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EXHIBIT 10.8
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STERLING CHEMICALS, INC.
SIXTH AMENDED AND RESTATED
SAVINGS AND INVESTMENT PLAN
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DATED AS OF OCTOBER 1, 2000
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STERLING CHEMICALS, INC.
SIXTH AMENDED AND RESTATED
SAVINGS AND INVESTMENT PLAN
Table Of Contents
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ARTICLE I - PURPOSE AND EFFECT OF PLAN; DEFINITIONS AND INTERPRETATION...................................... 1
Section 1.01 Purpose........................................................................... 1
Section 1.02 Effect of Amendment and Restatement............................................... 1
Section 1.03 Certain Defined Terms............................................................. 2
Section 1.04 Interpretation.................................................................... 11
ARTICLE II - PARTICIPATION.................................................................................. 11
Section 2.01 Eligibility....................................................................... 11
Section 2.02 Service........................................................................... 12
Section 2.03 Notice of Eligibility; Election of Participation.................................. 16
ARTICLE III - PERIOD OF PARTICIPATION....................................................................... 16
Section 3.01 Change in Participant's Status.................................................... 16
Section 3.02 Restricted Participation.......................................................... 16
ARTICLE IV - FORM OF PARTICIPATION.......................................................................... 16
Section 4.01 Participant Contribution Options.................................................. 16
Section 4.02 Employer Matching Contributions................................................... 17
Section 4.03 Actual Contribution Percentage Tests.............................................. 17
Section 4.04 Adjustment to Actual Contribution Percentage Tests................................ 20
Section 4.05 Discontinuance and Resumption of Contributions.................................... 21
ARTICLE V - PRE-TAX CONTRIBUTIONS........................................................................... 21
Section 5.01 Eligibility....................................................................... 21
Section 5.02 Pre-Tax Contributions............................................................. 21
Section 5.03 Limitation on Pre-Tax Contributions............................................... 22
Section 5.04 Deduction of Pre-Tax Contributions................................................ 22
Section 5.05 Cessation of Pre-Tax Contributions................................................ 23
Section 5.06 Distribution of Pre-Tax Contributions............................................. 23
Section 5.07 Actual Deferral Percentage Tests.................................................. 23
Section 5.08 Adjustment to Actual Deferral Percentage Tests.................................... 25
Section 5.09 Modification of Pre-Tax Contribution Percentage................................... 26
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ARTICLE VI - AFTER-TAX CONTRIBUTIONS........................................................................ 26
Section 6.01 Eligibility....................................................................... 26
Section 6.02 After-Tax Contributions........................................................... 26
Section 6.02 Limitation on After-Tax Contributions............................................. 27
Section 6.03 Deduction of After-Tax Contributions.............................................. 27
Section 6.04 Cessation of After-Tax Contributions.............................................. 27
Section 6.05 Modification of After-Tax Contribution Percentage................................. 27
ARTICLE VII - LIMITATIONS ON CONTRIBUTIONS.................................................................. 27
Section 7.01 Maximum Annual Additions.......................................................... 27
Section 7.02 Adjustment for Excessive Annual Additions......................................... 29
ARTICLE VIII - ACCOUNTING .................................................................................. 30
Section 8.01 Participant Accounts.............................................................. 30
Section 8.02 Rollovers From Qualified Plans.................................................... 31
Section 8.03 Adjustment of Accounts............................................................ 31
Section 8.04 Charging Payments and Distributions............................................... 32
Section 8.05 Crediting After-Tax Contributions................................................. 32
Section 8.06 Crediting Pre-Tax Contributions................................................... 32
Section 8.07 Employer Matching Contributions Account........................................... 32
Section 8.08 Cytec Accounts and Historical Employer Matching
Contributions Accounts........................................................ 32
Section 8.09 Allocation of Employer Matching Contributions and Forfeitures..................... 32
ARTICLE IX - THE FUNDS...................................................................................... 33
Section 9.01 The Investment Funds.............................................................. 33
Section 9.02 Investment Elections.............................................................. 33
Section 9.03 Transfers Between Investment Funds................................................ 34
Section 9.04 Company Stock Fund................................................................ 34
ARTICLE X - PAYMENT OF ACCOUNT BALANCES..................................................................... 34
Section 10.01 Retirement, Disability or Death................................................... 34
Section 10.02 Resignation or Dismissal.......................................................... 34
Section 10.03 Distribution Options.............................................................. 35
Section 10.04 Limitations on Distributions...................................................... 38
Section 10.05 Designation of Beneficiaries...................................................... 40
Section 10.06 Forfeitures....................................................................... 41
Section 10.07 Payment of Distribution Directly to Eligible Retirement Plan...................... 42
Section 10.08 Qualified Domestic Relations Order Distribution................................... 43
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ARTICLE XI - IN-SERVICE WITHDRAWALS......................................................................... 43
Section 11.01 General Withdrawals by Participants............................................... 43
Section 11.02 Periodic Distributions............................................................ 44
Section 11.03 Form of Withdrawals............................................................... 44
Section 11.04 Charging and Allocations of Withdrawals and Periodic Distributions................ 44
ARTICLE XII - LOANS .................................................................................. 44
Section 12.01 Loans............................................................................. 44
Section 12.02 Loan Administration............................................................... 44
Section 12.03 Loan Eligibility.................................................................. 45
Section 12.04 Loan Application.................................................................. 45
Section 12.05 Terms and Conditions of Loans..................................................... 45
Section 12.06 Maximum Loan...................................................................... 45
Section 12.07 Interest.......................................................................... 46
Section 12.08 Terms of Loan and Repayment....................................................... 46
Section 12.09 Risk of Loss...................................................................... 46
Section 12.10 Source of Loan Funds.............................................................. 47
Section 12.11 Debiting of Accounts.............................................................. 47
Section 12.12 Accounting for Loans.............................................................. 47
Section 12.13 Distributions While Loan Balance is Outstanding................................... 47
Section 12.14 Unpaid Balances at End of Sixty-Month Period...................................... 48
Section 12.15 Hardship Withdrawal in Bankruptcy................................................. 48
Section 12.16 Default........................................................................... 48
Section 12.17 Reductions in Force............................................................... 49
ARTICLE XIII - THE COMMITTEE................................................................................ 49
Section 13.01 Membership........................................................................ 49
Section 13.02 Committee's General Powers, Rights and Duties..................................... 49
Section 13.03 Manner of Action.................................................................. 50
Section 13.04 Information Required by Committee................................................. 51
Section 13.05 Committee Decision Final.......................................................... 51
Section 13.06 Review of Benefit Determinations.................................................. 51
Section 13.07 Uniform Rules..................................................................... 51
ARTICLE XIV - RELATING TO THE EMPLOYERS..................................................................... 51
Section 14.01 Action by Employers............................................................... 51
Section 14.02 Additional Employers.............................................................. 51
Section 14.03 Restrictions as to Reversion of Trust Assets to Employers......................... 52
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ARTICLE XV - GENERAL PROVISIONS............................................................................. 52
Section 15.01 Notices........................................................................... 52
Section 15.02 Waivers........................................................................... 52
Section 15.03 Absence of Guaranty............................................................... 52
Section 15.04 No Employment Rights.............................................................. 52
Section 15.05 Interests Not Transferable........................................................ 53
Section 15.06 Facility of Payment............................................................... 53
Section 15.07 Distribution of Payment........................................................... 53
Section 15.08 Evidence.......................................................................... 53
Section 15.09 Indemnity......................................................................... 53
Section 15.10 Controlling State Law............................................................. 54
Section 15.11 Severability...................................................................... 54
Section 15.12 Successors........................................................................ 54
ARTICLE XVI - AMENDMENT, TERMINATION OR PLAN MERGER......................................................... 54
Section 16.01 Amendment......................................................................... 54
Section 16.02 Termination....................................................................... 55
Section 16.03 Plan Merger or Consolidation...................................................... 55
Section 16.04 Notice of Amendment, Termination or Plan Merger................................... 55
Section 16.05 Distribution on Termination....................................................... 55
ARTICLE XVII - TOP-HEAVY PROVISIONS......................................................................... 56
Section 17.01 Determination of Top-Heavy........................................................ 56
Section 17.02 Minimum Allocations............................................................... 57
Section 17.03 Compensation Limitation........................................................... 57
Section 17.04 Repeal, Modification or Postponement of Top-Heavy Provisions...................... 57
Section 17.05 Minimum Vesting................................................................... 57
Section 17.06 Key Employee...................................................................... 57
Section 17.07 Compensation...................................................................... 58
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EXHIBITS
Exhibit A - Investment Funds
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STERLING CHEMICALS, INC.
SIXTH AMENDED AND RESTATED
SAVINGS AND INVESTMENT PLAN
PRELIMINARY STATEMENTS
A. Sterling Chemicals, Inc. (the "Corporation") established the
Sterling Chemicals, Inc. Savings and Investment Plan (the
"Original Plan") effective as of August 1, 1986, in recognition of
the contributions of its employees to the operation of the
Corporation.
B. The Corporation has heretofore amended, and amended and restated,
the Original Plan from time to time (as amended immediately prior
to the date hereof, the "Existing Plan").
C. In connection with the acquisition of certain assets from Cytec
Industries Inc. and certain of its affiliates (collectively,
"Cytec") on January 31, 1997, the Corporation assumed the
sponsorship of a plan created by the spin-off of the accounts of
those participants under the Cytec Employees Savings and Profit
Sharing Plan (the "Cytec Plan") who became employees of Sterling
Fibers, Inc., a Delaware corporation and a wholly-owned subsidiary
of the Corporation, and such plan was merged into the Existing
Plan, as constituted on January 31, 1997.
D. The Corporation desires to amend the Existing Plan in certain
respects and restate the Existing Plan as so amended in its
entirety.
NOW, THEREFORE, the Corporation hereby amends and restates the
Existing Plan, effective as of October 1, 2000, to read in its entirety as
follows:
ARTICLE I
Purpose and Effect of Plan; Definitions and Interpretation
Section 1.01. Purpose. This Plan is maintained by the Corporation
and certain of its Affiliates to provide benefits for Eligible Employees and
shall be administered for the exclusive benefit of the Participants and their
Beneficiaries.
Section 1.02. Effect of Amendment and Restatement. The Existing
Plan is hereby amended and completely restated as set forth herein and all
rights and benefits under this Plan shall hereafter be determined under the
terms and provisions hereof; provided, however, that the amendment and
restatement of the Existing Plan effected hereby shall not operate or be
construed to deprive any Participant of any "protected benefit" (within the
meaning of Section 411(d)(6) of the Code and the Regulations thereunder) that he
or she may have had under the Existing Plan as in effect immediately prior to
this amendment and restatement. Further, this amendment and restatement shall
not operate or be construed to confer on or provide for any
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Participant whose employment terminated for any reason prior to the Effective
Date any additional or different rights or benefits than those to which he or
she may have been entitled under the Existing Plan as in effect at the time his
or her employment terminated, except as otherwise specifically provided herein
or required by Law.
Section 1.03. Certain Defined Terms. Capitalized terms used in
this Plan shall have the following respective meanings, except as otherwise
provided herein or as the context shall otherwise require:
"60% Test" has the meaning specified in Section 17.01(a)(i).
"414(s) Compensation" means, with respect to any Participant for
any Plan Year, such Participant's Pre-Tax Contributions attributable to
Deferred Compensation recharacterized as After-Tax Contributions pursuant
to Section 5.08(a) plus 415 Compensation paid to such Participant during
such Plan Year. The amount of 414(s) Compensation with respect to any
Participant shall include 414(s) Compensation for the entire 12-month
period ending on the last day of such Plan Year and shall include amounts
which are contributed by any Employer pursuant to a salary reduction
agreement and which are not includable in the gross income of the
participant under Sections 125, 402(e)(3), 402(h), 403(b) or 457 of the
Code and Employee contributions described in Section 414(h)(2) of the
Code that are treated as Employer contributions; provided, however, that:
(i) 414(s) Compensation in excess of the greater of $150,000 and
the amount specified by the Secretary of the Treasury in
accordance with Section 401(a)(17) of the Code (prorated for
any Plan Year of less than 12 months) shall be disregarded;
(ii) 414(s) Compensation shall be adjusted at the same time and
in such manner as permitted under Section 415(d) of the Code
(except that the dollar increase in effect on January 1 of
any calendar year shall be effective for the Plan Year
beginning with or within such calendar year);
(iii) for any short Plan Year, the 414(s) Compensation limit shall
be an amount equal to the 414(s) Compensation limit for the
calendar year in which the Plan Year begins multiplied by
the ratio obtained by dividing the number of full months in
the short Plan Year by 12; and
(iv) in addition to other applicable limitations set forth in
this Plan, and notwithstanding any other provision of this
Plan to the contrary, the annual 414(s) Compensation of each
Employee taken into account under this Plan shall not exceed
the annual compensation limit as set forth in Section 5.03.
"415 Compensation" means, with respect to any Participant for any
Limitation Year, the "total compensation" (as defined in Section
415(c)(3) of the Code) actually paid to such Participant by the Employers
during such Limitation Year plus any amounts that the Employers
contributed on behalf of such Participant during such Limitation Year
under any salary reduction arrangement which are excludable from gross
income under Sections
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402(e)(3), 402(h)(1)(B), 403(b) or 125 of the Code; provided, however,
that 415 Compensation in excess of the greater of $150,000 and the amount
specified by the Secretary of the Treasury in accordance with Section
401(a)(17) of the Code (prorated for any Plan Year of less than 12
months) shall be disregarded.
"Accounts" means, with respect to any Participant, such
Participant's After-Tax Matched Contributions Account, After-Tax
Supplemental Contributions Account, Cytec Accounts, Employer Matching
Contributions Account, Historical Employer Matching Contributions
Account, Pre-Tax Matched Contributions Account, Pre-Tax Supplemental
Contributions Account or Rollover Account.
"Accounting Dates" means each day that the New York Stock Exchange
is open for trading.
"Actual Contribution Percentage" means, with respect to any person
or group as of any date of determination, the Actual Contribution
Percentage for the relevant person or group at such time, as determined
in accordance with Sections 4.03 and 4.04.
"Actual Contribution Ratio" means, with respect to any Highly
Compensated Participant for any Plan Year, the ratio of (i) such Highly
Compensated Participant's Actual Contribution Percentage to (ii) the
greater of:
(A) 1.25 times the Actual Contribution Percentage for the
Non-Highly Compensated Participant group for the immediately
preceding Plan Year; and
(B) the lesser of (x) 2.0 times the Actual Contribution
Percentage for the Non-Highly Compensated Participant group
for the immediately preceding Plan Year and (y) the Actual
Contribution Percentage for the Non-Highly Compensated
Participant group for the immediately preceding Plan Year
plus two percentage points.
"Actual Deferral Percentage" means, with respect to the Highly
Compensated Participant group and the Non-Highly Compensated Participant
group for any Plan Year, the Actual Deferral Percentage for such group
for such Plan Year, as determined in accordance with Sections 5.07 and
5.08.
"Actual Deferral Ratio" means, with respect to any Employee for
any Plan Year, the ratio of (i) the amount of Pre-Tax Contributions
allocated to such Employee's Pre-Tax Contributions Accounts (unreduced by
distributions made pursuant to Section 5.03) for such Plan Year to (ii)
such Employee's 414(s) Compensation for such Plan Year.
"Adjudication of Bankruptcy" has the meaning specified in Section
12.15.
"Affiliate" means (i) any corporation that is a member of a
"controlled group of corporations" (as defined in Section 414(b) of the
Code) that include the Corporation, (ii) any trade or business (whether
or not incorporated) that is under "common control" (as
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defined in Section 414(c) of the Code) with the Corporation, (iii) any
organization (whether or not incorporated) that is a member of an
"affiliated service group" (as defined in Section 414(m) of the Code)
that includes the Corporation and (iv) any other entity required to be
aggregated with the Corporation pursuant to the Regulations under Section
414(o) of the Code.
"After-Tax Contributions" means After-Tax Matched Contributions
and After-Tax Supplemental Contributions.
"After-Tax Contributions Accounts" means, with respect to any
Participant, such Participant's After-Tax Matched Contributions Account
and After-Tax Supplemental Contributions Account.
"After-Tax Matched Contributions" has the meaning specified in
Section 6.02.
"After-Tax Matched Contributions Account" has the meaning
specified in Section 8.01(c).
"After-Tax Supplemental Contributions" has the meaning specified
in Section 6.02.
"After-Tax Supplemental Contributions Account" has the meaning
specified in Section 8.01(d).
"Aggregate Excess Contributions" means, for any Plan Year:
(i) with respect to any Highly Compensated Participant, the
amount of Aggregate Excess Contributions for such Highly
Compensated Participant for such Plan Year, as determined
pursuant to Section 4.03(d); and
(ii) with respect to the Highly Compensated Participant group,
the amount by which (A) the aggregate amount of Employer
contributions, After-Tax Contributions, Excess
Contributions recharacterized as After-Tax Contributions
and any Qualified Non-Elective Contributions or Elective
Deferrals taken into account on behalf of all Highly
Compensated Participants for such Plan Year exceeds (B) the
maximum amount of such contributions permitted under the
limitations of Section 4.03(a).
"Annual Additions" means, with respect to any Participant for any
Limitation Year, the amount of Annual Additions for such Participant for
such Limitation Year, as determined in accordance with Article VII.
"Beneficiaries" means the persons, trusts, estates or other
entities to whom a deceased Participant's benefits under this Plan are
payable.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time.
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"Committee" means the committee established under Article XIII of
this Plan.
"Company Stock" means the common stock, par value $0.01 per share,
of Sterling Chemicals Holdings, Inc. (or its successor).
"Company Stock Fund" has the meaning specified in Section 9.04.
"Corporation" has the meaning specified in the Preliminary
Statements hereof.
"Correcting Contribution" has the meaning specified in Section
4.02(c).
"Cytec" has the meaning specified in the Preliminary Statements
hereof.
"Cytec Accounts" has the meaning specified in Section 8.08.
"Cytec Employees" has the meaning specified in Section 2.02(j).
"Cytec Plan" has the meaning specified in the Preliminary
Statements hereof.
"Deferred Compensation" means, with respect to any Participant,
the amount of such Participant's total Eligible Earnings which has been
contributed to this Plan in accordance with such Participant's deferral
election.
"Direct Rollover" has the meaning specified in Section 10.07(d).
"Distributee" has the meaning specified in Section 10.07(c).
"Effective Date" means October 1, 2000.
"Elective Deferral" has the meaning specified in Regulation
1.402(g)-I(b).
