EXHIBIT 4.8
KANSAS CITY SOUTHERN INDUSTRIES, INC.
401(k) AND PROFIT SHARING PLAN
(AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2001)
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KANSAS CITY SOUTHERN INDUSTRIES, INC.
401(k) AND PROFIT SHARING PLAN
TABLE OF CONTENTS
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Article I. DEFINITIONS..........................................................................................2
1.01 "Plan" ..............................................................................................2
1.02 "Employer" ..........................................................................................2
1.03 "Trustee" ...........................................................................................2
1.04 "Plan Administrator" ................................................................................2
1.05 "Advisory Committee" ................................................................................2
1.06 "Employee" ..........................................................................................2
1.07 "Highly Compensated Employee" .......................................................................2
1.08 "Participant" .......................................................................................3
1.09 "Beneficiary" .......................................................................................4
1.10 "Compensation" ......................................................................................4
1.11 "Account" ...........................................................................................5
1.12 "Accrued Benefit" ...................................................................................5
1.13 "Nonforfeitable" ....................................................................................5
1.14 "Plan Year" .........................................................................................5
1.15 "Effective Date" ....................................................................................5
1.16 "Plan Entry Date" ...................................................................................5
1.17 "Accounting Date"....................................................................................5
1.18 "Trust" .............................................................................................5
1.19 "Trust Fund" ........................................................................................5
1.20 "Nontransferable Annuity" ...........................................................................5
1.21 "ERISA" .............................................................................................5
1.22 "Code" ..............................................................................................5
1.23 "Service" ...........................................................................................6
1.24 "Hour of Service" ...................................................................................6
1.25 "Disability" ........................................................................................7
1.26 SERVICE FOR PREDECESSOR EMPLOYER. ..................................................................7
1.27 RELATED EMPLOYERS. .................................................................................7
1.28 LEASED EMPLOYEES. ..................................................................................8
1.29 DETERMINATION OF TOP HEAVY STATUS. .................................................................8
1.30 PLAN MAINTAINED BY MORE THAN ONE EMPLOYER. ........................................................10
ARTICLE II. EMPLOYEE PARTICIPANTS...............................................................................10
2.01 ELIGIBILITY. ......................................................................................10
2.02 YEAR OF SERVICE - PARTICIPATION.....................................................................11
2.03 BREAK IN SERVICE - PARTICIPATION. .................................................................11
2.04 PARTICIPATION UPON REEMPLOYMENT. ..................................................................11
Article III. EMPLOYER CONTRIBUTIONS AND FORFEITURES..............................................................12
3.01 AMOUNT..............................................................................................12
3.02 DETERMINATION OF CONTRIBUTION. ....................................................................13
3.03 TIME OF PAYMENT OF CONTRIBUTION. ..................................................................13
3.04 CONTRIBUTION ALLOCATION.............................................................................13
3.05 FORFEITURE ALLOCATION. ............................................................................15
3.06 ACCRUAL OF BENEFIT. ...............................................................................16
3.07 LIMITATIONS ON ALLOCATIONS TO PARTICIPANTS' ACCOUNTS................................................16
3.08 DEFINITIONS - ARTICLE III. ........................................................................18
Article IV. PARTICIPANT CONTRIBUTIONS...........................................................................21
4.01 PARTICIPANT VOLUNTARY CONTRIBUTIONS. ..............................................................21
4.02 PARTICIPANT VOLUNTARY CONTRIBUTIONS - SPECIAL
DISCRIMINATION TEST. (Reserved)....................................................................21
4.03 PARTICIPANT ROLLOVER CONTRIBUTIONS..................................................................21
4.04 PARTICIPANT CONTRIBUTION - FORFEITABILITY...........................................................21
4.05 PARTICIPANT CONTRIBUTION - WITHDRAWAL/DISTRIBUTION. ...............................................21
4.06 PARTICIPANT CONTRIBUTION - ACCRUED BENEFIT..........................................................22
Article V. TERMINATION OF SERVICE - PARTICIPANT VESTING........................................................22
5.01 NORMAL RETIREMENT AGE. ............................................................................22
5.02 PARTICIPANT DISABILITY OR DEATH. ..................................................................22
5.03 VESTING SCHEDULE. .................................................................................22
5.04 CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED PARTICIPANTS/RESTORATION OF FORFEITED ACCRUED BENEFIT....23
5.05 SEGREGATED ACCOUNT FOR REPAID AMOUNT................................................................24
5.06 YEAR OF SERVICE - VESTING. ........................................................................25
5.07 BREAK IN SERVICE - VESTING..........................................................................25
5.08 INCLUDED YEARS OF SERVICE - VESTING.................................................................25
5.09 FORFEITURE OCCURS. ................................................................................25
Article VI. TIME AND METHOD OF PAYMENT OF BENEFITS..............................................................25
6.01 TIME OF PAYMENT OF ACCRUED BENEFIT. ...............................................................25
6.02 METHOD OF PAYMENT OF ACCRUED BENEFIT. .............................................................27
6.03 BENEFIT PAYMENT ELECTIONS. ........................................................................29
6.04 ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND SURVIVING
SPOUSES. ..........................................................................................34
6.05 WAIVER ELECTION - QUALIFIED JOINT AND SURVIVOR ANNUITY. [Reserved].................................34
6.06 WAIVER ELECTION - PRERETIREMENT SURVIVOR ANNUITY. [Reserved].......................................34
6.07 DISTRIBUTIONS UNDER DOMESTIC RELATIONS ORDERS. ....................................................34
6.08 ROLLOVER DISTRIBUTIONS. ...........................................................................35
Article VII. EMPLOYER ADMINISTRATIVE PROVISIONS..................................................................36
7.01 INFORMATION TO COMMITTEE. .........................................................................36
7.02 NO LIABILITY. .....................................................................................36
7.03 INDEMNITY OF COMMITTEE. ...........................................................................36
7.04 EMPLOYER DIRECTION OF INVESTMENT. .................................................................36
7.05 AMENDMENT TO VESTING SCHEDULE. ....................................................................37
Article VIII. PARTICIPANT ADMINISTRATIVE PROVISIONS..............................................................37
8.01 BENEFICIARY DESIGNATION. ..........................................................................37
8.02 NO BENEFICIARY DESIGNATION. .......................................................................38
8.03 PERSONAL DATA TO COMMITTEE. .......................................................................38
8.04 ADDRESS FOR NOTIFICATION. .........................................................................38
8.05 ASSIGNMENT OR ALIENATION. .........................................................................38
8.06 NOTICE OF CHANGE IN TERMS. ........................................................................38
8.07 LITIGATION AGAINST THE TRUST. .....................................................................39
8.08 INFORMATION AVAILABLE. ............................................................................39
8.09 APPEAL PROCEDURE FOR DENIAL OF BENEFITS. ..........................................................39
Article IX. ADVISORY COMMITTEE - DUTIES WITH RESPECT TO PARTICIPANT'S ACCOUNTS..................................40
9.01 MEMBERS' COMPENSATION, EXPENSES. ..................................................................40
9.02 TERM. .............................................................................................40
9.03 POWERS. ...........................................................................................40
9.04 GENERAL. ..........................................................................................40
9.05 FUNDING POLICY. ...................................................................................41
9.06 MANNER OF ACTION. .................................................................................41
9.07 AUTHORIZED REPRESENTATIVE. ........................................................................41
9.08 INTERESTED MEMBER. ................................................................................41
9.09 INDIVIDUAL ACCOUNTS. ..............................................................................41
9.10 INDIVIDUAL STATEMENT. .............................................................................41
9.11 ACCOUNT CHARGED. ..................................................................................42
9.12 UNCLAIMED ACCOUNT PROCEDURE. ......................................................................42
9.13 INVESTMENT MANAGER. ...............................................................................43
Article X. [RESERVED]..........................................................................................43
Article XI. EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION...........................................................43
11.01 EXCLUSIVE BENEFIT. ................................................................................43
11.02 AMENDMENT BY EMPLOYER. ............................................................................43
11.03 DISCONTINUANCE. ...................................................................................44
11.04 FULL VESTING ON TERMINATION. ......................................................................44
11.05 MERGER/DIRECT TRANSFER. ...........................................................................44
11.06 TERMINATION. ......................................................................................45
Article XII. PROVISIONS RELATING TO THE CODEss.401(k) ARRANGEMENT................................................46
12.01 CODEss.401(k) ARRANGEMENT...........................................................................46
12.02 DEFINITIONS.........................................................................................47
12.03 ANNUAL ELECTIVE DEFERRAL LIMITATION.................................................................49
12.04 ACTUAL DEFERRAL PERCENTAGE ("ADP") TEST.............................................................50
12.05 NONDISCRIMINATION RULES FOR EMPLOYER MATCHING CONTRIBUTIONS/EMPLOYEE CONTRIBUTIONS. ...............53
12.06 MULTIPLE USE LIMITATION. ..........................................................................57
Article XIII. MISCELLANEOUS......................................................................................57
13.01 EVIDENCE............................................................................................57
13.02 NO RESPONSIBILITY FOR EMPLOYER ACTION. ............................................................58
13.03 FIDUCIARIES NOT INSURERS. .........................................................................58
13.04 WAIVER OF NOTICE. .................................................................................58
13.05 SUCCESSORS. .......................................................................................58
13.06 WORD USAGE. ........................................................................................58
13.07 STATE LAW. ........................................................................................58
13.08 EMPLOYMENT NOT GUARANTEED. ........................................................................58
Article XIV. [RESERVED]..........................................................................................59
Article XV. PARTICIPANT'S ACCOUNTS AND THEIR INVESTMENT.........................................................59
15.01 INDIVIDUAL ACCOUNTS. ..............................................................................59
15.02 INVESTMENT OF ACCOUNTS. ...........................................................................59
15.03 PARTICIPANT ACCOUNTS - INVESTMENT PERCENTAGES. ....................................................59
15.04 VALUATION OF PARTICIPANTS' ACCRUED BENEFITS. ......................................................60
15.05 ALLOCATION AND DISTRIBUTION OF NET INCOME GAIN OR LOSS. ...........................................60
15.06 PARTICIPANT VOTING RIGHTS - EMPLOYER STOCK. .......................................................60
Article XVI. PROVISIONS EFFECTIVE UPON CHANGE IN CONTROL OF KCSI.................................................61
16.01 DEFINITIONS OF "CHANGE IN CONTROL OF KCSI". .......................................................61
16.02 PROVISIONS EFFECTIVE UPON CHANGE IN CONTROL. ......................................................62
16.03 RIGHT TO AMEND ARTICLE XVI PRIOR TO CHANGE IN CONTROL
OF KCSI. ..........................................................................................63
Article XVII. PROVISIONS APPLICABLE TO ACCOUNTS TRANSFERRED FROM FORMER MIDSOUTH PLAN............................63
17.01 MIDSOUTH ACCOUNTS. ................................................................................63
17.02 MIDSOUTH PARTICIPANT CONTRIBUTION ACCOUNTS. .......................................................64
17.03 METHOD OF PAYMENT OF ACCRUED BENEFIT. .............................................................64
17.04 TIME OF PAYMENT AND ACCRUED BENEFIT. ..............................................................64
17.05 BENEFIT PAYMENT ELECTIONS. ........................................................................66
17.06 ANNUITY DISTRIBUTIONS TO MIDSOUTH PARTICIPANTS AND SURVIVING SPOUSES...............................68
17.07 WAIVER ELECTION-QUALIFIED JOINT AND SURVIVOR ANNUITY................................................70
17.08 WAIVER ELECTION - PRERETIREMENT SURVIVOR ANNUITY. .................................................71
17.09 COORDINATION WITH SURVIVOR REQUIREMENTS. ..........................................................72
17.10 PARTICIPANT LOANS. ................................................................................72
17.10 VESTING SCHEDULE FOR REPAID AMOUNTS. ..............................................................73
Article XVIII. PROVISIONS APPLICABLE TO ACCOUNTS TRANSFERRED FROM FORMER GATEWAY PLAN............................73
18.01 GATEWAY ACCOUNTS. .................................................................................73
18.02 SPECIAL WITHDRAWAL RIGHTS. ........................................................................74
18.03 METHOD OF PAYMENT OF ACCRUED BENEFIT. .............................................................74
18.04 TIME OF PAYMENT AND ACCRUED BENEFIT. ..............................................................75
18.05 BENEFIT PAYMENT ELECTIONS. ........................................................................77
18.06 ANNUITY DISTRIBUTIONS TO GATEWAY PARTICIPANTS AND
SURVIVING SPOUSES...................................................................................79
18.07 WAIVER ELECTION - QUALIFIED JOINT AND SURVIVOR ANNUITY..............................................80
18.08 WAIVER ELECTION - PRERETIREMENT SURVIVOR ANNUITY....................................................81
18.09 COORDINATION WITH SURVIVOR REQUIREMENTS.............................................................82
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ALPHABETICAL LISTING OF DEFINITIONS
Plan Definition Reference
(Page Number)
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Account.....................................................................................................1.11(5)
Accounting Date.............................................................................................1.17(5)
Accrued Benefit.............................................................................................1.12(5)
Advisory Committee..........................................................................................1.05(2)
Annual Addition.........................................................................................3.08(a)(18)
Annuity Starting Date......................................................................................6.01(25)
Beneficiary.................................................................................................1.09(4)
Break in Service for Vesting Purposes......................................................................5.07(25)
Cash-Out Distribution......................................................................................5.04(23)
Code........................................................................................................1.22(5)
Codess.411 (d)(6) Protected Benefits.......................................................................11.02(43)
Compensation................................................................................................1.10(4)
Compensation for Codess.415 Purposes.....................................................................3.08(b)(18)
Compensation for Top Heavy Purposes......................................................................1.29(c)(9)
Deemed Cash-Out Rule....................................................................................5.04(C)(24)
Deferral Contributions Account..........................................................................3.04(A)(13)
Defined Contribution Plan...............................................................................3.08(g)(19)
Defined Benefit Plan....................................................................................3.08(h)(19)
Determination Date......................................................................................1.29(g)(10)
Disability..................................................................................................1.25(7)
Distribution Date .........................................................................................6.01(25)
Distribution Valuation Date ...............................................................................6.01(25)
Effective Date..............................................................................................1.15(5)
Elective Contributions......................................................................................1.10(4)
Elective Transfer.........................................................................................11.05(44)
Employee....................................................................................................1.06(2)
Employer....................................................................................................1.02(2)
Employer for Codess.415 Purposes.........................................................................3.08(d)(18)
Employer for Top Heavy Purposes.........................................................................1.29(f)(10)
Employment Commencement Date...............................................................................2.01(10)
Employer Contributions Account.............................................................................3.04(13)
ERISA.......................................................................................................1.21(5)
Excess Amount...........................................................................................3.08(e)(19)
Forfeiture Break In Service................................................................................5.08(25)
Former Gateway Plan.......................................................................................18.01(73)
Former MidSouth Plan......................................................................................17.01(63)
Gateway Accounts..........................................................................................18.01(73)
Gateway Participant.......................................................................................18.01(73)
Hardship................................................................................................6.03(E)(32)
Highly Compensated Employee.................................................................................1.07(2)
Hour of Service.............................................................................................1.24(6)
Investment Manager............................................................................9.04(i)(41); 9.13(43)
KCSI........................................................................................................1.02(2)
Key Employee.............................................................................................1.29(a)(9)
Leased Employees............................................................................................1.28(8)
Limitation Year ........................................................................................3.08(f)(19)
Maximum Permissible Amount..............................................................................3.08(c)(18)
MidSouth Accounts.........................................................................................17.01(63)
MidSouth Participant......................................................................................17.01(63)
Minimum Distribution Incidental Benefit (MDIB)..........................................................6.02(A)(28)
Non-Key Employee.........................................................................................1.29(b)(9)
Nonforfeitable..............................................................................................1.13(5)
Nontransferable Annuity.....................................................................................1.20(5)
Normal Retirement Age......................................................................................5.01(22)
Participant.................................................................................................1.08(3)
Participating Employer......................................................................................1.02(2)
Permissive Aggregation Group............................................................................1.29(e)(10)
Plan........................................................................................................1.01(2)
Plan Entry Date.............................................................................................1.16(5)
Plan Administrator..........................................................................................1.04(2)
Plan Year...................................................................................................1.14(5)
Qualified Domestic Relations Order.........................................................................6.07(34)
Qualified Matching Contributions Account...................................................................3.04(13)
Qualified Nonelective Contributions Account................................................................3.04(13)
Regular Matching Contributions Account.....................................................................3.04(13)
Related Employers...........................................................................................1.27(7)
Required Aggregation Group..............................................................................1.29(d)(10)
Required Beginning Date.................................................................................6.01(B)(26)
Rollover Account...........................................................................................4.03(21)
Rollover Contributions.....................................................................................4.03(21)
Separation from Service.....................................................................................1.23(6)
Service.....................................................................................................1.23(6)
Sponsor.....................................................................................................1.02(2)
Top Heavy Minimum Allocation............................................................................3.04(B)(14)
Top Heavy Ratio.............................................................................................1.29(8)
Trust Fund..................................................................................................1.19(5)
Trust.......................................................................................................1.18(5)
Trustee.....................................................................................................1.03(2)
Year of Service for Eligibility Purposes...................................................................2.02(11)
Year of Service for Vesting Purposes.......................................................................5.06(25)
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KANSAS CITY SOUTHERN INDUSTRIES, INC.
401(k) AND PROFIT SHARING PLAN
(AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2001)
INTRODUCTION
Kansas City Southern Industries, Inc. ("KCSI") originally established,
effective as of January 1, 1996, the Kansas City Southern Industries, Inc.
401(k) Plan (the "401 (k) Plan"), for the administration and distribution of
contributions made by the Employers for the purpose of providing retirement
benefits for eligible Employees.
Immediately prior to July 12, 2000 (the "Spinoff Date"), Stilwell
Financial Inc. ("Stilwell") and its subsidiaries (collectively, the "Stilwell
Group") were members of the controlled group of corporations (within the meaning
of Code ss. 414(b)) that includes KCSI. As of the Spinoff Date, all of the
shares of Stilwell held by KCSI were distributed to the shareholders of KCSI as
a spinoff dividend (such transaction being referred to herein as the "Spinoff")
and the members of the Stilwell Group thereby ceased to be members of the
controlled group of corporations that includes KCSI.
As of the Spinoff Date, the 401(k) Plan was split into two separate
plans: (1) an amended and restated 401(k) plan providing benefits to eligible
employees of KCSI and certain of its affiliates (exclusive of the Stilwell
Group), which continued to hold the assets of the 401(k) Plan allocable to
employees and former employees of KCSI and certain of its affiliates other than
the Stilwell Group, and which continued to be known as the Kansas City Southern
Industries, Inc. 401(k) Plan (the "401(k) Plan"); and (2) a newly established
401(k) plan with a profit sharing plan component providing benefits to eligible
employees of the Stilwell Group, to which were transferred the assets of the
401(k) Plan allocable to employees and former employees of the Stilwell Group,
and which is known as the Stilwell Financial, Inc. 401(k) and Profit Sharing
Plan ("Stilwell Plan").
KCSI originally established, effective as of January 1, 1990, the
Kansas City Southern Industries, Inc. Profit Sharing Plan (the "Profit Sharing
Plan") for the administration and distribution of contributions made by the
Employers for the purpose of providing retirement benefits for eligible
Employees. Effective as of the Spinoff Date the Profit Sharing Plan was amended
and restated, participants in the Profit Sharing Plan who were employees or
former employees of the Stilwell Group ceased to actively participate in the
Profit Sharing Plan, and the assets of the Profit Sharing Plan allocable to
employees and former employees of the Stilwell Group were transferred to the
profit sharing component of the Stilwell Plan.
Effective as of January 1, 2001 (the "Effective Date") the Profit
Sharing Plan was merged with the 401(k) Plan, which was amended, restated and
renamed the Kansas City Southern Industries, Inc. 401(k) and Profit Sharing Plan
(the "Plan").
The provisions of this Plan, as hereby amended and restated effective
as of the Effective Date, shall apply to an Employee who is employed by an
Employer on or after the Effective Date, and to any other Employee who is
employed by an Employer before the Effective Date and whose Account under the
Profit Sharing Plan is transferred to the Plan as of the Effective Date. If a
Participant in the 401(k) Plan or the Profit Sharing Plan terminated employment
from his last Employer prior to the Effective Date, the benefits to which he is
entitled shall be determined under the terms of the 401(k) Plan or the Profit
Sharing Plan, as applicable, as in effect on the date of the Employee's
termination of employment, unless otherwise indicated.
ARTICLE I.
DEFINITIONS
1.01 "Plan" means the retirement plan established and continued by KCSI
as set forth herein, designated as the "Kansas City Southern Industries, Inc.
401(k) and Profit Sharing Plan."
1.02 "Employer" means Kansas City Southern Industries, Inc. ("KCSI" or
the "Sponsor") or any other employer (a "Participating Employer") who with the
written consent of KCSI adopts this Plan.
1.03 "Trustee" means the Trustee under the Master Trust or any
successor in office who in writing accepts the position of Trustee.
1.04 "Plan Administrator" is Kansas City Southern Industries, Inc.
unless KCSI designates another person to hold the position of Plan
Administrator. In addition to its other duties, the Plan Administrator has full
responsibility for compliance with the reporting and disclosure rules under
ERISA as respects this Plan.
1.05 "Advisory Committee" means the Sponsor's Advisory Committee as
from time to time constituted.
1.06 "Employee" means any employee of an Employer, excluding any Leased
Employee, and excluding any individual who performs services for an Employer and
(i) is working in a classification described as an independent contractor (even
if such person is subsequently determined to be a common-law employee of the
Employer), (ii) is paid, directly or indirectly, through an Employer's accounts
payable system, or (iii) performs such services pursuant to a contract or
agreement which provides that the person is an independent contractor or
consultant (even if such person is subsequently determined to be a common-law
employee of the Employer).
1.07 "Highly Compensated Employee" means, for any Plan Year commencing
on or after January 1, 1997, any individual who (i) is an Employee described in
subsection (a) or (b) below, or (ii) is a former Employee described in
subsection (c), below:
(a) An Employee who at any time during the current Plan Year or the
preceding Plan Year is a more than five percent (5%) owner (or is
considered as owning more than five percent (5%) within the meaning of
Section 318 of the Code) ("5% Owner") of the Employer;
(b) An Employee who (i) received Compensation during the preceding Plan
Year in excess of $80,000 (in 1996, as adjusted in accordance with
regulations and rulings under Section 414(q) of the Code), and (ii) if
the Advisory Committee elects by amendment of the Plan to apply this
clause (ii) to determine the Highly Compensated Employees for a Plan
Year, for this Plan and, except as otherwise permitted, consistently
for all plans of the Employer whose plan years begin in the same
calendar year as such preceding Plan Year, is in the group consisting
of the top twenty percent (20%) of the total number of persons
employed by the Employer when ranked on the basis of Compensation paid
during the preceding Plan Year, provided that, for purposes of
determining the total number of persons employed by the Employer, the
following Employees shall be excluded:
(1) Employees who have not completed an aggregate of six (6)
months of service during the preceding Plan Year,
(2) Employees who work less than seventeen and one-half (17-1/2)
hours per week for 50% or more of the total weeks worked by such
employees during the preceding Plan Year,
(3) Employees who normally work during not more than six (6)
months during any year,
(4) Employees who have not attained age 21 by the end of the
preceding Plan Year,
(5) Employees who are nonresident aliens and who receive no
earned income (within the meaning of Section 911(d)(2) of the Code)
from the Employer which constitutes income during the preceding Plan
Year from sources within the United States (within the meaning of
Section 861(a)(3) of the Code), and
(6) Except to the extent provided in regulations prescribed by
the Secretary of the Treasury, Employees who are members of a
collective bargaining unit represented by a collective bargaining
agent with which an Employer has or has had a bargaining agreement.
For purposes of this Section 1.07, "Compensation" means
Compensation as defined in Section 1.10 and Compensation must include
Elective Contributions.
The Advisory Committee must make the determination of who is a
Highly Compensated Employee, including the determinations of the number
and identity of the top paid 20% group and the relevant Compensation,
consistent with Code ss.414(q) and regulations issued under that Code
section. The Employer may make a calendar year election to determine
the Highly Compensated Employees for the Plan Year, as prescribed by
Treasury regulations. Except as otherwise permitted, a calendar year
election must apply to all plans and arrangements of the Employer.
(c) The term "Highly Compensated Employee" also includes any
former Employee who separated from Service (or has a deemed Separation
from Service, as determined under Treasury regulations) prior to the
Plan Year, performs no Service for the Employer during the Plan Year,
and was a Highly Compensated Employee either for the separation year
or any Plan Year ending on or after his 55th birthday.
1.08 "Participant" is an Employee who is eligible to be and becomes a
Participant in accordance with the provisions of Section 2.01.
1.09 "Beneficiary" is a person designated by a Participant who is or may
become entitled to a benefit under the Plan. A Beneficiary who becomes entitled
to a benefit under the Plan remains a beneficiary under the Plan until the
Trustee has fully distributed his benefit to him. A Beneficiary's right to (and
the Plan Administrator's, the Advisory Committee's or a Trustee's duty to
provide to the Beneficiary) information or data concerning the Plan does not
arise until he first becomes entitled to receive a benefit under the Plan.
1.10 "Compensation" means, effective as of January 1, 1997, the
Participant's wages, salaries, fees for professional service and other amounts
received for personal services actually rendered in the course of employment
with the Employer maintaining the Plan as defined in Code ss.3401(a) for
purposes of income tax withholding at the source but determined without regard
to any rules that limit remuneration included in wages based on the nature or
location of the employment or the services performed (such as the exception for
agricultural labor in ss.3401(a)(2)). Compensation includes Elective
Contributions made by the Employer on the Employee's behalf. "Elective
Contributions" are amounts excludible from the Employee's gross income under
Code ss.ss.125, ss.402(a)(8), 402(h) or 403(b), and contributed by the Employer,
at the Employee's election, to a Code ss.401(k) arrangement, a simplified
employee pension, cafeteria plan or tax-sheltered annuity. A Compensation
payment includes Compensation paid by the Employer to an Employee through
another person under the common paymaster provisions of Code ss.ss.3121(s) and
3306(p).
Any reference in this Plan to Compensation is a reference to the definition
in this Section 1.10, unless the Plan reference specifies a modification to this
definition. The Advisory Committee will take into account only Compensation
actually paid for the relevant period.
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, the annual
Compensation of each Employee taken into account under the Plan shall not exceed
the OBRA 93 annual compensation limit. The OBRA 93 annual compensation limit is
$150,000, as adjusted by the Commissioner for increases in the cost of living in
accordance with Code ss.401(a)(17)(B). The cost-of-living adjustment in effect
for a calendar year applies to any period, not exceeding 12 months, over which
Compensation is determined (determination period) beginning in such calendar
year. If a determination period consists of fewer than 12 months, the OBRA 93
annual compensation limit will be multiplied by a fraction, the numerator of
which is the number of months in the determination period, and the denominator
of which is 12.
If Compensation for any prior determination period is taken into account in
determining an Employee's benefits accruing in the current Plan Year, the
Compensation for that prior determination period is subject to the OBRA 93
annual compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
first Plan Year beginning on or after January 1, 1994, the OBRA 93 annual
compensation limit is $150,000.
Any reference in this Plan to the limitation under Code ss.401(a)(17) shall
mean the OBRA 93 annual compensation limit set forth in this provision.
NONDISCRIMINATION. For purposes of determining whether the Plan
discriminates in favor of Highly Compensated Employees, Compensation means
Compensation as defined in this Section 1.10, unless KCSI elects to use an
alternate nondiscriminatory definition, in accordance with the requirements of
Code ss.414(s) and the regulations issued under that Code section. KCSI may
elect to include all Elective Contributions made by the Employer on behalf of
the Employees. KCSI's election to include Elective Contributions must be
consistent and uniform with respect to Employees and all plans of the Employer
for any particular Plan Year. KCSI may make this election to include Elective
Contributions for nondiscrimination testing purposes, irrespective of whether
this Section 1.10 includes Elective Contributions in the general Compensation
definition applicable to the Plan.
1.11 "Account" means the separate account(s) which the Advisory Committee
or the Trustee maintains for a Participant under the Plan.
1.12 "Accrued Benefit" means the amount standing in a Participant's
Account(s) as of any date derived from both Employer contributions and Employee
contributions, if any.
1.13 "Nonforfeitable" means a Participant's or Beneficiary's unconditional
claim, legally enforceable against the Plan, to the Participant's Accrued
Benefit.
1.14 "Plan Year" means the fiscal year of the Plan, a 12 consecutive month
period ending every December 31.
1.15 "Effective Date" of this amended and restated Plan is January 1, 2001.
1.16 "Plan Entry Date" means every January 1 and July 1.
1.17 "Accounting Date" is the last day of the Plan Year. Unless otherwise
specified in the Plan, the Advisory Committee will make all the Plan allocations
for a particular Plan Year as of the Accounting Date of that Plan Year.
1.18 "Trust" means the Master Trust established pursuant to the Master
Trust Agreement between KCSI and UMB Bank, N.A. and/or any other Trust that may
be established under this Plan.
1.19 "Trust Fund" means all property of every kind held or acquired by the
Trustee under the Plan, other than incidental benefit insurance contracts. A
single Master Trust has been established for all Employers participating under
the Kansas City Southern Industries, Inc. 401(k) Plan. However, the Trustee
shall maintain separate records of account in order to reflect properly each
Participant's Accrued Benefit derived from each Participating Employer.
1.20 "Nontransferable Annuity" means an annuity which by its terms provides
that it may not be sold, assigned, discounted, pledged as collateral for a loan
or security for the performance of an obligation or for any purpose to any
person other than the insurance company. If the Trustee distributes an annuity
contract, the contract must be a Nontransferable Annuity.
1.21 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
1.22 "Code" means the Internal Revenue Code of 1986, as amended.
1.23 "Service" means any period of time the Employee is in the employ of
the Employer, including any period the Employee is on an unpaid leave of absence
authorized by the Employer under a uniform, nondiscriminatory policy applicable
to all Employees. Notwithstanding any provision of this Plan to the contrary,
contributions, benefits and service credit with respect to qualified military
service shall be provided in accordance with Section 414(u) of the Code.
"Separation from Service" means a separation from Service with the Employer
maintaining this Plan.
