2 or other applicable provisions of the Plan, and/or (c) which is
derived from his Rollover Contributions and Transfer Contributions, including
his ESOP Account Balance.
(54) Year of Service: Any twelve-month period, beginning on the
date a Participant is first credited with an Hour of Service, and on each
anniversary thereof, in which a Participant is credited with at least 1,000
Hours of Service.
1.2 Construction: (1) Unless the context otherwise indicates,
the masculine wherever used herein shall include the feminine and neuter, the
singular shall include the plural and words such as "herein", "hereof",
"hereby", "hereunder" and words of similar import refer to the Plan as a
whole and not to any particular part thereof.
(2) Where headings have been supplied to portions of the Plan they
have been supplied for convenience only and are not to be taken as limiting
or extending the meaning of any of its provisions.
(3) Wherever the word "person" appears in the Plan, it shall refer
to both natural and legal persons.
(4) Except to the extent federal law controls, the Plan shall be
governed, construed and administered according to the laws of the State of
Texas, including without limitation the Texas statute of limitations, but
without regard to the principles of conflicts of law of such State. All
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persons accepting or claiming benefits under the Plan shall be bound by and
deemed to consent to its provisions.
ARTICLE 2 - PARTICIPATION
2.1 Eligibility to Participate: Except as otherwise provided in
this Section, each full-time Employee who was not eligible to participate in
the Plan on June 30, 1997, will become eligible to participate in the Plan as
of the payroll period that includes that later of his date of hire by an
Employer or July 1, 1997. Each part-time or temporary Employee who was not
eligible to participate in the Plan on June 30, 1997, will become eligible to
participate in the Plan as of the first payroll period immediately following
the date on which the Employee has completed one Year of Service, provided he
is then employed by an Employer.
Notwithstanding the foregoing, an Employee who is otherwise
eligible to participate in the Plan will not become or continue as an active
Participant if (i) he is covered by a collective bargaining agreement that
expressly does not permit participation in the Plan, provided that the
representative of the Employees with whom the collective bargaining agreement
is executed has had an opportunity to bargain concerning retirement benefits
for those Employees; (ii) he is a nonresident alien who receives no earned
income (within the meaning of Code section 911(d)(2)) from an Employer which
constitutes income from sources within the United States (within the meaning
of Code section 861(a)(3)); (iii) he is a leased employee required to be
treated as an Employee under Code section 414(n) or otherwise performs
services under an arrangement with an employment agency, leasing organization
or any other person or entity that provides personnel to one or more
Controlled Group Members; (iv) he is classified by an Employer as an
independent contractor for federal income tax and withholding purposes whose
compensation for services is reported on a form other than Form W-2 or any
successor form for reporting wages paid to and taxes withheld from employees;
(v) he is on temporary assignment in the United States but more than 50% of
his Compensation is paid by a Controlled Group Member organized under the
laws of a jurisdiction outside the United States that is not an Employer; or
(vi) he is employed by a Controlled Group Member or an organizational unit
thereof that has not been designated as an Employer by the Board. An
individual described in clause (iii) or clause (iv) of the preceding sentence
who is subsequently determined to be a common law employee of an Employer
will not be eligible to participate in the Plan during any period prior to
the date on which such determination is actually and finally made. The
exclusion provided in clause (vi) of the preceding sentence will not apply to
an Employee of an Employer on temporary assignment outside of the United
States even though a portion of his Compensation is being paid by a
Controlled Group Member that is not an Employer.
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2.2 Commencement of Participation: In order for an eligible
Employee to become a Participant, he must elect to participate in the Plan in
accordance with rules and procedures established from time to time by the
Benefits Advisory Committee. Such election will include without limitation
the Employee's authorization to his Employer pursuant to a Compensation
Reduction and Deferral Authorization to deduct Deposits from his
Compensation. A Participant's election to participate shall remain in effect
unless and until such election is modified, terminated or otherwise becomes
ineffective pursuant to the terms of the Plan.
2.3 Duration of Participation and Eligibility for Contributions:
A Participant shall remain a Participant so long as a portion of the Trust
Fund is credited to his Account; provided, however, that if a Participant
ceases to be an eligible Employee, no further Deposits, Contributions,
Rollover Contributions or Transfer Contributions may be made by or for him
until he again becomes an eligible Employee and has again elected to
participate in the Plan pursuant to Section 2.2.
2.4 Reemployment Provisions: All Hours of Service are counted in
determining eligibility to participate. If an Employee or Participant
terminates employment and is reemployed at any time by a Controlled Group
Member, he will be eligible to participate in the Plan as of the payroll
period that includes the later of the date determined under Section 2.1 or
the date he is credited with one or more Hours of Service by an Employer
after reemployment.
2.5 Veterans' Reemployment Rights: (1) An Employee who returns
to employment with a Controlled Group Member following a period of Qualified
Military Service (as hereinafter defined) will not be treated as having
incurred any break in service years because of his period of Qualified
Military Service. In addition, each period of Qualified Military Service
will, upon reemployment with a Controlled Group Member, be deemed to be
employment with such Controlled Group Member for purposes of the Plan.
(2) An Employee described in subsection (1) above will be treated
for Plan purposes as having received compensation from the Controlled Group
Member during each period of Qualified Military Service equal to (a) the
compensation the Employee would have received during such period of Qualified
Military Service if he were not in Qualified Military Service, based on the
rate of pay the Employee would have received from the Controlled Group Member
but for his absence during the period of Qualified Military Service or (b) if
the compensation the Employee would have received during his period of
Qualified Military Service is not reasonably certain, the Employee's average
compensation from the employer during the 12-month period immediately
preceding the Qualified Military Service, or if shorter, during the period of
employment immediately preceding the Qualified Military Service.
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(3) For purposes of the Plan, the term "Qualified Military
Service" means service in the uniformed services (within the meaning of the
Uniformed Services Employment and Reemployment Rights Act ("USERRA"),
provided the Employee is entitled under USERRA to reemployment rights with a
Controlled Group Member and the Employee returns to employment with the
Controlled Group Member within the period in which such reemployment rights
are guaranteed.
(4) Pursuant to procedures adopted from time to time by the
Benefits Advisory Committee, an Employee described in subsection (1) above
may elect additional Deposits and will receive an allocation of additional
Company Contributions for the period of his Qualified Military Service. Such
additional Deposits and Company Contributions may be made during the period
beginning on the date of the Employee's reemployment and ending on the date
that is five years later or, if less, during the period that is three times
the Employee's period of Qualified Military Service, which period will begin
on the Employee's date of reemployment. An Employee's Deposits and
allocation of Company Contributions made pursuant to this Section will be
subject to the limitations of the Plan and the Code applicable to the years
of the Employee's period of Qualified Military Service, except that the
Average Deferral Percentage and Average Contribution Percentage limitations
described in Section 15.1 will not be recalculated for such years and will be
determined for the Plan Years in which the make-up Deposits and Company
Contributions are made without regard to such make-up Deposits and Company
Contributions.
ARTICLE 3 - PARTICIPANT DEPOSITS
3.1 Deposits: A Participant may elect to make Deposits to the
Plan pursuant to Section 3.2 and/or Section 3.3; provided, however, that the
aggregate Deposits to the Plan for any payroll period shall not exceed 15% of
the Participant's Compensation paid to the Participant for such period.
3.2 After-Tax Deposits: A Participant may elect to make, through
payroll deductions, After-Tax Deposits to the Plan from his Compensation in
an amount equal to any whole percentage up to 15% of his Compensation,
subject, however, to the aggregate limitation set forth in Section 3.1.
3.3 Before-Tax Deposits: (1) A Participant may elect to make
Deposits to the Plan by causing the Employer to contribute on his behalf,
pursuant to a Compensation Reduction and Deferral Authorization provided for
in Section 2.2, any whole percentage amount, up to 15% of his Compensation,
subject, however, to the aggregate limitation set forth in Section 3.1. In
no event shall a Participant's Before-Tax Deposits in any Plan Year exceed
$9,500, as adjusted for Plan Years beginning after December 31, 1996, in
regulations prescribed by the Secretary of the Treasury.
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(2) If, for any calendar year, a Participant has made tax-deferred
contributions to another 401(k) plan or plans (other than the Plan) whether
or not maintained by a Controlled Group Member and such contributions
(a) equal or exceed the limitation set forth in subsection (1) of
this Section, the Participant may not make any Before-Tax Deposits for
such year, or
(b) together with the Participant's aggregate Before-Tax Deposits,
exceed the limitation set forth in subsection (1) of this Section, the
Benefits Advisory Committee, at the Participant's direction, shall cause
the excess Before-Tax Deposits (and the earnings attributable thereto)
to be returned to the Participant no later than April 15 of the calendar
year next following the calendar year to which the excess relates.
3.4 Changes in Participant Deposits: (1) Any payroll deduction
percentage designated or Deferral Percentage agreed to by a Participant shall
continue in effect, notwithstanding any change in his Compensation, until a
modification of the deduction percentage or Deferral Percentage, as the case
may be, is requested by him. A Participant may modify any such deduction
percentage or Deferral Percentage by designating the new deduction percentage
or Deferral Percentage in the manner specified by the Benefits Advisory
Committee and the modification shall be effective as of the first payroll
period following receipt of such designation, or as soon thereafter as
administratively feasible. If a Participant's Compensation changes, a
deduction percentage or Deferral Percentage will be applied to his new
Compensation.
(2) Notwithstanding the foregoing provisions of this Section, in
the event that the Deferral Percentage in effect with respect to a
Participant would cause the aggregate Before-Tax Deposits for such
Participant to exceed $9,500 for the Plan Year ending on December 31, 1997
(for example, because of an increase in Compensation since the time of the
original election), or such other dollar limit as may be in effect with
respect to any other Plan Year in accordance with applicable Code provisions,
the excess payroll deduction will be made to the Plan as an After-Tax
Deposit. A Participant who does not wish to continue to make Deposits in
accordance with this subsection may modify his Deferral Percentage or
deduction percentage in accordance with Section 3.4(1).
3.5 Suspension of Deposits: Upon prior notice to the Plan in the
form or manner designated by the Benefits Advisory Committee, a Participant
may terminate any payroll deduction percentage or Compensation Reduction and
Deferral Authorization designated or entered into by him and thereby suspend
all of his After-Tax Deposits or all of his Before-Tax Deposits, as the case
may be, effective as of the first day of the following payroll period, or as
soon thereafter as administratively feasible. All Deposits with respect to a
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Participant shall be suspended automatically for the period of any approved
leave of absence without pay, including military and other governmental
service and during such period or a period for which the Participant has
suspended Deposits pursuant to this Section, all Company Contributions shall
be suspended automatically. A Participant who suspends his Deposits may
resume making Deposits to the Plan at any time by providing notice to the
Plan in the form or manner designated by the Benefits Advisory Committee,
effective as of the first day of the following payroll period or as soon
thereafter as administratively feasible.
3.6 Payments to Trustee: The Deposits of each Participant shall
be transferred by the Employers to the Trustee as soon as administratively
feasible, but in no event later than the 15th business day of the month
following the month in which such Deposits are deducted from the
Participant's Compensation, and the Trustee shall cause such Deposits to be
held in trust, subject to the provisions of the Plan.
3.7 Limitation on Deposit: Notwithstanding any other provision of
the Plan, the Plan Administrator may take such action as it deems appropriate
to limit (1) the amount of Before-Tax Deposits to the extent necessary to
comply with the actual deferral percentage test applicable thereto under Code
section 401(k)(3) or (2) the amount of all or any of the After-Tax Deposits
or Company Contributions to the extent necessary to comply with the actual
deferral percentage test applicable thereto under Code section 401(m). In
the event the Deposits made on behalf of Highly Compensated Employees for any
Plan Year exceed the amounts required to satisfy such tests, the Plan
Administrator shall cause such excess amounts (and the earnings attributable
thereto) to be returned to such Highly Compensated Employees within 2 1/2
months (or such later time as determined by the Plan Administrator which
shall not exceed twelve months) following the end of such Plan Year.