"Eligible Earnings" means, with respect to any Participant for any
applicable period, such Participant's cash compensation paid for services
rendered to the Employers, including any elective salary reduction
pursuant to Sections 401(k) and 129 of the Code, but only to the extent
that such cash compensation does not exceed straight time pay plus
overtime plus shift differential, exclusive of all other forms of premium
pay; provided, however, that notwithstanding any other provision of this
Plan to the contrary, (i) for Plan Years beginning on or after January 1,
1997, the annual Eligible Earnings of each Participant taken into account
under this Plan shall not exceed $160,000, as adjusted for increases in
the cost of living in accordance with Section 401(a)(17) of the Code,
(ii) the cost of living adjustment in effect for a calendar year applies
to any period, not exceeding 12 months, over which Eligible Earnings is
determined beginning in such calendar year and (iii) if a determination
period consists of fewer than 12 months, the annual compensation limit
will be multiplied by a fraction, the numerator of which is the number of
months in the determination period, and the denominator of which is 12.
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"Eligible Matched Earnings" means, with respect to any Participant
for any applicable period, such Participant's cash compensation paid for
services rendered to the Employers, including any elective salary
reduction pursuant to Sections 401(k) and 129 of the Code, but only to
the extent that such cash compensation does not exceed straight time pay,
exclusive of all other forms of premium pay.
"Eligible Employee" means an Employee who is not (i) a member of a
collective bargaining unit, unless the bargaining agreement with the
relevant Employer provides for his coverage, (ii) regularly scheduled to
work outside the United States or (iii) a leased employee, as defined in
Section 414(n) of the Code.
"Eligible Rollover Distribution" has the meaning specified in
Section 10.07(a).
"Eligible Retirement Plan" has the meaning specified in Section
10.07(b).
"Employee" means a person who is a common law employee of the
Corporation or any Affiliate.
"Employer Matching Contributions" means any contributions made by
any Employer to an Employer Matching Contributions Account pursuant to
Section 4.02.
"Employer Matching Contributions Account" has the meaning
specified in Section 8.07.
"Employers" means the Corporation, Sterling Pulp Chemicals, Inc.,
Sterling Pulp Chemicals US, Inc., Sterling Fibers, Inc. and any other
Affiliate which adopts this Plan.
"ERISA" means Public Law 93-406, the Employee Retirement Income
Security Act of 1974, as amended from time to time, or any comparable
section or sections of future legislation that amends, supplements or
supersedes any applicable provisions of ERISA or any other applicable
regulations or court decisions thereunder.
"Excess Contributions" means, with respect to any Highly
Compensated Participant for any Plan Year, the amount of Excess
Contributions for such Highly Compensated Participant for such Plan Year,
as determined pursuant to Section 5.08(a).
"Existing Plan" has the meaning specified in the Preliminary
Statements hereof.
"Extended Group" means all Affiliates and any other company, trade
or business which would be included in the definition of Affiliate
pursuant to Section 415(h) of the Code.
"Five Percent Owner" means any person who owns (or is considered
as owning within the meaning of Section 318 of the Code) more than 5% of
the outstanding stock of an employer or stock possessing more than 5% of
the total combined voting power of all stock of an employer or, in the
case of an unincorporated business, any person who owns
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more than 1% of the capital or profits interest in an employer; provided,
however, that in determining percentage ownership hereunder, employers
that would otherwise be aggregated under Sections 414(b), (c), (m) and
(o) of the Code shall be treated as separate employers.
"Five Year Break in Service" means five or more consecutive One
Year Breaks in Service.
"Forfeiture" has the meaning specified in Section 10.06(a).
"Highly Compensated Employee" means, as of the date of
determination, any Employee or former Employee who is a "highly
compensated employee" (as defined in Section 414(q) of the Code and the
Regulations thereunder), including any Employee or former Employee that:
(i) was at any time during the year of determination or the
preceding year a Five Percent Owner of the Employer; or
(ii) for the preceding year:
(A) received 415 Compensation (as adjusted) from the
Employer in excess of $80,000; and
(B) was in the group consisting of the top 20% of
Employees when ranked on the basis of 415
Compensation during such year.
"Highly Compensated Participant" means any Highly Compensated
Employee who is eligible to participate in this Plan.
"Historical Employer Matching Contributions Account" means, with
respect to any Participant, such Participant's Employer Matching
Contributions Account in effect immediately prior to the amendment and
restatement of the Existing Plan effected by this Plan.
"Investment Funds" has the meaning specified in Section 9.01(a).
"Hour of Service" has the meaning specified in Section 2.02(b).
"Key Employee" has the meaning specified in Section 17.06.
"Laws" means all laws, statutes, rules, regulations, ordinances,
orders, writs, injunctions or decrees and other pronouncements having the
effect of law of any governmental authority.
"Layoff" means, with respect to any Participant, a layoff of such
Participant from employment with an Employer or Affiliate.
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"Limitation Year" means the "limitation year" for purposes of
Section 415 of the Code, which shall be a calendar year; provided,
however, that for periods prior to January 1, 1996, the Limitation Year
was a period of 12 months ending each September 30, with the period
commencing October 1, 1995 and ending December 31, 1995 being a short
Limitation Year.
"Loan Account" has the meaning specified in Section 12.12.
"Loan Fund" has the meaning specified in Section 9.01(b).
"Long Term Disability" means, with respect to any Participant,
that such Participant qualifies for long term disability benefits under a
long term disability income plan of an Employer or an Affiliate or if the
Committee determines that such Participant is unable to engage in any
occupation or employment for remuneration or profit by reason of a bodily
injury or disease which has existed for six continuous months and which
disability the Committee presumes in its judgment will be permanent
during the remainder of such Participant's life, exclusive of any
disability resulting from service in the armed forces of any country,
resulting from warfare or acts of the public enemy, intentional
self-inflicted injury, willful misconduct or participation in any
criminal or unlawful act. The Committee shall have the responsibility for
determining whether a Participant has become disabled and may require
medical proof of such disability, including requiring that the
Participant submit to medical examination no more frequently than
semi-annually.
"Lump Sum Distribution" has the meaning specified in Section
10.03(a).
"Lump Sum Deferral Option" has the meaning specified in Section
10.03(b)(ii).
"Non-Highly Compensated Participant" means any Participant who is
not a Highly Compensated Participant.
"Normal Retirement Age" means, with respect to any Participant,
the later of such Participant's 65th birthday or the fifth anniversary of
the date such Participant's participation in this Plan commenced.
"One Percent Owner" means any person who owns (or is considered as
owning within the meaning of Section 318 of the Code) more than one
percent of the outstanding stock of an employer or stock possessing more
than one percent of the total combined voting power of all stock of an
employer or, in the case of an unincorporated business, any person who
owns more than one percent of the capital or profits interest in an
employer; provided, however, that (i) in determining percentage ownership
hereunder, employers that would otherwise be aggregated under Sections
414(b), (c), (m) and (o) of the Code shall be treated as separate
employers.
"One Year Break in Service" has the meaning specified in Section
2.02(d).
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"Original Plan" has the meaning specified in the Preliminary
Statements hereof.
"Participant" means any person who has an Account balance under
this Plan.
"Plan" means this Sixth Amended and Restated Savings and
Investment Plan, as amended, supplemented or modified from time to time
in accordance with its terms.
"Plan Year" means a calendar year; provided, however, that for
periods prior to January 1, 1996, the Plan Year was a period of 12 months
ending each September 30, with the period commencing October 1, 1995 and
ending December 31, 1995 being a short Plan Year.
"Pre-Tax Contributions" means, with respect to any Participant,
such Participant's Pre-Tax Matched Contributions and Pre-Tax Supplemental
Contributions.
"Pre-Tax Contributions Accounts" means, with respect to any
Participant, such Participant's Pre-Tax Matched Contributions Account and
Pre-Tax Supplemental Contributions Account.
"Pre-Tax Matched Contributions" has the meaning specified in
Section 5.02.
"Pre-Tax Matched Contributions Account" has the meaning specified
in Section 8.01(a).
"Pre-Tax Supplemental Contributions" has the meaning specified in
Section 5.02.
"Pre-Tax Supplemental Contributions Account" has the meaning
specified in Section 8.01(b).
"Prior Employer" means The Monsanto Company.
"Prior Plan" means the Monsanto Savings and Investment Plan.
"Qualified Election" has the meaning specified in Section
10.05(c).
"Qualified Non-Elective Contributions" has the meaning specified
in Section 401(m)(4)(C) of the Code.
"Regulations" means the Income Tax Regulations, as promulgated by
the Secretary of the Treasury or his or her delegate, and as amended from
time to time.
"Related Defined Contribution Plans" has the meaning specified in
Section 7.02.
"Retirement" means, with respect any Participant, such
Participant's ceasing to be an Employee (i) on or after reaching his or
her Normal Retirement Age or (ii) in connection with his or her
retirement under a defined benefit plan of Employer that is qualified
under Section 401(a) of the Code.
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"Rollover Account" has the meaning specified in Section 8.01(e).
"Settlement Dates" means, with respect to any Participant, the
Accounting Date following the date on which such Participant's employment
with all Employers and Affiliates is terminated for any reason, including
retirement, disability, death, resignation or dismissal.
"Standard Work Week" means (i) with respect to any regular,
full-time Employee, 40 Hours of Service, and (ii) with respect to any
Employee who is not a regular, full-time Employee, the average number of
hours which are regularly scheduled to be worked each week by such
Employee.
"Terminated ESOP" means the Sterling Chemicals, Inc. Employee
Stock Ownership Plan, which was terminated as of August 21, 1996.
"Top Heavy Plan" has the meaning specified in Section 17.01(a).
"Total and Permanent Disability" means, as determined by the
Committee, a Participant's complete inability to substantially perform
each of the material duties of any gainful occupation for which the
Participant is reasonably qualified by reason of his education, training
or experience, which condition is reasonably expected to continue for an
extended period of time.
"Trust" means the trust established under the Trust Agreement.
"Trust Agreement" means one or more trust agreements pursuant to
which the Trustee shall hold and invest the funds accumulated under this
Plan and that implement and form a part of this Plan.
"Trust Fund" means any and all assets of this Plan which are held
by the Trustee in accordance with this Plan and the Trust Agreement.
"Trustee" means one or more corporate trustees appointed by the
Committee or another Trustee who shall hold and invest the funds
accumulated under this Plan and who shall act in accordance with the
Trust Agreement.
"Vesting Computation Period" means each calendar year.
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<PAGE> 16
"Vesting Percentage" means, with respect to any Participant, the
percentage set forth in the following table opposite the number of such
Participant's Years of Service with the Employers and Affiliates:
<TABLE>
<CAPTION>
Years of Service Vesting Percentage
---------------- ------------------
<S> <C>
Less than 1 year.....................................................0%
1 year but less than 2 years........................................20%
2 years but less than 3 years.......................................40%
3 years but less than 4 years.......................................60%
4 years but less than 5 years.......................................80%
5 years or more....................................................100%
</TABLE>
"Year of Service" has the meaning specified in Section 2.02(a).
Section 1.04. Interpretation. In this Plan, unless a clear
contrary intention appears:
(a) the words "hereof," "herein" and "hereunder" and words of
similar import refer to this Plan as a whole and not to any particular
provision of this Plan;
(b) reference to any gender includes each other gender and the
neuter;
(c) all terms defined in the singular shall have the same meanings
in the plural and vice versa;
(d) all references to Articles and Sections shall be deemed to be
references to the Articles and Sections of this Plan;
(e) the word "including" (and with correlative meaning "include")
means including, without limiting the generality of any description
preceding such term;
(f) with respect to the determination of any period of time, the
word "from" means "from and including" and the words "to" and "until"
each means "to but excluding";
(g) the captions and headings contained in this Plan shall not be
considered or given any effect in construing the provisions hereof if any
question of intent should arise; and
(h) reference to any Law means such Law as amended, modified,
codified, reenacted, supplemented or superseded in whole or in part, and
in effect from time to time.
ARTICLE II
Participation
Section 2.01. Eligibility. Each Employee who was eligible to
participate in the Existing Plan on the date immediately prior to the Effective
Date shall continue to be eligible to
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<PAGE> 17
participate in this Plan. Thereafter, each Employee will be eligible to become a
Participant (in the manner described in Section 2.03) on any Accounting Date on
which he or she is an Eligible Employee. If an Eligible Employee does not elect
to become a Participant as of the first Accounting Date on which he or she is
eligible to do so, such Eligible Employee may join this Plan on any subsequent
Accounting Date; provided, however, that he or she is then an Eligible Employee.
Section 2.02. Service. In determining Years of Service, the
following rules shall apply:
(a) A "Year of Service" means a period of twelve consecutive
months during which an Employee has completed at least 1,000 Hours of
Service and, if an Employee was employed by an Employer on August 1,
1986, Years of Service shall include Years of Service as determined under
the Prior Plan as of that date. A Participant who completes at least
1,000 Hours of Service in both (i) the period beginning October 1, 1995
and ending September 30, 1996 and (ii) the calendar year beginning
January 1, 1996, shall be credited with two Years of Service for purposes
of vesting under this Plan.
(b) An "Hour of Service" means an hour for which an Employee is
directly or indirectly compensated by any Employer or Affiliate for the
performance of duties for an Employer or an Affiliate (including hours
for which an Employee has been awarded back pay by any Employer or
Affiliate or by any governmental agency or judicial body to the extent
such hours are not otherwise treated as Hours of Service).
Notwithstanding the preceding sentence, the following special rules shall
apply:
(i) To the extent not otherwise treated as Hours of Service,
the following shall constitute Hours of Service:
(A) overtime clock hours;
(B) Hours of Service required to be taken into account
to satisfy federal military service Laws or to
satisfy any other federal Laws;
(C) hours of absence from active work because of regular
paid vacations or holidays;
(D) hours of absence from active work because of
occupational illness or disability not yet
determined to constitute Long Term Disability;
(E) hours of absence from active work during the first
12 months of an absence due to non-occupational
illness or disability not yet determined to
constitute Long Term Disability or due to a Layoff;
provided, however, that the Participant returns to
work with an Employer or an Affiliate at the
expiration of such absence or Layoff;
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<PAGE> 18
(F) hours during an approved leave of absence or such
shorter period during such leave of absence as may
be specified by an Employer; and
(G) for any Employee who immediately prior to August 1,
1986 was employed by the Prior Employer, Hours of
Service shall include those hours which were
recognized and counted under the Prior Plan, as
adopted and in effect on July 31, 1986.
(ii) During the absences from employment during which no duties
are performed for any Employer or Affiliate as specified
above, an Employee will be credited with the number of
Hours of Service such Employee would have worked for an
Employer or Affiliate during a Standard Work Week if such
Employee had reported for work during each week of absence,
subject, however, to Section 2.02(b)(iii). No more than
eight Hours of Service shall be credited for any day of
absence and no more than 1,000 Hours of Service shall be
awarded under this Section in any one Vesting Computation
Period.
(iii) No Hours of Service shall be credited to an Employee:
(A) during any period of Layoff in excess of 12 months;
(B) during any absence for which the Employee performs
no duties and is solely compensated under, or by a
plan established pursuant to, applicable workers'
compensation laws, unemployment compensation or
disability income Laws of any state;
(C) during any period during which an Employee or former
Employee is in receipt of retirement benefits under
any plan established by any Employer or Affiliate
(or to which any such entity contributes) unless or
until such Employee or former Employee ceases
drawing such benefits and performs services for any
Employer or Affiliate;
(D) for any payment made solely to reimburse an Employee
for medical or medically related benefits;
(E) for any payment made on account of pay in lieu of
vacation;
(F) for any Hours of Service in excess of the Standard
Work Week (pro-rated) on account of payments made as
back-pay awards or agreement in amounts in excess of
the standard rate of compensation which would have
been made if the Employee had actually worked during
the period at issue; or
(G) for any Hours of Service in excess of the Standard
Work Week (pro-rated) on account of any other
payment made during an absence set forth in this
Section.
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<PAGE> 19
(iv) Effective May 1, 1996, in determining the Hours of Service
of any Employee, such Employee will be credited with 95
Hours of Service for each semi-monthly payroll period in
which such Employee is directly or indirectly compensated
by any Employer or Affiliate for the performance of duties
for any Employer or Affiliate.
(v) Once it is determined that an Employee should be credited
with an Hour of Service, such Hour of Service shall be
credited to the computation period or periods in which the
duties are performed or are deemed to have been performed
or to which the payment pertains; provided, however, that,
except as may be otherwise provided in this Section 2.02
for certain specified types of absences, no more than 501
Hours of Service shall be credited during any absence from
employment during which no services are rendered,
notwithstanding the fact that the Employee may have been
deemed to have performed services or for which payments are
due.
(c) If an Employee's employment with all of the Employers and
Affiliates terminates and such Employee is later re-employed without
incurring a One Year Break in Service, such Employee's Years of Service
both before employment termination and after reemployment shall be
aggregated for purposes of this Plan.
(d) For purposes of this Plan, a "One Year Break in Service" means
a Vesting Computation Period in which an Employee completes not more than
500 Hours of Service, except where such Vesting Computation Period is the
year in which the Employee either:
(i) first commenced employment with any Employer or Affiliate
and continuously accrued Hours of Service from the date of
hire to the end of such Vesting Computation Period; or
(ii) terminated all further employment with the Employers and
Affiliates following an unbroken, continuous accrual of
Hours of Service from the first day of such Vesting
Computation Period to the date of such termination.
In determining whether a One Year Break in Service has occurred, Hours of
Service will be credited pursuant to the normal method of crediting Hours
of Service under this Plan, not to exceed 501 Hours of Service due to any
period of absence from employment due to:
(A) the pregnancy of the Participant;
(B) the birth of a child of the Participant;
(C) the placement of a child with the Participant in connection
with the adoption of such child by such Participant; or
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<PAGE> 20
(D) the care of such child by the Participant immediately
following such birth or placement.
The Hours of Service to be credited under this paragraph (d) shall only
be credited in the Vesting Computation Period in which the absence from
work begins, if a Participant would be prevented from incurring a One
Year Break in Service solely because the period of absence is treated as
Hours of Service or, in any other case, in the immediately following
Vesting Computation Period. No credit for such enumerated absences shall
be given pursuant to this paragraph (d) unless the Participant furnishes
the Committee with such timely information as the Committee may
reasonably require to establish that the absence and the length of the
absence was due to an enumerated reason.