1.24 "Hour of Service" means:
(a) Each Hour of Service for which the Employer, either directly or
indirectly, pays an Employee, or for which the Employee is entitled to
payment, for the performance of duties. The Advisory Committee credits
Hours of Service under this paragraph (a) to the Employee for the
computation period in which the Employee performs the duties,
irrespective of when paid;
(b) Each Hour of Service for back pay, irrespective of mitigation of
damages, to which the Employer has agreed or for which the Employee
has received an award. The Advisory Committee credits Hours of Service
under this paragraph (b) to the Employee for the computation period(s)
to which the award or the agreement pertains rather than for the
computation period in which the award, agreement or payment is made;
and
(c) Each Hour of Service for which the Employer, either directly or
indirectly, pays an Employee, or for which the Employee is entitled to
payment (irrespective of whether the employment relationship is
terminated), for reasons other than for the performance of duties
during a computation period, such as leave of absence, vacation,
holiday, sick leave, illness, incapacity (including disability),
layoff, jury duty or military duty. The Advisory Committee will credit
no more than 501 Hours of Service under this paragraph (c) to an
Employee on account of any single continuous period during which the
Employee does not perform any duties (whether or not such period
occurs during a single computation period). The Advisory Committee
credits Hours of Service under this paragraph (c) in accordance with
the rules of paragraphs (b) and (c) of Labor Reg.ss.2530.200b-2, which
the Plan, by this reference, specifically incorporates in full within
this paragraph (c).
The Advisory Committee will not credit an Hour of Service under more than
one of the above paragraphs. A computation period for purposes of this Section
1.24 is the Plan Year, Year of Service period, Break in Service period or other
period, as determined under the Plan provision for which the Advisory Committee
is measuring an Employee's Hours of Service.
The Employer will credit every Employee with Hours of Service on the basis
of the "actual" method. For purposes of the Plan, "actual" method means the
determination of Hours of Service from records of hours worked and hours for
which the Employer makes payment or for which payment is due from the Employer.
However, for an Employee who is paid on other than an hourly basis, Hours of
Service shall be credited according to the following schedule, based on the
payroll period of the Employee, for each payroll period with respect to which he
or she is paid or is entitled to payment of compensation:
PAYROLL PERIOD HOURS OF SERVICE
Daily 10
Weekly 45
Bi-Monthly 95
Monthly 190
Solely for purposes of determining whether the Employee incurs a Break in
Service under any provision of this Plan, the Advisory Committee must credit
Hours of Service during an Employee's unpaid absence period due to maternity or
paternity leave. The Advisory Committee considers an Employee on maternity or
paternity leave if the Employee's absence is due to the Employee's pregnancy,
the birth of the Employee's child, the placement with the Employee of an adopted
child, or the care of the Employee's child immediately following the child's
birth or placement. The Advisory Committee credits Hours of Service under this
paragraph on the basis of the number of Hours of Service the Employee would
receive if he were paid during the absence period or, if the Advisory Committee
cannot determine the number of Hours of Service the Employee would receive, on
the basis of 8 hours per day during the absence period. The Advisory Committee
will credit only the number (not exceeding 501) of Hours of Service necessary to
prevent an Employee's Break in Service. The Advisory Committee credits all Hours
of Service described in this paragraph to the computation period in which the
absence period begins or, if the Employee does not need these Hours of Service
to prevent a Break in Service in the computation period in which his absence
period begins, the Advisory Committee credits these Hours of Service to the
immediately following computation period.
1.25 "Disability" means the Participant, because of a physical or mental
disability, will be unable to perform the duties of his customary position of
employment (or is unable to engage in any substantial gainful activity) for an
indefinite period which the Advisory Committee considers will be of long
continued duration. A Participant also is disabled if he incurs the permanent
loss or loss of use of a member or function of the body, or is permanently
disfigured, and incurs a Separation from Service. The Plan considers a
Participant disabled on the date the Advisory Committee determines the
Participant satisfies the definition of disability. The Advisory Committee may
require a Participant to submit to a physical examination in order to confirm
disability. The Advisory Committee will apply the provisions of this Section
1.25 in a nondiscriminatory, consistent and uniform manner.
1.26 SERVICE FOR PREDECESSOR EMPLOYER. If the Employer maintains the plan
of a predecessor employer, the Plan treats service of the Employee with the
predecessor employer as service with the Employer.
1.27 RELATED EMPLOYERS. A related group is a controlled group of
corporations (as defined in Code ss.414(b)), trades or businesses (whether or
not incorporated) which are under common control (as defined in Code ss.414(c))
or an affiliated service group (as defined in Code ss.414(m) or in Code
ss.414(o)). If the Employer is a member of a related group, the term "Employer"
includes, for the time period during which the relation exists, the related
group members for purposes of crediting Hours of Service, determining Years of
Service and Breaks in Service under Articles II and V, applying the limitations
on allocations in Part 2 of Article III, applying the top heavy rules and the
minimum allocation requirements of Article III, the definitions of Employee,
Highly Compensated Employee, Compensation and Leased Employee, and for any other
purpose required by the applicable Code section or by a Plan provision. In
addition, (i) the Plan shall treat all service prior to the Effective Date that
is credited with respect to an Employee under the terms of the Plan in effect
prior to the Effective Date as service with the Employer, and (ii) the Plan
shall treat service of an Employee on or after the Effective Date with an
"affiliate" of KCSI during the time it is an "affiliate" as service with the
Employer. For purposes of the immediately preceding sentence, the term
"affiliate" means any corporation, partnership, joint venture or other business
entity with respect to which twenty-five percent (25%) or more of the equity
interests therein are owned, directly or indirectly, by KCSI, or by any entity
at least 80% of the equity interests of which are owned by KCSI. However, only a
Participating Employer described in Section 1.02 may contribute to the Plan and
only an Employee employed by a Participating Employer described in Section 1.02
is eligible to participate in this Plan. For Plan allocation purposes,
"Compensation" does not include compensation received from a related employer
that is not participating in this Plan.
1.28 LEASED EMPLOYEES. The Plan does not treat a Leased Employee as an
Employee of the Employer. A Leased Employee is an individual (who otherwise is
not an Employee of the Employer) who, pursuant to a leasing agreement between
the Employer and any other person, has performed services for the Employer (or
for the Employer and any persons related to the Employer within the meaning of
Code ss.144(a)(3)) on a substantially full time basis for at least one year and
who performs services under the primary direction or control of the Employer. A
Leased Employee who performs services for the Employer pursuant to a contract or
agreement which provides that the person is a Leased Employee will not become
eligible to participate in this Plan merely by reason of a determination that
the person is a common-law employee of the Employer, unless and until the
Employer changes the employment classification of such person.
1.29 DETERMINATION OF TOP HEAVY STATUS. If this Plan is the only qualified
plan maintained by the Employer, the Plan is top heavy for a Plan Year if the
top heavy ratio as of the Determination Date exceeds 60%. The top heavy ratio is
a fraction, the numerator of which is the sum of the present value of Accrued
Benefits of all Key Employees as of the Determination Date and the denominator
of which is a similar sum determined for all Employees. The Advisory Committee
must include in the top heavy ratio, as part of the present value of Accrued
Benefits, any contribution not made as of the Determination Date but includible
under Code ss. 416 and the applicable Treasury regulations, and distributions
made within the Determination Period. The Advisory Committee must calculate the
top heavy ratio by disregarding the Accrued Benefit (and distributions, if any,
of the Accrued Benefit) of any Non-Key Employee who was formerly a Key Employee,
and by disregarding the Accrued Benefit (including distributions, if any, of the
Accrued Benefit) of an individual who has not received credit for at least one
Hour of Service with the Employer during the Determination Period. The Advisory
Committee must calculate the top heavy ratio, including the extent to which it
must take into account distributions, rollovers and transfers, in accordance
with Code ss. 416 and the regulations under that Code section.
If the Employer maintains other qualified plans (including a simplified
employee pension plan), or maintained another such plan which now is terminated,
this Plan is top heavy only if it is part of the Required Aggregation Group, and
the top heavy ratio for the Required Aggregation Group and for the permissive
Aggregation Group, if any, each exceeds 60%. The Advisory Committee will
calculate the top heavy ratio in the same manner as required by the first
paragraph of this Section 1.29, taking into account all plans within the
Aggregation Group. To the extent the Advisory Committee must take into account
distributions to a Participant, the Advisory Committee must include
distributions from a terminated plan which would have been part of the Required
Aggregation Group if it were in existence on the Determination Date. The
Advisory Committee will calculate the present value of Accrued Benefits under
defined benefit plans or simplified employee pension plans included within the
group in accordance with the terms of those plans, Code ss. 416 and the
regulations under that Code section. If a Participant in a defined benefit plan
is a Non-Key Employee, the Advisory Committee will determine his Accrued Benefit
under the accrual method, if any, which is applicable uniformly to all defined
benefit plans maintained by the Employer or, if there is no uniform method, in
accordance with the slowest accrual rate permitted under the fractional rule
accrual method described in Code ss. 411(b)(1)(C). To calculate the present
value of benefits from a defined benefit plan, the Advisory Committee will use
the actuarial assumptions (interest and mortality only) prescribed by the
defined benefit plan(s) to value benefits for top heavy purposes. If an
aggregated plan does not have a valuation date coinciding with the Determination
Date, the Advisory Committee must value the Accrued Benefits in the aggregated
plan as of the most recent valuation date falling within the twelve-month period
ending on the Determination Date, except as Code ss. 416 and applicable Treasury
regulations require for the first and second plan year of a defined benefit
plan. The Advisory Committee will calculate the top heavy ratio with reference
to the Determination Dates that fall within the same calendar year.
DEFINITIONS. For purposes of applying the provisions of this Section 1.29:
(a) "Key Employee" means, as of any Determination Date, any Employee
or former Employee (or Beneficiary of such Employee), who, for any Plan
Year in the Determination Period: (i) has Compensation in excess of 50% of
the dollar amount prescribed in Codess.415(b)(1)(A) (relating to defined
benefit plans) and is an officer of the Employer; (ii) has Compensation in
excess of the dollar amount prescribed in Codess.415(c)(1)(A) (relating to
defined contribution plans) and is one of the Employees owning the ten
largest interests in the Employer; (iii) is a more than 5% owner of the
Employer; or (iv) is a more than 1% owner of the Employer and has
compensation of more than $150,000. The constructive ownership rules of
Codess.318 (or the principles of that section, in the case of an
unincorporated Employer) will apply to determine ownership in the Employer.
The number of officers taken into account under clause (i) will not exceed
the greater of 3 or 10% of the total number (after application of the
Codess.414(q)(8) exclusions) of Employees, but no more than 50 officers.
The Advisory Committee will make the determination of who is a Key Employee
in accordance with Codess.416(i)(1) and the regulations under that Code
section.
(b) "Non-Key Employee" is an Employee who does not meet the definition
of Key Employee.
(c) "Compensation" means Compensation as determined under Section 1.07
(relating to the Highly Compensated Employee definition).
(d) "Required Aggregation Group" means: (1) each qualified plan of the
Employer in which at least one Key Employee participates at any time during
the Determination Period; and (2) any other qualified plan of the Employer
which enables a plan described in clause (1) to meet the requirements of
Code ss.401(a)(4) or Code ss.410.
(e) "Permissive Aggregation Group" is the Required Aggregation Group
plus any other qualified plans maintained by the Employer, but only if such
group would satisfy in the aggregate the requirements of Code ss.401(a)(4)
and Code ss.410. The Advisory Committee will determine the Permissive
Aggregative Group.
(f) "Employer" means the Employer that adopts this Plan and any
related employers described in Section 1.27.
(g) "Determination Date" for any Plan Year is the Accounting Date of
the preceding Plan Year or, in the case of the first Plan Year of the Plan,
the Accounting Date of that Plan Year. The "Determination Period" is the
5-year period ending on the Determination Date.
1.30 PLAN MAINTAINED BY MORE THAN ONE EMPLOYER. If more than one Employer
maintains this Plan, then for purposes of determining Service and Hours of
Service, the Advisory Committee will treat all Employers maintaining this Plan
as a single employer.
PLAN ALLOCATIONS. The Advisory Committee and the Trustee will account
separately for each Employer's contributions under the Plan. In this respect,
the Advisory Committee will allocate each Employer's contributions to the
Trustee for a Plan Year, in accordance with Article III, to the Accounts of
those Participants actually employed by that Employer during the Plan Year. The
Advisory Committee will attribute Participant forfeitures to the Employer or
Employers that actually employed the forfeited Participant in the year of the
forfeiture. For this purpose, Compensation will mean Compensation paid during
the Plan Year to those Participants actually employed by that Employer during
the Plan Year.
ARTICLE II.
EMPLOYEE PARTICIPANTS
2.01 ELIGIBILITY. Each Employee (other than an Excluded Employee) becomes a
Participant in the Plan on the Plan Entry Date (if employed on that date)
coincident with or immediately following the later of his Employment
Commencement Date or the date he attains age 18. Each Employee who was a
Participant in the 401(k) Plan or the Profit Sharing Plan on the day before the
Effective Date and who continues as an Employee on the Effective Date continues
as a Participant in the Plan on the Effective Date. The term "Employment
Commencement Date" means the date on which the Employee first performs an Hour
of Service for an Employer.
An Employee is an Excluded Employee if he is (a) a nonresident alien who
receives no earned income (within the meaning of Code ss.911(d)(2)) from an
Employer which constitutes income from sources within the United States (within
the meaning of Code ss.861(a)(3)), or (b) a member of a collective bargaining
unit, unless the collective bargaining agreement provides otherwise. An Employee
is a member of a collective bargaining unit if he is included in a unit of
employees covered by an agreement which the Secretary of Labor finds to be a
collective bargaining agreement between employee representatives and one or more
Employers if there is evidence that retirement benefits were the subject of good
faith bargaining between such employee representatives and such Employer or
Employers. The term "employee representatives" does not include an organization
more than one half the members of which are owners, officers or executives of
the Employer.
If a Participant has not incurred a Separation from Service but becomes an
Excluded Employee, then during the period such a Participant is an Excluded
Employee, the Advisory Committee will limit that Participant's sharing in the
allocation of Employer contributions and Participant forfeitures, if any, under
the Plan by disregarding his Compensation paid by the Employer for services
rendered in his capacity as an Excluded Employee. However, during such period of
exclusion, the Participant, without regard to employment classification,
continues to receive credit for vesting under Article V for each included Year
of Service and the Participant's Account continues to share fully in Trust Fund
allocations under Section 15.05.
If an Excluded Employee who is not a Participant becomes eligible to
participate in the Plan by reason of a change in employment classification, he
will participate in the Plan immediately if he has satisfied the eligibility
conditions of Section 2.01 and would have been a Participant had he not been an
Excluded Employee during his period of Service. Furthermore, the Plan takes into
account all of the Participant's included Years of Service with the Employer as
an Excluded Employee for purposes of vesting credit under Article V.
A Leased Employee who performs services for the Employer pursuant to a
contract or agreement which provides that the person is a Leased Employee will
not become eligible to participate in this Plan merely by reason of a
determination that the person is a common-law employee of the Employer, unless
and until the Employer changes the employment classification of such person. If
a Leased Employee who is not a Participant becomes eligible to participate in
the Plan by reason of a change in employment classification, he will participate
in the Plan immediately if he has satisfied the eligibility conditions of
Section 2.01 and would have been a Participant had he not been a Leased Employee
during his period of Service. Furthermore, the Plan takes into account all of
the Participant's included Years of Service with the Employer as a Leased
Employee for purposes of vesting credit under Article V.
2.02 YEAR OF SERVICE - PARTICIPATION. For purposes of an Employee's
participation in the Plan under Section 2.01, the Plan does not apply any
minimum Hour of Service requirement. The Plan does not require an Employee who
terminates employment to establish a new Employment Commencement Date if
re-employed by the Employer.
2.03 BREAK IN SERVICE - PARTICIPATION. For purposes of participation in the
Plan, the Plan does not apply any Break in Service rule.
2.04 PARTICIPATION UPON REEMPLOYMENT. A Participant whose employment
terminates reenters the Plan as a Participant on the date of his reemployment.
An Employee who satisfies the Plan's eligibility conditions but who terminates
employment prior to becoming a Participant becomes a Participant in the Plan on
the later of the Plan Entry Date on which he would have entered the Plan had he
not terminated employment or the date of his reemployment. Any Employee who
terminates employment prior to satisfying the Plan's eligibility conditions
becomes a Participant in accordance with the provisions of Section 2.01.
ARTICLE III.
EMPLOYER CONTRIBUTIONS AND FORFEITURES
PART 1. AMOUNT OF EMPLOYER CONTRIBUTIONS AND PLAN ALLOCATIONS:
SECTIONS 3.01 THROUGH 3.06.
3.01 AMOUNT.
(A) CONTRIBUTION FORMULA. For each Plan Year, the Employer shall contribute
to the Trust the following amounts:
DEFERRAL CONTRIBUTIONS. The amount by which the Participants have
elected to reduce their Compensation (as defined in Section 1.10 after
modification by Section 12.01) for the Plan Year under their salary
reduction agreements on file with the Advisory Committee.
EMPLOYER MATCHING CONTRIBUTIONS. An amount equal to 100% of each
Participant's eligible contributions. The Employer will determine the
amount of its matching contributions by disregarding Participants not
entitled to an allocation of matching contributions. The Employer, in
its sole discretion, may designate all or any portion of its matching
contribution as a qualified matching contribution at the time it makes
the contribution.
DISCRETIONARY PROFIT SHARING CONTRIBUTION. The additional amount
the Employer may from time to time deem advisable and designates as a
discretionary profit sharing contribution. The Employer, in its sole
discretion, may designate all or any portion of its discretionary
profit sharing contribution as a qualified nonelective contribution at
the time it makes the contribution.
The Employer shall make its contribution under the Plan irrespective of
whether it has net profits. Although the Employer may contribute to this Plan
irrespective of whether it has net profits, the Employer intends this plan to be
a profit sharing plan for all purposes under the Code. The Employer shall not
make a contribution to the Trust for any Plan Year to the extent the
contribution would exceed the Participants' "Maximum Permissible Amount" under
Section 3.08.
ELIGIBLE CONTRIBUTIONS. Under the matching contribution formula, a
Participant's "eligible contributions" are the deferral contributions allocated
to the Participant not in excess of 3% of the Participant's Compensation (as
defined in Section 1.10 after modification by Section 12.01) for the Plan Year.
Eligible contributions do not include deferral contributions that are excess
deferrals under Section 12.03. For this purpose: (a) excess deferrals relate
first to deferral contributions for the Plan Year not otherwise eligible for a
matching contribution; and (b) if the Plan Year is not a calendar year, the
excess deferrals for a Plan Year are the last deferrals made for a calendar
year.
(B) RETURN OF CONTRIBUTIONS. The Employer contributes to this Plan on the
condition its contribution is not due to a mistake of fact and the Internal
Revenue Service will not disallow the deduction for its contribution. The
Trustee, upon written request from the Employer, must return to the Employer the
amount of the Employer's contribution made by the Employer by mistake of fact or
the amount of the Employer's contribution disallowed as a deduction under Code
ss.404. The Trustee will not return any portion of the Employer's contribution
under the provisions of this paragraph more than one year after:
(a) The Employer made the contribution by mistake of fact; or
(b) The disallowance of the contribution as a deduction, and then
only to the extent of the disallowance.
The Trustee will not increase the amount of the Employer contribution
returnable under this Section 3.01 for any earnings attributable to the
contribution, but the Trustee will decrease the Employer contribution returnable
for any losses attributable to it. The Trustee may require the Employer to
furnish it whatever evidence the Trustee deems necessary to enable the Trustee
to confirm the amount the Employer has requested be returned is properly
returnable under ERISA.
3.02 DETERMINATION OF CONTRIBUTION. The Employer, from its records,
determines the amount of any contributions to be made by it to the Trust under
the terms of the Plan.
3.03 TIME OF PAYMENT OF CONTRIBUTION. The Employer may pay its contribution
for each Plan Year in one or more installments without interest. The Employer
must make its contribution to the Trust within the time prescribed by the Code
or applicable Treasury regulations. The Employer must make deferral
contributions to the Trust, to the extent made pursuant to salary reduction
agreements, within an administratively reasonable period of time after
withholding the corresponding Compensation from the Participant. The Employer
also must make deferral contributions and qualified nonelective contributions no
later than the time prescribed by the Code or by Treasury regulations. Deferral
contributions are Employer contributions for all purposes under this Plan,
except to the extent the Code or Treasury regulations prohibit the use of these
contributions to satisfy the qualification requirements of the Code.
3.04 CONTRIBUTION ALLOCATION.
--------------------------------
(A) METHOD OF ALLOCATION. To make allocations under the Plan, the Advisory
Committee must establish a Deferral Contributions Account, a Regular Matching
Contributions Account, a Qualified Matching Contributions Account, a Qualified
Nonelective Contributions Account and a Profit Sharing Contributions Account for
each Participant.
DEFERRAL CONTRIBUTIONS. The Advisory Committee will allocate to each
Participant's Deferral Contributions Account the deferral contributions the
Employer makes to the Trust on behalf of the Participant. The Advisory Committee
will make this allocation as of each date during the Plan Year on which such
Participant is paid.
MATCHING CONTRIBUTIONS. The Employer, at the time of contribution, must
designate which portion, if any, of its matching contribution is allocable to
the Qualified Matching Contributions Accounts and which part, if any, is
allocable to the Regular Matching Contributions Accounts. The Advisory Committee
will allocate the matching contributions to the Regular Matching Contributions
Account of the Participant on whose behalf the Employer makes that contribution
as of the last day of the Plan Year; provided, however, that the Advisory
Committee will make tentative interim allocations of matching contributions to
the Regular Matching Contributions Account of the Participant on whose behalf
the Employer makes the contribution as of each date during the Plan Year on
which such Participant is paid, and shall make a final allocation upon the
earlier of the Participant's termination of employment with the Employer or the
last day of the Plan Year equal to the amount of matching contribution required
under Section 3.01(A) less any interim allocations made to such Participant's
Regular Matching Contributions Account during the Plan Year.
To the extent the Employer makes qualified matching contributions, the
Advisory Committee will allocate the qualified matching contributions to the
Qualified Matching Contributions Account of the Participant on whose behalf the
Employer makes the contribution.
QUALIFIED NONELECTIVE CONTRIBUTIONS. If the Employer, at the time of
contribution, designates a contribution to be a qualified nonelective
contribution for the Plan Year, the Advisory Committee will allocate that
qualified nonelective contribution to the Qualified Nonelective Contributions
Account of each Participant in the same ratio that the Participant's
Compensation for the Plan Year bears to the total Compensation of all
Participants for the Plan Year.
DISCRETIONARY PROFIT SHARING CONTRIBUTIONS. Subject to Section 3.04(B) and
any restoration allocation required under Section 5.04, the Advisory Committee
will allocate and credit each annual Employer discretionary profit sharing
contribution, if any, other than discretionary profit sharing contributions
which, at the time of contribution, the Employer designates as qualified
nonelective contributions, to the Profit Sharing Contributions Account of each
Participant who satisfies the conditions of Section 3.06 in the same ratio that
each Participant's Compensation for the Plan Year bears to the total
Compensation of all such Participants for the Plan Year.
(B) TOP HEAVY MINIMUM ALLOCATION.
(1) MINIMUM ALLOCATION. If the Plan is top heavy in any Plan
Year:
(a) Each Non-Key Employee (as defined in Section 1.29) who is a
Participant and is employed by the Employer on the last day of the
Plan Year will receive a top heavy minimum allocation for that Plan
Year and
(b) The top heavy minimum allocation is the lesser of 3% of the
Non-Key Employee's Compensation for the Plan Year or the highest
contribution rate for the Plan Year made on behalf of any Key Employee
(as defined in section 1.29). However, if a defined benefit plan
maintained by the Employer which benefits a Key Employee depends on
this Plan to satisfy the antidiscrimination rules of Code ss.401(a)(4)
or the coverage rules of Code ss.410 (or another plan benefiting the
Key Employee so depends on such defined benefit plan), the top heavy
minimum allocation is 3% of the Non-Key Employee's Compensation
regardless of the contribution rate for the Key Employees.
(c) For purposes of this Section 3.04(B), the term "Participant"
includes any employee otherwise eligible to participate in the Plan
but who is not a Participant because of his failure to make elective
deferrals under a Code ss.401(k) arrangement or because of his failure
to make mandatory employee contributions. For purposes of clause (b),
"Compensation" means Compensation as defined in Section 1.10,
disregarding Elective Contributions and any exclusions from
Compensation. For purposes of this Section 3.04(B), a Participant's
contribution rate is the sum of Employer contributions (not including
Employer contributions to Social Security) and forfeitures allocated
to the Participant's Account for the Plan Year divided by his
Compensation for the entire Plan Year. However, for Plan Years
beginning after December 31, 1988, a Non-Key Employee's contribution
rate does not include any Elective Contributions under a Code
ss.401(k) arrangement nor any Employer matching contributions
necessary to satisfy the nondiscrimination requirements of Code
ss.401(k) or of Code ss.401(m). To determine a Participant's
contribution rate, the Advisory Committee must treat all qualified top
heavy defined contribution plans maintained by the Employer (or by any
related Employers described in Section 1.27) as a single Plan.
(2) METHOD OF COMPLIANCE. The Plan will satisfy the top heavy
minimum allocation in accordance with this Section 3.04(B)(2). The
Advisory Committee first will allocate the Employer contributions (and
Participant forfeitures, if any) for the Plan Year in accordance with
the allocation formula under Section 3.04(A). The Employer then will
contribute an additional amount for the Account of any Participant who
is entitled under this Section 3.04(B) to a top heavy minimum
allocation and whose contribution rate for the Plan Year is less than
the top heavy minimum allocation. The additional amount is the amount
necessary to increase the Participant's contribution rate to the top
heavy minimum allocation. The Advisory Committee will allocate the
additional contribution to the Account of the Participant on whose
behalf the Employer makes the contribution.
3.05 FORFEITURE ALLOCATION. The amount of a Participant's Accrued Benefit
forfeited under the Plan is a Participant forfeiture. Subject to any restoration
allocation required under Section 5.04 or 9.12 and the special forfeiture
allocation for certain excess aggregate contributions described in Section
12.05, the Advisory Committee will allocate the amount of a Participant's
Accrued Benefit forfeited under the Plan in accordance with Section 3.04 to
reduce the Employer matching contributions or profit sharing contributions for
the Plan Year in which the forfeiture occurs and, if necessary, to reduce
Employer matching contributions or profit sharing contributions in subsequent
Plan Years. The Advisory Committee will continue to hold the undistributed,
non-vested portion of a terminated Participant's Accrued Benefit in his Account
solely for his benefit until a forfeiture occurs at the time specified in
Section 5.09 or, if applicable, until the time specified in Section 9.12. Except
as provided under Section 5.04, a Participant will not share in the allocation
of a forfeiture of any portion of his Accrued Benefit.
FORFEITURE OF CERTAIN MATCHING CONTRIBUTIONS. A Participant will forfeit
any matching contributions allocated with respect to excess deferrals, excess
contributions or excess aggregate contributions, as determined under Article
XII. The Advisory Committee will allocate these forfeited amounts in accordance
with this Section 3.05.
3.06 ACCRUAL OF BENEFIT. The Advisory Committee will determine the accrual
of benefit (Employer contributions and Participant forfeitures) on the basis of
the Plan Year, except as provided in Section 3.04.
COMPENSATION TAKEN INTO ACCOUNT. In allocating an Employer qualified
nonelective contribution or an Employer discretionary profit sharing
contribution to a Participant's Account, the Advisory Committee, except for
purposes of determining the top heavy minimum contribution under Section
3.04(B), will take into account only the Compensation determined for the portion
of the Plan Year in which the Employee is actually a Participant.
HOURS OF SERVICE REQUIREMENT. A Participant will share in the
allocation of Employer deferral contributions, matching contributions and
qualified nonelective contributions for a Plan Year without regard to any Hours
of Service requirement for that Plan Year. Subject to the top-heavy minimum
allocation requirement of Section 3.04(B), a Participant will not share in the
allocation of Employer discretionary profit sharing contributions for a Plan
Year if the Participant does not complete a minimum of 1,000 Hours of Service
during the Plan Year, unless the Participant terminates employment during the
Plan Year because of death or Disability or because of the attainment of Normal
Retirement Age in the current Plan Year or in a prior Plan Year.
EMPLOYMENT REQUIREMENT. A Participant will share in the allocation of
Employer contributions for a Plan Year without regard to whether he is employed
by the Employer on the Accounting Date of that Plan Year.
PART 2. LIMITATIONS ON ALLOCATION: SECTIONS 3.07 AND 3.08.
3.07 LIMITATIONS ON ALLOCATIONS TO PARTICIPANTS' ACCOUNTS. The amount of
Annual Additions which the Advisory Committee may allocate under this Plan on a
Participant's behalf for a Limitation Year may not exceed the Maximum
Permissible Amount. If the amount the Employer otherwise would contribute to the
Participant's Account would cause the Annual Additions for the Limitation Year
to exceed the Maximum Permissible Amount, the Employer will reduce the amount of
its contribution so the Annual Additions for the Limitation Year will equal the
Maximum Permissible Amount. If an allocation of Employer contributions, pursuant
to Section 3.04, would result in an Excess Amount (other than an Excess Amount
resulting from the circumstances described in Section 3.07(B)) to the
Participant's Account, the Advisory Committee will reallocate the Excess Amount
to the remaining Participants who are eligible for an allocation of Employer
contributions for the Plan Year in which the Limitation Year ends. The Advisory
Committee will make this reallocation on the basis of the allocation method
under the Plan as if the Participant whose Account otherwise would receive the
Excess Amount is not eligible for an allocation of Employer contributions.
(A) ESTIMATION OF COMPENSATION. Prior to the determination of the
Participant's actual Compensation for a Limitation Year, the Advisory Committee
may determine the Maximum Permissible Amount on the basis of the Participant's
estimated annual Compensation for such Limitation Year. The Advisory Committee
must make this determination on a reasonable and uniform basis for all
Participants similarly situated. The Advisory Committee must reduce any Employer
contributions (including any allocation of forfeitures) based on estimated
annual Compensation by any Excess Amount carried over from prior years. As soon
as is administratively feasible after the end of the Limitation Year, the
Advisory Committee will determine the Maximum Permissible Amount for such
Limitation Year on the basis of the Participant's actual Compensation for such
Limitation Year.
(B) DISPOSITION OF EXCESS AMOUNT. If, as a result of a reasonable error in
determining the amount of elective deferrals an Employee may make without
violating the limitations of Part 2 of Article III, an Excess Amount results,
the Advisory Committee will return the Excess Amount (as adjusted for allocable
income) attributable to the elective deferrals. The Advisory Committee will make
this distribution before making any of the corrective distributions in the
remaining paragraphs of this Section 3.07(B). The Advisory Committee will
disregard any elective deferrals returned under this paragraph for purposes of
Article XII.
If, because of a reasonable error in estimating Compensation, or
because of the allocation of forfeitures, there is an Excess Amount with respect
to a Participant for a Limitation Year, the Advisory Committee will dispose of
such Excess Amount as follows:
(a) The Advisory Committee will return any nondeductible voluntary
Employee contributions to the Participant to the extent that the return
would reduce the Excess Amount.