ARTICLE 4 - COMPANY CONTRIBUTIONS
4.1 Amount of Company Contributions: With respect to Deposits
made on or after July 1, 1997, and subject to the limitations under Section
4.5 and Article 15, the Employers shall contribute to the Trust Fund on
behalf of each Participant an amount equal to 75% of the Participant's
Deposits for each payroll period, but only to the extent that the
Participant's Deposits do not exceed 6% of the Participant's Compensation for
the payroll period. The Employers may make such other matching contributions
to the Trust Fund as determined in their sole discretion consistent with any
applicable law, and such contributions shall be allocated as a single,
uniform percentage of all Participants' Deposits as provided in the
resolutions authorizing such additional contributions. In addition, the
Employers shall make an additional matching contribution for a Participant at
the end of each Plan Year beginning after December 31, 1992, and before
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January 1, 1998, if necessary to cause the total matching Company
Contributions for such Participant to be equal to the matching contributions
the Participant would have received if matching contributions were made on
the basis of Deposits for the entire Plan Year, rather than on the basis of
Deposits for each payroll period.
4.2 Transfer of Company Contributions to Trustee: Company
Contributions for payroll periods ending in a month shall be transferred to
the Trustee as soon as administratively feasible, but in no event later than
the 15th business day of the month following the month for which the Company
Contributions are made.
4.3 Reduction of Company Contributions: The aggregate amount of
Company Contributions required to be contributed on behalf of all
Participants pursuant to Section 4.1 shall be reduced by amounts which have
been forfeited in accordance with the provisions of Sections 4.5(3) and
7.2(5).
4.4 Return of Contributions to Employers: (1) Except as provided
in Section 4.4(2) or Section 4.3, amounts in the Trust Fund shall never be
returned to any Employer and shall be held for the exclusive purpose of
providing benefits to Participants and their Beneficiaries.
(2) If any Contribution is made by an Employer to the Trust Fund
due to a mistake of fact, such Contribution shall be returned to the Employer
upon its request generally within one year after the Contribution was made.
If the Internal Revenue Service shall determine that the Plan, as applied to
a corporation or business organization which has adopted the Plan pursuant to
Article 12, is not qualified under Code section 401(a) for the Plan year in
which such adoption is effective, all Contributions made by or an behalf of
such corporation or business organization shall, upon request, be returned to
such corporation or business organization generally within one year after the
denial of qualification; provided, however, that this provision shall apply
only with respect to the initial qualification of the Plan, as applied to
such corporation or business organization. If the Internal Revenue Service
shall determine that an Employer has contributed an amount for any Plan Year
which is in excess of the amount which is deductible by it for such year
under Code section 404, upon the request of the Employer, the excess
contribution shall be returned to the Employer generally within one year
after the deduction was disallowed. In the case of a return of assets due to
initial failure of the Plan to qualify, the entire assets of the Trust Fund
attributable to Contributions shall be returned to the Employers. In the
case of a return of Contributions due to mistake of fact or disallowance of a
deduction, earnings attributable to the Contributions may not be returned to
an Employer, but losses attributable to such Contributions shall reduce the
amount to be returned.
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4.5 Provision Pursuant to Code Section 415(c): (1)
Notwithstanding any other provision of the Plan, the aggregate annual
additions (as defined in subsection (2) of this Section) to a Participant's
Account (and to any account maintained for him under any other defined
contribution plan, whether or not terminated, maintained, or previously
maintained, by any Controlled Group Member) for any Plan Year shall in no
event exceed the lesser of (a) $30,000 or such adjusted amount as shall be
prescribed by the Secretary of the Treasury pursuant to Code section 415(d)
to reflect increases in the cost-of-living, or (b) 25% of the Participant's
Compensation for such year.
(2) For the purpose of this Section, the term "annual additions"
means the sum for any Plan Year of:
(a) Company Contributions (including amounts described in
Subsection (3) of this Section and Section 7.2(4)) credited to the
Participant's Account,
(b) the amount of Deposits made by the Participant, without regard
to any Rollover Contributions or Transfer Contributions,
(c) the amount allocated after March 31, 1984 to an individual
medical benefit account (as defined in Code section 415(1)(2)) which is
part of a defined benefit plan (as defined in Code section 414(j)) or an
annuity plan; and
(d) the amount derived from contributions paid or accrued after
December 31, 1985 in taxable years ending after such date that are
attributable to post-retirement medical benefits allocated to the
separate account of a key employee (as defined in Code section
419A(d)(3)) under a welfare benefit fund (as hereafter defined). The
term "welfare benefit fund" means an organization described in paragraph
(7), (9), (17) or (20) of Code section 501(c), a trust, corporation or
other organization not exempt from federal income tax, or to the extent
provided in Treasury regulations, any account held for an employer by
any person, which is part of a plan of an employer through which the
employer provides benefits to employees or their beneficiaries, other
than a benefit to which Code sections 83(h), 404 (determined without
regard to section 404(b)(2)) or 404A applies, or to which an election
under Code section 463 applies.
(3) The excess, if any, of Contributions over the maximum annual
addition to a Participant's Account shall be applied to reduce subsequent
Contributions to the Trust Fund by such Participant's Employer.
4.6 Provision Pursuant to Code Section 415(e): (1) Except as
otherwise provided in Code section 415(e), in the case of a Participant who
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is also a participant in any defined benefit plan maintained by any
Controlled Group Member, the sum of the defined contribution plan fraction
and the defined benefit plan fraction for any Plan Year ending before
January 1, 2000 shall in no event exceed 1.0. For purposes of the preceding
sentence,
(a) the defined benefit plan fraction for any Plan Year is a
fraction (i) the numerator of which is the projected annual benefit of
the Participant under the plan (determined as of the close of the Plan
Year), and (ii) the denominator of which is the lesser of (A) the
product of 1.25, multiplied by the dollar limitation in effect under
Code section 415(b)(1)(A) for such Plan Year or (B) the product of 1.4,
multiplied by the amount which may be taken into account under Code
section 415(b)(1)(B) with respect to such Participant under the plan for
such Plan Year; and
(b) the defined contribution plan fraction for any Plan Year is a
fraction (i) the numerator of which is the sum of the annual additions
to the Participant's Account as of the close of the Plan Year and for
all prior Plan Years, and (ii) the denominator of which is the sum of
the lesser of the following amounts determined for such Plan Year and
for each prior Year of Service with the Controlled Group: (A) the
product of 1.25, multiplied by the dollar limitation in effect under
Code section 415(c)(1)(A) for such Plan Year and each such prior Year of
Service, or (B) the product of 1.4, multiplied by the amount which may
be taken into account under Code section 415(c)(1)(B) with respect to
such Participant under the plan for such Plan Year and each such prior
Year of Service.
In the event the Plan is determined to be a top-heavy plan pursuant
to Section 14.2 with respect to any Plan Year beginning after December 31,
1983, then, unless the requirements of Code section 416(h)(2) are met with
respect to the Plan, the number "1.0" shall be substituted for "1.25"
wherever it appears in this Section and "$41,500" will be substituted for
"$51,875" in Section 4.6(3)(b)(i).
(2) Notwithstanding the foregoing provisions of this Section, for
purposes of applying part (b) of subsection (1) of this Section with respect
to years beginning before January 1, 1976,
(a) the aggregate amount taken into account under clause (i) of
said part (b) shall not exceed the aggregate amount taken into account
under clause (ii) of said part (b), and
(b) the amount taken into account under Code section
415(c)(2)(B)(i) for any year concerned shall be an amount equal to --
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(i) the excess of the aggregate amount of Deposits for all
years beginning before January 1, 1976, during which the Employee
was an active Participant in the Plan, over 10 percent of the
Employee's aggregate Compensation for all such years, multiplied by
(ii) a fraction the numerator of which is 1 and the
denominator of which is the number of years beginning with January
1, 1976, during which the Employee was an active Participant in the
Plan.
Employee contributions made on or after October 2, 1973, shall be taken into
account under part (b) of this subsection only to the extent that the amount
of such contributions does not exceed the maximum amount of contributions
permissible under the Plan as in effect on October 2, 1973.
(3) At the election of the Plan Administrator, in applying part
(b) of subsection (1) of this Section with respect to any year ending after
December 31, 1982, the amount taken into account under clause (ii) of said
part (b) with respect to each Participant for all years ending before
January 1, 1983, shall be an amount equal to the product of --
(a) the amount determined under clause (ii) of said part (b) (as
in effect for the year ending in 1982), multiplied by
(b) the transition fraction. The term "transition fraction" shall
mean a fraction --
(i) the numerator of which is the lesser of (A) $51,875, or
(B) 1.4, multiplied by 25 percent of the Compensation of the
Participant for the year ending in 1981, and
(ii) the denominator of which is the lesser of (A) $41,500,
or (B) 25 percent of the Compensation of the Participant for the
year ending in 1981.
(4) If the sum of the defined benefit plan fraction and the
defined contribution plan fraction, as such fractions are computed pursuant
to the foregoing provisions of this Section exceeds 1.0 for a Plan Year
beginning before January 1, 1983, an amount shall be subtracted from the
numerator of the defined contribution plan fraction (not exceeding such
numerator) so that after such subtraction the sum of the defined benefit plan
fraction and the defined contribution plan fraction shall not exceed 1.0 for
such year. The provisions of this subsection shall be subject to and shall
be applied in accordance with regulations prescribed by the Secretary of the
Treasury or his delegate.
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(5) In the event a reduction is necessary to avoid exceeding the
limitations set forth in this Section, such reduction shall be made to the
Participant's projected annual benefit under the Central and South West
Corporation Cash Balance Retirement Plan.
(6) The foregoing provisions of this Section 4.6 will not apply to
any Plan Year beginning after December 31, 1999.
4.7 Other Code Section 415 Provisions: (1) For purposes of
applying the limitations set forth in Sections 4.5 and 4.6, all qualified
defined benefit plans (whether or not terminated) ever maintained by one or
more Controlled Group Members shall be treated as one defined benefit plan,
and all qualified defined contribution plans (whether or not terminated) ever
maintained by one or more Controlled Group Members shall be treated as one
defined contribution plan.
(2) For purposes of this Section and sections 4.5 and 4.6, the
term "Controlled Group Member" defined in Section 1.1 shall be construed in
light of Code section 415 (h).
ARTICLE 5 - INVESTMENTS
5.1 Investment Options: (1) The Investment Committee shall
establish from time to time Investment Options for Deposits, Company
Contributions, Rollover Contributions and Transfer Contributions. The
Trustee shall invest and reinvest the principal and income of each Investment
Option without distinction between principal and income and without regard to
any percentage limitation contained in any law (other than ERISA) or rules of
court applying to investments by trust companies, trustees or other
fiduciaries. Without limitation of the foregoing, the Investment Committee
may, to the extent permitted under the Plan and the Rules, direct that all or
any part of an Investment Option shall be invested by the Trustee in its
discretion. Up to 100% of the Trust Fund may be invested in Company Stock
pursuant to the Participants' instructions.
(2) Dividends, interest and other distributions received by the
Trustee in respect of each Investment Option shall be reinvested in the same
Option in accordance with the provisions of the Plan and the Trust Agreement.
(3) The Trustee may keep such portion of each Investment Option in
cash or cash equivalents to the extent provided in the Trust Agreement.
5.2 Account: There shall be established for each Participant
under the Plan an Account that shall reflect his (1) After-Tax Deposits,
(2) Before-Tax Deposits, (3) Company Contributions, (4) ESOP Account Balance,
and (5) any other Rollover Contributions or Transfer Contributions. Separate
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records shall be maintained for each Account showing the portion of such
Account invested in each Investment Option and showing the amount of
Deposits, Company Contributions, Rollover Contributions and Transfer
Contributions credited to each Account, payments and withdrawals therefrom
and the amount of income, expenses, gains and losses attributable thereto.
The interest of each Participant in the Trust Fund at any time shall be his
Account Balance.
5.3 Investment of Accounts: (1) Each Participant shall direct
that his Deposits, Company Contributions, and any Rollover Contributions or
Transfer Contributions be invested in one percent increments in each of the
Investment Options elected by the Participant.
(2) The portion of a Participant's Account that represents his
ESOP Account Balance shall be invested in the Investment Option consisting of
Company Stock, unless and until the Participant elects a different Investment
Option in accordance with Section 5.4.