(e) The termination of an Employee's employment with one Employer
or Affiliate will not interrupt the continuity of such Employee's
employment if, concurrently with or immediately after such termination,
such Employee is employed by one or more other Employers or Affiliates.
(f) If and to the extent the Committee so provides, the last
continuous period of an Employee's service with any corporation or other
entity, the stock, assets or business of which is acquired by an Employer
(whether by merger, consolidation, purchase of assets or otherwise), and
any predecessor thereto designated by the Corporation, will be considered
as service with the Employers if such Employee becomes employed by one or
more of the Employers.
(g) For purposes of this Section 2.02, if an Employee had a prior
period or periods of service with an Affiliate that has not adopted this
Plan, such period or periods of service with the Affiliate will be
considered as service with an Employer.
(h) A period of concurrent service with two or more Employers
under this Plan or Affiliates that have not adopted this Plan will be
considered as employment with only one of them during that period.
(i) If an Employee incurs a Five Year Break in Service and is
subsequently re-employed by any Employer or Affiliate, such Employee's
Years of Service after such Five Year Break in Service shall not be taken
into account when determining his or her Vesting Percentage applicable to
the portion of his or her Employer Matching Contributions Account balance
which is attributable to his or her employment prior to such Five Year
Break in Service. However, such an Employee's Years of Service before and
after his Five Year Break in Service shall be aggregated for purposes of
determining his or her Vesting Percentage applicable to the portion of
his or her Employer Matching Contributions Account balance which is
attributable to employment subsequent to such Five Year Break in Service.
(j) Employees of Cytec who became Employees on February 1, 1997
("Cytec Employees") shall receive credit for all purposes under this Plan
for all service that was credited under the Cytec Plan as of January 31,
1997.
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<PAGE> 21
(k) Notwithstanding any provision of this Plan to the contrary,
contributions, benefits and service credit with respect to qualified
military service will be provided in accordance with Section 414(u) of
the Code.
Section 2.03. Notice of Eligibility; Election of Participation.
The Committee will notify an Employee of the circumstances under which such
Employee will be eligible to participate in this Plan and the steps required for
participation. The Committee will also notify each person that first becomes an
Eligible Employee on or after October 2, 2000 that, unless and until the earlier
of (a) such Employee making an election to participate in this Plan at a
specified rate or to not participate in this Plan and (b) such Employee ceasing
to be an Eligible Employee, the Corporation will deduct 3% of such Employee's
Eligible Compensation from each of such Employee's paychecks, and contribute
such amounts to this Plan on behalf of such Employee as Pre-Tax Contributions
(with such amounts being invested in the ML Retirement Preservation Trust until
redirected into another Investment Fund by the relevant Participant).
ARTICLE III
Period of Participation
Section 3.01. Change in Participant's Status. If a Participant
ceases to be an Eligible Employee, such Participant shall not be entitled to
make any additional contributions to this Plan unless such Participant again
becomes an Eligible Employee.
Section 3.02. Restricted Participation. When payment of all of a
Participant's benefits is not made at his or her Settlement Date, such
Participant or, in the event of his or her death, such Participant's Beneficiary
will be considered as a Participant for all purposes of this Plan, except that:
(a) a Beneficiary of a deceased Participant cannot designate a
beneficiary under Section 10.05;
(b) a Beneficiary of a deceased Participant shall not be entitled
to retain Accounts in this Plan except to the extent permitted by Section
10.04(c);
(c) such persons cannot make contributions to this Plan; and
(d) such persons cannot take out loans or make in-service
withdrawals that are available only to Participants who are Employees.
ARTICLE IV
Form of Participation
Section 4.01. Participant Contribution Options. Each Participant
who is an Eligible Employee shall have the right to make Pre-Tax Contributions
pursuant to Article V, After-Tax Contributions pursuant to Article VI or both.
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<PAGE> 22
Section 4.02. Employer Matching Contributions. (a) Each Employer
shall make Employer Matching Contributions to this Plan, determined by the
Pre-Tax Contributions made by such Employer on behalf of the Participants to the
Pre-Tax Contributions Accounts or the After-Tax Contributions made by such
Employer on behalf of the Participants to the After-Tax Contributions Accounts
as specified herein. Employer Matching Contributions with respect to any
Participant shall first be used to match such Participant's Pre-Tax
Contributions. All Employer Matching Contributions made to this Plan shall be
allocated to such Participant's Employer Matching Contributions Account.
(b) Except as otherwise provided in Article V or Article VI, for
each pay period, the Employers will make Employer Matching Contributions under
this Plan in an amount equal to 50% of the Pre-Tax Matched Contributions and
After-Tax Matched Contributions made for such pay period minus the aggregate
amounts of any outstanding Forfeitures. Employer Matching Contributions for any
pay period shall be paid to the Trustee at the same time and in the same manner
as Pre-Tax Matched Contributions and After-Tax Matched Contributions are paid to
the Trustee.
(c) In addition to the Employer Matching Contributions described
in paragraph (b) above, the Employers may make such additional contributions to
this Plan as may be necessary to correct any error which occurs in the
administration of this Plan (a "Correcting Contribution"). Any Correcting
Contribution which relates to correction of an investment loss occasioned by the
administration of the Accounts under the Plan shall not constitute an Annual
Addition to this Plan under Article VII and shall not be deemed Employer
Matching Contributions for purposes of this Section or Sections 8.07, 8.09 and
9.02 hereof. A Correcting Contribution which relates to errors made by the
Corporation in crediting the proper amount of Employer Matching Contributions to
a Participant's account for any Plan Year under this Section or Sections 8.07,
8.09 or 9.02 shall be attributable to the Annual Addition for the Plan Year to
which such Correcting Contribution relates and which may not be the Plan Year in
which such Correcting Contribution is made.
(d) Notwithstanding anything in Article V, VII or VII to the
contrary, the Employers shall not make Employer Matching Contributions in an
amount in excess of the amount which will be deductible by the Employers under
Section 404 of the Code for the taxable year with respect to which such
contributions are made.
Section 4.03. Actual Contribution Percentage Tests. (a) The Actual
Contribution Percentage for the Highly Compensated Participant group for any
Plan Year shall not exceed the greater of:
(i) 1.25 times the Actual Contribution Percentage for the
Non-Highly Compensated Participant group for the immediately preceding
Plan Year; and
(ii) the lesser of (A) 2.0 times the Actual Contribution
Percentage for the Non-Highly Compensated Participant group for the
immediately preceding Plan Year and (B) the Actual Contribution
Percentage for the Non-Highly Compensated Participant group for the
immediately preceding Plan Year plus two percentage points;
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<PAGE> 23
provided, however, that in order to prevent the multiple use of the alternative
method described in clause (ii) above and Section 401(m)(9)(A) of the Code, any
Highly Compensated Participant eligible to make Elective Deferrals pursuant to
any cash or deferred arrangement maintained by any Employer and to make Employee
contributions or to receive matching contributions under this Plan or any other
plan maintained by any Employer shall have his or her Actual Contribution Ratio
reduced pursuant to Regulation 1.401(m)-2. The provisions of Section 401(m) of
the Code and Regulations 1.401(m)-1(b) and 1.401(m)-2 are incorporated herein by
reference.
(b) For purposes of this Section 4.03 and Section 4.04, the Actual
Contribution Percentage for a Plan Year with respect to the Highly Compensated
Participant group and the Non-Highly Compensated Participant group is the
average of the ratios (calculated separately for each Participant in each group)
of:
(i) the sum of (A) all Employer Matching Contributions made
pursuant to Section 4.02 plus (B) all After-Tax Contributions made
pursuant to Section 6.02 plus (C) all Excess Contributions characterized
as After-Tax Contributions pursuant to Section 5.08(a) on behalf of such
Participant (determined with respect to the current Plan Year for a
Highly Compensated Participant and with respect to the immediately
preceding Plan Year for a Non-Highly Compensated Participant); to
(ii) such Participant's 414(s) Compensation for such Plan Year.
(c) In the event that the Actual Contribution Percentage test
under Section 4.03(a) for any Plan Year is not satisfied, the Actual
Contribution Ratio of the Highly Compensated Participant with the highest Actual
Contribution Ratio will be reduced (or if two or more Highly Compensated
Participants have the highest Actual Contribution Ratio, the Actual Contribution
Ratios of all of such Highly Compensated Participants will be reduced pro rata)
by reducing the amount of After-Tax Contributions and Employer Matching
Contributions made by or on behalf such Highly Compensated Participant in the
order specified in Section 4.04(a) until either the Actual Contribution
Percentage test is satisfied or such Highly Compensated Participant's Actual
Contribution Ratio is equal the Actual Contribution Ratio of the Highly
Compensated Participant(s) with the next highest Actual Contribution Ratio. This
process shall be repeated until the Actual Contribution Percentage test under
Section 4.03(a) is satisfied for such Plan Year. The amount of "Aggregate Excess
Contributions" for any Highly Compensated Participant is equal to the sum of
these hypothetical reductions multiplied, in each case, by such Highly
Compensated Participant's compensation.
(d) The distribution (or Forfeiture, if applicable) of Aggregate
Excess Contributions shall be made on the basis of the respective amounts
attributable to each Highly Compensated Participant. The Highly Compensated
Participants subject to actual distribution or Forfeiture in any Plan Year shall
be determined using the "dollar leveling method" starting with the Highly
Compensated Participant with the greatest dollar amount of employee
contributions for such Plan Year and continuing until the amount of the
Aggregate Excess Contributions has been accounted for.
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<PAGE> 24
(e) For purposes of determining Actual Contribution Percentage and
the amount of Aggregate Excess Contributions pursuant to Section 4.03(d), only
Employer Matching Contributions (excluding those Forfeited pursuant to Section
4.04(a)) contributed to this Plan prior to the end of the succeeding Plan Year
shall be considered. In addition, the Committee may elect to take into account,
with respect to Employees eligible to have Employer Matching Contributions or
After-Tax Contributions allocated to their accounts, Elective Deferrals and
Qualified Non-Elective Contributions contributed to any plan maintained by any
Employer. Such Elective Deferrals and Qualified Non-Elective Contributions shall
be treated as Employer Matching Contributions subject to Regulation
1.401(m)-I(b)(5), which is incorporated herein by reference. However, the Plan
Year must be the same as the plan year of the plan to which such Elective
Deferrals and Qualified Non-Elective Contributions are made. Qualified
Non-Elective Contributions shall be non-forfeitable when made and subject to the
provisions of Section 5.06.
(f) For purposes of this Section 4.03 and Sections 401(a)(4),
410(b) and 401(m) of the Code, if two or more plans of the Employers to which
matching contributions, Employee contributions or both are made are treated as
one plan for purposes of Sections 401(a)(4) or 410(b) of the Code (other than
the average benefits test under Section 410(b)(2)(A)(ii) of the Code), such
plans shall be treated as one plan. In addition, two or more plans of the
Employers to which matching contributions, Employee contributions or both are
made may be considered as a single plan for purposes of determining whether or
not such plans satisfy Sections 401(a)(4), 410(b) and 401(m) of the Code. In
such a case, the aggregated plans must satisfy this Section and Sections
401(a)(4), 410(b) and 401(m) of the Code as though such aggregated plans were a
single plan. Plans may be aggregated under this paragraph (f) only if they have
the same plan year.
(g) If a Highly Compensated Participant is a participant under two
or more plans which are maintained by the Employers to which matching
contributions, Employee contributions or both are made, all such contributions
on behalf of such Highly Compensated Participant shall be aggregated for
purposes of determining such Highly Compensated Participant's Actual
Contribution Ratio. However, if the plans have different plan years, this
paragraph (g) shall be applied by treating plans ending with or within the same
calendar year as a single plan. For purposes of this paragraph (g),
contributions under a plan that is an employee stock ownership plan described in
Section 4975(e)(7) or 409 of the Code may not be aggregated with contributions
under a plan that is not an employee stock ownership plan.
(h) For purposes of this Section 4.03 and Section 4.04, the Highly
Compensated Participants and the Non-Highly Compensated Participants for any
Plan Year shall include any Employee eligible to have Employer Matching
Contributions or After-Tax Contributions allocated to his or her account for
such Plan Year. For purposes of this Section 4.03, an Employee who is eligible
to have Employer Matching Contributions allocated to his or her account includes
(i) any Employee who would be a Participant but for the failure to make required
contributions, (ii) any Employee whose eligibility to receive Employer Matching
Contributions has been suspended because of an election (other than certain
one-time elections)
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<PAGE> 25
not to participate, a distribution or a loan, (iii) any Employee who cannot
receive Employer Matching Contributions because of the limits under Section 415
of the Code and (iv) any Employee who, although otherwise eligible, does not
elect to participate in this Plan.
Section 4.04.Adjustment to Actual Contribution Percentage Tests.
(a) In the event that the Actual Contribution Percentage for the Highly
Compensated Participant group exceeds the Actual Contribution Percentage for the
Non-Highly Compensated Participant group pursuant to Section 4.03(a), the
Committee (on or before the 15th day of the third month following the end of the
Plan Year, but in no event later than the close of the following Plan Year)
shall direct the Trustee to distribute to each Highly Compensated Participant
whose Actual Contribution Ratio was hypothetically reduced pursuant to Section
4.03(c), the vested portion of such Highly Compensated Participant's Aggregate
Excess Contributions (and income allocable to such contributions) and, if
forfeitable, forfeit any non-vested Aggregate Excess Contributions of such
Highly Compensated Participant attributable to Employer Matching Contributions
(and income allocable to such Forfeitures). The distribution and/or Forfeiture
of Aggregate Excess Contributions shall be made in the following order:
(i) first, After-Tax Contributions including Excess Contributions
recharacterized as After-Tax Contributions pursuant to Section 5.08(a);
and
(ii) second, Employer Matching Contributions.
With respect to the distribution of After-Tax Contributions pursuant to clause
(i) above, such distribution shall be made first from unmatched After-Tax
Contributions and, thereafter, from After-Tax Contributions which are matched.
Employer Matching Contributions which relate to such After-Tax Contributions
shall be forfeited.
(b) Any distribution and/or Forfeiture of less than the entire
amount of Aggregate Excess Contributions (and income) shall be treated as a pro
rata distribution and/or Forfeiture of Aggregate Excess Contributions and income
thereon. Distribution of Aggregate Excess Contributions shall be designated by
the Employer as a distribution of Aggregate Excess Contributions (and income).
Forfeitures of Aggregate Excess Contributions shall be treated in accordance
with Section 8.09.
(c) Aggregate Excess Contributions attributable to amounts other
than After-Tax Contributions, including forfeited matching contributions, shall
be treated as Employer contributions for purposes of Sections 404 and 415 of the
Code, even if distributed from this Plan. Forfeited matching contributions that
are reallocated to Participants' Accounts for the Plan Year in which the
Forfeiture occurs shall be treated as an Annual Addition for the Participants to
whose Accounts they are reallocated and for the Participants from whose Accounts
they are forfeited.
(d) The determination of the amount of Aggregate Excess
Contributions with respect to any Plan Year shall be made after first
determining the Excess Contributions, if any, to be treated as After-Tax
Contributions due to recharacterization for the Plan Year of any other
"qualified cash or deferred arrangement" (as defined in Section 401(k) of the
Code) maintained by the Employer that ends with or within the Plan Year or which
are treated as After-Tax Contributions due to recharacterization pursuant to
Section 5.08(a).
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<PAGE> 26
(e) If, during a Plan Year, the projected aggregate amount of
Employer Matching Contributions, After-Tax Contributions and Excess
Contributions to be recharacterized as After-Tax Contributions to be allocated
to all Highly Compensated Participants under this Plan would, by virtue of the
tests set forth in Section 4.03(a), cause this Plan to fail such tests, then the
Committee may automatically reduce, in the order provided in Section 4.03(d),
each affected Highly Compensated Participant's projected share of such
contributions by an amount necessary to satisfy one of the tests set forth in
Section 4.03(a).
Section 4.05. Discontinuance and Resumption of Contributions.
Effective the first day of the next available payroll period, a Participant may:
(a) elect to discontinue making After-Tax Contributions in
accordance with Section 6.02 and have his or her Employer discontinue
making Pre-Tax Contributions on his or her behalf in accordance with
Section 5.02; or
(b) elect to resume making After-Tax Contributions and have his or
her Employer resume making Pre-Tax Contributions on his or her behalf.
A resumption of contributions may only be made if the Participant then meets the
eligibility requirements of Article II. The Participant's specified Investment
Funds (both After-Tax Contributions and Pre-Tax Contributions) and the
percentage thereof, and his or her Beneficiary designation in effect at the time
of discontinuance, shall remain the same unless the Participant has elected to
make such changes as provided in this Plan.
ARTICLE V
Pre-Tax Contributions
Section 5.01. Eligibility. Each Participant who is an Eligible
Employee shall have the right to make Pre-Tax Contributions to this Plan.
Section 5.02. Pre-Tax Contributions. Each Participant shall
specify the amount by which his or her Eligible Earnings shall be reduced by his
or her Employer and contributed to this Plan on his or her behalf; provided,
however, that such Participant may not direct that more than 20% of his or her
Eligible Earnings be contributed to this Plan as Pre-Tax Contributions or
After-Tax Contributions, on a combined basis. The first 7% of a Participant's
contributions based upon his or her Eligible Matched Earnings shall be
considered "Pre-Tax Matched Contributions". Pre-Tax Matched Contributions shall
be contributed by the Employer on behalf of a Participant to such Participant's
Pre-Tax Matched Contributions Account. All remaining Pre-Tax Contributions made
by the Employer on behalf of such Participant shall be considered "Pre-Tax
Supplemental Contributions" and shall be contributed by the Employer on behalf
of such Participant to such Participant's Pre-Tax Supplemental Contributions
Account.
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<PAGE> 27
Section 5.03. Limitation on Pre-Tax Contributions. (a)
Notwithstanding anything to the contrary contained in Sections 5.01 or 5.02, no
Employer may make any Pre-Tax Contributions on behalf of any Participant for any
pay period which will cause the limitations of either Section 5.07 or 7.01 to be
exceeded. A Participant's Deferred Compensation made pursuant to this Plan and
all other plans, contracts or arrangements of the Employers and Affiliates shall
not exceed, during any taxable year of the Participant, the limitation imposed
by Section 402(g) of the Code, as in effect at the beginning of such taxable
year. The dollar limitation shall be adjusted annually pursuant to the method
provided in Section 415(d) of the Code in accordance with the Regulations.
