As filed with the Securities and Exchange Commission
on April 19, 1996
Registration No. 33-35013
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1 TO
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PROLER INTERNATIONAL CORP.
(Exact name of registrant as specified in its charter)
Delaware 76-0494529
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4265 San Felipe, Suite 900
Houston, Texas 77027
(Address of principal executive offices) (Zip Code)
PROLER INTERNATIONAL CORP.
TAX DEFERRED SAVINGS AND RETIREMENT PLAN AND TRUST
(Full Title of the Plan)
Steven F. Gilliland
President and Chief Executive Officer
Proler International Corp.
4265 San Felipe, Suite 900
Houston, Texas 77027
(713) 627-3737
(Name, Address and Telephone Number of Agent for Service)
Page 1 of 8
Exhibit Index on Page 8
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION.
Not included herein.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
Not included herein.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Effective February 28, 1996, the Registrant's predecessor (also named
Proler International Corp. and referred to herein as the "Predecessor")
reorganized its corporate structure into a "holding company" form of
organizational structure. The holding company organizational structure was
implemented by a merger conducted pursuant to ss.251(g) of the Delaware General
Corporation Law. In the merger (the "Merger"), the Predecessor merged with
Proler Merger, Inc., a newly-formed, wholly-owned indirect subsidiary of the
Predecessor, and each share of Common Stock of the Predecessor was automatically
converted into one share of Common Stock of the Registrant. As a result of the
Merger, the Registrant became the holding company and the successor issuer to
the Predecessor.
Also in connection with the Merger, the Registrant adopted the Proler
International Corp. Tax Deferred Savings and Retirement Plan and Trust and
assumed all obligations as sponsor thereunder. This post-effective amendment is
filed pursuant to Rule 414 under the Securities Act of 1933, as amended (the
"Securities Act"), to reflect the adoption by Proler International Corp.
(referred to herein as the "Registrant") of this Registration Statement, as well
as the Proler International Corp. Tax Deferred Savings and Retirement Plan and
Trust to which it relates, as its own for all purposes of the Securities Act and
the Securities Exchange Act of 1934, as amended.
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, which have been filed with the Securities and
Exchange Commission (the "Commission"), are incorporated herein by reference and
made a part hereof: (1) the Annual Report on Form 10-K (dated May 1, 1995) of
Proler International Corp. for its fiscal year ended January 31, 1995; (2) all
reports filed by Proler International Corp. with the
Page 2 of 8
Commission pursuant to Sections 13(a) or 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), since January 31, 1995; and (3) the
description of the Company's Common Stock and Stock Rights contained in the
Company's Registration Statement on Form 8-B under the Exchange Act
(Registration No. 1-05276) as filed with the Commission on March 11, 1996.
In addition, all documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference herein and to be a part hereof from the date of
filing of such documents. Any statement contained herein or in a document
incorporated by reference herein shall be deemed to be modified or superseded
for purposes hereof to the extent that a statement contained herein (or in any
other subsequently filed document which also is incorporated by reference
herein) modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed to constitute a part hereof except as so modified
or superseded.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Certain legal matters in connection with the Plan have previously been
passed upon by the law firm of Mayor, Day, Caldwell & Keeton, L.L.P., 700
Louisiana Street, Suite 1900, Houston, Texas 77002. Richard B. Mayor, a partner
in such firm, is a director of the Registrant.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law ("DGCL") provides for
indemnification of a corporation's directors and officers against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement in
connection with any action, suit or proceeding, whether civil, criminal,
administrative or investigative and including by or in the right of the
corporation, to which such directors and officers are parties or threatened to
be made parties by reason of their capacity as directors and officers.
Indemnification, unless ordered by the court, shall be made by the corporation
only as authorized in the specific case upon a determination that
indemnification is proper in the circumstances because the director or officer
has met the applicable standard of conduct, or to the extent that a director or
officer has been successful on the merits or otherwise in defense of any such
matter.
The Registrant has in effect, in its Certificate of Incorporation and in
its Bylaws, provisions providing for indemnification of directors and officers
to the fullest extent permitted under Section 145 of the DGCL. Insurance is
maintained for each director and officer of the Registrant covering certain
losses he may incur which arise by reason of his being a director or officer of
the Registrant.
Page 3 of 8
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The Exhibits are listed in the Exhibit Index immediately preceding the
Exhibits and are incorporated herein by reference.
ITEM 9. UNDERTAKINGS.
(a) The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, another post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in any subsequent post-effective amendment any
facts or events arising after the effective date of this
post-effective amendment (or the most recent post-effective
amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement, as amended;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration
Statement, as amended, or any material change to such information
in the Registration Statement, as amended;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in this post-effective amendment.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
Page 4 of 8
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The Registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d)
of the Exchange Act (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering hereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
Page 5 of 8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this amendment to the
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Houston, State of Texas, on this 18th day of
April, 1996.
PROLER INTERNATIONAL CORP.
By:/s/ MICHAEL F. LOY
Name: Michael F. Loy
Title: Vice President-Finance and Secretary
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the registration statement has been signed below by the following persons in
the capacities indicated, on this 18th day of April, 1996.
Name and Signature Title
------------------ -----
/s/ HERMAN PROLER Chairman of the Board
Herman Proler
/s/ STEVEN F. GILLILAND President, Chief Executive Officer,
Steven F. Gilliland and Director (Principal Executive
Officer)
/s/ MICHAEL F. LOY Vice President-Finance and
Michael F. Loy Secretary (Principal Financial and
Accounting Officer)
/s/ RICHARD B. MAYOR Director
Richard B. Mayor
/s/ JOHN MCKENNA Director
John McKenna
/s/ HARVEY ALTER Director
Harvey Alter
Page 6 of 8
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the registration statement has been signed on behalf of the Proler
International Corp. Tax Deferred Savings and Retirement Plan and Trust by the
undersigned, its Trustee, thereunto duly authorized, in the City of Houston,
State of Texas, on April 18, 1996.
PROLER INTERNATIONAL CORP. TAX
DEFERRED SAVINGS AND
RETIREMENT PLAN AND TRUST
By:/s/ CAROL MARTIN
Name: Carol Martin
Title: Trustee
Page 7 of 8
INDEX TO EXHIBITS
EXHIBIT
NO. DESCRIPTION AND LOCATION
- ------- ------------------------
3.1 Certificate of Incorporation of the Registrant (incorporated by
reference to Exhibit 3.1 to the Registrant's Registration Statement on
Form 8-B, Registration No. 1-05276, as filed with the Commission on
March 11, 1996).
3.2 By-Laws of the Registrant, as amended to date (incorporated by
reference to Exhibit 3.2 to the Registrant's Registration Statement on
Form 8-B, Registration No. 1-05276, as filed with the Commission on
March 11, 1996).
4.1 Form of Registrant's Common Stock Certificate.
4.2 Rights Agreement, dated February 28, 1996, between the Registrant and
KeyCorp Shareholder Services Inc. as Rights Agent (incorporated by
reference to Exhibit 4.2 to the Registrant's Registration Statement on
Form 8-B, Registration No. 1-05276, as filed with the Commission on
March 11, 1996).
4.3 Proler International Corp. Tax Deferred Savings and Retirement Plan and
Trust, as amended and restated effective January 1, 1993, as amended by
the First Amendment thereto.
5.1 Opinion of Mayor, Day, Caldwell & Keeton, L.L.P.*
23.1 Consent of Mayor, Day, Caldwell & Keeton, L.L.P. (included in Exhibit
5.1).*
23.2 Consents of Accountants (incorporated by reference to Exhibit 23 to the
Annual Report on Form 10-K dated May 1, 1995 of Proler International
Corp. for its fiscal year ended January 31, 1995).
- ------------
* Previously filed
Page 8 of 8
2-2513-152-83
COMMON STOCK COMMON STOCK
INCORPORATED UNDER THE LAWS OF PAR VALUE $1.00 EACH
THE STATE OF DELAWARE
SEE REVERSE
FOR RIGHTS LEGEND
THIS CERTIFICATE IS TRANSFERABLE IN
HOUSTON, TEXAS; CLEVELAND, OHIO;
OR NEW YORK, NEW YORK
PROLER INTERNATIONAL CORP
THIS CERTIFIES THAT CUSIP 743396 10 3
SEE REVERSE FOR CERTAIN DEFINITIONS
SPECIMEN
IS THE OWNER OF
FULL PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK OF
Proler International Corp. (hereinafter called the "Corporation")
transferable on the back of the Corporation by the holder hereof in person or
by duly authorized attorney upon surrender of this certificate properly
endorsed. This certificate and this issued and shall be held subject to
all of the previous of the Certificate of Incorporation By-Laws of the
Corporation and of any file with the Transfer Agent) to all of which the
holder by the acceptance hereof assents. This certificate is invalid
registered by the Registrant.
Witness: the facsimile seal of the Corporation and the facsimile signature of
its above authorized officers.