(b) If, after the application of paragraph (a), an Excess Amount still
exists, and the Plan covers the Participant at the end of the Limitation
Year, then the Advisory Committee will use the Excess Amount(s) to reduce
future Employer contributions (including any allocation of forfeitures)
under the Plan for the next Limitation Year and for each succeeding
Limitation Year, as is necessary, for the Participant.
(c) If, after the application of paragraph (a), an Excess Amount still
exists, and the Plan does not cover the Participant at the end of the
Limitation Year, then the Advisory Committee will hold the Excess Amount
unallocated in a suspense account. The Advisory Committee will apply the
suspense account to reduce Employer Contributions (including allocation of
forfeitures) for all remaining Participants in the next Limitation Year,
and in each succeeding Limitation Year if necessary.
(d) Except as provided in paragraph (a), the Advisory Committee will
not distribute any Excess Amount(s) to Participants or to former
Participants.
(C) MORE THAN ONE PLAN. If the Advisory Committee allocated an Excess
Amount to a Participant's Account on an allocation date of this Plan which
coincides with an allocation date of another defined contribution plan
maintained by the Employer, the Advisory Committee will attribute the Excess
Amount allocated as of such date to the profit sharing component of this Plan.
If an Excess Amount remains, it will then be attributed to the Kansas City
Southern Industries, Inc. Employee Stock Ownership Plan, and then, if necessary,
to the 401(k) plan component of this Plan.
(D) DEFINED BENEFIT PLAN LIMITATION. If the Participant presently
participates, or has ever participated, under a defined benefit plan maintained
by the Employer, then the sum of the defined benefit plan fraction and the
defined contribution plan fraction for the Participant for that Limitation Year
must not exceed 1.0. To the extent necessary to satisfy this limitation, the
Employer will reduce its contribution or allocation on behalf of the Participant
to the defined contribution plan under which the Participant participates and
then, if necessary, the Participant's projected annual benefit under the defined
benefit plan under which the Participant participates.
3.08 DEFINITIONS - ARTICLE III. For purposes of Article III, the following
terms mean:
(a) "Annual Addition" - The sum of the following amounts allocated on
behalf of a Participant for a Limitation Year: (i) all Employer
contributions; (ii) all forfeitures; and (iii) all Employee contributions.
Except to the extent provided in Treasury Regulations, Annual Additions
include excess contributions described in Codess.401(k), excess aggregate
contributions described in Codess.401(m) and excess deferrals described in
Codess.402(g), irrespective of whether the Plan distributes or forfeits
such excess amounts. Annual Additions also include Excess Amounts
re-applied to reduce Employer contributions under Section 3.07. Amounts
allocated after March 31, 1984, to an individual medical account (as
defined in Codess.415(1)(2)) included as part of a defined benefit plan
maintained by the Employer are Annual Additions. Furthermore, Annual
Additions include contributions paid or accrued after December 31, 1985,
for taxable years ending after December 31, 1985, attributable to
post-retirement medical benefits allocated to the separate account of a key
employee (as defined in Code ss.419A(d)(3)) under a welfare benefit fund
(as defined in Codess.419(e)) maintained by the Employer, but only for
purposes of the dollar limitation applicable to the Maximum Permissible
Amount.
(b) "Compensation" - For purposes of applying the limitations of Part
2 of this Article III, "Compensation" means Compensation as defined in
Section 1.10, disregarding any exclusions from Compensation and
disregarding Elective Contributions with respect to Plan Years commencing
before January 1, 1998, but including Elective Contributions for Plan Years
commencing after December 31, 1997.
(c) "Maximum Permissible Amount" - The lesser of (i) $30,000, or (ii)
25% of the Participant's Compensation for the Limitation Year. If there is
a short Limitation Year because of a change in Limitation Year, the
Advisory Committee will multiply the $30,000 (or adjusted) limitation by
the following fraction:
NUMBER OF MONTHS IN THE SHORT LIMITATION YEAR
---------------------------------------------
12
(d) "Employer" - The Employer that adopts this Plan and any related
employers described in Section 1.27. Solely for purposes of applying the
limitations of Part 2 of this Article III, the Advisory Committee will
determine related employers described in Section 1.27 by modifying Code
ss.414(b) and (c) in accordance with Code ss.415(h).
(e) "Excess Amount" - The excess of the Participant's Annual Additions
for the Limitation Year over the Maximum Permissible Amount.
(f) "Limitation Year" - The Plan Year. If the Employer amends the
Limitation Year to a different 12 consecutive month period, the new
Limitation Year must begin on a date within the Limitation Year for which
the Employer makes the amendment, creating a short Limitation Year.
(g) "Defined contribution plan" - A retirement plan which provides for
an individual account for each participant and for benefits based solely on
the amount contributed to the participant's account, and any income,
expenses, gains and losses, and any forfeitures of accounts of other
participants which the plan may allocate to such participant's account. The
Advisory Committee must treat all defined contribution plans (whether or
not terminated) maintained by the Employer as a single plan. For purposes
of the limitations of part 2 of this Article III, the Advisory Committee
will treat employee contributions made to a defined benefit plan maintained
by the Employer as a separate defined contribution plan. The Advisory
Committee also will treat as a defined contribution plan an individual
medical account (as defined in Codess.415(l)(2)) included as part of a
defined benefit plan maintained by the Employer and, for taxable years
ending after December 31, 1985, a welfare benefit fund under Code ss.419(e)
maintained by the Employer to the extent there are post-retirement medical
benefits allocated to the separate account of a key employee (as defined in
Codess.419A(d)(3)).
(h) "Defined benefit plan" - A retirement plan which does not provide
for individual accounts for Employer contributions. The Advisory Committee
must treat all defined benefit plans (whether or not terminated) maintained
by the Employer as a single plan.
(i) "Defined benefit plan fraction"
Projected annual benefit of the Participant under the
defined benefit plan(s)
-----------------------------------------------------
The lesser of (i) 125% (subject to the "100% limitation"
in paragraph (k)) of the dollar limitation in effect
under Code ss.415(b)(1)(A) for the Limitation Year,
or (ii) 140% of the Participant's average Compensation
for his high 3 consecutive Years of Service
To determine the denominator of this fraction, the Advisory Committee
will make any adjustment required under Code ss.415(b) and will determine a
Year of Service as a Plan Year in which the Employee completed at least
1,000 Hours of Service. The "projected annual benefit" is the annual
retirement benefit (adjusted to an actuarially equivalent straight life
annuity if the plan expresses such benefit in a form other than a straight
life annuity or qualified joint and survivor annuity) of the Participant
under the terms of the defined benefit plan on the assumptions he continues
employment until his normal retirement age (or current age, if later) as
stated in the defined benefit plan, his compensation continues at the same
rate as in effect in the Limitation Year under consideration until the date
of his normal retirement age and all other relevant factors used to
determine benefits under the defined benefit plan remain constant as of the
current Limitation Year for all future Limitation Years.
CURRENT ACCRUED BENEFIT. If the Participant accrued benefits in one or
more defined benefit plans maintained by the Employer which were in
existence on May 5, 1986, the dollar limitation used in the denominator of
this fraction will not be less than the Participant's Current Accrued
Benefit. A Participant's Current Accrued Benefit is the sum of the annual
benefits under such defined benefit plans which the Participant had accrued
as of the end of the 1986 Limitation Year (the last Limitation Year
beginning before January 1, 1987), determined without regard to any change
in the terms or conditions of the Plan made after May 5, 1986, and without
regard to any cost of living adjustment occurring after May 5, 1986. This
Current Accrued Benefit rule applies only if the defined benefit plans
individually and in the aggregate satisfied the requirements of Code ss.415
as in effect at the end of the 1986 Limitation Year.
(j) "Defined contribution plan fraction"
The sum, as of the close of the Limitation Year, of the
Annual Additions to the Participant's Account under the
defined contribution plan(s)
---------------------------------------------------
The sum of the lesser of the following amounts determined
for the Limitation Year and for each prior Year of Service
with the Employer: (i) 125% (subject to the
"100% limitation" in paragraph (k)) of the dollar
limitation in effect under Codess.415(c)(1)(A) for the
Limitation Year (determined without regard to the
special dollar limitations for employee stock ownership
plans), or (ii) 35% of the Participant's Compensation
for the Limitation Year
For purposes of determining the defined contribution plan fraction,
the Advisory Committee will not recompute Annual Additions in Limitation
Years beginning prior to January 1, 1987, to treat all Employee
contributions as Annual Additions. If the Plan satisfied Code ss.415 for
Limitation Years beginning prior to January 1, 1987, the Advisory Committee
will redetermine the defined contribution plan fraction and the defined
benefit plan fraction as of the end of the 1986 Limitation Year in
accordance with this Section 3.08. If the sum of the redetermined fractions
exceeds 1.0, the Advisory Committee will subtract permanently from the
numerator of the defined contribution plan fraction an amount equal to the
product of (1) the excess of the sum of the fractions over 1.0, times (2)
the denominator of the defined contribution plan fraction. In making the
adjustment, the Advisory Committee must disregard any accrued benefit under
the defined benefit plan which is in excess of the Current Accrued Benefit.
This Plan continues any transitional rules applicable to the determination
of the defined contribution plan fraction under the Employer's Plan as of
the end of the 1986 Limitation Year.
(k) "100% limitation." If the 100% limitation applies, the Advisory
Committee must determine the denominator of the defined benefit plan
fraction and the denominator of the defined contribution plan fraction by
substituting 100% for 125%. The 100% limitation applies only if: (i) the
Plan's top heavy ratio exceeds 90%; or (ii) the Plan's top heavy ratio is
greater than 60%, and the Employer does not provide extra minimum benefits
which satisfy Code ss.416(h)(2).
ARTICLE IV.
PARTICIPANT CONTRIBUTIONS
4.01 PARTICIPANT VOLUNTARY CONTRIBUTIONS. The Plan does not permit or
require Participant nondeductible contributions.
4.02 PARTICIPANT VOLUNTARY CONTRIBUTIONS - SPECIAL DISCRIMINATION TEST.
(Reserved)
4.03 PARTICIPANT ROLLOVER CONTRIBUTIONS. Any Participant, with the
Employer's written consent and after filing with the Trustee the form prescribed
by the Advisory Committee, may contribute cash or other property to the Trust
other than as a voluntary contribution if the contribution is a "rollover
contribution" which the Code permits an employee to transfer either directly or
indirectly from one qualified plan to another qualified plan. Before accepting a
rollover contribution, the Trustee may require an Employee to furnish
satisfactory evidence that the proposed transfer is in fact a "rollover
contribution" which the Code permits an employee to make to a qualified plan. A
rollover contribution is not an Annual Addition under Part 2 of Article III.
The Advisory Committee must establish a Rollover Account for each
Participant making a rollover contribution, and allocate the rollover
contribution to the Rollover Account as of the date the rollover contribution is
received. The Trustee will invest the rollover contribution as a part of the
Trust Fund.
The Advisory Committee may accept a rollover contribution on behalf of an
Employee prior to the date the Employee satisfies the Plan's eligibility
conditions. If the Advisory Committee accepts such a rollover contribution, the
Advisory Committee must treat the Employee as a Participant for all purposes of
the Plan except the Employee is not a Participant for purposes of sharing in
Employer contributions or Participant forfeitures under the Plan until he
actually becomes a Participant in the Plan.
4.04 PARTICIPANT CONTRIBUTION - FORFEITABILITY. A Participant's Accrued
Benefit is, at all times, one hundred percent (100%) Nonforfeitable to the
extent the value of his Accrued Benefit is derived from Participant rollover
contributions made by him to the Trust for his own benefit.
4.05 PARTICIPANT CONTRIBUTION - WITHDRAWAL/DISTRIBUTION. A Participant may
not withdraw any part of his Rollover Account attributable to a Participant
rollover contribution made by him to the Trust except as provided in Section
6.03(F). The Trustee, in accordance with the direction of the Advisory
Committee, will distribute a Participant's unwithdrawn Accrued Benefit
attributable to his Participant rollover contributions in accordance with the
provisions of Article VI applicable to the distribution of the Participant's
Nonforfeitable Accrued Benefit.
4.06 PARTICIPANT CONTRIBUTION - ACCRUED BENEFIT. The Advisory Committee
must maintain, or must direct the Trustee to maintain, a separate Account(s) in
the name of each Participant to reflect the Participant's Accrued Benefit under
the Plan derived from his Participant rollover contributions. A Participant's
Accrued Benefit derived from his Participant rollover contributions as of any
applicable date is the balance of his separate Participant rollover contribution
Account(s).
ARTICLE V.
TERMINATION OF SERVICE - PARTICIPANT VESTING
5.01 NORMAL RETIREMENT AGE. A Participant's Normal Retirement Age is 65
years of age. A Participant who remains in the employ of the Employer after
attainment of Normal Retirement Age will continue to participate in Employer
contributions. A Participant's Accrued Benefit derived from Employer
contributions is 100% Nonforfeitable upon and after his attaining Normal
Retirement Age (if employed by the Employer on or after that date).
5.02 PARTICIPANT DISABILITY OR DEATH. If a Participant's employment with
the Employer terminates as a result of death or disability, the Participant's
Accrued Benefit derived from Employer contributions will be 100% Nonforfeitable.
5.03 VESTING SCHEDULE. A Participant's Deferral Contributions Account,
Qualified Matching Contributions Account, Qualified Nonelective Contributions
Account, Profit Sharing Contributions Account and Rollover Account will be one
hundred percent (100%) Nonforfeitable at all times. Except as provided in
Sections 5.01 and 5.02, for each Year of Service, a Participant's Nonforfeitable
percentage of his Regular Matching Contributions Account equals the percentage
in the following vesting schedule:
Percent of
Years of Service Nonforfeitable
With the Employer Accrued Benefit
Less than 3 None
3 25%
4 50%
5 100%
For any Plan Year for which the Plan is a top heavy Plan (as defined in
Section 1.29), the Advisory Committee will calculate a Participant's
Nonforfeitable Percentage of his Accrued Benefit under the following schedule:
Percent of
Years of Service Nonforfeitable
With the Employer Accrued Benefit
Less than 2 . . . . . . . . . . . . . . . None
2 . . . . . . . . . . . . . . . 20%
3 . . . . . . . . . . . . . . . 40%
4 . . . . . . . . . . . . . . . 60%
5 . . . . . . . . . . . . . . . .100%
The Advisory Committee will apply the top heavy schedule to Participants
who earn at least one Hour of Service after the top heavy schedule becomes
effective. A shift between vesting schedules under this Section 5.03 is an
amendment to the vesting schedule and the Advisory Committee must apply the
rules of Section 7.05 accordingly. A shift to a new vesting schedule under this
Section 5.03 is effective on the first day of the Plan Year for which the top
heavy status of the Plan changes.
Notwithstanding anything in this Section 5.03 or Article XVIII to the
contrary, each Gateway Participant (as defined in Section 18.01) shall be 100%
vested in his Accrued Benefit.
5.04 CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED PARTICIPANTS/RESTORATION OF
FORFEITED ACCRUED BENEFIT. If, pursuant to Article VI, a partially-vested
Participant receives a cash-out distribution before he incurs a Forfeiture Break
in Service (as defined in Section 5.08), the cash-out distribution will result
in an immediate forfeiture of the non-vested portion of the Participant's
Accrued Benefit derived from Employer contributions. See Section 5.09. A
partially-vested Participant is a Participant whose Nonforfeitable Percentage
determined under Section 5.03 is less than 100%. A cash-out distribution is a
distribution of the entire present value of the Participant's Nonforfeitable
Accrued Benefit.
(A) RESTORATION AND CONDITIONS UPON RESTORATION. A partially-vested
Participant who is reemployed by the Employer after receiving a cash-out
distribution of the Nonforfeitable percentage of his Accrued Benefit may repay
the Trustee the amount of the cash-out distribution attributable to Employer
contributions, unless the Participant no longer has a right to restoration under
the requirements of this Section 5.04. If a partially-vested Participant makes
the cash-out distribution repayment, the Advisory Committee, subject to the
conditions of this paragraph (A), must restore his Accrued Benefit attributable
to Employer contributions to the same dollar amount as the dollar amount of his
Accrued Benefit on the Accounting Date, or other valuation date, immediately
preceding the date of the cash-out distribution, unadjusted for any gains or
losses occurring subsequent to that Accounting Date, or other valuation date.
Restoration of the Participant's Accrued Benefit includes restoration of all
Code ss.411(d)(6) protected benefits with respect to that restored Accrued
Benefit, in accordance with applicable Treasury regulations. The Advisory
Committee will not restore a reemployed Participant's Accrued Benefit under this
paragraph if:
(1) Five (5) years have elapsed since the Participant's first
reemployment date following the cash-out distribution; or
(2) The Participant incurred a Forfeiture Break in Service (as defined
in Section 5.08). This condition also applies if the Participant makes
repayment within the Plan Year in which he incurs the Forfeiture Break in
Service and that Forfeiture Break in Service would result in a complete
forfeiture of the amount the Advisory Committee otherwise would restore.
(B) TIME AND METHOD OF RESTORATION. If neither of the two conditions
preventing restoration of the Participant's Accrued Benefit applies, the
Advisory Committee will restore the Participant's Accrued Benefit as of the Plan
Year Accounting Date coincident with or immediately following the repayment. To
restore the Participant's Accrued Benefit, the Advisory Committee, to the extent
necessary, will allocate to the Participant's Account:
(1) First, the amount, if any, of Participant forfeitures the Advisory
Committee would otherwise allocate under Section 3.05;
(2) Second, the amount, if any, of the Trust Fund net income or gain
for the Plan Year; and
(3) Third, the Employer contribution for the Plan Year to the extent
made under a discretionary formula.
To the extent the amounts described in clauses (1), (2) and (3) are
insufficient to enable the Advisory Committee to make the required restoration,
the Employer must contribute, without regard to any requirement or condition of
Section 3.01, the additional amount necessary to enable the Advisory Committee
to make the required restoration. If, for a particular Plan Year, the Advisory
Committee must restore the Accrued Benefit of more than one reemployed
Participant, then the Advisory Committee will make the restoration allocation(s)
to each such Participant's Account in the same proportion that a Participant's
restored amount for the Plan Year bears to the restored amount for the Plan Year
of all reemployed Participants. The Advisory Committee will not take into
account the allocation under this Section 5.04 in applying the limitation on
allocations under Part 2 of Article III.
(C) 0% VESTED PARTICIPANT. The deemed cash-out rule applies to a 0% vested
Participant. A 0% vested Participant is a Participant whose Accrued Benefit
derived from Employer contributions is entirely forfeitable at the time of his
Separation from Service. Under the deemed cash-out rule, the Advisory Committee
will treat the 0% vested Participant as having received a cash-out distribution
on the date of the Participant's Separation from Service or, if the
Participant's Account is entitled to an allocation of Employer contributions for
the Plan Year in which he separates from Service, on the last day of that Plan
Year.
For purposes of applying the restoration provisions of this Section 5.04,
the Advisory Committee will treat the 0% vested Participant as repaying his
cash-out "distribution" on the first date of his reemployment with the Employer.
5.05 SEGREGATED ACCOUNT FOR REPAID AMOUNT. Until the Advisory Committee
restores the Participant's Accrued Benefit, as described in Section 5.04, the
Trustee will invest the cash-out amount the Participant has repaid in a
segregated Account maintained solely for that Participant. The Trustee must
invest the amount in the Participant's segregated Account in Federally insured
interest bearing savings account(s) or time deposit(s) (or a combination of
both), or in other fixed income investments. Until commingled with the balance
of the Trust Fund on the date the Advisory Committee restores the Participant's
Accrued Benefit, the Participant's segregated Account remains a part of the
Trust, but it alone shares in any income it earns and it alone bears any expense
or loss it incurs. Unless the repayment qualifies as a rollover contribution,
the Advisory Committee will direct the Trustee to repay to the Participant as
soon as is administratively practicable the full amount of the Participant's
segregated Account if the Advisory Committee determines either of the conditions
of Sections 5.04(A) prevents restoration as of the applicable Accounting Date,
notwithstanding the Participant's repayment.
5.06 YEAR OF SERVICE - VESTING. For purposes of vesting under Section 5.03,
Year of Service means any Plan Year during which an Employee completes not less
than 1,000 Hours of Service with the Employer.
5.07 BREAK IN SERVICE - VESTING. For purposes of this Article V, a
Participant incurs a "Break in Service" if during any Plan Year he does not
completed more than 500 Hours of Service with the Employer.
5.08 INCLUDED YEARS OF SERVICE - VESTING. For purposes of determining
"Years of Service" under Section 5.06, the Plan takes into account all Years of
Service an Employee completes with the Employer. For the sole purpose of
determining a Participant's Nonforfeitable percentage of his Accrued Benefit
derived from Employer contributions which accrued for his benefit prior to a
Forfeiture Break in Service, the Plan disregards any Year of Service after the
Participant first incurs a Forfeiture Break in Service. The Participant incurs a
Forfeiture Break in Service when he incurs 5 consecutive Breaks in Service.
5.09 FORFEITURE OCCURS. A Participant's forfeiture, if any, of his Accrued
Benefit derived from Employer contributions occurs under the Plan on the earlier
of:
(a) The last day of the Plan Year in which the Participant first
incurs a Forfeiture Break in Service; or
(b) The date the Participant receives a cash-out distribution.
The Advisory Committee determines the percentage of a Participant's Accrued
Benefit forfeiture, if any, under this Section 5.09 solely by reference to the
vesting schedule of Section 5.03. A Participant will not forfeit any portion of
his Accrued Benefit for any other reason or cause except as expressly provided
by this Section 5.09 or as provided under Section 9.12.
ARTICLE VI.
TIME AND METHOD OF PAYMENT OF BENEFITS
6.01 TIME OF PAYMENT OF ACCRUED BENEFIT. Unless, pursuant to Section 6.03,
the Participant or the Beneficiary elects in writing to a different time or
method of payment, the Advisory Committee will direct the Trustee to commence
distribution of a Participant's Nonforfeitable Accrued Benefit in accordance
with this Section 6.01. A Participant must consent, in writing, to any
distribution required under this Section 6.01 if the present value of the
Participant's Nonforfeitable Accrued Benefit, at the time of the distribution to
the Participant, exceeds $5,000 and the Participant has not attained the later
of Normal Retirement Age or age 62. For all purposes of this Article VI, the
term "annuity starting date" means the first day of the first period for which
the Plan pays an amount as an annuity or in any other form. Requests for
distributions under this Article VI (and under Articles XVII and XVIII) may be
made at such times, on such forms and in accordance with such procedures as the
Advisory Committee may from time to time prescribe. For purposes of making a
distribution, (i) a Participant's Account shall be valued as of a date
("distribution valuation date"), which ordinarily shall be the first Friday (or,
if such Friday is not a business day, the next following business day) that is
not less than four business days following receipt by the Advisory Committee of
a properly completed request for distribution (or, if the Participant's
Nonforfeitable Accrued Benefit does not exceed $5,000, following the
Participant's Separation from Service), or as soon as administratively
practicable thereafter, and (ii) the distribution shall be made or commenced on
a business day ("distribution date") as soon as administratively practicable
following such distribution valuation date.
(A) TERMINATION OF EMPLOYMENT FOR A REASON OTHER THAN DEATH. For a
Participant who terminates employment with the Employer for a reason other than
death, the Advisory Committee will direct the Trustee to commence distribution
of the Participant's Accrued Benefit, as follows:
(1) PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT NOT EXCEEDING $5,000.
In a lump sum, as soon as administratively practicable after the first
distribution valuation date following the Participant's Separation from
Service, but in no event later than the 60th day following the close of the
Plan Year in which the Participant attains Normal Retirement Age. If a
Participant incurred a Separation from Service under this Plan before
August 1, 1999 with a nonforfeitable Accrued Benefit of more than $3,500 as
of August 1, 1999 but not more than $5,000, has not previously received a
cash-out distribution under this subsection (1) and has not commenced to
receive a distribution under subsection (2) below and Section 6.03,
distribution to the Participant shall be made under this subsection (1) as
soon as practicable after August 1, 1999.
(2) PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT EXCEEDS $5,000 In a
form and at the time elected by the Participant, pursuant to Section 6.03.
In the absence of an election by the Participant, the Advisory Committee
will direct the Trustee to distribute the Participant's Nonforfeitable
Accrued Benefit in a lump sum, on the 60th day following the close of the
Plan Year in which the later of the following events occurs: (a) the
Participant attains Normal Retirement Age; or (b) the Participant separates
from Service.
(B) REQUIRED BEGINNING DATE. If any distribution commencement date
described under Paragraph (A) of this Section 6.01, either by Plan provision or
by Participant election (or nonelection), is later than the Participant's
Required Beginning Date, the Advisory Committee instead must direct the Trustee
to make distribution under this Section 6.01 on the Participant's Required
Beginning Date. A Participant's Required Beginning Date is the April 1 of the
calendar year following the later of (i) the calendar year in which the
Participant attains age 70 1/2, or (ii) the calendar year in which the
Participant separates from Service. However, clause (ii) of the preceding
sentence shall not apply if the Participant is a 5% owner (as defined in Section
1.07(a)) with respect to the Plan Year ending in the calendar year in which he
attains age 70 1/2. A mandatory distribution at the Participant's Required
Beginning Date will be in lump sum unless the Participant, pursuant to the
provisions of this Article VI, makes a valid election to receive an alternative
form of payment.
(C) DEATH OF THE PARTICIPANT. The Advisory Committee will direct the
Trustee, in accordance with this Section 6.01(C), to distribute to the
Participant's Beneficiary the Participant's Nonforfeitable Accrued Benefit
remaining in the Trust at the time of the Participant's death. The Advisory
Committee will determine the death benefit by reducing the Participant's
Nonforfeitable Accrued Benefit by any security interest the Plan has against
that Nonforfeitable Accrued Benefit by reason of an outstanding Participant
loan.
(1) DECEASED PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT DOES NOT
EXCEED $5,000. The Advisory Committee must direct the Trustee to pay the
deceased Participant's Nonforfeitable Accrued Benefit in a single cash sum,
as soon as administratively practicable after the first distribution
valuation date following the Participant's death or, if later, the date on
which the Advisory Committee receives notification of or otherwise confirms
the Participant's death.
(2) DECEASED PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT EXCEEDS
$5,000. The Advisory Committee will direct the Trustee to pay the deceased
Participant's Nonforfeitable Accrued Benefit at the time and in the form
elected by the Participant or, if applicable by the Beneficiary, as
permitted under this Article VI. In the absence of an election, the
Advisory Committee will direct the Trustee to distribute the Participant's
undistributed Nonforfeitable Accrued Benefit in a lump sum as soon as
administratively practicable after the first distribution valuation date
following the Participant's death or, if later, the date on which the
Advisory Committee receives notification of or otherwise confirms the
Participant's death.
If the death benefit is payable to the Participant's surviving spouse in
full, the surviving spouse, in addition to the distribution options provided in
this Section 6.01(C), may elect distribution at any time or in any form this
Article VI would permit for a Participant.
6.02 METHOD OF PAYMENT OF ACCRUED BENEFIT. Subject to any restrictions
prescribed by Section 6.03, a Participant or Beneficiary may elect distribution
from the Participant's Accounts under one or any combination of the following
methods: (a) by payment in a lump sum; or (b) by payment in monthly, quarterly
or annual installments over a fixed reasonable period of time, not exceeding the
life expectancy of the Participant, or the joint life and last survivor
expectancy of the Participant and his Beneficiary.
The installment distribution options permitted under this Section 6.02 are
available only if the present value of the Participant's Nonforfeitable Accrued
Benefit, at the time of the distribution to the Participant, exceeds $5,000. To
facilitate installment payments under this Article VI, the Advisory Committee
may direct the Trustee to segregate all or any part of the Participant's Accrued
Benefit in a separate Account. The Trustee will invest the Participant's
segregated Account in Federally insured interest bearing savings account(s) or
time deposit(s) (or a combination of both), or in other fixed income
investments. A segregated Account remains a part of the Trust, but it alone
shares in any income it earns, and it alone bears any expense or loss it incurs.
A Participant or Beneficiary may elect to receive an installment distribution in
the form of a Nontransferable Annuity Contract. Under an installment
distribution, the Participant or Beneficiary, at any time, may elect to
accelerate the payment of all, or any portion, of the Participant's unpaid
Nonforfeitable Accrued Benefit.
(A) MINIMUM DISTRIBUTION REQUIREMENTS FOR PARTICIPANTS. The Advisory
Committee may not direct the Trustee to distribute the Participant's
Nonforfeitable Accrued Benefit, nor may the Participant elect to have the
Trustee distribute his Nonforfeitable Accrued Benefit, under a method of payment
which, as of the Required Beginning Date, does not satisfy the minimum
distribution requirements under Code ss.401(a)(9) and the applicable Treasury
regulations. The minimum distribution for a calendar year equals the
Participant's Nonforfeitable Accrued Benefit as of the latest valuation date
preceding the beginning of the calendar year divided by the Participant's life
expectancy or, if applicable, the joint and last survivor expectancy of the
Participant and his designated Beneficiary (as determined under Article VIII,
subject to the requirements of the Code ss.401(a)(9) regulations). The Advisory
Committee will increase the Participant's Nonforfeitable Accrued Benefit, as
determined on the relevant valuation date, for contributions or forfeitures
allocated after the valuation date and by December 31 of the valuation calendar
year, and will decrease the valuation by distributions made after the valuation
date and by December 31 of the valuation calendar year. For purposes of this
valuation, the Advisory Committee will treat any portion of the minimum
distribution for the first distribution calendar year made after the close of
that year as a distribution occurring in that first distribution calendar year.
In computing a minimum distribution, the Advisory Committee must use the unisex
life expectancy multiples under Treas. Reg. ss.1.72-9. The Advisory Committee,
only upon the Participant's written request, may compute the minimum
distribution for a calendar year subsequent to the first calendar year for which
the Plan requires a minimum distribution by redetermining the applicable life
expectancy. However, the Advisory Committee may not redetermine the joint life
and last survivor expectancy of the Participant and a non-spouse designated
Beneficiary in a manner which takes into account any adjustment to a life
expectancy other than the Participant's life expectancy.
If the Participant's spouse is not his designated Beneficiary, a method of
payment to the Participant may not provide more than incidental benefits to the
Beneficiary. For Plan Years beginning after December 31, 1988, the Plan must
satisfy the minimum distribution incidental benefit ("MDIB") requirement in the
Treasury regulations issued under Code ss.401(a)(9) for distributions made on or
after the Participant's Required Beginning Date and before the Participant's
death. To satisfy the MDIB requirement, the Advisory Committee will compute the
minimum distribution required by this Section 6.02(A) by substituting the
applicable MDIB divisor for the applicable life expectancy factor, if the MDIB
divisor is a lesser number. Following the Participant's death, the Advisory
Committee will compute the minimum distribution required by this Section 6.02(A)
solely on the basis of the applicable life expectancy factor and will disregard
the MDIB factor. For Plan Years beginning prior to January 1, 1989, the Plan
satisfies the incidental benefits requirement if the distributions to the
Participant satisfied the MDIB requirement or if the present value of the
retirement benefits payable solely to the Participant is greater than 50% of the
present value of the total benefits payable to the Participant and his
Beneficiaries. The Advisory Committee must determine whether benefits to the
Beneficiary are incidental as of the date the Trustee is to commence payment of
the retirement benefits to the Participant, or as of any date the Trustee
redetermines the payment period to the Participant.