(b) If a Participant's Deferred Compensation under this Plan,
together with any Elective Deferrals under another "qualified cash or deferred
arrangement" (as defined in Section 401(k) of the Code), a "simplified employee
pension" (as defined in Section 408(k) of the Code), a "salary reduction
arrangement" (within the meaning of Section 3121(a)(5)(D) of the Code), a
"deferred compensation plan" under Section 457 of the Code or a trust described
in Section 501(c)(18) of the Code, cumulatively exceed the limitation imposed by
Section 402(g) of the Code (as adjusted annually in accordance with the method
provided in Section 415(d) of the Code pursuant to the Regulations) for such
Participant's taxable year, such Participant may, not later than March 1
following the close of such taxable year, notify the Committee in writing of
such excess and request that his or her Deferred Compensation under this Plan be
reduced by an amount specified by such Participant. In such event, the Committee
may direct the Trustee to distribute such excess amount, and any income
allocable to such amount, to such Participant not later than the first April
15th following the close of such Participant's taxable year. Any distribution of
less than the entire amount of excess Deferred Compensation and income shall be
treated as a pro rata distribution of excess Deferred Compensation and income.
The amount distributed shall not exceed such Participant's Deferred Compensation
under this Plan for such taxable year. Any distribution on or before the last
day of such Participant's taxable year must satisfy each of the following
conditions:
(i) the distribution must be made after the date on which this
Plan received the excess Deferred Compensation;
(ii) such Participant shall designate the distribution as excess
Deferred Compensation; and
(iii) this Plan must designate the distribution as a distribution
of excess Deferred Compensation.
Any distribution made pursuant to this Section 5.03 shall be made first from
unmatched Deferred Compensation and, thereafter, simultaneously from Deferred
Compensation which is matched and matching contributions which relate to such
Deferred Compensation; provided, however, that any such matching contributions
which are not vested shall be forfeited in lieu of being distributed.
Section 5.04. Deduction of Pre-Tax Contributions. The
contributions made by an Employer on behalf of a Participant in accordance with
Section 5.02 shall be made at regular
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payroll intervals and shall be paid to the Trustee as soon as practicable after
the end of the payroll period for which such contributions were made. The
Employer shall collect and withhold any Social Security, federal or state
unemployment taxes, other payroll taxes and any state or local income or
earnings taxes which are imposed on Pre-Tax Contributions and shall pay such
amounts to the applicable government authorities in a timely manner.
Section 5.05. Cessation of Pre-Tax Contributions. Except as
otherwise provided herein, no contributions shall be made for any pay period
which begins after a Participant ceases to be an Eligible Employee.
Section 5.06. Distribution of Pre-Tax Contributions. Amounts held
in a Participant's Pre-Tax Contributions Accounts may not be distributable prior
to the earlier of:
(a) such Participant's retirement, disability, death or separation
from service;
(b) such Participant's attainment of age 59 1/2;
(c) termination of this Plan without establishment of a "successor
plan" (as described in Regulation 1.401(k)-1(d)(3)) by any Employer or
Affiliate;
(d) the date of the sale by an Employer to an entity that is not
an Affiliate of substantially all of the assets of an Employer's trade or
business (within the meaning of Section 409(d)(2) of the Code) with
respect to a Participant who continues employment with the entity
acquiring such assets; or
(e) the date of the sale by an Employer or Affiliate of its
interest in a subsidiary (within the meaning of Section 409(d)(3) of the
Code) to an entity which is not an Affiliate with respect to a
Participant who continues employment with such subsidiary.
Section 5.07. Actual Deferral Percentage Tests. (a) For each Plan
Year, the annual allocation derived from Pre-Tax Contributions to a
Participant's Pre-Tax Contributions Accounts shall satisfy one of the following
tests:
(i) the Actual Deferral Percentage for the Highly Compensated
Participant group for such Plan Year shall not be more than the Actual
Deferral Percentage of the Non-Highly Compensated Participant group for
the immediately preceding Plan Year multiplied by 1.25, or
(ii) the excess of the Actual Deferral Percentage for the Highly
Compensated Participant group for such Plan Year over the Actual Deferral
Percentage for the Non-Highly Compensated Participant group for the
immediately preceding Plan Year shall not be more than two percentage
points. Additionally, the Actual Deferral Percentage for the Highly
Compensated Participant group for such Plan Year shall not exceed the
Actual Deferral Percentage for the Non-Highly Compensated Participant
group for the immediately preceding Plan Year multiplied by two. The
provisions of Section 401(k)(3) of the Code and Regulation 1.401(k)-I(b)
are incorporated herein by reference.
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To prevent the multiple use of the alternate method described in clause (ii)
above and in Section 401(m)(9)(A) of the Code, any Highly Compensated
Participant eligible to make Pre-Tax Contributions pursuant to Section 5.02 of
this Plan or under any other plan maintained by any Employer or Affiliate shall
have his or her Actual Contribution Ratio reduced pursuant to Regulation
1.401(m)-2, the provisions of which are incorporated herein by reference.
A Pre-Tax Contribution shall be taken into account for purposes of
the Actual Deferral Percentage test for a Plan Year only if it relates to
compensation that either would have been received by an Employee in such Plan
Year (but for the deferral election) or is attributable to services performed by
the Employee in the Plan Year and would have been received by the Employee
within 2 1/2 months after the close of the Plan Year (but for the deferral
election). In addition, a Pre-Tax Contribution shall be taken into account for
purposes of the Actual Deferral Percentage test for a Plan Year only if it is
allocated to the Employee as of a date within such Plan Year. For this purpose,
a Pre-Tax Contribution is considered allocated as of a date within a Plan Year
if the allocation is not contingent on participation or performance of services
after such date and the Pre-Tax Contribution is actually paid to the Trust no
later than 12 months after the Plan Year to which the contribution relates.
(b) For purposes of this Plan, the Actual Deferral Percentage of
the Highly Compensated Participant group and the Non-Highly Compensated
Participant group for a Plan Year is the average of the Actual Deferral Ratios
of all Employees in the relevant group. The Actual Deferral Ratio for each
Employee and the Actual Deferral Percentage for each group shall be calculated
to the nearest 1/100th of 1%.
(c) For purposes of this Section 5.07, if two or more plans (other
than an employee stock ownership plan as defined in Section 4975(e)(7) of the
Code) that include cash or deferred arrangements are considered one plan for the
purposes of Section 401(a)(4) or 410(b) of the Code (other than Section
410(b)(2)(A)(ii) of the Code), the cash or deferred arrangements included in
such plans shall be treated as one arrangement.
(d) For purposes of this Section 5.07, if a Highly Compensated
Participant is a participant under two or more cash or deferred arrangements of
the Employers or Affiliates (other than a cash or deferred arrangement that is
part of an employee stock ownership plan as defined in Section 4975(e)(7) of the
Code), all such cash or deferred arrangements shall be treated as one cash or
deferred arrangement for the purpose of determining the Actual Deferral
Percentage of such Highly Compensated Participant; provided, however, that if
the cash or deferred arrangements have different plan years, this paragraph (d)
shall be applied by treating all cash or deferred arrangements ending with or
within the same calendar year as a single arrangement.
(e) Notwithstanding anything to the contrary contained in this
Section 5.07, the determination and treatment of Pre-Tax Contributions and the
Actual Deferral Percentage of any Participant shall satisfy such other
requirements as may be prescribed by the Secretary of the Treasury.
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(f) For purposes of this Section 5.07, (i) the Highly Compensated
Participant group and the Non-Highly Compensated Participant group for any Plan
Year shall include each Employee who is directly or indirectly eligible to make
a Pre-Tax Contribution, whether or not such Pre-Tax Contribution was made, and
(ii) Employees who are eligible to make a Pre-Tax Contribution include (A) any
Employee who would be a Participant but for the failure to make required
contributions, (B) any Employee whose eligibility to make Pre-Tax Contributions
has been suspended because of an election (other than certain one-time
elections) not to participate, a distribution or a loan, (C) any Employee who
cannot make Pre-Tax Contributions because of the limits under Section 415 of the
Code and (D) any Employee who, although otherwise eligible, does not elect to
participate in this Plan.
Section 5.08. Adjustment to Actual Deferral Percentage Tests. In
the event that the initial allocations of the Pre-Tax Contributions made
pursuant to Section 5.02 do not satisfy one of the tests set forth in Section
5.07(a), the Committee shall adjust the Pre-Tax Contributions pursuant to the
options set forth below:
(a) On or before the 15th day of the third month following the end
of each Plan Year, the Excess Contributions for the Highly Compensated
Participant group shall be determined by (i) reducing the Actual Deferral
Ratio of the Highly Compensated Participant having the highest Actual
Deferral Ratio until either the Actual Deferral Percentage test set forth
in Section 5.07(a) is satisfied or such Highly Compensated Participant's
Actual Deferral Ratio is equal the Actual Deferral Ratio of the Highly
Compensated Participant with the next highest Actual Deferral Ratio. This
process shall be repeated until the Actual Deferral Percentage test under
Section 5.07(a) is satisfied for such Plan Year. The amount of "Excess
Contributions" for any Highly Compensated Participant is equal to the sum
of these hypothetical reductions multiplied, in each case, by such Highly
Compensated Participant's compensation. The Highly Compensated
Participants subject to distribution (or recharacterization) of Excess
Contributions in any Plan Year shall be determined using the "dollar
leveling method" starting with the Highly Compensated Participant with
the greatest dollar amount of elective and other contributions treated as
elective contributions for such Plan Year and continuing until the amount
of the Excess Contributions has been accounted for. Such Excess
Contribution amounts (and any earnings allocable thereto) shall be
distributed and/or recharacterized as After-Tax Contributions pursuant to
Article VI until one of the tests set forth in Section 5.07(a) is
satisfied. In determining the amount of Excess Contributions (and any
earnings allocable thereto) to be distributed and/or recharacterized with
respect to any affected Highly Compensated Participant, such Excess
Contribution amount shall be reduced by any excess Deferred Compensation
previously distributed to such affected Highly Compensated Participant
for his or her taxable year ending with or within such Plan Year. If
there is a loss allocable to such excess amount, the distribution shall
in no event be less than the lesser of such Participant's Pre-Tax
Contributions and such Participant's Deferred Compensation for the Plan
Year.
(b) Within 12 months after the end of the Plan Year, if necessary,
the Employer may make a special Qualified Non-Elective Contribution on
behalf of Non-Highly Compensated Participants in an amount sufficient to
satisfy one of the tests set forth in
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Section 5.07(a). Such contribution shall be allocated to the Pre-Tax
Contributions Accounts of each Non-Highly Compensated Participant in the
same proportion that each Non-Highly Compensated Participant's
compensation for the year bears to the total compensation of all
Non-Highly Compensated Participants. Qualified Non-Elective Contributions
shall be non-forfeitable when made and subject to the provisions of
Section 5.07. Qualified Non-Elective Contributions used to satisfy the
tests set forth in Section 5.07(a) shall be required to satisfy the
discrimination requirements of Regulation 1.401(k)-1(b)(5), the
provisions of which are specifically incorporated herein by reference.
(c) If during a Plan Year the projected aggregate amount of
Pre-Tax Contributions to be allocated to all Highly Compensated
Participants under this Plan would, by virtue of the tests set forth in
Section 5.07(a), cause this Plan to fail such tests, then the Committee
may automatically reduce proportionately, or in the order provided in
Section 5.08(a), each affected Highly Compensated Participant's Pre-Tax
Contributions, as specified by such Highly Compensated Participant
pursuant to Section 5.02, by an amount necessary to satisfy one of the
tests set forth in Section 5.07(a), as determined by the Committee, in
its sole discretion. Unless an affected Highly Compensated Participant
elects otherwise, any Pre-Tax Contributions reduced pursuant to this
paragraph (c) shall be treated as After-Tax Contributions.
Section 5.09. Modification of Pre-Tax Contribution Percentage. A
Participant may change the percentage of his or her Eligible Earnings that is
contributed as Pre-Tax Contributions at any time in 1/2% increments. Any such
change shall be effective the first day of the next available payroll period.
ARTICLE VI
After-Tax Contributions
Section 6.01. Eligibility. Each Participant who is an Eligible
Employee may make After-Tax Contributions to this Plan.
Section 6.02. After Tax Contributions. Each Participant shall
specify the percentage of his or her Eligible Earnings to be contributed to this
Plan; provided, however, that such Participant may not direct that more than 20%
of his or her Eligible Earnings be contributed as After-Tax Contributions or
Pre-Tax Contributions, on a combined basis. The first 7% of a Participant's
After-Tax Contributions based upon his or her Eligible Matched Earnings shall be
considered "After-Tax Matched Contributions"; provided, however, that if the sum
of a Participant's After-Tax Matched Contributions plus such Participant's
Pre-Tax Matched Contributions exceeds 7% of such Participant's Eligible Matched
Earnings, such Participant's After-Tax Matched Contributions shall be reduced
until such sum equals 7% of such Participant's Eligible Matched Earnings.
After-Tax Matched Contributions shall be contributed by the Employer on behalf
of a Participant to such Participant's After-Tax Matched Contributions Account.
All remaining After-Tax Contributions made by the Employer on behalf of such
Participant shall be considered "After-Tax Supplemental Contributions" and shall
be contributed by the Employer on behalf of such Participant to such
Participant's After-Tax Supplemental Contributions Account.
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Section 6.03. Limitation on After-Tax Contributions.
Notwithstanding anything to the contrary contained in Sections 6.01 or 6.02, no
Participant may make After-Tax Contributions for any pay period which will cause
the limitations of Section 4.03 or Section 7.01 to be exceeded.
Section 6.04. Deduction of After-Tax Contributions. A
Participant's After-Tax Contributions shall be made by regular payroll
deductions. After-Tax Contributions deducted by an Employer will be paid to the
Trustee as soon as practicable after the end of the payroll period for which
such contributions were made.
Section 6.05. Cessation of After-Tax Deductions. Except as
otherwise provided in this Plan, no After-Tax Contributions will be accepted on
behalf of any Participant for any pay period which begins after such Participant
ceases to be an Eligible Employee.
Section 6.06. Modification of After-Tax Contribution Percentage. A
Participant may change the percentage of his or her Eligible Earnings that is
contributed as After-Tax Contributions at any time in 1/2% increments. Any such
change shall be effective the first day of the next available payroll period.
ARTICLE VII
Limitations on Contributions
Section 7.01. Maximum Annual Additions. (a) Notwithstanding
anything contained in this Plan to the contrary, the maximum Annual Additions
credited to any Participant's account for any Limitation Year shall equal the
lesser of (i) $30,000 (as adjusted for cost of living increases pursuant to
Sections 415(c)(1), 415(d)(1), 415(d)(3) or 415(d)(4) under Section 415(b)(1)(A)
of the Code) and (ii) 25% of such Participant's 415 Compensation for such
Limitation Year. For any short Limitation Year, the dollar limitation in clause
(i) above shall be reduced by a fraction, the numerator of which is the number
of full months in the short Limitation Year and the denominator of which is 12.
(b) For purposes of applying the limitations of Section 415 of the
Code, the Annual Additions for a Participant is the sum credited to such
Participant's accounts for any Limitation Year of:
(i) such Participant's Pre-Tax Contributions and Employer Matching
Contributions for such Limitation Year; plus
(ii) such Participant's After-Tax Contributions for such
Limitation Year; plus
(iii) such Participant's Forfeitures for such Limitation Year;
plus
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(iv) amounts allocated to an "individual medical account" (as
defined in Section 415(l)(2) of the Code) on behalf of such Participant
which is part of a pension or annuity plan maintained by the Employer for
such Limitation Year; plus
(v) amounts derived from contributions paid or accrued which are
attributable to post-retirement medical benefits allocated to the
separate account of such Participant if he or she is a "key employee" (as
defined in Section 419A(d)(3) of the Code) under a "welfare benefit plan"
(as defined in Section 419(e) of the Code) maintained by the Employer for
such Limitation Year;
provided, however, that the 415 Compensation percentage limitation referred to
in paragraph (a) above shall not apply to (A) any contribution for "medical
benefits" (within the meaning of Section 419(A)(f)(2) of the Code) after
separation from service which is otherwise treated as an Annual Addition or (B)
any amount otherwise treated as an Annual Addition under Section 415(l)(1) of
the Code.
(c) For purposes of applying the limitations of Section 415 of the
Code, the transfer of funds from one qualified plan to another is not an Annual
Addition. In addition, the following are not Employee contributions for the
purposes of Section 7.01(b):
(i) "rollover contributions" (as defined in Sections 402(a)(5),
403(a)(4), 403(b)(8) and 408(d)(3) of the Code);
(ii) repayments of loans made to a Participant from this Plan;
(iii) repayments of distributions received by an Employee pursuant
to Section 411(a)(7)(B) of the Code (cash-outs);
(iv) repayments of distributions received by an Employee pursuant
to Section 411(a)(3)(D) of the Code (mandatory contributions); and
(v) Employee contributions to a simplified employee pension
excludable from gross income under Section 408(k)(6) of the Code.
(d) The dollar limitation under Section 415(b)(1)(A) of the Code
referred to in paragraph (a) above shall be adjusted annually as provided in
Section 415(d) of the Code pursuant to the Regulations. The adjusted limitation
is effective as of January 1st of each calendar year and is applicable to
Limitation Years ending with or within that calendar year.
(e) For purposes of this Section, all qualified defined benefit
plans (whether terminated or not) ever maintained by the Employer shall be
treated as one defined benefit plan, and all qualified defined contribution
plans (whether terminated or not) ever maintained by the Employer shall be
treated as one defined contribution plan.
(f) For purposes of this Section, if the Employer is a member of a
controlled group of corporations, trades or businesses "under common control"
(as defined by Section 1563(a) or
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Section 414(b) and (c) of the Code, as modified by Section 415(h) of the Code),
is a member of an "affiliated service group" (as defined by Section 414(m) of
the Code) or is a member of a group of entities required to be aggregated
pursuant to the Regulations under Section 414(o) of the Code, all Employees of
such Employers shall be considered to be employed by a single Employer.
(g) For purpose of this Section 7.01, if this Plan is a Section
413(c) of the Code plan, all Employers of a Participant who maintain this Plan
will be considered to be a single Employer.
(h)(i) If a Participant participates in more than one defined
contribution plan maintained by the Employers which have different
anniversary dates, the maximum Annual Additions under this Plan for any
Limitation Year shall equal the maximum Annual Additions for such
Limitation Year minus any Annual Additions previously credited to such
Participant's accounts during such Limitation Year.