DATED:
COUNTERSIGNED AND REGISTERED:
KeyCorp Shareholder Services, Inc.
(Cleveland, Ohio)
TRANSFER AGENT
AND REGISTRANT
AUTHORIZED SIGNATURE
PROLER INTERNATIONAL CORP. CORPORATE SEAL DELAWARE 1996
This certificate also evidences and entitles the holder hereof to certain
Rights as set forth in the Rights Agreement between Proler International Corp.
(the "Company") and KeyCorp Shareholder Services, inc. dated as of February 28,
196 (the "Rights Agreement"), the terms of which are hereby incorporated herein
by reference and a copy of which is on file at the principal office of the
Company. Under certain circumstances, as set forth in the Rights Agreement,
such rights will be evidenced by separate certificates and will no longer be
evidenced by this certificate. The Company will mail to the holder of this
certificate a copy of the Rights Agreement, as in effect on the date of
mailing, without charge, promptly after receipt of a written request therefor.
Under certain circumstances set forth in the Rights Agreement, Rights issued
to, or held by, any Person who is, was or becomes, an Acquiring Person or any
Affiliate, or Associates thereof (as such terms are defined in the Rights
Agreement), whether currently held by or on behalf of such Person or by any
subsequent holder, may become null and void.
PROLER INTERNATIONAL CORP.
A full statement of the designations, preferences and relative,
participating, optional or other special rights of each class of stock of the
Corporation or Series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights will be furnished by the
Corporation without charge to any stockholder who so requests upon application
to the Transfer Agent named on the face hereof or to the office of the
Secretary of Corporation.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM --as tenants in common
TEN ENT --as tenants by the entireties
JT TEN --as joint tenants with right of
survivorship and not as tenants
in common
UNIF GIFT MIN ACT -- ___Custodian___
(Cust) (Minor)
under Uniform Gifts to Minors
Act___________________
(State)
Additional abbreviations may also be used through not in the above list
For value received, ________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
__________________________________________________________________________
__________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING
POSTAL ZIP CODE OF ASSIGNEE
_________________________________________________________________________
________________________________________________________________Shares
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint________________________________________
__________________________________________________________________________
Attorney for transfer for the side stock on the Books of the within named
Corporation with full power of substitution in the premises.
Dated__________________________
_____________________________________________________
FIRST AMENDMENT TO
PROLER INTERNATIONAL CORP.
TAX DEFERRED SAVINGS AND RETIREMENT PLAN AND TRUST
(AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1993)
W I T N E S S E T H
WHEREAS, Proler International Corp. (the "Plan Sponsor") maintains the
Proler International Corp. Tax Deferred Savings and Retirement Plan and Trust
(the "Plan") for the benefit of its eligible employees; and
WHEREAS, in Section 11.1 of the Plan, the Board of Directors of the
Plan Sponsor (the "Board") reserved the right to amend the Plan from time to
time; and
WHEREAS, the Board has determined that the Plan should be amended
effective as of January 1, 1996 to (i) permit Members to defer up to 100 percent
(or such other percentage established by the Administrative Committee) of any
bonus otherwise earned and payable in cash to such a Member notwithstanding the
otherwise applicable 15 percent limitation on the amount of Considered
Compensation that may be deferred under the Plan; (ii) establish another Entry
Date on the first day of December in each Plan Year; and (iii) clarify that up
to 100 percent (or such other percentage established by the Administrative
Committee) of Considered Compensation for the month of December in each Plan
Year, including unused vacation pay in excess of two weeks, may be deferred
pursuant to a Special Compensation Deferral Agreement that must be executed by
the Member prior to the first day of December.
NOW, THEREFORE, the Plan is hereby amended by this First Amendment
thereto as follows:
1. EFFECTIVE AS OF JANUARY 1, 1996, SECTION 1.14 OF THE PLAN IS
AMENDED AND RESTATED IN ITS ENTIRETY TO PROVIDE AS FOLLOWS:
" 1.14 ENTRY DATE: "Entry Date" shall mean the January 1,
April 1, July 1, October 1 and, for Plan Years beginning on or
after January 1, 1996, December 1, of each Plan Year on which
an Employee becomes a Member by commencing participation in
the Plan after having met the eligibility requirements under
applicable provisions of the Plan."
2. EFFECTIVE AS OF JANUARY 1, 1996, THE SECOND PARAGRAPH OF
SECTION 3.1(A) OF THE PLAN IS AMENDED AND RESTATED IN ITS
ENTIRETY TO PROVIDE AS FOLLOWS:
" From and after the date, if any, established by the Board
pursuant to the preceding paragraph of this Section 3.1, or
the Entry Date or other date with respect to which a Member is
eligible to participate, if later, each Member may execute a
Compensation Deferral Agreement in a form satisfactory to the
Administrative Committee whereunder the Member shall agree,
subject to any necessary adjustments pursuant to this Section
and Sections 3.3 and 4.3, to a reduction (expressed in whole
percentages) of not less than one percent (1%) or in a fixed
dollar amount (not less than $20 per month), nor greater than
fifteen percent (15%), of his Considered Compensation (before
such authorized reduction) attributable to the applicable pay
periods; provided, however, on a nondiscriminatory basis, any
Elective Contributions authorized in a fixed dollar amount by
any Member shall not be applied to any incentive pay earned by
such Member, which incentive pay would otherwise be included
in Considered Compensation for this purpose. Notwithstanding
the limitations on the amount of Elective Contributions set
forth in the preceding sentence, effective for Plan Years
beginning on or after January 1, 1996, in lieu of the receipt
of any bonus otherwise payable to a Member, such Member may
execute a Compensation Deferral Agreement (in such form as is
satisfactory to the Administrative Committee) authorizing the
Employer to make an Elective Contribution to the Plan on his
behalf of an amount not in excess of 100% (or such other
percentage set by the Administrative Committee) of such bonus;
provided, however, that any such Compensation Deferral
Agreement must be executed by the Member prior to the date on
which the affected bonus would otherwise be earned and payable
in cash to the Member. The Employer shall contribute (as an
Elective Contribution) to the Plan, an amount equal to the
amount of the Member's authorized reduction, which Elective
Contribution shall be allocated and credited to the Member's
Employer Nonforfeitable Contributions Account."
3. EFFECTIVE AS OF JANUARY 1, 1996, SECTION 3.1(B) IS AMENDED AND
RESTATED IN ITS ENTIRETY TO PROVIDE AS FOLLOWS:
" (b) SPECIAL COMPENSATION DEFERRAL AGREEMENTS:
Notwithstanding the preceding subsection (a), unless the
Administrative Committee so determines in its sole discretion,
prior to December 1 of each calendar year, each Member may
execute a Compensation Deferral Agreement (in such form as is
satisfactory to the Administrative Committee and hereinafter
referred to as a "Special Compensation Deferral Agreement")
authorizing the Employer to make an Elective Contribution to
the Plan on his behalf of an amount not in excess of 100% (or
such other percentage set by the Administrative Committee) of
the Member's Considered Compensation for such month, including
any unused vacation pay in excess of two weeks; provided,
however, (i) that such Special Compensation Deferral Agreement
shall be deemed to modify and override any prior Compensation
Deferral Agreement during the period covered by the Special
Compensation Deferral Agreement, (ii) that the deferrals
authorized under the Special Compensation Deferral Agreement
may be increased, reduced or revoked only if permitted by the
Administrative Committee, and (iii) that the Special
Compensation Deferral Agreement shall automatically terminate
as of the earlier of (a) such time it is revoked by the Member
in accordance with
2
nondiscriminatory rules established by the Administrative
Committee or (b) the last day of the period with respect to
which authorized reductions thereunder are contributed to the
Plan. All deferrals required under the Plan as a result of the
execution of the Special Compensation Deferral Agreement shall
otherwise be subject to all applicable terms, conditions, and
limitations of the Plan. As of the date that the Special
Compensation Deferral Agreement ceases to be operative, the
Member's then otherwise operative Compensation Deferral
Agreement shall govern deferrals to be made on behalf of the
Member."
4. IN ORDER TO EFFECTUATE THE AMENDMENTS DESCRIBED ABOVE, THE
SUBSTITUTE PAGES I-11 AND III-2 THROUGH III-25 ATTACHED HERETO
SHALL BE INSERTED INTO THE PLAN AND SHALL REPLACE AND
SUPERSEDE THE PRIOR VERSION OF THOSE PAGES.
IN WITNESS WHEREOF, on behalf of the Plan Sponsor, the First Amendment
to the Plan is hereby approved and executed this 18th day of April, 1996.
PLAN SPONSOR:
PROLER INTERNATIONAL CORP.