5.4 Change of Investment Option: Subject to Section 5.5, a
Participant may change his Investment Option with respect to future Deposits,
Company Contributions, Rollover Contributions and Transfer Contributions, and
such change shall be effective as soon as administratively feasible following
receipt of notice by the Plan. In addition, subject to Section 5.5, a
Participant may transfer all or a portion of his Account Balance attributable
to his Deposits, Company Contributions, Rollover Contributions and Transfer
Contributions (including his ESOP Account Balance) from one Investment Option
to another, effective as soon as practicable after receipt of notice by the
Plan.
5.5 Investment Direction Procedures: The Benefits Advisory
Committee from time to time shall establish rules and procedures regarding
Participant investment directions under Sections 5.3 and 5.4, including,
without limitation, rules and procedures with respect to the manner in which
such directions may be furnished, the frequency with which such directions
may be changed during the Plan Year and the minimum portion of a
Participant's Account Balance that may be invested in any one investment
fund.
5.6 Valuation of Investment Options: (1) As of each Valuation
Date, the Trustee shall determine the value of assets held under each
Investment Option in accordance with subsection (4) of this Section. The
Trustee shall determine, from the change in value of each Investment Option
between the current Valuation Date and the then last preceding Valuation
Date, the net gain or loss of such Investment Option during such period
resulting from expenses paid and realized and unrealized earnings, profits
and losses of such Investment Option during such period. The transfer of
funds to or from an Investment Option pursuant to Section 5.4, Deposits,
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Company Contributions, Rollover Contributions and Transfer Contributions
(including transfer contributions from the ESOP) allocated to an Investment
Option, and payments, distributions and withdrawals from an Investment Option
to provide benefits under the Plan for Participants or Beneficiaries shall
not be deemed to be earnings, profits, expenses or losses of the Investment
Option.
(2) The Participant's Account Balance will be determined by
applying the closing market price of each Investment Option in which each
Account is invested on each Valuation Date to the share/unit balance of each
Investment Option in the Account as of the close of business on the Valuation
Date. Each Account will be further adjusted for withdrawals, distributions
and other additions or subtractions that may be appropriate.
(3) Except as may otherwise be provided by the Benefits Advisory
Committee, Deposits and Company Contributions shall normally be credited to
each Participant's Account on the Valuation Date when made, but in no event
shall Deposits be credited later than the 15th business day of the month
following the month in which Deposits are deducted from the Participant's
Compensation. Such Deposits and Company Contributions shall be allocated in
accordance with the Investment Option or Options chosen by such Participant
as soon as practicable after the Trustee has received such amounts and
appropriate instructions as to the allocation of such amounts among the
Investment Options.
(4) The Trustee shall determine, as follows, the value of assets
held under each Investment Option as of each Valuation Date:
(a) All securities (including Company Stock) and other property
held in such Option shall be valued at fair market value, or if the
market value is not readily ascertainable, at such amount as shall be
deemed by the Trustee to represent the fair value thereof. The fair
market value of units of an open-end investment company registered under
the Investment Companies Act of 1940 shall be the net asset value as
reported by such investment company, unless otherwise determined by the
Trustee. Brokerage commissions, transfer taxes, and other charges and
expenses in connection with the purchase, sale or distribution of
securities (including Company Stock) shall be added to the cost or
deducted from the proceeds of such securities, as determined by the
Trustee. The proceeds credited to an Account upon the sale or
redemption of any securities or units shall be the actual net proceeds.
(b) To the value thus determined there shall be added (i) interest
accrued but not collected on any interest bearing obligation and
dividends declared but not collected on a stock, which, if sold, would
be sold ex-dividend and (ii) the uninvested cash balance of such Option.
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(c) From the aggregate value so obtained there shall be deducted
(i) any reserve for contingencies, (ii) any taxes on the assets or the
income of the Participants held by the Trustee, or (iii) any
unliquidated liabilities, at the discretion of the Trustee.
(d) Notwithstanding the foregoing paragraphs of this subsection,
the value of any guaranteed income contract held pursuant to an
Investment Option shall be the value reported to the Trustee by the
issuing insurance company or bank or other financial institution or by
the bank or trust company operating or maintaining the collective,
common or pooled trust fund invested in such contracts, unless otherwise
determined by the Trustee.
(5) The reasonable and equitable decision of the Trustee as to the
value of each Investment Option as of each Valuation Date shall be conclusive
and binding upon all persons having any interest, direct or indirect, in such
Investment Option.
5.7 Purchase or Sale of Company Stock: Whenever the Trustee is
required to purchase or sell Company Stock for purposes of distributions,
withdrawals, the investment of Deposits, Company Contributions, Rollover
Contributions and Transfer Contributions, the change of Investment Options,
or otherwise, such purchases or sales shall be made either in the open
market, by private purchase from the Company, by matching purchases and sales
of such stock directed by two or more Participants or Beneficiaries
("Matching") or otherwise, as the Trustee shall determine in its sole
discretion. The Trustee in its discretion may, in the case of any Investment
Option which requires the purchase by it of securities (including Company
Stock) in the open market, time the execution of purchase orders for the
purpose of limiting or spreading daily volume of purchase, or otherwise as it
shall deem in the best interest of the Participants under such Option.
5.8 Registration of Company Stock: All shares of Company Stock
acquired by the Trustee pursuant to the Plan shall be held in the possession
of the Trustee until disposed of pursuant to the provisions of the Plan.
Such shares shall be registered in the name of the Trustee or its nominee.
ARTICLE 6 - VESTING OF DEPOSITS AND CONTRIBUTIONS
6.1 Deposits: The portion of a Participant's Account consisting
of any Deposits made by him or on his behalf (plus any net gain or less any
net loss thereon) shall at all times be 100% vested and nonforfeitable.
6.2 Contributions: (1) The portion of a Participant's Account
attributable to Company Contributions (plus any net gain or less any net loss
thereon) shall become 100% vested and nonforfeitable (a) on July 1, 1997, if
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the Participant has at least three Years of Service or has made at least
thirty-six monthly Deposits, which need not be consecutive, as of such date
and (b) if the Participant does not have at least three Years of Service or
has not made at least thirty-six monthly Deposits as of such date,
immediately after the Participant has completed at least five Years of
Service.
(2) Notwithstanding the provision of subsection (1) of this
Section, if a Participant's employment with the Controlled Group terminates
(a) due to the Participant's death, (b) after he has attained age fifty-five
(which will be considered the Plan's normal retirement age), or (c) after he
has become Disabled, his entire Account shall be nonforfeitable.
(3) If a person who is treated as a leased employee within the
meaning of Code section 414 for purposes of the Plan becomes regularly
employed (or deemed to be employed) on a full-time basis on the active
payroll by any Controlled Group Member, then such person's Years of Service
shall be determined, for purposes of this Section and Section 2.1, as if such
person had been employed on the active payroll by any Controlled Group Member
during the entire period for which such person had performed services for any
Controlled Group Member but had not been employed by a Controlled Group
Member.
6.3 Rollover and Transfer Contributions: The portion of a
Participant's Account attributable to Rollover Contributions or Transfer
Contributions (including his ESOP Account Balance) shall at all times be
nonforfeitable.
ARTICLE 7 - DISTRIBUTIONS AND WITHDRAWALS
7.1 Distributions Only as Provided: Participants' interests in
the Trust Fund shall only be distributable (and shall be distributed) as
provided in this Article or as required by a qualified domestic relations
order (as defined in Section 1.1). A Participant or Beneficiary eligible to
receive a distribution under the Plan shall elect to receive the distribution
in accordance with rules and procedures established from time to time by the
Benefits Advisory Committee and shall furnish such information as the Trustee
or Benefits Advisory Committee may reasonably require.
7.2 Distributions on Termination of Employment: (1) In the event
of his termination of employment with the Controlled Group for any reason
other than his death, a Participant shall receive his Vested Interest in a
lump sum payment, unless he elects an optional form of benefit pursuant to
subsection (2) below. Any amounts distributed to a Participant pursuant to
this Section shall be reduced to the extent the Participant's Account Balance
is subject to a pledge under Section 17.5(1). A Participant who elects a
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lump sum payment may elect to receive, to the extent practicable, any full
shares of Company Stock credited to his Account. Unless a Participant elects
shares of Company Stock, lump sum payments shall be made in cash.
(2) A Participant may elect to receive his benefits under the Plan
in an optional form (a) through the purchase by the Trustee from an insurance
company of an annuity in one of the following forms:
(i) a life annuity;
(ii) a life annuity with cash refund;
(iii) an annuity for a term certain of at least five years and
life thereafter;
(iv) an annuity for a term certain of at least ten years and life
thereafter;
(v) a joint and survivor annuity with cash refund;
(vi) a joint and survivor annuity payable to the Participant for
life and thereafter to his Spouse for the Spouse's life at the rate of
50% of the amount payable to the Participant; or
(vii) an annuity for a fixed term;
or (b) if he is at least fifty-five years of age when his employment with the
Controlled Group terminates, in equal installments at least annually over a
fixed period of not longer than the lesser of (i) fifteen years or (ii) the
life expectancy of the Participant. The Vested Interest of a Participant who
elects to receive benefits in the form of installments shall remain allocated
to his Account and shall continue to be invested pursuant to the
Participant's directions in accordance with the provisions of Article 5 until
fully distributed to him. Any annuity elected by a Participant shall be
subject to the following conditions:
(a) in the case of a contract purchased for a Participant and a
joint annuitant, the joint annuitant shall be the Participant's Spouse;
(b) any term certain or fixed term shall not extend over a period
longer than the lesser of (i) the life expectancy of the Participant or,
if applicable, the life expectancy of the Participant and his Spouse and
(ii) twenty years reduced by one year for each year the Participant is
over the age of sixty-five years; and
(c) payment of any cash refund under a life annuity shall be made
within five years of the death of the Participant, and payment of any
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cash refund under a joint and survivor annuity shall be made within five
years of the death of the last to die of the Participant and his Spouse.
(3) The portion of a Participant's Account which is forfeited
pursuant to this Section shall be applied to reduce future Company
Contributions as provided in Section 4.3.
(4) If a Participant terminates employment on or before
December 31, 1994, the nonvested portion of the Participant's Account shall
be forfeited on the last day of the Plan Year in which the Participant incurs
five consecutive one-year breaks in service (as such term is hereinafter
defined). For purposes of this subsection, a Participant shall incur a one-
year break in service if he is not credited with more than 500 Hours of
Service during the 12-consecutive month computation period used to determine
his Years of Service. If a distribution is made to a Participant pursuant to
this Article when the Participant's Vested Interest in Company Contributions
is less than 100% and he is reemployed prior to incurring a forfeiture, the
portion of his Account which was not vested will be maintained in a separate
subaccount until he becomes 100% vested. His Vested Interest in such
subaccount, at any relevant time prior to the time he is fully vested in his
Account, will be equal to an amount determined by the formula
X = P(AB&D) - D, where P is the vested percentage at the relevant time, AB is
the subaccount balance at the relevant time and D is the amount to the
distribution.
(5) If a Participant terminates employment after December 31,
1994, and receives a distribution of the entire vested portion of his
Account, the nonvested portion of the Participant's Account will be forfeited
an the date of such distribution. If the Participant again becomes an
Employee before incurring five consecutive one-year break in service years
(as defined in subsection (4) above), the portion of his Account that was
forfeited will be restored, unadjusted for earnings or losses. If the
Participant terminates employment after December 31, 1994, but does not
receive a distribution of the entire vested portion of his Account, the
nonvested portion will be forfeited on the date of the Participant's
termination of employment. If the Participant is reemployed prior to
incurring five consecutive one-year breaks in service, the portion of his
Account that was forfeited will be restored, adjusted for earnings and losses
based on the Investment Options that the Participant had elected as of the
date of his termination of employment.