(ii) If a Participant participates in both a defined contribution
plan subject to Section 412 of the Code and a defined contribution plan
not subject to Section 412 of the Code maintained by the Employers which
have the same anniversary date, Annual Additions will be credited to such
Participant's accounts under the defined contribution plan subject to
Section 412 of the Code prior to crediting Annual Additions to such
Participant's accounts under the defined contribution plan not subject to
Section 412 of the Code.
(iii) If a Participant participates in more than one defined
contribution plan not subject to Section 412 of the Code maintained by
the Employers which have the same anniversary date, the maximum Annual
Additions under this Plan for any Limitation Year shall equal the product
of (A) the maximum Annual Additions for such Limitation Year minus any
Annual Additions previously credited under clauses (i) or (ii) above,
multiplied by (B) a fraction, the numerator of which is the Annual
Additions which would be credited to such Participant's accounts under
this Plan without regard to the limitations of Section 415 of the Code
and the denominator of which is such Annual Additions for all plans
described in this clause.
Section 7.02. Adjustment for Excessive Annual Additions. It is
intended that in applying Section 7.01, the Annual Additions to a Participant's
Accounts under this Plan will be limited before the Annual Additions to such
Participant's accounts under any other defined contribution plan maintained by
the Extended Group ("Related Defined Contribution Plans"), if any, are limited.
This Section 7.02 shall be applied as follows:
(a) first, such Participant's After-Tax Supplemental Contributions
in such year shall be reduced until such Participant's Annual Additions
are within the limits specified above;
(b) second, if, after applying clause (a) above, such
Participant's Annual Additions are still in excess of the limits
specified above, then such Participant's Pre-Tax
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Supplemental Contributions shall be reduced until such Participant's
Annual Additions are within the limits specified above;
(c) third, if, after applying clauses (a) and (b) above, such
Participant's Annual Additions are still in excess of the limits
specified above, then Employer Matching Contributions hereunder shall be
reduced by applying any amount which cannot be credited to such
Participant's Employer Matching Contributions Account because of the
foregoing limitations in accordance with Section 4.02 to reduce the share
of Employer Matching Contributions due this Plan by such Participant's
Employer for such year;
(d) fourth, if, after applying clauses (a), (b) and (c) above,
such Participant's Annual Additions are still in excess of the limits
specified above, then such Participant's After-Tax Matched Contributions
shall be reduced until such Participant's Annual Additions are within the
limits specified above; and
(e) fifth, if, after applying clauses (a), (b), (c) and (d) above,
such Participant's Annual Additions are still in excess of the limits
specified above, then such Participant's Pre-Tax Matched Contributions
shall be reduced until such Participant's Annual Additions are within the
limits specified above.
If, in any Plan Year, as the result of a reasonable error in estimating a
Participant's compensation or in determining the amount of such Participant's
Pre-Tax Contributions, such Participant's Annual Additions exceed the maximum
amount that may be allocated to such Participant, the excess amount
attributable, first, to such Participant's After-Tax Supplemental Contributions
(and allocable earnings), second, to such Participant's Pre-Tax Supplemental
Contributions (and allocable earnings), third, to such Participant's After-Tax
Matched Contributions (and allocable earnings) and, fourth, to such
Participant's Pre-Tax Matched Contributions (and allocable earnings), shall be
returned to such Participant to the extent necessary to cure such excess.
ARTICLE VIII
Accounting
Section 8.01. Participant Accounts. The Committee shall maintain
the Accounts set forth below in the name of each Participant to reflect such
Participant's After-Tax Contributions, Pre-Tax Contributions and rollover
contributions:
(a) a "Pre-Tax Matched Contributions Account" to reflect the
Pre-Tax Matched Contributions made by an Employer on behalf of such
Participant in accordance with Section 5.02, as well as the income,
losses, appreciation and depreciation attributable to such contributions;
(b) a "Pre-Tax Supplemental Contributions Account" to reflect the
Pre-Tax Supplemental Contributions made by an Employer on behalf of such
Participant in accordance with Section 5.02, as well as the income,
losses, appreciation and depreciation attributable to such contributions;
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(c) an "After-Tax Matched Contributions Account" to reflect the
After-Tax Matched Contributions made by an Employer on behalf of such
Participant in accordance with Section 6.02, as well as the income,
losses, appreciation and depreciation attributable to such contributions;
(d) an "After-Tax Supplemental Contributions Account" to reflect
the After-Tax Supplemental Contributions made by an Employer on behalf of
such Participant in accordance with Section 6.02, as well as the income,
losses, appreciation and depreciation attributable to such contributions;
and
(e) a "Rollover Account" to reflect the rollover contributions
made by such Participant, as well as the income, losses, appreciation and
depreciation attributable to such contributions.
Each Participant shall have a full 100% vested interest in such Participant's
Pre-Tax Contributions Accounts, After-Tax Contributions Accounts and Rollover
Account.
Section 8.02. Rollovers From Qualified Plans. Any Participant may
transfer an eligible rollover distribution from a qualified retirement plan
under Section 401(a) of the Code to this Plan subject to the rules set forth in
the Regulations; provided, however, that effective on and after September 1,
1997, no rollovers from the Terminated ESOP (including indirectly through a
conduit IRA) shall be permitted. Any direct rollover from the Terminated ESOP
made prior to September 1, 1997 shall be continued in the same Investment Fund
as invested thereunder until changed by the Participant as permitted by this
Plan.
Section 8.03. Adjustment of Accounts. As of each Accounting Date,
the Committee shall:
(a) first, charge to the proper Accounts all payments,
distributions or loans made since the last preceding Accounting Date that
have not been charged previously as provided in Section 8.04;
(b) second, credit each Participant's Accounts with such
Participant's pro rata share of any increase, or charge such Accounts
with such Participant's pro rata share of any decrease, in the value of
the adjusted net worth of each Investment Fund in which such Accounts
have an interest as of that date;
(c) third, credit all After-Tax Contributions made by Participants
that are to be credited as of that date to the appropriate After-Tax
Contributions Accounts in accordance with Section 8.05;
(d) fourth, credit all Pre-Tax Contributions made on behalf of
Participants that are to be credited as of that date to the appropriate
Pre-Tax Contributions Accounts in accordance with Section 8.06; and
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(e) fifth, allocate and credit any Employer Matching Contributions
(including any Forfeitures applied to reduce those contributions) as of
that date in accordance with Section 8.09.
For purposes of this Plan, the "adjusted net worth" of an Investment Fund as of
any Accounting Date means the then net worth of that Investment Fund as
determined by the Trustee less an amount equal to any Employer Matching
Contributions and any Participants' After-Tax Contributions and Pre-Tax
Contributions that have not previously been credited to Participants' Accounts
in accordance with paragraphs (c), (d) and (e) above. The adjustment of
Participants' Accounts provided for in this Section shall be made on the basis
of an Accounting Date valuation of Investment Funds as determined by the Trustee
on a fair market value basis.
Section 8.04. Charging Payments and Distributions. As of each
Accounting Date, all payments or distributions made under this Plan since the
last preceding Accounting Date to or for the benefit of a Participant or any
Beneficiary will be charged to the proper Account of such Participant unless
previously charged.
Section 8.05. Crediting After-Tax Contributions. After-Tax
Contributions made by an Employer on behalf of a Participant shall be credited
to such Participant's applicable After-Tax Contributions Accounts as of the
Accounting Date on which the Trustee received the contributions from the
Employer.
Section 8.06. Crediting Pre-Tax Contributions. Pre-Tax
Contributions made by an Employer on behalf of a Participant shall be credited
to such Participant's applicable Pre-Tax Contributions Accounts as of the
Accounting Date on which the Trustee received the contributions from the
Employer.
Section 8.07. Employer Matching Contributions Account. The
Committee shall maintain an "Employers Matching Contributions Account" in the
name of each Participant to reflect such Participant's share of the Employer
Matching Contributions and the Forfeitures arising under the Plan which are
credited to such Employer Matching Contributions Account as a part of the
Employer Matching Contributions in accordance with Section 10.06, as well as the
income, losses, appreciation and depreciation attributable to both such items.
Section 8.08. Cytec Accounts and Historical Employer Matching
Contributions Accounts. The accounts of the Cytec Employees that were spun off
to this Plan from the Cytec Plan (the "Cytec Accounts") and each Participant's
Historical Employer Matching Contributions Account (if any) shall be separately
accounted for under this Plan.
Section 8.09. Allocation of Employer Matching Contributions and
Forfeitures. Employer Matching Contributions made by an Employer on behalf of a
Participant (after giving effect to any Forfeitures applied to reduce that
Employer's Employer Matching Contributions in accordance with Section 7.01(b)
and Section 10.06) shall be credited to such Participant's Employer Matching
Contributions Account as of the Accounting Date on which the Trustee received
such Employer Matching Contributions from the Employer. For purposes of this
Section 8.09, the portion of any Forfeiture arising under this Plan during any
period which is
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attributable to the prior contributions by any Employer shall be that proportion
of such Forfeiture which the contributions made by that Employer and credited to
the Employer Matching Contributions Accounts of the Participant with respect to
whom the Forfeiture arose bears to the total contributions of all Employers
which are credited to such Employer Matching Contributions Accounts. Until
credited in accordance with this Section 8.09, all Forfeiture accounts will be
treated the same as Participants' Accounts and will be adjusted in accordance
with Section 8.03.
ARTICLE IX
The Funds
Section 9.01. The Investment Funds. (a) The Trust Fund shall
consist of the Investment Funds set forth in Exhibit A as it may be amended from
time to time (the "Investment Funds"). The Trustee, pursuant to any discretion
given it by the Trust Agreement, may retain all or any portion of any of the
Investment Funds and, on a temporary or interim basis, may invest any of the
Investment Funds in property other than that specified as the primary type of
investment for such Investment Funds. Any Investment Fund, at the discretion of
the Trustee, may be partially or entirely invested in any commingled or mutual
fund which is invested in property of the type specified for that Investment
Fund. Except as provided in Section 9.04, no stocks or obligations issued by the
Corporation or its Affiliates shall be included in any of the Investment Funds;
provided, however, that any investment of any such Investment Fund through the
medium of commingled funds shall not constitute an investment in the stocks or
obligations of the Employers or the Affiliates, even though the commingled funds
may contain such stocks or obligations.
(b) As part of the Trust Fund, a "Loan Fund" shall be maintained
which shall include promissory notes executed by each Participant for whom a
loan has been made, which shall be reflected in the Loan Account of such
Participant. As of the time a loan is made, the borrowing Participant's other
Accounts shall be debited to reflect the amount of the loan to such Participant
in the manner specified in Section 12.11 and the amount of such loan shall be
credited to such Participant's Loan Account. As payments of principal and
interest are made on the loan, the Loan Account shall be debited as specified in
Section 12.12 hereof.
Section 9.02. Investment Elections. Each Participant may elect to
have his or her Accounts invested in any or all of the Investment Funds in 1%
increments. An investment election must be made in the time and manner
prescribed by the Committee. A Participant's After-Tax Contributions, Pre-Tax
Contributions, rollover contributions and Employer Matching Contributions shall
be invested, as soon as practicable after the Accounting Date for which the
contributions were made, in the Investment Funds in accordance with such
Participant's investment election then in effect; provided, however, that a
Participant's Employer Matching Contributions shall be invested in accordance
with such Participant's investment elections for his or her Pre-Tax
Contributions or, in the absence of any such investment election, in the ML
Retirement Preservation Trust. After making an investment election, a
Participant may change his or her investment election at any time, effective the
first day of the next available payroll period.
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Section 9.03. Transfers Between Investment Funds. A Participant
may elect as of any business day on which the national stock exchanges are open
to transfer all or a portion of his or her After-Tax Contributions Accounts and,
separately, all or a portion of his or her Pre-Tax Contributions Accounts,
Employer Matching Contributions Account and Rollover Account between the
Investment Funds. Such Participant shall make such election in the time and
manner prescribed by the Committee, which shall specify how the contributions
and earnings are to be allocated between the Investment Funds after the
transfer.
Section 9.04. Company Stock Fund. The "Company Stock Fund" shall
consist solely of those shares of Company Stock rolled over to this Plan upon
the liquidation of the Terminated ESOP's trust, including any "default"
rollovers with respect to those participants in the Terminated ESOP who did not
consent to a distribution upon such liquidation. Shares of Company Stock so
rolled over from the Terminated ESOP may not be directed to be sold and
reinvested in any other Investment Fund. Any withdrawal or distribution from the
Company Stock Fund shall be made solely in shares of Company Stock.
Notwithstanding anything in this Plan to the contrary, any distribution received
by the Trustee with respect to Company Stock, except for a stock dividend in
shares of Company Stock, shall be automatically reinvested in the ML Retirement
Preservation Trust, until redirected into another Investment Fund by the
relevant Participant. No amounts may be contributed to, redirected into or
otherwise added to the Company Stock Fund.
ARTICLE X
Payment of Account Balances
Section 10.01. Retirement, Disability or Death. If a Participant
terminates employment due to Retirement or a Total and Permanent Disability, or
dies while an Employee, the entire balances of such Participant's Accounts as of
such Participant's Settlement Date (after any adjustments then required under
this Plan) shall be vested and become distributable to such Participant or his
or her Beneficiary, as the case may be, in accordance with Section 10.03.
Section 10.02. Resignation or Dismissal. (a) If a Participant
resigns, is dismissed from the employ of the Employers and the Affiliates before
his or her Normal Retirement Age or otherwise incurs a separation from service,
the vested balance of such Participant's Accounts as of such Participant's
Settlement Date (after any adjustments then required under this Plan) shall
become distributable to such Participant in accordance with Section 10.03. The
vested balance in such Participant's Employer Matching Contributions Account
shall be determined by multiplying such balance by such Participant's Vesting
Percentage and the product thereof shall become distributable to such
Participant in accordance with Section 10.03.
.
(b) The computation of a Participant's non-forfeitable percentage
interest in his or her Accounts shall not be reduced as the result of any direct
or indirect amendment to this Section. In the event that this Plan is amended to
change or modify any vesting schedule, a Participant with a least three Years of
Service as of the expiration date of the election period may elect to have his
or her non-forfeitable percentage computed under this Plan without regard to
such amendment. If a Participant fails to make such election, then such
Participant shall be
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subject to the new vesting schedule. The Participant's election period shall
commence on the adoption date of the amendment and shall end 60 days after the
latest of:
(i) the adoption date of the amendment;
(ii) the effective date of the amendment; or
(iii) the date such Participant receives written notice of the
amendment from the Employer or Committee.
Notwithstanding anything herein to the contrary, a Participant shall have a
non-forfeitable interest in such Participant's Account balances on the
attainment of his or her Normal Retirement Age, Total and Permanent Disability
or death, while an Employee.
Section 10.03. Distribution Options. (a) Lump Sum Distribution.
Subject to the conditions and limitations set forth in this paragraph (a) and
Sections 10.04 and 10.05, the vested balances in a Participant's Accounts will
be distributed to such Participant or, in the case of such Participant's death,
to his or her Beneficiaries by payment in a lump sum (a "Lump Sum
Distribution"). If the vested value of such Participant's Account balances as of
such Participant's Settlement Date (or as of the date of any prior withdrawal)
does not exceed $5,000, the balances in such Participant's Accounts will be paid
in a Lump Sum Distribution as soon as practicable after such Participant's
Settlement Date (after all adjustments, if any, then required under this Plan
have been made).
(b) Lump Sum Deferral Option. If the vested value of a
Participant's Account balances as of such Participant's Settlement Date (or as
of the date of any prior withdrawal) exceeds $5,000, such Participant may elect
to receive payment of the balances in his or her Accounts as follows:
(i) in a Lump Sum Distribution as set forth in paragraph (a) above
as soon as practicable after such Participant's Settlement Date; or
(ii) in a lump sum at any time after his or her termination but in
no event beyond the Participant's attainment of age 65 (a "Lump Sum
Deferral Option").
If such Participant fails to make an election under clauses (i) or (ii) above,
such Participant shall be deemed to have elected a Lump Sum Deferral Option
under clause (ii). There shall be no immediate distribution of a Participant's
Account balances when his or her vested Account balances exceed $5,000 in the
aggregate. A Participant's Account balances are immediately distributable if any
part of the Account balances may be distributed to such Participant before the
later of Normal Retirement Age and age 62. However, this paragraph (b) shall not
be applicable after the death of a Participant.
If a Participant elects to retain the balances in his or her
Accounts in this Plan under a Lump Sum Deferral Option, such Participant shall
be entitled to make transfers between Investment Funds but shall not be entitled
to make After-Tax Contributions, to have Pre-Tax
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Contributions made on his or her behalf, to receive withdrawals or periodic
distributions as provided in Article XI or to obtain a loan under Article XII.
If such Participant elects a Lump Sum Deferral Option and dies prior to receipt
of the balances in his or her Accounts, the Accounts of such Participant shall
be distributed in a single lump sum to his or her Beneficiary as soon as
practicable after the death of such Participant. Upon termination of a Lump Sum
Deferral Option, in lieu of payment in a lump sum and subject to the provisions
of paragraph (c) below, the Participant may elect the Installment Payout Option.
(c) Installment Payout Option. Subject to the conditions and
limitations set forth in this paragraph (c) and in Sections 10.04 and 10.05, if
(i) a Participant retires while an Employee with an entitlement to receive an
Employer or an Affiliate pension benefit (as determined under the terms of the
pension plan in which such Participant participates) and (ii) the lump sum value
of the Participant's Account balances as of such Participant's Settlement Date
exceeds $5,000, such Participant may direct that the value of the balances in
his or her Accounts be distributed in monthly, quarterly or annual installments
from this Plan over a number of years up to the lesser of 20 years (30 years
with respect to a Cytec Account) or the life expectancy of such Participant on
the date the installments commence; provided, however, that in no event shall
installment payments under this paragraph (c) begin after such Participant's
attainment of age 65 or, if later, his or her retirement date, even if such
Participant had previously elected a Lump Sum Deferral Option. The amount of the
payments for the first calendar year in which such installment payments shall
commence shall be determined by dividing the value of such Participant's
Accounts, determined as of such Participant's Settlement Date, by the number of
remaining calendar years. For each subsequent calendar year, the amount of the
payments shall be determined at the beginning of each calendar year by dividing
the value of the balances of such Participant's Accounts, determined as of the
last day of the previous calendar year, by the number of remaining calendar
years. If a Participant dies prior to the receipt of the entire balance of his
or her Accounts under this Plan pursuant to this paragraph (c), the remaining
account balances shall be payable in a single lump sum to his or her Beneficiary
as soon as practicable after the death of such Participant.