The minimum distribution for the first distribution calendar year is due by
the Participant's Required Beginning Date. The minimum distribution for each
subsequent distribution calendar year, including the calendar year in which the
Participant's Required Beginning Date falls, is due by December 31 of that year.
If the Participant receives distribution in the form of a Nontransferable
Annuity Contract, the distribution satisfies this Section 6.02(A) if the
contract complies with the requirements of Code ss.401(a)(9) and the applicable
Treasury regulations.
(B) MINIMUM DISTRIBUTION REQUIREMENTS FOR BENEFICIARIES. The method of
distribution to the Participant's Beneficiary must satisfy Code ss.401(a)(9) and
the applicable Treasury regulations. If the Participant's death occurs after his
Required Beginning Date, the method of payment to the Beneficiary must provide
for completion of payment over a period which does not exceed the payment period
which had commenced for the Participant. If the Participant's death occurs prior
to his Required Beginning Date, the method of payment to the Beneficiary, must
provide for completion of payment to the Beneficiary over a period not
exceeding: (i) 5 years after the date of the Participant's death; or (ii) if the
Beneficiary is a designated Beneficiary, the designated Beneficiary's life
expectancy. The Advisory Committee may not direct payment of the Participant's
Nonforfeitable Accrued Benefit over a period described in clause (ii) unless the
Trustee will commence payment to the designated Beneficiary no later than the
December 31 following the close of the calendar year in which the Participant's
death occurred or, if later, and the designated Beneficiary is the Participant's
surviving spouse, December 31 of the calendar year in which the Participant
would have attained age 70 1/2. If the Trustee will make distribution in
accordance with clause (ii), the minimum distribution for a calendar year equals
the Participant's Nonforfeitable Accrued Benefit as of the latest valuation date
preceding the beginning of the calendar year divided by the designated
Beneficiary's life expectancy. The Advisory Committee must use the unisex life
expectancy multiples under Treas. Reg. ss.1.72-9 for purposes of applying this
paragraph. The Advisory Committee, only upon the written request of the
Participant or of the Participant's surviving spouse, may recalculate the life
expectancy of the Participant's surviving spouse not more frequently than
annually but may not recalculate the life expectancy of a non-spouse designated
Beneficiary after the Trustee commenced payment to the designated Beneficiary.
The Advisory Committee will apply this paragraph by treating any amount paid to
the Participant's child, which becomes payable to the Participant's surviving
spouse upon the child's attaining the age of majority, as paid to the
Participant's surviving spouse. Upon the Beneficiary's written request, the
Advisory Committee must direct the Trustee to accelerate payment of all, or any
portion, of the Participant's unpaid Accrued Benefit, as soon as
administratively practicable following the effective date of that request.
6.03 BENEFIT PAYMENT ELECTIONS. Not earlier than 90 days before nor later
than 30 days before the Participant's annuity starting date, the Plan
Administrator must provide a benefit notice to a Participant who is eligible to
make an election under this Section 6.03. The benefit notice must explain the
optional forms of benefit in the Plan, including the material features and
relative values of those options, and the Participant's right to defer
distribution until he attains the later of Normal Retirement Age or age 62.
A distribution may commence less than 30 days after the benefit notice is
given, provided that:
(1) the Plan Administrator clearly informs the Participant that the
Participant has a right to a period of at least 30 days after receiving the
notice to consider the decision of whether or not to elect a distribution
(and, if applicable, a particular distribution option), and
(2) the Participant, after receiving the notice, affirmatively elects
a distribution.
If a Participant or Beneficiary makes an election prescribed by this
Section 6.03, the Advisory Committee will direct the Trustee to distribute the
Participant's Nonforfeitable Accrued Benefit in accordance with that election.
Any election under this Section 6.03 is subject to the requirements of Section
6.02. The Participant or Beneficiary must make an election under this Section
6.03 by filing his election form with the Advisory Committee at any time before
the Trustee otherwise would commence to pay a Participant's Accrued Benefit in
accordance with the requirements of Article VI.
(A) PARTICIPANT ELECTIONS AFTER TERMINATION OF EMPLOYMENT. If the present
value of a Participant's Nonforfeitable Accrued Benefit exceeds $5,000, he may
elect to have the Trustee commence distribution as soon as administratively
practicable after any distribution valuation date following the Participant's
Separation from Service. The Participant may reconsider an election at any time
prior to the annuity starting date and elect to commence distribution as of any
other distribution date, but not earlier than the date described in the first
sentence of this Paragraph (A). A Participant who has separated from Service may
elect distribution as of any distribution date following his attainment of
Normal Retirement Age, irrespective of the restrictions otherwise applicable
under this Section 6.03(A). If the Participant is partially-vested in his
Accrued Benefit, an election under this Paragraph (A) to distribute prior to the
Participant's incurring a Forfeiture Break in Service (as defined in Section
5.08), must be in the form of a cash-out distribution (as defined in Article V).
A Participant may not receive a cash-out distribution if, prior to the time the
Trustee actually makes the cash out distribution, the Participant returns to
employment with the Employer.
(B) PARTICIPANT ELECTIONS PRIOR TO TERMINATION OF EMPLOYMENT.
(1) DISTRIBUTION. After a Participant (1) attains Normal Retirement
Age or (2) attains age 59-1/2 and has at least five Years of Service, the
Participant, until he retires, has a continuing election to receive all or
any portion of his Accrued Benefit attributable to his Regular Matching
Contributions Account. After a Participant attains Normal Retirement Age,
the Participant, until he retires, has a continuing election to receive all
or any portion of his Accrued Benefit attributable to his Profit Sharing
Contributions Account. A Participant must make an election under this
Section 6.03(B) on a form prescribed by the Advisory Committee at any time
during the Plan Year for which his election is to be effective. In his
written election, the Participant must specify the percentage or dollar
amount he wishes the Trustee to distribute to him. The Participant's
election relates solely to the percentage or dollar amount specified in his
election form and his right to elect to receive an amount, if any, for a
particular Plan Year greater than the dollar amount or percentage specified
in his election form terminates on the Accounting Date. The Trustee must
make a distribution to a Participant in accordance with his election under
this Section 6.03(B) within the 90-day period (or as soon as
administratively practicable) after the Participant files his written
election with the Trustee.
(2) DIRECT ROLLOVER. For purposes of this Section 6.03(B)(2), the
terms "eligible retirement plan," "direct rollover" and "eligible rollover
distribution" shall have the meanings ascribed to them in Section 6.08. Any
Participant who has attained 59-1/2 and has at least five Years of Service,
until he retires, has a continuing election to direct the Trustee to pay
directly to an eligible retirement plan specified by the Participant in a
direct rollover all or any portion, with a minimum portion of 20%, of his
Nonforfeitable Accrued Benefit attributable to his Profit Sharing
Contributions Account, provided that the payment is an eligible rollover
distribution. A Participant may make an election under this Section
6.03(B)(2) on a form prescribed by the Advisory Committee at any time
during the Plan Year for which his election is to be effective. In his
written election, the Participant must specify the percentage or dollar
amount he wishes the Trustee to distribute. The Participant's election
relates solely to the percentage or dollar amount specified in his election
form and his right to elect to have directly rolled over an amount, if any,
for a particular Plan Year greater than the dollar amount or percentage
specified in his election form terminates on the Accounting Date. The
Trustee must pay the amount specified by the participant in a direct
rollover in accordance with the Participant's election under this paragraph
within the 90 day period (or as soon as administratively practicable) after
the Participant files his written election with the Trustee.
The Trustee will distribute the balance of the Participant's Accrued Benefit not
distributed under this Section 6.03(B) in accordance with the other distribution
provisions of this Plan.
(C) DEATH BENEFIT ELECTIONS. If the present value of the deceased
Participant's Nonforfeitable Accrued Benefit exceeds $5,000, the Participant's
Beneficiary may elect to have the Trustee distribute the Participant's
Nonforfeitable Accrued Benefit in a form and within a period permitted under
Section 6.02. The Beneficiary's election is subject to any restrictions
designated in writing by the Participant and not revoked as of his date of
death.
(D) TRANSITIONAL ELECTIONS. Notwithstanding the provisions of Section 6.01
and 6.02, if the Participant (or Beneficiary) signed a written distribution
designation prior to January 1, 1984, the Advisory Committee must distribute the
Participant's Nonforfeitable Accrued Benefit in accordance with that
designation. This Section 6.03(D) does not apply to a pre-1984 distribution
designation, and the Advisory Committee will not comply with that designation if
any of the following applies: the method of distribution would have disqualified
the Plan under Code ss.401(a)(9) as in effect on December 31, 1983; (2) the
Participant did not have an Accrued Benefit as of December 31, 1983; (3) the
distribution designation does not specify the timing and form of the
distribution and the death Beneficiaries (in order of priority); (4) the
substitution of a Beneficiary modifies the payment period of the distribution;
or (5) the Participant (or Beneficiary) modifies or revokes the distribution
designation. In the event of a revocation, the Plan must distribute, no later
than December 31 of the calendar year following the year of revocation, the
amount which the Participant would have received under Section 6.02(A) if the
election had not been in effect or, if the Beneficiary revokes the election, the
amount which the Beneficiary would have received under Section 6.02(B) if the
election had not been in effect. The Advisory Committee will apply this Section
6.03(D) to rollovers and transfers in accordance with Part J of the Code
ss.401(a)(9) regulations.
(E) SPECIAL DISTRIBUTIONS RULES FOR DEFERRAL CONTRIBUTIONS ACCOUNT AND
QUALIFIED ACCOUNTS. The in-service distribution provisions in Section 6.03(B)
will not apply to the Deferral Contributions Account, Qualified Nonelective
Contributions Account, and Qualified Matching Contributions Account. Instead,
the distribution provisions in this Section 6.03(E) will apply to withdrawals
from these Accounts by a Participant prior to his Separation from Service. After
the Participant's Separation from Service, the provisions of this Article VI
other than this Section 6.03(E) will apply to the distribution of the
Participant's entire Accrued Benefit. If the Employer sells substantially all of
the assets (within the meaning of Code ss.409(d)(2)) used in a trade or business
or sells a subsidiary (within the meaning of Code ss.409(d)(3)), a Participant
who continues employment with the acquiring corporation is eligible for
distribution from these Accounts as if he has a Separation from Service, but for
distributions made after March 31, 1988, only if the distribution constitutes a
lump sum distribution, determined in a manner consistent with Code ss.401(k)(10)
and the applicable Treasury regulations.
The Participant, until he retires, has a continuing election to receive a
distribution from his Deferral Contributions Account, Qualified Nonelective
Contributions Account, and Qualified Matching Contributions Account if: (I) he
has attained age 59-1/2; or (II) he incurs an immediate and heavy financial
hardship. The distribution event under clause (I) applies to all or any portion
of these Accounts. The distribution event under clause (II) applies only to the
elective deferrals allocated to the Participant's Deferral Contributions Account
plus any earnings on the Participant's elective deferrals credited before
January 1, 1989.
A hardship distribution, as described in clause (II), must be on account of
one or more of the following immediate and heavy financial needs: (1) medical
expenses described in Code ss.213(d) incurred by the Participant, by the
Participant's spouse, or any of the Participant's dependents; (2) the purchase
(excluding mortgage payments) of a principal residence for the Participant; (3)
the payment of post-secondary education tuition, related educational fees, and
room and board expenses, for the next 12 months for the Participant, for the
Participant's spouse, or for any of the Participant's dependents; or (4) to
prevent the eviction of the Participant from his principal residence or the
foreclosure on the mortgage of the Participant's principal residence. The
Participant may make application for a hardship distribution at any time.
RESTRICTIONS ON HARDSHIP DISTRIBUTION. The following restrictions apply to
a Participant's hardship distribution under this Section 6.03(E): (a) the
Participant may not make elective deferrals or employee contributions to the
Plan for the 12-month period following the date of his hardship distribution;
(b) the distribution may not exceed the amount of the immediate and heavy
financial need; (c) the Participant must have obtained all distributions under
this Section 6.03(E), other than hardship distributions, and all nontaxable
loans currently available under this Plan and all other qualified plans
maintained by the Employer; and (d) the Participant agrees to limit elective
deferrals under this Plan and under any other qualified plan maintained by the
Employer, for the Participant's taxable year immediately following the taxable
year of the hardship distribution under this Section 6.03(E), to the ss.402(g)
limitation (as described in Section 12.03), reduced by the amount of the
Participant's elective deferrals made in the taxable year of the hardship
distribution.
PROCEDURE. A Participant must make an election under this Section 6.03(E)
on a form prescribed by the Advisory Committee at any time during the Plan Year
for which his election is to be effective. In his written election, the
Participant must specify the percentage or dollar amount he wishes the Trustee
to distribute to him. The Participant's election relates solely to the
percentage or dollar amount specified in his election form and his right to
elect to receive an amount, if any, for a particular Plan Year greater than the
dollar amount or percentage specified in his election form terminates on the
Accounting Date. The Trustee must make a distribution to a Participant in
accordance with his election under this Section 6.03(E) within the 90-day period
(or as soon as administratively practicable) after the Participant files his
written election with the Trustee.
(F) SPECIAL DISTRIBUTION RULES FOR ROLLOVER ACCOUNT. The in-service
distribution provisions in Section 6.03(B) will not apply to the Rollover
Account. Instead, the distribution provisions in this Section 6.03(F) will apply
to withdrawals from that account by a Participant prior to his Separation from
Service. After the Participant's Separation from Service, the provisions of this
Article VI other than this Section 6.03(F) will apply to the distribution of the
Participant's entire Accrued Benefit.
The Participant, until he retires, has a continuing election to receive a
distribution from his Rollover Account if: (I) he has attained age 59 1/2; or
(II) he incurs an immediate and heavy financial hardship.
A hardship distribution, as described in clause (II), must be on
account of one or more of the following immediate and heavy financial needs: (1)
medical expenses described in Code ss.213(d) incurred by the Participant, by the
Participant's spouse, or any of the Participant's dependents; (2) the purchase
(excluding mortgage payments) of a principal residence for the Participant; (3)
the payment of post-secondary education tuition, related educational fees, and
room and board expenses, for the next 12 months for the Participant, for the
Participant's spouse, or for any of the Participant's dependents; or (4) to
prevent the eviction of the Participant from his principal residence or the
foreclosure on the mortgage of the Participant's principal residence. The
Participant may make application for a hardship distribution of his Rollover
Account at any time.
PROCEDURE. A Participant must make an election under this Section 6.03(F)
on a form prescribed by the Advisory Committee at any time during the Plan Year
for which his election is to be effective. In his written election, the
Participant must specify the percentage or dollar amount he wishes the Trustee
to distribute to him. The Participant's election relates solely to the
percentage or dollar amount specified in his election form and his right to
elect to receive an amount, if any, for a particular Plan Year greater than the
dollar amount or percentage specified in his election form terminates on the
Accounting Date. The Trustee must make a distribution to a Participant in
accordance with his election under this Section 6.03(F) within the 90-day period
(or as soon as administratively practicable) after the Participant files his
written election with the Trustee.
6.04 ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND SURVIVING SPOUSES. The joint
and survivor annuity requirements do not apply to this Plan. The Plan does not
provide any annuity distributions to Participants nor to surviving spouses. A
transfer agreement described in Section 11.05 may not permit a plan which is
subject to the provisions of Code ss.417 to transfer assets to this Plan, unless
the transfer is an elective transfer, as described in Section 11.05.
6.05 WAIVER ELECTION - QUALIFIED JOINT AND SURVIVOR ANNUITY. [Reserved]
6.06 WAIVER ELECTION - PRERETIREMENT SURVIVOR ANNUITY. [Reserved]
6.07 DISTRIBUTIONS UNDER DOMESTIC RELATIONS ORDERS. Nothing contained in
this Plan prevents the Trustee, in accordance with the direction of the Advisory
Committee, from complying with the provisions of a qualified domestic relations
order (as defined in Code ss.414(p)). This Plan specifically permits
distribution to an alternate payee under a qualified domestic relations order as
soon as administratively practicable after any distribution valuation date of
any Plan Year, irrespective of whether the Participant has attained his earliest
retirement age (as defined under Code ss.414(p)) under the Plan. A distribution
to an alternate payee prior to the Participant's attainment of earliest
retirement age is available only if: (1) the order specifies distribution at
that time or permits an agreement between the Plan and the alternate payee to
authorize an earlier distribution; and (2) if the present value of the alternate
payee's benefits under the Plan exceeds $5,000, and the order requires, the
alternate payee consents to any distribution occurring prior to the
Participant's attainment of earliest retirement age. Nothing in this Section
6.07 gives a Participant a right to receive distribution at a time otherwise not
permitted under the Plan nor does it permit the alternate payee to receive a
form of payment not permitted under the Plan.
The Plan Administrator must establish reasonable procedures to determine
the qualified status of a domestic relations order. Upon receiving a domestic
relations order, the Plan Administrator promptly will notify the Participant and
any alternate payee named in the order, in writing, of the receipt of the order
and the Plan's procedures for determining the qualified status of the order.
Within a reasonable period of time after receiving the domestic relations order,
the Plan Administrator must determine the qualified status of the order and must
notify the Participant and each alternate payee, in writing, of its
determination. The Plan Administrator must provide notice under this paragraph
by mailing to the individual's address specified in the domestic relations
order, or in a manner consistent with Department of Labor regulations. A
qualified domestic relations order that, prior to the Effective Date, had been
determined to be qualified under the Profit Sharing Plan with respect to the
Accrued Benefit of a Participant under the Profit Sharing Plan, shall continue
to be treated as a qualified domestic relations order under this Plan with
respect to the Accounts of the Participant that were transferred to this Plan
from the Profit Sharing Plan.
If any portion of the Participant's Nonforfeitable Accrued Benefit is
payable during the period the Plan Administrator is making its determination of
the qualified status of the domestic relations order, the Advisory Committee
must make a separate accounting of the amounts payable. If the Plan
Administrator determines the order is a qualified domestic relations order
within 18 months of the date amounts first are payable following receipt of the
order, the Advisory Committee will direct the Trustee to distribute the payable
amounts in accordance with the order. If the Plan Administrator does not make
its determination of the qualified status of the order within the 18 month
determination period, the Advisory Committee will direct the Trustee to
distribute the payable amounts in the manner the Plan would distribute if the
order did not exist and will apply the order prospectively if the Plan
Administrator later determines the order is a qualified domestic relations
order.
To the extent it is not inconsistent with the provisions of the qualified
domestic relations order, the Advisory Committee at the election of an alternate
payee may direct the Trustee to invest any partitioned amount in a segregated
subaccount or separate account and to invest the account in Federally insured,
interest-bearing savings account(s) or time deposit(s) (or a combination of
both), or in other fixed income investments. A segregated subaccount remains a
part of the Trust, but it alone shares in any income it earns, and it alone
bears any expense or loss it incurs. The Trustee will make any payments or
distributions required under this Section 6.07 by separate benefit checks or
other separate distribution to the alternate payee(s).
6.08 ROLLOVER DISTRIBUTIONS. Notwithstanding any provision of the Plan to
the contrary that would otherwise limit a distributee's election under this
Section, a distributee may elect, at the time and in the manner prescribed by
the Plan Administrator, to have any portion of an eligible rollover distribution
paid directly to an eligible retirement plan specified by the distributee in a
direct rollover. For purposes of this Section 6.08, the following definitions
shall apply.
(a) ELIGIBLE ROLLOVER DISTRIBUTION: An eligible rollover distribution
is any distribution of all or any portion of the balance to the credit of
the distributee, except that an eligible rollover distribution does not
include: any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life (or
life expectancy) of the distributee and the distributee's designated
beneficiary, or for a specified period of ten years or more; any
distribution to the extent such distribution is required under section
401(a)(9) of the Code; and the portion of any distribution that is not
includible in gross income (determined without regard to the exclusion for
net unrealized appreciation with respect to employer securities).
(b) ELIGIBLE RETIREMENT PLAN: An eligible retirement plan is an
individual retirement account described in section 408(a) of the Code, an
individual retirement annuity described in section 408(b) of the Code, an
annuity plan described in 403(a) of the Code, or a qualified trust
described in section 401(a) of the Code, that accepts the distributee's
eligible rollover distribution. However, in the case of an eligible
rollover distribution to the surviving spouse, an eligible retirement plan
is an individual retirement account or individual retirement annuity.
(c) DISTRIBUTEE: A distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's surviving spouse
and the Employee's or former Employee's spouse or former spouse who is the
alternate payee under a qualified domestic relations order, as defined in
section 414(p) of the Code, are distributees with regard to the interest of
the spouse or former spouse.
(d) DIRECT ROLLOVER: A direct rollover is a payment by the Plan to an
eligible retirement plan specified by the distributee.
ARTICLE VII.
EMPLOYER ADMINISTRATIVE PROVISIONS
7.01 INFORMATION TO COMMITTEE. The Employer must supply current information
to the Advisory Committee as to the name, date of birth, date of employment,
annual compensation, leaves of absence, Years of Service and date of termination
of employment of each Employee who is, or who will be eligible to become, a
Participant under the Plan, together with any other information which the
Advisory Committee considers necessary. The Employer's records as to the current
information the Employer furnishes to the Advisory Committee are conclusive as
to all persons.
7.02 NO LIABILITY. The Employer assumes no obligation or responsibility to
any of its Employees, Participants or Beneficiaries for any act of, or failure
to act, on the part of its Advisory Committee (unless the Employer is the
Advisory Committee), the Trustee or the Plan Administrator (unless the Employer
is the Plan Administrator).
7.03 INDEMNITY OF COMMITTEE. The Employer indemnifies and saves harmless
the Plan Administrator and the members of the Advisory Committee, and each of
them, from and against any and all loss resulting from liability to which the
Plan Administrator and the Advisory Committee, or the members of the Advisory
Committee, may be subjected by reason of any act or conduct (except willful
misconduct or gross negligence) in their official capacities in the
administration of this Trust or Plan or both, including all expenses reasonably
incurred in their defense, in case the Employer fails to provide such defense.
The indemnification provisions of this Section 7.03 do not relieve the Plan
Administrator or any Advisory Committee member from any liability he may have
under ERISA for breach of a fiduciary duty. Furthermore, the Plan Administrator
and the Advisory Committee members and the Employer may execute a letter
agreement further delineating the indemnification agreement of this Section
7.03, provided the letter agreement must be consistent with and must not violate
ERISA. The indemnification provisions of this Section 7.03 extend to the Trustee
solely to the extent provided by a letter agreement executed by the Trustee and
the Employer.
7.04 EMPLOYER DIRECTION OF INVESTMENT. The Employer has the right to direct
the Trustee with respect to the investment and reinvestment of assets comprising
the Trust Fund only if the Trustee consents in writing to permit such direction.
If the Trustee consents to Employer direction of investment, the Trustee and the
Employer must execute a letter agreement as a part of this Plan containing such
conditions, limitations and other provisions they deem appropriate before the
Trustee will follow any Employer direction as respects the investment or
reinvestment of any part of the Trust Fund.
7.05 AMENDMENT TO VESTING SCHEDULE. Though the Employer reserves the right
to amend the vesting schedule at any time, the Advisory Committee will not apply
the amended vesting schedule to reduce the Nonforfeitable percentage of any
Participant's Accrued Benefit derived from Employer contributions (determined as
of the later of the date the Employer adopts the amendment, or the date the
amendment becomes effective) to a percentage less than the Nonforfeitable
percentage computed under the Plan without regard to the amendment.
If the Employer makes a permissible amendment to the vesting schedule, each
Participant having at least 3 Years of Service with the Employer may elect to
have the percentage of his Nonforfeitable Accrued Benefit computed under the
Plan without regard to the amendment. The Participant must file his election
with the Plan Administrator within 60 days of the latest of (a) the Employer's
adoption of the amendment; (b) the effective date of the amendment; or (c) his
receipt of a copy of the amendment. The Plan Administrator, as soon as
practicable, must forward a true copy of any amendment to the vesting schedule
to each affected Participant, together with an explanation of the effect of the
amendment, the appropriate form upon which the Participant may make an election
to remain under the vesting schedule provided under the Plan prior to the
amendment and notice of the time within which the Participant must make an
election to remain under the prior vesting schedule. For purposes of this
Section 7.05, an amendment to the vesting schedule includes any Plan amendment
which directly or indirectly affects the computation of the Nonforfeitable
percentage of an Employee's rights to his Employer derived Accrued Benefit.
ARTICLE VIII.
PARTICIPANT ADMINISTRATIVE PROVISIONS
8.01 BENEFICIARY DESIGNATION. Any Participant may from time to time
designate, in writing, any person or persons, contingently or successively, to
whom the Trustee will pay his Accrued Benefit (including any life insurance
proceeds payable to the Participant's Account) in the event of his death and the
Participant may designate the form and method of payment. The Advisory Committee
will prescribe the form for the written designation of Beneficiary and, upon the
Participant's filing the form with the Advisory Committee, the form effectively
revokes all designations filed prior to that date by the same Participant. A
Beneficiary designation by a Participant that was valid under the Profit Sharing
Plan immediately prior to the Effective Date shall continue to be valid under
this Plan as to the Participant's Accounts transferred to the Plan from the
Profit Sharing Plan until revoked by the Participant in accordance with this
Section 8.01.
A married Participant's Beneficiary designation is not valid unless the
Participant's spouse consents, in writing, to the Beneficiary designation. The
spouse's consent must acknowledge the effect of that consent and a notary public
or the Plan Administrator (or his representative) must witness that consent. The
spousal consent requirements of this paragraph do not apply if: (1) the
Participant and his spouse are not married through the one-year period ending on
the date of the Participant's death; (2) the Participant's spouse is the
Participant's sole primary beneficiary; (3) the Plan Administrator is not able
to locate the Participant's spouse; (4) the Participant is legally separated or
has been abandoned (within the meaning of State law) and the Participant has a
court order to that effect; or (5) other circumstances exist under which the
Secretary of the Treasury will excuse the consent requirement. If the
Participant's spouse is legally incompetent to give consent, the spouse's legal
guardian (even if the guardian is the Participant) may give consent.
8.02 NO BENEFICIARY DESIGNATION. If a Participant fails to name a
Beneficiary in accordance with Section 8.01, or if the Beneficiary named by a
Participant predeceased him, then the Trustee will pay the Participant's Accrued
Benefit in accordance with Section 6.02 in the following order of priority to:
(a) The Participant's surviving spouse;
(b) The Participant's surviving children, including adopted children,
in equal shares;
(c) The Participant's surviving parents, in equal shares; or
(d) The legal representative of the estate of the Participant.
If the Beneficiary does not predecease the Participant, but dies prior to
distribution of the Participant's entire Nonforfeitable Accrued Benefit, the
Trustee will pay the remaining Nonforfeitable Accrued Benefit to the
Beneficiary's estate unless the Participant's Beneficiary Designation provides
otherwise. The Advisory Committee will direct the Trustee as to the method and
to whom the Trustee will make the payment under this Section 8.02.
8.03 PERSONAL DATA TO COMMITTEE. Each Participant and each Beneficiary of a
deceased Participant must furnish to the Advisory Committee such evidence, data
or information as the Advisory Committee considers necessary or desirable for
the purpose of administering the Plan. The provisions of this Plan are effective
for the benefit of each Participant upon the condition precedent that each
Participant will furnish promptly full, true and complete evidence, data and
information when requested by the Advisory Committee, provided the Advisory
Committee advises each Participant of the effect of his failure to comply with
its request.
8.04 ADDRESS FOR NOTIFICATION. Each Participant and each Beneficiary of a
deceased Participant must file with the Advisory Committee from time to time, in
writing, his post office address and any change of post office address. Any
communication, statement or notice addressed to a Participant, or Beneficiary,
at his last post office address filed with the Advisory Committee, or as shown
on the records of the Employer, binds the Participant, or Beneficiary, for all
purposes of this Plan.
8.05 ASSIGNMENT OR ALIENATION. Subject to Code ss.414(p) relating to
qualified domestic relations orders, neither a Participant nor a Beneficiary may
anticipate, assign or alienate (either at law or in equity) any benefit provided
under the Plan, and the Trustee will not recognize any such anticipation,
assignment or alienation. Furthermore, a benefit under the Plan is not subject
to attachment, garnishment, levy, execution or other legal or equitable process.
8.06 NOTICE OF CHANGE IN TERMS. The Plan Administrator, within the time
prescribed by ERISA and the applicable regulations, must furnish all
Participants and Beneficiaries a summary description of any material amendment
to the Plan or notice of discontinuance of the Plan and all other information
required by ERISA to be furnished without charge.
8.07 LITIGATION AGAINST THE TRUST. A court of competent jurisdiction may
authorize any appropriate equitable relief to redress violations of ERISA or to
enforce any provisions of ERISA or the terms of the Plan. A fiduciary may
receive reimbursement of expenses properly and actually incurred in the
performance of his duties with the Plan.
8.08 INFORMATION AVAILABLE. Any Participant in the Plan or any Beneficiary
may examine copies of the Plan description, latest annual report, any bargaining
agreement, this Plan and Trust, contract or any other instrument under which the
Plan was established or is operated. The Plan Administrator will maintain all of
the items listed in this Section 8.08 in his office, or in such other place or
places as he may designate from time to time in order to comply with the
regulations issued under ERISA, for examination during reasonable business
hours. Upon the written request of a Participant or Beneficiary the Plan
Administrator will furnish him with a copy of any item listed in this Section
8.08. The Plan Administrator may make a reasonable charge to the requesting
person for the copy so furnished.
8.09 APPEAL PROCEDURE FOR DENIAL OF BENEFITS. The Plan Administrator will
provide adequate notice in writing to any Participant or to any Beneficiary
("Claimant") whose claim for benefits under the Plan the Advisory Committee has
denied. The Plan Administrator's notice to the Claimant must set forth:
(a) The specific reason for the denial;
(b) Specific references to pertinent Plan provisions on which the
Advisory Committee based its denial;
(c) A description of any additional material and information needed
for the Claimant to perfect his claim and an explanation of why the
material or information is needed; and
(d) That any appeal the Claimant wishes to make of the adverse
determination must be in writing to the Advisory Committee within 75 days
after receipt of the Plan Administrator's notice of denial of benefits. The
Plan Administrator's notice must further advise the Claimant that his
failure to appeal the action to the Advisory Committee in writing within
the 75 day period will render the Advisory Committee's determination final,
binding and conclusive.
