<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
--------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Laidlaw Environmental Services, Inc.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 51-0228924
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1301 Gervais Street, Suite 300, Columbia, South Carolina 29201
- -------------------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Safety-Kleen Corp. 401(k) Savings Plan
--------------------------------------
(Full title of the plan)
Henry H. Taylor, Esq.
Laidlaw Environmental Services, Inc.
1301 Gervais Street, Suite 300
Columbia, South Carolina 29201
---------------------------------------
(Name and address of agent for service)
Telephone number, including area code, of agent for service: (803) 933-4200
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Proposed maximum Proposed maximum Amount of
Title of securities Amount to be offering price per aggregate offering registration
to be registered(1) registered(2) share price fee
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common stock, par
value $1.00 per share 5,000,000 shares $2.3438(3) $1,111,900 $345.71
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933 this
registration statement also covers an indeterminate amount of interests to
be offered and sold pursuant to the employee benefit plan described herein.
(2) Together with an indeterminable number of additional shares which may be
necessary to adjust the number of shares reserved for issuance pursuant to
such plan as the result of any future stock split, stock dividend or similar
adjustment of the registrant's outstanding common stock.
(3) Estimated pursuant to Rule 457(h) under the Securities Act of 1933 solely
for the purpose of calculating the registration fee based on the average of
the high and low prices of Laidlaw Environmental Services, Inc. common stock
as reported on the New York Stock Exchange, Inc. Composite Transactions
Reporting System on October 14, 1998.
<PAGE> 2
PART I: INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1. Plan Information*
ITEM 2. Registrant Information and Employee Plan Annual Information*
________________________
* Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from the registration statement in accordance with
Note to Part I of Form S-8.
<PAGE> 3
PART II: INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The registrant hereby incorporates by reference in this registration
statement the following documents:
(a) The registrant's annual report on Form 10-K for the year ended
August 31, 1997;
(b) The Plan's annual report on Form 11-K for the year ended December
31, 1997;
(c) The registrant's quarterly reports on Form 10-Q for the quarters
ended November 30, 1997, as amended on July 17, 1998; February 28,
1998, as amended on July 17, 1998; and May 31, 1998, as amended on
July 17, 1998.
(d) The registrant's current reports on Form 8-K dated November 5, 1997,
as amended on December 31, 1997; November 14, 1997 and November 14,
1997, as amended on January 2, 1998; November 19, 1997, as amended
December 31, 1997; November 21, 1997, as amended December 31, 1997;
November 25, 1997, as amended December 31, 1997; December 8, 1997;
December 19, 1997; January 28, 1998; February 5, 1998; February 9,
1998; February 9, 1998; February 11, 1998; February 17, 1998;
February 17, 1998; February 18, 1998; February 20, 1998; February
24, 1998, as amended on February 24, 1998; February 25, 1998;
February 26, 1998; March 5, 1998; March 6, 1998; March 10, 1998;
March 12, 1998; March 13, 1998; March 16, 1998; March 19, 1998;
March 30, 1998; April 1, 1998; April 6, 1998; April 8, 1998; April
20, 1998, as amended on April 22, 1998; May 18, 1998; May 27, 1998;
June 25, 1998 and July 9, 1998.
(e) The description of the registrant's common stock, par value $1.00
per share, contained in the registrant's current report on Form 8-K,
dated July 29, 1997.
All documents subsequently filed by the registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior to the filing
of a post-effective amendment to this registration statement which indicates
that all securities offered hereby have been sold or which deregisters all
securities remaining unsold, shall be deemed to be incorporated by reference in
this registration statement and to be a part hereof from the date of filing of
such documents. Any statement contained in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this registration statement to the extent that a statement
contained herein or in any other subsequently filed document that also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this registration
statement.
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ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Subsection (a) of Section 145 of the General Corporation Law of the State
of Delaware empowers a corporation to indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that such person is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit or proceeding if
such person acted in good faith and in a manner such person reasonably believed
to be in or not opposed to the best interests of the corporation and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
such person's conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by such person in
connection with the defense or settlement of such action or suit if such person
acted in good faith and in a manner such person reasonably believed to be in or
not opposed to the best interests of the corporation, except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper.
Subsection (c) of Section 145 provides that to the extent a present or
former director or officer of a corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in
subsections (a) and (b) of Section 145, or in defense of any claim, issue or
matter therein, such person shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by such person in connection
therewith.
Other subsections of Section 145: (i) provide that indemnification
<PAGE> 5
provided for by Section 145 shall not be deemed exclusive of any other rights to
which the indemnified party may be entitled; (ii) provide that indemnification
provided for by Section 145 shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of such person's heirs,
executors and administrators; and (iii) empower the corporation to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the corporation, or any person who is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against any
liability asserted against such person and incurred by such person in any such
capacity, or arising out of such person's status as such, whether or not the
corporation would have the power to indemnify such person against such
liabilities under Section 145.
The registrant's Bylaws provide that the registrant shall indemnify and
advance expenses to its directors, officers, employees, agents or fiduciaries of
the registrant to the fullest extent permitted by Delaware law.
Section 102(b)(7) of the General Corporation Law of the State of Delaware
provides that a certificate of incorporation may contain a provision eliminating
or limiting the personal liability of a director to a corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
provided that such provision shall not eliminate or limit the liability of a
director (i) for any breach of the director's duty of loyalty to the corporation
or its stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the General Corporation Law of the State of Delaware or (iv) for
any transaction from which the director derived an improper personal benefit.
Article Tenth of the registrant's Restated Certificate of Incorporation, as
amended, eliminates the personal liability of the registrant's directors for
monetary damages for breach of fiduciary duty except to the extent that such
elimination of liability is not permitted under Delaware corporate law.
The registrant also maintains liability insurance for its directors and
officers which provides for coverage against loss from claims made against
directors and officers in their capacity as such, including liabilities under
the Securities Act of 1933, as amended.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
See Exhibit Index.
The registrant hereby undertakes to submit the Plan and any amendments
thereto to the Internal Revenue Service in a timely manner and to make all
changes required by the Internal Revenue Service in order to qualify the Plan.
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ITEM 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(A) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(B) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement; and
(C) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(A) and (a)(1)(B) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Securities and Exchange Commission by the registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the
<PAGE> 7
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Columbia, State of South Carolina, on October 15,
1998.
LAIDLAW ENVIRONMENTAL SERVICES, INC.
By: /s/ Kenneth W. Winger
---------------------------------
Kenneth W. Winger, President
and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Kenneth W. Winger and Paul R. Humphreys,
and each of them acting individually, as his attorneys-in-fact, each with full
power of substitution, for him in any and all capacities, to sign any and all
amendments to this registration statement and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming our signatures as they may
be signed by our said attorney to any and all amendments to said registration
statement.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
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Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Kenneth W. Winger Director, President October 6, 1998
- ------------------------ and Chief Executive
Kenneth W. Winger Officer (principal
Executive officer)
/s/ Paul R. Humphreys Chief Financial Officer October 6, 1998
- ------------------------ (principal financial
Paul R. Humphreys officer and principal
accounting officer)
/s/ James R. Bullock Director, Chairman of October 6, 1998
- ------------------------ the Board
James R. Bullock
/s/ John R. Grainger Director October 6, 1998
- ------------------------
John R. Grainger
</TABLE>
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<TABLE>
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/s/ Leslie W. Haworth Director October 6, 1998
- ------------------------
Leslie W. Haworth
/s/ John W. Rollins, Sr. Director October 6, 1998
- ------------------------
John W. Rollins, Sr.
/s/ John W. Rollins, Jr. Director October 6, 1998
- ------------------------
John W. Rollins, Jr.
/s/ David E. Thomas, Jr. Director October 6, 1998
- ------------------------
David E. Thomas, Jr.
/s/ Henry B. Tippie Director October 6, 1998
- ------------------------
Henry B. Tippie
/s/ James L. Wareham Director October 6, 1998
- ------------------------
James L. Wareham
/s/ Grover C. Wrenn Director October 6, 1998
- ------------------------
Grover C. Wrenn
</TABLE>
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Pursuant to the requirements of the Securities Act of 1933, the committee
which administers the Safety-Kleen Corp. 401(k) Savings Plan has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of Columbia, State of South Carolina on
October 15, 1998
Safety-Kleen Corp. 401(k) Savings Plan
By: /s/ Robert Arquilla
------------------------------------
Robert Arquilla
Its: Vice President, Administration
<PAGE> 11
EXHIBIT INDEX
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Exhibit
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4.1(a) Restated Certificate of Incorporation of the registrant,
filed as Exhibit 3(a) to the registrant's Form 10-Q for the
quarter ended May 31, 1997, is incorporated herein by
reference.
4.1(b) Certificate of Correction of the registrant, filed as Exhibit
3(a)(1) to the registrant's Annual Report on Form 10-K for
the year ended August 31, 1997, is incorporated herein by
reference.
4.1(c) Amendment to the Restated Certificate of Incorporation of the
registrant, filed as Exhibit 3(a)(2) to the registrant's
quarterly report on Form 10-Q for the quarter ended February
28, 1998, is incorporated herein by reference.
4.2 Bylaws of the registrant, as amended, filed as Exhibit 3(ii)
to the registrant's current report on Form 8-K dated July 29,
1997, is incorporated herein by reference.
4.3 Safety-Kleen Corp. 401(k) Savings Plan as Amended and
Completely Restated through July 1, 1998.
23.1 Consent of Pricewaterhouse Coopers, LLP.
24.1 Power of Attorney (included as part of the signature page of
this registration statement).
</TABLE>
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10/12/98
EXHIBIT 4.3
SAFETY-KLEEN CORP. 401(K) SAVINGS PLAN
(FORMERLY THE LAIDLAW ENVIRONMENTAL SERVICES, INC.
401(K) SAVINGS PLAN)
AS AMENDED AND COMPLETELY RESTATED
THROUGH AUGUST 1, 1998
<PAGE> 2
SAFETY-KLEEN CORP. 401(K) SAVINGS PLAN
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE I
ESTABLISHMENT OF THE PLAN.................................... 7
1.01 NAME OF PLAN.......................................................... 7
1.02 ADOPTION OF PLAN...................................................... 7
1.03 TRUST AGREEMENT....................................................... 7
1.04 QUALIFICATION OF THE PLAN............................................. 7
1.05 PURPOSE OF THE PLAN................................................... 8
1.06 EXCLUSIVE BENEFIT..................................................... 8
ARTICLE II
DEFINITIONS.................................................. 9
ACCOUNT OR ACCOUNTS................................................... 9
ACTUAL DEFERRAL PERCENTAGE............................................ 10
INTENTIONALLY OMITTED................................................. 11
ADOPTION AGREEMENT.................................................... 11
AFFILIATE............................................................. 11
ANNIVERSARY DATE...................................................... 11
AUTHORIZED LEAVE OF ABSENCE........................................... 11
BENEFICIARY........................................................... 11
BENEFITS COMMITTEE.................................................... 11
BOARD OF DIRECTORS.................................................... 11
BREAK IN SERVICE...................................................... 12
CODE.................................................................. 12
COMPANY STOCK......................................................... 12
COMPENSATION.......................................................... 13
COMPUTATION PERIODS................................................... 13
CONTRIBUTION PERCENTAGE............................................... 13
DISABILITY............................................................ 14
EARLY RETIREMENT DATE................................................. 14
EFFECTIVE DATE........................................................ 14
EMPLOYEE.............................................................. 14
EMPLOYMENT COMMENCEMENT DATE.......................................... 15
EMPLOYER.............................................................. 15
ENTRY DATE............................................................ 15
ERISA................................................................. 15
FAMILY MEMBER......................................................... 15
</TABLE>
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<TABLE>
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ARTICLE II
FIDUCIARIES........................................................... 15
FORMER PARTICIPANT.................................................... 16
HIGHLY COMPENSATED EMPLOYEE........................................... 16
HOUR OF SERVICE....................................................... 18
INCOME................................................................ 19
INVESTMENT COMMITTEE.................................................. 19
INVESTMENT MANAGER.................................................... 19
LEASED EMPLOYEE(S).................................................... 19
LIMITATION YEAR....................................................... 20
MONTH OF SERVICE...................................................... 20
NORMAL RETIREMENT AGE................................................. 20
NORMAL RETIREMENT DATE................................................ 20
PARTICIPANT........................................................... 20
PAYROLL PERIOD........................................................ 20
PERIOD OF SERVICE..................................................... 20
PERIOD OF SEVERANCE................................................... 20
PLAN.................................................................. 20
PLAN ADMINISTRATOR (ALSO REFERRED TO AS
"ADMINISTRATOR" AND "COMMITTEE")...................................... 20
PLAN SPONSOR (ALSO REFERRED TO AS "SPONSOR").......................... 20
PLAN YEAR............................................................. 21
PRIOR PLAN............................................................ 21
REEMPLOYMENT COMMENCEMENT DATE........................................ 21
SERVICE SPANNING RULES................................................ 21
SEVERANCE FROM SERVICE DATE........................................... 21
SPOUSE..................................................................21
SUBSIDIARY............................................................ 21
TEMPORARY EMPLOYEE.................................................... 22
TOP PAID GROUP........................................................ 22
TRUST AGREEMENT....................................................... 22
TRUST FUND, TRUST OR FUND............................................. 22
TRUSTEE.................................................................22
VALUATION DATE........................................................ 22
YEAR OF SERVICE FOR ELIGIBILITY, PARTICIPATION AND
VESTING PURPOSES...................................................... 22
ARTICLE III
ELIGIBILITY AND PARTICIPATION................................ 25
3.01 ELIGIBILITY FOR PARTICIPATION......................................... 25
3.02 APPLICATION FOR PARTICIPATION......................................... 25
3.03 OMISSION OF ELIGIBLE EMPLOYEE......................................... 26
3.04 INCLUSION OF INELIGIBLE EMPLOYEE...................................... 26
3.05 PARTICIPATION BY FORMER PARTICIPANTS.................................. 26
</TABLE>
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<TABLE>
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ARTICLE III
3.06 IMMEDIATE PARTICIPATION IN CASE OF PLAN MERGERS....................... 27
ARTICLE IV
ALLOCATION OF CONTRIBUTIONS AND FORFEITURES.................. 28
4.01 PRETAX CONTRIBUTIONS.................................................. 28
4.02 DISCRETIONARY EMPLOYER CONTRIBUTIONS.................................. 30
4.03 MATCHING EMPLOYER CONTRIBUTIONS....................................... 31
4.04 INTENTIONALLY OMITTED................................................. 31
4.05 ALLOCATION OF FORFEITURES............................................. 31
4.06 ROLLOVERS AND TRANSFERS............................................... 32
4.07 PRE-TAX LIMITATIONS................................................... 34
4.08 LIMITATIONS ON EMPLOYER CONTRIBUTIONS................................. 38
4.09 ANNUAL ADDITIONS...................................................... 42
4.10 RETURN OF EMPLOYER CONTRIBUTIONS...................................... 43
ARTICLE V
ALLOCATION OF GAINS AND LOSSES............................... 45
5.01 VALUATION OF THE TRUST FUND........................................... 45
5.02 PRIORITY OF ALLOCATIONS TO ACCOUNTS................................... 45
5.03 ALLOCATION OF DIVIDENDS............................................... 45
5.04 PARTICIPANT-DIRECTED INVESTMENTS...................................... 45
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS................... 46
6.01 VESTING OF ACCOUNTS................................................... 46
6.02 FORFEITURES........................................................... 48
6.03 CHANGES IN VESTING SCHEDULE........................................... 49
6.04 INVOLUNTARY CASH-OUT.................................................. 49
6.05 REINSTATEMENT OF ACCOUNT.............................................. 49
6.06 SEPARATE ACCOUNT BALANCES............................................. 50
6.07 DETERMINATION OF BENEFITS UPON NORMAL RETIREMENT...................... 50
6.08 DETERMINATION OF BENEFITS UPON DISABILITY............................. 50
6.09 DETERMINATION OF BENEFITS UPON DEATH.................................. 41
6.10 DETERMINATION OF BENEFITS UPON TERMINATION OF
EMPLOYMENT............................................................ 51
6.11 ERISA REQUIRED COMMENCEMENT DATE...................................... 51
6.12 MANDATORY COMMENCEMENT DATE........................................... 52
6.13 REQUIRED PARTICIPANT OR BENEFICIARY CONSENT TO
DISTRIBUTE............................................................ 53
6.14 FORM OF PAYMENT BEFORE JULY 1, 1996................................... 53
6.14A FORM OF PAYMENT AFTER JUNE 30, 1996................................... 54
6.15 AMOUNTS NOT DETERMINED................................................ 55
</TABLE>
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<TABLE>
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ARTICLE VI
6.16 NO EMPLOYER DISCRETION IN BENEFIT SELECTION OR
DISTRIBUTION.......................................................... 55
6.17 REQUIRED INFORMATION.................................................. 55
6.18 LIMITATIONS ON BENEFITS AND DISTRIBUTIONS............................. 55
6.19 DIRECT ROLLOVER....................................................... 56
6.20 CALCULATION OF DISTRIBUTIONS AFTER APRIL 1, 1996...................... 57
6.21 DISTRIBUTIONS IN CONNECTION WITH DISPOSITION OF
ASSETS OR SUBSIDIARIES................................................ 57
6.22 DISTRIBUTIONS TO ALTERNATE PAYEES..................................... 57
ARTICLE VII
WITHDRAWALS AND LOANS........................................ 58
7.01 WITHDRAWALS, IN GENERAL............................................... 58
7.02 HARDSHIP WITHDRAWALS.................................................. 58
7.03 LOANS................................................................. 60
7.04 WITHDRAWALS FROM ROLLOVER ACCOUNTS.................................... 60
7.05 IN-SERVICE WITHDRAWALS AFTER AGE 59-1/2............................... 60
ARTICLE VIII
ADMINISTRATION OF PLAN....................................... 61
8.01 APPOINTMENT AND TERM OF COMMITTEE..................................... 61
8.02 POWERS AND RESPONSIBILITIES........................................... 61
8.03 ALLOCATION OF DUTIES AMONG COMMITTEE MEMBERS.......................... 65
8.04 COMPENSATION OF COMMITTEE MEMBERS..................................... 65
8.05 MANNER OF ACTING...................................................... 65
8.06 RECORDS AND REPORTS................................................... 66
8.07 INFORMATION FROM EMPLOYER............................................. 66
8.08 PAYMENT OF EXPENSES................................................... 66
8.09 DISCRETION............................................................ 66
8.10 LIABILITY OF THE COMMITTEE............................................ 67
8.11 EMPLOYER LIABILITY.................................................... 67
8.12 BONDING.................................................................67
8.13 INDEMNIFICATION....................................................... 67
8.14 MULTIPLE FIDUCIARY CAPACITIES......................................... 68
8.15 INFORMATION TO PARTICIPANTS........................................... 68
8.16 RELIANCE.............................................................. 68
8.17 NO DECISIONS BY INTERESTED PARTY IN OWN BENEFIT....................... 68
ARTICLE IX
PARTICIPANT ADMINISTRATIVE PROVISIONS AND
CLAIMS PROCEDURE............................................. 69
9.01 BENEFICIARY DESIGNATIONS.............................................. 69
9.02 NO BENEFICIARY DESIGNATIONS........................................... 69
</TABLE>
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<TABLE>
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ARTICLE IX
9.03 PERSONAL INFORMATION TO COMMITTEE..................................... 70
9.04 ADDRESS FOR NOTIFICATION.............................................. 70
9.05 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN........................ 70
9.06 NOTICE OF CHANGE IN PLAN TERMS........................................ 70
9.07 REVIEW OF PLAN DOCUMENTS AND INFORMATION.............................. 70
9.08 CLAIMS PROCEDURE...................................................... 71
9.09 CLAIMS REVIEW PROCEDURE............................................... 71
9.10 INDIVIDUALLY DIRECTED INVESTMENTS..................................... 71
ARTICLE X
TOP-HEAVY PROVISIONS......................................... 73
10.01 GENERALLY............................................................. 73
10.02 MAXIMUM PAY........................................................... 73
10.03 MINIMUM CONTRIBUTIONS................................................. 73
10.04 SUPER TOP-HEAVY PLANS................................................. 74
10.05 DETERMINATION OF TOP HEAVINESS........................................ 75
10.06 DETERMINATION OF SUPER TOP HEAVINESS.................................. 75
10.07 CALCULATION OF TOP-HEAVY RATIOS....................................... 75
10.08 CUMULATIVE ACCOUNTS ACCRUED BENEFITS.................................. 75
10.09 OTHER DEFINITIONS..................................................... 76
ARTICLE XI
AMENDMENT, TERMINATION AND MISCELLANEOUS
PLAN PROVISIONS.............................................. 79
11.01 INTENT TO QUALIFY..................................................... 79
11.02 EXCLUSIVE BENEFIT/PROHIBITION ON DIVERSION OF ASSETS.................. 79
11.03 ERISA STATUS.......................................................... 79
11.04 NONDISCRIMINATION..................................................... 79
11.05 NONALIENATION OF BENEFITS............................................. 79
11.06 APPLICABLE LAW........................................................ 80
11.07 TITLES AND HEADINGS NOT TO CONTROL.................................... 80
11.08 GENDER AND NUMBER..................................................... 80
11.09 SEVERABILITY.......................................................... 81
11.10 NO CONTRACT OF EMPLOYMENT............................................. 81
11.11 NO DUPLICATION OF BENEFITS............................................ 81
11.12 LEGAL ACTION.......................................................... 81
11.13 PROTECTIVE CLAUSE..................................................... 81
11.14 ACTION BY EMPLOYER OR SPONSOR......................................... 81
11.15 RIGHT TO AMEND AND TERMINATE.......................................... 81
11.16 CONSENT TO AMENDMENT BY TRUSTEE IF DUTIES INCREASED................... 82
11.17 TERMINATION OF THE PLAN............................................... 82
11.18 VESTING UPON PLAN TERMINATION......................................... 83
11.19 MERGERS, CONSOLIDATIONS AND TRANSFERS................................. 83
</TABLE>
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<TABLE>
<C> <C> <C>
ARTICLE XI
11.20 NAMED FIDUCIARIES..................................................... 84
11.21 SUCCESSORS............................................................ 85
11.22 FIDUCIARIES NOT INSURERS.............................................. 85
11.23 NO LIABILITY.......................................................... 85
11.24 NOTICE AND WAIVER OF NOTICE........................................... 85
11.25 EVIDENCE FURNISHED CONCLUSIVE......................................... 85
11.26 RETURNED PAYMENTS..................................................... 85
11.27 RELEASE OF CLAIMS..................................................... 86
11.28 PAYMENTS TO MINORS OR INCOMPETENTS.................................... 86
11.29 MULTIPLE COPIES OF PLAN AND/OR TRUST DOCUMENT......................... 86
11.30 SEGREGATION OF PLAN ASSETS............................................ 86
11.31 PARTIES TO LITIGATION................................................. 86
ARTICLE XII
ADOPTION BY OTHER EMPLOYERS.................................. 88
12.01 ADOPTION BY OTHER EMPLOYERS........................................... 88
12.02 DESIGNATION OF AGENT.................................................. 88
12.03 AMEND ............................................................... 88
12.04 REQUIREMENTS OF PARTICIPATING EMPLOYERS............................... 88
12.05 PARTICIPANT TRANSFERS................................................. 88
12.06 SEPARATE ACCOUNTING................................................... 89
12.07 DISCONTINUANCE OF PARTICIPATION....................................... 89
12.08 COMMITTEE'S AUTHORITY................................................. 89
12.09 PARTICIPATING EMPLOYER'S CONTRIBUTION................................. 89
ARTICLE XIII
VOTING RIGHTS AND DIVERSIFICATION............................ 90
13.01 TENDER RIGHTS AND OTHER SHAREHOLDER RIGHTS............................ 90
13.02 VOTING COMPANY STOCK.................................................. 90
13.03 RIGHTS, RESTRICTIONS AND OPTIONS ON COMPANY STOCK..................... 92
13.04 INTENTIONALLY OMITTED................................................. 93
ARTICLE XIV
QUALIFIED SURVIVOR ANNUITIES................................. 94
14.01 EFFECT OF THIS ARTICLE................................................ 94
14.02 DEFINITIONS........................................................... 94
14.03 WAIVER: QUALIFIED JOINT AND SURVIVOR ANNUITY.......................... 95
14.04 WAIVER: QUALIFIED PRE-RETIREMENT SURVIVOR ANNUITY..................... 95
14.05 OPTIONAL BENEFIT FORMS................................................ 95
14.06 ELECTION OF OPTIONAL BENEFIT FORMS AND ALTERNATIVE
BENEFICIARY........................................................... 96
14.07 CASH OUTS............................................................. 97
</TABLE>
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<PAGE> 8
ARTICLE I
HISTORY OF THE PLAN
1.01 NAME OF PLAN. The provisions contained in this agreement shall constitute
the Safety-Kleen Corp. 401(k) Savings Plan, formerly known as the Laidlaw
Environmental Services, Inc. 401(K) Savings Plan (the "Plan").