ATTEST:
By: /s/ M. F. LOY
By: /s/ DAVID JUENGEL Printed Name: M. F. Loy
Title: VP - Finance and Secretary
Printed Name: David Juengel
Title: VP & Treasurer
TRUSTEE:
/s/ CAROL MARTIN
Carol Martin
3
THE STATE OF TEXAS |
|--
COUNTY OF HARRIS |
This instrument was acknowledged before me on April 18, 1996 by Michael
F. Loy, V.P. Finance/Secretary, of Proler International Corp., on behalf of said
corporation.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 18th day of April, 1996.
/s/ MARISA MILLER HEGYESI
Notary Public in and for
the State of Texas
Printed Name: Marisa Miller Hegyesi
My Commission expires: June 17, 1999
THE STATE OF TEXAS |
|--
COUNTY OF HARRIS |
BEFORE ME, the undersigned authority, on this day personally appeared
Carol Martin, an individual, to me known to be the person who executed the
foregoing instrument, as Trustee of the Proler International Corp. Tax Deferred
Savings and Retirement Plan and Trust, and acknowledged to me that she executed
the same as her free and voluntary act and deed, in the above-described capacity
and for the uses and purposes therein set forth.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 18th day of April, 1996.
/s/ MARISA MILLER HEGYESI
Notary Public in and for
the State of Texas
Printed Name: Marisa Miller Hegyesi
My Commission expires: June 17, 1999
4
PROLER INTERNATIONAL CORP.
TAX DEFERRED SAVINGS AND RETIREMENT PLAN AND TRUST
(As Amended and Restated, Effective January 1, 1993)
TABLE OF CONTENTS
Section
ARTICLE I - DEFINITIONS
Account............................................................1.1
Act................................................................1.2
Active Service.....................................................1.3
Administrative Committee...........................................1.4
Affiliated Employer................................................1.5
Beneficiary........................................................1.6
Board..............................................................1.7
Code...............................................................1.8
Compensation Deferral Agreement....................................1.9
Considered Compensation............................................1.10
Contribution.......................................................1.11
Employee...........................................................1.12
Employer...........................................................1.13
Entry Date.........................................................1.14
Highly Compensated Employee........................................1.15
Leased Employee....................................................1.16
Member.............................................................1.17
Net Income.........................................................1.18
Non-Highly Compensated Employee....................................1.19
Plan...............................................................1.20
Plan Sponsor.......................................................1.21
Plan Year..........................................................1.22
Prior Plan.........................................................1.23
Rollover Contribution..............................................1.24
Total and Permanent Disability.....................................1.25
Transferred .......................................................1.26
Trust..............................................................1.27
Trustee............................................................1.28
Trust Fund.........................................................1.29
ARTICLE II - EMPLOYEES ELIGIBLE TO PARTICIPATE
Eligibility Requirements...........................................2.1
Certification and Notice of Eligibility............................2.2
Frozen Participation...............................................2.3
i
ARTICLE III - CONTRIBUTIONS
Compensation Deferral Agreements for Elective Contributions........3.1
Rollover Contributions.............................................3.2
Employer Contributions.............................................3.3
Composition of and Deadline for Payment of
Employer Contributions...........................................3.4
Return of Contributions for Mistake, Disqualification
or Disallowance of Deduction.....................................3.5
ARTICLE IV - PARTICIPATION
Periodic Certification by Employer.................................4.1
Allocation of Employer Contributions...............................4.2
Limitation on Additions to Account.................................4.3
Periodic Valuation of Trust Fund...................................4.4
Extraordinary Valuation of Trust Fund..............................4.5
Forfeitures and Allocation Thereof.................................4.6
Effective Date of Allocations and Adjustments......................4.7
Accounting for Transferred Member..................................4.8
No Vesting Unless Otherwise Prescribed.............................4.9
Investment Elections with Respect to Commingled Funds.............4.10
ARTICLE V - RETIREMENT
Normal Retirement..................................................5.1
Late Retirement....................................................5.2
Rights of Members and Prohibition of Unauthorized Distribution.....5.3
ARTICLE VI - DISTRIBUTION OF BENEFITS
Death Benefit......................................................6.1
Retirement Benefit.................................................6.2
Total and Permanent Disability Benefit.............................6.3
Severance Benefit..................................................6.4
Accounting for Distributions; Offsets in Special Circumstances.....6.5
Distributions - Settlement Options.................................6.6
Lost Members or Beneficiaries; Escheat.............................6.7
Withdrawals by Members.............................................6.8
Claims Procedure for Benefits......................................6.9
Loans to Members and Beneficiaries.................................6.10
Distributions to Divorced Spouse...................................6.11
ii
ARTICLE VII - TOP-HEAVY PLAN PROVISIONS
General Rules for Determining Top-Heavy Status.....................7.1
Computation of Present Value of Accrued Benefits...................7.2
Special Rules for Plan Years that Plan is Top-Heavy................7.3
Definitions........................................................7.4
ARTICLE VIII - ADMINISTRATIVE COMMITTEE
Appointment, Term of Service & Removal.............................8.1
Powers.............................................................8.2
Organization.......................................................8.3
Quorum and Majority Action.........................................8.4
Signatures.........................................................8.5
Disqualification of Committee Member...............................8.6
Disclosure to Members..............................................8.7
Standard of Performance............................................8.8
Liability of Committee and Liability Insurance.....................8.9
Exemption from Bond................................................8.10
No Compensation....................................................8.11
Persons Serving in Dual Fiduciary Roles............................8.12
Administrator......................................................8.13
Payment of Expenses................................................8.14
Indemnification of Plan Administrative Employees...................8.15
ARTICLE IX - TRUSTEE
Appointment........................................................9.1
Authority..........................................................9.2
Investment Powers..................................................9.3
Standard of Performance............................................9.4
Liability for Investments..........................................9.5
Reliance on Directions.............................................9.6
General Liability of the Trustee...................................9.7
Proof of Trustee's Authority.......................................9.8
Accounting Required by Trustee.....................................9.9
Resignation or Removal of Trustee..................................9.10
Appointment and Power of Successor Trustee.........................9.11
Compensation of Trustee............................................9.12
Bonding............................................................9.13
iii
ARTICLE X - ADOPTION OF PLAN BY OTHER EMPLOYERS
Adoption Procedure................................................10.1
No Joint Venture Implied..........................................10.2
Transfer of Members...............................................10.3
ARTICLE XI - AMENDMENT AND TERMINATION
Right to Amend and Limitations Thereon............................11.1
Mandatory Amendments..............................................11.2
Withdrawal of an Employer.........................................11.3
Voluntary and Involuntary Termination.............................11.4
Vesting Upon Discontinuance of Employer Contributions,
Total or Partial Termination....................................11.5
Continuance Permitted Upon Sale or Transfer of Assets.............11.6
Requirement on Merger, Transfer, etc..............................11.7
ARTICLE XII - MISCELLANEOUS
Plan Not An Employment Contract...................................12.1
Benefits Provided Solely From Trust Fund..........................12.2
Spendthrift Provision.............................................12.3
Gender, Tense and Headings........................................12.4
General Transition Rules Relating to Amendment,
Restatement and Continuation of Plan............................12.5
Severability......................................................12.6
Governing Law; Parties to Legal Actions...........................12.7
Notices...........................................................12.8
Counterparts......................................................12.9
ADOPTION AGREEMENTS
iv
PROLER INTERNATIONAL CORP.
TAX DEFERRED SAVINGS AND
RETIREMENT PLAN AND TRUST
THIS AGREEMENT made the __ day of ______________, 1994, by and between
PROLER INTERNATIONAL CORP., a Delaware corporation, and Carol Martin, an
individual, as Trustee,
W I T N E S S E T H:
WHEREAS, for the exclusive benefit of its eligible employees and their
beneficiaries, Proler International Corp. ("Plan Sponsor") adopted, effective as
of April 1, 1990, the savings and retirement plan and trust embodied in the
instrument entitled "Proler International Corp. Tax Deferred Savings and
Retirement Plan and Trust" (the "Plan"), which Plan was intended to meet the
requirements for qualification under applicable provisions of the Internal
Revenue Code of 1986, as amended (the "Code") and to comply with applicable
provisions of the Employee Retirement Income Security Act of 1974, as amended,
(the "Act"); and
WHEREAS, it had been determined that effective as of January 1, 1991,
the Plan should be amended, restated and continued without a gap or lapse in
coverage, time or effect of a qualified plan and exempt trust under applicable
provisions of the Code in order (i) to effect numerous technical changes for the
benefit of eligible employees and their beneficiaries and (ii) to ensure that
the terms and provisions of the Plan continued to meet the requirements for
qualification and exemption under applicable provisions of the Code and to
comply with applicable provisions of the Act following amendment of the Code and
the Act by the Tax Reform Act of 1986, the Omnibus Budget Reconciliation Act of
1986, the Omnibus Budget Reconciliation Act of 1987, the Technical and
Miscellaneous Revenue Act of 1988 and the Omnibus Budget Reconciliation Act of
1989, and regulations and other applicable guidance promulgated by appropriate
governmental agencies pursuant to such legislation; and
WHEREAS, it has again been determined that said Plan should be
completely amended, restated and continued under the form of the Plan
hereinafter set forth in order (i) to effect numerous additional technical
changes for the benefit of eligible employees and their beneficiaries and (ii)
to ensure that the terms and provisions of the Plan continue to meet the
requirements for qualification and exemption under applicable provisions of the
Code and to comply with applicable provisions of the Act following amendment of
the Code and the Act by the Unemployment Compensation Amendments of 1992 and the
Omnibus Budget Reconciliation Act of 1993, and regulations and other applicable
guidance promulgated by appropriate governmental agencies pursuant to such
legislation; and
WHEREAS, it is intended that certain other business organizations may
adopt the Plan for the exclusive benefit of their eligible employees and
beneficiaries; and
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WHEREAS, it is intended that the benefits offered under the Plan will
help retain and attract the highest quality employees by providing additional
financial incentives and financial security for eligible employees and their
beneficiaries;
NOW, THEREFORE, the parties hereto enter into this agreement, as a
complete amendment, restatement and continuation of the Plan under the form of
the Plan hereinafter set forth, without a gap or lapse in coverage, time or
effect of a qualified plan and exempt trust under applicable provisions of Code,
as follows:
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ARTICLE I
DEFINITIONS
As used herein, the words and phrases next below set forth shall have
the meaning next below attributed to them unless the context in which any such
word or phrase appears reasonably requires a broader, narrower or different
meaning:
1.1 ACCOUNT: "Account" shall mean, with respect to a Member, all
of the ledger accounts maintained by the Administrative Committee to set out
such Member's proportionate interest in the Trust Fund.