If the Claimant should appeal to the Advisory Committee, he, or his duly
authorized representative, may submit, in writing, whatever issues and comments
he, or his duly authorized representative, fees are pertinent. The Claimant, or
his duly authorized representative, may review pertinent plan documents. The
Advisory Committee will reexamine all facts related to the appeal and make a
final determination as to whether the denial of benefits is justified under the
circumstances. The Advisory Committee must advise the Claimant of its decision
within 60 days of the Claimant's written request for review, unless special
circumstances (such as a hearing) would make the rendering of a decision within
the 60 day limit unfeasible, but in no event may the Advisory Committee render a
decision respecting a denial for a claim for benefits later than 120 days after
its receipt of a request for review.
The Plan Administrator's notice of denial of benefits must identify the
name of each member of the Advisory Committee and the name and address of the
Advisory Committee member to whom the Claimant may forward his appeal.
ARTICLE IX.
ADVISORY COMMITTEE - DUTIES WITH RESPECT
TO PARTICIPANT'S ACCOUNTS
9.01 MEMBERS' COMPENSATION, EXPENSES. The Sponsor must appoint an Advisory
Committee to administer the Plan, the members of which may or may not be
Participants in the Plan, or which may be the Plan Administrator acting alone.
The members of the Advisory Committee will serve without compensation for
services as such, but the Employer will pay all expenses of the Advisory
Committee, including the expense for any bond required under ERISA.
9.02 TERM. Each member of the Advisory Committee serves until the
appointment of his successor.
9.03 POWERS. In case of a vacancy in the membership of the Advisory
Committee, the remaining members of the Advisory Committee may exercise any and
all of the powers, authority, duties and discretion conferred upon the Advisory
Committee pending the filling of the vacancy.
9.04 GENERAL. The Advisory Committee, in its sole and absolute discretion,
shall have all powers necessary to discharge its duties under this Plan
including, without limitation, the following:
(a) To select a Secretary, who need not be a member of the Advisory
Committee;
(b) To determine the rights of eligibility of an Employee to
participate in the Plan, the value of a Participant's Accrued Benefit and
the Nonforfeitable percentage of each Participant's Accrued Benefit;
(c) To adopt rules of procedure and regulations necessary for the
proper and efficient administration of the Plan provided the rules are not
inconsistent with the terms of this Plan;
(d) To construe and enforce the terms of the Plan and the rules and
regulations it adopts, including interpretation of the Plan documents and
documents related to the Plan's operation, and its decisions shall be final
and binding on all interested persons;
(e) To direct the Trustee as respects the crediting and distribution
of the Trust;
(f) To review and render decisions respecting a claim for (or denial
of a claim for) a benefit under the Plan;
(g) To furnish the Employer with information which the Employer may
require for tax or other purposes;
(h) To engage the service of agents whom it may deem advisable to
assist it with the performance of its duties; and
(i) To engage the services of an Investment Manager or Managers (as
defined in ERISA ss.3(38)), each of whom will have full power and authority
to manage, acquire or dispose (or direct the Trustee with respect to
acquisition or disposition) of any Plan asset under its control.
The Advisory Committee must exercise all of its powers, duties and
discretion under the Plan in a uniform and nondiscriminatory manner.
9.05 FUNDING POLICY. The Advisory Committee will review, not less often
than annually, all pertinent Employee information and Plan data in order to
establish the funding policy of the Plan and to determine the appropriate
methods of carrying out the Plan's objectives. The Advisory Committee must
communicate periodically, as it deems appropriate, to the Trustee and to any
Plan Investment Manager the Plan's short-term and long-term financial needs so
investment policy can be coordinated with Plan financial requirements.
9.06 MANNER OF ACTION. The decision of a majority of the members appointed
and qualified controls.
9.07 AUTHORIZED REPRESENTATIVE. The Advisory Committee may authorize any
person, whether or not such person is a member of the Advisory Committee, to
sign on its behalf any notices, directions, applications, certificates,
consents, approvals, waivers, letters or other documents. The Advisory Committee
must evidence this authority by an instrument signed by all members and filed
with the Trustee.
9.08 INTERESTED MEMBER. No member of the Advisory Committee may decide or
determine any matter concerning the distribution, nature or method of settlement
of his own benefits under the Plan, except in exercising an election available
to that member in his capacity as a Participant, unless the Plan Administrator
is acting alone in the capacity of the Advisory Committee.
9.09 INDIVIDUAL ACCOUNTS. The Advisory Committee will maintain, or direct
the Trustee to maintain, a separate Account, or multiple Accounts, in the name
of each Participant to reflect the Participant's Accrued Benefit in accordance
with the provisions of Article XV hereof and shall give the Trustee directions
with respect to the investment of the Accounts of Participants in accordance
with the provisions of Article XV.
9.10 INDIVIDUAL STATEMENT. As soon as practicable after the Accounting Date
of each Plan Year, but within the time prescribed by ERISA and the regulations
under ERISA, the Plan Administrator will deliver to each Participant (and to
each Beneficiary) a statement reflecting the condition of his Accrued Benefit in
the Trust as of that date and such other information ERISA requires be furnished
the Participant or Beneficiary. No Participant, except a member of the Advisory
Committee, has the right to inspect the records reflecting the Account of any
other Participant.
9.11 ACCOUNT CHARGED. The Advisory Committee will charge all distributions
made to a Participant or to his Beneficiary from his Account against the Account
of the Participant when made.
9.12 UNCLAIMED ACCOUNT PROCEDURE. The Plan does not require either the
Trustee or the Advisory Committee to search for, or ascertain the whereabouts
of, any Participant or Beneficiary. At the time the Participant's or
Beneficiary's benefit becomes distributable under Article VI, the Advisory
Committee, by certified or registered mail addressed to his last known address
of record with the Advisory Committee or the Employer, must notify the
Participant, or Beneficiary, that he is entitled to a distribution under this
Plan. The notice must quote the provisions of this Section 9.12 and otherwise
must comply with the notice requirements of Article VI. If the Participant, or
Beneficiary, fails to claim his distributive share or make his whereabouts known
in writing to the Advisory Committee within 6 months from the date of mailing of
the notice, the Advisory Committee will treat the Participant's or Beneficiary's
unclaimed payable Accrued Benefit as forfeited and will reallocate the unclaimed
payable Accrued Benefit in accordance with Section 3.05. Where the benefit is
distributable to the Participant, the forfeiture under this paragraph occurs as
of the last day of the notice period, if the Participant's Nonforfeitable
Accrued Benefit does not exceed $5,000, or as of the first day the benefit is
distributable without the Participant's consent, if the present value of the
Participant's Nonforfeitable Accrued Benefit exceeds $5,000. Where the benefit
is distributable to a Beneficiary, the forfeiture occurs on the date the notice
period ends except, if the Beneficiary is the Participant's spouse and the
Nonforfeitable Accrued Benefit payable to the spouse exceeds $5,000, the
forfeiture occurs as of the first day the benefit is distributable without the
spouse's consent. Pending forfeiture, the Advisory Committee, following the
expiration of the notice period, may direct the Trustee to segregate the
Nonforfeitable Accrued Benefit in a segregated Account and to invest that
segregated Account in Federally insured interest bearing savings accounts or
time deposits (or in a combination of both), or in other fixed income
investments.
If a Participant or Beneficiary who has incurred a forfeiture of his
Accrued Benefit under the provisions of the first paragraph of this Section 9.12
makes a claim, at any time, for his forfeited Accrued Benefit, the Advisory
Committee must restore the Participant's or Beneficiary's forfeited Accrued
Benefit to the same dollar amount as the dollar amount of the Accrued Benefit
forfeited, unadjusted for any gains or losses occurring subsequent to the date
of the forfeiture. The Advisory Committee will make the restoration during the
Plan Year in which the Participant or Beneficiary makes the claim, first from
the amount, if any, of Participant forfeitures the Advisory Committee otherwise
would allocate for the Plan Year, then from the amount, if any, of the Trust
Fund net income or gain for the Plan Year and then from the amount, or
additional amount, the Employer contributes to enable the Advisory Committee to
make the required restoration. The Advisory Committee will direct the Trustee to
distribute the Participant's or Beneficiary's restored Accrued Benefit to him no
later than 60 days after the close of the Plan Year in which the Advisory
Committee restores the forfeited Accrued Benefit. The forfeiture provisions of
this Section 9.12 apply solely to the Participant's or to the Beneficiary's
Accrued Benefit derived from Employer contributions.
9.13 INVESTMENT MANAGER. The Advisory Committee shall have the right, as
provided in Section 9.04(i), to appoint an Investment Manager for all or any
part of the assets of the Trust Fund as the Advisory Committee shall designate,
provided that any firm so appointed shall be and continue qualified to act as
such in accordance with ERISA. The Advisory Committee may remove any Investment
Manager at any time, and need not specify any cause for such removal.
ARTICLE X.
[RESERVED]
ARTICLE XI.
EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION
11.01 EXCLUSIVE BENEFIT. Except as provided under Article III, the Employer
has no beneficial interest in any asset of the Trust and no part of any asset in
the Trust may ever revert to or be repaid to an Employer, either directly or
indirectly; nor, prior to the satisfaction of all liabilities with respect to
the Participants and their Beneficiaries under the Plan, may any part of the
corpus or income of the Trust Fund, or any asset of the Trust, be (at any time)
used for, or diverted to, purposes other than the exclusive benefit of the
Participants or their Beneficiaries.
11.02 AMENDMENT BY EMPLOYER. Kansas City Southern Industries, Inc., by duly
adopted resolution of its Board of Directors, or of the Compensation and
Organization Committee of its Board of Directors, has the right at any time and
from time to time:
(a) To amend this Plan in any manner it deems necessary or advisable
in order to qualify (or maintain qualification of) this Plan and the Trust
created under it under the appropriate provisions of Code ss.401(a); or
(b) To amend this Plan in any other manner.
No amendment may authorize or permit any of the Trust Fund (other than the
part which is required to pay taxes and administration expenses) to be used for
or diverted to purposes other than for the exclusive benefit of the Participants
or their Beneficiaries or estates. No amendment may cause or permit any portion
of the Trust Fund to revert to or become a property of the Employer. No
amendment may be made which affects the rights, duties or responsibilities of
the Trustee, the Plan Administrator or the Advisory Committee without the
written consent of the affected Trustee, the Plan Administrator or the affected
member of the Advisory Committee.
CODE SS.411(D)(6) PROTECTED BENEFITS. An amendment (including the adoption
of this Plan as a restatement of an existing plan) may not decrease a
Participant's Accrued Benefit, except to the extent permitted under Code
ss.412(c)(8), and may not reduce or eliminate Code ss.411(d)(6) protected
benefits determined immediately prior to the adoption date (or, if later, the
effective date) of the amendment. An amendment reduces or eliminates Code
ss.411(d)(6) protected benefits if the amendment has the effect of either (1)
eliminating or reducing an early retirement benefit or a retirement-type subsidy
(as defined in Treasury regulations), or (2) except as provided by Treasury
regulations, eliminating an optional form of benefit. The Advisory Committee
must disregard an amendment to the extent application of the amendment would
fail to satisfy this paragraph. If the Advisory Committee must disregard an
amendment because the amendment would violate clause (1) or clause (2), the
Advisory Committee must maintain a schedule of the early retirement option or
other optional forms of benefit the Plan must continue for the affected
Participants.
All amendments must be made in writing. Each amendment must state the date
to which it is either retroactively or prospectively effective.
11.03 DISCONTINUANCE. Each Employer has the right, at any time, to suspend
or discontinue its contributions under the Plan. The Board of Directors of
Kansas City Southern Industries, Inc., or the Compensation and Organization
Committee thereof, or any other duly authorized committee thereof, has the right
to terminate, at any time, this Plan and the Trust created under it. The Plan
will terminate upon the first to occur of the following:
(a) The date terminated by action of the Board of Directors of Kansas
City Southern Industries, Inc., or the Compensation and Organization
Committee thereof, or any other duly authorized committee thereof; or
(b) The date Kansas City Southern Industries, Inc. is judicially
declared bankrupt or insolvent, unless the proceeding authorized continued
maintenance of the Plan.
11.04 FULL VESTING ON TERMINATION. Upon either full or partial termination
of the Plan, or, if applicable, upon complete discontinuance of profit sharing
plan contributions to the Plan, an affected Participant's right to his Accrued
Benefit is 100% Nonforfeitable, irrespective of the Nonforfeitable percentage
which otherwise would apply under Article V.
11.05 MERGER/DIRECT TRANSFER. The Plan may not be a party to any merger or
consolidation with another plan, or to a transfer of assets or liabilities to
another plan, unless immediately after the merger, consolidation or transfer,
the surviving Plan provides each Participant a benefit equal to or greater than
the benefit each Participant would have received had the Plan terminated
immediately before the merger or consolidation or transfer. The Advisory
Committee possesses the specific authority to enter into merger agreements or
direct transfer of assets agreements with the trustees of other retirement plans
described in Code ss.401(a), including an elective transfer, and to accept the
direct transfer of plan assets, or to transfer plan assets, as a party to any
such agreement.
The Advisory Committee may accept a direct transfer of plan assets on
behalf of an Employee prior to the date the Employee satisfies the Plan's
eligibility conditions. If the Advisory Committee accepts a direct transfer of
plan assets, the Advisory Committee must treat the Employee as a Participant for
all purposes of the Plan except the Employee is not a Participant for purposes
of sharing in Employer contributions or Participant forfeitures under the Plan
until he actually becomes a Participant in the Plan.
The Advisory Committee may not consent to, or be a party to a merger,
consolidation or transfer of assets with a defined benefit plan, except with
respect to an elective transfer. The Trustee will hold, administer and
distribute the transferred assets as a part of the Trust Fund and the Trustee
must maintain a separate Employer contribution Account for the benefit of the
Employee on whose behalf the Advisory Committee accepted the transfer in order
to reflect the value of the transferred assets. Unless a transfer of assets to
this Plan is an elective transfer, the Plan will preserve all Code ss.411(d)(6)
protected benefits with respect to those transferred assets, in the manner
described in Section 11.02. A transfer is an elective transfer if: (1) the
transfer satisfies the first paragraph of this Section 11.05; (2) the transfer
is voluntary, under a fully informed election by the Participant; (3) the
Participant has an alternative that retains his Code ss.411(d)(6) protected
benefits (including an option to leave his benefit in the transferor plan, if
that plan is not terminating); (4) the transfer satisfies the applicable spousal
consent requirements of the Code; (5) the transferor plan satisfies the joint
and survivor notice requirements of the Code, if the Participant's transferred
benefit is subject to those requirements; (6) the Participant has a right to
immediate distribution from the transferor plan, in lieu of the elective
transfer; (7) the transferred benefit is at least the greater of the single sum
distribution provided by the transferor plan payable at that plan's normal
retirement age; (8) the Participant has a 100% Nonforfeitable interest in the
transferred benefit; and (9) the transfer otherwise satisfies applicable
Treasury regulations. An elective transfer may occur between qualified plans of
any type.
DISTRIBUTION RESTRICTIONS UNDER CODE SS.401(K). If the Plan receives a
direct transfer (by merger or otherwise) of elective contributions (or amounts
treated as elective contributions) under a plan with a Code ss.401(k)
arrangement, the distribution restrictions of Code ss.ss.401(k)(2) and (10)
continue to apply to those transferred elective contributions.
11.06 TERMINATION. Upon termination of the Plan, the distribution
provisions of Article VI remain operative, with the following exceptions:
(1) if the present value of the Participant's Nonforfeitable Accrued
Benefit does not exceed $5,000, the Advisory Committee will direct the
Trustee to distribute the Participant's Nonforfeitable Accrued Benefit to
him in lump sum as soon as administratively practicable after the Plan
terminates; and
(2) if the present value of the Participant's Nonforfeitable Accrued
Benefit exceeds $5,000, the Participant or the Beneficiary, in addition to
the distribution events permitted under Article VI, may elect to have the
Trustee commence distribution of his Nonforfeitable Accrued Benefit as soon
as administratively practicable after the Plan terminates.
To liquidate the Trust, the Advisory Committee will purchase a deferred
annuity contract for each Participant which protects the Participant's
distribution rights under the Plan, if the Participant's Nonforfeitable Accrued
Benefit exceeds $5,000 and the Participant does not elect an immediate
distribution pursuant to Paragraph (2). The Trust will continue until the
Trustee in accordance with the direction of the Advisory Committee has
distributed all of the benefits under the Plan.
On each valuation date, the Advisory Committee will credit any part of a
Participant's Accrued Benefit retained in the Trust with its proportionate share
of the Trust's income, expenses, gains and losses, both realized and unrealized.
Upon termination of the Plan, the amount, if any, in a suspense account under
Article III will revert to the Employer, subject to the conditions of the
Treasury regulations permitting such a reversion. A resolution or amendment to
freeze all future benefit accrual but otherwise to continue maintenance of this
Plan, is not a termination for purposes of this Section 11.06.
Special Rule for Deferral Contributions Account. Notwithstanding the
provisions of this Section 11.06, the Participant may not receive a distribution
of the portion of his Nonforfeitable Accrued Benefit attributable to elective
contributions under a Code ss.401(k) arrangement (or to amounts treated under
the Code ss.401(k) arrangement as elective contributions) pursuant to the
termination of the Plan unless: (a) the Participant otherwise is entitled to a
distribution of that portion of his Nonforfeitable Accrued Benefit; or (b) the
Plan termination occurs without the establishment of a successor plan. A plan is
a successor plan under clause (b) if (i) the plan is a defined contribution plan
(other than an ESOP) maintained by the Employer (or by a related employer); (ii)
at least 2% of the Employees who were eligible under the Plan are or were
eligible under the successor plan at any time within the 24-month period ending
after the time of termination; and (iii) the successor plan is in existence at
the time of the termination of the Plan or within the period ending twelve (12)
months after the final distribution of assets of the Plan. A distribution
pursuant to clause (b), must be part of a lump sum distribution to the
Participant of his Nonforfeitable Accrued Benefit.
ARTICLE XII.
PROVISIONS RELATING TO THE CODE SS.401(K) ARRANGEMENT
12.01 CODE SS.401(K) ARRANGEMENT. The deferral contributions and related
Employer contributions described in Section 3.01(A) comprise a Code ss.401(k)
arrangement. An Employee who is eligible to participate in the 401(k)
arrangement may file a salary reduction agreement with the Advisory Committee. A
salary reduction agreement must specify the amount of Compensation or percentage
of Compensation the Employee wishes to defer; for which purpose "Compensation"
shall be as defined in Section 1.10 but modified to exclude income attributable
to the grant or exercise of employee stock options, the vesting of restricted
property, and such similar items of extraordinary or non-cash compensation as
the Advisory Committee shall prescribe. Any reference in this Section to
"Compensation" is a reference to such definition of "Compensation" as so
modified.
A salary reduction agreement executed by an eligible Employee shall be
effective as of the first day of the calendar quarter specified by the Employee
in such agreement; provided, however, that the agreement may not be effective
earlier than the following date which occurs last: (i) the execution date of the
Employee's salary reduction agreement; (ii) the Employee's Plan Entry Date (or,
in the case of a reemployed Employee, his reparticipation date under Article
II); or (iii) the effective date of the Code ss.401(k) arrangement. The salary
reduction agreement will apply only to Compensation which is currently available
to the Employee after the effective date of the salary reduction agreement.
If the salary reduction agreement specifies the reduction amount as a
percentage of Compensation, the percentage may not be less than one percent (1%)
of Compensation and shall specify a reduction percentage equal to an increment
of one percent (1%). If the salary reduction agreement specifies the reduction
amount as a dollar amount of Compensation, the dollar amount must equal an
increment of $5. An Employee's deferral contributions for the Plan Year may not
exceed ten percent (10%) of his Compensation for the portion of the Plan Year in
which the Employee is actually a Participant. Further, each individual deferral
contribution may not exceed ten percent (10%) of Compensation for the pay period
for which such deferral contribution is calculated. The Advisory Committee may
from time to time specify a maximum deferral percentage for Highly Compensated
Employees that is less than ten percent (10%). An Employee may modify his salary
reduction agreement, either to reduce or to increase the amount of deferral
contributions, as of the first day of any calendar quarter. The Employee shall
make this modification by filing a new salary reduction agreement with the
Advisory Committee. An Employee may revoke a salary reduction agreement as of
the first day of any calendar quarter. An Employee who revokes his salary
reduction agreement may file a new salary reduction agreement effective as of
the first day of the next calendar quarter.
12.02 DEFINITIONS.
(a) "Highly Compensated Employee" means an Eligible Employee who
satisfies the definition in Section 1.07 of the Plan.
(b) "Nonhighly Compensated Employee" means an eligible Employee who is
not a Highly Compensated Employee.
(c) "Eligible Employee" means, for purposes of the ADP test described
in Section 12.04, an Employee who is eligible to make elective deferrals
for the Plan Year, irrespective of whether the Employer actually makes
deferral contributions on behalf of the Employee. For purposes of the ACP
test described in Section 12.05, an "Eligible Employee" means a Participant
who is eligible to receive an allocation of Employer matching contributions
(or would be eligible if he made the type of contributions necessary to
receive an allocation of matching contributions) and a Participant who is
eligible to make employee contributions, irrespective of whether he
actually makes employee contributions. An Employee continues to be an
Eligible Employee during a period the Plan suspends the Employee's right to
make elective deferrals or nondeductible contributions following a hardship
distribution.
(d) "Highly Compensated Group" means the group of Eligible Employees
who are Highly Compensated Employees for the Plan Year.
(e) "Nonhighly Compensated Group" means the group of Eligible
Employees who are Nonhighly Compensated Employees for the Plan Year.
(f) "Compensation" means, for purposes of any nondiscrimination test
required under this Article XII, Compensation as defined for
nondiscrimination purposes in the last paragraph of Section 1.10 of the
Plan. Compensation must include Compensation for the entire Plan Year,
irrespective of whether the Code ss.401(k) arrangement was in effect for
the entire Plan Year or whether the Employee begins, resumes or ceases to
be an Eligible Employee during the Plan Year.
(g) "Deferral contributions" means the sum of the deferral
contributions the Employer contributes to the Trust on behalf of an
Eligible Employee, pursuant to Section 3.01.
(h) "Elective deferrals" are the deferral contributions the Employer
contributes to the Trust at the election of an Eligible Employee. If the
Codess.401(k) arrangement includes a cash or deferred feature, any portion
of a cash or deferred contribution contributed to the Trust because of the
Employee's failure to make a cash election is an elective deferral, but any
portion of a cash or deferred contribution over which the Employee does not
have a cash election is not an elective deferral. Elective deferrals do not
include amounts which have become currently available to the Employee prior
to the election nor amounts designated as nondeductible employee
contributions at the time of deferral or contribution.
(i) "Matching contributions" are contributions made by the Employer on
account of elective deferrals under a Code ss.401(k) arrangement or on
account of employee contributions. Matching contributions also include
Participant forfeitures allocated on account of such elective deferrals or
employee contributions.
(j) "Nonelective contributions" are contributions made by the Employer
which are not subject to a deferral election by an Employee and which are
not matching contributions.
(k) "Qualified matching contributions" are matching contributions
which are 100% Nonforfeitable at all times and which are subject to the
distribution restrictions described in paragraph (m). For purposes of this
definition, matching contributions are not 100% Nonforfeitable at all times
if the Employee has a 100% Nonforfeitable interest because of his Years of
Service taken into account under a vesting schedule.
(l) "Qualified nonelective contributions" are nonelective
contributions which are 100% Nonforfeitable at all times and which are
subject to the distribution restrictions described in paragraph (m). For
purposes of this definition, nonelective contributions are not 100%
Nonforfeitable at all times if the Employee has a 100% Nonforfeitable
interest because of his Years of Service taken into account under a vesting
schedule. Any nonelective contributions allocated to a Participant's
Qualified Nonelective Contributions Account under the Plan automatically
satisfy the definition of qualified nonelective contributions.
(m) "Distribution restrictions" means the Employee may not receive a
distribution of the specified contributions (nor earnings on those
contributions) except in the event of (1) the Participant's death,
disability, termination of employment, attainment of age 59 1/2, (2)
financial hardship satisfying the requirements of Codess.401(k) and the
applicable Treasury regulations, (3) plan termination, without
establishment of a successor defined contribution plan (other than an
ESOP), (4) a sale of substantially all of the assets (within the meaning of
Codess.409(d)(2)) used in a trade or business, but only to an employee who
continues employment with the corporation acquiring those assets, or (5) a
sale by a corporation of its interest in a subsidiary (within the meaning
of Codess.409(d)(3)), but only to an employee who continues employment with
the subsidiary. A distribution on account of financial hardship, as
described in clause (2), may not include earnings on elective deferrals
credited as of a date later than December 31, 1988, and may not include
qualified matching contributions and qualified nonelective contributions,
nor any earnings on such contributions, irrespective of when credited. A
distribution described in clauses (3), (4) or (5), must be a lump sum
distribution, as required under Code ss.401(k)(10).
(n) "Employee contributions" are contributions made by a Participant
on an after-tax basis, whether voluntary or mandatory, and designated, at
the time of contribution, as an employee (or nondeductible) contribution.
Elective deferrals and deferral contributions are not employee
contributions. Participant nondeductible contributions, made pursuant to
Section 4.01 of the Plan, are employee contributions.
12.03 ANNUAL ELECTIVE DEFERRAL LIMITATION.
ANNUAL ELECTIVE DEFERRAL LIMITATION. An Employee's elective deferrals may
not exceed the 402(g) limitation. The 402(g) limitation is the greater of $7,000
or the adjusted amount determined by the Secretary of the Treasury. If the
Employer determines the Employee's elective deferrals to the Plan for a calendar
year would exceed the 402(g) limitation for the calendar year, the Employer will
not make any additional elective deferrals with respect to that Employee for the
remainder of that calendar year, paying in cash to the Employee any amounts
which would result in the Employee's elective deferrals for the calendar year
exceeding the 402(g) limitation. If the Advisory Committee determines an
Employee's elective deferrals already contributed to the Plan for a calendar
year exceed the 402(g) limitation, the Advisory Committee will distribute the
amount in excess of the 402(g) limitation (the "excess deferral"), as adjusted
for allocable income, no later than April 15 of the following calendar year. If
the Advisory Committee distributes the excess deferral by the appropriate April
15, it may make the distribution irrespective of any other provision under this
Plan or under the Code. The Advisory Committee will reduce the amount of excess
deferrals for a calendar year distributable to the Employee by the amount of
excess contributions (as determined in Section 12.04), if any, previously
distributed to the Employee for the Plan Year beginning in that calendar year.
If an Employee participates in another plan under which he makes elective
deferrals pursuant to a Code ss.401(k) arrangement, elective deferrals under a
Simplified Employee Pension, or salary reduction contributions to a
tax-sheltered annuity, irrespective of whether the Employer maintains the other
plan, he may provide the Advisory Committee a written claim for excess deferrals
made for a calendar year. The Employee must submit the claim no later than the
March 1 following the close of the particular calendar year and the claim must
specify the amount of the Employee's elective deferrals under this Plan which
are excess deferrals. If the Advisory Committee receives a timely claim, it will
distribute the excess deferral (as adjusted for allocable income) the Employee
has assigned to this Plan, in accordance with the distribution procedure
described in the immediately preceding paragraph.
ALLOCABLE INCOME. For purposes of making a distribution of excess deferrals
pursuant to this Section 12.03, allocable income means net income or net loss
allocable to the excess deferrals for the calendar year in which the Employee
made the excess deferral and for the "gap period" measured from the beginning of
the next calendar year to the date of the distribution. If the distribution of
the excess deferral occurs during the calendar year in which the Employee made
the excess deferral, the Advisory Committee will treat as a "gap period" the
period from the first day of that calendar year to the date of the distribution.
The Advisory Committee will determine allocable income in the same manner as
described in Section 12.04 for excess contributions, except the numerator of the
allocation fraction will be the amount of the Employee's excess deferrals and
the denominator of the allocation fraction will be the Employee's Accrued
Benefit attributable to his elective deferrals.
12.04 ACTUAL DEFERRAL PERCENTAGE ("ADP") TEST. For each Plan Year, the
Advisory Committee must determine whether the Plan's Code ss.401(k) arrangement
satisfies one of the following ADP tests:
(i) The average ADP for the Highly Compensated Group for such Plan
Year does not exceed 1.25 times the average ADP of the Nonhighly
Compensated Group for the preceding Plan Year; or
(ii) The average ADP for the Highly Compensated Group for such Plan
Year does not exceed the average ADP for the Nonhighly Compensated Group
for the preceding Plan Year by more than two percentage points (or the
lesser percentage permitted by the multiple use limitation in Section
12.06) and the average ADP for the Highly Compensated Group for such Plan
Year is not more than twice the average ADP for the Nonhighly Compensated
Group for the preceding Plan Year.
If the Advisory Committee so elects, it may apply the limits set forth in
paragraphs (i) and (ii) of this Section by using the Average ADP of the
Nonhighly Compensated Group for the Plan Year for which the determination is
made rather than for the preceding Plan Year; provided that such election may
not be changed except as provided by the Secretary of the Treasury.
CALCULATION OF ADP. The average ADP for a group is the average of the
separate ADPs calculated for each Eligible Employee who is a member of that
group. An Eligible Employee's ADP for a Plan Year is the ratio of the Eligible
Employee's deferral contributions for the Plan Year to the Employee's
Compensation for the Plan Year. A Nonhighly Compensated Employee's ADP does not
include elective deferrals made to this Plan or to any other Plan maintained by
the Employer, to the extent such elective deferrals exceed the ss.402(g)
limitation described in Section 12.03.
The Advisory Committee may determine (in a manner consistent with Treasury
regulations) the ADPs of the Eligible Employees by taking into account qualified
nonelective contributions or qualified matching contributions, or both, made to
this Plan or to any other qualified Plan maintained by the Employer. The
Advisory Committee may not include qualified nonelective contributions in the
ADP test unless the allocation of nonelective contributions is nondiscriminatory
when the Advisory Committee takes into account all nonelective contributions
(including the qualified nonelective contributions) and also when the Advisory
Committee takes into account only the nonelective contributions not used in
either the ADP test described in this Section 12.04 or the ACP test described in
Section 12.05. The Advisory Committee may not include in the ADP test any
qualified nonelective contributions or qualified matching contributions under
another qualified plan unless that plan has the same plan year as this Plan. The
Advisory Committee must maintain records to demonstrate compliance with the ADP
test, including the extent to which the Plan used qualified nonelective
contributions or qualified matching contributions to satisfy the test.