1.02 ADOPTION OF PLAN. The Plan was originally adopted for the benefit of the
Employees of Laidlaw Environmental Services, Inc. (hereinafter known as
the "Plan Sponsor" or merely "Sponsor") and its Subsidiaries effective
September 1, 1990, which was the date as of which such Employees ceased
participation in the Laidlaw Savings Plan. If any Affiliates of the
Sponsor adopt the Plan, it will be adopted for the Employees of such
Affiliates, in accordance with an adoption and joiner agreement, and the
effective date of such adoption will be set forth therein. The Plan was
amended and completely restated on December 30, 1993 in order to bring the
Plan into compliance with all aspects of the Tax Reform Act of 1986, all
subsequent legislation, and all regulations and other interpretations of
such legislative changes, with the effective date of such restatement
generally being the Plan's original effective date of September 1, 1990.
The Plan was amended and completely restated as of August 1, 1998 in order
to incorporate all amendments to the Plan adopted after the 1993
restatement and to make certain other amendments to the Plan. Laidlaw
Environmental Services, Inc. has changed its name to Safety-Kleen Corp.
1.03 TRUST AGREEMENT. To implement the provisions of the Plan the Sponsor
previously entered into a trust agreement with First National Bank of
Chicago, as Trustee. First National Bank of Chicago was removed as Trustee
effective as of July 1, 1996, and Investors Fiduciary Trust Company was
appointed as successor Trustee effective as of July 1, 1996. Investors
Fiduciary Trust Company was removed as successor Trustee effective as of
July 1, 1998, and Wachovia Bank, N.A. was appointed as successor Trustee
effective as of July 1, 1998, pursuant to a Trust Agreement dated as of
July 1, 1998 between the Plan Sponsor and Wachovia Bank, N.A., such
Agreement being incorporated herein by reference and forming a part of the
Plan hereunder.
1.04 QUALIFICATION OF THE PLAN. This Plan is intended to qualify under Section
401 (a) of the Internal Revenue Code of 1986, as amended, and regulations
thereunder as a qualified profit sharing plan and includes an arrangement
intended to be a qualified cash or deferred arrangement under Code Section
401(K). The Trust holding the assets of the Plan is intended to be an
exempt trust within the meaning of Code Section 501 (a). Both the Plan and
its related Trust are also intended to comply with the Employee Retirement
Income Security Act of 1974, as amended. The profit sharing portion of the
Plan is intended to constitute an eligible individual account plan as
defined in ERISA Section 407(d)(3).
7
<PAGE> 9
The employee stock ownership portion of the Plan as previously included in
the Plan was intended to constitute an eligible individual account plan as
defined in ERISA Section 407(d)(3) and to be an employee stock ownership
plan as defined in ERISA Section 407(d)(6), which was designed to invest
primarily in qualifying employer securities, as such item is defined in
ERISA Sections 407(d)(5) and (e) and Code Section 4975(e)(7). The employee
stock ownership portion of the Plan was terminated in 1996 pursuant to
Part I of Amendment #4 to the Plan.
Since the Plan is intended to be an eligible individual account plan, the
Plan shall have a 1 00 % investment limitation based on fair market value
of the total assets of the Plan with respect to the acquisition and
holding of qualifying employer securities, except that Employer elective
deferrals and amounts held in Transfer or Rollover Accounts, if any, shall
not be used to acquire or hold such securities.
1.05 PURPOSE OF THE PLAN. The purpose of the Plan is to encourage and assist
eligible employees (a) to adopt a regular savings and investment program,
(b) to shelter from current taxation income generated on funds invested in
the Plan, and (c) to help provide additional financial security for
retirement years.
1.06 EXCLUSIVE BENEFIT. This agreement has been adopted for the exclusive
benefit of the Participants (and their Beneficiaries). Except as provided
in Sections 4.10 and 11.05, under no circumstances shall any property of
the Trust, or any contributions of the Employer made pursuant to the terms
of this agreement be used for, or diverted to purposes other than for the
exclusive benefit of the Participants and their Beneficiaries for whom it
was established.
- ----------------
END OF ARTICLE I
8
<PAGE> 10
ARTICLE II
DEFINITIONS
The following words and terms shall have the meanings as hereinafter defined
unless the context of their usage plainly indicates otherwise.
ACCOUNT OR ACCOUNTS. The total interest of a Participant in the Trust Fund
consisting of one or more of the following Accounts which may be
established for him. The Plan Administrator may establish additional
Accounts for Participants as necessary, beyond those set out in this
Section 2.01, in order to carry out the purposes of this Plan. The
maintenance of individual accounts is only for accounting purposes. The
Accounts which may be established for each Participant as of the Effective
Date of this agreement are:
(a) MATCHING ACCOUNT. The account of a Participant credited with matching
contributions under Section 4.03, as adjusted for earnings and losses
attributable to such contributions.
(b) PRETAX ACCOUNT. The account of a Participant credited with pretax
contributions made under Section 4.01, as adjusted for earnings and
losses attributable to such contributions.
(c) DISCRETIONARY ACCOUNT. The account of a Participant credited with
discretionary Employer contributions under Section 4.06, as adjusted
for earnings and losses attributable to such contributions.
(d) ROLLOVER ACCOUNT. The account of a Participant credited with rollover
contributions made to the Plan pursuant to Section 4.06, as adjusted
for earnings and losses attributable to such contributions. In
addition, a Rollover Account shall be established for each
Participant who participated in the employee stock ownership portion
of the Plan before January 1, 1996. Upon termination of the employee
stock ownership portion of the Plan, such Rollover Account shall be
credited with the Company stock that was allocated to the
Participant's Company Stock account under the employee stock
ownership portion of the Plan on the date of such termination, and
shall thereafter be adjusted for earnings and losses attributable to
such transferred amounts (as the same may be invested and
reinvested).
(e) TRANSFER ACCOUNT. The account of a Participant credited with funds
transferred from qualified plans pursuant to Section 4.06, as
adjusted for earnings
9
<PAGE> 11
and losses attributable to such funds. A Participant may have the
following Transfer Accounts established for him:
(1) GSX TRANSFER ACCOUNT. This account shall be credited with
amounts transferred for the benefit of a Participant from the
GSX Corporation Employees' Flexible Retirement Benefit Plan.
(2) FIW TRANSFER ACCOUNT. This account shall be credited with
amounts transferred for the benefit of a Participant from the
FIW, Inc. Savings Plan.
(3) SW, INC. TRANSFER ACCOUNT. This account shall be credited with
amounts transferred for the benefit of a Participant from the
SW, INC. Savings and Investment Plan.
(4) GENSTAR TRANSFER ACCOUNT. This account shall be credited with
amounts transferred for the benefit of a Participant from the
Genstar Company Salaried Employees Thrift Plan.
(5) OSCO HOLDINGS, INC. TRANSFER ACCOUNT. This account shall be
credited with amounts transferred for the benefit of a
Participant from the OSCO Holdings, Inc. 401(k) Profit Sharing
Plan.
(6) USPCI TRANSFER ACCOUNT. This account shall be credited with
amounts transferred for the benefit of a Participant from the
USPCI, Inc. 401(k) Savings Plan.
(7) ROLLINS TRANSFER ACCOUNT. This account shall be credited with
amounts transferred for the benefit of a Participant from the
Rollins Environmental Services, Inc. 401(k) Savings Plan.
(8) SAFETY-KLEEN TRANSFER ACCOUNT. This account shall be credited
with amounts transferred for the benefit of a Participant from
the Safety-Kleen Corp. 401(k) Savings Plan.
ACTUAL DEFERRAL PERCENTAGE. Shall mean, for each Plan Year, the average of
the ratios within a specified group (calculated separately for each
eligible Employee in the specified group) of :
(a) The amount of pretax contributions made by the Employee pursuant to
Section 4.01 to be paid over to the Trust Fund on behalf of such
eligible Employee for such Plan Year, to
10
<PAGE> 12
(b) The eligible Employee's compensation (within the meaning of Section
414(s) of the Code) for such Plan Year calculated to the nearest
one-hundredth percent.
Each Plan Year the Employer may elect to include matching contributions
and/or profit sharing contributions as defined in Section 401(m)(4)(A) of
the Code which meet the requirements of Section 401(K)(2)(B) and (C) of
the Code in Subsection (a), above, in order to determine the Actual
Deferral Percentage of each eligible Employee.
[INTENTIONALLY OMITTED]
ADOPTION AGREEMENT. The agreement by which an Affiliate adopts the Plan
and Trust for its Employees.
AFFILIATE. Any corporation or organization which is not a member of a
controlled group of corporations but which may adopt this Plan with the
approval of the Board of Directors.
ANNIVERSARY DATE. December 31.
AUTHORIZED LEAVE OF ABSENCE. Any absence authorized by the Employer under
the Employer's standard personnel practices, provided that all persons
under similar circumstances must be treated alike in the granting of such
Authorized Leaves of Absence and provided further that the Participant
returns at the end of the period of authorized absence. Absence due to
mandatory military service in the Armed Forces of the United States
(including enlistment in lieu of impending mandatory service) shall be
considered as an Authorized Leave of Absence.
BENEFICIARY. A person or persons (natural or otherwise) designated by a
Participant or Former Participant in accordance with the provisions of
Section 9.01 to receive any death benefit which shall be payable under
this Plan. If a married Participant fails to designate a Beneficiary or if
a married Participant names a Beneficiary other than his Spouse and the
Spouse's consent is not on file with the Committee, the Participant's
entire account balance shall be paid to his Spouse.
BENEFITS COMMITTEE. The person(s) appointed by the Board of the Plan
Sponsor to assist in the administration of the Plan (except for those
matters within the purview of the Investment Committee). The Benefits
Committee shall serve at the pleasure of the Sponsor.
BOARD OF DIRECTORS. The Board of Directors of Laidlaw Environmental
Services, Inc. (the name of which will be changed to Safety-Kleen Corp.)
or any committee of the Board authorized to act on its behalf.
11
<PAGE> 13
BREAK IN SERVICE. For Employees whose service under the Plan is tracked on
the elapsed time method, a Break in Service is defined as a Period of
Severance under Section 2.40 of the Plan.
CODE. The Internal Revenue Code of 1986, as amended.
COMPANY STOCK. The presently authorized common stock of the Employer (or a
corporation which is a member of the same controlled group with the
meaning of Code Section 409(1)(4)) and any other stock into which such
stock may hereafter be changed, which constitutes "qualifying employer
securities" as "defined in Code Section 4975(e)(8) and which is Readily
Tradable on an Established Securities Market.
If the Company Stock as described above is not Readily Tradable on an
Established Securities Market then Company Stock shall mean the common
stock of the Employer (or a corporation which is a member of the same
controlled group within the meaning of Code Section 409(l)(4)) having a
combination of voting power and dividend rights equal to or in excess of:
(a) that class of common stock of the Employer (or of any other such
corporation) having the greatest voting power, and (b) that class of
common stock of the Employer (or of any other such corporation) having the
greatest dividend rights.
Company Stock shall also mean non-callable preferred stock if such stock
is convertible at any time into stock which meets the requirements of the
foregoing two paragraphs (whichever is applicable) and if such conversion
is at a conversion price which: (a) was fixed as of the date of
acquisition of such security by the Plan, and (b) such fixed price as of
the date of acquisition of such security by the Plan was reasonable.
Notwithstanding the foregoing, in accordance with regulations promulgated
by the Secretary of the Treasury, preferred stock which is callable shall
be treated as non-callable preferred stock (and therefore shall be
available under this Plan for acquisition as Company Stock) if after the
call there is a reasonable opportunity for a conversion which meets the
requirements described above for non-callable preferred stock.
For the purposes of this Plan and this Section 2.13, the term "Readily
Tradable" refers to a security that is listed on a national securities
exchange registered under Section 6 of the Securities and Exchange Act of
1934 or that is quoted on a system sponsored by a national securities
association registered under Section 15(A)(b) of such Act.
For the purposes of this Plan and this Section 2.13, the term "Trading
Limitation" means a restriction under any Federal or state securities law
or any regulation thereunder or an agreement not prohibited by applicable
law or regulation affecting such share that makes such share not as freely
tradable as one not subject to such restriction or agreement.
For purposes of this Plan and this Section 2.13, the term "Established
Securities Market" shall refer to a national securities exchange
registered under the Securities Exchange Act
12
<PAGE> 14
of 1934 where securities are quoted on a system sponsored by a national
securities association registered under Section 15(A)(b) of the Securities
Exchange Act.
For the purposes of establishing the fair market value of Company Stock
which is not traded on an Established Securities Market, all valuations of
Company Stock not so readily tradable shall be determined by an
independent appraiser (as defined in Code Section 170(a)(1)) on an annual
basis (or more frequently as necessary with respect to specific
transactions of the Plan involving such Company Stock). The independent
appraiser shall be independent of any party to any transaction as required
under Regulation Section 54.4975-1(b)(9).
COMPENSATION. The Participant's W-2 compensation, excluding expense
allowances, unpaid earnings, non-qualified deferred compensation, amounts
realized from the exercise of a non-qualified stock option, bonuses,
overtime and other special non-recurring payments and including any
amounts deferred under a salary deferral plan or salary reduction plan
sponsored by the Employer.
Compensation shall be measured from the beginning of the Plan Year except
that for any year, Compensation shall not include Compensation paid while
an Employee is not a Participant.
Compensation in excess of $150,000 (as adjusted by the Commissioner of the
Internal Revenue Service) shall be disregarded. This definition shall be
used in determining allocated benefits under the Plan.
COMPUTATION PERIODS. The Computation Period for Eligibility and
Participation Purposes and the Computation Period for Vesting Purposes
shall be as follows:
(a) ELIGIBILITY AND PARTICIPATION: The Computation Period for Eligibility
and Participation Purposes shall be measured on the twelve
consecutive month period beginning with an Employee's Employment
Commencement Date (or Reemployment Commencement Date) and each
anniversary thereof.
(b) VESTING: The Computation Period for Vesting purposes shall be
measured on the twelve consecutive month period beginning with an
Employee's Employment Commencement Date (or Reemployment Commencement
Date) and each anniversary thereof.
CONTRIBUTION PERCENTAGE. The contribution percentage for a specified group
of Employees for a Plan Year shall be the average of the ratios
(calculated separately for each Employee in the specified group) of:
13
<PAGE> 15
(a) the sum of the matching Contributions paid under the Plan on behalf
of such Employee for such Plan Year, to
(b) the Employee's compensation (within the meaning of Section 414(s) of
the Code) for such Plan Year calculated to the nearest one-hundredth
percent.
Each Plan Year the Employer may elect to: (i) include pretax contributions
which meet the requirements of Section 401(m)(4) of the Code in Subsection
(a) above, in order to determine the Contribution Percentage of each
Participant; and/or (ii) make additional matching or discretionary
contributions which meets the requirements of Code Section 401(m)(4).
Notwithstanding anything contained herein to the contrary, such additional
matching or discretionary contributions shall be allocated
disproportionately in favor of the non-Highly Compensated Employees.
DISABILITY. A physical or mental condition which permanently prevents an
Employee from satisfactorily performing his usual duties for the Employer
or the duties of such other position or job which the Employer makes
available to him and for which such Employee is qualified by reason of his
training, education or experience. The determination as to whether a
Participant is disabled shall be made on evidence that the Participant is
eligible for disability benefits under the Federal Social Security Act.
EARLY RETIREMENT DATE. The first day of the month coincident with or next
following the Participant's attainment of age fifty-five (55) following
completion of five (5) Years of Service for Vesting Purposes.
EFFECTIVE DATE. The original Effective Date of this Plan is September 1,
1990. The Effective Date of this restatement of the Plan is August 1,
1998.
EMPLOYEE. A Full-time or part-time Employee on or after the Effective Date
who is receiving remuneration for personal services rendered to the
Employer (or who, were it not for being on an Authorized Leave of Absence
would be receiving such remuneration). The term "Employee" shall include
Leased Employees, but excludes Temporary Employees as defined in Section
2.51.
Notwithstanding the preceding paragraph, a Leased Employee shall not be
considered to be an Employee of the Employer if:
a) such employee is covered by a money purchase pension plan providing:
(1) a nonintegrated employer contribution rate of at least ten
percent of compensation as defined in Code Section 415(c)(3),
but including amounts contributed by the employer pursuant to a
salary reduction agreement which are excludable from the
employee's gross income under Section 125, Section 402(a)(8),
Section 402(h) or Section 403(b) of the Code,
14
<PAGE> 16
(2) immediate participation,
(3) full and immediate vesting, and
(b) Leased Employees do not constitute more than twenty percent of the
Employer's non-Highly compensated workforce.
(c) If a Leased Employee is treated as an Employee under the Plan (and
cannot be excluded from participation because he is not in a safe
harbor plan described in Section 2.20(a) above), the Committee shall
reduce a Leased Employee's allocation of Employer contributions (if
any) under this Plan by the Leased Employee's allocation under the
leasing organization's plan, but only to the extent that allocation
is attributable to the Leased Employee's service provided to the
Employer.
EMPLOYMENT COMMENCEMENT DATE. The date on which an Employee first
completes an Hour of Service.
EMPLOYER. Laidlaw Environmental Services, Inc. (the name of which has been
changed to Safety-Kleen Corp.) and its Subsidiaries and any Affiliate
which shall adopt this Plan, or any successor which shall assume the
obligations of this Plan. Any other Affiliate which is acquired subsequent
to the Effective Date shall be considered an Employer under the Plan
subject to the approval of the Board, and a resolution of the Affiliates'
own board of directors.
ENTRY DATE. The earlier of January 1 or July 1 (or such other date the
Committee may designate in a nondiscriminatory manner) coincident with or
next following the date the Employee has satisfied the requirements of
Section 3.01.
ERISA. Public Law No. 93-406, the Employee Retirement Income Security Act
of 1974, as amended from time to time.
FAMILY MEMBER. With respect to any Employee (and particularly in
determining Highly Compensated Employees), Family Member means the spouse,
lineal ascendants and descendants of the Employee or former Employee and
the spouses of such lineal ascendants and descendants.
FIDUCIARIES. The Employer, the Sponsor, the Benefits Committee, the
Investment Committee and the Trustee, but only with respect to the
specific responsibilities of each for Plan and Trust administration, all
as described in Articles VIII and IX.
15
<PAGE> 17
FORMER PARTICIPANT. A Participant whose employment with the Employer has
terminated but who has a vested account balance under the Plan which has
not been pain in fun.
HIGHLY COMPENSATED EMPLOYEE. Any eligible Employee who:
(a) was a five percent owner at any time during the year of the preceding
year; or;
(b) received compensation from the Employer for the preceding year in
excess of $80,000.
The $80,000 and $85,485 threshold amount in (b) above shall be
adjusted for cost-of-living increases each year by the Secretary of
the Treasury.
Compensation. For purposes of this definition, "Compensation"
includes:
(1) 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 (including, but not limited to, commissions
paid salesmen, compensation for services on the basis of a
percentage of profits, and bonuses), including elective
contributions made by the Employer on the Employee's behalf.
(2) In the case of a Participant who is an Employee within the
meaning of Code Section 401(c)(1) and the regulations
thereunder, the Participant's earned income.
(3) Amounts described in Code Section 104(a)(3), 105(a) and 105(h),
but only to the extent that these amounts are includable in the
gross income of the Employee.
(4) Amounts paid or reimbursed by the Employer for moving expenses
incurred by the Employee, but only to the extent that these
amounts are not deductible by the Employee under Code Section
217.
(5) The value of a non-qualified stock option granted to an Employee
by the Employer, but only to the extent that the value of the
option is includable in gross income of the Employee for the
taxable year in which granted.
(6) The amount includable in the gross income of an Employee upon
making the election described in Code Section 83(b).
16
<PAGE> 18
(7) Elective contributions excludable from the Employee's gross
income under Code Section 402(a)(8) (relating to a Code Section
401(k) arrangement), Code Section 402(h) (relating to a
Simplified Employee Pension), Code Section 125 (relating to a
cafeteria plan) or Code Section 403(b) (relating to a
tax-sheltered annuity).
The term "Compensation" does not include:
(1) Employer contributions, other than "elective contributions," to
a plan of deferred compensation to the extent the contributions
are not included in the gross income of the Employee for the
taxable year in which contributed. Also not included are
Employer contributions on behalf of an Employee to a Simplified
Employee Pension Plan to the extent such contributions are
excludable from the Employee's gross income and any
distributions from a plan of deferred compensation, regardless
of whether such amounts are includable in the gross income of
the Employee when distributed.
(2) Amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by an
Employee either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture.
(3) Amounts realized from the sale, exchange or other disposition of
stock acquired under a qualified stock option.
(4) Other amounts which receive special tax benefits, such as
premiums for group term life insurance (but only to the extent
that the premiums are not includable in the gross income of the
Employee).
Determination of highly compensated. The Benefits Committee must make
the determination of who is a Highly Compensated Employee, consistent
with Code Section 414(q) and regulations issued under that Code
Section. Employers aggregated under Code Section and 414(b), (c), (m)
or (o) are treated as a single employer.
The Employer will make the determination of who is a Highly
Compensated Employee based on a determination year which is the Plan
Year. The look-back year used to determine Highly Compensated
Employees is the 12 month period immediately preceding the
determination year except that the Employer may elect to use the
calendar year ending with or within the determination year as
prescribed by Treasury regulations. A calendar year election must
apply to all plans and arrangements of the Employer.
17
<PAGE> 19
Former Employee. 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. If the former Employee's Separation from Service occurred
prior to January 1, 1987, he is a Highly Compensated Employee only if
he satisfied clause (a) of this Section 2.28 or received Compensation
in excess of $50,000 during: (1) the year of his Separation from
Service (or the prior year); or (2) any year ending after his 54th
birthday.
Nondiscrimination. For purposes of determining whether the Plan
discriminates in favor of Highly Compensated Employees,
"Compensation" means Compensation as defined in this Section 2.28.
The Employer also may elect to use an alternate nondiscriminatory
definition, in accordance with the requirements of Code Section
414(s) and the regulations issued under that Code Section.
HOUR OF SERVICE
(a) Each hour for which an Employee is paid, or entitled to payment, for
the performance of duties for the Employer. These hours shall be
credited to the Employee for the computation period or periods in
which duties are performed;
(b) Each hour for which an Employee is paid, or entitled to payment, by
the employer on account of a period of time during which no duties
are performed (irrespective of whether the employment relationship
has terminated) due to vacation, holiday, illness, incapacity
(including disability), layoff, jury duty, military duty or
Authorized Leave of Absence. No more than 501 Hours of Service shall
be credited under this paragraph for any single continuous period
(whether or not such period occurs in a single computation period).
Hours under this paragraph shall be calculated and credited pursuant
to Section 2530.200b2 of the Department of Labor Regulations which
are incorporated herein by this reference; and
(c) Each hour for which back pay, irrespective of mitigation of damages,
is either awarded or agreed to by the Employer. The same Hours of
Service shall not be credited both under paragraph (a) or paragraph
(b), as the case may be, and under this paragraph (c). These hours
shall be credited to the Employee for the computation period or
periods to which the award or agreement pertains rather than the
computation period in which the award, agreement or payment is made.
18
<PAGE> 20
(d) Hours of Service shall be determined on the basis of actual hours for
which an Employee is paid or entitled to payment.
(e) The above provisions shall be construed so as to resolve any
ambiguities in favor of crediting Employees with Hours of Service.
(f) An Hour of Service respecting any member of a controlled group of
corporations (as defined under Section 414(b) of the Code) or an
affiliated service group (as defined in Section 414(m) of the Code)
of which the Employer is a member, or respecting any incorporated or
unincorporated trade or business which is under common control with
the Employer (as defined in Section 414(c) of the Code) shall be
credited as an Hour of Service with the Employer.
(g) Hours of Service also will be credited for any individual considered
an Employee for purposes of this Plan under Section 414(n) of the
Code.
INCOME. The net gain or loss of the Trust Fund from investments, as
reflected by interest payments, realized and unrealized gains and losses
on securities, other investment transactions and expenses paid out of the
Trust Fund. In determining the Income of the Trust Fund for any period,
assets shall be valued on the basis of fair market value.
INVESTMENT COMMITTEE. The person(s) appointed by the Board of the Sponsor
to assist in matters relating to the investment of Plan assets. The
Investment Committee shall serve at the pleasure of the Sponsor.
INVESTMENT MANAGER. Any person, firm or corporation who:
(a) is a registered investment advisor under the Investment Advisors Act
of 1940;
(b) is a bank or an insurance company;
(c) has the power to manage, acquire or dispose of Plan assets; and
(d) acknowledges in writing his fiduciary responsibility to the Plan.
LEASED EMPLOYEE(S). Any person (other than an Employee of the Employer)
who pursuant to an agreement between the Employer and any other person (a
"leasing organization") has performed services for the Employer (or any
other organization described in Code Section 414(n)(6) which is related to
the Employer) on a substantially Full-time basis for a period of at least
one (1) year, and such services are of a type historically performed by
Employees in the business field of the Employer. Any contributions or
benefits provided under the Plan to a Leased Employee by a leasing
organization which are attributable to services performed for the Employer
shall be treated as provided by the Employer.
19
<PAGE> 21
LIMITATION YEAR. The Limitation Year shall be the Plan Year.