An "Employer Account" shall be maintained, as necessary, for each
Member which reflects the portion of the Employer's Contributions allocated to
the Member, and the appreciation or depreciation and income or loss incurred by
the Trust Fund allocated to such Employer Account. The Employer Account
maintained for each Member shall consist of (i) an Employer Nonforfeitable
Contributions Account which shall separately reflect (a) any Elective
Contributions which pursuant to Compensation Deferral Agreements are made by the
Employer on behalf of such Member, and (b) any Qualified Non-Elective
Contributions which are made by the Employer on behalf of the Member; and/or
(ii) an Employer Contributions Account which shall reflect the Thrift
Contributions, if any, which are made by the Employer on behalf of the Member in
order to match Elective Contributions.
A "Predecessor Plan Account" shall be maintained, if necessary, which
reflects (i) the portion of the Member's accrued benefit derived from employee
contributions and/or the Member's accrued benefit derived from employer
contributions under any defined contribution plan (other than the Plan or any
Prior Plan) which is described in Section 414(i) of the Code, (excluding plans
subject to the minimum funding standards of Section 412 of the Code or which are
required to provide a qualified joint and survivor annuity or a qualified
preretirement survivor annuity described in Sections 401(a)(11) and 417 of the
Code), which plan at all times relevant meets the requirements for qualification
under Section 401(a) or 403(a) of the Code, and which accrued benefit, with the
consent or ratification of the Board, is transferred directly from such defined
contribution plan to the Trust Fund, at such time and in such manner as the
Administrative Committee, with the consent or ratification of the Board, may
determine pursuant to uniformly applied nondiscriminatory rules established by
the Administrative Committee, and (ii) the appreciation or depreciation and
income or loss incurred by the Trust Fund allocated to the Predecessor Plan
Account.
A "Rollover Account" shall be maintained for each Member who has made a
Rollover Contribution to the Plan, which reflects the amount of the Rollover
Contribution and the appreciation or depreciation and income earned or loss
incurred by the Trust Fund allocated to the Rollover Account.
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The Administrative Committee in its discretion may direct that any of
the above-described accounts be divided into subaccounts in order to facilitate
administration of the Plan.
1.2 ACT: "Act" shall mean the Employee Retirement Income Security
Act of 1974, as amended, and the regulations and other authority issued
thereunder by the appropriate governmental authority.
1.3 ACTIVE SERVICE: "Active Service" shall mean the period or
periods of active employment with any Employer or Affiliated Employer during
which period or periods an Employee shall be credited with one year of Active
Service for purposes of determining the Employee's eligibility to participate
and vesting credit for each computation period (described below) during which
the Employee is entitled to be credited with one thousand (1,000) or more hours
of service with any Employer or Affiliated Employer. No Employee shall be
credited with a year of Active Service for eligibility or vesting with respect
to any computation period during which the Employee was not entitled to be
credited with at least one thousand (1,000) or more hours of service with any
Employer or Affiliated Employer.
All service with any Affiliated Employer shall be deemed to be service
with the Employer. All covered service and contiguous noncovered service with an
employer which has adopted the Plan but which is not an Affiliated Employer
shall be deemed to be service with the Employer. For this purpose, "covered
service" means service within a job classification or class of Employees covered
under the Plan; and contiguous noncovered service means service other than
covered service, which precedes or follows covered service, if no quit,
discharge or retirement occurs between such covered service and such other
service.
In the event that an Employer assumes and maintains the plan of a
predecessor employer described in Section 414(a)(2) of the Code, Active Service
for such predecessor employer shall be treated as Active Service for the
Employer in accordance with the provisions of Section 414(a)(1) of the Code.
However, if the Employer does not maintain the plan of a predecessor employer,
the Plan shall treat any Employee's service with the predecessor employer as
service with the Employer only to the extent prescribed in Section 414(a)(2) of
the Code.
In addition, pursuant to uniform and nondiscriminatory rules
established by the Administrative Committee with the consent or ratification of
the Board, the Administrative Committee may vote to allow Employees to be
credited with Active Service for eligibility or vesting with respect to periods
of service which would otherwise be disregarded under the Plan. Any such
decision shall be evidenced by formal minutes reflecting such action of the
Administrative Committee, or by a unanimous written consent of the members of
the Administrative Committee, and must be approved or ratified by the Board
unless, pursuant to the rules described in the preceding sentence, approval or
ratification by the Board is not required. Any such decision shall be
appropriately communicated to the affected Members.
The initial eligibility computation period shall be the twelve (12)
consecutive month period beginning on an Employee's employment commencement
date. An Employee's
I-4
employment commencement date shall be the first day for which the Employee is
entitled to be credited with an hour of service. Regardless of whether the
Employee is entitled to be credited with one thousand (1,000) hours of service
during the initial eligibility computation period, the eligibility computation
period shall shift from the above described initial eligibility computation
period to the Plan Year which includes the first anniversary of the Employee's
employment commencement date, provided that an Employee who is credited with one
thousand (1,000) hours of service in both the initial eligibility computation
period and the Plan Year which includes the first anniversary of the Employee's
employment commencement date shall be credited with two years of Active Service
for purposes of eligibility to participate (but not for vesting purposes).
The Plan Year shall be the vesting computation period. Years of Active
Service during any period prior to the effective date of the adoption of the
Plan by an Employer shall be taken into account for purposes of determining
vesting credit hereunder.
A one year break in Active Service shall occur only if the Employee is
not credited with at least five hundred one (501) hours of service for an
Employer or Affiliated Employer during any given Plan Year; provided, however,
for eligibility purposes, a one year break in Active Service shall not occur if
the Employee is credited with at least 501 hours of service for an Employer or
Affiliated Employer during the initial eligibility computation period.
Notwithstanding the preceding sentence, a one year break in Active Service shall
be deemed not to occur if an Employee is not entitled to be credited with at
least five hundred one (501) hours of service on account of (i) the Transfer of
an Employee; (ii) a leave of absence, without regard to the reason for granting
it or whether it is granted with or without pay, provided that it does not
exceed 18 months of duration and the rules for granting leaves of absence are
applied uniformly to all Employees in similar circumstances, and further
provided that the Employee returns to active employment with an Employer or
Affiliated Employer immediately following termination of the leave of absence,
(iii) a temporary layoff with or without pay, provided, the Employee returns to
active employment with an Employer or Affiliated Employer immediately following
termination of the temporary layoff; or (iv) service in the armed forces of the
United States, provided the Employee returns to active employment with an
Employer or Affiliated Employer within ninety (90) days following termination of
military service without having been employed elsewhere during such ninety-day
period, unless the Member knowingly waives his rights under all applicable law
or makes the armed forces a career.