SPECIAL AGGREGATION RULE FOR HIGHLY COMPENSATED EMPLOYEES. To determine the
ADP of any Highly Compensated Employee, the deferral contributions taken into
account must include any elective deferrals made by the Highly Compensated
Employee under any other Code ss.401(k) arrangement maintained by the Employer,
unless the elective deferrals are to an ESOP. If the plans containing the Code
ss.401(k) arrangements have different plan years, the Advisory Committee will
determine the combined deferral contributions on the basis of the plan years
ending in the same calendar year.
AGGREGATION OF CERTAIN CODE SS.401(K) ARRANGEMENTS. If the Employer treats
two plans as a unit for coverage or nondiscrimination purposes, the Employer
must combine the Code ss.401(k) arrangements under such plans to determine
whether either plan satisfies the ADP test. This aggregation rule applies to the
ADP determination for all Eligible Employees, irrespective of whether an
Eligible Employee is a Highly Compensated Employee or a Nonhighly Compensated
Employee. An aggregation of Code ss.401(k) arrangements under this paragraph
does not apply to plans which have different plan years and the Advisory
Committee may not aggregate an ESOP (or the ESOP portion of a plan) with a
non-ESOP plan (or non-ESOP portion of a plan).
CHARACTERIZATION OF EXCESS CONTRIBUTIONS. If, pursuant to this Section
12.04, the Advisory Committee has elected to include qualified matching
contributions in the average ADP, the Advisory Committee will treat excess
contributions as attributable proportionately to deferral contributions and to
qualified matching contributions allocated on the basis of those deferral
contributions. If the total amount of a Highly Compensated Employee's excess
contributions for the Plan Year exceeds his deferral contributions or qualified
matching contributions for the Plan Years, the Advisory Committee will treat the
remaining portion of his excess contributions as attributable to qualified
nonelective contributions. The Advisory Committee will reduce the amount of
excess contributions for a Plan Year distributable to a Highly Compensated
Employee by the amount of excess deferrals (as defined in Section 12.03), if
any, previously distributed to that Employee for the Employee's taxable year
ending in that Plan Year.
DISTRIBUTION OF EXCESS CONTRIBUTIONS. If the Advisory Committee determines
the Plan fails to satisfy the ADP test for a Plan Year, it must distribute the
excess contributions, as adjusted for allocable income, during the next Plan
Year. However, the Employer will incur an excise tax equal to 10% of the amount
of excess contributions for a Plan Year not distributed to the appropriate
Highly Compensated Employees during the first 2 1/2 months of that next Plan
Year. The excess contributions are the amount of deferral contributions made by
the Highly Compensated Employees which causes the Plan to fail to satisfy the
ADP test. The Advisory Committee will distribute to each Highly Compensated
Employee his respective share of the excess contributions. The Advisory
Committee will determine the respective shares of excess contributions as
follows:
STEP 1: The Advisory Committee shall first determine the dollar amount
of the reductions which would have to be made to the elective deferrals of
each Highly Compensated Employee who is a Participant for the Plan Year in
order for the average ADP of the Highly Compensated Group for the Plan Year
to satisfy Section 401(k)(3) of the Code. Such amount shall be calculated
by first determining the dollar amount by which the deferred contributions
of Highly Compensated Employees who have the highest ADPs would have to be
reduced until the first to occur of: (i) such Employees' ADPs would equal
the ADPs of the Highly Compensated Employee or group of Highly Compensated
Employees with the next highest ADPs; or (ii) the average ADP of the Highly
Compensated Group, as recalculated after the reductions made under this
Step 1, satisfies the requirements of Section 401(k)(3) of the Code and
this Section.
Then, unless the recalculated average ADP of the Highly Compensated
Group satisfies Section 401(k)(3) of the Code, the reduction process shall
be repeated by determining the amount of reductions which would have to be
made to the elective deferrals of the Highly Compensated Employees who,
after all prior reductions, would have the highest ADP until the first to
occur of: (iii) the ADP, after all prior reductions under this Step 1, of
each person in such group would equal the ADP of the Highly Compensated
Employee or group of Highly Compensated Employees with the next highest
ADP; or (iv) the average ADP of the Highly Compensated Group, after the
prior reductions, satisfies the requirements of Code Section 401(k)(3) and
this Section. This process is repeated until the average ADP of the Highly
Compensated Group, after all reductions, satisfies the requirements of Code
Section 401(k)(3) and this Section.
STEP 2: Determine the total dollar amount of reductions to the
elective deferrals calculated under Step 1 ("TOTAL EXCESS DEFERRALS").
STEP 3: Reduce the elective deferrals of the Highly Compensated
Employees with the highest dollar amount of elective deferrals by the
lesser of the dollar amount which either (i) causes each such Highly
Compensated Employee's elective deferrals to equal the dollar amount of the
elective deferrals of the Highly Compensated Employee or group of Highly
Compensated Employees with the next highest dollar amount of elective
deferrals; or (ii) reduces the Highly Compensated Employees' elective
deferrals by the Total Excess Deferrals.
Then, unless the total amount of reductions made to Highly Compensated
Employees' elective deferrals under this Step 3 equals the amount of the
Total Excess Deferrals, the reduction process shall be repeated by reducing
the elective deferrals of the group of Highly Compensated Employees with
the highest dollar amount of elective deferrals, after the prior reductions
made in this Step 3, by the lesser of the amount which either: (iii) causes
such Highly Compensated Employees' elective deferrals after prior
reductions made in this Step 3 to equal the dollar amount of the elective
deferrals of the Highly Compensated Employees with the next highest dollar
amount of elective deferrals; or (iv) causes total reductions to equal the
Total Excess Deferrals. This process is repeated with each successive group
of Highly Compensated Employees with the highest dollar amount, after the
prior reductions, of elective deferrals until the total reductions made
under this Step 3 equal the Total Excess Deferrals.
A Participant's elective deferrals required to be reduced under this
Section shall be reduced in the following order: the Participant's unmatched
elective deferrals will be reduced first, and then, if necessary, matched
elective deferrals. Matching contributions made with respect to elective
deferrals so reduced (other than qualified matching contributions treated as
elective deferrals for purposes of this Section) shall be forfeited.
ALLOCABLE INCOME. To determine the amount of the corrective distribution
required under this Section 12.04, the Advisory Committee must calculate the
allocable income for the Plan Year in which the excess contributions arose and
for the "gap period" measured from the beginning of the next Plan Year to the
date of the distribution. "Allocable income" means net income or net loss. To
calculate allocable income for the Plan Year, the Advisory Committee: (1) first
will determine the net income or net loss for the Plan Year on the Highly
Compensated Employee's Accrued Benefit attributable to deferral contributions;
and (2) then will multiply this net income or net loss by the following
fraction:
Amount of the Highly Compensated Employee's Excess Contributions
----------------------------------------------------------------
Accrued Benefit attributable to deferral contributions
The Accrued Benefit attributable to deferral contributions includes the Accrued
Benefit attributable to qualified matching contributions and qualified
nonelective contributions taken into account in the ADP test for the Plan Year
or for any prior Plan Year. For purposes of the denominator of the fraction, the
Advisory Committee will calculate the Accrued Benefit attributable to deferral
contributions as of the last day of the Plan Year (without regard to the net
income or net loss for the Plan Year on that Accrued Benefit).
To calculate allocable income for the "gap period," the Advisory Committee
will perform the same calculation as described in the preceding paragraph,
except in clause (1) the Advisory Committee will determine, as of the last day
of the month preceding the date of distribution, the net income or net loss for
the "gap period" and in clause (2) will calculate the Accrued Benefit
attributable to deferral contributions as of the day before the distribution. If
the Plan does not perform a valuation on the last day of the month preceding the
date of distribution, the Advisory Committee, in lieu of the calculation
described in this paragraph, will calculate allocable income for each month in
the "gap period" as equal to 10% of the allocable income for the Plan Year.
Under this alternate calculation, the Advisory Committee will disregard the
month in which the distribution occurs, if the Plan makes the distribution no
later than the 15th day of that month.
12.05 NONDISCRIMINATION RULES FOR EMPLOYER MATCHING CONTRIBUTIONS/EMPLOYEE
CONTRIBUTIONS. The Advisory Committee must determine whether the annual Employer
matching contributions (other than qualified matching contributions used in the
ADP test), if any, and the Employee contributions, if any, satisfy one of the
following average contribution percentage ("ACP") test:
(i) The ACP for the Highly Compensated Group for such Plan Year does
not exceed 1.25 times the ACP of the Nonhighly Compensated Group for the
prior Plan Year; or
(ii) The ACP for the High Compensated Group for such Plan Year does
not exceed the ACP for the Nonhighly Compensated Group for the prior Plan
Year by more than two percentage points (or the lesser percentage permitted
by the multiple use limitation in Section 12.06) and the ACP for the Highly
Compensated Group for such Plan Year is not more than twice the ACP for the
Nonhighly Compensated Group for the prior Plan Year.
If the Advisory Committee so elects, it may apply the limits set forth in
paragraphs (i) and (ii) of this Section by using the Average ACP of the
Nonhighly Compensated Group for the Plan Year for which the determination is
made rather than for the preceding Plan Year; provided that such election may
not be changed except as provided by the Secretary of the Treasury.
(A) CALCULATION OF ACP. The average contribution percentage for a group is
the average of the separate contribution percentages calculated for each
Eligible Employee who is a member of that group. An Eligible Employee's
contribution percentage for a Plan Year is the ratio of the Eligible Employee's
aggregate contributions for the Plan Year to the Employee's Compensation for the
Plan Year. "Aggregate contributions" are matching contributions (other than
qualified matching contributions used in the ADP test) and employee
contributions.
The Advisory Committee, in a manner consistent with Treasury regulations,
may determine the contribution percentages of the Eligible Employees by taking
into account qualified nonelective contributions (other than qualified
nonelective contributions used in the ADP test under Section 12.04) or elective
deferrals, or both, made to this Plan or to any other qualified Plan maintained
by the Employer. The Advisory Committee may not include qualified nonelective
contributions in the ACP test unless the allocation of nonelective contributions
is nondiscriminatory when the Advisory Committee takes into account all
nonelective contributions (including the qualified nonelective contributions)
and also when the Advisory Committee takes into account only the nonelective
contributions not used in either the ADP test described in Section 12.04 or the
ACP test described in Section 12.05 The Advisory Committee may not include
elective deferrals in the ACP test, unless the Plan which includes the elective
deferrals satisfies the ADP test both with and without the elective deferrals
included in this ACP test. For Plan Years beginning after December 31, 1989, the
Advisory Committee may not include in the ACP test any qualified nonelective
contributions or elective deferrals under another qualified plan unless that
plan has the same plan year as this Plan. The Advisory Committee must maintain
records to demonstrate compliance with the ACP Test, including the extent to
which the Plan used qualified nonelective contributions or elective deferrals to
satisfy the test.
(B) SPECIAL AGGREGATION RULE FOR HIGHLY COMPENSATED EMPLOYEES. To determine
the contribution percentage of any Highly Compensated Employee, the aggregate
contributions taken into account must include any matching contributions (other
than qualified matching contributions used in the ADP test) and any employee
contributions made on his behalf to any other plan maintained by the Employer,
unless the other plan is an ESOP. If the plans have different plan years, the
Advisory Committee will determine the combined aggregate contributions on the
basis of the plan years ending in the same calendar year.
(C) AGGREGATION OF CERTAIN PLANS. If the Employer treats two plans a unit
for coverage or nondiscrimination purposes, the Employer must combine the plans
to determine whether either plan satisfies the ACP test. This aggregation rule
applies to the contribution percentage determination for all Eligible Employees,
irrespective of whether an Eligible Employee is a Highly Compensated Employee or
a Nonhighly Compensated Employee. For Plan Years beginning after December 31,
1989, an aggregation of plans under this paragraph does not apply to plans which
have different plan years and the Advisory Committee may not aggregate an ESOP
(or the ESOP portion of a plan) with a non-ESOP plan (or non-ESOP portion of
plan).
(D) DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS. The Advisory Committee
will determine excess aggregate contributions after determining excess deferrals
under Section 12.03 and excess contributions under Section 12.04. If the
Advisory Committee determines the Plan fails to satisfy the ACP test for a Plan
Year, it must distribute the excess aggregate contributions, as adjusted for
allocable income, during the next Plan Year. However, the Employer will incur an
excise tax equal to 10% of the amount of excess aggregate contributions for a
Plan Year not distributed to the appropriate Highly Compensated Employees during
the first 2 1/2 months of that next Plan Year. The excess aggregate
contributions are the amount of aggregate contributions made by the Highly
Compensated Employees which causes the Plan to fail to satisfy the ACP test. The
Advisory Committee will distribute to each Highly Compensated Employee his
respective share of the excess aggregate contributions. The Advisory Committee
will determine the respective shares of excess aggregate contributions as
follows:
STEP 1: The Advisory Committee shall first determine the dollar amount
of the reductions which would have to be made to the aggregate
contributions of each Highly Compensated Employee who is a Participant for
the Plan Year in order for the average ACP of the Highly Compensated Group
for the Plan Year to satisfy Section 401(m) of the Code. Such amount shall
be calculated by first determining the dollar amount by which the aggregate
contributions of Highly Compensated Employees who have the highest ACPs
would have to be reduced until the first to occur of: (i) such Employees'
ACPs would equal the ACPs of the Highly Compensated Employee or group of
Highly Compensated Employees with the next highest ACPs; or (ii) the
average ACP of the Highly Compensated Group, as recalculated after the
reductions made under this Step 1, satisfies the requirements of Section
401(m) of the Code and this Section.
Then, unless the recalculated average ACP of the Highly Compensated
Group satisfies Section 401(m) of the Code, the reduction process shall be
repeated by determining the amount of reductions which would have to be
made to the aggregate contributions of the Highly Compensated Employees
who, after all prior reductions, would have the highest ACP until the first
to occur of: (iii) the ACP, after all prior reductions under this Step 1,
of each person in such group would equal the ACP of the Highly Compensated
Employee or group of Highly Compensated Employees with the next highest
ACP; or (iv) the average ACP of the Highly Compensated Group, after the
prior reductions, satisfies the requirements of Code Section 401(m) and
this Section. This process is repeated until the average ACP of the Highly
Compensated Group, after all reductions, satisfies the requirements of Code
Section 401(m) and this Section.
STEP 2: Determine the total dollar amount of reductions to the
aggregate contributions calculated under Step 1 ("TOTAL EXCESS
CONTRIBUTIONS").
STEP 3: Reduce the aggregate contributions of the Highly Compensated
Employees with the highest dollar amount of aggregate contributions by the
lesser of the dollar amount which either (i) causes each such Highly
Compensated Employee's aggregate contributions to equal the dollar amount
of the aggregate contributions of the Highly Compensated Employee or group
of Highly Compensated Employees with the next highest dollar amount of
aggregate contributions; or (ii) reduces the Highly Compensated Employees'
aggregate contributions by the Total Excess Contributions.
Then, unless the total amount of reductions made to Highly Compensated
Employees' aggregate contributions under this Step 3 equals the amount of
the Total Excess Contributions, the reduction process shall be repeated by
reducing the aggregate contributions of the group of Highly Compensated
Employees with the highest dollar amount of aggregate contributions, after
the prior reductions made in this Step 3, by the lesser of the amount which
either: (iii) causes such Highly Compensated Employees' aggregate
contributions after prior reductions made in this Step 3 to equal the
dollar amount of the aggregate contributions of the Highly Compensated
Employees with the next highest dollar amount of aggregate contributions;
or (iv) causes total reductions to equal the Total Excess Deferrals. This
process is repeated with each successive group of Highly Compensated
Employees with the highest dollar amount, after the prior reductions, of
aggregate contributions until the total reductions made under this Step 3
equal the Total Excess Contributions.
(E) ALLOCABLE INCOME. To determine the amount of the corrective
distribution required under this Section 12.05, the Advisory Committee must
calculate the allocable income for the Plan Year in which the excess aggregate
contributions arose. "Allocable income" means net income or net loss. The
Advisory Committee will determine allocable income in the same manner as
described in Senior 12.04(F) for excess contributions.
(F) CHARACTERIZATION OF EXCESS AGGREGATE CONTRIBUTIONS. The Advisory
Committee will treat a Highly Compensated Employee's allocable share of excess
aggregate contributions in the following priority: (1) first as attributable to
his employee contributions which are voluntary contributions, it any; (2) then
as matching contributions allocable with respect to excess contributions
determined under the ADP test; (3) then on a pro rata basis to matching
contributions and to the deferral contributions relating to those matching
contributions which the Advisory Committee has included in the ACP test; (4)
then on a pro rata basis to employee contributions which are mandatory
contributions; and (5) last to qualified nonelective contributions used in the
ACP test. To the extent the Highly Compensated Employee's excess aggregate
contributions are attributable to matching contributions and he is not 100%
vested in his Accrued Benefit attributable to matching contributions, the
Advisory Committee will distribute only the vested portion and forfeit the
nonvested portion. The vested portion of the Highly Compensated Employee's
excess aggregate contributions attributable to Employer matching contributions
is the total amount of such excess aggregate contributions (as adjusted for
allocable income) multiplied by his vested percentage (determined as of the last
day of the Plan Year for which the Employer made the matching contribution). The
Plan will allocate forfeited excess aggregate contributions to reduce Employer
matching contributions for the Plan Year in which the forfeiture occurs.
12.06 MULTIPLE USE LIMITATION. If at least one Highly Compensated Employee
is includible in the ADP test and in the ACP test, the sum of the Highly
Compensated Group's ADP and ACP may not exceed the multiple use limitation.
The multiple use limitation for a Plan Year is the sum of (i) and (ii):
(i) 125% of the greater of (a) the ADP of the Nonhighly Compensated
Group for the prior Plan Year under the Code ss.401(k) arrangement; or (b)
the ACP of the Nonhighly Compensated Group for the prior Plan Year.
(ii) 2% plus the lesser of (i)(a) or (i)(b), but not more than twice
the lesser of (i)(a) or (i)(b).
The Advisory Committee, in lieu of determining the multiple use
limitation as the sum (i) and (ii), may elect to determine the multiple use
limitation as the sum of (iii) and (iv):
(iii) 125% of the lesser of: (a) the ADP of the Nonhighly Compensated
Group under the Code ss.401(k) arrangement for the prior Plan Year; or (b)
the ACP of the Nonhighly Compensated Group for the prior Plan Year.
(iv) 2% plus the greater of (iii)(a) or (iii)(b), but no more than
twice the greater of (iii)(a) or (iii)(b).
If the Advisory Committee so elects, it may apply the limits set forth in
paragraphs (i) and (ii) or (iii) and (iv) of this Section by using the Average
ADP and ACP of the Nonhighly Compensated Group for the Plan Year for which the
determination is made rather than for the preceding Plan Year; provided that
such election may not be changed except as provided by the Secretary of the
Treasury.
This Section 12.06 does not apply unless, prior to application of the
multiple use limitation, the ADP and ACP of the Highly Compensated Group for the
current Plan Year each exceeds 125% of the respective percentages for the
Nonhighly Compensated Group for the prior Plan Year (or, if the Advisory
Committee has made the election described in the previous paragraph, the current
Plan Year).
The Advisory Committee will determine whether the Plan satisfies the
multiple use limitation after applying the ADP test under Section 12.04 and the
ACP test under Section 12.05 and after making any corrective distributions
required by those Sections. If, after applying this Section 12.06, the Advisory
Committee determines the Plan has failed to satisfy the multiple use limitation,
the Advisory Committee will correct the failure by treating the excess amount as
excess aggregate contributions under Section 12.05.
ARTICLE XIII.
MISCELLANEOUS
13.01 EVIDENCE. Anyone required to give evidence under the terms of the
Plan may do so by certificate, affidavit, document or other information which
the person to act in reliance may consider pertinent, reliable and genuine, and
to have been signed, made or presented by the proper party or parties. Both the
Advisory Committee and the Trustee are fully protected in acting and relying
upon any evidence described under the immediately preceding sentence.
13.02 NO RESPONSIBILITY FOR EMPLOYER ACTION. Neither the Trustee nor the
Advisory Committee has any obligation or responsibility with respect to any
action required by the Plan to be taken by the Employer, any Participant or
eligible Employee, or for the failure of any of the above persons to act or make
any payment or contribution, or to otherwise provide any benefit contemplated
under this Plan. Furthermore, the Plan does not require the Trustee or the
Advisory Committee to collect any contribution required under the Plan, or to
determine the correctness of the amount of any Employer contribution. Neither
the Trustee nor the Advisory Committee need inquire into or be responsible for
any action or failure to act on the part of the others. Any action required of
Kansas City Southern Industries, Inc. must be by its Board of Directors, the
Compensation and Organization Committee of such Board, or the designees of such
Board or Committee. Any action required of any other corporate Employer must be
by its Board of Directors or its designees.
13.03 FIDUCIARIES NOT INSURERS. The Trustee, the Advisory Committee, the
Plan Administrator and the Employer in no way guarantee the Trust Fund from loss
or depreciation. The Employer does not guarantee the payment of any money which
may be or becomes due to any person from the Trust Fund. The liability of the
Advisory Committee and the Trustee to make any payment from the Trust Fund at
any time and all times is limited to the then available assets of the Trust.
13.04 WAIVER OF NOTICE. Any person entitled to notice under the Plan may
waive the notice.
13.05 SUCCESSORS. The Plan is binding upon all persons entitled to benefits
under the Plan, their respective heirs and legal representatives, upon the
Employer, its successors and assigns, and upon the Trustee and the Advisory
Committee and their successors.
13.06 WORD USAGE. Words used in the masculine also apply to the feminine
where applicable, and wherever the context of the Plan dictates, the plural
includes the singular and the singular includes the plural.
13.07 STATE LAW. Missouri law will determine all questions arising with
respect to the provisions of this Plan except to the extent Federal law
supersedes Missouri law.
13.08 EMPLOYMENT NOT GUARANTEED. Nothing contained in this Plan, or with
respect to the establishment of the Trust, or any modification or amendment to
the Plan or Trust, or in the creation of any Account, or the payment of any
benefit, gives any Employee, Employee-Participant or any Beneficiary any right
to continue employment, any legal or equitable right against the Employer, or
Employee of the Employer, or against the Trustee, or its agents or employees, or
against the Plan Administrator, except as expressly provided by the Plan, the
Trust, ERISA or by a separate agreement.
ARTICLE XIV.
[RESERVED]
ARTICLE XV.
PARTICIPANT'S ACCOUNTS AND THEIR INVESTMENT
15.01 INDIVIDUAL ACCOUNTS. The Advisory Committee shall maintain, or direct
the Trustee to maintain, a separate Account, or multiple Accounts, in the name
of each Participant to reflect the Participant's Accrued Benefit under the Plan.
Such Accounts shall include, but not be limited to, a Deferral Contributions
Account, a Qualified Nonelective Contributions Account, a Regular Matching
Contributions Account, a Qualified Matching Contributions Account, and a Profit
Sharing Contributions Account. Furthermore, if a Participant reenters the Plan
subsequent to his having a Forfeiture Break in Service, the Advisory Committee,
or the Trustee, shall maintain a separate Account for the Participant's
pre-Forfeiture Break in Service Accrued Benefit and a separate Account for his
post-Forfeiture Break in Service Accrued Benefit unless the Participant's entire
Accrued Benefit under the Plan is one hundred percent (100%) Nonforfeitable. The
Advisory Committee will make its allocations, or request the Trustee to make its
allocations, to the Accounts of the Participants in accordance with the
provisions of Section 15.05. The Advisory Committee may direct the Trustee to
maintain a temporary segregated investment Account in the name of a Participant
to prevent a distortion of income, gain or loss allocations under Section 15.05.
The Advisory Committee shall maintain records of its activities.
A Participant's Accrued Benefit shall be segregated for separate investment
when and as so expressly provided under the Plan. Except where the Plan
expressly provides for such segregation, Participants' Accrued Benefits shall be
invested collectively.
15.02 INVESTMENT OF ACCOUNTS. Each Participant's Accounts shall be
invested, in accordance with the individual election of the Participant, in one
or more investment vehicles designated by the Advisory Committee, including
designated pooled investment funds. Effective as of January 1, 2001, such
investment vehicles shall include an employer stock fund consisting of shares of
common stock of KCSI.
15.03 PARTICIPANT ACCOUNTS - INVESTMENT PERCENTAGES. The Advisory Committee
from time to time shall establish procedures by which each Participant may
specify the percentage of his Accounts, and the percentage of future
contributions to be made on his behalf, to be invested in each of the available
investment vehicles for Accounts. The investment percentage for each investment
vehicle selected by the Participant must be a multiple of 1%. The Participant's
investment direction shall remain in effect unless and until the Participant
replaces the direction in accordance with the established procedures.
Contributions and Accounts with respect to which no affirmative Participant
investment direction has been made shall be invested in an investment vehicle
selected by the Advisory Committee and having as its primary objective the
generation of a high level of current income consistent with the preservation of
capital and a high degree of liquidity. The Trustee shall be responsible for
carrying out Participant investment direction.
15.04 VALUATION OF PARTICIPANTS' ACCRUED BENEFITS. The value of each
Participant's Accrued Benefit shall consist of the value of such Participant's
Account(s), including any segregated account hereunder. For purposes of a
distribution under the Plan, the value of a Participant's Accrued Benefit shall
be its value as of the valuation date immediately preceding the date of the
distribution.
15.05 ALLOCATION AND DISTRIBUTION OF NET INCOME GAIN OR LOSS. A "valuation
date" under this Plan is the last day of each calendar month and each interim
valuation date determined under the Trust. As of each valuation date the
Advisory Committee must adjust Accounts to reflect net income, gain or loss
since the last valuation date. The valuation period is the period beginning the
day after the last valuation date and ending on the current valuation date.
TRUST FUND ACCOUNTS. The allocation provisions of this paragraph apply to
all Participant's Accounts other than segregated investment Accounts. The
Advisory Committee first will adjust the Participant Accounts, as those Accounts
stood at the beginning of the current valuation period, by reducing the Accounts
for any forfeitures arising under Section 5.09 or under Section 9.12, for
amounts charged during the valuation period to the Accounts in accordance with
Section 9.11 (relating to distributions) and for the amount of any Account which
the Trustee has fully distributed since the immediately preceding valuation
date. The Advisory Committee then, subject to the restoration allocation
requirements of Section 5.04 or of Section 9.12, will allocate the net income,
gain or loss for the current valuation period for each of the Plan's investment
vehicles (as specified by the Advisory Committee pursuant to Section 15.02) pro
rata to the Participants having accounts in each respective investment vehicle
as the accounts stood at the beginning of the valuation period. Separate
allocations and adjustments shall be made with respect to each investment
vehicle. For each investment vehicle the allocable net income, gain or loss is
the net income (or net loss), including the increase or decrease in the fair
market value of assets, since the last valuation date.
SEGREGATED INVESTMENT ACCOUNTS. A segregated investment Account receives
all income it earns and bears all expenses or loss it incurs. As of the
valuation date, the Advisory Committee must reduce a segregated Account for any
forfeiture arising under Section 5.09 after the Advisory Committee has made all
other allocations, changes or adjustments to the Account for the Plan Year.
ADDITIONAL RULES. An Excess Amount or suspense account described in Part 2
of Article III does not share in the allocation of net income, gain or loss
described in this Section 15.05. This Section 15.05 applies solely to the
allocation of net income, gain or loss of the Trust. The Advisory Committee will
allocate the Employer contributions and Participant forfeitures, if any, in
accordance with Article III.
15.06 PARTICIPANT VOTING RIGHTS - EMPLOYER STOCK. Each Participant (or the
Beneficiary thereof) acting as a named fiduciary shall have the right to direct
the Trustee as to the manner in which (a) to vote any shares of stock of KCSI
allocated to his Accounts as of the applicable record date of any shareholder
meeting in any matter put to a shareholder vote; and (b) to respond to a tender
offer, exchange offer or any other offer to purchase shares of KCSI stock
allocated to the Participant's Accounts.
Before any meeting in which a shareholder vote is to be taken, the Employer
will deliver to the Trustee or its designee such quantities of proxy soliciting
materials as are necessary to solicit voting instructions from the Participants.
The Trustee or its designee will mail the proxy solicitation materials (and any
additional material made available to other shareholders or otherwise deemed
appropriate by the Trustee) to the Participants within a reasonable time before
the meeting. A reasonable deadline for the return of such materials may be
specified.
Shares will be voted as instructed by the Participants on each matter
brought before the meeting. Such participants are appointed as named fiduciaries
to direct the Trustee as to the voting of shares allocated to the accounts of
Participants who have not timely instructed the Trustee how to vote them and any
unallocated shares. Such shares will be voted in the same proportions as the
shares for which the Trustee has received timely instructions. The Trustee may
submit to the Employer one summary proxy for the aggregate number of shares.
With regard to any tender offer, exchange offer or any other offer to
purchase shares of KCSI stock, the Trustee or its designee will solicit such
instructions from Participants by distributing to each Participant such
information as is distributed to shareholders of the Employer, generally in
connection with any such offer, and any additional information the trustee deems
appropriate in order for each Participant to give instructions. A reasonable
deadline for the return of such materials may be specified.
Shares will, in response to a tender offer, exchange offer or other offer
to purchase, be tendered, exchanged or sold as instructed by the Participants.
Fractional shares will be aggregated for purposes of tendering, exchanging or
selling shares, to the extent possible, to reflect the instructions of the
Participants. Such participants are appointed as named fiduciaries to direct the
Trustee as to the tender, exchange or sale of shares allocated to an Account of
a Participant who has not timely instructed the Trustee how to respond to such
offer and any unallocated shares. Such shares will be tendered, exchanged or
sold in the same proportion as shares for which the Trustee has received timely
instructions.
For purposes of receiving, tabulating and transmitting instructions, the
Trustee will establish a procedure to insure that instructions received from
individual Participants regarding voting or responding to a tender offer,
exchange offer, or any other offer are held in confidence, and are not divulged,
released or otherwise utilized in a manner that, in the Trustee's reasonable
judgment, might influence the Participant's free exercise of the rights set
forth in this Section 15.06.
ARTICLE XVI.