(6) If the Plan Administrator cannot locate a person entitled to
receive a benefit under the Plan within a reasonable period (as determined by
the Plan Administrator in its discretion), the amount of the benefit will be
treated as a forfeiture during the Plan Year in which the period ends. If,
before final distributions are made from the Trust Fund following termination
of the Plan, a person who was entitled to a benefit which has been forfeited
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under this Section makes a claim to the Plan Administrator or the Trustee for
his benefit, he will be entitled to receive, as soon as administratively
feasible, a benefit in an amount equal to the value of the forfeited benefit
on the date of forfeiture. This benefit will be reinstated from Employer
contributions made to the Plan for this purpose.
7.3 Distributions on Death or Disability: (1) Upon the death of
a Participant prior to the date payments are to commence under the Plan and
before the Trustee has purchased an annuity contract from an insurance
company (if the Participant had elected an annuity prior to his death), his
Vested Interest shall be paid to his Beneficiary in any form of payment
permitted under the Plan that the Beneficiary elects in a manner prescribed
by the Benefits Advisory Committee. Any amounts distributed to the
Participant's Beneficiary pursuant to this subsection shall be reduced to the
extent the Participant's Account Balance is subject to a pledge under Section
17.5(l). Distribution of a Participant's Vested Interest will be made, or
commence, as soon as practicable after the Participant's death, unless the
Beneficiary defers distribution to a later date (subject to the restrictions
on deferral provided in Section 7.6). If a Beneficiary who is the
Participant's surviving Spouse defers distribution of the Participant's
Vested Interest, the surviving Spouse may thereafter withdraw such Vested
Interest in whole or in part in accordance with the provisions of Section 7.7
at any time (with the restrictions of Section 7.7 applied on the basis of the
age the Participant would have attained on the date of the withdrawal). If a
Beneficiary other than a surviving Spouse defers distribution, the
Beneficiary may thereafter withdraw such Vested Interest in whole, but not in
part, at any time.
(2) A Participant who becomes Disabled (as defined in Section 1.1)
will be considered to have terminated employment for purposes of the Plan and
may request a distribution of his Vested Interest in any form of payment
available under Section 7.2.
7.4 Valuation Upon Distribution: A Participant's distributable
Account Balance shall be valued as of the latest Valuation Date prior to
distribution of the Account Balance. Unless a Participant defers
distribution to a later date (but not later than April 1 following the
calendar year in which the Participant attains age 70-1/2), distribution of
the Participant's Vested Interest in his Account will begin no later than the
60th day after the close of the Plan Year in which occurs the latest of (i)
the date on which the Participant attains the earlier of normal retirement
age or age 65, (ii) the tenth anniversary of the Plan Year in which the
Participant began participation in the Plan, or (iii) the Participant's
termination of employment.
7.5 Rules Relating to Annuities: (1) If a married Participant
elects to receive his Vested Interest in the form of an annuity other than
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the joint and survivor annuity described in Section 7.2(2)(a)(vi), the
Participant's election shall not be effective without the written consent of
his Spouse, witnessed by a notary public and acknowledging the effect of such
election, unless it is established to the satisfaction of the Benefits
Advisory Committee that the consent required by this subsection cannot be
obtained because (i) there is no Spouse, (ii) the Spouse cannot be located,
or (iii) of such other circumstances as regulations under Code section 417
set forth. An election under this Section must be made in accordance with
rules and procedures established from time to time by the Benefits Advisory
Committee within 90 days of the date on which the Participant would receive
his first payment of benefits under the Plan. A Participant may revoke an
election to receive an annuity without the consent of his Spouse at any time,
and any number of times, before the date on which he would receive his first
payment of benefits under the Plan. If a married Participant revokes a
prior election to receive an annuity, he may elect without the consent of his
Spouse to receive his Vested Interest in a lump sum payment, installments (if
applicable) described in Section 7.2(2)(b) or the joint and survivor annuity
described in Section 7.2(2)-(a)(vi).
(2) If a Participant who has elected to receive any form of
annuity under Section 7.2(2) dies before the Trustee has purchased the
annuity contract from an insurance company, the Participant's Vested Interest
shall be paid to the Participant's surviving Spouse, if any, and if none, to
the Participant's Beneficiary, in accordance with the provisions of Section
7.3. If the Participant dies after the Trustee has purchased the annuity
contract, any benefits payable after the Participant's death shall be
determined under the terms of the annuity contract.
7.6 Timing of Distribution: (1) Except as otherwise provided in
this subsection, any distribution to a Participant or Beneficiary made
pursuant to this Article shall be made as soon as practicable after a
Participant's termination of employment with the Controlled Group; provided,
however, that no distribution, including the first payment under an annuity,
shall be made later than sixty days after the close of the Plan Year in which
he terminates his employment with the Controlled Group. If the amount of a
Participant's vested Account Balance exceeds $3,500 ($5,000 for Plan Years
beginning after December 31, 1997), the Plan Administrator will not
distribute the Participant's vested Account Balances to him prior to his
attainment of age 62 unless he consents to the distribution. The foregoing
provision will not apply to any distributions required under Article 16. If
a Participant terminates employment and defers distribution of his Account,
the Account shall be retained and administered under the Plan until the date
of distribution. Such terminated Participant shall continue to have the
rights with respect to the election of Investment Options provided in Article
5 and may withdraw his Account Balance in whole or in part in accordance with
the provisions of Section 7.7 at any time prior to the date of distribution.
The Plan Administrator may establish and change from time to time the rules
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and restrictions applicable to the administration of any Account held in
respect of a Participant who has not consented to such distribution, and may
assess against the Account of any such Participant any reasonable costs of
the administration of the same.
(2) Notwithstanding any other provision of the Plan, the entire
Vested Interest of each Participant shall be distributed not later than as
provided below.
(a) The entire Vested Interest of a Participant who terminates
employment before attaining age 70-1/2 will be paid in one of the forms
permitted under Section 7.2 no later than April 1 of the calendar year
following the calendar year in which he attains age 70-1/2.
(b) If a Participant is a 5-percent owner of a Controlled Group
Member and is an Employee on the date he attains age 70-1/2, the
Participant's Vested Interest will be paid in one of the forms permitted
under Section 7.2 on April 1 of the calendar year immediately following
the calendar year in which the Participant attains age 70-1/2. Each
other Participant who remains an Employee on the date he attains age
70-1/2 may elect in accordance with procedures established from time to
time by the Benefits Advisory Committee to receive a distribution of his
Vested Interest on April 1 of the calendar year immediately following
the calendar year in which he attains age 70-1/2 or on the first day of
any subsequent month prior to terminating employment. If a
Participant's Vested Interest is distributed or begun before he
terminates employment, distribution of the entire amount of any
additional balances in the Participant's Account (determined as of the
preceding Valuation Date) will be made in a lump sum on or before
December 31 of each succeeding calendar year.
(3) If distribution of a Participant's Vested Interest has begun
in accordance with clause 7.6(2)(b) and such Participant dies before his
entire Vested Interest has been distributed to him, the remaining portion
thereof shall be distributed to his Beneficiary at least as rapidly as under
the method of distribution being used under such clause (b) as of the date of
the Participant's death.
(4) If a Participant dies before the distribution of his Vested
Interest has begun in accordance with clause 7.6(2)(b), the Participant's
entire Vested Interest shall be distributed to his Beneficiary within five
years after such Participant's death; provided, however, that such five-year
rule shall not apply to any portion of the Participant's Vested Interest
which is payable to any individual designated by the Participant as his
Beneficiary if --
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(a) such portion will be distributed (in accordance with
regulations prescribed by the Secretary of the Treasury) over the life
of such Beneficiary (or over a period not extending beyond the life
expectancy of such Beneficiary), and
(b) such distributions to such Beneficiary begin not later than
one year after the date of the Participant's death or such later date as
the Secretary of the Treasury may by regulations prescribe or, if such
Beneficiary is the Participant's surviving Spouse, not later than the
date on which the Participant would have attained age 70-1/2.
(5) Notwithstanding any other provision of the Plan, all
distributions from the Plan shall be made in accordance with Code section
401(a)(9) and the regulations promulgated thereunder, including Proposed
Treasury Regulation section 1.401(a)(9)-2, and the provisions reflecting the
same shall override any other Plan provision inconsistent therewith.
(6) Notwithstanding any other provision of the Plan, a
distribution to which Code section 411(a)(11) or Code section 417 applies may
be made or may begin less than 30 days after an explanation of the
distribution options has been furnished to the Participant provided that (a)
the Benefits Advisory Committee clearly informs the Participant that he has
the right to consider whether to accept a distribution and whether to consent
to a particular form of distribution for at least 30 days after he has been
provided the relevant information, (b) the Participant affirmatively elects
to waive the 30-day notice period and receive a distribution, and (c) with
respect to a distribution to which Code section 417 applies, the Participant
is permitted to revoke the election and make a new election at any time prior
to the later of the date of distribution or the expiration of the seven-day
period after the explanation of distribution options (including the qualified
joint and survivor annuity) is provided to the Participant.
7.7 Withdrawal of Accounts: (1) Upon prior written notice filed
with the Benefits Advisory Committee, in a form approved by the Benefits
Advisory Committee, a Participant may make withdrawals from his Account
subject to the terms and conditions contained in this Section. Withdrawals
shall be made from among the categories, and within each category, in the
order set forth below. No amount shall be withdrawn from a category (or from
within a category), unless all amounts available for withdrawal from prior
categories (or from higher priorities within that category) have been
withdrawn. The withdrawal priorities are as follows:
(i) A Participant who has not attained age 59-1/2 may withdraw, in
cash, all or any part of his Account attributable to After-Tax Deposits,
including earnings with respect to such Deposits; provided, however,
that if a Participant makes such a withdrawal prior to having made
Deposits for twelve months, his right to make further Deposits shall
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automatically be suspended for a period of six calendar months following
the month in which such withdrawal is made and may be reinstated only if
the Participant again elects to participate in the Plan pursuant to
Section 2.2 and, if applicable, authorizes Before-Tax Deposits pursuant
to Section 2.3.
(ii) A Participant may withdraw, in cash and without penalty, all
or any part of his Account attributable to, first, his ESOP Account
Balance relating to the Participant's deposits to the ESOP, second, his
ESOP Account Balance relating to employer contributions to the ESOP on
behalf of the Participant and, third, any Rollover Contribution or
Transfer Contribution (other than transfers from the ESOP) and, in each
case, earnings thereon.
(iii) A Participant who has attained age 59-1/2 (or a terminated
Participant who attained age 55) as of the Valuation Date as of which
such withdrawal is to be made may withdraw (in addition to the amounts
that may be withdrawn pursuant to paragraph (i) above), in Company Stock
or cash and, in either case, without penalty, all or any part of his
Account attributable to, first, Company Contributions and earnings
thereon and, second, Before-Tax Deposits and earnings thereon.
(iv) A Participant who has not attained age 59-1/2 as of the
Valuation Date as of which a withdrawal is to be made may withdraw, in
cash, all or any part of his Account attributable to Before-Tax
Deposits; provided, however, that such withdrawal is made on account of
Hardship and, provided further, however, that for a period of twelve
months following the month in which such withdrawal is made (a) the
Participant's right to have further Deposits made on his behalf shall
automatically be suspended and may be reinstated only by again electing
to participate in the Plan pursuant to Section 2.2 and, if applicable,
authorizing Before-Tax Deposits pursuant to Section 2.3 and (b) the
Participant shall not be permitted to reduce his Compensation pursuant
to any salary reduction agreement (whether or not pursuant to a plan
qualified under Code section 401(a)) with the Employer in an amount that
exceeds the elective deferral limitation under Code section 402(g) (or
other applicable Code provision) applicable during such period reduced
by any elective deferrals made during the calendar year in which the
withdrawal on account of Hardship was distributed.
(2) For purposes of this Section, Hardship shall be deemed to
exist if the Plan Administrator is satisfied that the requested withdrawal is
necessary in light of immediate and heavy financial needs of the Participant
occasioned by (a) the payment of tuition for the next semester or quarter of
post-secondary education for the Participant or his Spouse or dependents
(within the meaning of Code section 152), (b) the purchase (excluding
mortgage payments) of a principal residence for the Participant, (c) the
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payment of medical expenses described in Code section 213(d) incurred by the
Participant or his Spouse or dependents (within the meaning of Code section
152), or (d) the need to prevent the eviction of the Participant from his
principal residence or foreclosure on the mortgage of the Participant's
principal residence. The amount of any withdrawal made on account of
Hardship shall not exceed the amount required to satisfy the immediate
financial need created by the Hardship. Prior to any withdrawal on account
of Hardship, the Participant shall have obtained all distributions (other
than distributions pursuant to this Section) and all nontaxable loans
currently available to him under all benefit plans maintained by the Employer
(including the Plan).