MONTH OF SERVICE. A Participant shall be credited with a full Month of
Service for each full calendar month during the Computation Period which
is concurrent with a calendar month within his Period of Service, and
shall be credited with a partial Month of Service (prorata based on days
of service) for each partial month during the Computation Period which is
concurrent with a calendar year within his Period of Service.
NORMAL RETIREMENT AGE. Sixty-five (65) years of age. With respect to
amounts credited to Transfer Accounts, the determination of vesting and
the timing of distribution of those amounts shall be determined using the
Normal Retirement Age of the Plan from which such amounts were
transferred.
NORMAL RETIREMENT DATE. The date on which a Participant actually
terminates from service following the attainment of Normal Retirement Age.
PARTICIPANT. An Employee who has satisfied the eligibility requirements to
participate and who has actually become a member of the Plan and is
participating in accordance with the provisions of Article III.
PAYROLL PERIOD. Any monthly period over which pretax contributions
discussed in Section 4.01 are made and administered.
PERIOD OF SERVICE. For the purposes of eligibility, participation and
vesting, the term Period of Service shall mean the period that begins on a
Participant's Employment Commencement Date (or Reemployment Commencement
Date) and ends on his Severance from Service Date.
PERIOD OF SEVERANCE. A twelve (12) consecutive month period which begins
on a Participant's Severance from Service Date and ends on the date which
is twelve months later. A Period of Severance also ends on a Participant's
Reemployment Commencement Date.
PLAN. The Safety-Kleen Corp. 401(k) Savings Plan (formerly known as the
Laidlaw Environmental Services, Inc. 401(k) Savings Plan), which is the
Plan set forth herein, and as amended from time to time.
PLAN ADMINISTRATOR (ALSO REFERRED TO AS "ADMINISTRATOR" AND "COMMITTEE").
The Benefits Committee.
PLAN SPONSOR (ALSO REFERRED TO AS "SPONSOR"). Safety-Kleen Services, Inc.
20
<PAGE> 22
PLAN YEAR. The Plan's accounting year of twelve consecutive months ending
on December 31.
PRIOR PLAN. The Laidlaw Savings Plan under which Participants in this Plan
may have accrued benefits prior to September 1, 1990.
REEMPLOYMENT COMMENCEMENT DATE. The date on which an Employee again
performs an Hour of Service following his Severance from Service Date or
termination of employment.
SERVICE SPANNING RULES. For purposes of eligibility and vesting, the
Service Spanning Rules shall operate as follows:
(a) If a Participant quits, retires or is discharged and then performs an
Hour of Service prior to the first anniversary of his Severance from
Service Date, his Period of Severance shall be counted as a Period of
Service for eligibility and vesting purposes.
(b) Notwithstanding (a) above, if a Participant is absent from service
for any other reason than as set out in (a), and if prior to the
first anniversary of the original date of his absence he quits,
retires or is discharged and then performs an Hour of Service, his
Period of Severance shall be counted as a Period of Service for
eligibility and vesting purposes.
SEVERANCE FROM SERVICE DATE. The earlier of the date on which an Employee
quits, retires, is discharged, or dies, or the first anniversary of the
first date of a period during which an Employee is absent from service for
any other reason.
SPOUSE. The spouse of an Employee who was legally married to the Employee
under the laws of the jurisdiction in which the marriage was contracted
prior to the Employee's death or actual retirement date. Also see
definition of Surviving, Spouse at Section 14.02(c).
SUBSIDIARY. Subsidiary shall mean: (a) any corporation or organization,
other than an Employer, which is a member of a controlled group of
corporations (within the meaning of Section 414(b) of the Code) or of an
affiliated service group (within the meaning of Section 414(m) of the
Code) with respect to which an Employer is also a member; (b) any
incorporated or unincorporated trade or business which along with an
Employer is under common control (within the meaning of the regulations
from time-to-time promulgated by the Secretary of the Treasury pursuant to
Section 414(c) of the Code); and (c) any other incorporated or
unincorporated trade or business which is designated by the Board of
Directors of the Sponsor as an Affiliate for the purposes of this Plan. In
determining
21
<PAGE> 23
the applicable Annual Addition under Section 4.09 of the Plan, Section
414(b) and (c) of the Code shall be applied as modified by Section 415(h)
of the Code.
TEMPORARY EMPLOYEE. Any employee hired for a specific project(s) after
which time the project(s) is completed, the Temporary Employee's
employment will be terminated.
TOP PAID GROUP. The Employees which as a group constitute the top twenty
percent of all Employees when ranked on the basis of compensation (as
determined under Code Section 414(q)(7)) for the Plan Year.
TRUST AGREEMENT. The Safety-Kleen Corp. 401(k) Savings Trust Agreement
(formerly known as the Laidlaw Environmental Services, Inc. 401(k) Savings
Trust Agreement, a separate agreement entered into between the Sponsor and
the Trustee establishing the Trust which forms part of this Plan.
TRUST FUND, TRUST OR FUND. The Plan assets held in trust by the Trustee,
constituting the fund to which contributions are made and from which
benefits are provided.
TRUSTEE. Any duly appointed, qualified and acting trustee or successor
trustee which assumes responsibility and liability for the Plan assets
under such terms acceptable to the Trustee and upon execution of such
document or documents acceptable to the Trustee evidencing acceptance of
Plan assets and liabilities by such successor trustee.
VALUATION DATE. Every date on which the New York Stock Exchange is open.
YEARS OF SERVICE FOR ELIGIBILITY, PARTICIPATION AND VESTING PURPOSES.
Prior to the Effective Date of this Plan, a Participant's Years of Service
for Eligibility, Participation and Vesting Purposes shall be determined
under the provisions of the Prior Plan. Years of Service for service
between the Effective Date of this Plan and June 30, 1995 shall be
determined under the provisions of the Plan as restated on December 30,
1993. Service after June 30, 1995 for all Plan purposes shall be measured
according to the elapsed time method for all Employees, whether full-time
or part-time, and the service of part-time Employees shall no longer be
measured according to the hours of service method.
Employees shall receive credit for a Year of Service for Eligibility,
Participation or Vesting Purposes as follows:
(a) ELIGIBILITY AND PARTICIPATION. An Employee shall receive credit for a
Year of Service for Eligibility and Participation Purposes for each
Computation Period for Eligibility and Participation Purposes in
which he completes twelve
22
<PAGE> 24
consecutive Months of Service, unless such service can be disregarded
under the Break in Service rules.
(b) VESTING. An Employee shall receive credit for a Year of Service for
Vesting Purposes for each Computation Period for Vesting Purposes in
which he completes twelve consecutive Months of Service, unless such
service can be disregarded under the Break in Service rules.
Years of Service with any participating or non-participating
Affiliate or Subsidiary shall be treated as Years of Service with the
Employer. An Employee who transfers from the participating Employer
to another participating Affiliate or Subsidiary or from a
non-participating Affiliate or Subsidiary to a participating
Affiliate or Subsidiary shall continue to be covered by this Plan
without interruption and shall not be considered to have incurred a
termination of service.
Notwithstanding anything in this Plan to the contrary, a
Participant's nonforfeitable interest in his Transfer Accounts shall
not be less than his nonforfeitable interest determined under the
service crediting method in effect under the plan from which his
Transfer Account derived.
(c) BREAK IN SERVICE RULES.
(1) If a Participant who had a nonforfeitable interest in benefits
derived from Employer contributions under the Plan incurs a
Break in Service and then again returns to employment with the
Employer, his Years of Service before and after the Break in
Service shall count towards determining his Years of Service for
all purposes under the Plan.
(2) If a Participant who had no nonforfeitable interest in benefits
derived from Employer contributions under the Plan, his Years of
Service before the Break in Service shall count towards
determining his Years of Service for all purposes under the Plan
only if the number of the Participant's consecutive Breaks in
Service was less than the greater of:
(a) the number five, or
(b) the aggregate number of a Participant's Years of Service
before the consecutive Breaks in Service being measured.
Years of Service prior to any Break in Service which have
been previously disregarded by operation of these Break in
Service rules shall not be taken into account.
23
<PAGE> 25
(3) If a Participant who had a nonforfeitable interest in benefits
derived from Employer contributions under the Plan incurs five
consecutive one year Breaks in Service, service rendered after
such Breaks in Service shall not be taken into account in
determining the nonforfeitable percentage of a Participant's
Accounts derived from Employer contributions for service
completed before such Breaks in Service.
- -----------------
END OF ARTICLE II
24
<PAGE> 26
ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.01 ELIGIBILITY FOR PARTICIPATION. Employees shall be eligible for
participation in the Plan in accordance with the following:
(a) Each Employee who was a Participant in the Prior Plan as in effect
immediately before the Effective Date of this Plan shall be a
Participant under this Plan.
(b) Each Employee shall become a Participant in the Plan on the Entry
Date coincident with or next following the date on which he: (1)
completes one Year of Service for Eligibility and Participation
Purposes and (2) completes an application for participation in
accordance with Section 3.02 below.
(c) Employees whose employment is governed by a collective bargaining
agreement between Employee representatives and the Employer under
which retirement benefits were found to be the subject of good faith
bargaining between the parties shall not be eligible to participate
in the Plan unless such bargaining agreement specifically provides
for such coverage.
(d) Nonresident aliens who receive no earned income from the Employer
which constitutes income from sources within the United States shall
not be eligible to participate in this Plan.
(e) United States citizens employed by a foreign affiliate (any foreign
entity in which the Employer has not less than a ten percent
interest) shall be eligible to become a Participant in the Plan
provided the Employer has entered into an agreement with the
Secretary of the Treasury pursuant to Section 3121(l) of the Code.
(f) Employees who are covered by another plan qualified under Code
Section 401 which is sponsored by an Employer shall not be eligible
to participate in the Plan.
(g) Each Employee who becomes an Employee by reason of a business
acquisition described in Section 4.06 below shall be eligible to
become a Participant under this Plan as soon as he becomes an
Employee if such Employee was a participant in a 401(k) plan
maintained by the Target Company or by the company whose business
assets were acquired, and if such Employee was making contributions
to such 401(k) plan by payroll deduction immediately prior to such
business acquisition.
3.02 APPLICATION FOR PARTICIPATION. The Benefits Committee shall notify
prospective eligible Employees of their eligibility to participate in the
Plan. In order to
25
<PAGE> 27
become a Participant hereunder, each Employee must make application to the
Benefits Committee for participation in the Plan and agree to the terms
hereof. The Employee shall supply all information, including a designation
of Beneficiary form, required by the Benefits Committee in such manner and
at such time as determined by the Benefits Committee. Upon the crediting
to the Account of any Employee of any amounts under this Plan, such
Employee shall automatically be bound by the terms and conditions of this
Plan and all amendments hereto.
3.03 OMISSION OF ELIGIBLE EMPLOYEE. If, in any year, any Employee who is
eligible and made application for participation in the Plan pursuant to
this Article is, due to administrative error, omitted and discovery of
such omission is not made until after a contribution has been made by the
Employer for the year, the Employer shall make a subsequent contribution
with respect to the omitted Employee in the amount which the Employer
would have contributed with respect to him had he not been omitted. Such
contribution shall be made whether or not it is deductible in whole or in
part in any taxable year under applicable provisions of the Code.
3.04 INCLUSION OF INELIGIBLE EMPLOYEE. If, in any year, any person who should
not have been included as a Participant in the Plan is erroneously
included and discovery of such incorrect inclusion is not made until after
a contribution by the Employer has been made for the Plan Year, the
Employer shall be entitled to recover the contribution made with respect
to the ineligible person whether or not a deduction is allowed with
respect to such contribution to the extent allowed by Section 4. 10.
Notwithstanding the foregoing, the Employer may elect in its sole
discretion to treat any amounts which it would be entitled to recover
under the previous sentence as a forfeiture or as matching and/or
discretionary contributions, whether or not a deduction is allowed with
respect to amounts treated as Contributions.
If an ineligible Employee has made pretax contributions to the Plan in
accordance with Section 4.01, then notwithstanding Section 4. 10, the
Employer shall direct the Trustee to return such contributions (unadjusted
for any gain or loss).
3.05 PARTICIPATION BY FORMER PARTICIPANTS. An Employee who is a Former
Participant who had a nonforfeitable right in his Account at the time of
his termination of service shall be eligible to participate immediately
upon his completion of one Hour of Service.
A Former Participant who did not have a nonforfeitable right to a portion
of his Account at the time of his termination shall be eligible to
participate in the Plan immediately upon his rehire if (a) he is rehired
before he incurs a Break in Service, or (b) he is rehired after a Break in
Service but his prior service cannot be disregarded under the Break in
Service rules under Section 2.57(c) and Code Section 410(a)(5).
26
<PAGE> 28
Any other Former Participant who is an Employee must satisfy the
eligibility requirements in Section 3.01 if his consecutive one year
Breaks in Service equal or exceed the greater of the number five or the
aggregate number of his pre-break Years of Service. An Employee's prior
Years of Service for Eligibility and Vesting Purposes shall be counted
unless they can be disregarded under the Break in Service rules under
Section 2.57(c) and Code Section 4.10(a)(5).
3.06 IMMEDIATE PARTICIPATION IN CASE OF PLAN MERGERS. Employees who
participated in tax-qualified retirement plans which are merged into the
Plan and who have credit for at least one Year or Service on the effective
date of such plan merger shall be eligible to participate in the Plan and
shall be admitted to the Plan on the effective date of such merger
(regardless of whether or not they are laid off in connection with the
business acquisition relating to such plan merger), provided that the
Employee satisfies all criteria for eligibility other than length of
service.
- ------------------
END OF ARTICLE III
27
<PAGE> 29
ARTICLE IV
ALLOCATION OF CONTRIBUTIONS AND FORFEITURES
4.01 PRETAX CONTRIBUTIONS. For any Plan Year, each Participant may enter into a
salary reduction agreement in which he elects to have allocated to his
Pre-Tax Account a percentage of his "Base Pay" (as that term is defined in
Section 4.03) (his "pretax contribution") in one percent increments to a
maximum of 15%.
(a) TIMING OF SALARY REDUCTION AGREEMENTS. All salary reduction
Agreements shall be made at the time, in the manner and subject to
the conditions specified by the Benefits Committee which shall
prescribe uniform and nondiscriminatory rules for such agreements.
(b) AMOUNT OF PRETAX CONTRIBUTIONS. Pretax contributions for each Plan
Year shall not exceed the amount specified in Code Section 402(g)(1).
If a Participant exceeds the limit imposed by Code Section 402(g)(1),
the Benefits Committee shall distribute such "excess deferrals"
(amounts contributed in excess of the limitations imposed by Code
Section 402(g)(1)) no later than the April 15 following the close of
the Plan Year. The excess deferrals to be distributed shall be
adjusted for income or loss in accordance with the regulations and
procedures promulgated by the Internal Revenue Service. If a
Participant participates in another plan under which he makes
elective deferrals pursuant to a Code 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 Benefits
Committee a written claim for excess deferrals made for a calendar
year. The Participant 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 Participant's elective deferrals under
this Plan which are excess deferrals. If the Benefits Committee
receives a timely claim, it will distribute the excess deferral (as
adjusted for allocable income) the Participant has assigned to this
Plan.
(c) AMENDING SALARY REDUCTION AGREEMENTS. A Participant may change the
rate of pretax contributions to his Pre-Tax Account over each
calendar quarter each Plan Year, provided the Benefits Committee
receives the amended salary reduction agreement at least fifteen days
prior to the effective date of the change. Amended salary reduction
agreements shall be effective as of the first day of the first full
Payroll Period beginning after the January 1, April 1, July 1 or
October 1, whichever is earlier, following receipt of the notice of
the change. Amended salary reduction agreements that are received
within fifteen days of the proposed effective date of the change
shall not be effective until the first day of the first day of the
first Payroll Period beginning after the next following January 1,
28
<PAGE> 30
April 1, July 1 or October 1, as the case may be. Provided, however,
that a Participant who was entitled to receive short-term disability
benefits from his Employer and who ceased making pretax contributions
to the Plan due to a reduction in compensation caused by such
disability may file an amended salary reduction Agreement to increase
his pretax contributions at any time within ninety (90) days after
the end of his short-term disability benefit payment period.
(d) SUSPENDING AND RESUMING PRETAX CONTRIBUTIONS. A Participant may
suspend his salary reduction agreement at any time during the year
with respect to Compensation not yet paid. Notification of the
suspension must be provided to the Benefits Committee and the
effective date of the suspension will be as soon as administratively
practicable. Any Participant who suspends his salary reduction
agreement shall not thereafter recommence pretax contributions until
after the next following January 1, April 1, July 1, or October 1.
(e) TIME FOR DEPOSIT OF PLAN ASSETS IN TRUST FUND. Pretax contributions
shall be paid to the Trustee as soon as administratively feasible
after the date withheld, but in no event later than ninety days after
the date the pretax contributions are withheld or at such earlier
time as may be required by regulations under Section 401(k) of the
Code. Pretax contributions shall be made in cash.
(f) TIMING OF SALARY REDUCTION CONTRIBUTIONS. Salary reduction
contributions shall be required as a percentage of Base Pay, except
that the salary reduction contributions for Participants who desire
to contribute the maximum amount permitted under Code Section
402(g)(1) for a particular Plan Year shall be fixed periodic dollar
amounts.
(g) CERTAIN FORMER ROLLINS EMPLOYEES. Any Participant formerly employed
by Rollins Environmental Services, Inc. who was admitted to
participation in the Plan in connection with the Rollins merger
pursuant to Section 3.06 above and who was laid off in connection
with such merger shall be permitted to make pretax contributions to
the Plan with respect to severance pay received by such Participant
as a result of such lay off (which shall be included in the "Base
Pay" of such Participant for this purpose). Employer matching
contributions shall be made with respect to such pretax contributions
as provided in Section 4.03 below.
(h) CERTAIN FORMER SAFETY-KLEEN EMPLOYEES. Any Participant formerly
employed by Safety-Kleen Corp. (as it existed before its acquisition
by Laidlaw Environmental Services, Inc.), who was admitted to
participation in the Plan in connection with such acquisition
pursuant to Section 3.06 above and who was laid off in connection
with such acquisition shall be permitted to make pretax
29
<PAGE> 31
contributions to the Plan with respect to severance pay received by
such Participant as a result of such lay off (which shall be included
in the "Base Pay" of such Participant for this purpose). Provided,
however, that no employer matching contributions shall be made with
respect to such pretax contributions.
4.02 DISCRETIONARY EMPLOYER CONTRIBUTIONS. The Employer may, for each Plan
Year, contribute to the Trust an amount as determined by the Board of
Directors of the Employer ("discretionary contributions"). Except as
otherwise set forth in Section 4.02(d) below, no such contribution is
required for any Plan Year.
(a) Each Participant who is eligible to share in discretionary
contributions made during the Plan Year shall have credited to his
Discretionary Account his share of discretionary contributions.
(b) As of the last day of each Plan Year, discretionary contributions
shall be allocated equally to all Participants who have been Eligible
Employees and have been actively employed for the entire Plan Year,
whether or not the Participant has made pre-tax contributions. No
contribution shall be made by or on behalf of any Participant who is
not an Employee as of the last day of the Plan Year.
(c) Employer contributions shall be made no later than the date
prescribed by law for filing the Employer's federal income tax
return, including extensions, for the taxable year in which the Plan
Year ends. Employer contributions shall be made in cash or in other
such property acceptable to the Trustee.
(d) During the period from January 1, 1994 through July 31, 1998, the
annual discretionary contribution made for Participants eligible to
share in such contributions was determined according to the following
formula:
<TABLE>
<CAPTION>
ACTUAL EBIT DISCRETIONARY
COMPARED TO BUDGETED EBIT CONTRIBUTION
------------------------- -----------------
<S> <C>
Less than 90% $100
90% - 94.99% 0.75% of Base Pay
95% - 99.99% 1.50% of Base Pay
100% - 104.99% 2.25% of Base Pay
105% or more 3.00% of Base Pay
</TABLE>
"EBIT" for this purposes shall mean "earnings before income taxes" on
a consolidated basis of the corporate group of which the Plan Sponsor
is a member, as determined in accordance with generally accepted
accounting principles. The discretionary employer contribution made
with respect to the period from January 1, 1998 to July 31, 1998
shall be calculated based on EBIT for the period from
30
<PAGE> 32
September 1, 1997 to August 31, 1998. No contribution shall be made
under this Section 4.02(d) for any period after July 31, 1998.
4.03 MATCHING EMPLOYER CONTRIBUTIONS. The Employer may, for each Plan Year,
contribute to the Plan an amount as determined by the Board of Directors
of the Employer specifically dedicated to matching all or a portion of a
Participant's pre-tax contributions ("matching contributions").
(a) Each Participant who is eligible to share in matching contributions
made during the Plan Year shall have credited to his Matching Account
his share of matching contributions.
(b) For Plan Years beginning on or after January 1, 1998, the Employer
shall make, and there shall be allocated to Participants who made
pre-tax contributions, a matching contribution in the amount of $0.75
for each $1.00 of pre-tax contributions up to six percent (6%) of
the Participant's Compensation (matching contribution not to exceed
three percent (3%) of Compensation per Participant). The matching
contributions under this Section 4.03(b) shall be allocated each
Valuation Date to all Participants who made pre-tax contributions
since the immediately preceding Valuation Date.
(c) For purposes of this Section 4.03, the term "Base Pay" shall mean a
Participant's regular pay and commissions, but excluding bonuses,
overtime, car allowances, and other special pay. "Base pay" shall
also exclude commissions paid prior to August 1, 1998.
(d) If allocating the matching contributions would cause discrimination
pursuant to Section 4.08, the excess matching contributions shall be
distributed or allocated in accordance with Section 4.08(d) of the
Plan.
(e) Employer contributions shall be made no later than the date
prescribed by law for filing the Employer's federal income tax
return, including extensions, for the taxable year in which the Plan
Year ends. Employer contributions shall be made in cash or in other
such property acceptable to the Trustee.
4.04 [INTENTIONALLY OMITTED]
4.05 ALLOCATION OF FORFEITURES. Amounts forfeited pursuant to Section 6.02 of
the Plan shall be allocated to Participants who made pre-tax contributions
at any time during the Plan Year and who are still employed by the
Employer at the end of the Plan Year; forfeitures shall be allocated on
the ratio that the total of a Participants' individual inception-to-date
Employer matching contributions bears to the total of all Participants'
31
<PAGE> 33
individual inception-to-date Employer matching contributions; forfeitures
shall be allocated to the Discretionary Accounts of the Participants.
4.06 ROLLOVERS AND TRANSFERS. Assets may be rolled or transferred into the Plan
for an Employee either before or after such Employee has become a
Participant in the Plan except that no such rollover or transfer shall
occur before an Employee has become a Participant in the Plan unless the
Benefits Committee reasonably expects that such Employee will become
eligible to participate in the Plan. Such amounts shall not be taken into
account in determining the Annual Additions limitations under the Plan.
(a) Assets may be transferred immediately into the Plan with respect to a
group of Employees from another tax-qualified retirement plan (the
"Transferor Plan") if each of the following conditions is satisfied:
(1) The Employees become Employees by reason of (A) the acquisition
by the Employer (or by its Subsidiary or Affiliate) of stock of
a corporation which becomes a Subsidiary or Affiliate of the
Employer as a result of such acquisition and which adopts the
Plan (the "Target Company"), or (B) the acquisition of
substantially all of the assets of a business by the Employer
(or by its Subsidiary or Affiliate which has adopted the Plan);
and
(2) The Transferor Plan was maintained by the Target Company (or its
affiliate) or by the company whose assets were acquired (or its
affiliate); and
(3) All assets held by the Transferor Plan for the account of such
Employees are transferred directly into the Plan from the
Transferor Plan.
(b) Any rollover or transferred amounts do not consist of nondeductible
voluntary contributions made to another plan or deductible voluntary
contributions defined in Section 219(e)(3) of the Code.
(c) The rollover or transferred contribution complies with all
requirements of Code Sections 402(a)(5), 403(a)(4), or
408(d)(3)(A)(ii), whichever is applicable.
(d) [INTENTIONALLY OMITTED]
(e) Any transferred amounts from plans of unrelated employers are
accompanied by a certificate from the custodian or trustee of the
transferor plan stating that:
(1) the amounts transferred do not contain any amounts which were
contributed to such plan on behalf of the Employee when the
transferor
32
<PAGE> 34
plan failed to meet the requirements of Section 401(a) or 403(a)
of the Code at the time of the contribution of such amounts to
the plan generating the transfer nor at the time of transfer;
and
(2) that the transfer of such amounts is not incidental to the loss
by the plan of its qualified status under Section 401(a) or
403(a) of the Code.
(f) The rollover or transferred amounts at no time prior to or incidental
to the rollover or transfer were actually or constructively received
as a taxable distribution by the Employee on whose behalf the
rollover or transfer is made.
(g) Any rollover or transfer contribution to the Trust shall be credited
to a separate account established under the Trust on behalf of the
Participant.
(h) Any rollover or transfer contribution must be in the form of cash. If
the Participant wishes to make a rollover or transfer contribution in
a form other than cash, or if the Participant desires to retain any
such rollover contributions in its present investment, the approval
of the Benefits Committee and acceptance by the Trustee must be
granted prior to such rollover or transfer. All expenses of
establishing and maintaining such account will be charged directly to
such account or paid by the Participant.