In addition, with respect to any Employee who is absent from work on
account of any period of absence which (i) begins after the first day of the
Plan Year beginning after December 31, 1984, and which is incurred by reason of
(1) the pregnancy of the Employee, (2) the birth of a child of the Employee, (3)
the placement of a child with the Employee in connection with the adoption of
such child by the Employee, or (4) for purposes of caring for such child for a
period beginning immediately following such birth or placement, or (ii) begins
on or after August 5, 1993, and to which the Employee is entitled under the
Family and Medical Leave Act of 1993, solely for purposes of determining whether
a one year break in Active Service has occurred, the Plan shall recognize as
hours of service the hours of service which, but for the absence, would
otherwise have been credited to the Employee, or if the Plan is
I-5
unable to determine the hours of service which would otherwise have been
credited to such Employee, the Plan shall credit the Employee with eight (8)
hours of service for each day of the period of absence; provided, however, that
no more than five hundred one (501) hours of service shall be recognized by
reason of such absence and, further provided, that such hours of service shall
be credited to the computation period in which such period of absence begins if
the Employee would be prevented from incurring a one year break in Active
Service in such computation period solely because hours of service are
recognized with respect to such period of absence in accordance with this
paragraph, otherwise such hours of service shall be credited to the following
computation period. When a one year break in Active Service has occurred, Active
Service (for vesting purposes only) prior to the one year break in Active
Service shall not be counted until the Employee has completed one year of Active
Service following his return to Active Service.
In the case of an Employee who completes at least one hour of service
under the Plan on or after the beginning of any Plan Year commencing after
December 31, 1984, and who has no vested right under the Plan to any amounts
allocated to his Employer Account at the time he incurs a period of five (or
more) consecutive one year breaks in Active Service, years of Active Service
completed by such Employee before such period shall be disregarded if at such
time the number of consecutive one-year breaks in Active Service included in his
most recent period of five (or more) consecutive breaks in Active Service equals
or exceeds the aggregate number of his years of Active Service, whether or not
consecutive, completed before such period; provided, however, any years of
Active Service which would have been disregarded under the Plan or any Prior
Plan as of the date immediately prior to the first day of any Plan Year
commencing after December 31, 1984, shall not be recognized under the Plan. In
computing the aggregate number of years of Active Service completed prior to any
one year break in Active Service, years of Active Service which could have been
disregarded by reason of any prior one-year break in Active Service or period of
consecutive one-year breaks in Active Service shall be disregarded.
An "hour of service" shall be each hour (i) for which an Employee is
either directly or indirectly paid or entitled to payment by an Employer or
Affiliated Employer for the performance of duties; (ii) for which an Employee is
either directly or indirectly paid or entitled to payment by an Employer or
Affiliated Employer on account of a period of time during which no duties are
performed (irrespective of whether the employment relationship has terminated)
due to vacation, holiday, illness, incapacity (including disability), layoff,
jury duty, military duty or leave of absence; or (iii) for which back pay,
irrespective of mitigation of damages, is either awarded or agreed to by an
Employer or Affiliated Employer; provided, however, that hours of service shall
not be credited under clauses (i) or (ii) and this clause (iii). Solely for
purposes of clause (ii) of the preceding sentence, (i) no more than five hundred
one (501) hours of service shall be credited to an Employee on account of any
single continuous period during which the Employee performs no duties (whether
or not such period occurs in a single computation period,
I-6
as described above); (ii) hours of service shall not be credited if payment
therefor is made or due under a plan maintained solely for the purpose of
complying with applicable workmen's compensation, unemployment compensation or
disability insurance laws; and (iii) hours of service shall not be credited for
a payment which solely reimburses an Employee for medical or medically related
expenses incurred by the Employee. Moreover, the number of hours of service to
be credited under clause (ii) of the first sentence of this paragraph (with
respect to a payment which is made or due on account of a period during which an
Employee performs no duties) shall be determined with reference to whether the
payment is calculated on the basis of units of time.
Except as otherwise provided below, with respect to payment (described
in the last sentence of the preceding paragraph) which is calculated on the
basis of units of time, such as hours, days, weeks, or months, the number of
hours of service to be credited shall be the number of regularly scheduled hours
included in the unit of time on the basis of which payment is calculated. With
respect to a payment made or due which is not calculated on the basis of units
to time, the number of hours of service to be credited shall be equal to the
amount of the payment divided by the Employee's most recent hourly rate of
compensation before the period during which no duties are performed. For
purposes of the preceding sentence, (i) if an Employee's compensation is
determined on the basis of an hourly rate, such hourly rate shall be the
Employee's most recent hourly rate of compensation, (ii) if an Employee's
compensation is determined on the basis of a fixed rate for specified periods of
time (other than hours) such as days, weeks or months, the Employee's hourly
rate of compensation shall be the Employee's most recent rate of compensation
for a specified period of time (other than hours) divided by the number of hours
regularly scheduled for the performance of duties during such period of time,
and (iii) if an Employee's compensation is not determined on the basis of a
fixed rate for specified periods of time, then the Employee's hourly rate of
compensation shall be the lowest hourly rate of compensation paid to Employees
in the same job classification as Employee or, if no Employees in the same job
classification have the same hourly rate, the minimum wage as established from
time to time under Section 6(a)(1) of the Fair Labor Standards Act of 1938, as
amended. Notwithstanding the above, an Employee shall not be credited on account
of a period during which no duties are performed with a number of hours of
service which is greater than the number of hours regularly scheduled for the
performance of duties during such period. For purposes of this paragraph, with
respect to an Employee without a regular work schedule, such Employee shall be
deemed to regularly work a 40 hour week, 8 hour day, or such other
representative period (determined by the Administrative Committee) which
reflects the average hours worked by the Employee, or by other Employees in the
same job classification, provided that the method used to calculate the average
number of hours worked during such period is consistently applied with respect
to all Employees within the same reasonably defined job classifications.
Except as otherwise provided below, hours of service shall be credited
to the above described computation period(s) in which duties are performed. With
respect to hours of service for which an Employee is either directly or
indirectly paid or entitled to payment by an Employer or Affiliated Employer on
account of a period of time during which no duties are
I-7
performed, (i) hours of service credited to the Employee on account of a payment
which is calculated on the basis of units of time, such as hours, days, weeks or
months, shall be credited to the computation period or periods in which the
period during which no duties are performed occurs, beginning with the first
unit of time to which the payment relates, and (ii) hours of service credited to
an Employee by reason of a payment which is not calculated on the basis of units
of time shall be credited to the computation period in which the period during
which no duties are performed occurs, or if the period during which no duties
are performed extends beyond one computation period, such hours of service shall
be allocated between not more than the first two computation periods on any
reasonable basis which is consistently applied with respect to all Employees
within the same reasonably defined job classifications. Hours of service for
which back pay, irrespective of mitigation of damages, is either awarded or
agreed to by an Employer or Affiliated Employer shall be credited to the
computation period or periods to which the award or agreement for back pay
pertains, rather than to the computation period in which the award, agreement or
payment is made. For purposes of this paragraph, if hours of service are to be
credited to an Employee in connection with a period of no more than 31 days
which extends beyond one computation period, all such hours may be credited to
the first or second computation period provided all Employees within the same
reasonably defined job classifications are consistently treated similarly.
1.4 ADMINISTRATIVE COMMITTEE: "Administrative Committee" shall
mean the committee appointed by the Board in accordance with Article VIII
hereof.
1.5 AFFILIATED EMPLOYER: "Affiliated Employer" shall mean an
employer which is a member of the same controlled group of corporations (within
the meaning of Section 414(b) of the Code), or which is a trade or business
(whether or not incorporated) which is under common control (within the meaning
of Section 414(c) of the Code), or which is a member of an affiliated service
group of employers (within the meaning of Section 414(m) of the Code), which
related group of corporations, businesses or employers includes the Employer;
and any other entity required to be aggregated with the Employer pursuant to
regulations under Section 414(o) of the Code.
1.6 BENEFICIARY: "Beneficiary" shall mean the person, the trust
created for the benefit of a person who is the natural object of the Member's
bounty or estate, whichever is designated by the Member to receive benefits
payable hereunder upon the Member's death.
1.7 BOARD: "Board" shall mean the Board of Directors (or
equivalent governing authority) of the Plan Sponsor.
1.8 CODE: "Code" shall mean the Internal Revenue Code of 1986, as
amended, and regulations and other authority issued thereunder by the
appropriate governmental authority. References to any section of the Code or the
Income Tax Regulations shall include reference to any successor section or
provision of the Code or Income Tax Regulations, as applicable.
I-8
1.9 COMPENSATION DEFERRAL AGREEMENT: "Compensation Deferral
Agreement" shall mean a written agreement between an eligible Employee and the
Employer in a form satisfactory to the Administrative Committee to permit the
Employer, in lieu of paying such amounts to the Employee in cash, to reduce such
Employee's current Considered Compensation and contribute the amount of the
reduction to the Trust as an Employer Elective Contribution for the benefit of
the Member.