If a Participant elects the Installment Payout Option, such
Participant shall be entitled to make transfers between Investment Funds but
shall not be entitled to make After-Tax Contributions or to have Pre-Tax
Contributions made on his or her behalf, to receive withdrawals or periodic
distributions as provided in Article XI or to obtain a loan under Article XII.
Once each Plan Year, a Participant who is receiving payments under the
Installment Payout Option may elect to withdraw all or any portion of his or her
Account balances under this Plan; provided, however, that if the remaining
Account balances immediately after such withdrawal do not equal or exceed
$5,000, the remaining Account balances shall be distributed to the Participant
in a lump sum.
(d) Life Expectancy Payout Option. Subject to the conditions and
limitations set forth below and in Sections 10.04 and 10.05, if (i) a
Participant retires while an Employee on or after a date determined by the
Committee with an entitlement to receive an Employer or an Affiliate pension
benefit (as determined under the terms of the pension plan in which such
Participant participates), and (ii) the vested value of such Participant's
Account balances exceeds $5,000 as of such Participant's Settlement Date, such
Participant may elect to receive payment of
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his or her Account balances in the form of a Life Expectancy Payout Option, even
if such Participant had previously elected a Lump Sum Deferral Option. Under the
Life Expectancy Payout Option, the Account balances of such Participant will be
distributed to such Participant over a period equal to the life expectancy of
such Participant in monthly, quarterly or annual installments; provided,
however, that in no event shall installment payments under this paragraph (d)
begin after such Participant's attainment of age 65 or, if later, his or her
retirement date, even if such Participant had previously elected a Lump Sum
Deferral Option.
The amount of the payment for each Plan Year shall be determined
at the beginning of each Plan Year by dividing the vested value of the balances
of the relevant Participant's Accounts determined as of the last day of the
previous Plan Year by the life expectancy of such Participant, which shall be
recalculated annually as of the last day of each Plan Year. If such Participant
predeceases his or her designated Beneficiary, the remaining Account balances
shall be payable to the designated Beneficiary in a single lump sum as soon as
practicable after the death of such Participant. The life expectancy of such
Participant shall be determined by the qualified actuary for the Corporation's
qualified pension plan, and the qualified actuary's determination shall be final
and binding on all parties.
If a Participant elects the Life Expectancy Payout Option, such
Participant shall be entitled to make transfers between Investment Funds but
shall not be entitled to make After-Tax Contributions or to have Pre-Tax
Contributions made on his or her behalf, to receive withdrawals or periodic
distributions as provided in Article XI or to obtain a loan under Article XII.
Once each Plan Year, a Participant who is receiving payments under the Life
Expectancy Payout Option may elect to withdraw all or any portion of his or her
Account balances under this Plan; provided, however, that if the remaining
Account balances immediately after such withdrawal do not equal or exceed
$5,000, the remaining Account balances shall be distributed to such Participant
in a lump sum. In addition, a Cytec Employee may elect, with respect to his or
her Cytec Account, to have such Account used to purchase a non-transferable
single life annuity contract or a 50% joint and survivor annuity contract from
an insurance company selected by the Committee.
(e) Cytec Account Annuities. Each Cytec Employee may elect, with
respect to his or her Cytec Accounts, to use the balance of such Cytec Accounts
to purchase a non-transferable single life annuity contract or a 50% joint and
survivor annuity contract from an insurance company selected by the Committee.
(f) Any distribution to a Participant who has a vested benefit
which exceeds, or has ever exceeded, $5,000 at the time of any prior
distribution shall require such Participant's consent if such distribution
commences prior to the later of his or her Normal Retirement Age or age 62. With
regard to this required consent:
(i) notice of the rights specified under this paragraph (e) shall
be provided no less than 30 days and no more than 90 days before the
first day on which all events have occurred which entitle such
Participant to such benefit; and
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(ii) written consent of such Participant to the distribution may
not be made before such Participant receives the notice and may not be
made more than 90 days before the first day on which all events have
occurred which entitle such Participant to such benefit;
provided, however, that notwithstanding the foregoing, if a distribution is one
to which Sections 401(a)(11) and 417 of the Code do not apply, such distribution
may commence less than 30 days after the required notice is given if, but only
if, (A) the Committee clearly informs such Participant that such 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 (B) such Participant, after receiving the
notice, affirmatively elects a distribution.
Section 10.04. Limitations on Distributions. (a) Payment of
benefits under this Plan to a Participant shall not commence later than the 60th
day after the latest of the end of the Plan Year during which:
(i) such Participant attains age 65 years;
(ii) the tenth anniversary of the date on which such Participant's
participation in this Plan occurs; or
(iii) such Participant's employment with the Employers and
Affiliates terminates.
(b) Notwithstanding any provision in this Plan to the contrary,
the distribution of a Participant's benefits shall be made in accordance with
the following requirements and shall otherwise comply with Section 401(a)(9) of
the Code and the Regulations thereunder (including Regulation Section
1.401(a)(9)-2):
(i) a Participant's benefits shall be distributed to him or her
not later than April 1 of the calendar year following the calendar year
in which such Participant attains age 70 1/2 or, alternatively,
distributions to a Participant must begin no later than the April 1st as
determined under the preceding sentence and must be made over the life
expectancy of such Participant (or the life expectancies of such
Participant and his or her designated Beneficiaries) in accordance with
the Regulations; and
(ii) distributions to such Participant and his or her Beneficiaries
shall only be made in accordance with the incidental death benefit
requirements of Section 401(a)(9)(G) of the Code and the Regulations
thereunder;
provided, however, that with respect to any Participant who attains age 70 1/2
after 1998 (other than an "owner" within the meaning of Section 318 of the
Code), benefits shall not be paid or begin prior to such Participant's
termination of employment with all Employers and Affiliates but, except to the
extent otherwise required by Section 401(a)(9) of the Code, this Plan shall not
preclude such Participant from receiving benefits in any of the same optional
forms (except for the difference in the timing of the commencement of payments)
that would have been available to such Participant hereunder if such Participant
retired in the calendar year in which he or she attained the age 70 1/2.
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(c) Notwithstanding anything to the contrary contained in this
Plan, distributions upon the death of a Participant shall be made in accordance
with the following requirements and shall otherwise comply with Section
401(a)(9) of the Code and the Regulations thereunder. If it is determined,
pursuant to the Regulations, that the distribution of such Participant's
interest has begun and such Participant dies before his or her entire interest
has been distributed, the remaining portion of such interest shall be
distributed at least as rapidly as under the method of distribution selected
pursuant to Section 10.03 as of the date of such Participant's death. If such
Participant dies before he or she has begun to receive any distributions of his
or her interest under this Plan or before distributions are deemed to have begun
pursuant to the Regulations, then such Participant's death benefit shall be
distributed to his or her Beneficiaries by December 31st of the calendar year in
which the fifth anniversary of the date of such Participant's death occurs.
However, in the event that such Participant's spouse (determined as of the date
of such Participant's death) is such Participant's Beneficiary, then in lieu of
the preceding rules, distributions must be made over a period not extending
beyond the life expectancy of the spouse and must commence on or before the
later of:
(i) December 31st of the calendar year immediately following the
calendar year in which such Participant died; or
(ii) December 31st of the calendar year in which such Participant
would have attained age 70 1/2.
If the surviving spouse dies before distributions to such spouse begin, then the
5-year distribution requirement of this Section 10.04 shall apply as if the
spouse was the Participant.
(d) For purposes of this Section 10.04, the life expectancy of a
Participant and a Participant's spouse may, at the election of such Participant
or such Participant's spouse, respectively, be redetermined in accordance with
the Regulations; provided, however, that any such election, once made, shall be
irrevocable. If no election is made by the time distributions must commence,
then the life expectancy of such Participant and such Participant's spouse shall
not be subject to recalculation.
(e) If a distribution is made at a time when a Participant is not
fully vested in any of his or her Accounts and such Participant may increase the
vested percentage in such Account:
(i) a separate account shall be established for such Participant's
interest in this Plan as of the time of the distribution; and
(ii) at any relevant time, such Participant's vested portion of
the separate account shall equal:
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P(AB + (R x D)) - (R x D), where
P = the vested percentage at the relevant time,
AB = the account balance at the relevant time,
D = the amount of distribution and
R = the ratio of the account balance at the
relevant time to the account balance after
distribution.
Section 10.05. Designation of Beneficiaries. (a) Each Participant
may, from time to time, designate any person or persons (who may be designated
concurrently, contingently or successively) to whom any benefits payable on
behalf of such Participant are to be distributed if such Participant dies before
he or she receives all of his or her benefits. Such Beneficiary designation
shall also be effective if a Participant dies after such Participant's
Settlement Date but prior to distribution of all of the balances of his or her
Accounts. A Beneficiary designation shall be effective only when it is signed,
dated and filed with the Committee while the Participant is alive and will
cancel all beneficiary forms previously signed and filed by such Participant.
(b) In the event of the death of a Participant prior to
distribution of the balances of such Participant's Accounts pursuant to Section
10.03, if such Participant was married on the date of his or her death, the
balances in such Participant's Accounts will be distributed by payment in a lump
sum to the surviving spouse unless such Participant had made a Qualified
Election prior to his or her death, in which event payment shall be made in a
lump sum to or for the benefit of such Participant's Beneficiaries.
(c) For purposes of this Plan, a "Qualified Election" means, with
respect to any Participant, an election made by such Participant (on forms
provided by and filed with the Committee) providing that the balances of such
Participant's Accounts will not be distributed in full to the surviving spouse,
and:
(i) the spouse of such Participant consents in writing to such
Qualified Election (witnessed by a Plan representative or a notary
public) and the designation of the applicable Beneficiary (which may not
be changed without spousal consent) and acknowledges the effect of such
election on forms provided by and filed with the Committee and; or
(ii) it is established that there is no spouse, the spouse cannot
be located or there exists such other circumstances as may be provided by
the Regulations prescribed by the Code.
Any Qualified Election consented to by a spouse pursuant to this paragraph (c)
shall be irrevocable and shall be effective only with respect to such spouse. A
Qualified Election may be revoked but not changed by such Participant without
consent of such Participant's spouse in accordance with this paragraph (c).
(d) If a Participant fails to designate a Beneficiary or if the
designated Beneficiary predeceases such Participant, for purposes of this Plan
it shall be conclusively presumed that
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such Participant intended to and did designate as the Beneficiary (i) his or her
surviving spouse or (ii) in the event that such Participant has no surviving
spouse, his or her estate.
Section 10.06. Forfeitures. (a) For purposes of this Plan,
"Forfeiture" shall mean that portion of a Participant's Employer Matching
Contributions Account, if any, that is not vested, and occurs on the earlier of
the last day of the Plan Year in which such Participant incurs five consecutive
One Year Breaks in Service or receives the distribution of the entire vested
balances of his or her Accounts.
(b) As of each Accounting Date, any amounts which became
Forfeitures since the last Accounting Date shall first be made available to
reinstate previously forfeited account balances of former Participants, if any,
in accordance with paragraph (c) below. The remaining Forfeitures, if any, shall
be applied to reduce the Employer Matching Contributions in accordance with
Section 4.02 for the Plan Year in which such Forfeiture occurs.
(c)(i) If any former Participant shall be reemployed by an
Employer or an Affiliate before a One Year Break in Service occurs, such
Participant shall continue to participate in this Plan in the same manner
as if such termination had not occurred and any Forfeitures shall be
reinstated pursuant to clause (ii) below.
(ii) If any former Participant shall be reemployed by an Employer
or an Affiliate before five consecutive One Year Breaks in Service, and
such former Participant received a distribution of the vested balances of
his or her Accounts prior to reemployment, any amounts which became
Forfeitures shall be reinstated if, but only if, such Participant repays
the full amount distributed to him or her before the earlier of five
years after the first date on which such Participant is subsequently
reemployed by an Employer or an Affiliate or the close of the first
period of five consecutive One Year Breaks in Service commencing after
the distribution. In the event that such former Participant does repay
the full amount distributed to him or her, the undistributed portion of
such Participant's Employer Matching Contributions Account shall be
restored in full, unadjusted by any gains or losses occurring subsequent
to the Accounting Date coinciding with or preceding such Participant's
termination. The source for such reinstatement shall first be any
Forfeitures of other Participants occurring during the year in which such
Participant's Employer Matching Contributions Account is reinstated. If
such source is insufficient, then such Participant's Employer shall
contribute an amount which is sufficient to restore any such forfeited
Employer Matching Contributions Accounts.
(iii) If any former Participant is reemployed after a One Year
Break in Service has occurred, Years of Service shall include Years of
Service prior to his One Year Break in Service, subject to the following
rules:
(A) if a former Participant has a One Year Break in Service,
such Participant's pre-break and post-break service shall
be used for computing Years of Service for eligibility and
for vesting purposes only after such Participant has been
employed for one Year of Service following the date of his
or her reemployment with an Employer;
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(B) any former Participant who under this Plan does not have a
non-forfeitable right to any interest in this Plan
resulting from Employer contributions shall lose credits
otherwise allowable under clause (A) above if such
Participant's consecutive One Year Breaks in Service equal
or exceed the greater of (x) five and (y) the aggregate
number of such Participant's pre-break Years of Service;
(C) after five consecutive One Year Breaks in Service, a former
Participant's vested Employer Matching Contributions
Account balance attributable to pre-break service shall not
be increased as a result of post-break service;
(D) if a former Participant who has not had his or her Years of
Service before a One Year Break in Service disregarded
pursuant to clause (B) above completes one Year of Service
for eligibility purposes following his or her reemployment
with an Employer, such Participant shall participate in
this Plan retroactively from the date of reemployment; and
(E) if a former Participant who has not had his or her Years of
Service before a One Year Break in Service disregarded
pursuant to clause (B) above completes a Year of Service (a
One Year Break in Service previously occurred, but
employment had not terminated), such Participant shall
participate in this Plan retroactively from the first day
of the Plan Year during which such Participant completes
one Year of Service.
(d) Subject to the foregoing provisions of this Section 10.06, if
(i) a Participant elects the Lump Sum Deferral Option pursuant to Section
10.03(b), (ii) such Participant (or his or her Beneficiary) has not requested
distribution of the balances of such Participant's Accounts on or before the
date such Participant would have attained age 65 and (iii) such Participant
cannot be located by the Corporation, then the balances in such Participant's
Accounts may be forfeited at the end of a Plan Year and shall be applied to
reduce the Employer Matching Contributions in accordance with Section 4.02 at
the Accounting Date which occurs at the end of such Plan Year. Any such
Participant (or his or her Beneficiary) who subsequently requests a distribution
of the balances of such Participant's Accounts shall have his or her Accounts
restored by the Corporation based upon the balances in such Accounts on the
Accounting Date on which such Forfeiture occurred, unadjusted by any subsequent
gains or losses.
Section 10.07. Payment of Distribution Directly to Eligible
Retirement Plan. Notwithstanding any provision of this Plan to the contrary that
would otherwise limit a Distributee's election under this Section 10.07, a
Distributee may elect, at the time and in the manner prescribed by the
Committee, to have any portion of an Eligible Rollover Distribution paid
directly to an Eligible Retirement Plan specified by the Distributee in a Direct
Rollover. For purposes of this Section:
(a) "Eligible Rollover Distribution" means, with respect to any
Distributee, any distribution of all or any portion of the balance of an
Account to the credit of such Distributee; provided, however, that an
"Eligible Rollover Distribution" does not include (i)
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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 such Distributee or the joint lives (or joint life
expectancies) of such Distributee and such Distributee's designated
beneficiary, or for a specified period of ten years or more, (ii) any
distribution to the extent such distribution is required under Section
401(a)(9) of the Code or (iii) the portion of any distribution that is
not includable in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to Employer
securities);
(b) "Eligible Retirement Plan" means, with respect to any
Distributee, 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, in each case,
that accepts such Distributee's Eligible Rollover Distribution; provided,
however, that in the case of an Eligible Rollover Distribution to a
surviving spouse, "Eligible Retirement Plan" means an individual
retirement account or individual retirement annuity;
(c) "Distributee" means (i) a Participant or former Participant,
(ii) the surviving spouse of a Participant or former Participant and
(iii) with respect to the interest of a spouse or former spouse of a
Participant or former Participant who is the alternate payee under a
"qualified domestic relations order" (as defined in Section 414(p) of the
Code), such spouse or former spouse; and
(d) "Direct Rollover" means a payment by this Plan to the Eligible
Retirement Plan specified by a Distributee.
Section 10.08. Qualified Domestic Relations Order Distribution.
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." Furthermore, a distribution to an
alternate payee shall be permitted if such distribution is authorized by a
qualified domestic relations order, even if the affected Participant has not
separated from service and has not reached the "earliest retirement age" under
this Plan. For purposes of this Section 10.08, "alternate payee," "qualified
domestic relations order" and "earliest retirement age" shall have the meaning
set forth under Section 414(p) of the Code.
ARTICLE XI
In-Service Withdrawals
Section 11.01. General Withdrawals by Participants. Twice each
calendar year, a Participant who is an Employee may elect to withdraw up to (a)
the balance of his or her Rollover Account and all earnings credited to such
Rollover Account and (b) the vested balance of his or her After-Tax Supplemental
Contributions Account, Historical Employer Matching Contributions Account, Cytec
Accounts (excluding any Cytec Account designated as a "Pre-Tax Account") and
After-Tax Matched Contributions Account; provided, however, that, with respect
to such Participant's After-Tax Matched Contributions Account, such amounts have
been in this Plan for at least two years. The minimum withdrawal shall be the
lesser of $500 and the entire
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vested balance of the relevant Account. Withdrawals from the Accounts of a
Participant specified in clause (b) above shall be made in the order established
by Plan administrative procedures. Notwithstanding anything contained in this
Section 11.01 to the contrary, any withdrawals during a calendar year pursuant
to Section 11.02 shall be considered to be withdrawals under this Section 11.01
for purposes of the requirement that withdrawals be made no more than twice each
calendar year.
Section 11.02. Periodic Distributions. Twice each calendar year, a
Participant who is an Employee and age 59 1/2 or older may elect to withdraw up
to the vested balance of any of his or her Accounts other than his or her
Employer Matching Contributions Account; provided, however, that, with respect
to such Participant's After-Tax Matched Contributions Account, such amounts have
been in this Plan for at least two years. The minimum withdrawal shall be the
lesser of $500 and the entire balance of the relevant Account. Notwithstanding
anything contained in this Section 11.02 to the contrary, any withdrawals during
a calendar year pursuant to Section 11.01 shall be considered to be withdrawals
under this Section 11.02 for purposes of the requirement that withdrawals be
made no more than twice each calendar year. Except as provided above,
withdrawals and distributions from a Participant's Pre-Tax Contributions
Accounts, Rollover Account and Employer Matching Contributions Account shall be
prohibited until the earlier of such Participant's retirement, death, disability
or separation from service.