(i) The Trustee shall not be liable for any adverse consequences which
may result to a Participant, the Employer, the Plan or the Trust
should any contribution pursuant to this Section 4.06 be determined
not to constitute a proper rollover or transfer contribution under
the Code and the Employer and Participant agrees to hold the Trustee
harmless from any and all such liability.
(j) The Employer, at the time of the transfer of any amounts from a plan
described under Code Section 401(k) which constitute under such other
plan what is described as pre-tax contributions under this Plan,
shall designate which plan shall take into account such amounts for
purposes of satisfying the Actual Deferral Percentage Test under Code
Section 401(k) with respect to such amounts.
(k) The Employer, at the time of the transfer of any amounts from a plan
described under Code Section 401(k) which constitute under such other
plan what is described as matching contributions under this Plan
shall designate which plan shall take into account such amounts for
purposes of satisfying the Contribution Percentage Test under Code
Section 401(m) with respect to such amounts. Such amounts as are
transferred and allocated under this Section 4.06(k) shall
nevertheless be identified separately and shall be subject to the
second paragraph of Section 6.01.
33
<PAGE> 35
(l) All transfer contributions must comply with the requirements of
Regulation Section 1.411(d)(4), Q&A3.
4.07 PRE-TAX LIMITATIONS. For each Plan Year, the Employer shall ensure that
the following discrimination test is satisfied with respect to pre-tax
contributions.
(a) ACTUAL DEFERRAL PERCENTAGE TEST. Under this test the Actual Deferral
Percentage for all eligible Highly Compensated Employees for the Plan
Year may not exceed the greater of either:
(1) the Actual Deferral Percentage for all other eligible Employees
for the Plan Year multiplied by 1.25; or
(2) the Actual Deferral Percentage for all other eligible Employees
for the Plan Year multiplied by 2.0, provided that the Actual
Deferral for the eligible Highly Compensated Employees does not
exceed the Actual Deferral Percentage for all other eligible
Employees by more than 2 percentage points for the Plan Year.
(b) For purposes of this section, the term "eligible Employee" shall mean
for any Plan Year every Employee who is eligible to participate in
the Plan.
(c) In order to pass the Actual Deferral Percentage Test, the Employer
may, when determining the Actual Deferral Percentage of each
Employee: (i) aggregate with the pre-tax contributions any
contributions as defined in Section 401(m)(4)(A) of the Code which
meet the requirements of Sections 401(k)(2)(B) and (C) of the Code;
and/or (ii) make additional qualified non-elective contributions that
meet the requirements of Section 401(m)(4)(c) of the Code to the
Plan. Such qualified non-elective contributions shall be allocated
disproportionately in favor of the non-Highly Compensated Employees.
In order to be aggregated with the pre-tax Contributions the
qualified matching contributions and qualified non-elective
contributions described above, without regard to whether such
contributions are actually taken into account as pre-tax
contributions, must be 100% nonforfeitable at all times and subject
to certain distribution restrictions. "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 Code Section 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 Code
Section 409(d)(2)) used in a trade or business, but
34
<PAGE> 36
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 Code Section
409(d)(3)), but only to an Employee who continues employment with the
subsidiary. For Plan Years beginning after December 31, 1988, 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 non-elective contributions, nor
any earnings on such contributions, irrespective of when credited. A
distribution described in clauses (3), (4) or (5) if made after March
31, 1988, must be a lump sum distribution, as required under Code
Section 401(k)(10).
The Benefits Committee may determine (in a manner consistent with
Treasury regulations) the Actual Deferral Percentages of the eligible
Employees by taking into account qualified non-elective contributions
or qualified matching contributions, or both, made to this Plan or to
any other qualified Plan maintained by the Employer. The Benefits
Committee may not include qualified non-elective contributions in the
Actual Deferral Percentage test unless the allocation of non-elective
contributions is nondiscriminatory when the Benefits Committee takes
into account all non-elective contributions and also when the
Benefits Committee takes into account only the non-elective
contributions not used in either the Actual Deferral Percentage test
or the Contribution Percentage test described in Section 4.08.
Qualified non-elective contributions must not be treated as pre-tax
contributions if the effect is to increase the difference between the
Actual Deferral Percentage for the highly compensated group and the
Non-Highly compensated group. In order to be taken into account,
qualified non-elective and qualified matching contributions must meet
the same requirements to be taken into account as those described
below for pre-tax contributions.
Contributions taken into account. In applying the Actual Deferral
Percentage test, a pre-tax contribution may be taken into account
only if it satisfies the following two requirements:
(1) It must be allocated to the Employee as of a date within the
Plan Year; and
(2) It must relate to Compensation that either would have been
received by the Employee in the Plan Year except for the
Employee's election to defer it or is attributable to services
performed by the Employee in the Plan Year, and but for the
Employee's election to defer, would have been received by the
Employee within 2 1/2 months after the close of the Plan Year.
For purposes of the first requirement, a pre-tax contribution is
considered to be allocated as of a date within the Plan Year
only if (1) the allocation is
35
<PAGE> 37
not contingent upon the Employee's participation in the Plan or
performance of services on any later date and (2) the elective
contribution is actually paid to the Trust no later than the end
of the 12-month period immediately following the Plan Year to
which it relates.
Aggregation rule for Highly Compensated Employees. To determine
the Actual Deferral Percentage of any Highly Compensated
Employee, the pre-tax contributions taken into account must
include any pre-tax contributions made by the Highly Compensated
Employee under any other Code Section 401(k) arrangement
maintained by the Employer. If the plans containing the Code
Section 401(k) arrangements have different plan years, the
Committee will determine the combined pre-tax contributions on
the basis of the plan years ending in the same calendar year.
Family aggregation rule. In the case of a Highly Compensated
Employee who is either a 5% owner or one of the 10 most highly
compensated Employees, the aggregated family members are treated
as a single Highly Compensated Employee. The Actual Deferral
Percentage of the family unit is the Actual Deferral Percentage
determined by combining the pre-tax contributions, Compensation
and amounts treated as pre-tax contributions under this Section
4.07(c) of all aggregated family members.
Except to the extent taken into account above, the pre-tax
contributions, Compensation and amounts treated as pre-tax
contributions of all family members are disregarded in
determining the Actual Deferral Percentages for the groups of
Highly Compensated and Non-Highly Compensated Employees.
Aggregation of certain Code Section 401(k) arrangements. If the
Employer treats two plans as a unit for coverage or
nondiscrimination purposes, the Employer must combine the Code
Section 401(k) arrangements under such plans to determine
whether either plan satisfies the Actual Deferral Percentage
test. This aggregation rule applies to the Actual Deferral
Percentage determination for all eligible Employees,
irrespective of whether an eligible Employee is a Highly
Compensated Employee or a Non-Highly Compensated Employee. The
Employer also may elect to aggregate the Code Section 401(k)
arrangements under plans which the Employer is not required to
treat as a unit for coverage or nondiscrimination purposes. If
the Employer chooses to aggregate such plans, they must then be
treated as one unit for coverage and nondiscrimination purposes.
For Plan Years beginning after December 31, 1989, an aggregation
of Code Section 401(k) arrangements under this paragraph does
not apply to plans which have different plan years.
36
<PAGE> 38
Any Employer contributions or qualified non-elective
contributions that are used to determine the Employee's Actual
Deferral Percentage shall not be used to determine the
Employee's Contribution Percentage.
(d) If the Actual Deferral Percentage Test is not satisfied for a Plan
Year, the pre-tax contributions shall be reduced to the extent
necessary so that the Actual Deferral Percentage for the Highly
Compensated Employees is not more than the greater of Section
4.07(a)(1) or (2) of the Plan. Such reduction shall be accomplished
by:
(1) First, reducing the rate of deferral down a specified percentage
or fractional portion of a percentage point for the Highly
Compensated Employees and rerunning the test as outlined in
Section 4.07(a)(1) and (2) of the Plan.
(2) In the event of test failure under Subsection (d)(1) above, the
percentages of Highly Compensated Employees shall be adjusted
down by one percentage point or a fractional portion of a
percentage point and the test repeated until such time as the
test is met. The Benefits Committee shall have the discretion to
determine whether or not to use fractional percentages under
this adjustment procedure.
(e) In the event "excess contributions" (the excess of the pre-tax
contributions on behalf of Highly Compensated Employees over the
maximum amount permitted by the Actual Deferral Percentage limits)
exist at the end of the Plan Year, the amount of excess contributions
for such Plan Year shall be returned to the Highly Compensated
Employee within 2 1/2 months after the close of such Plan Year. The
excess contributions to be distributed shall be adjusted for income
or loss in accordance with the regulations and procedures promulgated
by the Internal Revenue Service.
If the Highly Compensated Employee is part of an aggregated family
group, the excess contributions for the family group (as determined
by using the method in (d) above) are allocated among the family
members in proportion to the pre-tax contribution of each family
member that is combined to determine the Actual Deferral Percentage.
The Committee will reduce the amount of excess contributions for a
Plan Year distributable to a Highly Compensated Employee by the
amount of "excess deferrals", if any, previously distributed to that
Employee for the Employee's taxable year ending in that Plan Year.
The amount of "excess deferrals" under Code Section 402(g) that may
be distributed with respect to an Employee for a taxable year must be
reduced by any excess contributions previously distributed
37
<PAGE> 39
with respect to that Employee for the Plan Year beginning with or
within that taxable year.
4.08 LIMITATIONS ON EMPLOYER CONTRIBUTIONS. For each Plan Year, the Employer
shall ensure that the following discrimination test is satisfied with
respect to matching contributions.
(a) CONTRIBUTION PERCENTAGE TEST. Under this test, the Contribution
Percentage for all eligible Highly Compensated Employees may not
exceed the greater of either:
(1) the Contribution Percentage for all other eligible Employees for
the Plan Year multiplied by 1.25; or
(2) the Contribution Percentage for all other eligible Employees for
the Plan Year multiplied by 2.0, provided that the Contribution
Percentage for the eligible Highly Compensated Employees does
not exceed the Contribution Percentage for all other eligible
Employees by more than 2 percentage points for the Plan Year.
(b) For purposes of this section, the term "eligible Employee" shall mean
for any Plan Year every Employee who is eligible to participate in
the Plan.
(c) In order to pass the Contribution Percentage Test, the Employer may,
when determining the Contribution Percentage of each Employee; (i)
aggregate with the matching Contributions any pre-tax contributions
which meet the requirements of Section 401(m)(4)(B) of the Code; and
(ii) make additional matching or qualified non-elective
contributions. Notwithstanding anything contained herein to the
contrary, such additional contributions shall be allocated
disproportionately in favor of the non-Highly Compensated Employees.
In order to be aggregated with the matching Contributions, the
non-elective contributions described above, without regard to whether
such contributions are actually taken into account as matching
Contributions, must be 100% nonforfeiture at all times and subject to
certain distribution restrictions. "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 Code Section 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 Code
Section 409(d)(2)) used in a trade or business, but only to an
Employee who
38
<PAGE> 40
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 Code Section 409(d)(3)), but only to an Employee who
continues employment with the subsidiary. A distribution on account
of financial hardships 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, 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 Section
401(k)(10).
The Benefits Committee may determine (in a manner consistent with
Treasury regulations) the Contribution Percentages of the eligible
Employees by taking into account qualified non-elective contributions
or elective deferrals, or both, made to this Plan or to any other
qualified Plan maintained by the Employer. The Benefits Committee may
not include qualified non-elective contributions in the Contribution
Percentage test unless the allocation of non-elective contributions
is nondiscriminatory when the Benefits Committee takes into account
all non-elective contributions (including the qualified non-elective
contributions) and also when the Benefits Committee takes into
account only the non-elective contributions not used in either the
Actual Deferral Percentage test described in Section 4.07 or the
Contribution Percentage test described in this Section 4.08.
Qualified non-elective contributions may not be treated as qualified
matching contributions if the effect is to increase the difference
between the Contribution Percentage for the highly compensated group
and the Non-Highly compensated group. In order to be taken into
account, a qualified non-elective contribution must meet the
requirements below:
(1) It must be allocated to the Employee as of a date within the
plan year; and
(2) It must relate to Compensation that either would have been
received by the Employee in the Plan Year except for the
Employee's election to defer it or is attributable to services
performed by the Employee in the Plan Year, and but for the
Employee's election to defer, would have been received by the
Employee within 2 1/2 months after the close of the Plan Year.
For purposes of the first requirement, a pre-tax contribution is
considered to be allocated as of a date within the Plan Year only if
(1) the allocation is not contingent upon the Employee's
participation in the Plan or performance of services on any later
date and (2) the elective contribution is actually paid to the Trust
no later than the end of the 12-month period immediately following
the Plan Year to which it relates.
39
<PAGE> 41
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 Actual Deferral Percentage test) and any Employee contributions
made on his behalf to any other plan maintained by the Employer. If
the plans have different plan years, the Committee will determine the
combined aggregate contributions on the basis of the plan years
ending in the same calendar year.
Family aggregation rule. In the case of a Highly Compensated Employee
who is either a 5% owner of one of the 10 most highly compensated
Employees, the aggregated family members are treated as a single
Highly Compensated Employee. The Contribution Percentage of the
family unit is the Contribution Percentage determined by combining
the contributions and Compensation of all aggregated family members.
Except to the extent taken into account above, the contributions and
Compensation of all family members are disregarded in determining the
Contribution Percentages for the groups of Highly Compensated and
Non-Highly Compensated Employees.
Aggregated of certain plans. If the Employer treats two plans as a
unit for coverage or nondiscrimination purposes, the Employer must
combine the plans to determine whether either plan satisfies the
Contribution Percentage 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 Non-Highly Compensated Employee. The Employer also may
elect to aggregate plans which the Employer does not treat as a unit
for coverage or nondiscrimination purposes. If the Employer chooses
to aggregate such plans, they must then be treated as one unit for
coverage and nondiscrimination purposes. 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.
Any Employer contributions or qualified non-elective contributions
used to determine the Employee's Actual Deferral Percentage, as
provided for in Section 4.07(c) of the Plan, shall not be used in
determining the Employee's Contribution Percentage for the Plan Year.
The Employer may not include pre-tax contributions in the
Contribution Percentage Test unless the Plan which includes the
elective deferrals satisfies the Actual Deferral Percentage Test both
with and without the pre-tax contributions included in this
Contribution Percentage Test.
40
<PAGE> 42
(d) If the Contribution Percentage of Highly Compensated Employees
exceeds the limitations set forth in Section 4.08(a)(1) and (2)
("excess matching contributions"), then the nonforfeitable portion of
such excess matching contributions made on behalf of Highly
Compensated Employees shall be distributed to the Highly Compensated
Employees within 2 1/2 months after the close of the Plan Year. The
excess matching contributions to be distributed shall be adjusted for
income or loss in accordance with the regulations and procedures
promulgated by the Internal Revenue Service.
To the extent the Highly Compensated Employees do not have a
nonforfeitable interest in such excess matching contributions they
shall be alternatively allocated to all other eligible non-Highly
Compensated Employees in the ratio that such non-Highly Compensated
Employee's pre-tax contribution bears to all other non-Highly
Compensated Employees' pre-tax contributions for the Plan Year. The
excess matching contributions shall be alternatively allocated to the
extent necessary so that the Contribution Percentage for the Highly
Compensated Employees is not more than the greater of Section
4.08(a)(1) or (2) of the Plan. Such alternative allocation shall be
accomplished by:
(1) First, distributing and/or alternatively allocating what would
otherwise be the excess matching contribution of the Employee
receiving the highest Contribution Percentage until such
Employee's Contribution Percentage is equal to the Contribution
Percentage of the Highly Compensated Employee with the next
highest Contribution Percentage and rerunning the test as
outlined in Section 4.08(a)(1) and (2) of the Plan.
(2) In the event of test failure under Subsection (d)(1) above, the
excess matching contributions of the Highly Compensated.
Employees shall continue to be distributed and/or alternatively
allocated in the manner specified above and the test repeated
until some time as the test is met.
If the Highly Compensated Employee is part of an aggregated family
group, the excess matching contributions for the family group (as
determined by using the method in (d)(1) and (2) above) are allocated
among the family members in proportion to the matching Contributions
of each family member that are combined to determine the Contribution
Percentage.
(e) In the event that pre-tax contributions for which a Participant
received an allocation of a matching contribution are distributed to
a Participant due to failure of the Actual Deferral Percentage test
or because such contributions are "excess deferrals" described in
Section 401(b), then notwithstanding any other provision of this Plan
to the contrary, the matching contribution which relates to the
excess
41
<PAGE> 43
contribution or excess deferral shall be forfeited by the Participant
and reallocated at the same time and in the same manner as
forfeitures under Section 4.05.
4.09 ANNUAL ADDITIONS.
(a) BASIC LIMITATION. In accordance with IRS Revenue Notice 87-21,
Q&A-11, the Plan hereby incorporates the limitations on benefits and
contributions relating to maximum permissible annual additions by
reference, as if fully set out herein. The maximum annual addition
under the Plan shall not exceed, for any Participant, the maximum
permissible annual addition under Code Section 415. The special
employee stock ownership plan limitations under Code Section
415(c)(6) are also hereby incorporated by reference.
If contributions to this Plan on behalf of a Participant are to be
reduced as a result of this Section 4.09, such reduction shall be
effected (to the extent necessary) by reducing the Participant's
pre-tax contributions, discretionary contributions and matching
contributions on a prorated basis until the annual additions
limitation is not violated or by not allocating forfeitures to a
Participant.
(b) ADJUSTMENTS FOR ERRORS IN ESTIMATING COMPENSATION. If, as a result a
reasonable error in estimating a Participant's compensation (as
defined in Code Section 415(b)(3) and the regulations thereunder) or
under the limited facts and circumstances which the Commissioner of
Internal Revenue finds justify the availability of these rules,
Annual Additions under the terms of the Plan for a particular
Participant would cause the limitations of Code Section 415
applicable to that Participant for the Limitation Year to be
exceeded, the excess amount shall not be deemed to be Annual
Additions in that Limitation Year if they are treated as follows:
(1) The excess amounts in the Participant's Discretionary
Contribution or Matching Contribution Account shall be used to
reduce contributions for the next Limitation Year (and
succeeding Limitation Years, as necessary) for that Participant
if that Participant is covered by the Plan as of the end of the
Limitation Year. However, if that Participant is not covered by
the Plan as of the end of the Limitation Year then the excess
amounts must be held unallocated in a suspense account for the
Limitation Year and allocated and reallocated in the next
Limitation Year to all of the remaining Participants in the
Plan.
If a suspense account is in existence at any time during a
particular Limitation Year, other than the first Limitation Year
described in the preceding sentence, all amounts in the suspense
account must be allocated and reallocated to Participant's
Accounts (subject to the limitations of Code
42
<PAGE> 44
Section 415) before any contributions which would constitute
Annual Additions may be made to the Plan for that Limitation
Year. Furthermore, the excess amounts must be used to reduce
contributions for the next Limitation Year (and succeeding
Limitation Years, as necessary) for all of the remaining
Participants in the Plan.
(2) In the event of termination of the Plan, notwithstanding any
other provision in this Plan to the contrary, the suspense
account described in (1) above shall revert to the Employer to
the extent it may not then be allocated to any Participant's
Account.
(3) Notwithstanding any other provisions in this Section 4.09, the
Employer shall not contribute any amount that would cause an
allocation to the suspense account as of the date of the
contribution is allocated. If the contribution is made prior to
the date as of which it is to be allocated, then such
contribution shall not exceed an amount that would cause an
allocation to the suspense account if the date of contributions
were an allocation date.
(c) [INTENTIONALLY OMITTED]
(d) COMBINED DEFINED CONTRIBUTION/DEFINED CONTRIBUTION PLAN LIMITATION
ADJUSTMENTS. For any Participant of this Plan who participates in
another defined contribution plan of the Employer, the rate of
contribution under this Plan by such Participant during the
Limitation Year will be reduced to the extent necessary to prevent
the maximum permissible annual addition limitations of Code Section
415(c) from being exceeded.
4.10 RETURN OF EMPLOYER CONTRIBUTIONS. Except as provided below and otherwise
specifically permitted by law, it shall be impossible by operation of the
Plan or of the Trust, by termination of either, by power or revocation or
amendment, by the happening of any contingency, by collateral arrangement
or by any other means, for any part of the corpus or income of any Trust
Fund maintained pursuant to the Plan or any funds contributed thereto to
be used for, or diverted to, purposes other than the exclusive benefit of
Participants or their Beneficiaries.
(a) FAILURE TO RECEIVE INITIAL QUALIFICATION. Notwithstanding anything
herein to the contrary, if, pursuant to an application filed by or in
behalf of the Plan, the Commissioner of Internal Revenue Service or
his delegate should determine that the Plan does not initially
qualify as a tax-exempt plan and trust under Sections 401 and 501 of
the Code, and such determination is not contested, of if contested,
is finally upheld, then the Plan shall be void from its inception and
43
<PAGE> 45
all amounts contributed to the Plan by the Employer, less expenses
paid, shall be returned within one year and the Plan shall terminate,
and the Trustee shall be discharged from all further obligations.
(b) CONTRIBUTIONS MADE BY A MISTAKE OF FACT. In the event the Employer
shall make an excessive contribution under a mistake of fact pursuant
to Section 403(c)(2)(A) of ERISA, the Employer may demand repayment
of such excessive contribution at any time within one year following
the time of payment and the Trustees shall return such amount to the
Employer within the one year period. Earnings of the Plan
attributable to the excess contributions may not be returned to the
Employer but any losses attributable thereto must reduce the amount
so returned.
(c) DISALLOWED DEDUCTION. All contributions by the Employer to the Trust
Fund are strictly conditioned upon the deductibility of such
contributions by the Employer under the Code and, to the extent any
deduction is disallowed, the Employer may within One year following a
final determination of the disallowance, whether by agreement with
the Internal Revenue Service or by final decision of a court of
competent jurisdiction, demand repayment of such disallowed
contribution and the Trustee shall return such contribution within
one year following the disallowance. Earnings of the Plan
attributable to the excess contribution will not be returned to the
Employer and any losses attributable thereto shall reduce the amount
so returned.
- -----------------
END OF ARTICLE IV
44
<PAGE> 46
ARTICLE V
ALLOCATION OF GAINS AND LOSSES
5.01 VALUATION OF THE TRUST FUND. The Trustee shall value the assets of the
Trust Fund on each Valuation Date. In making such valuation, the Trustee
shall take into account earnings or losses of the Trust Fund, net of
reasonable expenses, and capital appreciation or depreciation in such
assets whether or not realized. The method of valuation shall be
determined by the Trustee and shall be followed with reasonable
consistency from year to year in which valuations are made.
5.02 PRIORITY OF ALLOCATIONS TO ACCOUNTS. As of each Valuation Date, the
Account balances of Participants and Former Participants shall be adjusted
to reflect adjustments in the value of the Trust Fund, payments of
benefits, and transfers of benefits to or for the benefit of any
Participant or Former Participant. The value of each account shall be
determined by multiplying the number of units held in each Account by the
current unit value.
5.03 ALLOCATION OF DIVIDENDS. Any cash dividends received on shares of Company
Stock allocated to Participants' Accounts shall be allocated directly to
the Account to which such Company Stock is allocated.
5.04 PARTICIPANT-DIRECTED INVESTMENTS. For any period during which Participants
are permitted to direct the investment of their Accounts, Accounts shall
be valued based on the investment performance of the particular mutual
fund(s) or other investment vehicle(s) selected by the Participant or
otherwise allocated to the Participant.
- ----------------
END OF ARTICLE V
45
<PAGE> 47
ARTICLE IV
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.01 VESTING OF ACCOUNTS. Participants shall vest in their Accounts in
accordance with the following:
(a) Participants shall always be 100% vested in their Pre-Tax Accounts
and their Rollover or Transfer Accounts (other than the Transfer
Accounts listed in Subsection 2.01(e))(if any).
(b) Participants shall vest in their Discretionary and Matching
Contribution Accounts and Transfer Accounts in accordance with the
following schedule:
<TABLE>
<CAPTION>
Years of Service Vested Percentage
---------------- -----------------
<S> <C>
Less than 5 0%
5 or more 100%
</TABLE>
For Plan Years beginning on or after January 1, 1994, Participants
shall vest in their Discretionary and Matching Contribution Accounts
and Transfer Accounts in accordance with the following schedule:
<TABLE>
<CAPTION>
Years of Service Vested Percentage
---------------- -----------------
<S> <C>
Less than 3 0%
3 or more 100%
</TABLE>
For Plan Years beginning on or after January 1, 1995, immediate 100%
vesting shall apply to Discretionary Contribution Accounts.