PROVISIONS EFFECTIVE UPON CHANGE IN CONTROL OF KCSI
16.01 DEFINITIONS OF "CHANGE IN CONTROL OF KCSI". For purposes of this
Plan, a "Change in Control of KCSI" shall be deemed to have occurred if:
(a) for any reason at any time less than seventy-five percent (75%) of
the members of the Board of Directors of Kansas City Southern Industries,
Inc., a Delaware corporation ("KCSI"), shall be individuals who fall into
any of the following categories: (A) individuals who were members of such
Board on September 1, 1995; (B) individuals whose election, or nomination
for election by KCSI's stockholders, was approved by a vote of at least
seventy-five percent (75%) of the members of the Board then still in office
who were members of such Board on September 1, 1995; or (C) individuals
whose election, or nomination for election, by KCSI's stockholders, was
approved by a vote of at least seventy-five percent (75%) of the members of
the Board then still in office who were elected in the manner described in
(A) or (B) above, or
(b) any "person" (as such term is used in Sections 13(d) and 14(d)(2)
of the Securities Exchange Act of 1934 (the "Exchange Act")) shall have
become after September 1, 1995, according to a public announcement or
filing, without the prior approval of the Board of Directors of KCSI, the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of KCSI representing forty percent
(40%) or more (calculated in accordance with Rule 13d-3) of the combined
voting power of KCSI's, then outstanding voting securities (such "person"
hereinafter referred to as a "Major Stockholder of KCSI"); or
(c) the stockholders of KCSI shall have approved a merger,
consolidation or dissolution of KCSI or a sale, lease, exchange or
disposition of all or substantially all of KCSI's assets, or a Major
Stockholder of KCSI shall have proposed any such transaction, unless such
merger, consolidation, dissolution, sale, lease, exchange or disposition
shall have been approved by at least seventy-five percent (75%) of the
members of the Board of Directors of KCSI who are individuals falling into
any combination of the following categories: (i) individuals who were
members of such Board of Directors on September 1, 1995, (ii) individuals
whose election, or nomination for election by KCSI's stockholders, was
approved by at least seventy-five percent (75%) of the members of the Board
of Directors then still in office who are members of the Board of Directors
on September 1, 1995, or (iii) individuals whose election or nomination for
election by KCSI's stockholders was approved by a vote of at least
seventy-five percent (75%) of the members of the Board then still in office
who were elected in the manner described in (i) or (ii) above.
16.02 PROVISIONS EFFECTIVE UPON CHANGE IN CONTROL. Upon a Change in Control
of KCSI as defined in Section 16.01, notwithstanding what is otherwise provided
in this Plan, the following provisions will supersede the indicated sections and
otherwise govern the operation of the Plan from that point forward:
(a) "Section 5.03, Vesting Schedule" shall provide as follows:
5.03 VESTING SCHEDULE. A Participant's Accrued Benefit
derived from Employer contributions shall be one hundred percent
(100%) Nonforfeitable at all times.
(b) A new section numbered "8.10" and entitled "Participant
Direction of Investment" shall be added to provide as follows:
8.10 PARTICIPANT DIRECTION OF INVESTMENT. A Participant
shall have the right to direct the Trustee with respect to the
investment of reinvestment of the assets comprising the
Participant's individual Account only if the Trustee consents in
writing to permit such direction. If the Trustee does consent to
Participant direction of investment, the Trustee and each
Participant shall execute a letter agreement as a part of this
Plan containing such conditions, limitations and other provisions
they deem appropriate before the Trustee shall follow any
Participant direction as respects the investment or reinvestment
of any part of the Participant's individual Account. The Trustee
shall not be liable for any loss, or by reason of any breach,
resulting from a Participant's direction of the investment of any
part of his individual Account.
(c) Except for the right to amend the Plan pursuant to Section
11.02(a), the Employer shall not exercise its right to amend pursuant
to Section 11.02(b), discontinue or terminate pursuant to Section
11.03, or transfer assets of or merge, pursuant to Section 11.05, the
Plan without the prior written consent to such aforesaid action by
seventy-five percent (75%) of the Participants on a per capita basis.
16.03 RIGHT TO AMEND ARTICLE XVI PRIOR TO CHANGE IN CONTROL OF KCSI. The
Board of Directors of KCSI, or any duly authorized committee thereof, reserves
the right to amend or eliminate this Article XVI prior to the date of a Change
in Control of KCSI.
ARTICLE XVII.
PROVISIONS APPLICABLE TO ACCOUNTS
TRANSFERRED FROM FORMER MIDSOUTH PLAN
17.01 MIDSOUTH ACCOUNTS. The Advisory Committee shall maintain, in order to
reflect each Participant's Accrued Benefit under the Plan derived from
contributions to the MidSouth Rail Corporation Thrift and Savings Plan ("Former
MidSouth Plan"), a separate MidSouth Deferral Contributions Account, a separate
MidSouth Other Contributions Account and a separate MidSouth Participant
Contributions Account ("MidSouth Accounts") for each Participant ("MidSouth
Participant") in the Former MidSouth Plan who had an account under the Former
MidSouth Plan which was transferred to the Former Plan and thereafter
transferred to this Plan, except that a MidSouth Participant's Contribution
Account shall be maintained only for a MidSouth Participant who had such an
account under the Former MidSouth Plan. The MidSouth Deferral Contributions
Account shall reflect a Participant's Accrued Benefit derived from his deferral
contributions to the MidSouth Plan, the MidSouth Participant Contributions
Account shall reflect a Participant's Accrued Benefit derived from his
participant contributions to the Former MidSouth Plan, and the MidSouth Other
Contributions Account shall reflect a Participant's Accrued Benefit derived from
all other contributions to the Former MidSouth Plan on his behalf. The
provisions of this Article XVII shall govern the separate MidSouth Accounts, and
with respect to such Accounts, the provisions of this Article XVII shall
supersede any other provisions in the Plan to the contrary. Except as provided
under this Article XVII, the Trustee shall hold, administer and distribute the
MidSouth Accounts in the same manner under the Plan as the similar Account
derived from contributions to this Plan.
The provisions of this Article XVII shall not apply to any Accounts other
than the MidSouth Accounts.
A MidSouth Participant's Accrued Benefit is, at all times, one hundred
percent (100%) Nonforfeitable to the extent the value of his Accrued Benefit is
derived from the transfer to the Trust of his Account(s) in the Former MidSouth
Plan.
17.02 MIDSOUTH PARTICIPANT CONTRIBUTION ACCOUNTS. The Advisory Committee
must maintain a separate MidSouth Participant Contributions Account for each
MidSouth Participant who had a Participant Contributions Account under the
Former MidSouth Plan to reflect the MidSouth Participant's Accrued Benefit under
the Plan derived from his participant contributions to the Former MidSouth Plan.
A MidSouth Participant's Accrued Benefit derived from his Participant
contributions as of any applicable date is the balance of his separate MidSouth
Participant Contribution Account(s).
A MidSouth Participant, by giving prior written notice to the Trustee, may
withdraw all or any part of his MidSouth Participant Contributions Account
described in this Section 17.02. A distribution of Participant contributions
must comply with the joint and survivor annuity requirements described in this
Article XVII, if those requirements apply to the MidSouth Participant. The
Trustee, in accordance with the direction of the Advisory Committee, will
distribute a Participant's unwithdrawn MidSouth Participant Contributions
Account in accordance with the provisions of this Article XVII applicable to the
distribution of the MidSouth Participant's Nonforfeitable Accrued Benefit
derived from his MidSouth Accounts.
17.03 METHOD OF PAYMENT OF ACCRUED BENEFIT. Subject to the annuity
distribution requirements, if any, prescribed by Section 17.06, and any
restrictions prescribed by Section 17.05, a MidSouth Participant or beneficiary
of a MidSouth Participant ("MidSouth Beneficiary") may elect distribution of his
MidSouth Accounts under one, or any combination, of the following methods:
(a) by payment in a lump sum;
(b) by payment in the form of a qualified joint and survivor annuity,
as defined in Section 17.06(A). If, as of the annuity starting date, the
MidSouth Participant is married, the MidSouth Participant may elect to
receive a smaller annuity benefit, having an actuarial value equivalent to
the actuarial value of the qualified joint and survivor annuity, with
continuation of payments to the surviving spouse at a rate of seventy-five
(75%) or one hundred percent (100%) of the rate payable to the MidSouth
Participant during his lifetime.
The distribution options permitted under this Section 17.03 are available
only if the present value of the MidSouth Participant's entire Nonforfeitable
Accrued Benefit under the Plan, at the time of the distribution to the MidSouth
Participant, exceeds $5,000.
The provisions of Section 6.02(A) shall apply in determining the minimum
distribution requirements under Code ss.401(a)(9) for MidSouth Participants, and
the provisions of Section 6.02(B) shall apply in determining the minimum
distribution requirements under Code ss.401(a)(9) for MidSouth Beneficiaries.
17.04 TIME OF PAYMENT AND ACCRUED BENEFIT. Unless, pursuant to Section 6.03
or 17.05, the MidSouth Participant or the MidSouth Beneficiary elects in writing
a different time or method of payment, the Advisory Committee will direct the
Trustee to commence distribution of a MidSouth Participant's Nonforfeitable
Accrued Benefit derived from his MidSouth Accounts in accordance with this
Section 17.04. A MidSouth Participant must consent, in writing, to any
distribution required under this Section 17.04 if the present value of the
MidSouth Participant's Nonforfeitable Accrued Benefit, at the time of the
distribution to the MidSouth Participant, exceeds $5,000 and the MidSouth
Participant has not attained the later of Normal Retirement Age or age 62.
Furthermore, the MidSouth Participant's spouse also must consent, in writing, to
any distribution for which Section 17.06 requires the spouse's consent. For all
purposes of Article VI and this Article XVII, the term "annuity starting date"
means the first day of the first period for which the Plan pays an amount as an
annuity or in any other form. For purposes of the consent requirements under
this Article XVII, if the present value of the MidSouth Participant's
Nonforfeitable Accrued Benefit derived from his MidSouth Accounts, at the time
of any distribution, exceeds $5,000 the Advisory Committee must treat that
present value as exceeding $5,000 for purposes of all subsequent Plan
distributions to the MidSouth Participant.
(A) Separation from Service for a Reason Other Than Death.
(1) MIDSOUTH PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT NOT
EXCEEDING $5,000. If the MidSouth Participant's Separation from
Service is for any reason other than death, the Advisory Committee
will direct the Trustee to distribute the MidSouth Participant's
Nonforfeitable Accrued Benefit derived from his MidSouth Accounts in a
lump sum as soon as administratively practicable after the first
distribution valuation date following the MidSouth Participant's
Separation from Service, but in no event later than the 60th day
following the close of the Plan Year in which the MidSouth Participant
attains Normal Retirement Age. If the MidSouth Participant has
attained Normal Retirement Age when he separates from Service, the
distribution under this paragraph will occur no later than the 60th
day following the close of the Plan Year in which the MidSouth
Participant's Separation from Service occurs.
(2) MIDSOUTH PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT EXCEEDS
$5,000. If the MidSouth Participant's Separation from Service is for
any reason other than death, the Advisory Committee will direct the
Trustee to distribute the MidSouth Participant's Nonforfeitable
Accrued Benefit derived from his MidSouth Accounts in a form and at
the time elected by the MidSouth Participant, pursuant to Section
17.05. In the absence of an election by the MidSouth Participant, the
Advisory Committee will direct the Trustee to distribute the MidSouth
Participant's Nonforfeitable Accrued Benefit derived from his MidSouth
Accounts in a lump sum (or, if applicable, the normal annuity form of
distribution required under Section 17.06), on the 60th day following
the close of the Plan Year in which the latest of the following events
occurs: (a) the MidSouth Participant attains Normal Retirement Age;
(b) the MidSouth Participant attains age 62; or (c) the MidSouth
Participant's Separation from Service.
(3) DISABILITY. If the MidSouth Participant's Separation from
Service is because of disability, the Advisory Committee will direct
the Trustee to pay the MidSouth Participant's Nonforfeitable Accrued
Benefit in lump sum (or, if applicable, the normal annuity form of
distribution required under Section 17.06), as soon as
administratively practicable after the first distribution valuation
date following the MidSouth Participant's Separation from Service,
subject to the notice and consent requirements of this Article XVII
and to the applicable mandatory commencement dates described in
Paragraph (1) or in Paragraph (2) of this Section 17.04(A).
(B) REQUIRED BEGINNING DATE. The provisions of Section 6.01(B) shall
determine a MidSouth Participant's Required Beginning Date.
(C) DEATH OF THE MIDSOUTH PARTICIPANT. The Advisory Committee will direct
the Trustee, in accordance with this Section 17.04(C), to distribute to the
MidSouth Participant's Beneficiary the MidSouth Participant's Nonforfeitable
Accrued Benefit derived from his MidSouth Accounts remaining in the Trust at the
time of the MidSouth Participant's death. Subject to the requirements of Section
17.06, the Advisory Committee will determine the death benefit by reducing the
MidSouth Participant's Nonforfeitable Accrued Benefit derived from his MidSouth
Accounts by any security interest the Plan has against that Nonforfeitable
Accrued Benefit derived from his MidSouth Accounts by reason of an outstanding
MidSouth Participant loan.
(1) DECEASED MIDSOUTH PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT
DOES NOT EXCEED $5,000. The Advisory Committee, subject to the requirements
of Section 17.06, must direct the Trustee to distribute the deceased
MidSouth Participant's Nonforfeitable Accrued Benefit derived from his
MidSouth Accounts in a single cash sum, as soon as administratively
practicable after the first distribution valuation date following the
MidSouth Participant's death or, if later, the date on which the Advisory
Committee receives notification of or otherwise confirms the MidSouth
Participant's death.
(2) DECEASED MIDSOUTH PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT
EXCEEDS $5,000. The Advisory Committee will direct the Trustee to
distribute the deceased MidSouth Participant's Nonforfeitable Accrued
Benefit derived from his MidSouth Accounts at the time and in the form
elected by the MidSouth Participant or, if applicable, by the MidSouth
Beneficiary, as permitted under this Article XVII. In the absence of an
election, subject to the requirements of Section 17.06, the Advisory
Committee will direct the Trustee to distribute the MidSouth Participant's
undistributed Nonforfeitable Accrued Benefit derived from his MidSouth
Accounts in a lump sum as soon as administratively practicable after the
first distribution valuation date following the MidSouth Participant's
death or, if later, the date on which the Advisory Committee receives
notification of or otherwise confirms the MidSouth Participant's death.
If the death benefit is payable in full to the MidSouth Participant's
surviving spouse, the surviving spouse, in addition to the distribution
options provided in this Section 17.04(C), may elect distribution at any
time or in any form (other than the joint and survivor annuity) this
Article XVII would permit for a MidSouth Participant.
(D) ROLLOVERS. The provisions of Section 6.08 shall apply to the MidSouth
Accounts.
17.05 BENEFIT PAYMENT ELECTIONS. Not earlier than 90 days before nor later
than 30 days before the MidSouth Participant's annuity starting date, the Plan
Administrator must provide a benefit notice to a MidSouth Participant who is
eligible to make an election under this Section 17.05. The benefit notice must
explain the optional forms of benefit in the Plan, including the material
features and relative values of those options, and the MidSouth Participant's
right to defer distribution until he attains the later of Normal Retirement Age
or age 62.
Such distribution may commence less than 30 days after the benefit notice
is given, provided that:
(1) the Plan Administrator clearly informs the Participant that the
Participant has a right to a period of at least 30 days after receiving the
notice to consider the decision of whether or not to elect a distribution
(and, of applicable, a particular distribution option), and
(2) the Participant, after receiving the notice, affirmatively elects
a distribution.
If a MidSouth Participant or MidSouth Beneficiary makes an election
prescribed by this Section 17.05, the Advisory Committee will direct the Trustee
to distribute the MidSouth Participant's Nonforfeitable Accrued Benefit derived
from his MidSouth Accounts in accordance with that election. Any election under
this Section is subject to the requirements of Section 17.06. The MidSouth
Participant or MidSouth Beneficiary must make an election under this Section
17.05 by filing his election form with the Advisory Committee at any time before
the Trustee otherwise would commence to pay a MidSouth Participant's Accrued
Benefit derived from his MidSouth Accounts in accordance with the requirements
of Articles VI and XVII.
(A) MIDSOUTH PARTICIPANT ELECTIONS AFTER SEPARATION FROM SERVICE.
If the present value of a MidSouth Participant's Nonforfeitable Accrued
Benefit exceeds $5,000, he may elect to have the Trustee commence distribution
as soon as administratively practicable after any distribution valuation date
following the MidSouth Participant's Separation from Service. The MidSouth
Participant may reconsider an election at any time prior to the annuity starting
date and elect to commence distribution as of any other distribution date, but
not earlier than the date described in the first sentence of this Paragraph (A).
Following his attainment of Normal Retirement Age, a MidSouth Participant who
has separated from Service may elect distribution as of any distribution date,
irrespective of the restrictions otherwise applicable under this Section
17.05(A). If the MidSouth Participant is partially vested in his Accrued
Benefit, an election under this Paragraph (A) to distribute prior to the
MidSouth Participant's incurring a Forfeiture Break in Service (as defined in
Section 5.08) must be in the form of a cash-out distribution (as defined in
Article V). A MidSouth Participant may not receive a cash-out distribution if,
prior to the time the Trustee actually makes the cash-out distribution, the
MidSouth Participant returns to employment with the Employer.
(B) MIDSOUTH PARTICIPANT ELECTIONS PRIOR TO SEPARATION FROM SERVICE.
In addition to the distribution options provided in Section 6.03, a
MidSouth Participant, until he retires, has a continuing election to receive all
or any portion of his MidSouth Deferral Contributions Account and his MidSouth
Other Contributions Accounts if: (a) he has attained age 59 1/2 and (b) he is
100% vested in the Account. The procedures set forth in Section 6.03(B) shall
apply.
(C) DEATH BENEFIT ELECTIONS.
If the present value of the deceased MidSouth Participant's Nonforfeitable
Accrued Benefit exceeds $5,000, the MidSouth Participant's Beneficiary may elect
to have the Trustee distribute the MidSouth Participant's Nonforfeitable Accrued
Benefit derived from his MidSouth Accounts in a form and within a period
permitted under Section 17.04. The MidSouth Beneficiary's election is subject to
any restrictions designated in writing by the MidSouth Participant and not
revoked as of his date of death.
(D) TRANSITIONAL ELECTIONS.
Notwithstanding the provisions of Sections 17.03 and 17.04, if the MidSouth
Participant (or MidSouth Beneficiary) signed a written distribution designation
prior to January 1, 1984, the Advisory Committee must distribute the MidSouth
Participant's Nonforfeitable Accrued Benefit in accordance with that
designation, subject, however, to the survivor requirements, if applicable, of
Sections 17.06, 17.07 and 17.08. This Section 17.05(D) does not apply to a
pre-1984 distribution designation, and the Advisory Committee will not comply
with that designation, if any of the following applies: (1) the method of
distribution would have disqualified the Plan under Code ss. 401(a)(9) as in
effect on December 31, 1983; (2) the MidSouth Participant did not have an
Accrued Benefit as of December 31, 1983; (3) the distribution designation does
not specify the timing and form of the distribution and the death Beneficiaries
(in order of priority); (4) the substitution of a MidSouth Beneficiary modifies
the payment period of the distribution; or (5) the MidSouth Participant (or
MidSouth Beneficiary) modifies or revokes the distribution designation. In the
event of a revocation, the Plan must distribute, no later than December 31 of
the calendar year following the year of revocation, the amount which the
MidSouth Participant would have received under Section 17.04(A) if the
distribution designation had not been in effect or, if the MidSouth Beneficiary
revokes the distribution designation, the amount which the MidSouth Beneficiary
would have received under Section 17.04(C) if the distribution designation had
not been in effect. The Advisory Committee will apply this Section 17.05(D) to
rollovers and transfers in accordance with Part J of the Code ss. 401(a)(9)
Treasury regulations.
(E) HARDSHIP DISTRIBUTIONS.
The provisions of Section 6.03(E) shall apply to permit a MidSouth
Participant to receive hardship distributions from his MidSouth Deferral
Contributions Account.
17.06 ANNUITY DISTRIBUTIONS TO MIDSOUTH PARTICIPANTS AND SURVIVING SPOUSES.
(A) JOINT AND SURVIVOR ANNUITY. The Advisory Committee must direct the
Trustee to distribute a MidSouth Participant's Nonforfeitable Accrued Benefit
derived from his MidSouth Accounts in the form of a qualified joint and survivor
annuity, unless the MidSouth Participant makes a valid waiver election
(described in Section 17.07) within the 90-day period ending on the annuity
starting date. If, as of the annuity starting date, the MidSouth Participant is
married, a qualified joint and survivor annuity is an immediate annuity which is
purchasable with the MidSouth Participant's Nonforfeitable Accrued Benefit
derived from his MidSouth Account and which provides a life annuity for the
MidSouth Participant and a survivor annuity payable for the remaining life of
the MidSouth Participant's surviving spouse equal to 50% of the amount of the
annuity payable during the life of the MidSouth Participant. If, as of the
annuity starting date, the MidSouth Participant is not married, a qualified
joint and survivor annuity is an immediate life annuity for the MidSouth
Participant which is purchasable with the MidSouth Participant's Nonforfeitable
Accrued Benefit derived from his MidSouth Accounts. On or before the annuity
starting date, the Advisory Committee, without MidSouth Participant or spousal
consent, must direct the Trustee to pay the MidSouth Participant's
Nonforfeitable Accrued Benefit derived from his MidSouth Accounts, in a lump
sum, in lieu of a qualified joint and survivor annuity in accordance with
Section 17.04, if the MidSouth Participant's Nonforfeitable Accrued Benefit is
not greater than $5,000.
(B) PRERETIREMENT SURVIVOR ANNUITY. If a married MidSouth Participant dies
prior to his annuity starting date the Advisory Committee will direct the
Trustee to distribute a portion of the MidSouth Participant's Nonforfeitable
Accrued Benefit derived from his MidSouth Accounts to the MidSouth Participant's
surviving spouse in the form of a preretirement survivor annuity, unless the
MidSouth Participant has a valid waiver election (as described in Section 17.08)
in effect, or unless the MidSouth Participant and his spouse were not married
throughout the one year period ending on the date of his death. A preretirement
survivor annuity is an annuity which is purchasable with 50% of the MidSouth
Participant's Nonforfeitable Accrued Benefit derived from his MidSouth Accounts
(determined as of the date of the MidSouth Participant's death) and which is
payable for the life of the MidSouth Participant's surviving spouse. The value
of the preretirement survivor annuity is attributable to Employer contributions
and to Employee contributions in the same proportion as the MidSouth
Participant's Nonforfeitable Accrued Benefit derived from his MidSouth Accounts
is attributable to those contributions. The portion of the MidSouth
Participant's Nonforfeitable Accrued Benefit derived from his MidSouth Accounts
not payable under this paragraph is payable to the MidSouth Participant's
Beneficiary, in accordance with the other provisions of this Article XVII. If
the present value of the preretirement survivor annuity does not exceed $5,000,
the Advisory Committee, on or before the annuity starting date, must direct the
Trustee to make a lump sum distribution to the MidSouth Participant's surviving
spouse, in lieu of a preretirement survivor annuity.
(C) SURVIVING SPOUSE ELECTIONS. If the present value of the preretirement
survivor annuity exceeds $5,000, the MidSouth Participant's surviving spouse may
elect to have the Trustee commence payment of the preretirement survivor annuity
at any time following the date of the MidSouth Participant's death, but not
later than the mandatory distribution periods described in Section 17.04, and
may elect any form of payment described in Section 17.03, in lieu of the
preretirement survivor annuity. In the absence of an election by the surviving
spouse, the Advisory Committee must direct the Trustee to distribute the
preretirement survivor annuity on the first distribution date following the
close of the Plan Year in which the latest of the following events occurs: (i)
the MidSouth Participant's death; (ii) the date the Advisory Committee receives
notification of or otherwise confirms the MidSouth Participant's death, (iii)
the date the MidSouth Participant would have attained Normal Retirement Age; or
(iv) the date the MidSouth Participant would have attained age 62.
(D) SPECIAL RULES. If the MidSouth Participant has in effect a valid waiver
election regarding the qualified joint and survivor annuity or the preretirement
survivor annuity, the Advisory Committee must direct the Trustee to distribute
the MidSouth Participant's Nonforfeitable Accrued Benefit derived from his
MidSouth Accounts in accordance with Sections 17.03, 17.04 and 17.05. The
Advisory Committee will reduce the MidSouth Participant's Nonforfeitable Accrued
Benefit derived from his MidSouth Accounts by any security interest (pursuant to
any offset rights authorized by Section 17.10) held by the Plan by reason of a
MidSouth Participant loan to determine the value of the MidSouth Participant's
Nonforfeitable Accrued Benefit derived from his MidSouth Accounts distributable
in the form of a qualified joint and survivor annuity or preretirement survivor
annuity, provided any post-August 18, 1985, loan satisfied the spousal consent
requirement described in Section 17.10 of the Plan. For purposes of applying
this Article XVII, the Advisory Committee treats a former spouse as the MidSouth
Participant's spouse or the surviving spouse to the extent provided under a
qualified domestic relations order described in Section 6.07. The provisions of
this Article XVII apply separately to the portion of the MidSouth Participant's
Nonforfeitable Accrued Benefit derived from his MidSouth Accounts subject to the
qualified domestic relations order and to the portion of the MidSouth
Participant's Nonforfeitable Accrued Benefit derived from his MidSouth Accounts
not subject to that order.
(E) LIMITED APPLICATION OF SECTION. The preceding provisions of this
Section 17.06 apply only to (1) a MidSouth Participant as respects whom the Plan
is a direct or indirect transferee from a plan subject to the Code ss.417
requirements and the Plan received the transfer after December 31, 1984, unless
the transfer is an elective transfer described in Section 11.05; (2) a MidSouth
Participant who is eligible to and who elects a life annuity distribution; and
(3) a MidSouth Participant whose benefits under a defined benefit plan are
offset by benefits provided under this Plan. Sections 17.07 and 17.08 only apply
to MidSouth Participants to whom the preceding provisions of this Section 17.06
apply.
17.07 WAIVER ELECTION-QUALIFIED JOINT AND SURVIVOR ANNUITY. Within 90 days,
but not later than 30 days, before the MidSouth Participant's annuity starting
date, the Advisory Committee must provide the MidSouth Participant a written
explanation of the terms and conditions of the qualified joint and survivor
annuity, the MidSouth Participant's right to make, and the effect of, an
election to waive the joint and survivor form of benefit, the rights of the
MidSouth Participant's spouse regarding the waiver election, and the MidSouth
Participant's right to make, and the effect of, a revocation of a waiver
election. The Plan does not limit the number of times the MidSouth Participant
may revoke a waiver of the qualified joint and survivor annuity or make a new
waiver during the election period.
A married MidSouth Participant's waiver election is not valid unless (a)
the MidSouth Participant's spouse (to whom the survivor annuity is payable under
the qualified joint and survivor annuity), after the MidSouth Participant has
received the written explanation described in this Section 17.07, has consented
in writing to the waiver election, the spouse's consent acknowledges the effect
of the election, and a notary public or the Plan Administrator (or his
representative) witnesses the spouse's consent, (b) the spouse consents to the
alternate form of payment designated by the MidSouth Participant or to any
change in that designated form of payment, and (c) unless the spouse is the
MidSouth Participant's sole primary MidSouth Beneficiary, the spouse consents to
the MidSouth Participant's Beneficiary designation or to any change in the
MidSouth Participant's Beneficiary designation. The spouse's consent to a waiver
of the qualified joint and survivor annuity is irrevocable, unless the MidSouth
Participant revokes the waiver election. The spouse may execute a blanket
consent to any form of payment designation or to any Beneficiary designation
made by the MidSouth Participant, if the spouse acknowledges the right to limit
that consent to a specific designation but, in writing, waives that right. The
consent requirements of this Section 17.07 apply to a former spouse of a
MidSouth Participant, to the extent required under a qualified domestic
relations order described in Section 6.07.
The Advisory Committee will accept as valid a waiver election which does
not satisfy the spousal consent requirements if the Advisory Committee
establishes the MidSouth Participant does not have a spouse, the Advisory
Committee is not able to locate the MidSouth Participant's spouse, the MidSouth
Participant is legally separated or has been abandoned (within the meaning of
State law) and the MidSouth Participant has a court order to that effect, or
other circumstances exist under which the Secretary of the Treasury will excuse
the consent requirement. If the MidSouth Participant's spouse is legally
incompetent to give consent, the spouse's legal guardian (even if the guardian
is the MidSouth Participant) may give consent.
17.08 WAIVER ELECTION - PRERETIREMENT SURVIVOR ANNUITY. The Advisory
Committee must provide a written explanation of the preretirement survivor
annuity to each married MidSouth Participant, within the following period which
ends last: (1) the period beginning on the first day of the Plan Year in which
the MidSouth Participant attains age 32 and ending on the last day of the Plan
Year in which the MidSouth Participant attains age 34; (2) a reasonable period
after an Employee becomes a MidSouth Participant; (3) a reasonable period after
the joint and survivor rules become applicable to the MidSouth Participant; or
(4) a reasonable time after a fully subsidized preretirement survivor annuity no
longer satisfies the requirements of a fully subsidized benefit. A reasonable
period described in clauses (2), (3) and (4) is the period beginning one year
before and ending one year after the applicable event. If the MidSouth
Participant separates from Service before attaining age 35, clauses (1), (2),
(3) and (4) do not apply and the Advisory Committee must provide the written
explanation within the period beginning one year before and ending one year
after the Separation from Service. The written explanation must describe, in a
manner consistent with Treasury Regulations, the terms and conditions of the
preretirement survivor annuity comparable to the explanation of the qualified
joint and survivor annuity required under Section 17.06. The Plan does not limit
the number of times the MidSouth Participant may revoke a waiver of the
preretirement survivor annuity or make a new waiver during the election period.
A MidSouth Participant's waiver election of the preretirement survivor
annuity is not valid unless (a) the MidSouth Participant makes the waiver
election no later than the first day of the Plan Year in which he attains age 35
and (b) the MidSouth Participant's spouse (to whom the preretirement survivor
annuity is payable) satisfies the consent requirements described in Section
17.06, except the spouse need not consent to the form of benefit payable to the
designated MidSouth Beneficiary. The spouse's consent to the waiver of the
preretirement survivor annuity is irrevocable, unless the MidSouth Participant
revokes the waiver election. Irrespective of the time of election requirement
described in clause (a), if the MidSouth Participant separates from Service
prior to the first day of the Plan Year in which he attains age 35, the Advisory
Committee will accept a waiver election as respects the MidSouth Participant's
Accrued Benefit attributable to his Service prior to this Separation from
Service. Furthermore, if a MidSouth Participant who has separated from Service
makes a valid waiver election, except for the timing requirement of clause (a),
the Plan Administrator will accept that election as valid, but only until the
first day of the Plan Year in which the MidSouth Participant attains age 35. A
waiver election described in this paragraph is not valid unless made after the
MidSouth Participant has received the written explanation described in this
Section 17.08.
17.09 COORDINATION WITH SURVIVOR REQUIREMENTS. If the joint and survivor
requirements of Article XVII apply to the MidSouth Participant, neither Section
8.01 nor this Section 17.09 impose any special spousal consent requirements on
the MidSouth Participant's Beneficiary designation. However, in the absence of
spousal consent (as required by Articles VI and XVII) to the MidSouth
Participant's Beneficiary designation: (1) any waiver of the joint and survivor
annuity or of the preretirement survivor annuity is not valid; and (2) if the
MidSouth Participant dies prior to his annuity starting date, the MidSouth
Participant's Beneficiary designation will apply only to the portion of the
death benefit which is not payable as a preretirement survivor annuity.