1.10 CONSIDERED COMPENSATION: "Considered Compensation" shall mean
(subject to the top-heavy rules under Section 7.3(b)), as to each Employee,
compensation received during the Plan Year by the Employee from the Employer
which is required to be reported as wages on the Employee's form W-2 (or its
successor) for federal income tax withholding purposes, but determined without
regard to any rules under the Code that limit the remuneration included in wages
based on the nature or location of the employment or the services performed
(such as the exception for agricultural labor in Section 3401(a)(2) of the
Code); provided, however, Consideration Compensation shall not include any
expense allowances and any form of compensation included on such form W-2 that
would not be subject to tax (for purposes of the Federal Insurance Contributions
Act) under Section 3101(a) of the Code without regard to the dollar limitation
of Section 3121(a)(1) of the Code. For purposes of clarity with respect to the
immediately preceding sentence, the term "Considered Compensation" does include
any unused vacation days during the Plan Year for which the Member receives a
cash payment from the Employer which is reportable on the Member's form W-2 for
the applicable calendar year. Considered Compensation shall be determined before
reduction under a compensation deferral agreement under (i) the Plan or another
plan described in Section 401(k) or 408(k) of the Code, (ii) an annuity
described in Section 403(b) of the Code or (iii) a qualified election under a
cafeteria plan described in Section 125 of the Code.
With respect to Plan Years commencing prior to January 1, 1994,
Considered Compensation in excess of $200,000 (as adjusted, as may be determined
by the Commissioner of Internal Revenue, at the same time and in the same manner
as prescribed in Section 415(d) of the Code) shall be disregarded; and with
respect to Plan Years commencing on or after January 1, 1994, Considered
Compensation in excess of $150,000 (as adjusted by the Commissioner of Internal
Revenue for increases in the cost of living in accordance with Section
401(a)(17)(B) of the Code) ("the applicable compensation limit") shall be
disregarded. In determining the applicable compensation limit, the rules
pertaining to treatment of family members set out in the third paragraph of the
definition of Highly Compensated Employee shall apply except that, in applying
such rules, the term "family" shall include only the spouse and any lineal
descendants of the Member who have not attained age 19 before the close of the
applicable Plan Year.
For purposes of this definition of "Considered Compensation," and for
purposes of the corresponding limitations on Considered Compensation in Sections
3.3(g), 3.3(i), 7.3(b) and 7.4(l) of the Plan, the following provisions shall
apply:
(a) the cost-of-living adjustment in effect for a
calendar year applies to any period, not exceeding 12 months, over
which compensation is determined
I-9
("determination period") beginning in such calendar year. If a
determination period consists of fewer than 12 months, the applicable
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; and
(b) if compensation for any prior determination period is
taken into account in determining an employee's benefits accruing in
the current plan year, the compensation for that prior determination
period is subject to the applicable compensation limit in effect for
that prior determination period, and for this purpose, for
determination periods beginning before the first day of the first plan
year beginning on or after January 1, 1994, the applicable compensation
limit is $150,000.
1.11 CONTRIBUTION: "Contribution" shall mean as to the Employer all
amounts which the Employer contributes to the Trustee under the terms of the
Plan. "Elective Contribution" means the amounts which the Employer contributes
to the Trust on behalf of Members pursuant to Compensation Deferral Agreements.
"Thrift Contribution" means the amount, if any, which the Employer contributes
to the Trustee pursuant to applicable provisions of the Plan in order to match
Elective Contributions. "Qualified Non-Elective Contribution" means the amount,
if any, which the Employer contributes to the Trust on behalf of the Non-Highly
Compensated Employees who are Members of the Plan in order to satisfy the actual
deferral percentage test or the actual contribution percentage test under
Section 3.3.
1.12 EMPLOYEE: "Employee" shall mean every person employed as a
common law employee by an Employer, including, in the case of a corporation,
officers (but excluding any director unless the director is also an officer or
other common law employee). In accordance with Section 414(n) of the Code,
Leased Employees shall be treated as Employees of the recipient Employer;
provided, however, contributions or benefits provided by the Leasing
Organization (described in the definition of Leased Employee) which are
attributable to services performed for the recipient Employer shall be treated
as provided by the recipient Employer. Provided that Leased Employees do not
comprise more than 20 percent of the recipient's nonhighly compensated work
force (described in Section 414(n)(5)(C) of the Code), the preceding sentence
shall not apply if such Leased Employee is covered by a money purchase pension
plan providing: (i) a nonintegrated employer contribution rate of at least 10
percent of compensation, as defined in Section 415(c)(3) of the Code, but
including amounts contributed pursuant to a salary reduction agreement which are
excludable from the employee's gross income under Section 125, Section
402(e)(3), Section 402(h) or Section 403(b) of the Code, (ii) immediate
participation by each employee of the Leasing Organization other than (a)
employees who perform substantially all of their services for the Leasing
Organization and (b) any individual whose compensation (as defined in Section
415(c)(3) of the Code, including also amounts contributed pursuant to a salary
reduction agreement which are excludable from the individual's gross income
under Section 125, Section 402(a)(8), Section 402(h) or Section 403(b) of the
Code) from the Leasing Organization in each Plan Year during the 4-year period
ending with the Plan Year is less than $1,000, and (iii) full and immediate
vesting.
I-10
1.13 EMPLOYER: "Employer" shall mean the Plan Sponsor and any other
person (described in Section 7701(a) of the Code) which adopts the Plan in
accordance with applicable provisions thereof.
1.14 ENTRY DATE: Effective as of April 15, 1994, "Entry Date" shall
mean the January 1, April 1, July 1 or October 1 of each Plan Year on which an
Employee becomes a Member by commencing participation in the Plan after having
met the eligibility requirements under applicable provisions of the Plan;
provided, however, that solely for purposes of being entitled to authorize
Elective Contributions pursuant to a Special Compensation Deferral Agreement
under Section 3.1(b), the Entry Date for an Employee who satisfies the
eligibility requirements under Section 2.1, and who would otherwise have a later
Entry Date applicable thereto, shall be December 1st of the Plan Year in which
such eligibility requirements are met.
1.15 HIGHLY COMPENSATED EMPLOYEE: "Highly Compensated Employee"
shall mean (subject to the subsequent provisions hereof) any Employee, who
during the Plan Year for which the determination is being made (the
"determination year") or during the 12-month period immediately preceding the
Plan Year (the "look-back year"):
(i) was at any time a 5-percent owner (as defined in
Section 416(i)(1) of the Code and Section 7.4),
(ii) received compensation (described below) from the
Employer in excess of $75,000 (as adjusted at such time and in such
manner as may be prescribed under Section 414(q) and Section 415(d) of
the Code),
(iii) received compensation from the Employer in excess of
$50,000 (as adjusted at such time and in such manner as may be
prescribed under Section 414(q) and Section 415(d) of the Code), and
was in the top-paid group of Employees consisting of the top 20-percent
of the Employees when ranked on the basis of compensation paid during
such year, excluding, however, for purposes of determining the number
(but, except for Employees covered by collective bargaining agreements
described below, not identity) of Employees which comprise such
top-paid group of Employees, (a) any Employee who has not completed six
months of service as of the end of the current year after aggregating
the Employee's service for the Employer during the current year and the
immediately preceding year, (b) any Employee who normally works less
than 17-1/2 hours per week for fifty percent (50%) or more of the total
weeks worked during such year (excluding weeks during which an Employee
did not work for the Employer), (c) any Employee who normally works
during not more than six months during any year (an Employee who works
on one day during a month is deemed to have worked during that month),
(d) any Employee who has not attained age 21 as of the end of the
applicable year, and (e) except to the extent provided in regulations
issued under Section 414(q) of the Code by the appropriate governmental
authority, any Employee who is included in a unit of Employees covered
by an agreement which the Secretary of
I-11
Labor finds to be a collective bargaining agreement between Employee
representatives and the Employer, if at least ninety percent (90%) of
the Employees of the Employer are covered under one or more such
collective bargaining agreements and the Plan does not cover any
Employee who is covered by any such collective bargaining agreement.
(iv) was at any time an officer (within the meaning of
Section 416(i) of the Code) and received compensation greater than
50-percent of the dollar amount in effect under Section 415(b)(1)(A) of
the Code for the calendar year in which the determination year or
look-back year begins.
With respect to the exclusions for Employees who normally work less than 17 1/2
hours per week or during not more than six months during any year (as described
in clauses (iii)(b) and (iii)(c), respectively, above), such exclusion
determinations may be made separately with respect to each Employee, or on the
basis of groups of Employees who fall within particular job categories as
established by the Employer on a reasonable and consistent basis. For purposes
of clause (iii)(b) above, the Employer may exclude Employees who are members of
a particular job category if (i) 80% of the positions within that job category
are filled by Employees who normally work less than 17 1/2 hours per week, or
(ii) the median number of hours of service credited to Employees in that job
category during a determination year or look-back year, as the case may be, is
less than or equal to 500. Any Employee who is a non-resident alien who receives
no earned income (within the meaning of Section 911(d)(2) of the Code) from the
Employer which constitutes income from sources within the United States (within
the meaning of Section 861(a)(3) of the Code) shall not be treated as an
Employee for the purpose of determining whether an Employee is a Highly
Compensated Employee or a Non-Highly Compensated Employee.