Notwithstanding the foregoing, with respect to amounts credited to
Transfer Accounts under this Plan, the determination of a
Participant's vested interest shall be as follows:
(c) GSX TRANSFEREES. For Participants who were participants in the GSX
Corporation Employees' Flexible Retirement Benefit Plan, they shall
be vested according to the following schedule:
<TABLE>
<CAPTION>
Years of Service Vested Percentage
---------------- -----------------
<S> <C>
Less than 4 0%
4 but less than 5 40%
5 or more 100%
</TABLE>
46
<PAGE> 48
Notwithstanding the preceding, vesting schedule, Participants who are
transferees of the GSX Corporation Employees' Flexible Retirement
Benefit Plan who had less than five years of service for Vesting
purposes as defined under the Prior Plan as of September 1, 1998,
shall become vested in their GSX Transfer Account in accordance with
the vesting schedule in Section 6.01(b) above.
(d) FIW, INC. TRANSFEREES. For Participants who were participants in the
FIW, Inc. Savings Plan, they shall be vested according to the
following schedule:
<TABLE>
<CAPTION>
Years of Service Vested Percentage
---------------- -----------------
<S> <C>
Less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 or more 100%
</TABLE>
Notwithstanding the preceding vesting schedule, Participants who are
transferees of the FIW, Inc. Savings Plan who had less than one year
of service for vesting purposes are defined under this Plan as of
March 1, 1990, shall become vested in their FIW Transfer Account in
accordance with the vesting schedule in Section 6.01(b) above.
(e) SW, INC. TRANSFEREES. For Participants who were participants in the
SW, Inc. Savings and Investment Plan, they shall be 100% vested in
their SW, Inc. Transfer Account upon the completion of one year of
service for vesting purposes under the Prior Plan.
Notwithstanding the preceding vesting schedule, Participants who are
transferees of the SW, Inc. Savings and Investment Plan who had less
than one year of service for vesting purposes as defined under the
Prior Plan as of February 15, 1989, shall become vested in their SW,
Inc. Transfer Account in accordance with the vesting schedule in
section 6.01(b) above.
(f) GENSTAR TRANSFEREES. For Participants who were participants in the
Genstar Company Salaried Employees Thrift Plan, they shall be 100%
vested in the entire amount of their Transfer Account.
(g) OSCO HOLDINGS, INC. TRANSFEREES. For Participants who were
participants in the OSCO Holdings, Inc. 401(k) Profit Sharing Plan,
they shall vest in their OSCO Holdings, Inc. Transfer Account in
accordance with the following schedule.
47
<PAGE> 49
<TABLE>
<CAPTION>
Years of Service Vested Percentage
---------------- -----------------
<S> <C>
Less than 3 0%
3 or more 100%
</TABLE>
The vested percentage of any Participant who participated in the
Bryson Industrial Services, Inc. Profit Sharing Plan will not be less
than his vested percentage attained under that plan as of July 1,
1992 (33% after one year of service, 66% after 2 years of service and
100% after 3 years of service).
(h) USPCI TRANSFEREES. Participants who participated in the USPCI, Inc.
401(k) Savings Plan and who terminated employment with USPCI or its
affiliates prior to March 1, 1995 shall vest in that portion of their
USPCI Transfer Account which is derived from employer contributions
made under the USPCI, Inc. 401(k) Savings Plan in accordance with the
following schedule:
<TABLE>
<CAPTION>
Years of Service Vested Percentage
---------------- -----------------
<S> <C>
Less than 3 0%
3 but less than 4 33-1/3%
4 but less than 5 66-2/3%
5 or more 100%
</TABLE>
Participants who participated in the USPCI, Inc. 401(k) Savings Plan
and who terminated employment with USPCI or its affiliates on or
after March 1, 1995 shall vest in that portion of their USPCI
Transfer Account which is derived from employer contributions made
under the USPCI, Inc. 401(k) Savings Plan in accordance with the
following schedule:
<TABLE>
<CAPTION>
Years of Service Vested Percentage
---------------- -----------------
<S> <C>
Less than 3 0%
3 or more 100%
</TABLE>
6.02 FORFEITURES. A forfeiture of the non-vested portion of the Participant's
Discretionary, matching and/or Transfer Account shall take place upon the
last day of the Plan Year during which a Participant incurs five
consecutive one year Breaks in Service, or, if earlier, upon a cash out of
the Participant's entire nonforfeitable Accounts under the Plan. For
purposes of allowing a forfeiture to take place upon the last day of the
Plan year during which a Participant incurs a Break in Service or
terminates employment, a Participant who is 0% vested is deemed to have
had a cash out of his entire Account
48
<PAGE> 50
balance upon his termination of employment. The Plan does not distribute
less than 100% of the Participant's vested Accounts under Section 6.10.
Forfeitures shall first be used to reinstate previously forfeited Account
balances of rehired Former Participant's who are entitled to reinstatement
pursuant to Section 6.05 of the Plan. Remaining forfeitures shall be
utilized in accordance with Section 4.05.
In the event that forfeitures for any particular Plan year are
insufficient to reinstate previously forfeited Account balances of rehired
Former Participants, then notwithstanding any other provision of this Plan
to the contrary, such amounts shall be reinstated by additional Employer
contributions, whether or not such amounts are deductible.
6.03 CHANGES IN VESTING SCHEDULE. Effective January 1, 1989, if the Plan's
vesting schedule in Section 6.01 above is amended in any way that directly
or indirectly affects the computation of a Participant's nonforfeitable
interest in their Discretionary, Matching or Transfer Accounts, affected
Participants who have completed at least three Years of Service for
Vesting Purposes as of the later of the date which is:
(a) 60 days after the day the Plan amendment is adopted,
(b) 60 days after the day the Plan amendment becomes effective, or
(c) 60 days after the day the Participant is issued written notice of the
Plan amendment by the Employer or the committee, shall have the
nonforfeitable portion of their Discretionary and matching Accounts
determined under the most favorable of the two vesting schedules.
Participants who have not completed at least three Years of Service
for Vesting Purposes as of the date the amendment is adopted or
deemed to be made shall have the nonforfeitable portion of their
Discretionary and Matching Accounts determined under the new vesting
schedule.
6.04 INVOLUNTARY CASH-OUT. If the total of a Participant's nonforfeitable
Accounts is $5,000 or less, the Benefits Committee shall immediately
distribute the entire amount in a single cash payment without the consent
of the Participant (or if the Participant has died, the Participant's
Beneficiary) due to a Participant's termination of participation in the
Plan. Such distribution shall be made as soon as practicable but, in any
event, not later than the close of the second Plan Year following the Plan
Year in which such termination of employment occurs.
6.05 REINSTATEMENT OF ACCOUNT. If any non-vested, partially vested or fully
vested Former Participant is re-employed before he receives an actual or
deemed distribution of the entire nonforfeitable portion of his Account,
the Former Participant shall continue to
49
<PAGE> 51
participate in the Plan in the same manner as if such termination of
employment had not occurred.
If any non-vested or partially vested Former participant shall be
re-employed by the Employer before five consecutive one year Breaks in
Service, and such Former Participant has received an actual or deemed
distribution of his nonforfeitable interest prior to his re-employment,
that portion of his Discretionary and/or Matching Contribution Account (or
such other Accounts as are subject to vesting schedules under other plans
as described in the second paragraph of Section 6.01 above and from which
a forfeiture occurred) that was forfeited shall be reinstated.
Notwithstanding the above, no forfeitures shall be reinstated unless a
Participant described in the foregoing paragraphs has completed one Year
of Service for Vesting Purposes after his Reemployment Commencement Date.
Furthermore, if a Participant described in the foregoing paragraphs has
incurred FIVE consecutive one year Breaks in Service prior to his
Reemployment Commencement Date, forfeitures shall not be reinstated in any
event.
6.06 SEPARATE ACCOUNT BALANCES. If a Former Participant is re-employed after
five consecutive one year Breaks in Service (such Former Participant not
having received a distribution of his entire vested interest), then
separate Accounts will be maintained as follows:
(a) One Account for nonforfeitable benefits attributable to pre-break
service; and
(b) One Account representing his status in the Plan attributable to
post-break service.
6.07 DETERMINATION OF BENEFITS UPON NORMAL RETIREMENT. Notwithstanding Section
6.01 of the Plan, a Participant who terminates his employment on or after
his Normal Retirement Age shall be 100% vested in his Accounts and shall
be entitled to all amounts credited to his Accounts as of the date of
distribution. The distribution of a Participant's Accounts due to his
retirement shall commence as soon as practical following the Valuation
Date and concurrent with or next following his Normal Retirement Date
unless deferred due to his continued employment to his actual termination
of employment due to retirement after his Normal Retirement Date unless
required to commence earlier under Section 6.11 or 6.12 of the Plan.
6.08 DETERMINATION OF BENEFITS UPON DISABILITY. Notwithstanding Section 6.01 of
the Plan, a Participant who terminates his employment as a result of a
Disability shall be 100% vested in his Accounts as of the date of
termination of employment determined in accordance with Section 6.01 of
the Plan. The distribution of a Participant's Accounts due to his
termination of employment as a result of Disability shall commence as
practical following the Valuation Date concurrent with or next following
the date of
50
<PAGE> 52
termination of employment unless required to commence earlier under
Section 6.11 or 6.12 of the Plan.
6.09 DETERMINATION OF BENEFITS UPON DEATH. Notwithstanding Section 6.01 of the
Plan, upon the death of a Participant before his termination of
employment, his entire Account shall be 100% vested and held for the
benefit of his Beneficiary. Upon the death of a Former Participant whose
employment terminated prior to his death and whose Accounts had not been
distributed to him prior to his death, the vested portion of his Accounts,
determined as of the date of his termination of employment, shall be held
for the benefit of his Beneficiary. The distribution of a Participant's
Accounts as a result of his death shall commence as soon as practical
following the Valuation Date concurrent with or next following the
Participant's termination of employment unless required to commence
earlier under Section 6.11 or 6.12 of the Plan.
The Benefits Committee may require such proper proof of death and such
evidence of the right of any person to receive payment of the value of the
Accounts of a deceased Participant or Former Participant as may be deemed
desirable. The Benefits Committee's determination of death and of the
right of any person to receive payment shall be conclusive and binding on
all persons.
6.10 DETERMINATION OF BENEFITS UPON TERMINATION OF EMPLOYMENT. Upon the
Participant's termination of employment before his Normal Retirement Age
for any reason other than death or Disability, the Participant shall be
entitled to the vested portion of his Accounts as of the date of
termination of employment determined in accordance with Section 6.01 of
the Plan. The distribution of a Participant's Accounts as a result of his
termination of employment for a reason other than retirement on or after
his Normal Retirement Date, death or Disability shall commence as soon as
practical after the Valuation Date concurrent with or next following his
termination of employment unless required to commence earlier under
Section 6.11 or 6.12 of the Plan.
6.11 ERISA REQUIRED COMMENCEMENT DATE. Payment of a Participant's benefits,
unless the Participant otherwise elects, will begin not later than the
60th day after the latest of the close of the Plan Year in which:
(a) The date on which the Participant attains age 65;
(b) Occurs the 10th anniversary of the year in which the Participant
commenced participation in the Plan; or
(c) The Participant terminates his service with the Employer.
Any Participant who attains age 70 1/2 before January 1, 1999 may elect to
receive distribution of his Accounts as if the Mandatory Commencement Date
described in Section 6.12 below were the calendar year in which the
Participant attains age 70 1/2.
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<PAGE> 53
6.12 MANDATORY COMMENCEMENT DATE. A Participant's entire interest in the Plan
(which - does not include ancillary death benefits that are never
available to the Participant, such as Qualified Joint and Survivor
Annuities and Qualified Pre-Retirement Survivor Annuities, if any) shall
be distributed to him not later than the April 1st of the calendar year
which follows the later of (i) the calendar year in which the individual
attains age 70 1/2 or (ii) the calendar year during which the Participant
retires. Provided, however, that if the Participant is a 5% Owner (as
defined in Code Section 416(i)(1)(B)(i)) with respect to the Plan Year
during which the Participant attains age 70 1/2, the Participant's entire
interest in the Plan shall be distributed to him not later than April 1st
of the calendar year which follows the calendar year in which the
individual attains age 70 1/2. Alternatively, distributions to a
Participant may begin to be paid to the Participant by such date, provided
that such payments are made over a period not extending beyond (or a
combination thereof):
(a) The life of the Participant;
(b) The life of the Participant and a designated Beneficiary;
(c) A period certain not extending beyond the life expectancy of the
Participant; or
(d) A period certain not extending beyond the joint and last survivor
expectancy of the Participant and a designated Beneficiary.
Notwithstanding any provision in this Plan to the contrary, if a
Participant's benefits have commenced and the Participant dies before his
entire interest has been distributed to him, the remaining portion of such
interest will be distributed at least as rapidly as under the method of
distribution being used prior to the Participant's death. However, the
surviving Spouse may direct the commencement of benefits within a
reasonable time after the death of the Participant.
If a Participant dies before his distributions have commenced, such
Participant's entire interest will be distributed within five years after
his death. The preceding sentence shall not apply if:
(e) any portion of a Participant's benefit is payable to (or for the
benefit of) any individual designated (or if the applicable law
permits, deemed designated) as a Beneficiary by the Participant and
such portion will be distributed over a period not extending beyond
the life expectancy of such Beneficiary and such distribution begins
not later than one year after the date of the Participant's death (or
such later date as is prescribed by regulations); or
52
<PAGE> 54
(f) if the designated Beneficiary is the Participant's surviving Spouse,
then this Section 6.12(f) of the Plan shall apply as if the surviving
Spouse was the Participant, except that the distribution need only
begin on the date on which the Participant would have attained age 70
1/2 (rather than one year after the date of the Participant's death);
provided, however, if the surviving spouse then dies before payments
are required to begin, then the entire interest must be distributed
within five years of the surviving Spouse's death.
The life expectancy of the Participant or his designated Beneficiary will
not be recalculated each year in order to determine the minimum
distribution requirements for each year.
Notwithstanding anything to the contrary, the surviving Spouse of the
Participant can direct the commencement of benefits within a reasonable
time after the death of a Participant, subject to the restrictions on
immediate distributions under Treasury Regulation Section
1.417(e)-l(b)(3).
The provisions of this Section are not intended to confer distribution
rights on the Participant beyond those provided under any other section of
the Plan, but are only intended to incorporate limitations required by the
Code.
Notwithstanding anything in this Section 6.12 to the contrary, no
commencement of benefits shall be required to comply with this Section
6.12 to the extent that a Participant had made a written election under
Section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act of 1982
no later than December 31, 1983 in accordance with Revenue Notice 83-23 or
if a Participant is permitted to delay distributions until April 1, 1990
in accordance with Revenue Notice 89-42.
6.13 REQUIRED PARTICIPANT OR BENEFICIARY CONSENT TO DISTRIBUTE. Except as
otherwise provided in Article XIV, if the value of a Participant's
nonforfeitable Accounts payable under this Article VI exceeds $5,000 and
if the benefit to be distributed is immediately distributable (prior to
the Participant attaining (if not dead) the later of age 62 or Normal
Retirement Age), the Participant shall be required to consent in writing
to the distribution. No Beneficiary consent shall be required for any
distribution under the Plan. If the Participant (and, if necessary, the
Participant's spouse) does not consent to the immediate distribution, the
distribution will be deferred until the Valuation Date coinciding with or
next following the day the Participant attains age sixty-five.
6.14 FORM OF PAYMENT BEFORE JULY 1, 1996. With respect to all benefits which
first become payable under the Plan before July 1, 1996, a Participant's
entire interest in the Plan shall be paid in a single-sum payment as
follows: Pre-Tax, Rollover and Transfer Accounts shall be paid in cash and
Matching and Discretionary Accounts shall be paid in cash or kind, at the
Participant's election (fractional shares shall be paid in cash). The
53
<PAGE> 55
amount of such cash distribution shall be determined by multiplying the
number of whole shares of Company Stock allocated to the Participant's
Accounts by the closing price of the Stock on the last business day
concurrent with or immediately preceding the Valuation Date immediately
preceding the date of distribution.
6.14A FORM OF PAYMENT AFTER JUNE 30, 1996. With respect to all benefits which
first become payable under the Plan after June 30, 1996, a Participant or
Beneficiary entitled to receive a benefit under the Plan shall be paid
such benefit in the following manner:
(a) The normal form of benefit for an unmarried Participant shall be a
single-sum payment as described in Section 6.14A(b)(i) below. Except
as otherwise provided in Article XIV, the normal form of benefit
settlement of a Participant who is married shall be a Qualified Joint
and Survivor Annuity, and the normal form of benefit for the
surviving spouse of a deceased Participant shall be a Pre-Retirement
Survivor Annuity.
(b) The optional benefit forms which a Participant (or, if the
Participant is married, the Participant and his spouse) may elect are
as follows:
(i) Lump Sum Distribution. Payment of the Participant's entire
interest in the Plan in a single-sum payment. Such interest
shall be paid in cash, except that the Participant may elect to
receive Company stock credited to his account in kind (except
for fractional shares).
(ii) 50% or 100% Joint and Survivor Annuity. An annuity for the life
of the Participant with a survivor annuity for the life of the
Surviving Spouse which is equal to 50% or 100% of the amount of
the annuity which is payable during the joint lives of the
Participant and the Surviving Spouse, and which is the
Actuarial Equivalent of a Qualified Joint and Survivor Annuity
for the Participant and his Surviving Spouse.
(iii) Installment Payments. Monthly, quarterly, semiannual, or annual
cash installments over a specifically designated period of time
not extending beyond the Participant's life, the joint lives of
the Participant and his designated Beneficiary, the
Participant's life expectancy, or the joint life expectancy of
the Participant and his designated Beneficiary.
(iv) Straight Life Annuity. An annuity for the life of the
Participant which is the Actuarial Equivalent of 100% of the
Participant's nonforfeitable benefit.
(v) Straight Life Annuity With 10 Years Certain. An annuity for the
life of the Participant or ten years following the Annuity
Starting Date
54
<PAGE> 56
(whichever period is longer), which is the Actuarial Equivalent
of a straight life annuity for the Participant.
(c) A Surviving Spouse who is entitled to a Pre-Retirement Survivor
Annuity shall be able to elect any one of the options above with
respect to the amount of the Pre-Retirement Survivor Annuity.
(d) Benefits payable other than as a lump sum distribution or as
installment payments under Section 6.14(b)(iii) shall be provided
through the purchase of a nontransferable, conventional fixed annuity
contract, providing payments at least annually and which satisfies
the requirements of Code Section 401(a)(11) and 417.
(e) Benefits otherwise payable hereunder shall be reduced by any portion
thereof which is being used as security for a loan from the Plan.
6.15 AMOUNTS NOT DETERMINED. If the amount of a Participant's benefit cannot be
determined by the date on which the benefit is to commence, the benefit
shall be paid within 60 days after the earliest date on which such amount
can be determined.
If a Participant's benefit remains unpaid by reason of Section 9.05 and
subsequently the Participant or Beneficiary entitled to such benefit is
located and the benefit restored under Section 9.05, then such benefit
shall be paid within 60 days after the restoration of the benefit.
6.16 NO EMPLOYER DISCRETION IN BENEFIT SELECTION OR DISTRIBUTION.
Notwithstanding anything in this Plan to the contrary, the Employer shall
have no discretion in the selection of any form of benefit to be paid to
any Participant. The calculation and payment of selected benefits in
accordance with the terms of the Plan and/or the application of any
administrative provision to the calculation or payment of benefits in
accordance with the terms of the Plan shall not be considered an exercise
of discretion.
6.17 REQUIRED INFORMATION. Each Participant who elects in accordance with
Section 6.14 to take an optional form of benefit under the Plan shall
provide such information to the committee as the same shall require in
order to implement the election. Failure to provide such information as
may be required in order to effect such election shall result in the
Participant receiving the normal form of benefit under the Plan.
6.18 LIMITATIONS ON BENEFITS AND DISTRIBUTIONS. All rights and benefits,
including elections, provided to a Participant in this Plan shall be
subject to the rights afforded to any "alternate payee" under a "qualified
domestic relations order" as those terms are defined in Code Section
414(p).
55
<PAGE> 57
6.19 DIRECT ROLLOVER. This Section applies to distributions made on or after
January 1, 1993. Notwithstanding any provision of the Plan to the contrary
that would otherwise limit a distributee's election under this Section, a
distributee may elect, at the time and in the manner prescribed by the
Plan Administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the
distributes in a direct rollover.
For purposes of this Section the following definitions shall apply:
(1) 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 distributes or the joint lives (or joint life expectancies) of
the distributes 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 includable in
gross income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities).
(2) An eligible retirement plan is an individual retirement account
described in section 408(a) of the Code, an individual retirement
annuity described in section 408(b) of the Code, an annuity plan
described in section 403(a) of the Code, or a qualified trust
described in section 401(a) of the Code, that accepts the
distributee's eligible rollover distribution. However, in the case of
an eligible rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement account or
individual retirement annuity.
(3) 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.
(4) A direct rollover is a payment by the plan to the eligible retirement
plan specified by the distributee.
If a distribution is one to which sections 401(a)(11) and 417 of the
Internal Revenue Code do not apply, such distribution may commence less
than 30 days after the notice required under section 1.411(a)-1l(c) of the
Income Tax Regulations is given, provided that:
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<PAGE> 58
(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.
6.20 CALCULATION OF DISTRIBUTIONS AFTER APRIL 1, 1996. Notwithstanding anything
in this Plan to the contrary, the total benefit to which a Participant
shall be entitled by reason of retirement, termination of employment,
death, or any other triggering event occurring on or after April 1, 1996
shall equal the total balance of such Participant's Accounts as of the
Valuation Date on which the investments credited to the Participant's
Accounts are actually liquidated. All distributions which a Participant
shall become entitled to receive by reason of a triggering event occurring
on or after April 1, 1996 shall be made as soon as administratively
practicable after the occurrence of such triggering event, and in no event
later than the date required under Section 6.11 or 6.12 of the Plan.
6.21 DISTRIBUTIONS IN CONNECTION WITH DISPOSITION OF ASSETS OR SUBSIDIARIES. If
an Employer disposes of substantially all of the assets used by such
Employer in a trade or business, or if an Employer disposes of its
interest in a subsidiary, distributions may be made by the Plan as
permitted under Code Section 401(k)(10) to Participants who terminate
their employment relationship with the Employer but who continue their
employment relationship with the entity acquiring such assets or with the
subsidiary.
6.22 DISTRIBUTIONS TO ALTERNATE PAYEES. Notwithstanding any provision in this
Plan to the contrary, if an alternate payee is awarded a fixed dollar or
percentage amount of a Participant's account balances under the Plan
pursuant to a qualified domestic relations order, the amount so awarded
may be distributed to such alternate payee at any time after such
qualified domestic relations order becomes effective.
- -----------------
END OF ARTICLE VI
57
<PAGE> 59
ARTICLE VII
WITHDRAWALS AND LOANS
7.01 WITHDRAWALS IN GENERAL. Withdrawals are permitted under the Plan as
provided in Section 7.02, 7.04, and 7.05 below. All withdrawals under the
Plan shall be paid in a single lump sum. Withdrawals under the Plan shall
be subject to Federal income tax withholding as prescribed by Section 3405
of the Code and regulations thereunder.
7.02 HARDSHIP WITHDRAWALS. Upon the application of any Participant, the
Benefits Committee, in accordance with a uniform nondiscriminatory policy,
shall at any time permit such Participant to withdraw any portion of the
following described Accounts, if the withdrawal is necessary in fight of
immediate and heavy financial need of the Participant (described in
Section 7.02(d)) and is necessary to satisfy such financial need. The
amount of the withdrawal shall not exceed the amount required to meet the
financial need.
(a) The Participant may withdraw up to 100% of his Pre-Tax Account (after
a Participant has withdrawn all of the value of his Rollover
Account), excluding any earnings applicable to this Account after
December 31, 1988.
(b) The Participant may not have more than 3 hardship withdrawals in each
Plan Year.
(c) A distribution shall be deemed to be on account of an immediate and
heavy financial need of the Participant if the distribution is on
account of:
(1) Medical expenses described in Section 213(d) of the Code
incurred by the Employee, the Employee's Spouse or any
dependents of the Employee (as defined in Section 152 of the
Code);
(2) Purchase (excluding mortgage payments) of a principal residence
of the Employee;
(3) Payment of tuition for the next semester or quarter of
post-secondary education for the Employee, his or her Spouse,
children or dependents;
(4) The need to prevent the eviction of the Employee from his
principal residence or foreclosure on the mortgage of the
Employee's principal residence; or
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<PAGE> 60
(5) Any extraordinary financial hardship deemed acceptable by the
Commissioner of Internal Revenue Service.
(d) The Employer shall be permitted to reasonably rely on a Participant's
representations that a distribution is necessary to satisfy an
immediate and heavy financial need if the distribution is not in
excess of the amount of the immediate and heavy financial need of the
Employee and cannot be relieved by:
(1) reimbursement or compensation by insurance or otherwise;
(2) reasonable liquidation of the Employee's assets, to the extent
such liquidation would not itself cause an immediate and heavy
financial need;
(3) by cessation of pre-tax contributions or other Employee
contributions under the Plan; and
(4) other distributions or nontaxable (at the time of the loan)
loans from plans maintained by the Employer or by any other
employer, or by borrowing from commercial sources on reasonable
commercial terms.
For purposes of this subparagraph (e), the Employee's resources
shall be deemed to include those assets of his spouse (if any)
and minor children (if any) that are reasonably available to the
Employee. However, property held for the Employee's child under
an irrevocable trust or under the Uniform Gifts to Minors Act
will not be treated as a resource of the Employee.