(3) A Participant may make a withdrawal pursuant to this Section
at any time. All withdrawals will be processed as soon as administratively
feasible following approval of the Participant's withdrawal notice.
7.8 Direct Rollovers: (1) Notwithstanding any other provision of
the Plan, for distributions made on or after January 1, 1993 a Distributee
(as hereinafter defined) may elect, at any time and in the manner prescribed
by the Benefits Advisory Committee, to have any portion of an Eligible
Rollover Distribution (as hereinafter defined) paid directly to an Eligible
Retirement Plan (as hereinafter defined) specified by the Distributee.
(2) 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 (i) 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 life expectancies of the Distributee and
the Distributee's designated beneficiary, or for a specified period of ten
years or more, (ii) any distribution to the extent such distribution is
required by Code section 401(a) (9), and (iii) 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).
(3) An Eligible Retirement Plan is an individual retirement
account described in Code section 408(a), an individual retirement annuity
described in Code section 408(b), an annuity plan described in Code section
403(a), or a qualified trust described in Code section 401(a) that is a
defined contribution plan within the meaning of Code section 414(i), that
accepts the Distributee's Eligible Rollover Distribution. However, in the
case of an Eligible Rollover Distribution to a Participant's surviving
Spouse, an Eligible Retirement Plan is an individual retirement account or
individual retirement annuity.
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(4) A Distributee includes a Participant, the Participant's
Spouse, or a Participant's former spouse who is an alternate payee under a
qualified domestic relations order, as defined in Code section 414(p).
ARTICLE 8 - ADMINISTRATION OF THE PLAN AND TRUST AGREEMENT
8.1 Responsibility for Administration: The Plan shall be
administered by the Named Fiduciaries designated pursuant to the Rules. The
powers and responsibilities and the duties of the Named Fiduciaries shall be
established under the Rules which are hereby incorporated in the Plan by this
reference. In addition to the powers granted to the Named Fiduciaries under
the Rules, the Named Fiduciaries shall have the powers granted hereunder.
8.2 Audit: The independent accountants who audit the books and
accounts of the Employers shall annually examine the records of the Employers
in respect of the Plan and, on the basis of such examination, make such
report to the Trustee as said accountants deem necessary. The records of the
Trustee and (subject to such report by said independent accounts) the records
of the Employers and the Benefits Advisory Committee shall be conclusive in
respect to all matters involved in the administration of the Plan.
8.3 Statement of Accounts: At least annually the Company shall
cause each Participant to receive a statement of his Account, at such time
and in such form as the Benefits Advisory Committee shall determine. Such
statement shall be deemed to have been accepted as correct unless written
notice to the contrary is received by the Benefits Advisory Committee within
thirty days after making such statement available to the Participant.
8.4 Expenses: The expenses of administering the Plan, including
without limitation the fees and expenses of the Trustee and the expenses of
the Benefits Advisory Committee and Investment Committee properly incurred in
the performance of their duties under the Plan, shall be paid from the Trust
Fund, and all such expenses paid by the Employers on behalf of the Plan shall
be reimbursed from the Trust Fund, unless the Employers in their own
discretion elect not to submit such expenses to the Trustee for
reimbursement. Notwithstanding the foregoing, the members of the Committees
will not be compensated by the Plan for their services as Committee members.
8.5 The Trust Fund: The Trust Fund shall be held by the Trustee
for the exclusive benefit of the Participants and their Beneficiaries, and
shall be invested by the Trustee upon such terms and in such property as is
provided in the Plan and the Trust Agreement. The Trustee will, from time to
time, make payments, distributions and deliveries from the Trust Fund as
provided in the Plan and the Trust Agreement. The Trustee, in its relation
to the Plan, shall be entitled to all of the rights, privileges, immunities
and benefits conferred upon it and shall be subject to all of the duties
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imposed upon it under the Trust Agreement. The Trust Agreement is hereby
incorporated in the Plan by this reference, and each Employer, by adopting
the Plan, authorizes the Company to execute the Trust Agreement (including
any amendment or supplement thereto) on its behalf with respect to the Plan.
8.6 No Guarantee Against Loss: No Employer in any manner
guarantees the Trust Fund or any part thereof against loss or depreciation.
All persons having any interest in the Trust Fund shall look solely to such
Fund for payment with respect to such interest.
8.7 Payment of Benefits: All payments of benefits provided for by
the Plan (less any deductions provided for by the Plan) shall be made solely
out of the Trust Fund in accordance with instructions given to the Trustee by
the Benefits Advisory Committee pursuant to the terms of the Plan and the
Trust Agreement, and no Employer shall be otherwise liable for any benefits
payable under the Plan. The Trustee shall not be required to make any
distribution under the Plan under circumstances which, in its judgment, would
subject it to penalty or liability or constitute a breach of any legal duty.
8.8 Requirement of Written Action: Whenever a provision of the
Plan requires a Participant or Beneficiary to furnish any notice,
application, election or representation in writing, or to take any other
action in writing, the Benefits Advisory Committee may require the
Participant or Beneficiary to take such action by utilizing a voice response
system ("VRS") or other means of electronic communication that is used in the
administration of the Plan, provided the Benefits Advisory Committee
determines that such VRS or other electronic communication will satisfy the
requirements of applicable law.
8.9 Correction of Participants' Accounts: If an error or omission
in the administration of the Plan that affects the Account of a Participant
is discovered, the Benefits Advisory Committee will make such equitable
adjustments in the records of the Plan as may be necessary or appropriate to
correct such error or omission as of the Plan Year in which such error or
omission is discovered. Further, an Employer may, in its discretion, make a
special contribution to the Plan which will be allocated by the Benefits
Advisory Committee only to the Account of one or more affected Participants
to correct any such administrative error or omission, and such contribution
will not be treated as a Company Contribution for purposes of Code sections
401, 402 and 415. In addition, an Employer may designate at the time of a
corrective contribution that all or a portion of such contribution be treated
as a "qualified matching contribution" or a "qualified nonelective
contribution", in which case the designated contribution will be 100%
nonforfeitable at all times and will be subject to the distribution and
withdrawal restrictions that apply to Before-Tax Deposits under Article 7.
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ARTICLE 9 - CLAIMS PROCEDURES
9.1 Method of Filing Claim: Any Participant or Beneficiary who
believes he is entitled to receive a distribution under the Plan which he did
not receive or that amounts credited to his Account are inaccurate, may file
a written claim signed by the Participant or his representative with the
Benefits Advisory Committee specifying the basis for his claim. Unless such
claim is allowed in full, the Benefits Advisory Committee shall, within
ninety days after such claim was filed, (or up to 180 days if special
circumstances require an extension, in which case the claimant shall receive
within the initial ninety-day period a written explanation of the reasons for
the extension) cause written notice to be mailed to the claimant of the total
or partial denial of such claim. Such notice shall be written in a manner
calculated to be understood by the claimant and shall include (1) the
specific reasons for the denial of the claim, (2) specific reference to the
provisions of the Plan and/or Trust Agreement upon which the denial of the
claim was based, (3) 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 (4) an explanation of the
review procedure specified in Section 9.2.
9.2 Review Procedure: Within sixty days after the receipt by the
claimant of such a notice of denial, the claimant may appeal such denial by
filing with the secretary of the Benefits Appeals Committee a written request
for a review of his claim. If such an appeal is so filed within such sixty-
day period, the Benefits Appeals Committee, or a duly appointed
representative of the Benefits Appeals Committee, shall conduct a full and
fair review of such claim and mail or deliver to the claimant its written
decision on the matter based on the facts, the pertinent provisions of the
Plan, the Rules and the Trust Agreement and any Plan interpretations, rules
or regulations of the Benefits Advisory Committee, within sixty days after
the receipt of the request for review (unless special circumstances as
determined by the Benefits Advisory Committee or the Benefits Appeals
Committee require an extension of up to sixty additional days, in which case,
written notice of such extension shall be given to the claimant prior to the
commencement of such extension). Such decision shall be written in a manner
calculated to be understood by the claimant, shall state the specific reasons
for the decision and the specific provisions of the Plan and/or Trust
Agreement on which the decision was based and shall, to the extent permitted
by law, be final and binding on all interested persons. During such full
review, the claimant or his representative shall be given an opportunity to
review documents that are pertinent to his claim and to submit issues and
comments in writing and, if he requests a hearing on his claim and the
Benefits Appeals Committee concludes such a hearing is advisable and
schedules such a hearing, to present his case in person or by an authorized
representative at such hearing.
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ARTICLE 10 - FIDUCIARY RESPONSIBILITY
10.1 Immunities: Except as otherwise provided by applicable law,
(1) no Fiduciary shall be liable for any action taken or not taken with
respect to the Plan or the Trust Agreement, except for his own gross
negligence or willful misconduct; (2) no Fiduciary shall be personally liable
upon any contract, agreement or other instrument made or executed by him or
in his behalf in the administration of the Plan or the Trust Agreement; (3)
no Fiduciary shall be liable for the neglect, omission or wrongdoing of
another Fiduciary nor shall any Fiduciary be required to make inquiry into
the propriety of any action by another Fiduciary; (4) each Employer and each
officer or director thereof, the Benefits Appeals Committee and each member
thereof, the Benefits Advisory Committee and each member thereof, the
Investment Committee and each member thereof, the Investment Policy Committee
and each member thereof, and any other person to whom the Company, the
Benefits Advisory Committee or the Investment Committee delegates (or the
Plan, the Rules or the Trust Agreement assigns) any duty with respect to the
Plan or the Trust Agreement, may rely and shall be fully protected in acting
in good faith upon the advice of counsel for a Controlled Group Member, upon
the records of the Controlled Group Member, upon the opinion, certificate,
valuation, report, recommendation, or determination of the Trustee or of the
auditor or actuary of the Company, or upon any certificate, statement or
other representation made by or any information furnished by an Employee, a
Participant, a Beneficiary or the Trustee concerning any fact required to be
determined under any of the provisions of the Plan; (5) if any responsibility
of a Fiduciary is allocated to any other person then such Fiduciary is not
responsible for any act or omission of such person in carrying out such
responsibility; and (6) no Fiduciary shall have the duty to discharge any
duty, function or responsibility which is assigned by the terms of the Plan
or Trust Agreement or delegated pursuant to the provisions of Section 10.2 to
another person.
10.2 Allocation and Delegation of Fiduciary Responsibilities: (1)
The Fiduciaries shall have only such powers, duties, responsibilities and
authorities as are specified in the Plan or the Trust Agreement or as shall
be delegated to them pursuant to this Section. The Company shall have the
responsibility (along with the other Employers) for making contributions
under the Plan to the Trust Fund. The Board of Directors shall have the
authority to amend or terminate the Plan or the Trust Agreement in whole or
in part, to appoint and remove any certified public accountant that is
employed for purposes of the Plan and to appoint and remove the Trustee. The
Benefits Advisory Committee shall have the responsibility and authority to
interpret and administer the Plan, subject to the provisions hereof. The
Trustee shall have the responsibility and authority for the administration of
the Trust Agreement.
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(2) The Company may designate any person (in addition to those
specifically designated in the Plan or the Trust Agreement) as a Fiduciary or
Named Fiduciary and may delegate to any such person any one or more powers,
functions, duties and/or responsibilities with respect to the Plan or the
Trust Agreement, provided that no such power, function, duty or
responsibility which is assigned to a Fiduciary (other than the delegator)
pursuant to some other Section of the Plan or the Trust Agreement shall be so
delegated without the written consent of such Fiduciary.