Section 11.03. Form of Withdrawals. Withdrawals shall be in the
form of a lump sum, except to the extent a Participant elects to receive
Installment Payments pursuant to Section 10.03.
Section 11.04 Charging and Allocations of Withdrawals and Periodic
Distributions. All withdrawals under Sections 11.01 and 11.02 shall be charged
to the proper Accounts of the Participant and taken from his or her interests in
the Investment Funds as directed by such Participant.
ARTICLE XII
Loans
Section 12.01. Loans. The Committee, or its delegate, may, in its
sole discretion, direct the Trustee to loan a Participant who is an Employee
amounts from any of such Participant's Accounts (to the extent vested);
provided, however, that all loans (including the amount thereof) shall be
subject to all of the terms, conditions, requirements and limitations specified
in this Article XII. It is intended that all loans made to participants under
this Article XII shall meet the requirements of Section 72(p) of the Code and
Department of Labor Regulation 2550.408b.
Section 12.02. Loan Administration. The loan provisions of this
Plan shall be administered by the Committee, which shall establish the terms and
conditions generally applicable to loans made under this Plan. The Committee is
authorized to delegate to a committee or Employees the authority to review loan
applications, execute loan agreements and collect loan payments. The Committee
is also authorized to:
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(a) adopt such rules and regulations as it deems necessary for the
proper and efficient administration of loans under this Plan, including
such adjustments to the accounting provisions of this Plan as it deems
necessary and advisable to facilitate accounting for loans under this
Plan;
(b) establish standards which shall be used to determine if a loan
application should be approved;
(c) prescribe the forms to be used in administering the loan
provisions of this Plan;
(d) determine how the interest rate to be charged on outstanding
loans is to be calculated and when the rate to be charged for new loans
is to be changed;
(e) determine, from time to time, the minimum loan amount (which
shall not be less than $1,000);
(f) employ agents, attorneys, accountants and other persons to
properly and efficiently administer the loan provisions of this Plan and
to collect outstanding loans; and
(g) take all other actions necessary or advisable to carry out the
provisions of this Article XII.
Section 12.03. Loan Eligibility. Only those Participants who are
Employees shall be eligible to submit loan applications or to obtain a loan.
Section 12.04. Loan Application. The Committee shall set
procedures by which Participants may apply for a loan and by which loans shall
be approved. Only three loans per Participant may be outstanding at any time.
All loan applications are to be considered on a reasonably equivalent basis, and
in making such loans the Committee should consider only those factors which
would be considered in a normal commercial setting by a person in the business
of making similar types of loans.
Section 12.05. Terms and Conditions of Loans. From time to time
the Committee shall establish rules governing the making of loans, including the
minimum amount for which a loan shall be made (which shall not be less than
$1,000) and the terms and conditions of repayment of principal and interest.
Such rules shall be uniformly applied to all similarly situated Participants.
Each loan shall be evidenced by a promissory note in a form approved by the
Committee, shall provide for a reasonable annual rate of interest and shall be
adequately secured.
Section 12.06. Maximum Loan. The maximum aggregate amount for
which loans may be made to any Participant shall be the lesser of the following
amounts:
(a) 50% of the vested balances in such Participant's Accounts; or
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(b) $50,000, reduced by the amount (if any) by which (i) the
highest outstanding balance of such Participant's loans from this Plan
(and all other plans of the Employers and Affiliates) during the one year
period ending on the day before the date on which such loan is to be made
exceeds (ii) the outstanding balance of such Participant's loans from
this Plan on the date the loan is made.
The foregoing loan limit shall apply only at the time the loan is made. The
Committee shall also establish guidelines relating to the ability of
Participants to repay loans, which shall determine the maximum amount of any
loan which can be made to any Participant.
Section 12.07. Interest. Each loan shall bear interest at a
reasonable rate to be fixed by the Committee. In determining the interest rate,
the Committee shall provide this Plan with a return commensurate with the
interest rates charged by persons in the business of lending money for loans
which would be made under similar circumstances. Interest rates shall be fixed
for the term of the loan at the time the loan is made, and the Committee shall
determine periodically, but not less often than annually, the interest rate to
be charged on new loans.
Section 12.08. Terms of Loan and Repayment. (a) The Committee, or
its delegate, shall review each loan application in accordance with the
provisions of this Plan and decide whether or not the relevant loan shall be
approved. The decision of the Committee, or its delegate, regarding the approval
or rejection of a loan application shall be final and binding on all parties.
The period of repayment for any loan shall be determined by mutual agreement
between the Committee, or its delegate, and the Participant, but such period
shall in no event exceed 60 months.
(b) Each loan to a Participant must be adequately secured. A
Participant's vested balance in this Plan is the only collateral which may be
used as security for a loan.
(c) Loan payments shall be required to be made through payroll
deductions and each Participant shall be required to execute irrevocable
authorization forms authorizing the Employers to deduct the loan payments from
such Participant's wages or salary, which amounts shall be transmitted to the
Trustee and applied against the outstanding loan balance. A Participant may
prepay the entire outstanding unpaid principal balance on any loan (and all
remaining interest due thereon) other than by payroll deduction at any time
without penalty. If a Participant is not receiving wages or a salary from the
Employer, repayment of any loan to such Participant shall be made in accordance
with the terms and procedures established by the Committee.
(d) Loan repayments will be suspended under this Plan as permitted
by Section 414(u)(4) of the Code.
Section 12.09. Risk of Loss. To insure the loan program does not
place other Participants at risk with respect to their interest in this Plan,
the Committee may administer any Participant's loan as a Participant directed
investment of that portion of the vested balances of such Participant's Accounts
and, as such, may charge any expenses related to issuing, maintaining or
collecting such loan to such Participant's Accounts.
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Section 12.10. Source of Loan Funds. Loans to a Participant may be
made from any of such Participant's Accounts (to the extent vested); provided,
however, that notwithstanding anything contained in this Plan to the contrary,
Company Stock held in a Participant's Account may not under any circumstances be
sold to fund a loan.
Section 12.11. Debiting of Accounts. Accounts of a Participant
shall be debited to satisfy a loan request in the order established by Plan
administrative procedures. If a Participant has Account balances in more than
one of the Investment Funds, such Investment Funds shall be reduced in the
manner established by Plan administrative procedures, except that balances
invested in Company Stock will not be sold to fund a loan or distributed as a
loan. Company Stock may, however, be used as security for a loan.
Section 12.12. Accounting for Loans. Any loan made to a
Participant from any of such Participant's Accounts specified in Section 12.11
shall be made by liquidating and converting to cash the appropriate Accounts and
Investment Funds (other than Company Stock). A "Loan Account" shall then be
established for such Participant, which shall reflect the outstanding unpaid
balance of the loan from time to time. Repayments towards such loan shall be
separated into principal and interest payments. Principal and interest payments
shall be debited against such Participant's Loan Account and credited to such
Participant's Accounts in the order established by Plan administrative
procedures. Principal and interest payments credited to such Participant's
Accounts shall be invested in Investment Funds in accordance with such
Participant's current investment election with respect to new deposits or, if
such Participant does not have a current investment election, in the ML
Retirement Preservation Trust.
Section 12.13. Distributions While Loan Balance is Outstanding.
(a) When a final distribution is made with respect to a Participant who has an
outstanding loan balance, such Participant (or his or her Beneficiaries) shall
receive a distribution equal to (i) the vested balances in such Participant's
Accounts minus (ii) any balance in such Participant's Loan Account plus accrued
and unpaid interest through the date of distribution. In addition, such
Participant's promissory note shall be delivered to such Participant (or his or
her Beneficiaries) and the balance in such Participant's Loan Account shall be
reduced to zero.
(b) If a Participant who has an outstanding loan balance elects a
Lump Sum Distribution, a Lump Sum Deferral Option, an Installment Payout Option
or a Life Expectancy Payout Option, the entire outstanding unpaid principal
amount of all loans plus accrued and unpaid interest must be extinguished prior
to such Participant's Settlement Date. If such Participant does not pay the
entire outstanding unpaid principal amount of all loans plus accrued and unpaid
interest in cash prior to his or her Settlement Date, such Participant's
promissory note shall be delivered to him or her (or his or her Beneficiaries)
and the balance in such Participant's Loan Account shall be reduced to zero;
provided, however, that none of such Participant's Accounts shall be credited in
connection with such reduction in the balance of such Participant's Loan
Account.
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(c) In no event shall any Participant, Beneficiary or any other
person be paid in cash or property (other than the promissory note of the
relevant Participant) an amount attributable to a balance in such Participant's
Loan Account.
Section 12.14. Unpaid Balances at End of Sixty-Month Period. In
the event that any principal or interest on any loan remains outstanding at the
end of 60 months, the Committee or its delegate shall declare the remaining
unpaid loan balance to be a taxable distribution from this Plan for purposes of
Section 72(p) of the Code. If the outstanding loan balance is subsequently
repaid, the principal payments shall be credited as provided in Section 12.12.
For all other purposes, the remaining unpaid loan balance shall remain a legal
obligation of the Participant, and the Trustee and the Committee shall take all
necessary action to ensure its collection.
Section 12.15. Hardship Withdrawal in Bankruptcy. Upon an
Adjudication of Bankruptcy with respect to any Participant that has an
outstanding loan, the Committee, or its delegate, shall determine if such
Adjudication of Bankruptcy has caused such Participant to incur a hardship. If
the Committee or its delegate, in its sole discretion, determines that a
hardship (within the meaning of Section 401(k)(2)(B) of the Code) exists for
such Participant, the Committee or its delegate shall declare a hardship
distribution, such Participant's promissory note shall be delivered to him or
her (or his or her Beneficiaries) and the balance in such Participant's Loan
Account shall be reduced to zero; provided, however, that none of such
Participant's Accounts shall be credited in connection with such reduction in
the balance of such Participant's Loan Account. For purposes of this Plan, an
"Adjudication of Bankruptcy" means, with respect to any Participant, the
earliest of the following to occur:
(a) an entry of an order for relief with respect to such
Participant under the United States Bankruptcy Code, as amended; or
(b) the filing of a petition against such Participant in an
involuntary case under the United States Bankruptcy Code, as amended.
Section 12.16. Default. The Committee will treat a loan to any
Participant as in default if any scheduled payment remains unpaid more than 90
days. If a loan is required to be treated as in default hereunder, the entire
outstanding principal amount of such loan and accrued and unpaid interest
thereon shall automatically become immediately due and payable on demand. To the
extent a distribution to a Participant whose loan is required to be treated as
in default hereunder is permissible under this Plan, the Committee will, as soon
as practicable after such loan is required to be treated as in default
hereunder, reduce the vested balances in such Participant's Accounts by the
lesser of (a) the outstanding principal amount of such loan plus accrued and
unpaid interest thereon and (b) the aggregate vested balances in such
Participant's Accounts. To the extent a distribution to a Participant whose loan
is required to be treated as in default hereunder is not permissible under this
Plan, such Participant may be treated as having a deemed taxable distribution in
an amount equal to the outstanding principal amount of such loan plus accrued
and unpaid interest thereon and the Committee will treat the promissory note as
repaid to the extent of, and after making, any permissible offset or deemed
distribution.
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Section 12.17. Reductions in Force. Notwithstanding anything to
the contrary contained in this Article XII, in the event that a Participant's
employment is involuntarily terminated on or after November 16, 1998 by an
Employer (other than for cause) as part of a formal reduction in force or a
layoff program, the term of such Participant's loan shall not be accelerated by
reason of such termination of employment and, thereafter, each monthly
installment payment shall be due at the end of each month remaining in such
term. This provision shall constitute a part of the terms and provisions of each
loan; provided, however, that to the extent that this Section 12.17 constitutes
a modification to an outstanding loan, it shall be effective with respect to
such loan only if the requirements of Section 2550.408b-1 of the regulations of
the Department of Labor are determined to have been complied with at the time of
such modification.
ARTICLE XIII
The Committee
Section 13.01. Membership. The Committee shall consist of three or
more members appointed by the Corporation.
Section 13.02. Committee's General Powers, Rights and Duties. The
Committee, which is established by and derives its authority from the
Corporation, is, as respects the rights and obligations of all parties with an
interest in this Plan, given the powers, rights and duties specifically stated
elsewhere in this Plan, the Trust Agreement or any other document, and in
addition is given the power, right and duty to:
(a) determine all questions arising under this Plan, including the
power to determine the rights or eligibility of Employees or Participants
and any other persons, and the amounts of their benefits under this Plan,
and to remedy ambiguities, inconsistencies or omissions;
(b) adopt such rules of procedure and regulations as in its
opinion may be necessary for the proper and efficient administration of
this Plan and as are consistent with this Plan and the Trust Agreement;
(c) enforce this Plan in accordance with the terms of this Plan
and the Trust Agreement and in accordance with any rules of procedure and
regulations adopted by the Committee pursuant to clause (b) above;
(d) direct the Trustee in connection with payments, distributions
or loans from the Trust Fund in accordance with the provisions of this
Plan;
(e) furnish the Employers with such information as may be required
by them for tax or other purposes in connection with this Plan; and
(f) employ agents, attorneys, accountants or other persons (who
also may be employed by any Employer or the Trustee), and allocate or
delegate to them such powers,
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rights and duties as the Committee may consider necessary or advisable to
properly carry out the administration of this Plan; provided, however,
that such allocation or delegation and the acceptance thereof by such
agents, attorneys, accountants or other persons are in writing.
Section 13.03. Manner of Action. During any period in which two or
more Committee members are acting, the following provisions apply where the
context admits:
(a) at all meetings of the Committee, a majority of the members of
the Committee shall be necessary and sufficient to constitute a quorum
for the transaction of business;
(b) if a quorum shall not be present at any meeting of the
Committee, the members of the Committee present thereat may adjourn the
meeting from time to time (without notice other than announcement at the
meeting) until a quorum shall be present;
(c) a meeting of the Committee at which a quorum is initially
present may continue to transact business notwithstanding the withdrawal
of members of the Committee; provided, however, that no action of the
remaining members of the Committee shall constitute the act of the
Committee;
(d) an action or a decision of a majority of the members of the
Committee shall be the act of the Committee;
(e) any action required or permitted to be taken at any meeting of
the Committee may be taken without a meeting if a majority of the members
of the Committee consent thereto in writing;
(f) members of the Committee may participate in a meeting of the
Committee by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can
hear each other, and such participation in a meeting shall constitute
presence in person at such meeting;
(g) any document to be signed by the Committee may be signed in
any number of counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument;
(h) a Committee member may delegate any or all of his or her
rights, powers, duties and discretion to any other Committee member, with
the consent of the latter; provided, however, that such delegation and
the acceptance thereof by such other Committee member are in writing;
(i) if, because of the number qualified to act, there is an even
division of opinion among the Committee members as to a matter, a
disinterested party selected by the Committee shall decide the matter and
such party's decision shall control;
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(j) except as otherwise provided by Law, no member of the
Committee shall be liable or responsible for an act or omission of the
other Committee members in which the former has not concurred; and
(k) a certificate signed by the Secretary of the Committee or a
majority of the members of the Committee certifying that the Committee
has taken or authorized any action shall be conclusive in favor of any
person relying on such certificate.
Section 13.04. Information Required by Committee. The Employers
shall furnish the Committee with such data and information as the Committee may
deem necessary or desirable in order to administer this Plan. The records of the
Employers as to an Employee's or Participant's period of employment, termination
of employment and the reason therefor, leave of absence, reemployment and
earnings will be conclusive on all persons unless determined to the Committee's
satisfaction to be incorrect. Participants and other persons entitled to
benefits under this Plan also shall furnish the Committee with such evidence,
data or information as the Committee considers necessary or desirable to
administer this Plan.
Section 13.05. Committee Decision Final. Subject to applicable Law
and the provisions of Section 13.06, any interpretation of the provisions of
this Plan and any decision on any matter within the discretion of the Committee
made by the Committee in good faith shall be binding on all persons. A
misstatement or other mistake of fact shall be corrected when it becomes known
and the Committee shall make such adjustment on account thereof as it considers
equitable and practicable.
Section 13.06. Review of Benefit Determinations. The Committee
will provide notice in writing to any Participant, Beneficiary or other person
whose claim for benefits under this Plan is denied and the Committee shall
afford such Participant, Beneficiary or other person a full and fair review of
its decision, if so requested.
Section 13.07. Uniform Rules The Committee shall administer this
Plan on a reasonable and nondiscriminatory basis and shall apply uniform rules
to all Participants similarly situated.
ARTICLE XIV
Relating to the Employers
Section 14.01. Action by Employers. Any action required or
permitted of an Employer under this Plan shall be by resolution of its Board of
Directors, by a duly authorized committee of its Board of Directors or by a
person or persons authorized by resolution of its Board of Directors or duly
authorized committee.
Section 14.02. Additional Employers. Any Affiliate that is not an
Employer may adopt this Plan and become an Employer under this Plan, with the
consent of the Committee.
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Section 14.03. Restrictions as to Reversion of Trust Assets to
Employers. An Employer contribution made based on a good faith mistake of fact
or good faith mistake in determining the deductibility of the contribution or
conditioned upon the initial qualification of this Plan shall be returned to the
Employer within one year of the mistaken payment or disallowance of the
deduction or denial of qualification, as the case may be. The amount returnable
is the excess of the amount contributed over the amount that would have been
contributed had there not occurred such mistaken payment or disallowance of the
deduction or denial of qualification, as the case may be. However, earnings on
the excess amount may not be so returned and any losses attributable to such
amount shall reduce the amount returnable. Further, the amount returnable cannot
cause the individual account of any Participant to be reduced to less than it
would have been had such amount not been contributed.
ARTICLE XV
General Provisions
Section 15.01. Notices. Each person entitled to benefits under
this Plan must file in writing with the Committee such person's post office
address and each change of post office address. Any communication, statement or
notice addressed to any person at the last post office address filed with the
Committee will be binding upon such person for all purposes of this Plan, and
none of the Committee, the Employers or the Trustee shall be obligated to search
for or ascertain the whereabouts of any such person. Any notice or document
required to be given to or filed with the Committee shall be considered as given
or filed if delivered or mailed by registered mail, postage prepaid, to the
Committee in care of the Corporation.