(e) A Participant making an application under this Section shall have the
burden of presenting to the Benefits Committee evidence of such need,
and the Benefits Committee shall not permit withdrawal under this
Section without first receiving such-evidence. If a Participant's
application for a hardship withdrawal is approved, the Benefits
Committee shall then instruct the Trustee to make payment of the
approved amount of the hardship withdrawal to the Participant.
(f) The minimum amount a Participant can request as a hardship withdrawal
from their Pre-Tax Account is $500.
(g) Notwithstanding subsection (d) above, a distribution will be deemed
to be necessary to satisfy an immediate and heavy financial need of
an Employee if all of the following requirements are satisfied:
(1) The distribution is not in excess of the amount of the immediate
and heavy financial need of the Employee;
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<PAGE> 61
(2) The Employee has obtained all distributions, other than hardship
distributions, and all nontaxable loans currently available
under all plans maintained by the Employer;
(3) The Plan, and all other plans maintained by the Employer,
provide that the Employee's elective contributions and employee
contributions will be suspended for at least 12 months after
receipt of the hardship distribution; and
(4) The Plan, and all other plans maintained by the Employer,
provide that the Employee may not make elective contributions
for the Employee's taxable year immediately following the
taxable year of the hardship distribution in excess of the
applicable limit under section 402(g) for such next taxable year
less the amount of such Employee's elective contributions for
the taxable year of the hardship distribution.
7.03 LOANS. Effective from and after July 1, 1994, the Plan provides for loans
to Participants from or against the vested interest in the Plan in
accordance with the written Loan Policy adopted by the Benefits Committee,
as such Loan Policy may be amended from time to time. Such written Loan
Policy, as amended from time to time, is expressly incorporated herein by
reference.
7.04 WITHDRAWALS FROM ROLLOVER ACCOUNTS. Upon the application of any
Participant, the Benefits Committee shall at any time permit such
Participant to withdraw all of any portion of his Rollover Account. No
Participant may make more than one withdrawal from his Rollover Account
during any Plan Year.
7.05 IN-SERVICE WITHDRAWALS AFTER AGE 59-1/2. Except in the case of a
bankruptcy proceeding involving the Participant, upon the application of
any Participant who has attained age 59-1/2, the Benefits Committee shall
at any time permit such Participant to withdraw all or any part of the
withdrawable portion of his vested Pre-Tax Account, his Discretionary
Account, and/or his Matching Account. No Participant may make more than
one withdrawal from these Accounts during any Plan Year.
- ------------------
END OF ARTICLE VII
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<PAGE> 62
ARTICLE VIII
ADMINISTRATION OF PLAN
8.01 APPOINTMENT AND TERM OF COMMITTEE. The Board of Directors shall appoint
one or more individuals to each of the Benefits Committee and the
Investment Committee, the members of which shall serve until their
resignation, death or removal.
Any person who is a director, shareholder, officer or Employee of the
Employer shall be eligible to serve on either or both Committees.
Vacancies on either Committee arising by resignation, death, removal or
otherwise shall be filled by the Board of Directors. Until such vacancies
are filled, however, the remaining members of the Committee shall carry
out the powers and duties of the Committee. The Board of Directors, within
30 days after the occurrence of a vacancy on the Committee, shall
designate a successor to the open position.
A member of either Committee may resign at any time by delivering his
written notice of resignation to the Board of Directors, with or without
cause or prior notice, to take effect on the specified date. The Board of
Directors may remove a member of either Committee at any time by
delivering a written notice of removal to the Committee member, with or
without cause or prior notice, to take effect on the specified date.
8.02 POWERS AND RESPONSIBILITIES OF INVESTMENT COMMITTEE.
(a) STATEMENT OF FUNDING POLICY. The Investment Committee shall establish
a funding policy and method, including but not limited to
determination of the short-term objectives for liquidity and
long-term objectives for investment growth, or shall appoint a
qualified person to do so. The Investment Committee shall review, not
less often than annually, all pertinent Employee information and Plan
data in order to adjust the established funding policy and method of
the Plan to carry out the Plan's objectives. The Investment Committee
shall communicate the funding policy and method, and any changes
therein, periodically as it deems appropriate, to the Trustee and any
Investment Manager.
(b) APPOINTMENT OF INVESTMENT MANAGER. The Investment Committee shall
possess the authority to appoint an Investment Manager or Managers to
manage, including the power to acquire and dispose of, all or any of
the assets of the Trust. In the event of any such appointment, the
Investment Committee shall establish the portion of the assets of the
Trust which shall be subject to the management of the Investment
Manager and shall so notify the Trustee in writing. Neither the
Investment Committee nor the Trustee shall have investment
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responsibility with respect to those assets subject to the investment
direction of the Investment Manager. Notwithstanding the foregoing,
the Investment Committee shall possess the authority to direct the
Trustee as to the investment of Plan assets. In the event the
Investment Committee exercises such power, the Trustee shall have no
investment responsibility with respect to those assets subject to the
investment direction of the Investment Committee.
(c) APPOINTMENT OF ADVISORS. The Investment Committee or the Trustee with
the consent of the Committee may appoint counsel, specialists,
advisers, and other persons as the Committee or the Trustee deems
necessary or desirable in connection with the administration of this
Plan.
(d) ADMINISTRATION OF PROGRAM OF SELF-DIRECTION OF INVESTMENTS BY
PARTICIPANTS. The Investment Committee shall administer the program
for self-direction of Accounts by Participants in accordance with
Section 9.10 below and Section 404(c) of ERISA. So long as the
participants in the Plan continue to have the right to direct the
investment of their Plan account balances among various mutual funds
or other investment alternatives (the "Investment Alternatives"), the
Investment Committee shall:
(1) Select the Investment Alternatives, monitor their performance,
and change the menu of Investment Alternatives when and as
appropriate.
(2) Review periodically the Investment Alternative portfolios (if
any), and rebalance such portfolios as and when needed.
(3) Select a "default" Investment Alternative for Participants who
fail to direct the investment of their Plan account balances.
(4) Establish, maintain, and publicize the Plan's procedures whereby
the Participants can direct the investment of their Plan account
balances.
(5) Provide or cause to be provided to Participants adequate
information concerning the Investment Alternatives, investment
managers, transaction fees, and the like.
(6) Monitor the investment education services provided to
Participants by the Plan (if any) to make sure that such
activities are within the safe-harbor rules of ERISA
Interpretive Bulletin 96-1.
(7) Establish and administer a procedure for passing through to
Participants the voting rights and similar ownership rights
associated with their Plan account investments.
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(8) Appoint an independent fiduciary to carry out activities
involving a potential for undue employer influence with respect
to Company Stock held in Plan accounts (e.g., activities
relating to pass-through of voting rights, tender rights, or
other shareholder rights).
(9) Engage a qualified investment advisory firm to advise the
Committee in performing the functions listed above.
(a) SPECIFIC POWERS AND DUTIES. The primary responsibility of the
Benefits Committee is to administer the Plan for the exclusive
benefit of the Participants and their Beneficiaries, subject to the
specific terms of the Plan. The Benefits Committee shall administer
the Plan in accordance with the terms hereof and shall have the power
to determine all questions arising in connection with the
administration, interpretation and application of the Plan and as
more specifically set out in this Section and other sections of the
Plan, except for investment matters within the purview of the
Investment Committee. The Benefits Committee may correct any defect,
supply any omission or reconcile any inconsistency in such manner and
to such extent as shall be deemed necessary or advisable to carry out
the purposes of this Plan, provided however, that any interpretation
or construction shall be done in a nondiscriminatory manner and shall
be consistent with the intent that the Plan shall continue to be
deemed a qualified plan and trust under the terms of Code Sections
401(a) and 501(a) and ERISA and all regulations issued pursuant
thereto.
(b) CERTAIN AMENDMENT AUTHORITY. The Benefits Committee shall have the
power to make amendments to the Plan on behalf of the Employer
without prior approval of the Board of Directors of administrative
and/or qualifying (changes required by the IRS or the DOL or a Court
of competent jurisdiction) natures. Such amendments are authorized to
be executed on behalf of the employer by a member of the Benefits
Committee.
(c) OVERSIGHT AND REVIEW. The Benefits Committee shall periodically
review the performance of any Fiduciary or other person to whom
duties have been delegated or allocated by it under the provisions of
the Plan or pursuant to procedures established hereunder, except for
investment matters within the purview of the Investment Committee.
This requirement may be satisfied by formal periodic review by the
Employer or by a qualified person specifically designated by the
Employer, through day-to-day conduct on evaluation or through other
appropriate means.
The Benefits Committee shall be charged with the duties of the
general administration of the Plan, including, but not limited to,
the following:
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(1) Resolving all questions relating to the eligibility of Employees
to participate or remain Participants hereunder;
(2) Computing, certifying, and directing, the Trustee with respect
to the amount and the kind of benefits to which any Participant
shall be entitle hereunder;
(3) Authorizing and directing the Trustee with respect to all
non-discretionary or otherwise directed disbursements from the
Trust;
(4) Maintaining all necessary records for the administration of the
Plan;
(5) Interpreting the provisions of the Plan and making and
publishing such rules for regulation of the Plan as are
consistent with the terms hereof;
(6) Determining the size and type of any annuity contract to be
purchased from any insurer, and designating the insurer from
which such contract shall be purchased;
(7) Computing and certifying to the Employer and to the Trustee from
time to time the sums of money necessary to desirable to be
contributed to the Plan;
(8) Providing information to any Participant regarding his rights,
benefits, or elections available under the Plan;
(9) Furnishing the Employer with information which the Employer may
require for tax or other purposes;
(10) To enforce the terms of the Plan and the rules and regulations
the Committee adopts;
(11) To review and render decisions respecting a claim for (or denial
of a claim for) a benefit under the Plan; and
(12) To determine the value of a Participant's Accounts and the
nonforfeitable percentage of each Participant's Accounts.
(d) OTHER POWERS AND DUTIES. The Benefits Committee shall have all powers
necessary or appropriate to accomplish its duties under this Plan.
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8.03 ALLOCATION OF DUTIES AMONG COMMITTEE MEMBERS. Each Committee may select a
Chairman from among its members. A Secretary may also be appointed by the
Committee who may or may not be a member of the Committee. The Chairman
shall preside at all meetings of the Committee unless, in his absence, a
Vice Chairman selected by the Committee presides. The Secretary shall keep
all minutes of Committee proceedings and such records and documents as are
necessary for the proper administration of the Plan. In the event that
only one person is appointed to the Committee, such person shall, for all
intents and purposes, be the Chairman of the Committee.
If more than one person is appointed to serve on a Committee, the
responsibilities of each member may be specified by the Sponsor and
accepted in writing by each member. In the event that no such delegation
is made by the Sponsor, the Committee members may, by written instrument,
allocate the responsibilities among themselves, in which event the
Committee shall notify the Sponsor and the Trustee in writing of such
action and specify the responsibilities of each member of the Committee.
The Trustee thereafter shall accept and rely upon any documents executed
by the appropriate member of the Committee until such time as the Sponsor
or the Committee files with the Trustee a written revocation of such
designation.
8.04 COMPENSATION OF COMMITTEE MEMBERS. Committee members may receive
reasonable compensation for services rendered, or for the reimbursement of
expenses properly and actually incurred in the performance of duties with
the Plan; except that no person so serving on the Committee who already
receives full-time pay from the Employer or an association of Employers
whose Employees are Participants in the Plan, shall receive compensation
from the Plan, except for reimbursement of expenses properly and actually
incurred.
8.05 MANNER OF ACTING. Except where there has been an allocation and delegation
of administrative authority pursuant to Section 8.03, if there shall be
more than one member of a Committee, they shall act by a majority of their
number.
The Chairman or the Secretary of a Committee may execute any certificate
or other written evidence of the action of the Committee. A Committee may
delegate any of its rights, powers and duties to any one or more of its
members, including the power to execute any document on behalf of the
Committee, in which event the Committee shall notify the Board of
Directors, the Employer and the Trustee of the name or names of its
members so designated. The Trustee thereafter shall accept and rely upon
any document executed by such member of members as representing action by
the Committee until the Committee shall file with the Board of Directors,
the Employer and the Trustee a written revocation of such designation.
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8.06 RECORDS AND REPORTS. Each Committee shall keep a record of all actions
taken and shall keep all other books of account, records, and other data
that may be necessary for proper administration of the Plan and shall be
responsible for supplying all information and reports to the Internal
Revenue Service, Department of Labor, Participants, Beneficiaries and
others as required by law.
8.07 INFORMATION FROM EMPLOYER. The Employer shall furnish the Trustee with
proper written evidence of the names of the individuals duly appointed to
each Committee and authorized to carry out the duties and responsibilities
thereof and of any resignations, deaths, removals or replacements of
members of the Committee.
To enable the Benefits Committee to perform its functions, the Employer
shall supply full and timely information to each Committee on all matters
relating to the compensation of all Participants, Hours of Service, Years
of Service, occurrences of retirement, death, Disability, or termination
of employment, and such other pertinent facts and data as the Committee
may require; and the Committee shall advise the Trustee of the foregoing
facts as may be pertinent to the Trustee's duties under the Plan. The
Committee and Trustee may rely upon such information as is supplied by the
Employer and shall have no duty or responsibility to verify such
information.
8.08 PAYMENT OF EXPENSES. Any bond which may be required by applicable laws or
regulations for the performances of duties by members of a Committee and
all reasonable and necessary costs, expenses, and liabilities incurred by
the Committee in the supervision and administration of the Plan which are
not paid by the Employer shall be a charge against the Plan assets and
shall be paid there from by the Trustee as directed in writing by the
Committee.
All expenses of administration may be paid out of the Plan assets unless
paid by the Employer. Such expenses shall include any expenses incident to
the functioning of the Committees, including, but not limited to, fees of
accountants, counsel, and other specialists, and other costs of
administering the Plan. Until paid, the expenses shall constitute a
liability of the Plan assets. However, the Employer may reimburse the
Trust for any administration expenses incurred pursuant to the above. Any
administration expense paid to the Trust as a reimbursement shall not be
considered as a company contribution.
8.09 DISCRETION. Each Committee shall discharge its duties with respect to the
Plan in the sole interest of the Participants and their Beneficiaries,
using the care, skill and discretion that a prudent man acting in a like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character under the circumstances then prevailing.
The Investment Committee, in communicating the funding policy to the
Trustee and any Investment Manager appointed to serve the Plan, shall
instruct them to diversify
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the investments of the Trust so as to minimize the risk of large losses
unless it is clearly prudent not to do so under the circumstances.
8.10 LIABILITY OF THE COMMITTEE. No member of a Committee shall be liable for
any act or omission on his own part of for any other member of the
Committee, the Trustee, any Investment Manager appointed to serve the Plan
or any other Fiduciary or agent appointed to serve the Plan, except to the
extent required by law and for which liability cannot be waived.
8.11 EMPLOYER LIABILITY. The Employer assumes no obligation or responsibility
to any of its Employee's, Participants or Beneficiaries for any act of, or
failure to act, on the part of the Committees, the Trustee or any other
Fiduciary, except to the extent such liability cannot be waived by law.
8.12 BONDING. Every Fiduciary, except a bank or an insurance company, unless
exempted by ERISA and regulations thereunder, shall be bonded in an amount
not less than 10% of the amount of the fund such Fiduciary handles;
provided, however, that the minimum bond shall be $1,000 and the maximum
bond, $500,000. The amount of the bond shall be determined at the
beginning of each Plan Year by the amount of funds handled by each such
person, group, or class to be covered and their predecessors, if any,
during the preceding Plan Year, or if there is no preceding Plan Year,
then by the amount of the funds to be handled during the then current
year. The bond shall provide protection to the Plan against any loss by
reason of acts of fraud or dishonesty by the Fiduciary alone or in
connivance with others. The surety shall be a corporate surety company (as
such term is used in Section 412(a)(12) of ERISA), and the bond shall be
in a form approved by the Secretary of Labor. Notwithstanding anything,
herein to the contrary, the cost of such bonds shall be an expense of the
Plan and may, at the election of the Benefits Committee, by paid from the
Plan assets or by the Employer.
8.13 INDEMNIFICATION. The Employer shall indemnify each member of each
Committee and each member of its Board of Directors from and against any
and all liabilities, costs, or expenses incurred as a result of any act or
omission to act in connection with the performance of fiduciary duties or
responsibilities, if any, under this Plan and applicable laws and
regulations, but not for liabilities and claims arising from such
Fiduciary's will misconduct or gross negligence.
It is specifically provided that the Employer may purchase out of its own
funds or the Trustee may purchase out of the Trust Fund insurance for the
members of a Committee and any other Fiduciary appointed by the Board of
Directors, the Employer or the Committee, and for the Trust Fund itself,
to cover liability or losses occurring by reason of the act or omission of
any one or more of the members of the Committee or any other Fiduciary
appointed to serve the Plan, provided such insurance permits recourse by
the
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insurer against such Fiduciaries concerned in a case for breach of a
Fiduciary obligation by one or more Fiduciaries covered thereby.
8.14 MULTIPLE FIDUCIARY CAPACITIES. Any individual, organization, firm or other
entity may serve in more than one Fiduciary capacity with respect to this
Plan, including the ability to serve both as Trustee and as a member of
one or both of the Committees.
8.15 INFORMATION TO PARTICIPANTS. The Committees shall make available to each
Participant and any Beneficiary such record, document and other data as is
required by ERISA and such Participant or Beneficiary shall have the right
to examine such records at reasonable time during business hours. Nothing
contained in this agreement, however, shall give any Participant or
Beneficiary the right to examine any data or records reflecting the
compensation or benefits paid to any other individual Participant or
Beneficiary.
8.16 RELIANCE. 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.
The Committees and the Trustee shall be fully protected in acting and
relying upon any evidence described in this Section 8.16.
8.17 NO DECISIONS BY INTERESTED PARTY IN OWN BENEFIT. A member of a Committee
who is also a Participant in the Plan shall not vote or act upon any
matter relating solely to himself unless there is only one member of the
Committee.
- -------------------
END OF ARTICLE VIII
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ARTICLE IX
PARTICIPANT ADMINISTRATIVE PROVISIONS
AND
CLAIMS PROCEDURE
9.01 BENEFICIARY DESIGNATIONS. Each Participant from time to time may designate
any person or persons (who may be designated contingently or successively
and who may be an entity other than a natural person) as his Beneficiary
or Beneficiaries to whom his Plan benefits are paid if he dies before
receipt of all such benefits. Each Beneficiary designation shall be on a
form approved by the Benefits Committee and will be effective only when
such form is filed with the Benefits Committee during the Participant's
lifetime.
Each Beneficiary designation filed with the Benefits Committee will cancel
all Beneficiary designations previously filed with the Benefits Committee.
In the event a married Participant designates a Beneficiary other than his
Spouse, his Spouse must acknowledge the effect of designating an alternate
Beneficiary (or change in the form of benefit) and consent to the
specifically named alternate Beneficiary(ies) (or to the form of benefit
payment) in writing, and such consent must be witnessed by a notary public
or a representative of the Benefits Committee. This consent must be on
file with the Benefits Committee before the Beneficiary designation can be
honored. A spousal consent filed with the Benefits Committee shall be
applicable only with respect to the Spouse who has signed such form.
9.02 NO BENEFICIARY DESIGNATIONS. If a married Participant fails to designate a
Beneficiary or if a married Participant names a Beneficiary other than his
Spouse and the Spouse's consent is not on file with the Benefits
Committee, the Participant's entire Account balance shall be paid to his
Surviving Spouse.
If any Participant fails to designate a Beneficiary in the manner provided
above, or if the Beneficiary designated by a deceased Participant dies
before him or before complete distribution of the Participant's benefits,
the Benefits Committee in its discretion, may direct the Trustee to
distribute such Participant's benefits (or the balance thereof) equally
among all the persons, in the first of the following classes of preference
Beneficiaries, in which there shall be any person surviving such
Participant:
(a) the Participant's children;
(b) the Participant's parents;
(c) the Participant's brothers and sisters;
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(d) the Participant's executor or administrator.
9.03 PERSONAL INFORMATION TO COMMITTEE. Each Participant and each Beneficiary
of a deceased Participant must furnish to the Benefits Committee such
evidence, data or information as the Benefits Committee considers
necessary or desirable for the purposes 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 Committee, provided the Benefits Committee shall advise each
Participant of the effect of his failure to comply with its request.
9.04 ADDRESS FOR NOTIFICATION. Each Participant and each Beneficiary of a
deceased Participant shall file with the Benefits 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 Benefits Committee, or as shown on the records of the Employer shall
bind the Participant, or Beneficiary for all purposes of this Plan.
9.05 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN. In the event that all, or
any portion, of the distribution payable to a Participant or his
Beneficiary hereunder shah, at the expiration of two year after it shall
become payable, remain unpaid solely by reason of the inability of the
Administrator, after sending a registered letter, return receipt
requested, to the last known post office address, and after further
diligent effort, to ascertain the whereabouts of such Participant or his
Beneficiary, such amount shall be utilized in the same manner as a
forfeiture pursuant to this agreement. In the event a Participant or
Beneficiary is located subsequent to his benefit being forfeited, such
benefit shall be restored.
9.06 NOTICE OF CHANGE IN PLAN TERMS. The Benefits Committee, within the time
prescribed by the Act and the applicable regulations, shall furnish all
Participants and Beneficiaries a summary plan description and a summary
description of any material modification to the Plan or notice of
discontinuance of the Plan and all other information required by the Act
to be furnished without charge.
9.07 REVIEW OF PLAN DOCUMENTS AND INFORMATION. Any Participant or Beneficiary
of a deceased Participant may examine copies of the Plan, its summary
descriptions, the latest annual report, any bargaining agreement, this
agreement and the Trust Agreement, contract or any other instrument under
which the Plan was established or is maintained. The Benefits Committee
will maintain all of the items listed in this Section 9.07 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 the Act, for examination
during reasonable business hours. Upon the written request of a
Participant or a deceased Participant's Beneficiary, the Benefits
Committee shall furnish him with a copy of any
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item listed in this Section 9.07. The Benefits Committee may make a
reasonable charge to the requesting party for the copies so furnished.
9.08 CLAIMS PROCEDURE. Claims for benefits under the Plan may be filed with the
Benefits Committee on forms supplied by the Employer. Written notice of
the disposition of a claim shall be furnished to the claimant within
ninety (90) days after the application thereof is filed. In the event the
claim is denied, the reasons for the denial shall be specifically set
forth in the notice in language calculated to be understood by the
claimant, pertinent provisions of the Plan shall be cited, and, where
appropriate, an explanation as to how the claimant can perfect the claim
will be provided. In addition, the claimant shall be furnished with an
explanation of the Plan's claims review procedure.
9.09 CLAIMS REVIEW PROCEDURE. Any Employee, former Employee, or Beneficiary of
either, who has been denied a benefit by a decision of the Benefits
Committee pursuant to Section 9.08 shall be entitled to claim by filing
with the Benefits Committee (on a form which may be obtained from the
Benefits Committee) a request for a hearing. Such request, together with a
written statement of the reasons why the claimant believes his claim
should be allowed, shall be filed with the Benefits Committee no later
than sixty days after receipt of the written notification provided for in
Section 9.08. The Benefits Committee shall then conduct a hearing within
the next fifty days, at which time the claimant may be represented by an
attorney or any other representative of his choosing and at which time the
claimant shall have an opportunity to submit written and oral evidence and
arguments in support of his claim. At the hearing (or upon five business
days written notice to the Benefits Committee) the claimant or his
representative shall have an opportunity to review all documents in the
possession of the Benefits Committee which are pertinent to the claim at
issue and its disallowance. Either the claimant or the Benefits Committee
may cause a court reporter to attend the hearing and hearing and record
the proceedings. In such event, a complete written transcript of the
proceedings shall be furnished to both parties by the court reporter. The
full expense of any such court reporter and such transcripts shall be
borne by the party causing the court reporter to attend the hearing. A
final decision as to the allowance of the claim shall be made by the
Benefits Committee within sixty days of receipt of the appeal unless there
has been an extension of sixty days and shall be communicated in writing
to the claimant. Such communication shall be written in a manner
calculated to be understood by the claimant and shall include specific
reasons for the decision and specific references to the pertinent Plan
provisions on which the decision is based.
9.10 INDIVIDUALLY DIRECTED INVESTMENTS. A Participant or former Participant may
elect how their accounts shall be invested among the various investment
alternatives established under the Plan from time to time by the
Investment Committee. The Investment Committee shall furnish to each
Participant and former Participant sufficient information for them to make
informed decisions with regard to the investment alternatives available
under the Plan. It is intended that this section 9.10 will be
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administered by the Investment Committee in a manner which satisfies the
requirements of the regulations issued under ERISA Section 404(c).
The Investment Committee shall from time to time establish and shall
communicate in writing to Participants and former Participants the various
restrictions and procedures applicable to their individual direction of
their investments. All such restrictions and procedures shall be applied
on a uniform and nondiscriminatory basis to all similarly situated
individuals, and shall be in compliance with the requirements of the
regulations under ERISA Section 404(c).