(3) Any delegation pursuant to subsection (2) of this Section, (a)
shall be signed by the delegator, be delivered to and accepted in writing by
the delegatee and be delivered to the Benefits Advisory Committee, (b) shall
contain such provisions and conditions relating to such delegation as the
delegator deems appropriate, (c) shall specifically designate the powers,
functions, duties and responsibilities therein delegated, (d) may be amended
from time to time by written agreement signed by the delegator and the
delegatee and delivered to the Benefits Advisory Committee and (e) may be
revoked (in whole or in part) at any time by written notice from the
delegator delivered to the delegatee and the Benefits Advisory Committee or
from the delegatee delivered to the delegator and the Benefits Advisory
Committee.
ARTICLE 11 - MISCELLANEOUS
11.1 Spendthrift Provisions: To the extent permitted by law and
except as otherwise provided in the Plan, or under a qualified domestic
relations order (as defined in Section 1.1), no right or interest of any kind
of a Participant or Beneficiary hereunder shall be transferable or assignable
by the Participant or Beneficiary, nor shall any such right or interest be
subject to alienation, anticipation, encumbrance, garnishment, attachment,
execution or levy of any kind, voluntary or involuntary. In addition, if the
terms of the qualified domestic relations order permit, the amounts payable
to the alternate payee under such order shall be paid at such time or times
specified in the order before the earliest retirement date specified in Code
section 414(p)(4)(B).
11.2 Facility of Payment: In the event the Benefits Advisory
Committee finds that any Participant or Beneficiary to whom a benefit is
payable under the Plan is (at the time such benefit is payable) unable to
care for his affairs because of physical, mental or legal incompetence, the
Benefits Advisory Committee, in its sole discretion, may cause any payment
due to him hereunder, for which prior claim has not been made by a duly
qualified guardian or other legal representative, to be paid to the person or
institution deemed by the Benefits Advisory Committee to be maintaining or
responsible for the maintenance of such Participant or Beneficiary, and any
such payment shall be deemed a payment for the benefit of such Participant or
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Beneficiary and shall constitute a complete discharge of any liability
therefor under the Plan.
11.3 No Enlargement of Employment Rights: A Participant by
accepting benefits under the Plan does not thereby agree to continue for any
period in the employ of his Employer, and the Employers, by adopting the
Plan, making contributions to the Plan or taking any action with respect to
the Plan, do not obligate themselves to continue the employment of any
Participant for any period. Participation in the Plan by an Employee shall
in no way affect any of the Employer's rights to assign such Employee to a
different job or position, to change his title, authority, duties or
Compensation or to terminate his employment.
11.4 Merger or Transfer of Assets: Notwithstanding any other
provision of the Plan, in the case of any merger or consolidation with, or
the transfer of assets or liabilities of the Plan to any other plan, in no
event shall any Participant (if the other plan then terminates) receive a
benefit immediately after the merger, consolidation or transfer which is less
than the benefit he would have been entitled to receive immediately before
the merger, consolidation, or transfer (if the Plan had then terminated).
This Section is intended to comply with Code sections 401(a)(12) and 414(l)
and shall be construed in accordance with valid rules and regulations issued
pursuant thereto.
11.5 Severability Provision: If any provision of the Plan or the
application thereof to any circumstance or person is invalid, the remainder
of the Plan and the application of such provision to other circumstances or
persons shall not be affected thereby.
ARTICLE 12 - EMPLOYERS
12.1 Adoption by Other Corporations: Any corporation or business
organization may, with the consent of the Board of Directors, adopt the Plan
and become an Employer hereunder by executing an instrument evidencing such
adoption on the order of its board of directors and filing a copy thereof
with the Company and the Trustee. Such adoption may be subject to such terms
and conditions as the Board of Directors requires or approves. The amount to
be contributed to the Plan by any Controlled Group Member shall be
conditioned upon the initial qualification of the Plan as to it under Code
section 401(a).
12.2 Contribution of Employers: Each Employer shall separately
pay its share of the Employers' contribution to the Trust Fund for any Plan
Year. However, the contribution of the Employers under the Plan may be paid
by the Company on behalf of itself and other Employers, in which event each
Employer, other than the Company, shall pay to the Company its share of the
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expenses of the Plan, including contributions to the Trust Fund, determined
on such basis as may be agreeable to the Company and such Employer and as
will permit to the extent possible the deduction (for purposes of federal
taxes on income) by each such Employer of its payments toward such expenses
and contributions.
12.3 Withdrawal of Employer: Any Employer (other than the
Company) which adopts the Plan may elect, with the consent of the Board of
Directors, to withdraw from the Plan or exclude any identifiable unit or
group of its employees from the Plan, and a complete withdrawal by an
Employer shall constitute a termination of the Plan as to it. Any such
withdrawal shall be expressed in an instrument executed by the withdrawing
Employer on the order of its board of directors and filed with the Company
and the Trustee. Any withdrawal by an Employer shall be deemed as to the
Participants employed by such Employer, to be an adverse modification and
Section 13.4 shall apply. In the event of such a withdrawal of an Employer
or in the event the Plan is terminated as to an Employer (but not all
Employers) or a group of Employees pursuant to Section 13.1, such Employer
(herein called "former Employer") shall cease to be an Employer and the
interests of Participants who are or were Employees of such former Employer
shall be distributed at that time as if each such Participant had retired
pursuant to Section 7.3 at the time of such withdrawal or termination;
provided, however, that no such distribution shall be made to the extent that
the qualified status of the Plan under Code section 4.01(a) or the tax exempt
status of the Trust under Code section 501(a) would be adversely affected as
a result thereof.
ARTICLE 13 - AMENDMENT OR TERMINATION
13.1 Right to Amend or Terminate: Subject to the limitations of
Section 4.4, the Board of Directors has reserved, and does hereby reserve,
the exclusive right at any time or times, without the consent of any other
Employer or of the Participants, Beneficiaries or any other person (except as
provided below), (1) to terminate the Plan, in whole or in part or as to any
or all of the Employers or as to any designated group of Employees,
Participants and their Beneficiaries, or (2) to amend the Plan, in whole or
in part. No such termination or amendment shall decrease the amount to be
contributed by the Employers on account of any Plan Year preceding the Plan
Year in which such termination or amendment is approved by the Board of
Directors. Any such amendment of the Plan shall be automatically effective
with respect to an Employer and its Employees, and no modification, amendment
or termination of the Plan may diminish the Account of any Participant as of
the effective date of such amendment or termination. A modification which
affects the rights or duties of the Trustee may be made only with the
Trustee's consent. No amendment will have the effect of reducing the
percentage of the Vested Interest of any Participant in his Account nor will
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the vesting provisions of the Plan be amended unless each Participant with at
least three Years of Service is permitted to elect to continue to have the
prior vesting provisions apply to him, within 60 days after the latest of the
date on which the amendment is adopted, the date on which the amendment is
effective, or the date on which the Participant is issued written notice of
the amendment.
13.2 Procedure for Termination or Amendment: Any termination or
amendment of the Plan pursuant to Section 13.1 shall be expressed in an
instrument executed by the Company and shall become effective as of the date
designated in such instrument or, if no date is so designated, on its
execution.
13.3 Distribution Upon Termination: If the Plan shall be
terminated by the Company as to all the Employers, subject to the penultimate
sentence of Section 13.1, Deposits and Contributions shall cease, and the
Vested Interest of each Participant shall be distributed as if each
Participant had then retired pursuant to Section 7.3 at the time of the
termination. No distribution will be made that is prohibited by Code section
411(a) (11) and the regulations thereunder. In addition, the portion of a
Participant's Account attributable to Before-Tax Deposits may be distributed
upon Plan termination only if the Plan is terminated without the
establishment or maintenance by an Employer of another defined contribution
plan (other than an employee stock ownership plan defined in Code section
4975(e) (7)).
13.4 Adverse Modification: In the event that any modification of
the Plan shall adversely affect the rights of any Participant as to the use
of or withdrawal from his Account (other than a modification required to
maintain the qualified status of the Plan under Code section 401(a) or the
tax-exempt status of the Trust under Code section 501(a)), such Participant,
for a period of ninety days after the effective date of such modification,
shall have the option, to be exercised by written notice to the Benefits
Advisory Committee, in a form prescribed by such Committee (a copy of which
form of notice shall accompany the notice of modification), to have
liquidated and distributed to him his entire Vested Interest as of the
effective date of such modification, in which event he shall be ineligible
for participation in the Plan, as so modified, for a period of twelve full
months from such effective date; provided, however, that no such liquidation
and distribution shall be made to the extent that the qualified status of the
Plan under Code section 401(a) or the tax-exempt status of the Trust under
Code section 501(a) would be adversely affected as a result thereof. The
modification or termination of any Investment Option shall be deemed not
adversely to affect the rights of any Participant, provided that he shall be
given notice thereof and an opportunity to change his instructions in
accordance with Section 5.5.
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13.5 Subsidiary Cessation: If an Employer which is a subsidiary
of the Company ceases to be a subsidiary of a Controlled Group Member, it
shall cease to be an Employer as of the date it ceases to be such a
subsidiary and Section 13.3 will apply.
13.6 Provision Pursuant to Code Section 411(d)(3): Notwith-
standing any other provision of the Plan, upon the termination or partial
termination of the Plan or upon complete discontinuance of contributions
under the Plan, the rights of all Participants to the amounts credited to the
Participants' Accounts shall be nonforfeitable. Partial termination of the
Plan shall represent an adverse modification as to all Participants adversely
affected thereby, and such Participants shall have the rights set forth in
Section 13.4.
ARTICLE 14 - TOP-HEAVY PLAN REQUIREMENTS
14.1 Definitions:
For purposes of this Article 14, the following definitions shall
apply:
(1) "Key Employee" means any Employee of an Employer who during
the Plan Year containing the Determination Date or during the four
preceding Plan Years is:
(a) an officer of an Employer having an annual compensation
greater than 50 percent (50%) of the amount in effect under Code
section 415(b)(1)(A) for any such Plan Year;
(b) one of the ten Employees of an Employer having annual
compensation of more than the limitation in effect under Code
section 415(c)(1)(A) and owning (or considered as owning within the
meaning of Code section 318) both more than a 1/2 percent interest
and the largest interest in the Employer;
(c) a five percent (5%) owner of an Employer; or
(d) a one percent (1%) owner of an Employer who has an annual
compensation above $150,000.
The definition of Key Employee shall be interpreted in accordance
with Code section 416(i) and the rules and regulations promulgated
thereunder.
(2) "Determination Date" means the last day of the preceding Plan
Year.
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14.2 Top-Heavy Determination: This Plan shall be top-heavy for
any Plan Year if as of the Determination Date, the aggregate of the Accounts
of Key Employees under the Plan exceeds sixty percent (60%) of the aggregate
of the Accounts of all Employees under the Plan. For purposes of this
determination, the following rules shall apply:
(1) "Employees" shall mean employees and former employees of the
Employers and Beneficiaries and former Beneficiaries, who have a benefit
greater than zero on the Determination Date (taking into account Section
14.2(2)).
(2) The amount of the Account of any Employee shall be increased
by the aggregate distributions made with respect to such Employee within
the five year period ending on the Determination Date.
(3) The Account of any Employee who is not a Key Employee as of
the Determination Date but who was a Key Employee during any prior Plan
Year shall be disregarded.
(4) The Account of any Employee who has not performed services for
an Employer maintaining any of the aggregated plans during the five-year
period ending on the Determination Date will not be taken into account.
(5) If an Employer maintains other plans which are qualified under
Code section 401(a), the top-heavy determination described above shall
be made by aggregating (a) any such plan in which a Key Employee is a
participant and (b) any other plan which enables a plan in which a Key
Employee is a participant to meet the requirements of Code sections
401(a)(4) or 410. The Employer may also aggregate any such other plans
not required to be aggregated, provided the resulting group of plans,
taken as a whole, continue to meet the requirements of Code sections
401(a)(4) and 410.
(6) The top-heavy determination under this Section shall be made
in accordance with Code section 416 and the rules and regulations
promulgated thereunder.