An Employee shall not be treated as described in clause (ii), (iii) or
(iv) of the first sentence of the immediately preceding paragraph for the
determination year unless such Employee is also a member of the group consisting
of the 100 Employees paid the greatest compensation (described below) during the
determination year. For purposes of clause (iv) of the first sentence of the
immediately preceding paragraph, without regard to any exclusions applicable for
purposes of determining the number of Employees in the top-paid group of
Employees, no more than 50 Employees (or, if lesser, the greater of (a) three
Employees who perform services during the determination or look-back year or (b)
ten percent (10%) of such Employees) shall be treated as officers with respect
to the determination year or the look-back year, whichever may be applicable.
Provided, however, that if for either such year the number of officers of the
Employer who satisfy the requirements of clause (iv) of the first sentence of
the immediately preceding paragraph (as limited by the first sentence of this
paragraph) exceeds the 50-Employee limitation of the immediately preceding
sentence of this paragraph, then the officers who receive the greatest
compensation during the determination year or look-back year will be considered
includible officers; and further provided, that if for any such year, no officer
of the Employer is described in clause (iv) of the first sentence of the
immediately preceding paragraph, the highest paid officer of the Employer for
such year (without regard to the amount of compensation paid to such officer in
relation to the dollar limit of Section 415(c)(1)(A) of the
I-12
Code for the year) shall be treated as described in such clause (iv) whether or
not such Employee is also a Highly Compensated Employee on any other basis. An
individual who is a Highly Compensated Employee for the determination year or
the look-back year by reason of being described in two or more of clauses (i)
through (iv) of the first sentence of the immediately preceding paragraph shall
not be disregarded in determining whether another individual is a Highly
Compensated Employee. The Administrative Committee shall prescribe reasonable
and nondiscriminatory rules which shall be uniformly and consistently applied
for the purposes of (i) rounding calculations incident to determining the number
of Employees in the top-paid group of Employees and (ii) breaking ties among two
or more Employees incident to identifying particular Employees who are in the
top-paid group of Employees, who are among the top-10 Highly Compensated
Employees, or who are among the 100 Employees paid the greatest compensation
during the determination year.
If, on any single day during any determination year or look-back year,
an Employee is a member of the family (described below) of another individual
who is (i) a 5-percent owner who is a current or former Employee or (ii) a
Highly Compensated Employee (including former Employees) in the group consisting
of the 10 Highly Compensated Employees paid the greatest compensation during the
determination year or the look-back year, then such family member and 5-percent
owner or top-10 Highly Compensated Employee shall be considered to be a single
Employee receiving an amount of compensation and a Plan contribution that is
based on the compensation and Plan contribution attributable to such family
member and the 5-percent owner or top-10 Highly Compensated Employee. For
purposes of the immediately preceding sentence, family members of any Employee
or former Employee include the Employee's or former Employee's spouse and lineal
ascendants or descendants and the spouses of lineal ascendants and descendants.
Family members are subject to the aggregation rule described in the second
preceding sentence whether or not (i) they fall within the categories of
Employees that may be excluded for purposes of determining the number of
Employees in the top-paid group consisting of the top 20-percent of the
Employees when ranked on the basis of compensation (as such top-paid group is
described in clause (iii) of the first paragraph hereof), or (ii) they are
Highly Compensated Employees when considered separately.
A former Employee who, with respect to the Employer, had a "separation
year" (described below) or a "deemed separation year" (described below) prior to
the determination year will be treated as a Highly Compensated Employee for the
determination year if such former Employee was (i) a Highly Compensated Employee
for such former Employee's separation year or deemed separation year, or (ii) a
Highly Compensated Employee for any determination year ending on or after such
former Employee attained age 55. For purposes of the immediately preceding
sentence, an Employee who performs no services for the Employer during a
determination year (including a leave of absence throughout the determination
year) is treated as a former Employee. A "separation year" is the determination
year during which the Employee separates from service with the Employer;
provided, however, an Employee who performs no services for the Employer during
a determination year will be treated as having separated from service with the
Employer in the year in which such Employee last performed services for the
Employer. An Employee who performs services for the Employer during a
I-13
determination year will incur a "deemed separation year" if, in any
determination year which ends prior to such Employee's attainment of age 55, the
Employee receives compensation in an amount less than fifty percent (50%) of the
Employee's average annual compensation for the three consecutive calendar years
preceding such determination year during which the Employee received the
greatest amount of compensation from the Employer; provided, however, an
Employee will not be treated as a Highly Compensated Employee (solely by reason
of a deemed separation in a deemed separation year) if after such deemed
separation and before the year of the Employee's actual separation, such
Employee's compensation increased sufficiently to permit the Employee to be
treated as having a deemed resumption of employment with respect to a
determination year, as prescribed in regulations issued under Section 414(q) of
the Code by the appropriate governmental authority.
Former Employees are not counted for purposes of determining the
top-paid group consisting of the top 20-percent of the Employees when ranked on
the basis of compensation (as such top-paid group is described in clause (iii)
of the first sentence of the first paragraph hereof). Furthermore, with respect
to the determination year, former Employees are not included in (i) the group
consisting of the 100 Employees paid the greatest compensation, or (ii) the
group of includible officers of the Employer, as such groups are described in
the second paragraph of this Section.
For purposes of this Section, "compensation" shall mean the wages (as
defined in Section 3401(a) of the Code for purposes of income tax withholding at
the source) that are paid (within the meaning of Section 1.415-2(d)(3) and (4)
if the Income Tax Regulations) to the Employee by the Employer during the Plan
Year for services performed and reportable on the Employee's form W-2 (or its
successor), determined without regard to any rules that limit the remuneration
included in wages based on the nature or location of the employment or the
services performed (such as the exception for agricultural labor in Section
3401(a)(2) of the Code), but including elective or salary reduction
contributions to cafeteria plans under Section 125 of the Code, or to cash or
deferred arrangements under Sections 402(e)(3) and 402(h)(1)(B) of the Code, or
to tax-sheltered annuities under Section 403(b) of the Code. Only compensation
received by the Employee, or deemed to be received pursuant to the preceding
sentence, shall be considered for purposes of this Section; therefore,
compensation shall not be annualized in order to compute an Employee's
compensation in the determination year or the look-back year.
The rules of Section 414(b), (c), (m), (n) and (o) of the Code shall be
applied before the above provisions of this Section are applied. The rules
described in the immediately preceding sentence do not apply for purposes of
determining who is a 5-percent owner. Notwithstanding any provision hereof to
the contrary, the determination of who is a Highly Compensated Employee shall be
made in accordance with Section 414(q) of the Code.
If testing for determining who is a Highly Compensated Employee is to
be done on a separate line of business basis, then, with respect to the
statutory exclusions for Employees under Section 414(r)(2)(A) of the Code
(relating to the 50-employee requirement for qualifying
I-14
as a separate line of business), for Plan Years beginning prior to January 1,
1994, the rules set forth in Q&A-9 of Section 1.414(q)-1T(g) of the Temporary
Income Tax Regulations are hereby incorporated herein by reference; and for Plan
Years beginning on or after January 1, 1994, the rules set forth in Q&A-9 of
Section 1.414(q)-1 of the Income Tax Regulations are hereby incorporated herein
by reference.
In the event that the Administrative Committee elects to have one or
more of the provisions of this paragraph apply for purposes of determining the
status of an Employee as a Highly Compensated Employee or a Non-Highly
Compensated Employee, the Administrative Committee shall adopt a resolution
which shall specifically identify the provision of this paragraph which shall
apply and the effective date of such application, and a certified copy of such
resolution shall be attached to the Plan as an exhibit which shall be referenced
to this Section and shall be deemed to be an amendment of the Plan which is
incorporated in and made a part of this Section for all purposes of the Plan.
Any provision of this paragraph which becomes operative by virtue of application
of the preceding sentence shall override or supersede and control over any
provisions of this Section which may be inconsistent with the operative
provision of this paragraph. Accordingly, to the extent elected by the
Administrative Committee in compliance with the requirements of the first
sentence of this paragraph, the following provision or provisions shall apply:
(i) To the extent permitted in regulations issued under
Section 414(q) of the Code, the look-back year calculation for a
determination year shall be made on the basis of the calendar year
ending with or within the applicable determination year (or, in the
case of a determination year that is shorter than twelve months, the
calendar year ending with or within the twelve month period ending with
the end of the applicable determination year); provided, however, the
computation contemplated hereunder shall apply only if the
Administrative Committee, as described above, to apply the same
computation provisions to all plans, entities and arrangements of the
Employer which are required to apply the definition of Highly
Compensated Employee set forth in Section 414(q) of the Code.
(ii) To the extent permitted in regulations issued under
Section 414(q) of the Code, Leased Employees covered under a qualified
money purchase pension plan maintained by a leasing organization and
not covered under a qualified retirement plan of the Employer
(including the Plan), as described in Section 1.12 shall be included
for purposes of determining the group of Highly Compensated Employees
hereunder.