The accounts of a Participant or a former Participant form whom no
investment direction is received by the Investment Committee shall be
invested by the Trustee as it deems appropriate.
The Investment Committee shall have the authority to select the various
investment alternatives under the Plan, and shall have the ability to make
such changes as it deems prudent in the investment alternatives available
to Participants and former Participants. Any changes in investment
alternatives shall be handled in a manner which allows for provision of
adequate written notice to all Participants and former Participants and
which allows them an appropriate time period for adjusting their
investment directions in light of such changes in the available investment
alternatives.
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END OF ARTICLE IX
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ARTICLE X
TOP-HEAVY PROVISIONS
10.01 GENERALLY. For any Plan Year in which the Plan is a Top-Heavy Plan, the
requirements of Sections 10.02 and 10.03 must be met in accordance with
Section 416 of the Code and the regulations thereunder.
10.02 MAXIMUM PAY. Annual pay of any Employee shall not be taken into account
under the Plan in excess of $150,000 for Plan Years beginning after
December 31, 1993 (such amount to be adjusted annually for increases in
the cost of living in accordance with Section 416(d) of the Code).
10.03 MINIMUM CONTRIBUTIONS. Minimum Employer contributions for a Participant
who is not a Key Employee shall be required under the Plan for the Plan
Year as follows:
(a) The amount of the minimum contributions shall be the lesser of the
following percentages of Compensation (reduced by forfeitures
allocated to a Participant's Account):
(1) three percent or,
(2) the highest percentage at which such contributions are made
under the Plan for the Plan Year on behalf of a Key Employee.
(A) For purposes of this paragraph (2), all defined
contribution plans required to be included in an
Aggregation Group shall be treated as one plan.
(B) This paragraph (2) shall not apply if the Plan is required
to be included in an Aggregation Group and the Plan enables
a defined benefit plan required to be included in the
Aggregation Group to meet the requirements of Sections
401(a)(4) or 410 of the Code.
(C) For purposes of this paragraph (2), the calculation of the
percentage at which contributions are made for a Key
Employee shall be based only on his pay not in excess of
$200,000, such amount to be adjusted annually for increases
in the cost of living in accordance with Section 416(d) of
the Code.
(D) If the highest rate allocated to a Key Employee for a year
in which the Plan is Top-Heavy is less than 3%, any amounts
contributed as
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a result of a salary reduction agreement must be included
in determining contributions made on behalf of Key
Employees.
(b) There shall be disregarded for purposes of this Section 10.03 any
contributions or benefits under chapter 21 of the Code (relating to
the Federal Insurance Contributions Act), Title II of the Social
Security Act, or any other Federal or State law.
(c) For purposes of this Section 10.03, the term "Participant" shall be
deemed to refer to all Participants who have not separated from
service at the end of the Plan Year including, without limitation,
individuals who declined to elect or make contributions to the Plan.
(d) Any Employer contribution attributable to a salary reduction or
similar arrangement shall not be taken into account.
(e) For any Plan Year for which the Plan is a Top-Heavy Plan, the
Participants shall vest in their Discretionary and Matching
Contribution Accounts in accordance with the following schedule:
<TABLE>
<CAPTION>
Years of Service Vested Percentage
---------------- -----------------
<S> <C>
Less than 3 0%
3 or more 100%
</TABLE>
A shift between vesting schedules under this Section 10.03 is an
amendment to the vesting schedule and the Committee must apply the
rules of Section 6.03 accordingly. A shift to a new vesting schedule
under this Section 10.03 is effective on the first day of the Plan
Year for which the top heavy status of the Plan changes.
10.04 SUPER TOP-HEAVY PLANS. If, for any Plan Year in which the Plan is a
Top-Heavy Plan it is also a Super Top-Heavy Plan, then for purposes of the
limitations on contributions and benefit under Section 415 of the Code,
the dollar limitations in the defined benefit plan fraction and the
defined contribution plan fraction shall be multiplied by 1.0 rather than
1.25. However, if the application of the provisions of this Section 10.04
would cause any individual to exceed the combined Section 415 limitations
on contributions and benefits, then the application of the provisions of
this Section 10.04 shall be suspended as to such individual until such
time as he no longer exceeds the combined Section 415 limitations as
modified by this Section 10.04. During the period of such suspension,
there shall be no Employer contributions, forfeitures or voluntary
nondeductible contributions allocated to such individual under this or any
other defined
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contribution plan of the Employer and there shall be no accruals for such
individual under any defined benefit plan of the Employer.
10.05 DETERMINATION OF TOP HEAVINESS. The determination of whether a plan is
Top-Heavy shall be made as follows:
(a) If the Plan is not required to be included in an Aggregated Group
with other plans, then it shall be Top-Heavy only, if when considered
by itself, it is a Top-Heavy Plan and it is not included in a
permissive Aggregation Group that is not a Top-Heavy Group.
(b) If the Plan is required to be included in an Aggregation Group with
other plans, it shall be Top-Heavy only if the Aggregation Group,
including any permissively aggregated plans, is Top Heavy.
(c) If a plan is not a Top-Heavy Plan and is not required to be included
in an Aggregation Group, then it shall not be Top-Heavy even if it is
permissively aggregated in an Aggregation Group which is a Top-Heavy
Group.
10.06 DETERMINATION OF SUPER TOP HEAVINESS. A plan shall be a Super Top-Heavy
Plan if it would be a Top-Heavy Plan under the provisions of Section
10.07, but substituting "90 percent" for "60 percent" in the ratio test in
Section 10.07.
10.07 CALCULATION OF TOP-HEAVY RATIOS. A plan shall be Top-Heavy and an
Aggregation Group shall be a Top-Heavy Group with respect to any Plan Year
as of the Determination Date, if the sum as of the Determination Date of
the Cumulative Accrued Benefits and the Cumulative Accounts of Employees
who are Key Employees for the Plan Year, exceeds 60 percent of a similar
sum determined for all Employees, excluding former Key Employees.
10.08 CUMULATIVE ACCOUNTS ACCRUED BENEFITS. The Cumulative Accounts and
Cumulative Accrued Benefits for any Employee shall be determined as
follows:
(a) "Cumulative Account" shall mean the sum of the amount of an
Employee's accounts under a defined contribution plan (for an
unaggregated plan) or under all defined contribution plans included
in an Aggregation Group (for aggregated plans) determined as of the
most recent Plan Valuation Date within a 12-month period ending on
the Determination Date, increased by any contributions due after such
Valuation Date and before the Determination Date.
(b) "Cumulative Accrued Benefit" means the sum of the present value of an
Employee's accrued benefits under a defined benefit plan (for an
unaggregated plan) or under all defined benefit plans included in an
Aggregation Group (for
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aggregated plans), determined under the actuarial assumptions set
forth in such plan or plans, as of the most recent Plan Valuation
Date within a 12-month period ending on the Determination Date as if
the Employee voluntarily terminated service as of such Valuation
Date.
(c) Accounts and benefits shall be calculated to include all amounts
attributable to both Employer and Employee contributions but
excluding amounts attributable to voluntary deductible Employee
contributions.
(d) Accounts and benefits shall be increased by the aggregate
distributions during the five-year period ending on the Determination
Date made with respect to an Employee under the plan or plans as the
case may be or under a terminated plan which, if it had not been
terminated, would have been required to be included in the
Aggregation Group.
(e) If any Employee has not performed services for the Employer
maintaining the Plan at any time during the five-year period ending
on the Determination Date, any accrued benefit for such Employee (and
the account of such Employee) shall not be taken into account.
(f) Rollovers and direct plan-to-plan transfers shall be handled as
follows:
(1) If the transfer is initiated by the Employee and made from a
plan maintained by one employer to a plan maintained by another
employer, the transferring plan continues to count the amount
transferred under the rules for counting distributions. The
receiving plan does not count the amount if accepted after
December 31, 1983, but does count it if accepted prior to
December 31, 1983.
(2) If the transfer is not initiated by the Employee or is made
between plans maintained by the Employer, the transferring plan
shall no longer count the amount transferred and the receiving
plan shall count the amount transferred.
(3) For purposes of this Subsection (e), all employers aggregated
under the rules of Sections 414(b), (c) and (m) of the Code
shall be considered a single employer.
10.09 OTHER DEFINITIONS. For purposes of this Article X, the following
definitions shall apply, to be interpreted in accordance with the
provisions of Section 416 of the Code and the regulations thereunder:
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(a) "Aggregation Group" means a plan or group of plans which includes all
plans maintained by the employers in which a Key Employee is a
participant or which enables any plan in which a Key Employee is a
participant to meet the requirements of Code Section 401(a)(4) or
Code Section 410, as well as all other plans selected by the Employer
for permissive aggregation inclusion of which would not prevent the
group of plans from continuing to meet the requirements of such Code
Sections.
(b) "Compensation" shall have the meaning set forth in Regulation Section
1.415-2(d)(1) and (2), except that for purposes of this Article X,
salary deferral contributions and other deferred compensation
contributions made to the Plan by the Employer shall be included in
compensations.
(c) "Determination Date" means, with respect to any Plan Year: (1) the
last day of the preceding Plan Year, or (2) in the case of the first
Plan Year of any plan, the last day of such Plan Year.
(d) "Employee" means, for purposes of this Article X, any person employed
by an Employer and shall also include any Beneficiary of such person,
provided that the requirement of Sections 10.02 and 10.03 shall not
apply to any person 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.
(e) "Employer" means any corporation which is a member of a controlled
group of corporations (as defined in Code Section 414(b) which
includes the Employer or any trades or businesses (whether or not
incorporated) which are under common control (as defined in Code
Section 414(c)) with the Employer, or a member of an affiliated
service group (as defined in Code Section 414(m)) which includes the
Employer.
(f) "Hour of Service" shall have the meaning set forth in Section 2.29.
(g) "Key Employee" means as of any defecation date, any Employee, former
Employee, or Beneficiary of a former Employee who is, at any time
during the Plan Year, or was, during any one of the four preceding
Plan Years any one or more of the following:
(1) An officer of an Employer having annual Compensation greater
than 150% of the limitation in effect under Code Section
415(c)(1)(A) for any such Plan Year, unless 50 other such
officers (or, if lesser, a number of
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such officers equal to the greater of three or ten percent of
the Employees) have higher annual Compensation.
(2) An owner (or considered an owner under Code Section 318) of one
of the ten largest interests in the Employer if such
individual's annual Compensation exceeds 100 percent of the
dollar limitation in effect under Code Section 415(c)(1)(A). For
purposes of this paragraph (2), if two Employees have the same
interest, the one with the greater Compensation shall be treated
as owning the larger interest.
(3) Any person owning (or considered as owning within the meaning of
Code Section 318) more than five percent of the outstanding
stock of a Employer or stock possessing more than five percent
of the total combined voting power of such stock.
(4) A person who would be described in paragraph (3) above if "one
percent" were substituted for "five percent" each place it
appears in paragraph (3) above, and who has annual Compensation
of more than $150,000. For purposes of determining ownership
under this Subsection 10.09(g), Code Section 318(a)(2)(C) shall
be applied by substituting "five percent" for "50 Percent" and
the rules of Subsections (b), (c) and (m) of Section 414 of the
Code shall not apply.
(h) "Year of Service" means a year which constitutes a "Year of Service"
under the rules of paragraphs (4), (5) and (6) of Code Section 411(a)
to the extent not inconsistent with the provisions of this Article X.
(i) "Non-Key Employee" means an Employee who is not a Key Employee.
- ----------------
END OF ARTICLE X
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ARTICLE XI
AMENDMENT, TERMINATION AND MISCELLANEOUS PLAN PROVISIONS
11.01 INTENT TO QUALIFY. This Plan is intended to be a qualified employee
benefit pension plan within the meaning of Code Section 401(a). The trust
portion of the Plan is intended to be an exempt trust within the meaning
of Code Section 501(a).
11.02 EXCLUSIVE BENEFIT/PROHIBITION ON DIVERSION OF ASSETS. This Plan has been
executed for the exclusive benefit of the Participants and their
Beneficiaries. So far as possible, this Plan shall be interpreted and
administered in a manner consistent with this intent and with the
intention of the Employer that this Plan shall at all times fully comply
with the requirements of applicable laws and regulations. Neither the
Employer nor either Committee shall exercise any power or right to do or
perform any act which is in conflict with or violates such laws and
regulations. Any power or right granted under this Plan or retained by the
Employer shall be void to the extent that its exercise or retention shall
violate laws and regulations. The Employer shall make any and all
retroactive amendments to this Plan that are required under applicable
laws and regulations in order to establish and maintain the Plan in
conformity as a qualified Plan pursuant to Section 401(a) of the Code and
the Trust which is a part hereof exempt pursuant to Section 501(a) of the
Code.
Except as provided in Section 4.10 and otherwise specifically permitted by
law, it shall be impossible by operation of the Plan or of the Trust, by
termination of either, by power of revocation or amendment, by the
happening of any contingency, by collateral arrangement or by any other
means, for any part of the corpus or income of any Trust Fund maintained
pursuant to the Plan or any funds contributed thereto to be used for, or
diverted to, purposes other than the exclusive benefit of Participants,
retired Participants, or their Beneficiaries.
11.03 ERISA STATUS. This Plan shall be considered to be an employer pension
benefit plan under ERISA Section 3(l).
11.04 NONDISCRIMINATION. All provisions of this Plan shall be interpreted and
applied in a uniform, nondiscriminatory manner.
11.05 NONALIENATION OF BENEFITS. Subject to the exceptions provided below, no
benefit which shall be payable out of the Trust Fund to any person
(including a Participant or his Beneficiary) shall be subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge, and any attempt to anticipate, alienate, sell,
transfer, assign, pledge, encumber or charge the same shall be void; and
no such benefit shall in any manner to be liable for, or subject to, the
debts, contracts, liabilities, engagements or torts of any such person,
nor shall it be subject to attachment
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or legal process for or against such person and the same shall not be
recognized by the Trustee, except to the extent as may be required by law.
The preceding paragraph shall not apply to the extent that a Participant
or Beneficiary is indebted to the Plan, for any reason, under any
provision of this agreement. At the time a distribution is to be made to
or for a Participant's or Beneficiary's benefit, such portion of the
amount distributed as shall equal such indebtedness shall be paid by the
Trustee to the Trustee or the Benefits Committee, at the direction of the
Benefits Committee, to apply against or discharge such indebtedness. Prior
to making a payment, however, the Participant or Beneficiary must be given
written notice by the Benefits Committee that such indebtedness is to be
so paid in while or part from his nonforfeitable Accounts. If the
Participant or Beneficiary does not agree that the indebtedness is a valid
claim against his nonforfeitable Accounts, he shall be entitled to a
review of the validity of the claim in accordance with the Claims and
Claims Review Procedures under the Plan.
The preceding paragraphs shall not apply to a qualified domestic relations
order and such other domestic relations orders permitted to be so treated
by the Benefits Committee under the provisions of the Retirement Equity
Act of 1984.
The Benefits Committee shall establish a written procedure to determine
the qualified status of any domestic relations orders received by the Plan
and to administer distributions under such qualified orders.
All rights and benefits, including elections provided to Participants,
their Spouses or Beneficiaries, shall be subject to the rights accorded
"alternate payees" under "qualified domestic relations orders" as such
terms are defined in Code Section 414(p). To the extent provided under a
qualified domestic relations order, a former spouse of a Participant shall
be treated as the Spouse, or surviving Spouse for all purposes under the
Plan.
11.06 APPLICABLE LAW. This Plan shall be construed and administered in
accordance with ERISA and the laws of the State of Texas, to the extent
that such laws are not preempted by ERISA.
11.07 TITLES AND HEADINGS NOT TO CONTROL. The headings and subheadings in this
Plan have been inserted for convenience of reference only and are to be
ignored in any interpretation of the provisions herein.
11.08 GENDER AND NUMBER. Words used herein in the masculine or feminine gender
shall be construed as the feminine or masculine gender, respectively,
where appropriate. Words used in the singular or plural shall be construed
as the plural or singular, respectively, where appropriate.
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11.09 SEVERABILITY. Should any provisions of this Plan be determined to be void
by any Court of competent jurisdiction, the Plan will continue to operate,
subject to the Board of Director's right to amend or terminate it as
provided in Section II. 15 below, and, for the purposes of the
jurisdiction of the Court only, will be deemed not to include the
provision determined to be void.
11.10 NO CONTRACT OF EMPLOYMENT. The adoption and maintenance of the Plan shall
not be deemed to constitute a contract between the Employer and any
Participant or Employee, or to be a consideration for or inducement to
employment of any person. Nothing herein contained shall be construed to
give any Participant or Employee the right to be retained in the employ of
the Employer or to interfere with the right of the Employer to terminate
the employment of any Participant at any time.
11.11 NO DUPLICATION OF BENEFITS. There shall be no duplication of benefits
under the Plan because of employment by more than one participating
Employer.
11.12 LEGAL ACTION. In the event any claim, suit, or proceeding is brought
regarding the Trust and/or Plan established hereunder to which the Trustee
or the Benefits Committee may be a party, and such claim, suit, or
proceeding is resolved in favor of the Trustee or Committee, they shall be
entitled to be reimbursed from the Trust Fund for any and all costs,
attorney's fees, and other expenses pertaining thereto incurred by them
for which they shall have become liable.
11.13 PROTECTIVE CLAUSE. Neither the Sponsor, the Employer nor the Trustee, nor
their successors, shall be responsible for the validity of any insurance
contract issued hereunder or for the failure on the part of the insurer to
make payments provided by any such contract, or for the action of any
person which may delay payment or render a contract null and void or
unenforceable in whole or in part.
11.14 ACTION BY EMPLOYER OR SPONSOR. Whenever the Sponsor or Employer under the
terms of this agreement is permitted or required to do or perform any act
or matter or thing, it shall be done and performed by a person duly
authorized by its legally constituted authority.
11.15 RIGHT TO AMEND AND TERMINATE. The Employer hopes and expects to continue
the Plan and the payment of contributions indefinitely, but continuance is
not assumed as a contractual obligation. Therefore, the Employer reserves
the right to: amend, in whole or part, terminate in whole or part, or
discontinue contributions in whole or part, the Plan at any time and from
time to time without the consent of any other party, subject to the
restrictions set out below.
At no time shall any amendment:
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(a) Violate the exclusive benefit clause Section 11.02 or the prohibition
on diversion of assets clause of the same section;
(b) Affect the duties, rights or responsibilities of the Trustee, the
Plan Administrator or the Benefits Committee without the written
consent of the affected party;
(c) Decrease the Accounts of a Participant, except to the extent
permitted by Code Section 412(c)(8) or such other law, regulation or
ruling which specifically permits the reduction of same.
An amendment (including the adoption of this Plan as a restatement of
the Prior Plans) shall be treated as prohibitively decreasing a
Participant's Accounts determined immediately before the adoption of
such amendment if it has the effect of either:
(1) eliminating or reducing an early retirement benefit or a
retirement type subsidy (except-as permitted by law or
regulations), or
(2) eliminating an optional form or benefit (except as permitted by
law or regulations).
All amendments shall be in writing and shall state the date to which it is
either retroactively or prospectively effective.
11.16 CONSENT TO AMENDMENT BY TRUSTEE IF DUTIES INCREASED. No amendment which
affects the rights, duties or the responsibilities of the Trustee,
Committee or Investment Manager may be made without such party's written
consent. The Trustee shall not be required to execute any such amendment
unless the Trust Agreement is amended thereby.
11.17 TERMINATION OF THE PLAN. The Employer shall have the right, at any time,
to suspend or discontinue its contributions under the Plan and to
terminate, at any time, this Plan and the Trust. The Plan shall terminate
upon the first to occur -of the following:
(a) The date terminated by action of the Employer,
(b) The date the Employer shall be judicially declared bankrupt or
insolvent, or
(c) The dissolution, merger, consolidation or reorganization of the
Employer or the sale by the Employer of all or substantially all of
its assets, unless the successor or purchaser makes provision to
continue the Plan, in which event the successor or purchaser shall
become the Employer under the Plan.
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Upon termination of the Plan, the distribution provisions of the Plan
shall remain operative, with the following exceptions:
(d) if a Participant's nonforfeitable Accounts do not exceed $5,000, the
Benefits Committee shall direct the Trustee to distribute the
Participant's nonforfeitable Accounts to him in a lump sum cash
payment as soon as administratively practicable after the Plan
terminates; and
(e) if a Participant's nonforfeitable Account exceeds $5,000, the
Participant or his Beneficiary, in addition to the distribution
events permitted under the Plan, may elect in writing to have the
Trustee commence distribution of his nonforfeitable Accounts as soon
as administratively practicable after the Plan terminates.
To liquidate the Trust, the Investment 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
Accounts exceed $5,000 and the Participant does not elect an immediate
distribution pursuant to paragraph (e) above.
The Trust shall continue until the Trustee in accordance with the
direction of the Benefits Committee has distributed all of the benefits
under the Plan. A resolution or amendment to freeze all future Employer
contributions but otherwise to continue to maintain this Plan, shall not
be a termination for purposes of this Section 11.17.
11.18 VESTING UPON PLAN TERMINATION. Notwithstanding any other provision of this
Plan to the contrary, upon either full or partial termination of the Plan
or the complete discontinuance of contributions, an affected Participant's
right to his Accounts derived from Employer contributions shall be one
hundred percent vested and nonforfeitable to the extent funded.
11.19 MERGERS, CONSOLIDATIONS AND TRANSFERS. In the event of any merger or
consolidation of the Plan with, or transfer in whole or in part of the
assets and liabilities of the Trust Fund to another trust fund held under
any other plan of deferred compensation maintained or to be established
for the benefit of all or some of the Participants of this Plan, the
assets of the Trust Fund with respect to such Participants shall be
transferred to the other trust fund only if:
(a) Each Participant would (if either this Plan or the other plan then
terminated) receive a benefit immediately after the merger,
consolidation or transfer which is equal to or greater than the
benefit he would have been entitled to receive immediately before the
merger, consolidation or transfer,
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(b) Actions of the Sponsor under this Plan, or of any new or successor
Sponsor of the affected Participants, shall authorize such transfer
or assets, and, in the case of the new or successor sponsor of the
affected Participants, its resolutions shall include an assumption of
liabilities with respect to such Participants' inclusion in the new
sponsor's plan, and
(c) Such other plan and trust are qualified under Code Section 401(a) and
501(a).
The following plans have been merged into the Plan between the Effective
Date and July 1, 1998:
<TABLE>
<CAPTION>
PLAN EFFECTIVE DATE OF MERGER
---- ------------------------
<S> <C>
Profit Sharing Plan for Employees of the April 1, 1995
USPCI Group
Rollins Environmental Services, Inc. June 1, 1997
Savings and Investment Plan
Safety-Kleen Corp. Savings and August 1, 1998
Investment Plan
</TABLE>
11.20 NAMED FIDUCIARIES. The "Named Fiduciaries" of this Plan are: (a) the
Employer, (b) the Sponsor, (c) the Benefits Committee, (d) the Investment
Committee, (e) the Trustee and (f) any Investment Manager appointed
hereunder. The Named Fiduciaries shall have only those specific powers,
duties, responsibilities, and obligations as are specifically given them
under this agreement. In general, the Employer shall have the sole
responsibility for making the contributions for the Participants who are
its Employees provided for under Article IV. The Sponsor shall have the
sole authority to appoint and remove the Trustee and the Committee; and to
amend or terminate, in whole or in part, this agreement. The Committee
shall have the sole responsibility for the administration of this
agreement, which responsibility is specifically described in this
agreement. The Trustee shall have the sole responsibility of management of
the assets held under the Trust, except those assets, the management of
which has been assigned to an Investment Manager, who shall be solely
responsible for the management of the assets assigned to it, all as
specifically provided in this agreement. Each Named Fiduciary warrants
that any directions given, information furnished, or action taken by it
shall be in accordance with the provisions of this agreement, authorizing
or providing for such direction, information or action. Furthermore, each
Named Fiduciary may rely upon any such direction, information or action of
another Named Fiduciary as being proper under this agreement, and is not
required under this agreement to inquire into the propriety of any such
direction, information or action. It is intended under this agreement that
each Named Fiduciary shall be responsible for the proper exercise of its
own powers, duties,
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responsibilities and obligations under this agreement. No Named Fiduciary
shall guarantee the Trust Fund in any manner against investment loss or
depreciation in asset value. Any person or group may serve in more than
one Fiduciary capacity.
11.21 SUCCESSORS. In the event of the dissolution, merger, consolidation or
reorganization of the Sponsor or an Employer under the Plan, provision may
be made by which the Plan will be continued by the successor to the
Sponsor or such Employer. In such event, such successor shall be
substituted for the Sponsor or Employer, as the case may be, under the
Plan. The substitution of the successor shall constitute an assumption of
Plan liabilities by the successor and the successor shall have all the
powers, duties and responsibilities of the Sponsor or such Employer under
the Plan.
11.22 FIDUCIARIES NOT INSURERS. The Fiduciaries under the Plan in no way
guarantee the Trust Fund from investment 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
Benefits 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.