14.3 Top-Heavy Requirements: (1) If the Plan is top-heavy under
section 14.2, notwithstanding any other provision of the Plan to the
contrary, the following shall apply with respect to each Plan Year in which
the Plan is top-heavy:
(a) Minimum Contributions: Each Non-Key Employee who is eligible
to share in any Company Contribution for such Plan Year (or who would
have been eligible to share in any such Contribution if a Deposit had
been made by him during such Plan Year) shall be entitled to receive an
allocation of such Contribution, which is at least equal to three
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percent (3%) of his compensation for such Plan Year provided, however,
that the percentage minimum contribution requirement with respect to a
Plan Year shall not exceed the percentage at which Contributions are
made (or required to be made) under the Plan for such Plan Year for the
Key Employee for whom such percentage is the highest for such Year. In
determining the highest percentage for any Key Employee, any Before-Tax
Deposits shall be counted as Company Contributions. For purposes of the
minimum contribution, Before-Tax Deposits for Non-Key Employees are not
taken into account.
(b) Compensation: For purposes of this Article, Compensation
means the wages as defined in Code section 3401(a) for purposes of
income tax withholding at the source (but determined without regard to
any rules that limit the remuneration included in wages based on the
nature or location of the employment or services performed) that are
paid to an Employee by a Controlled Group Member. For purposes of
determining whether an Employee is a Key Employee, Compensation shall
include the amount of any salary reduction contributions pursuant to a
cash or deferred arrangement meeting the requirements of Code section
401(k) or a cafeteria plan meeting the requirements of Code section 125.
Compensation shall be limited in accordance with the $150,000 limitation
set forth in the definition of Compensation contained in Section 1.1.
(c) Minimum Vesting Requirement: Each Employee who has completed
at least three Years of Service and who has been credited with an Hour
of Service after the Plan becomes a Top-Heavy Plan shall have a
nonforfeitable right to 100 percent (100%) of the Contributions
allocated to his Account. The minimum vesting schedule applies to all
Account balances including amounts attributable to Plan Years before the
effective date of Code section 416 and amounts attributable to Plan
Years before the Plan became a Top-Heavy Plan. Further, no reduction in
vested Account balances may occur in the event the Plan's status as a
Top-Heavy Plan changes for any Plan Year, and any change in the
effective vesting schedule from the schedule set forth in this
subsection to the regular vesting rules provided in Article 6 will be
treated as an amendment subject to Section 13.1.
(2) The top-heavy requirements under subsection (1) of this
Section shall be effected in accordance with Code section 416 and the rules
and regulations promulgated thereunder.
14.4 Super Top-Heavy Requirements: (1) The modification of the
aggregate benefit limit described in Section 4.6(3)(b)(i) of the Plan will
not be required if the top-heavy ratio does not exceed 90% and one of the
following conditions is met: (i) Employees who are not Key Employees do not
participate in both a defined benefit plan and a defined contribution plan
which are in the group of plans required to be aggregated under this Article,
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and the minimum contribution requirements of Section 14.3(1)(a) are met when
such requirements are applied with the substitution of "four percent (4%)"
for "three percent (3%)"; (ii) the minimum contribution requirements of
subsection (2) below are met when such requirements are applied with the
substitution of "7 1/2%" for "5%"; or (iii) Employees who are not Key
Employees have an accrued benefit of not less than 3% of their average
Compensation for the five consecutive Plan Years in which they had the
highest Compensation multiplied by their Years of Service in which the Plan
is a Top-Heavy Plan (not to exceed a total such benefit of 30%), expressed as
a life annuity commencing at the Participant's normal retirement age in a
defined benefit plan which is in the group of plans that must be aggregated.
(2) If a Controlled Group Member maintains one or more other
defined contribution plans covering Employees who are Participants in this
Plan, the minimum contribution will be provided under this Plan, unless such
other defined contribution plans make explicit reference to this Plan and
provide that the minimum contribution will not be provided under this Plan,
in which case the provisions of Section 14.3(1)(a) will not apply to any
Participant covered under such other defined contribution plans. If a
Controlled Group Member maintains one or more defined benefit plans covering
Employees who are Participants in this Plan, and such defined benefit plans
provide that Employees who are participants therein will accrue the minimum
benefit applicable to top-heavy defined benefit plans notwithstanding their
participation in this Plan, then the provisions of Section 14.3(l)(a) will
not apply to any Participant covered under such defined benefit plans. If a
Controlled Group Member maintains one or more defined benefit plans covering
Employees who are Participants in this Plan, and the provisions of the
preceding sentence do not apply, then each Participant who is not a Key
Employee and who is covered by such defined benefit plans will receive a
minimum contribution determined by applying the provisions of Section
14.3(1)(a) with the substitution of "five percent (5%)" in each place that
"three percent (3%)" occurs therein.
14.5 Benefit Accrual Requirements: Solely for the purpose of
determining if the Plan, or any other plan included in a required aggregation
group of which this Plan is a part, is top-heavy (within the meaning of Code
section 416(g)), the accrued benefit of an Employee other than a key employee
(within the meaning of Code section 416(i)(1)) shall be determined under the
method, if any, that uniformly applies for accrual purposes under all plans
maintained by the Employers, or (2) if there is no such method, as if such
benefit accrued not more rapidly than the slowest accrual rate permitted
under the fractional accrual rate of Code section 411(b)(1)(C).
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ARTICLE 15 - LIMITATIONS ON BEFORE-TAX DEPOSITS AND CONTRIBUTIONS
15.1 Average Deferral Percentage: Notwithstanding any other
provision of the Plan, Before-Tax Deposits shall be limited in a
nondiscriminatory manner so that the Average Deferral Percentage for Eligible
Participants who are Highly Compensated Employees for the Plan Year shall not
exceed the greater of:
(1) the Average Deferral Percentage for the preceding Plan Year of
Eligible Participants who are Non-Highly Compensated Employees in such
Plan Year multiplied by 1.25; or
(2) the Average Deferral Percentage for the preceding Plan Year of
Eligible Participants who are Non-Highly Compensated Employees in such
Plan Year multiplied by 2, provided that the Average Deferral Percentage
for Eligible Participants who are Highly Compensated Employees does not
exceed the Average Deferral Percentage for Eligible Participants who are
Non-Highly Compensated Employees by more than 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.
15.2 Average Contribution Percentage: Notwithstanding any other
provision of the Plan, Contributions shall be limited in a nondiscriminatory
manner so that the Average Contribution Percentage for Eligible Participants
who are Highly Compensated Employees for the Plan Year shall not exceed the
greater of:
(1) the Average Contribution Percentage for the preceding Plan
Year of Eligible Participants who are Non-Highly Compensated Employees
in such Plan Year multiplied by 1.25; or
(2) the Average Contribution Percentage for the preceding Plan
Year of Eligible Participants who are Non-Highly Compensated Employees
in such Plan Year multiplied by 2, provided that the Average
Contribution Percentage for Eligible Participants who are Highly
Compensated Employees does not exceed the Average Contribution
Percentage for Eligible Participants who are Non-Highly Compensated
Employees by more than two 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.
15.3 Definitions: For purposes of this Article, the following
definitions shall apply:
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(1) Average Contribution Percentage shall mean the average
(expressed as a percentage) of the Contribution Percentages of the
Eligible Participants in a group (calculated separately for each
Eligible Participant in the group).
(2) Average Deferral Percentage shall mean the average (expressed
as a percentage) of the Deferral Percentages of the Eligible
Participants in a group (calculated separately for each Eligible
Participant in the group).
(3) Contribution Percentage shall mean the ratio (expressed as a
percentage) of the sum of the After-Tax Deposits and Company
Contributions, determined as separate ratios, under the Plan on behalf
of the Eligible Participant for the Plan Year to the Eligible
Participant's Compensation for the Plan Year.
(4) Deferral Percentage shall mean the ratio (expressed as a
percentage) of the sum of the Before-Tax Deposits under the Plan on
behalf of the Eligible Participant for the Plan Year to the Eligible
Participant's Compensation for the Plan Year. A Before-Tax Deposit by a
Participant will be taken into account for a Plan Year only if (i) the
allocation of such Deposit is not contingent on participation in the
Plan or the performance of services after the Plan Year, (ii) such
Deposit is paid to the Trustee within 12 months after the end of the
Plan Year, and (iii) such Deposit relates to Compensation that either
would have been received by the Participant in the Plan Year, or that is
attributable to services performed during the Plan Year and that would
have been received within two and one-half months after the Plan Year,
but for the election to defer.
(5) Eligible Participant shall mean any Employee of the Employer
who is otherwise authorized under the terms of the Plan to have Deposits
or Contributions allocated to his Account for the Plan Year. An
Employee is eligible to make Deposits for purposes of determining his
Deferral Percentage and Contribution Percentage even though he does not
make Deposits because of the suspension of his Before-Tax Deposits under
the terms of the Plan, because of an election not to participate, or
because of the Code section 415 limitations contained in Sections 4.5
through 4.7 of the Plan.
(6) Compensation shall mean (a) the total compensation for a Plan
Year paid to an Employee by a Controlled Group Member as reported on
Form W-2 to be filed with the Internal Revenue Service and (b) for Plan
Years beginning after December 31, 1997, such total compensation plus
the amount of any salary reduction contributions pursuant to a cash or
deferred arrangement meeting the requirements of Code section 401(k) or
a cafeteria plan meeting the requirements of Code section 125. The
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annual Compensation of an Employee taken into account for any purpose
for any Plan Year shall be limited to $150,000, as adjusted in
regulations prescribed by the Secretary of the Treasury.
15.4 Special Rules: (1) For purposes of this Article, the
Deferral Percentage and the Contribution Percentage for any Eligible
Participant who is a Highly Compensated Employee for the Plan Year and who is
eligible to make Deposits or have Deposits made on his behalf, or to receive
contributions allocated to his account under two or more plans described in
Code section 401(a) that are maintained by the Employer or a Controlled Group
Member, shall be determined as if all such contributions were made under a
single plan.
(2) In the event that this Plan satisfies the requirements of Code
section 410(b) (other than for purposes of the average benefit percentage
test) only if aggregated with one or more other plans, or is one or more
other plans satisfy the requirements of Code section 410(b) (other than for
purposes of the average benefit percentage test) only if aggregated with the
Plan, then Section 15.1 shall be applied by determining the Deferral
Percentages and the Contribution Percentages of Eligible Participants as if
all such plans were a single plan.
(3) The determination and treatment of the Deferral Percentage and
the Contribution Percentage of any Participant shall satisfy other
requirements as may be prescribed by the Secretary of the Treasury.
15.5 Multiple Use of Alternative Limitation: Multiple use of the
alternative limitation of Section 15.1(2) and 15.2(2) will be limited in
accordance with Section 1.401(m)-2(b) of the Treasury Regulations. If such
limit on multiple use of the alternative limitation would be exceeded for any
Plan Year, the excess will be treated as an excess aggregate contribution
under Section 16.2, and the Contribution Percentage of all Highly Compensated
Employees will be reduced (beginning with the highest Contribution Percentage
as provided in Section 16.2) so that the limit is not exceeded.
ARTICLE 16 - DISTRIBUTION OF EXCESS CONTRIBUTIONS AND
EXCESS AGGREGATE CONTRIBUTIONS
16.1 Reduction of Excess Contributions: If, for any Plan Year
beginning after December 31, 1996, the Average Deferral Percentage for
Participants who are Highly Compensated Employees exceeds the limitation
described in Section 15.1, the dollar amount of excess contributions for each
Highly Compensated Employee will be calculated in the manner described in
Code section 401(k)(8)(B) and the regulations thereunder, and the aggregate
dollar amount of the excess contributions for all Participants who are Highly
Compensated Employees will be distributed on the basis of the dollar amount
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of Before-Tax Deposits for each such Participant (as hereinafter provided)
until the aggregate amount of excess contributions has been distributed. The
Before-Tax Deposits of the Highly Compensated Employee with the highest
dollar amount of Before-Tax Deposits will be reduced first by the amount
required to cause that Participant's Before-Tax Deposits to equal the dollar
amount of the Before-Tax Deposits of the Highly Compensated Employee with the
next highest dollar amount, and this process will be repeated until the total
amount of excess contributions has been distributed. Upon distribution of
the total excess Before-Tax Deposits in this manner, the Plan will be treated
as satisfying the limitations of Section 15.1. Company Contributions made
with respect to a Participant's excess Before-Tax Deposits will be forfeited
and applied as provided in Section 7.2(3). All distributions under this
Section will be made within two and one-half months following the close of
the Plan Year, if practicable, but in no event later than the last day of the
immediately following Plan Year. The amount of excess Before-Tax Deposits
distributed pursuant to this Section with respect to a Participant for the
Plan Year will be reduced by any Before-Tax Deposits previously distributed
to the Participant for the same Plan Year pursuant to Section 3.3(3).