Regarding clause (2), if the MidSouth Participant's surviving spouse in a
primary Beneficiary under the MidSouth Participant's Beneficiary designation,
the Trustee will satisfy the spouse's interest in the MidSouth Participant's
death benefit first from the portion which is payable as a preretirement
survivor annuity.
17.10 PARTICIPANT LOANS. Effective for Plan Years beginning after December
31, 1993, the Trustee shall not make any new loans to MidSouth Participants or
MidSouth Beneficiaries. This Section 17.10 specifically authorizes the Trustee
to maintain loans made on a nondiscriminatory basis to a MidSouth Participant or
to a MidSouth Beneficiary in accordance with the loan policy established by the
Advisory Committee under the Former MidSouth Plan, provided: (1) the loan policy
satisfies the requirements of Section 9.04; (2) loans are available to all
MidSouth Participants and MidSouth Beneficiaries on a reasonably equivalent
basis and are not available in a greater amount for Highly Compensated Employees
than for other Employees; (3) any loan is adequately secured and bears a
reasonable rate of interest; (4) the loan provides for repayment within a
specified period of time; (5) the default provisions of the note prohibit offset
of the MidSouth Participant's Nonforfeitable Accrued Benefit prior to the time
the Trustee otherwise would distribute the MidSouth Participant's Nonforfeitable
Accrued Benefit; (6) the amount of the loan does not exceed (at the time the
Plan extends the loan) the present value of the MidSouth Participant's
Nonforfeitable Accrued Benefit derived from his MidSouth Accounts; and (7) the
loan otherwise conforms to the exemption provided by Code ss.4975(d)(1). If the
joint and survivor requirements of Article XVII apply to the MidSouth
Participant, the MidSouth Participant may not pledge any portion of his accrued
Benefit as security for a loan made after August 18, 1985, unless, within the 90
day period ending on the date the pledge becomes effective, the MidSouth
Participant's spouse, if any, consents (in a manner described in Section 17.06
other than the requirement relating to the consent of a subsequent spouse) to
the security or, by separate consent, to an increase in the amount of security.
The Advisory Committee, to the extent provided in a written loan policy
adopted under the Former MidSouth Plan, will treat a loan made to a MidSouth
Participant as a MidSouth Participant direction of investment under this Section
17.10. To the extent of the loan outstanding at any time, the borrowing MidSouth
Participant's Account alone shares in any interest paid on the loan, and it
alone bears any expense or loss it incurs in connection with the loan. The
Trustee may retain any principal or interest paid on the borrowing MidSouth
Participant's loan in an interest bearing segregated Account on behalf of the
borrowing MidSouth Participant until the Trustee deems it appropriate to add the
amount paid to the MidSouth Participant's separate Account under the Plan.
(A) DEFAULT ON A LOAN. If a MidSouth Participant or MidSouth Beneficiary
defaults on a loan made pursuant to a loan policy adopted by the Advisory
Committee of the Former MidSouth Plan, the Plan treats the default as a
distributable event. The Trustee, at the time of the default, will reduce the
MidSouth Participant's Nonforfeitable Accrued Benefit derived from his MidSouth
Accounts by the lesser of the amount in default (plus accrued interest) or the
Plan's security interest in that Nonforfeitable Accrued Benefit derived from his
MidSouth Accounts. To the extent the loan is attributable to the MidSouth
Participant's Deferral Contributions Account in the Former MidSouth Plan, the
Trustee will not reduce the MidSouth Participant's Nonforfeitable Accrued
Benefit derived from his MidSouth Accounts unless the MidSouth Participant has
separated from Service or unless the MidSouth Participant has attained age 59
1/2.
17.10 VESTING SCHEDULE FOR REPAID AMOUNTS. If a former MidSouth Participant
in the Former MidSouth Plan received a cash-out distribution when he was less
than 100% vested and repays his distribution pursuant to Section 5.04 of the
Former MidSouth Plan, his Accrued Benefit shall be, at all times, one hundred
percent (100%) Nonforfeitable to the extent the value of his Accrued Benefit is
derived from his MidSouth Accounts.
ARTICLE XVIII.
PROVISIONS APPLICABLE TO ACCOUNTS
TRANSFERRED FROM FORMER GATEWAY PLAN
18.01 GATEWAY ACCOUNTS. The Advisory Committee shall maintain, in order to
reflect each Participant's Accrued Benefit under the Plan derived from
contributions to the Gateway Western 401(k) Plan ("Former Gateway Plan"), a
separate Gateway Deferral Contributions Account, a separate Gateway Rollover
Contributions Account, a separate Gateway Voluntary Contributions Account, and a
separate Gateway Matching Contributions Account ("Gateway Accounts") for each
Participant in the Former Gateway Plan ("Gateway Participant") who had an
account under the Former Gateway Plan, except that a Gateway Rollover
Contributions Account shall be maintained only for a Gateway Participant who had
such an account under the Former Gateway Plan, and a Gateway Voluntary
Contributions Account shall be maintained only for a Gateway Participant who had
such an account under the Former Gateway Plan. The Gateway Deferral
Contributions Account shall reflect a Participant's Accrued Benefit derived from
his deferral contributions to the Former Gateway Plan, the Gateway Rollover
Contributions Account shall reflect a Participant's Accrued Benefit derived from
his rollover contributions to the Former Gateway Plan, the Gateway Voluntary
Contributions Account shall reflect a Participant's Accrued Benefit derived from
his voluntary after-tax contributions to the Former Gateway Plan and the Gateway
Matching Contributions Account shall reflect a Participant's Accrued Benefit
derived from all matching contributions to the Former Gateway Plan on his
behalf. The provisions of this Article XVIII shall govern the separate Gateway
Accounts, and with respect to such Accounts, the provisions of this Article
XVIII shall supersede any other provisions in the Plan to the contrary. Except
as provided under this Article XVIII, the Trustee shall hold, administer and
distribute the Gateway Accounts in the same manner under the Plan as the similar
Account derived from contributions to this Plan.
The provisions of this Article XVIII shall not apply to any Accounts other
than the Gateway Accounts.
A Gateway Participant's early retirement age under the Plan shall be 55.
18.02 SPECIAL WITHDRAWAL RIGHTS. A Gateway Participant, by giving prior
written notice to the Trustee, may withdraw all or any part of his Gateway
Voluntary Contributions Account described in this Section 18.02 at any time,
provided, however, that a Gateway Participant may make no more than two such
withdrawals in any 12-month period. A distribution of voluntary contributions
must comply with the joint and survivor annuity requirements described in this
Article XVIII, if those requirements apply to the Gateway Participant. The
Trustee, in accordance with the direction of the Advisory Committee, will
distribute a Participant's unwithdrawn Gateway Voluntary Contributions Account
in accordance with the provisions of this Article XVIII applicable to the
distribution of the Gateway Participant's Nonforfeitable Accrued Benefit derived
from his Gateway Accounts.
18.03 METHOD OF PAYMENT OF ACCRUED BENEFIT. Subject to the annuity
distribution requirements, if any, prescribed by Section 18.06, and any
restrictions prescribed by Section 18.05, a Gateway Participant or the
beneficiary of a Gateway Participant ("Gateway Beneficiary") may elect
distribution of his Gateway Accounts under one, or any combination, of the
following methods:
(a) by payment in a lump sum;
(b) by payment in the form of a single life annuity;
(c) by payment in the form of a single life annuity with certain
periods of five, ten, or fifteen years;
(d) by payment in the form of a single life annuity with installment
refund;
(e) by payment in the form of a qualified joint and survivor annuity,
as defined in Section 18.06(A). As of the annuity starting date, the
Gateway Participant may elect to receive a smaller annuity benefit, having
an actuarial value equivalent to the actuarial value of the qualified joint
and survivor annuity, with continuation of payments to the beneficiary at a
rate of 100% of the rate payable to the Gateway Participant during his
lifetime;
(f) fixed period annuities for any period of whole months which is not
less than 60 and does not exceed the life expectancy of the Gateway
Participant and named beneficiary where the life expectancy is not
recalculated;
(g) a series of installments chosen by the Participant. The
Participant may choose at any time to have the balance of his account paid
in a different form permitted under this Section 18.03.
If the Gateway Participant's Accrued Benefit is distributed in the form of
an annuity purchased from an insurance company, distributions thereunder shall
be made in accordance with the requirements of Code ss. 401 (a)(9) and the
regulations thereunder. Any annuity contract distributed shall be
nontransferable.
A series of installment payments shall not be available as a death benefit
if the Gateway Beneficiary is riot the spouse of the deceased Gateway
Participant.
The distribution options permitted under this Section 18.03 are available
only if the present value of the Gateway Participant's entire Nonforfeitable
Accrued Benefit under the Plan, at the time of the distribution to the Gateway
Participant, exceeds $5,000.
The provisions of Section 6.02(A) shall apply in determining the minimum
distribution requirements under Code ss. 401(a)(9) for Gateway Participants, and
the provisions of Section 6.02(B) shall apply in determining the minimum
distribution requirements under Code ss. 401 (a)(9) for Gateway Beneficiaries.
18.04 TIME OF PAYMENT AND ACCRUED BENEFIT. Unless, pursuant to Section
18.05, the Gateway Participant or the Gateway Beneficiary elects in writing a
different time or method of payment, the Advisory Committee will direct the
Trustee to commence distribution of a Gateway Participant's Nonforfeitable
Accrued Benefit derived from his Gateway Accounts in accordance with this
Section 18.04. A Gateway Participant must consent, in writing, to any
distribution required under this Section 18.04 if the present value of the
Gateway Participants Nonforfeitable Accrued Benefit, at the time of the
distribution to the Gateway Participant, exceeds $5,000 and the Gateway
Participant has not attained the later of Normal Retirement Age or age 62.
Furthermore, the Gateway Participant's spouse also must consent, in writing, to
any distribution for which Section 18.06 requires the spouse's consent. For all
purposes of Article VI and this Article XVIII, the term "annuity starting date"
means the first day of the first period for which the Plan pays an amount as an
annuity or in any other form. For purposes of the consent requirements under
this Article XVIII, if the present value of the Gateway Participants
Nonforfeitable Accrued Benefit derived from his Gateway Accounts, at the time of
any distribution, exceeds $5,000, the Advisory Committee must treat that present
value as exceeding $5,000 for purposes of all subsequent Plan distributions to
the Gateway Participant.
(A) SEPARATION FROM SERVICE FOR A REASON OTHER THAN DEATH.
(1) GATEWAY PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT NOT EXCEEDING
$5,000. If the Gateway Participant's Separation from Service is for any
reason other than death, the Advisory Committee will direct the Trustee to
distribute the Gateway Participant's Nonforfeitable Accrued Benefit derived
from his Gateway Accounts in a lump sum as soon as administratively
practicable after the first distribution valuation date following the
Gateway Participant's Separation from Service, but in no event later than
the 60th day following the close of the Plan Year in which the Gateway
Participant attains Normal Retirement Age. If the Gateway Participant has
attained Normal Retirement Age when he separates from Service, the
distribution under this paragraph will occur no later than the 60th day
following the close of the Plan Year in which the Gateway Participant's
Separation from Service occurs.
(2) GATEWAY PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT EXCEEDS
$5,000. If the Gateway Participant's Separation from Service is for any
reason other than death, the Advisory Committee will direct the Trustee to
distribute the Gateway Participant's Nonforfeitable Accrued Benefit derived
from his Gateway Accounts in a form and at the time elected by the Gateway
Participant, pursuant to Section 18.05. In the absence of an election by
the Gateway Participant, the Advisory Committee will direct the Trustee to
distribute the Gateway Participant's Nonforfeitable Accrued Benefit derived
from his Gateway Accounts in a lump sum (or, if applicable, the normal
annuity form of distribution required under Section 19.06), on the 60th day
following the close of the Plan Year in which the latest of the following
events occurs: (a) the Gateway Participant attains Normal Retirement Age;
(b) the Gateway Participant attains age 62; or (c) the Gateway
Participant's Separation from Service.
(3) DISABILITY. If the Gateway Participant's Separation from Service
is because of disability, the Advisory Committee will direct the Trustee to
pay the Gateway Participant's Nonforfeitable Accrued Benefit derived from
his Gateway Accounts in lump sum (or, if applicable, the normal annuity
form of distribution required under Section 18.06), as soon as
administratively practicable after the first distribution valuation date
following the Gateway Participant's Separation from Service, subject to the
notice and consent requirements of this Article XVIII and to the applicable
mandatory commencement dates described in Paragraph (1) or in Paragraph (2)
of this Section 18.04(A).
(B) REQUIRED BEGINNING DATE. The provisions of Section 6.01(B) shall
determine a Gateway Participants Required Beginning Date.
(C) DEATH OF THE GATEWAY PARTICIPANT. The Advisory Committee will direct
the Trustee, in accordance with this Section 18.04(C), to distribute to the
Gateway Beneficiary the Gateway Participant's Nonforfeitable Accrued Benefit
derived from his Gateway Accounts remaining in the Trust at the time of the
Gateway Participant's death.
(1) DECEASED GATEWAY PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT DOES
NOT EXCEED $5,000. The Advisory Committee, subject to the requirements of
Section 18.06, must direct the Trustee to distribute the deceased Gateway
Participant's Nonforfeitable Accrued Benefit derived from his Gateway
Accounts in a single cash sum, as soon as administratively practicable
after the first distribution valuation date following the Gateway
Participant's death or, if later, the date on which the Advisory Committee
receives notification of or otherwise confirms the Gateway Participant's
death.
(2) DECEASED GATEWAY PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT
EXCEEDS $5,000. The Advisory Committee will direct the Trustee to
distribute the deceased Gateway Participant's Nonforfeitable Accrued
Benefit derived from his Gateway Accounts at the time and in the form
elected by the Gateway Participant or, if applicable, by the Gateway
Beneficiary, as permitted under this Article XVIII.
If the death benefit is payable in full to the Gateway Participant's
surviving spouse, the surviving spouse, in addition to the distribution options
provided in this Section 18.04(C), may elect distribution at any time or in any
form (other than the joint and survivor annuity) this Article XVIII would permit
for a Gateway Participant.
(D) ROLLOVERS. The provisions of Section 6.08 shall apply to the Gateway
Accounts.
18.05 BENEFIT PAYMENT ELECTIONS. Not earlier than 90 days before nor later
than 30 days before the Gateway Participant's annuity starting date, the Plan
Administrator must provide a benefit notice to a Gateway Participant who is
eligible to make an election under this Section 18.05. The benefit notice must
explain the optional forms of benefit in the Plan, including the material
features and relative values of those options, and the Gateway Participant's
right to defer distribution until he attains the later of Normal Retirement Age
or age 62.
Such distribution may commence less than 30 days after the benefit notice
is given, provided that:
(1) The Plan Administrator clearly informs the Participant that the
Participant has a right to a period of at least 30 days after receiving the
notice to consider the decision of whether or not to elect a distribution
(and, if applicable, a particular distribution option), and
(2) The Participant, after receiving the notice, affirmatively elects
a distribution.
If a Gateway Participant or Gateway Beneficiary makes an election
prescribed by this Section 18.05, the Advisory Committee will direct the Trustee
to distribute the Gateway Participant's Nonforfeitable Accrued Benefit derived
from his Gateway Accounts in accordance with that election. Any election under
this Section is subject to the requirements of Section 18.06. The Gateway
Participant or Gateway Beneficiary must make an election under this Section
18.05 by filing his election form with the Advisory Committee at any time before
the Trustee otherwise would commence to pay a Gateway Participant's Accrued
Benefit derived from his Gateway Accounts in accordance with the requirements of
Articles VI and XVIII.
(A) GATEWAY PARTICIPANT ELECTIONS AFTER SEPARATION FROM SERVICE.
If the present value of a Gateway Participant's Nonforfeitable Accrued
Benefit exceeds $5,000, he may elect to have the Trustee commence distribution
as soon as administratively practicable after any distribution valuation date
following the Gateway Participant's Separation from Service. The Gateway
Participant may reconsider an election at any time prior to the annuity starting
date and elect to commence distribution as of any other distribution date, but
not earlier than the date described in the first sentence of this Paragraph (A).
Following his attainment of Normal Retirement Age, a Gateway Participant who has
separated from Service may elect distribution as of any distribution date,
irrespective of the restrictions otherwise applicable under this Section
18.05(A).
(B) GATEWAY PARTICIPANT ELECTIONS PRIOR TO SEPARATION FROM SERVICE.
In addition to the distribution options provided in Section 6.03, a Gateway
Participant, until he retires, has a continuing election to receive all or any
portion of his Gateway Deferral Contributions Account if: (a) he has attained
age 59 1/2 and (b) he is 100% vested in the Account. The procedures set forth in
Section 6.03(B) shall apply. Any distribution is subject to the requirements of
Section 19.06.
(C) DEATH BENEFIT ELECTIONS.
If the present value of the deceased Gateway Participant's Nonforfeitable
Accrued Benefit exceeds $5,000, the Gateway Beneficiary may elect to have the
Trustee distribute the Gateway Participant's Nonforfeitable Accrued Benefit
derived from his Gateway Accounts in a form and within a period permitted under
Section 18.04. The Gateway Beneficiary's election is subject to any restrictions
designated in writing by the Gateway Participant and not revoked as of his date
of death.
(D) TRANSITIONAL ELECTIONS.
Notwithstanding the provisions of Section 18.03 and 18.04, if the Gateway
Participant (or Gateway Beneficiary) signed a written distribution designation
prior to January 1, 1984, the Advisory Committee must distribute the Gateway
Participant's Nonforfeitable Accrued Benefit in accordance with that
designation, subject however, to the survivor requirements, if applicable, of
Sections 18.06, 18.07 and 18.08. This Section 18.05(D) does not apply to a
pre-1984 distribution designation, and the Advisory Committee will not comply
with that designation, if any of the following applies: (1) the method of
distribution would have disqualified the Plan under Code ss.401(a)(9) as in
effect on December 31, 1983; (2) the Gateway Participant did not have an Accrued
Benefit as of December 31, 1983; (3) the distribution designation does not
specify the timing and form of the distribution and the death Beneficiaries (in
order of priority); (4) the substitution of a Gateway Beneficiary modifies the
payment period of the distribution; or (5) the Gateway Participant (or Gateway
Beneficiary) modifies or revokes the distribution designation. In the event of a
revocation, the Plan must distribute, no later than December 31 of the calendar
year following the year of revocation, the amount which the Gateway Participant
would have received under Section 18.04(A) if the distribution designation had
not been in effect or, if the Gateway Beneficiary revokes the distribution
designation, the amount which the Gateway Beneficiary would have received under
Section 18.04(C) if the distribution designation had not been in effect. The
Advisory Committee will apply this Section 18.05(D) to rollovers and transfers
in accordance with Part J of the Code ss.401(a)(9) Treasury regulations.
(E) HARDSHIP DISTRIBUTIONS.
The last four full paragraphs of Section 6.03(E) shall apply to permit a
Gateway Participant to receive hardship distributions from his Gateway Matching
Contributions Account, his Gateway Rollover Contributions Account, and the
elective deferrals credited to his Gateway Deferral Contributions Account plus
any earnings on the Gateway Participant's elective deferrals credited before
January 1, 1989. Any hardship distribution is subject to Section 18.06.
18.06 ANNUITY DISTRIBUTIONS TO GATEWAY PARTICIPANTS AND SURVIVING SPOUSES.
(A) JOINT AND SURVIVOR ANNUITY. The Advisory Committee must direct the
Trustee to distribute a Gateway Participant's Nonforfeitable Accrued Benefit
derived from his Gateway Accounts in the form of a qualified joint and survivor
annuity, unless the Gateway Participant makes a valid waiver election (described
in Section 18.07) within the 90-day period ending on the annuity starting date.
If, as of the annuity starting date, the Gateway Participant is married, a
qualified joint and survivor annuity is an immediate annuity which is
purchasable with the Gateway Participant's Nonforfeitable Accrued Benefit
derived from his Gateway Account and which provides a life annuity for the
Gateway Participant and a survivor annuity payable for the remaining life of the
Gateway Participant's surviving spouse equal to 50% of the amount of the annuity
payable during the life of the Gateway Participant. If, as of the annuity
starting date, the Gateway Participant is not married, a qualified joint and
survivor annuity is an immediate life annuity for the Gateway Participant which
is purchasable with the Gateway Participant's Nonforfeitable Accrued Benefit
derived from his Gateway Accounts. On or before the annuity starting date, the
Advisory Committee, without Gateway Participant or spousal consent, must direct
the Trustee to pay the Gateway Participant's Nonforfeitable Accrued Benefit
derived from his Gateway Accounts, in a lump sum, in lieu of a qualified joint
and survivor annuity in accordance with Section 18.04, if the Gateway
Participant's Nonforfeitable Accrued Benefit is not greater than $5,000.
(B) PRERETIREMENT SURVIVOR ANNUITY. If a married Gateway Participant dies
prior to his annuity starting date the Advisory Committee will direct the
Trustee to distribute a portion of the Gateway Participant's Nonforfeitable
Accrued Benefit derived from his Gateway Accounts to the Gateway Participant's
surviving spouse in the form of a preretirement survivor annuity, unless the
Gateway Participant has a valid waiver election (as described in Section 18.08)
in effect, or unless the Gateway Participant and his spouse were not married
throughout the one year period ending on the date of his death. A preretirement
survivor annuity is an annuity which is purchasable with 50% of the Gateway
Participants Nonforfeitable Accrued Benefit derived from his Gateway Accounts
(determined as of the date of the Gateway Participant's death) and which is
payable for the life of the Gateway Participant's surviving spouse. The value of
the preretirement survivor annuity is attributable to Employer contributions and
to Employee contributions in the same proportion as the Gateway Participant's
Nonforfeitable Accrued Benefit derived from his Gateway Accounts is attributable
to those contributions. The portion of the Gateway Participant's Nonforfeitable
Accrued Benefit derived from his Gateway Accounts not payable under this
paragraph is payable to the Gateway Participant's Beneficiary, in accordance
with the other provisions of this Article XVIII. If the present value of the
preretirement survivor annuity does not exceed $5,000, the Advisory Committee,
on or before the annuity starting date, must direct the Trustee to make a lump
sum distribution to the Gateway Participant's surviving spouse, in lieu of a
preretirement survivor annuity.
(C) SURVIVING SPOUSE ELECTIONS. If the present value of the preretirement
survivor annuity exceeds $5,000, the Gateway Participant's surviving spouse may
elect to have the Trustee commence payment of the preretirement survivor annuity
at any time following the date of the Gateway Participant's death, but not later
than the mandatory distribution periods described in Section 18.04, and may
elect any form of payment described in Section 18.03, in lieu of the
preretirement survivor annuity. In the absence of an election by the surviving
spouse, the Advisory Committee must direct the Trustee to distribute the
preretirement survivor annuity on the first distribution date following the
close of the Plan Year in which the latest of the following events occurs: (i)
the Gateway Participant's death; (ii) the date the Advisory Committee receives
notification of or otherwise confirms the Gateway Participant's death; (iii) the
date the Gateway Participant would have attained Normal Retirement Age; or (iv)
the date the Gateway Participant would have attained age 62.
(D) SPECIAL RULES. If the Gateway Participant has in effect a valid waiver
election regarding the qualified joint and survivor annuity or the preretirement
survivor annuity, the Advisory Committee must direct the Trustee to distribute
the Gateway Participant's Nonforfeitable Accrued Benefit derived from his
Gateway Accounts in accordance with Sections 18.03, 18.04 and 18.05. For
purposes of applying this Article XVIII, the Advisory Committee treats a former
spouse as the Gateway Participant's spouse or the surviving spouse to the extent
provided under a qualified domestic relations order described in Section 6.07.
The provisions of this Article XVIII apply separately to the portion of the
Gateway Participant's Nonforfeitable Accrued Benefit derived from his Gateway
Accounts subject to the qualified domestic relations order and to the portion of
the Gateway Participant's Nonforfeitable Accrued Benefit derived from his
Gateway Accounts not subject to that order.
LIMITED APPLICATION OF SECTION. The preceding provisions of this Section
18.06 apply only to (1) a Gateway Participant as respects whom the Plan is a
direct or indirect transferee from a plan subject to the Code ss. 417
requirements and the Plan received the transfer after December 31, 1984, unless
the transfer is an elective transfer described in Section 11.05; (2) a Gateway
Participant or Gateway Beneficiary who is eligible to and who elects a life
annuity distribution; and (3) a Gateway Participant whose benefits under a
defined benefit plan are offset by benefits provided under this Plan. Sections
18.07 and 18.08 only apply to a Gateway Participant or Gateway Beneficiary to
whom the preceding provisions of this Section 18.06 apply.
18.07 WAIVER ELECTION - QUALIFIED JOINT AND SURVIVOR ANNUITY. Within 90
days, not later than 30 days, before the Gateway Participants annuity starting
date, the Advisory Committee must provide the Gateway Participant a written
explanation of the terms and conditions of the qualified joint and survivor
annuity, the Gateway Participant's right to make, and the effect of, an election
to waive the joint and survivor form of benefit, the rights of the Gateway
Participant's spouse regarding the waiver election, and the Gateway
Participant's right to make, and the effect of, a revocation of a waiver
election. The Plan does not limit the number of times the Gateway Participant
may revoke a waiver of the qualified joint and survivor annuity or make a new
waiver during the election period.
A married Gateway Participants waiver election is not valid unless (a) the
Gateway Participant's spouse (to whom the survivor annuity is payable under the
qualified joint and survivor annuity), after the Gateway Participant has
received the written explanation described in this Section 18.07, has consented
in writing to the waiver election, the spouse's consent acknowledges the effect
of the election, and a notary public as the Plan Administrator (or his
representative) witnesses the spouse's consent, (b) the spouse consents to the
alternate form of payment designated by the Gateway Participant or to any change
in that designated form of payment, and (c) unless the spouse is the Gateway
Participant's sole primary Beneficiary, the spouse consents to the Gateway
Participant's Beneficiary designation or to any change in the Gateway
Participant's Beneficiary designation. The spouse's consent to a waiver of the
qualified joint and survivor annuity is irrevocable, unless the Gateway
Participant revokes the waiver election. The spouse may execute a blanket
consent to any form of payment designation or to any Beneficiary designation
made by the Gateway Participant, if the spouse acknowledges the right to limit
that consent to a specific designation but, in writing, waives that right. The
consent requirements of this Section 18.07 apply to a former spouse of a Gateway
Participant, to the extent required under a qualified domestic relations order
described in Section 6.07.
The Advisory Committee will accept as valid a waiver election which does
not satisfy the spousal consent requirements if the Advisory Committee
establishes the Gateway Participant does not have a spouse, the Advisory
Committee is not able to locate the Gateway Participant's spouse, the Gateway
Participant is legally separated or has been abandoned (within the meaning of
State law) and the Gateway Participant has a court order to that effect, or
other circumstances exist under which the Secretary of the Treasury will excuse
the consent requirement. If the Gateway Participant's spouse is legally
incompetent to give consent, the spouse's legal guardian (even if the guardian
is the Gateway Participant) may give consent.
18.08 WAIVER ELECTION - PRERETIREMENT SURVIVOR ANNUITY. The Advisory
Committee must provide a written explanation of the preretirement survivor
annuity to each married Gateway Participant, within the following period which
ends last: (1) the period beginning on the first day of the Plan Year in which
the Gateway Participant attains age 32 and ending on the last day of the Plan
Year in which the Gateway Participant attains age 34; (2) a reasonable period
after an Employee becomes a Gateway Participant; (3) a reasonable period after
the joint and survivor rules become applicable to the Gateway Participant; or
(4) a reasonable time after a fully subsidized preretirement survivor annuity no
longer satisfies the requirements of a fully subsidized benefit. A reasonable
period described in clauses (2), (3) and (4) is the period beginning one year
before and ending one year after the applicable event. If the Gateway
Participant separates from Service before attaining age 35, clauses (1), (2),
(3) and (4) do not apply and the Advisory Committee must provide the written
explanation within the period beginning one year before and ending one year
after the Separation from Service. The written explanation must describe, in a
manner consistent with Treasury Regulations, the terms and conditions of the
preretirement survivor annuity comparable to the explanation of the qualified
joint and survivor annuity required under Section 18.06. The Plan does not limit
the number of times the Gateway Participant may revoke a waiver of the
preretirement survivor annuity or make a new waiver during the election period.
A Gateway Participants waiver election of the preretirement survivor
annuity is not valid unless (a) the Gateway Participant makes the waiver
election no later than the first day of the Plan Year in which he attains age 35
and (b) the Gateway Participant's spouse (to whom the preretirement survivor
annuity is payable) satisfies the consent requirements described in Section
18.06, except the spouse need not consent to the form of benefit payable to the
designated Gateway Beneficiary. The spouse's consent to the waiver of the
preretirement survivor annuity is irrevocable, unless the Gateway Participant
revokes the waiver election. Irrespective of the time of election requirement
described in clause (a), if the Gateway Participant separates from Service prior
to the first day of the Plan Year in which he attains age 35, the Advisory
Committee will accept a waiver election as respects the Gateway Participant's
Accrued Benefit attributable to his Service prior to this Separation from
Service. Furthermore, if a Gateway Participant who has separated from Service
makes a valid waiver election, except for the timing requirement of clause (a),
the Plan Administrator will accept that election as valid, but only until the
first day of the Plan Year in which the Gateway Participant attains age 35. A
waiver election described in this paragraph is not valid unless made after the
Gateway Participant has received the written explanation described in this
Section 18.08.
18.09 COORDINATION WITH SURVIVOR REQUIREMENTS. If the joint and survivor
requirements of Article XVIII apply to the Gateway Participant, neither Section
8.01 nor this Section 18.09 impose any special spousal consent requirements on
the Gateway Participant's Beneficiary designation. However, in the absence of
spousal consent (as required by Articles VI and XVIII) to the Gateway
Participant's Beneficiary designation: (1) any waiver of the joint and survivor
annuity or of the preretirement survivor annuity is not valid; and (2) if the
Gateway Participant dies prior to his annuity starting date, the Gateway
Participant's Beneficiary designation will apply only to the portion of the
death benefit which is not payable as a preretirement survivor annuity.
Regarding clause (2), if the Gateway Participant's surviving spouse is a primary
Beneficiary under the Gateway Participant's Beneficiary designation, the Trustee
will satisfy the spouse's interest in the Gateway Participant's death benefit
first from the portion which is payable as a preretirement survivor annuity.
IN WITNESS WHEREOF, the Kansas City Southern Industries, Inc. has executed
this amended and restated Plan in Kansas City, Missouri as of this 12th day of
December, 2000, to be effective as of January 1, 2001.
KANSAS CITY SOUTHERN INDUSTRIES. INC.
By: /s/ Eric B. Freestone
----------------------------------
WITNESS:
/s/ Tony L. Robertson
---------------------------