Section 15.02. Waivers. No amendment, modification, restatement or
supplement of this Plan shall be valid unless the same is in writing and signed
by the Corporation. No waiver of any provision of this Plan shall be valid
unless in writing and signed by the person or entity against whom that waiver is
sought to be enforced. No failure or delay on the part of any person or entity
in exercising any right, power or privilege hereunder shall operate as a waiver
of any right, power or privilege hereunder. No single or partial exercise of any
right, power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder. No
notice to or demand on any person or entity in any case shall entitle such
person or entity to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of any person or entity to
any other or further action in any circumstances without notice or demand.
Section 15.03. Absence of Guaranty. None of the Committee, the
Employers or the Trustee in any way guarantees the Trust Fund from loss or
depreciation, nor guarantees any payment to any person. The liability of the
Committee, the Employers and the Trustee to make any payment under this Plan
will be limited to the assets held by the Trustee as a part of the Trust Fund.
Section 15.04. No Employment Rights. The Plan does not constitute
a contract of employment, and participation in this Plan will not give any
Employee the right to be retained in
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the employ of the Employers or Affiliates nor any right or claim to any benefit
under this Plan, (other than rights and claims that have specifically accrued
under the terms of this Plan).
Section 15.05. Interests Not Transferable. Except as may be
required or permitted by the Code, and except (to the extent permitted by
applicable Law) as to any loan owing to the Trustee under this Plan, the
interests of Participants and Beneficiaries under this Plan are not subject to
the claims of their creditors and may not be voluntarily or involuntarily sold,
transferred, alienated, assigned or encumbered.
Section 15.06. Facility of Payment. When a person entitled to
benefits under this Plan is under a legal disability or, in the Committee's
opinion, is in any way incapacitated so as to be unable to manage his or her
financial affairs, the Committee may direct that the benefits to which such
person otherwise would be entitled shall be made to such person's legal
representative, or to a relative or friend of such person for such person's
benefit, or the Committee may direct the application of such benefits for the
benefit of such person. If the Committee receives proper authorization by a
Participant or any other person entitled to benefits under this Plan, and unless
and until the Committee is notified or becomes aware that such authorization no
longer is in effect, the Committee will direct that periodic deposits of the
benefits which otherwise would be payable directly to such Participant shall be
made into a savings or checking account established in such Participant's name
at a bank or other financial institution. Any payment made in accordance with
the provisions of this Section 15.06 shall be a full and complete discharge of
any liability for such payment under this Plan.
Section 15.07. Distribution of Payment. In the event that any
distribution or payment directed by the Committee shall be mailed by the Trustee
to the person specified in such direction at the latest address of such person
filed with the Committee, and shall be returned to the Trustee because such
person cannot be located at such address, the Trustee shall promptly notify the
Committee of the return. Upon the expiration of 60 days after such notification,
such direction shall become void and unless and until a further direction by the
Committee is received by the Trustee with respect to such distribution or
payment, the Trustee shall thereafter continue to administer the Trust as if
such direction had not been made by the Committee. The Trustee shall not be
obligated to search for or ascertain the whereabouts of any such person.
Section 15.08. Evidence. Evidence required of anyone under this
Plan may be by certificate, affidavit, document or other information which the
person acting on it considers pertinent and reliable, and signed, made or
presented by the proper party or parties.
Section 15.09. Indemnity. Without in any way limiting the scope of
any indemnity agreement entered into in favor of or by and between parties
referred to in this Section 15.09, the Trustee, the Committee, the members of
the Committee, the former members of the Committee and any persons who are or
were directors, officers or employees of the Employers, any Affiliates or any of
their respective subsidiaries, and each of them, shall be indemnified and saved
harmless by the Corporation from and against any and all loss, cost, liability
or expense that may be imposed upon or reasonably incurred by such indemnified
person in connection with or resulting from any claim, action, suit or
proceeding to which such indemnified person may be a party or in which such
indemnified person may be involved by reason of any action taken or
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failure to act under this Plan or the Trust, the administration thereof or the
investment of the assets held in the Trust Fund, and against and from any and
all amounts paid by such indemnified person in settlement thereof, with the
Corporation's approval, or paid by such indemnified person in satisfaction of
any judgment in any such action, suit or proceeding; provided, however, that
such indemnified person shall give the Corporation prompt written notice of any
such action, suit or proceeding and an opportunity, at its own expense, to
handle, defend and settle the same before such indemnified person undertakes to
handle, defend or settle the same. The foregoing right of indemnification shall
not be exclusive of any other rights or indemnification to which any such
indemnified person may be entitled under the Corporation's Certificate of
Incorporation or Bylaws, as a matter of law or otherwise, or any power that the
Corporation may have to indemnify them or hold them harmless.
Section 15.10. Controlling State Law. To the extent not superseded
by the Laws of the United States, the Laws of the State of Texas shall be
controlling in all matters relating to this Plan.
Section 15.11. Severability. Should any clause, sentence,
paragraph, subsection, Section or Article of this Plan be judicially declared to
be invalid, unenforceable or void, such decision will not have the effect of
invalidating or voiding the remainder of this Plan, and the part or parts of
this Plan so held to be invalid, unenforceable or void will be deemed to have
been stricken herefrom as if such stricken part or parts had never been included
herein.
Section 15.12. Successors. The provisions of this Plan shall be
binding upon the Employers and their successors and assigns and upon the
Participants and their Beneficiaries and their respective heirs, executors,
personal representatives, administrators, successors and assigns.
ARTICLE XVI
Amendment, Termination or Plan Merger
Section 16.01. Amendment. While the Corporation expects and
intends to continue this Plan, the Corporation, by action of its Board of
Directors or the Committee, reserves the right to amend, retroactively or
prospectively, this Plan from time to time; provided, however, that:
(a) the Committee may not make any amendment to this Plan that
would materially increase the Employers' costs or obligations under this
Plan;
(b) except as may be required by the Internal Revenue Service for
the purpose of meeting the conditions for qualification or for tax
deduction under Sections 401 through 415 and Section 501 of the Code or
as may be required by ERISA or any other state or federal Law, no action
of the Corporation hereunder shall alter the operation of this Plan as it
applies to employees with whom or with whose representatives there exists
a written agreement pertaining to retirement income benefits, during the
term of any such agreement; and
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(c) except as provided in Section 14.03, under no condition shall
any amendment result in the return or repayment to any Employer of any
part of the Trust Fund or the income therefrom, or result in the
distribution of the Trust Fund for the benefit of anyone other than
Participants and any other persons entitled to benefits under this Plan.
Section 16.02. Termination. This Plan will terminate as to all
Employers on any date specified by the Corporation if 30 days' advance written
notice of such termination is given to the Committee, the Trustee and the other
Employers. This Plan will terminate as to an individual Employer on the first to
occur of the following:
(a) the date it is terminated by the Board of Directors of the
Corporation as to that Employer; or
(b) the date that such Employer ceases to be an Affiliate of the
Corporation, such Employer dissolves, merges, consolidates or reorganizes
or such Employer sells all or substantially all of its assets, except
that:
(i) in any such event, arrangements may be made with the
consent of the Corporation whereby this Plan may be
continued by any successor to that Employer or any
purchaser of all or substantially all of its assets, in
which case, the successor or purchaser may be substituted
for that Employer under this Plan and the Trust Agreement;
and
(ii) if any Employer is merged, dissolved or in any way
reorganized into, or consolidated with, any other Employer,
this Plan as applied to the former Employer will
automatically continue in effect without a termination
thereof.
Notwithstanding anything to the contrary contained in this Plan, if this Plan is
terminated or partially terminated, or the Employers' contributions under this
Plan are completely discontinued, each affected Participant shall thereupon be
100% vested in his or her Accounts as of the date of such discontinuance or
termination and in any amount thereafter credited or allocated to such Accounts.
Section 16.03. Plan Merger or Consolidation. In no event shall
there be any merger or consolidation of this Plan with, or transfer of assets or
liabilities of this Plan to, any other plan unless each Participant in this Plan
would (if this Plan then terminated) receive a benefit immediately after the
merger, consolidation or transfer which is equal to or greater than the benefit
such Participant would have been entitled to receive immediately before the
merger, consolidation or transfer (if this Plan had then terminated).
Section 16.04. Notice of Amendment, Termination or Plan Merger.
Affected Participants will be notified of any termination, plan merger,
consolidation or substantial amendment within a reasonable time.
Section 16.05. Distribution on Termination. On termination of this
Plan, distributions shall be paid as soon as practicable thereafter in a lump
sum.
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ARTICLE XVII
Top-Heavy Provisions
Section 17.01. Determination of Top-Heavy. (a) Except as otherwise
provided in this Section 17.01, this Plan shall be considered a "Top-Heavy Plan"
with respect to any Plan Year if, as of the last day of the preceding Plan Year:
(i) the aggregate of the sum of the Accounts of Participants who
are Key Employees exceeds 60% of the aggregate of the sum of the Accounts
of all Participants (the "60% Test"); or
(ii) this Plan is part of a "required aggregation group" (i.e.,
each qualified plan of the Employers in which at least one Key Employee
participates and any other qualified plan of the Employers which enables
any such plan to meet the requirements of Sections 401(a)(4) or 410 of
the Code) and, as of the last day of the preceding Plan Year:
(A) the sum of (x) the present value of the Accrued Benefits
for Key Employees under all defined benefit plans included
in such group plus (y) the aggregate of the Accounts of Key
Employees under all defined contribution plans included in
such group, exceeds
(B) 60% of the sum, as of the last day of the preceding Plan
Year, of the amounts specified in clause (A) above for all
participants under the plans described in clause (A);
provided, however, that if any Participant has not performed services for any
Employer at any time during the five-year period ending on the determination
date, such Participant's Account balances shall not be taken into account for
purposes of top heavy determination. For purposes of this Section 17.01, the
"determination date" means, for the first plan year of any plan, the last day of
such plan year and, for each subsequent plan year of such plan, the last day of
the preceding plan year).
(b) Notwithstanding anything to the contrary contained in this
Section 17.01, this Plan shall not be considered a Top-Heavy Plan with respect
to any Plan Year if this Plan is a part of a "permissive aggregation group"
(i.e., the required aggregation group of plans plus any other plan or plans of
the Employer which, when considered as a group with the required aggregation
group, would continue to satisfy the requirements of Sections 401(a)(4) and 410
of the Code) which does not satisfy the requirements of Section 17.01(a)(ii).
(c) Distributions made within the preceding Plan Year and within
the four Plan Years immediately preceding such Plan Year shall be added to the
Account of any Participant in determining whether this Plan shall be considered
a Top-Heavy Plan; provided, however, that the Accounts of any Participant who is
not a Key Employee but who was a Key Employee in a prior
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<PAGE> 62
Plan Year or who has not received any compensation from any Employer maintaining
this Plan at any time during such five-year period will be disregarded.
Section 17.02. Minimum Allocations. Notwithstanding anything
contained in this Plan to the contrary, for any Plan Year in which this Plan is
deemed a Top-Heavy Plan, the minimum Employer contributions for a Plan Year for
each Participant who is not a Key Employee shall be equal to 3% of such
Participant's compensation.
Section 17.03. Compensation Limitation. The compensation limits of
Section 401(a)(17) of the Code shall apply.
Section 17.04. Repeal, Modification or Postponement of Top-Heavy
Provisions. In the event that all or any portion of Section 416 of the Code is
modified, this Article XVII shall be deemed to have been modified in a manner
commensurate with such amendment to Section 416 of the Code. In the event that
all or any portion of Section 416 of the Code is repealed, this Article XVII
shall have no effect as of the effective date of such repeal. Furthermore, if
the effective date of Section 416 of the Code is delayed or postponed, this
Article XVII shall have no effect until the effective date of Section 416 of the
Code.
Section 17.05. Minimum Vesting. If a Participant resigns or is
dismissed from the employ of the Employers and the Affiliates before retirement,
payment of Account balances shall be governed by Section 10.02 of this Plan.
Section 17.06. Key Employee. An Employee is considered a "Key
Employee" with respect to any Plan Year if such Employee, at any time during
such Plan Year or any of the preceding four Plan Years, has been included in one
of the following categories:
(a) an "officer" of the Employer (as defined in the Regulations
under Section 416 of the Code) having annual 415 Compensation greater
than 50% of the amount in effect under Section 415(b)(1)(A) of the Code
for any such Plan Year;
(b) one of the ten Employees having annual 415 Compensation from
the Employers for any such Plan Year greater than the dollar limitation
in effect under Section 415(c)(1)(A) of the Code for the calendar year in
which such Plan Year ends and owning (or considered as owning within the
meaning of Section 318 of the Code) both more than a 0.5% interest and
the largest interests in the Employer;
(c) a Five Percent Owner of any Employer; or
(d) a One Percent Owner of any Employer having annual 415
Compensation from such Employer of more than $150,000; provided, however,
that in determining whether an individual has 415 Compensation of more
than $150,000, 415 Compensation from each Employer required to be
aggregated under Sections 414(b), (c), (m) and (o) of the Code shall be
taken into account.
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For purposes of this Section 17.06, the determination of 415 Compensation shall
be based only on 415 Compensation which is actually paid, including amounts
which are (i) contributed by the Employers pursuant to a salary reduction
agreement and which are not includable in the gross income of the relevant
Participant under Sections 125, 402(e)(3), 402(h), 403(b) or 457 of the Code and
(ii) contributions by such Participant that are described in Section 414(h)(2)
of the Code and treated as Employer contributions.
Section 17.07. Compensation. For purposes of this Article XVII,
the "compensation" to be used for any Employee is the compensation stated on
such Employee's Form W-2 for the calendar year that ends within the relevant
Plan Year. This definition of compensation shall be used for determining a
minimum benefit or a minimum contribution for any Employee and for all Top-Heavy
Plan purposes, except that, for the purpose of determining whether an Employee
is a Key Employee with respect to any Plan Year beginning on or after January 1,
1989, the compensation to be used is "compensation" (as defined in Section
415(c)(3) of the Code) but including Employer contributions made pursuant to any
salary reduction arrangement.
IN WITNESS WHEREOF, the Corporation has executed this Sixth
Amended and Restated Savings and Investment Plan effective as of October 1,
2000.
STERLING CHEMICALS, INC.
By:
-------------------------------------
Frank P. Diassi
Chairman of the Board of Directors
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EXHIBIT A
Investment Funds
CORE INVESTMENT OPTIONS
AIM BALANCED FUND...................... Ordinarily invests in a broadly
diversified portfolio of
high-yielding securities, including
common stocks, preferred stocks,
convertible securities and bonds, in
order to meet the Fund's goal of
achieving as high a total return as
possible, consistent with
preservation of capital.
CALVERT INCOME FUND.................... Ordinarily invests in bonds and other
income-producing securities in order
to meet the Fund's goal of maximizing
long-term income, consistent with
prudent investment management and
preservation of capital.
DAVIS NY VENTURE FUND.................. Ordinarily invests in equity
securities of companies with market
capitalization of at least $5 billion
in order to meet the Fund's goal of
growth of capital.
JOHN HANCOCK SMALL CAP................. Ordinarily invests in stocks that
VALUE FUND appear comparatively undervalued and
are out of favor in order to meet the
Fund's goal of capital appreciation,
with income as a secondary
consideration.
MANAGERS INTERNATIONAL................. Ordinarily invests in equity
EQUITY FUND securities domiciled outside the U.S.
and fixed-income securities
denominated in both foreign and
domestic currencies in order to meet
the Fund's goal of long-term capital
appreciation, with income as a
secondary objective.
MFS EMERGING GROWTH.................... Ordinarily invests in common stocks
FUND of emerging growth companies, which
are companies that the Fund's
management believes are either early
in their life cycle but have the
potential to become major enterprises
or are major enterprises whose rates
of earnings growth are expected to
accelerate, in order to meet the
Fund's goal of providing long-term
growth of capital.
ML EQUITY INDEX TRUST.................. Ordinarily invests in a portfolio of
equity securities designed to
substantially track the performance
of Standard & Poor's 500 Composite
Stock Price Index (before expenses).
ML RETIREMENT.......................... Ordinarily invests in a broadly
PRESERVATION TRUST diversified portfolio of guaranteed
investment contracts, obligations of
U.S. government and U.S. government
agency securities in order to meet
the Fund's goals of preservation of
investments, liquidity and current
income that is typically higher than
money market funds.
A-i
<PAGE> 65
MUTUAL FUND WINDOW
DELAWARE TREND FUND.................... Ordinarily invests in common stocks,
including small-capitalization and
convertibles, of companies that the
Fund's management believes have the
fundamental characteristics to
support growth in order to meet the
Fund's goal of achieving long-term
capital appreciation.
ML BALANCED CAPITAL FUND............... Ordinarily invests in equity
securities, corporate bonds and money
market securities in order to meet
the Fund's goal of achieving the
highest total investment return,
consistent with prudent risk.
ML GLOBAL ALLOCATION FUND.............. Ordinarily invests in U.S. and
foreign equity, debt and money market
securities in order to meet the
Fund's goal of achieving the highest
total investment return, consistent
with prudent risk.
ML HEALTHCARE FUND..................... Ordinarily invests in worldwide
equity securities of companies that,
in the opinion of the Fund's
management, derive a substantial
portion of their sales from products
and services in health care in order
to meet the Fund's goal of achieving
long-term capital appreciation.
OPPENHEIMER DEVELOPING................. Ordinarily invests in equity
MARKETS FUND securities of issuers whose principal
activities are located in at least
three different developing markets,
debt securities of corporate or
government issuers in developing
markets, equity and debt securities
of corporate issuers in developed
markets (including the U.S.) and cash
and money market instruments in order
to meet the Fund's goal of
aggressively seeking capital
appreciation.
PIMCO INNOVATION FUND.................. Ordinarily invests in common stocks
of companies which utilize innovative
technologies to gain a strategic
competitive advantage in the industry
and companies that provide and
service those technologies in order
to meet the Fund's goal of achieving
capital appreciation.
OTHERS
COMPANY STOCK FUND..................... The Company Stock Fund invested
solely in Company Stock and
constitutes a "frozen" fund as of
September 1, 1997.
CYTEC STOCK FUND....................... The Cytec Accounts that were invested
in Cytec common stock under the Cytec
Plan on January 31, 1997 continue to
be in such stock and constitute a
"frozen" fund as of that date (i.e.,
no additional Cytec common stock
shall be acquired by this Fund, other
than Cytec stock dividends and any
cash dividends or other distributions
received by such frozen fund which
are automatically reinvested in Cytec
common stock).
A-ii