16.2 Reduction of Excess Aggregate Contributions: If, for any
Plan Year beginning after December 31, 1996, the Average Contribution
Percentage for Participants who are Highly Compensated Employees exceeds the
limitation described in Section 15.2, the dollar amount of excess aggregate
contributions for each Highly Compensated Employee will be calculated in the
manner described in Code section 401(m)(6)(B) and the regulations thereunder,
and the aggregate dollar amount of the excess aggregate contributions for all
Participants who are Highly Compensated Employees will be forfeited (if
forfeitable) or (if not forfeitable) will be distributed on the basis of the
aggregate dollar amount of After-Tax Deposits and Company Contributions for
each such Participant (as hereinafter provided) until the aggregate amount of
excess contributions has been forfeited or distributed. The After-Tax
Deposits and Company Contributions of the Highly Compensated Employee with
the highest aggregate dollar amount of After-Tax Deposits and Company
Contributions will be reduced pro rata first by the amount required to cause
that Participant's After-Tax Deposits and Company Contributions to equal the
dollar amount of the After-Tax Deposits and Company Contributions of the
Highly Compensated Employee with the next highest dollar amount, and this
process will be repeated until the total amount of excess contributions has
been forfeited or distributed. Upon forfeiture or distribution of the total
excess After-Tax Deposits and Company Contributions in this manner, the Plan
will be treated as satisfying the limitations of Section 15.2. Company
Contributions forfeited pursuant to this Section will be applied as provided
in Section 7.2(3). All distributions under this Section will be made within
two and one-half months following the close of the Plan Year, if practicable,
but in no event later than the last day of the immediately following Plan
Year.
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16.3 Determination of Income or Loss: All distributions under
this Article will be increased by Trust Fund earnings and decreased by Trust
Fund losses for the Plan Year (but not for the period between the end of the
Plan Year and the date of distribution). Income or loss allocable to amounts
distributed under this Article will be determined under a reasonable method
approved by the Plan Administrator. The method for allocating income will be
consistently used for all Participants and for all corrective distributions
under this Article for the Plan Year, and will be the method used by the Plan
for allocating income and loss to Participants' Accounts.
16.4 Timing of Distributions: All distributions under this Article
will be made within two and one-half months following the close of the Plan
Year, if practicable, but in no event later than the last day of the
immediately following Plan Year.
ARTICLE 17 - LOANS TO PARTICIPANTS
17.1 Eligibility for Borrowing: A Participant (who is an
Employee) may borrow from the Plan to the extent permitted and subject to the
conditions set forth in this Article. A loan from the Plan shall be made to
a former Participant whose employment with the Controlled Group has
terminated only to the extent required to comply with the applicable
provisions of ERISA and the Code. No loan to a Participant pursuant to this
Article, or right or interest therein, shall be transferable or assignable by
the Participant, nor shall any such loan be assumed by any person.
17.2 Amount of Loans: (1) The maximum amount available for a
Loan to a Participant when added to the outstanding balance of all other
Loans to such Participant as of the Loan Valuation Date shall be the lesser
of
(a) $50,000 reduced by the excess (if any) of
(i) the highest outstanding balance of Loans to the
Participant during the one-year period ending on the day before the
Loan Valuation Date, less
(ii) the outstanding balance of Loans to the Participant as
of the Loan Valuation Date, or
(b) 1/2 of the value of the Participant's Vested Interest on the
Loan Valuation Date; provided, however, that in no event shall the
amount of any Loan exceed the Participant's Account Balance as of the
Valuation Date coinciding with or immediately preceding the date of
disbursement of the Loan.
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(2) Except as otherwise determined by the Plan Administrator and
subject to subsection (1) of this Section, no more than two Loans (only one
of which may be a Home Loan) may be outstanding with respect to a Participant
at any time, and no Loan shall be made to a Participant who is in default
under a Loan.
(3) Except as otherwise determined by the Plan Administrator, the
minimum amount of any Loan shall be $500 and Loans shall be made in $100
increments.
(4) No withdrawal under Section 7.7 may be made by a Participant
as of his Loan Valuation Date.
17.3 Interest Rate: The interest rate payable on any Loan shall
be established by the Plan Administrator in accordance with the requirements
of law and this Section and shall be communicated to Participants. Not less
frequently than annually, the Plan Administrator shall review any rate so
established and shall determine whether a new rate shall be substituted in
lieu of the then effective rate. A rate established pursuant to this Section
shall remain in effect until a new rate is established and communicated to
Participants. The interest rate established under this Section that is in
effect on the Loan Valuation Date of any Loan shall be applicable to such
Loan and shall remain in effect during the term of the Loan.
17.4 Term of Loan: (1) Except as otherwise determined by the
Plan Administrator, a Home Loan shall be repaid prior to the expiration of
the fifteen-year period beginning on the first day of the first calendar
month following the Loan Valuation Date. Any Loan under the Plan, other than
a Home Loan, shall be repaid on or before the end of the five-year period
beginning on the first day of the first calendar month following the Loan
Valuation Date.
(2) Except as otherwise determined by the Plan Administrator, the
minimum term of any Loan shall be one year.
(3) Except to the extent required to comply with applicable
provisions of ERISA or the Code, the outstanding balance of principal and
accrued interest under any Loan shall become immediately due and payable as
of the last day of the calendar month during which the Participant's
employment with the Controlled Group is terminated for any reason, including
death.
(4) Notwithstanding the preceding provisions of this Section, the
full amount of the outstanding principal balance of any Loan that has been
outstanding for not less than such period as shall be established by the Plan
Administrator may be prepaid without penalty, effective as of the first
Valuation Date succeeding such prepayment.
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17.5 Disbursement and Security: (1) A Loan shall be evidenced by
the promissory note of the borrowing Participant that shall be executed and
delivered by the Participant on or before the date on which Loan proceeds are
disbursed to him, shall be effective upon such disbursement and shall
include, without limitation, an assignment of 1/2 of the value of the
Participant's Vested Interest as of the Loan Valuation Date and the
Participant's entire Outstanding Loan Balance (or, in either case, any lesser
portion thereof) as security for such Loan and the Participant's consent to a
reduction of the Participant's Account Balance in satisfaction of such
security interest. Each Loan shall be secured by the Participant's pledge of
his Account Balance and his outstanding Loan Balance to the extent assigned
pursuant to the immediately preceding sentence.
(2) In the event that a Participant has executed a promissory note
and that prior to the date on which Loan proceeds are disbursed to him it is
determined that the amount available for a Loan under Section 17.2 is less
than the amount of such promissory note, the Participant shall be required to
accept a Loan in the maximum lesser amount permitted under Section 17.2 and
shall execute a revised promissory note in such amount.
(3) Except as otherwise determined by the Plan Administrator,
Loans shall be disbursed as soon as administratively feasible following the
Loan Valuation Date.
(4) An account denominated the "Outstanding Loan Balance" shall be
established for each Participant with respect to whom a Loan is outstanding
under the Plan. As of the Loan Valuation Date, an amount equal to the
principal amount of the Loan shall be transferred from the Participant's
Account to the Participant's Outstanding Loan Balance, reducing such Account
in the following order: (i) Company Contributions, (ii) Before-Tax Deposits,
(iii) Rollover Contributions or Transfer Contributions (other than transfers
from the ESOP), (iv) ESOP Account Balance relating to employer contributions
on behalf of the Participant to the ESOP, (v) ESOP Account Balance relating
to the Participant's deposits to the ESOP and (vi) After-Tax Deposits; and in
each case, earnings thereon. The amount so transferred shall be invested
solely in the promissory note evidencing the Loan made to the Participant.
Amounts transferred from the Participant's Account in accordance with the
preceding provisions of this Section shall be deducted on a pro rata basis
from the Investment Options in which such amount is invested.
17.6 Repayment of Loans: (1) Repayment of the principal and
interest of any Loan under the Plan shall be made in substantially equal
payments during the term of the Loan which shall be due upon the first pay
date of the borrowing Participant beginning with the first such pay date
occurring in the second month following the Loan Valuation Date of such Loan.
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(2) Payments and prepayments of principal shall reduce the balance
in the Participant's Outstanding Loan Balance and such principal amounts and
any interest paid thereon shall be credited to the Participant's Account and
invested in the Investment Options in the proportion last elected by the
Participant in accordance with Sections 5.3 and 5.4, crediting the Account in
the inverse of the order set forth in Section 17.5(4).
17.7 Defaults and Remedies: (1) Except as otherwise provided in
this Section 17.7(l), in the event that a Participant fails to make any
required payment under a Loan, such Participant shall be deemed to be in
default on such Loan. A Loan that is in default shall become due and payable
90 days after the Participant terminates employment or, if the default occurs
while the Participant is an Employee, 90 days after the date of the default.
A Participant who is on an unpaid leave of absence shall be permitted to
defer Loan payments until the earliest of
(i) termination of employment or expiration of the leave of absence, (ii) 12
months after the date of the leave of absence or (iii) the expiration of the
maximum permissible term of the Loan (as set forth in Section 17.4(l)). A
Participant who is on a leave of absence in Qualified Military Service
(within the meaning of Section 2.5) shall be permitted to defer Loan payments
until the Participant returns to employment with a Controlled Group Member
after the expiration of the period of Qualified Military Service or, if
earlier, until the Participant terminates employment. If a Participant who
has been an unpaid leave of absence or in Qualified Military Service returns
to active employment with a Controlled Group Member, Loan payments will
resume and the amount of each remaining Loan payment will be recalculated to
the extent necessary to amortize the amount of unpaid principal and interest
over a period that does not exceed the maximum permissible term of the Loan.
(2) The Plan Administrator, in its sole discretion, may take such
action as it may deem appropriate to enforce payment of any Loan including,
without limitation, the execution by the Plan upon its security interest in
the Participant's Account Balance and Outstanding Loan Balance; provided,
however, that the Plan shall not levy against the Account Balance of the
Participant until such time that a distribution from the Account would
otherwise be available under the Plan including, if applicable, withdrawal on
account of a Hardship. If the entire balance and accrued interest on the
Loan in default cannot be discharged as set forth in the preceding provisions
of this Section, the remaining amount may be collected by the Plan
Administrator using appropriate legal remedies and, until collected in full,
shall be deducted from any subsequent withdrawals and distributions from the
Plan. Nothing in this Section shall affect the right of the Plan
Administrator to retain the security in any part of the Participant's Account
Balance that is not available for withdrawal at the time that any other
remedies are available to the Plan Administrator.
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17.8 Loan Rules: The Plan Administrator shall establish such
rules consistent with the provisions of this Section as it may deem necessary
or advisable to provide for the administration of Loans, including, without
limitation, rules governing (a) the date on which Loans shall begin to be
made under the Plan, (b) the manner and timing of repayments and
prepayments; (c) the treatment of Loans and repayments, including the
determination of the events of default, in the event of absence from
employment by reason of leave of absence, lay-off or otherwise, (d) the form
and content of the promissory note and any other documentation required in
connection with Loans, (e) the timing of applications and notifications in
connection with Loans, and (f) any matter as to which discretion is reserved
to the Plan Administrator under this Section. Without limitation of the
foregoing, the Plan Administrator may establish such rules and procedures,
including the modification of the terms of any outstanding Loan, that may be
deemed to be necessary or desirable to comply with any regulations governing
employee loans under the provisions of ERISA or the Code, and by requesting a
Loan hereunder each borrowing Participant agrees to execute such modified or
superseding documents as may be required by the Plan Administrator pursuant
to such rules or procedures.
Executed at Dallas, Texas, this 31st day of December, 1997.
CENTRAL AND SOUTH WEST CORPORATION
By__________________________________
E. R. Brooks, Chairman and
Chief Executive Officer
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