11.23 NO LIABILITY. The Employer assumes no obligation or responsibility to. any
of its Employees, Participant's or their Beneficiaries for any act of, or
failure to act, on the part of a Committee, the Trustee or any Investment
Manager.
11.24 NOTICE AND WAIVER OF NOTICE. Whenever written notice is required to be
given under this Plan, such notice shall be deemed given on the date that
such written notice is deposited at a United States Postal Service
station, first class postage paid. Notice may be waived by any party
entitled otherwise to receive written notice concerning any matter under
this Plan.
11.25 EVIDENCE FURNISHED CONCLUSIVE. 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. The Fiduciaries under the Plan shall be fully
protected in acting and relying upon any evidence described under this
Section 11.25.
11.26 RETURNED PAYMENTS. If no one claims a payment or a distribution made from
the Trust, or if a payment which was mailed to the last known post office
address of a Participant or Beneficiary is returned because the addressee
failed to claim the payment, the Trustee shall promptly cease benefit
payments to such Participant, redeposit into the Trust such payment or
payments which remain unclaimed and shall notify the Benefits Committee.
The Benefits Committee and/or the Trustee shall conduct a reasonable
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search for the Participant or Beneficiary but if after a reasonable search
has been made without success, the provisions of Section 9.05 shall apply
to the benefit payments.
11.27 RELEASE OF CLAIMS. Any payment to any Participant, his legal
representative, Beneficiary, or to any guardian or committee appointed for
such Participant or Beneficiary in accordance with the provisions of this
agreement, shall, to the extent thereof, be in full satisfaction of all
claims hereunder against the Plan Sponsor, the Trustee and the Employer,
either of whom may require such Participant, legal representative,
Beneficiary, guardian or committee, as a condition precedent to such
payment, to execute a receipt and release thereof in such form as shall be
determined by the Sponsor, the Trustee or Employer.
11.28 PAYMENTS TO MINORS OR INCOMPETENTS. In the event a distribution is to be
made to a minor Beneficiary, or to the custodian for such minor
Beneficiary under the Uniform Gift to Minors Act or Gift to Minors Act, if
such is permitted by the laws of the state in which said Beneficiary
resides, such payment to the legal guardian, custodian or parent of a
minor Beneficiary shall fully discharge the Trustee, Employer, and Plan
from further liability on account thereof.
If the Benefits Committee receives satisfactory evidence that any person
entitled to a benefit hereunder is physically, mentally or legally
incompetent to receive the benefit and give a valid receipt therefor at
the time the benefit is payable, and that an individual or institution is
then maintaining or has custody of than person and that a guardian or
other representative of that person has been appointed to see to the
affairs of that person, the Benefits Committee may direct the Trustee to
pay the benefit to the individual or institution maintaining or then
having custody of that person and the receipt by that individual or
institution shall be a valid and complete discharge from further liability
of the Plan to such person.
11.29 MULTIPLE COPIES OF PLAN AND/OR TRUST DOCUMENT. This agreement and the
Trust Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which shall constitute one
and the same agreement or Trust Agreement (as the case may be) and shall
be binding on the respective successors and assigns of the Employer and
other Fiduciaries.
11.30 SEGREGATION OF PLAN ASSETS. All assets of the Plan shall be held in Trust
for the exclusive benefit of the Participants and their Beneficiaries
hereunder.
11.31 PARTIES TO LITIGATION. Except as other provided by ERISA, only the
Employer, the Benefits Committee and the Trustees shall be necessary
parties to any court proceeding involving the Trustee or the Trust Fund.
No Participant or Beneficiary shall be entitled to any notice of process
unless required by ERISA. Any final judgment
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entered in any proceeding shall be binding and conclusive upon the
Employer, a Committee, the Trustee and the Participants and their
Beneficiaries.
- -----------------
END OF ARTICLE XI
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ARTICLE XII
ADOPTION BY OTHER EMPLOYERS
12.01 ADOPTION BY OTHER EMPLOYERS. Notwithstanding anything herein to the
contrary, with the consent of the Sponsor, any Affiliate may adopt this
Plan and all of the provisions hereof, and participate herein and be known
as a 'Participating Employer', by a properly executed document evidencing
said intent and will of such Participating Employer.
12.02 DESIGNATION OF AGENT. Each Participating Employer shall be deemed to be a
part of this Plan; provided, however, that with respect to all of its
relations with the Trustee and Committees for the purpose of this Plan,
each Participating Employer shall be deemed to have designated irrevocably
the Sponsor as its agent. Unless the context of the Plan clearly indicates
the contrary, the word "Employer" shall be deemed to include each
Participating Employer as related to its adoption of the Plan.
12.03 AMEND. Amendment of this Plan by the Sponsor at any time when there shall
be a Participating Employer hereunder shall only be by the written action
of the Sponsor and with the consent of the Trustee where such consent is
necessary in accordance with the terms of this Plan.
12.04 REQUIREMENTS OF PARTICIPATING EMPLOYERS.
(a) Each such Participating Employer shall be required to use the same
Trustee as provided in this Plan.
(b) The Trustee may, but shall not be required to, commingle, hold and
invest as one Trust Fund all contributions made by Participating
Employers, as well as all increments thereof.
(c) The transfer of any Participant from or to a Employer participating
in this Plan, whether he be an Employee of the Employer or a
Participating Employer, shall not affect such Participant's rights
under the Plan, and his Accounts as wen as his accumulated service
time with the transferor or predecessor, and his length of
participation in the Plan, shall continue to his credit.
12.05 PARTICIPANT TRANSFERS. It is anticipated than an Employee may be
transferred between Participating Employers, and in the event of any such
transfer, the Employee involved shall carry with him his accumulated
service and eligibility. No such transfer shall effect a termination of
employment hereunder, and the Participating Employer to which the Employee
is transferred shall thereupon become obligated hereunder with
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respect to such Employee in the same manner as was the Participating
Employer from whom the Employee was transferred.
12.06 SEPARATE ACCOUNTING. All contributions made by a Participating Employer,
as provided for in this Plan, shall be paid to and held by the Trustee for
the exclusive benefit of the Employees of such Participating Employer and
the Beneficiaries of such Employees, subject to all the terms and
conditions of this Plan. On the basis of the information furnished by the
Benefits Committee, the Trustee may, upon Committee request and Sponsor
approval, keep separate books and records concerning the affairs of each
Participating Employer hereunder and as the Accounts and credits of the
Employees of each Participating Employer.
12.07 DISCONTINUANCE OF PARTICIPATION. Any Participating Employer shall be
permitted to discontinue or revoke its participation in the Plan. At the
time of any such discontinuance or revocation, satisfactory evidence
thereof and of any applicable conditions imposed shall be delivered to the
Trustee. The Trustee shall thereafter transfer, deliver and assign
contracts and other Trust Funds assets allocable to the Participants of
such Participating Employer to such new Trustee as shall have been
designated by such Participating Employer, in the event that it has
established a separate pension plan for its Employees. If no successor to
the Trustee is designated, the Trustee shall retain such assets for the
Employees of said Participating Employer pursuant to the provisions of
Article XII hereof. In no such event shall any part of the corpus or
income of the Trust as it relates to such Participating Employer be used
for or diverted for purposes other than for the exclusive benefit of the
Employees of such Participating Employer.
12.08 COMMITTEE'S AUTHORITY. The Benefits Committee shall have authority to make
any and all necessary rules or regulations, binding upon all Participating
Employers and all Participants, to effectuate the purpose of this Article.
12.09 PARTICIPATING EMPLOYER'S CONTRIBUTION. All contributions made by a
Participating Employer, as provided for in this Plan, shall be paid to and
held by the Trustee for the exclusive benefit of the Employees and their
Beneficiaries, subject to all the terms and conditions of this Plan. On
the basis of the information furnished by the Benefits Committee, the
Trustee may keep separate books and records concerning the affairs of each
Participating Employer hereunder and as to the Accounts and credits of the
Employees of each Participating Employer.
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END OF ARTICLE XII
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ARTICLE XIII
VOTING RIGHTS AND DIVERSIFICATION
13.01 TENDER RIGHTS AND OTHER SHAREHOLDER RIGHTS. A Participant or a
Participant's Beneficiary shall be entitled to direct the Trustee as to
the manner in which tender rights or similar shareholder rights with
respect to Company Stock allocated to his Company Stock Account are
exercised by the Plan for his account.
13.02 VOTING COMPANY STOCK. A Participant shall be entitled to direct the
Trustee as to the manner in which Company Stock allocated to his Company
Stock Account are voted by the Plan. This requirement shall apply equally
with respect to allocated whole and fractional shares. In addition, all
tender or exchange decisions with respect to Stock held under the Plan
shall be made only by the Participants with respect to both allocated and
unallocated shares in accordance with the following provisions of this
Section 13.02:
(a) As soon as practicable before each annual or special shareholders'
meeting of the issues of the Company Stock (the "Company"), the
Trustee shall furnish to each Participant a copy of the proxy
solicitation material sent generally to shareholders, together with a
form requesting confidential instructions on how the shares of
Company Stock allocated to such Participant's Accounts and a
proportionate share of any unallocated shares are to be voted. The
Company will cooperate with the Trustee to ensure that Participants
receive the requisite voting information and instructions in a timely
manner. The materials furnished to the Participants shall include a
notice from the Trustee that the Trustee will not vote any shares
(allocated or unallocated) for which timely instructions are not
received by the Trustee. Upon timely receipt of such instructions,
the Trustee (after combining votes of fractional shares to give
effect to the greatest extent to Participants' instructions) shall
vote the shares as instructed. If voting instructions for shares of
Company Stock allocated or unallocated to the Account of any
Participant are not timely received by the Trustee for a particular
shareholders' meeting (hereinafter referred to as "Unvoted Shares"),
such Unvoted Shares shall be voted by the Trustee in accordance with
directions provided to the Trustee under Section 13.02(c) below. The
instructions received by the Trustee from Participants shall be held
by the Trustee in strict confidence and shall not be divulged or
released to any person including directors, officers or employees of
any Employer, except as otherwise required by law.
(b) With respect to all corporate matters submitted to shareholders, all
shares of Company Stock allocated to the Accounts of Participants
shall be voted only in accordance with the directions of such
Participants as given to the Trustee. Each Participant shall be
entitled to direct the voting of shares of Company Stock
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allocated to the Participant's Accounts. With respect to shares of
Company Stock allocated to the Accounts of a deceased Participant,
such Participant's Beneficiary shall be entitled to direct the voting
with respect to such allocated shares as if such Beneficiary were the
Participant.
(c) Each Participant who has been allocated Company Stock in the
Participant's Accounts and who is entitled to vote on any matter
presented for a vote by the stockholders shall separately direct the
Trustee with respect to the vote of a portion of the shares of
Company Stock that are Unvoted Shares. Such direction shall be with
respect to such number of votes equal to the total number of votes
attributable to Unvoted Shares multiplied by a fraction, the
numerator of which is the number of votes attributable to Company
Stock allocated to the Participant's Account, and the denominator of
which is the total number of votes attributable to Company Stock
allocated to the Accounts of such Participants who have provided
directions to the Trustee under this Section 13.02(c). Fractional
shares shall be rounded to the nearest 1/1000th of a share.
(d) In the event an offer shall be received by the Trustee (including a
tender offer for shares of Company Stock pursuant to Section 14(d)(1)
of the Securities Exchange Act of 1934 or subject to Rule 13-e-4
promulgated under that Act, as those provisions may from time to time
be amended) to purchase or exchange any shares of Company Stock held
by the Trust, the Trustee will advise each Participant who has shares
of Company Stock credited to such Participant's Accounts in writing
of the terms of the offer as soon as practicable after its
commencement, and will furnish each Participant with a form by which
he may instruct the Trustee confidentially whether or not to tender
or exchange shares allocated to such Participant's Account. The
materials furnished to the Participant shall include (i) a notice
from the Trustee that, except as provided in this Section, the
Trustee will not tender or exchange any shares (allocated or
unallocated) for which timely instructions are not received by the
Trustee and (ii) such related documents as are prepared by any person
and provided to the shareholders of the Company pursuant to the
Securities Exchange Act of 1934. The Company and the Trustee may also
provide Participants with such other material concerning the tender
or exchange offer as the Trustee or the Company in its discretion
determines to be appropriate; provided, however, that prior to any
distribution of materials by the Company, the Trustee shall be
furnished with sufficient numbers of complete copies of all such
materials. The Company will cooperate with the Trustee to ensure that
Participants receive the requisite information in a timely manner.
(e) The Trustee shall tender or not tender shares or exchange shares of
Company Stock allocated to the Accounts of any Participant (including
fractional shares to 1/1000th of a share) only as and to the extend
instructed by the Participant. If tender or exchange instructions for
shares of Company Stock allocated to the
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Accounts of any Participant are not timely received by the Trustee,
the Trustee will treat the non-receipt as a direction not to tender
or exchange such shares. The instructions received by the Trustee
from Participants shall be held by the Trustee in strict confidence
and shall not be divulged or released to any person, including
directors, officers or employees of the Employer, except as otherwise
required by law.
(f) If, under the terms of a tender offer or otherwise, any shares of
Company Stock tendered for sale, exchange or transfer pursuant to
such offer are withdrawn from such offer, the Trustee shall follow
such instructions respecting the withdrawal of such securities from
such offer in the same manner and the same proportion as shall be
timely received by the Trustee from the Participants entitled under
this Section to give instructions as to the sale exchange of transfer
of securities pursuant to such offer.
(g) A Participant's instructions to the Trustee to tender or exchange
shares of Company Stock will not be deemed a withdrawal or suspension
from the Plan or a forfeiture of any portion of the Participant's
interest in the Plan. Funds received in exchange for tendered shares
will be credited to the Accounts of the Participant whose shares were
tendered, and will be invested by the Trustee as soon as practicable
in short term funds, including money market funds, pending receipt of
instructions.
13.03 RIGHTS, RESTRICTIONS AND OPTIONS ON COMPANY STOCK. A share of Company
Stock shall be subject to a put option and the restrictions of this
Section 13.03, if and only if, at the time of its distribution from the
Trust it is not publicly traded, or, it is subject to a 'Trading
Limitation' when so distributed (and not otherwise prohibited by
applicable Federal, State or other relevant law). Under any other
circumstances of distribution, this Section 13.03 shall have no force or
effect and no Participants or their Beneficiaries shall have any rights or
privileges hereunder with respect to this Section 13.03.
The Employer shall issue a "put option" to any Participant who receives a
distribution of Company Stock. The put option shall permit the Participant
to sell such Company Stock to the Employer at any time during two option
periods, at the fair market value of such shares. The first put option
period shall be for at least 60 days beginning on the date of
distribution. The second put option period shall be for at least 60 days
beginning after the new determination of the fair market value of Company
Stock by the Committee (and notice to the Participant) in the following
Plan Year. The Employer may allow the Investment Committee to direct the
Trustee to purchase shares of Company Stock tendered to the Employer under
a put option. The payment of any Company Stock sold under a put option
shall be made in a lump sum or in substantially equal, annual installments
over a period beginning not later than 30 days after exercise of the
option
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and not exceeding five years, with interest payable at a reasonable rate
on any unpaid installment balance (as determined by the Employer or the
Benefits Committee).
Shares of Company Stock held or distributed by the Trustee may include
such legend restrictions on transferability as the Employer may reasonable
require in order to assure compliance with applicable Federal and State
securities laws.
In order to determine the fair market value of the Company Stock for
purposes of issuing the put option, such stock shall be valued in
accordance with Internal Revenue Code Regulation Section 54.4975-1
1(d)(5).
13.04 [INTENTIONALLY OMITTED]
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END OF ARTICLE XIII
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ARTICLE XIV
QUALIFIED SURVIVOR ANNUITIES
14.01 EFFECT OF THIS ARTICLE. With respect to benefits payable before July 1,
1996, this article shall be effective only with respect to benefits
payable from this Plan which were transferred to this Plan form a plan
which was required to provide for the payment of such benefits in the form
of a Qualified Joint and Survivor Annuity or a Qualified Pre-Retirement
Survivor Annuity and for which a separate accounting of the amount so
transferred and interest thereon has been maintained. With respect to
benefits payable on or after July 1, 1996, this article shall be effective
with respect to all benefits payable from this Plan.
14.02 DEFINITIONS. For the purposes of this article, the following definitions
shall apply.
(a) "Qualified Joint and Survivor Annuity" shall mean an annuity for the
life of the Participant with a survivor annuity for the fife of the
Surviving Spouse which is equal to 100% of the amount of the annuity
which is payable during the joint lives of the Participant and the
Surviving Spouse and which is the Actuarial Equivalent of a single
annuity for the life of the Participant based on 100% of the sum of
the nonforfeitable transferred benefits and interest thereon which
has been separately accounted for as described in Section 14.01 above
(reduced by any amount of such benefits and interest thereon as has
been used as security for a loan described in Code Section
417(a)(4)).
For an unmarried Participant, the term "Qualified Joint and Survivor
Annuity" shall mean an annuity for the life of the Participant based
on the amounts described above.
The Qualified Joint and Survivor Annuity will be paid in accordance
with Section 6.09.
(b) "Qualified Pre-Retirement Survivor Annuity" shall mean an annuity for
the life of the Surviving Spouse the Actuarial Equivalent of which is
equal to 100% of the sum of the nonforfeitable transferred benefits
and interest thereon which has been separately accounted for as
described in Section 14.01 above (reduced by any amount of such
benefits and interest thereon as has been used as security for a loan
described in Code Section 417(a)(4)), determined as of the date of
the Participant's death.
The Qualified Pre-Retirement Survivor Annuity will begin to be paid
to the Surviving Spouse not later than the month in which the
Participant would have attained the earliest retirement age under the
Plan. Notwithstanding the
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foregoing, however, a Surviving Spouse shall have the right to defer
payment of the Qualified Pre-Retirement Surviving Annuity, in a
written election, to a date not later than the date on which the
Participant would have been required to have benefits commence under
Section 6.09.
(c) "Surviving Spouse" shall mean the husband or wife of the Participant
to whom the Participant was legally married on the date of death.
Common law marriages shall be recognized as valid marriages in states
so recognizing common law marriages, however, if a Participant is not
legally divorced from a spouse prior to entering into a common law
marriage, the spouse from whom he has not been legally divorced shall
be treated as the Surviving Spouse and the Spouse hereunder.
(d) "Actuarial Equivalent" shall have the meaning as defined in the plan
from which the transferred amounts originated.
(e) "Annuity Starting Date" shall mean the first day of the first period
for which an amount is payable as an annuity, or in the case of a
benefit not payable as an annuity, the first day on which all events
have occurred which entitled the Participant to such benefit.
(f) The phrase, "earliest retirement age under the Plan" shall mean the
earliest date on which the Participant could elect to receive
retirement benefits under the Plan.
14.03 WAIVER: QUALIFIED JOINT AND SURVIVOR ANNUITY. With respect to the benefits
subject to this article, a Participant (or, if the Participant is married,
the Participant and his spouse) may elect to waive the Qualified Joint and
Survivor Annuity (or designate a non-spouse Beneficiary of the survivor
portion of the Qualified Joint and Survivor Annuity), which is the normal
form of benefit settlement for a Participant who is married, and accept an
optional form of benefit distribution under Section 14.05 in accordance
with the election procedures in Section 14.06.
14.04 WAIVER: QUALIFIED PRE-RETIREMENT SURVIVOR ANNUITY. With respect to the
benefits subject to this article, a Participant and his spouse may elect
to waive the Qualified Pre-Retirement Survivor Annuity (or designate a
non-spouse Beneficiary of the Qualified Pre-Retirement Survivor Annuity)
and accept an optional form of benefit distribution under Section 14.05 In
accordance with the election procedures in Section 14.06.
14.05 OPTIONAL BENEFIT FORMS. With respect to the benefits subject to this
article, the available optional benefit forms which a Participant (or, if
the Participant is married, the Participant and his spouse) may elect are
those set out in Section 6.14.
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14.06 ELECTION OF OPTIONAL BENEFIT FORMS AND ALTERNATIVE BENEFICIARY. Each
Participant (and, if married, the Participant and his spouse) shall be
provided with a written explanation of: (a) the terms and conditions of
the Qualified Joint and Survivor Annuity; (b) the Participant's right to
make, and the effect of, an election to waive the Qualified Joint and
Survivor Annuity and the Qualified Pre-Retirement Survivor Annuity; (c)
the Participant's spouse's rights regarding the election to waive either
the Qualified Joint and Survivor Annuity and the Qualified Pre-Retirement
Survivor Annuity, the effect of any waiver and/or revocation thereof; and,
(d) the right of the Participant to revoke any waiver of the Qualified
Joint and Survivor Annuity and the Qualified Pre-Retirement Survivor
Annuity.
The written notice regarding a Participant's rights to waive the Qualified
Joint and Survivor Annuity shall be furnished to a Participant (and, if
married, the Participant and his spouse) no earlier than 90 days before
the 90 day period which ends on the Annuity Starting Date. The written
notice regarding a Participant's rights to waive the Qualified
Pre-Retirement Survivor Annuity shall be furnished to a Participant and
his spouse before the last date of whichever of the following periods
which ends last:
(a) The period beginning with the first day of the Plan year in which the
Participant attains age 32 and ending with the close of the Plan Year
preceding the Plan Year in which the Participant attains age 35;
(b) The one year period ending on the anniversary of the date on which an
individual becomes a Participant;
(c) The one year period ending on the anniversary of the date on which
benefits subject to this Article are transferred to the Plan; or
(d) The one year ending on the anniversary date on which occurs a
Participant's separation from service, in the case of a Participant
who separates from service before attaining age 35.
The period during which the Participant (and, if married, the Participant
and his spouse), at any time any number of times, may waive the Qualified
Joint and Survivor Annuity (or designate a non-spouse beneficiary) or
during which the Participant may revoke any previous waiver and again
elect the Qualified Joint and Survivor Annuity (or re-designate his spouse
as his beneficiary) shall be the 90 day period ending on the Annuity
Starting Date.
The period during which the Participant and his spouse may waive the
Qualified Pre-Retirement Survivor Annuity and elect an optional form of
benefit (or designate a non-Surviving Spouse beneficiary) or during which
the Participant may revoke any previous waiver or designation and again
elect the Qualified Pre-Retirement Survivor Annuity or
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re-designate his spouse as his Surviving Spouse) shall begin on the first
day of the Plan Year in which the Participant attains age 35 and ends on
the date of the Participant's death. In the case of a Participant who has
separated from service on or before the effective date of this article and
who has benefits transferred to the Plan which are subject to this
article, the period for the elections described in the preceding sentence
shall not begin later than date of separation from service if such
Participant separated from service prior to the attainment of age 35.
No election to waive either a Qualified Joint and Survivor Annuity, a
Qualified Pre-Retirement Survivor Annuity or designate a non-spouse
beneficiary for Qualified Joint and Survivor or Qualified Pre-Retirement
Survivor Annuity purposes shall be given effect unless: (a) the spouse of
the Participant consents in writing to such election, (b) such election
designates a specific form of optional benefit being elected or the
specific beneficiary being designated or both and (c) the written consent
of the spouse is witnessed by a Plan representative of a notary public.
Notwithstanding the foregoing sentence, the written consent of the spouse
shall not be required if the Participant is not married, the spouse cannot
be located or because of such other circumstances as may be permitted by
regulations. Spousal consent as described above shall only be effective
with respect to the spouse giving such consent.
Since the Plan does not permit loans, no spouse consent under Code Section
417(a)(4) shall be required.
14.07 CASH OUTS. If the Present Value of the nonforfeitable Accounts to which
this Article applies expressed as either a Qualified Joint and Survivor
Annuity or a Qualified Pre-Retirement Survivor Annuity does not exceed
$5,000 as determined above, the Committee shall direct the Trustee to
immediately distribute the Present Value of the nonforfeitable Accounts in
accordance with Section 6.13 and 6.14(a).
No distribution described in the previous paragraph shall be permitted
after the Annuity Starting Date unless the Participant and his spouse (or
where the Participant has died, the Surviving Spouse) consents in writing
to such distribution.
If the Present Value of the nonforfeitable Accounts to which this Article
applies exceeds $5,000, then the distribution rules under Section 6.13
shall apply. With respect to this rule, the notification requirements of
the first paragraph of Section 14.06 shall apply and the consent as
described in the penultimate paragraph of Section 14.06 shall only be
effective with respect to the spouse giving such consent.
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END OF ARTICLE XIV
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IN WITNESS WHEREOF, this Plan has been executed this _____ day of _____________,
1998.
SAFETY-KLEEN SERVICES, INC ATTEST:
PLAN SPONSOR
- --------------------------- --------------------------------
Kenneth W. Winger
President & CEO
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EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Form S-8 of our report dated October 7, 1997, which includes an explanatory
paragraph relating to the revised statement of cash flows for the years ended
August 31, 1996 and 1995, on our audits of the consolidated financial statements
and financial statement schedule of Laidlaw Environmental Services, Inc. as of
August 31, 1997 and 1996 and for each of the three years in the period ended
August 31, 1997, which report is incorporated by reference in the Annual Report
on Form 10-K.
/s/ PricewaterhouseCoopers LLP
- ------------------------------
PricewaterhouseCoopers LLP
Charlotte, North Carolina
October 14, 1998