(iii) To the extent permitted in regulations issued under
Section 414(q) of the Code, the special definition (described in such
regulations) for purposes of determining whether former Employees who
separated from service with the Employer prior to January 1, 1987 are
Highly Compensated Employees shall apply; provided, however, the
special definition contemplated hereunder shall apply only if the
Administrative Committee elects, as described above, to apply the
special definition to all plans, entities and arrangements of the
Employer which are required to apply the definition of Highly
I-15
Compensated Employee set forth in Section 414(q) of the Code, and
further, provided that such election to use such special definition may
not be changed by the Employer without the consent of the Internal
Revenue Service.
Subject to any governmental approval as may be required under applicable
regulations or other authority issued by the appropriate governmental authority,
any operative provision of this paragraph may be changed by attaching a
certified resolution of the Administrative Committee (which shall be attached to
the Plan as an exhibit) which (i) shall identify the provision or provisions of
the paragraph that are to be changed and the effective date of such change, (ii)
shall be referenced to this Section, and (iii) shall be deemed to be an
amendment of the Plan which is incorporated in and made part of this Section for
all purposes of the Plan.
In addition, without limitation of the provisions of the preceding
Paragraph, the Committee may, in its discretion pursuant to nondiscriminatory
rules that shall be uniformly and consistently applied, elect to:
(i) Use the simplified definition of Highly Compensated
Employee that is set forth in Section 414(q)(12) of the Code, pursuant
to which $50,000 shall be substituted for $75,000 in clause (ii) of the
first paragraph of this Section and clause (iii) thereof shall be
disregarded; provided, however, that this simplified definition of
Highly Compensated Employee may only apply if the Plan Sponsor
maintains significant business activities (and employs employees) in at
least two significantly separate geographic areas; or
(ii) Substitute the simplified method pursuant to
Section 4 of Revenue Procedure 93-42, in which case the Highly
Compensated Employees shall be determined under this Section 1.15 on
the basis of the look-back year and determination year, or the
determination year only, taking into account all Employees employed
during such year.
1.16 LEASED EMPLOYEE: "Leased Employee" shall mean any person (i)
who is not a common law employee of the recipient Employer and (ii) who
(pursuant to an agreement between an Employer (or Affiliated Employer) and any
other person ("Leasing Organization")) has performed services for the Employer
(or for the Employer and related persons determined in accordance with Section
414(n)(6) of the Code) (a) on a substantially full time basis for a period of at
least one year (including periods of service for the recipient Employer for
which such person would have been a Leased Employee but for the requirements of
this subclause (a) of this Section), and (b) such services are of a type
historically performed by employees in the business field of the recipient
Employer.
1.17 MEMBER: "Member" shall mean an Employee who is participating
in the Plan during the Plan Year and, if consistent with the context in which
such term is used, a former Member of the Plan.
1.18 NET INCOME: "Net Income" shall mean, as to an Employer, its
net profit for any given year as determined by its accountant or accounting firm
and reflected on its profit and loss
I-16
statement for such year, without reduction for contributions under the Plan or
payments of, or reserves for, federal and state taxes based on income, and after
elimination of all gains from the sale or disposition of property not held for
sale to customers in the ordinary course of business.
1.19 NON-HIGHLY COMPENSATED EMPLOYEE: "Non-Highly Compensated
Employee" shall mean a Employee who is neither a Highly Compensated Employee nor
a family member thereof described in Section 414(q)(6) of the Code.
1.20 PLAN: "Plan" shall mean the Proler International Corp. Tax
Deferred Savings and Retirement Plan and Trust herein set forth and all
subsequent amendments thereto. The Plan is hereby designated as a "profit
sharing plan" for purposes of Sections 401, 402, 412 and 417 of the Code.
1.21 PLAN SPONSOR: "Plan Sponsor" shall mean Proler International
Corp. and any successor thereto which adopts and continues the Plan.
1.22 PLAN YEAR: "Plan Year" shall mean the fiscal year of the Plan
which shall end on the last day of December of each calendar year.
1.23 PRIOR PLAN: "Prior Plan" shall mean any defined contribution
plan described in Section 414(i) of the Code (excluding any such plan which is
subject to the minimum funding standards of Section 412 of the Code or which is
required to provide a qualified joint and survivor annuity or a qualified
preretirement survivor annuity described in Sections 401(a)(11) and 417 of the
Code), which plan at all times relevant met the requirements for qualification
under Section 401(a) or 403(a) of the Code, as such plan is in effect on the
date immediately prior to the date that such plan was completely amended,
restated and continued under the form of the Plan, without a gap or lapse in
coverage, time or effect of a qualified plan and exempt trust under applicable
provisions of the Code.
1.24 ROLLOVER CONTRIBUTION: "Rollover Contribution" shall mean an
amount that (i) the Administrative Committee determines may be deposited in the
Trust Fund in accordance with Sections 402(c), 402(e) or 408(d)(3) of the Code
without endangering the qualification and exemption of the Plan and the Trust
under Sections 401(a) and 501(a) of the Code, respectively, and (ii) is either
contributed by a Member, or received in a "direct rollover" described in Section
401(a)(31) of the Code, and credited to his Rollover Account.
1.25 TOTAL AND PERMANENT DISABILITY: "Total and Permanent
Disability" shall mean a mental or physical disability which, in the opinion of
a physician selected or pre-approved by the Administrative Committee, will
prevent a Member from earning a reasonable livelihood with the Employer or any
Affiliated Employer, which can be expected to result in death or which has
lasted or can be expected to last for a continuous period of not less than
twelve months and which:
I-17
(a) Was not contracted, suffered or incurred while such
Member was engaged in, or did not result from his having engaged in, a
felonious criminal enterprise;
(b) Did not result from alcoholism or addiction to
narcotics or any self-inflicted injury; and
(c) Did not result from an injury incurred while a member
of the armed forces of the United States after the effective date of
the Plan and for which such Member receives a military pension.
1.26 TRANSFERRED: "Transferred" as used with respect to an Employee
and "Transfer of an Employee" shall mean the termination of employment with one
Employer and the contemporaneous commencement of employment with another
Employer.
1.27 TRUST: "Trust" shall mean the trust estate created under the
Plan.
1.28 TRUSTEE: "Trustee" shall mean the trustee or trustees
qualified and acting hereunder or any successor or successors appointed by the
Board.
1.29 TRUST FUND: "Trust Fund" shall mean the cash, bonds, stocks
and other assets or liabilities held by the Trustee pursuant to the terms of the
Trust.
I-18
ARTICLE II
EMPLOYEES ELIGIBLE TO PARTICIPATE
2.1 ELIGIBILITY REQUIREMENTS: Subject to compliance with
applicable provisions of Section 3.1, every Employee who was a Member or
participant in any Prior Plan on the date immediately prior to the date such
Prior Plan was amended, restated and continued under the form of the Plan, shall
be deemed to be a Member of this Plan as of the date such Prior Plan was
amended, restated and continued under the form of the Plan. Every other Employee
(other than security guards) who is twenty-one (21) or more years of age and who
has completed one (1) year or more of Active Service shall be eligible to
participate in the Plan as of the Entry Date coincident with or next following
the later of (i) the effective date of the adoption of the Plan by the Employer,
or (ii) the date that the Employee satisfies the aforementioned eligibility
requirements.
In addition, pursuant to uniform and nondiscriminatory rules
established by the Administrative Committee with the consent or approval of the
Board, the Administrative Committee may vote to allow Employees to enter the
Plan as Members on any date which would not otherwise be permitted under the
terms of the Plan. Any such decision shall be evidenced by formal minutes
reflecting such action of the Administrative Committee or by a unanimous written
consent of the members of the Administrative Committee and shall be
appropriately communicated to the affected Members, and must be approved or
ratified by the Board, unless pursuant to the rules described in the preceding
sentence, approval or ratification by the Board is not required.
If an individual who satisfies the requirements for membership in the
Plan was separated from service of the Employer before the Entry Date on which
such person would otherwise initially be entitled to participate in the Plan but
returns to active employment with the Employer prior to incurring a period of
five (or more) consecutive one year breaks in Active Service for eligibility,
such person shall become a Member of the Plan on the later of (i) such initial
Entry Date or (ii) the date he ended the above described period of separation
from service. Upon his return to employment, an Employee (i) who had a vested
interest in any amount credited to his Employer Account at the time of his
termination of employment and who incurred a period of five (or more)
consecutive one year breaks in Active Service, or (ii) who had no vested
interest in any amounts credited to his Employer Account at the time of his
termination of employment and who has incurred a period of five (or more)
consecutive one year breaks in Active Service, which period is less than the
aggregate number of years of Active Service for eligibility (whether or not
consecutive) completed prior to such period, shall be eligible to participate in
the Plan immediately as of his return to the employ of the Employer. Except for
those situations described in the preceding provisions of this paragraph, upon
an individual's return to covered employment, he will be treated as a new
Employee for eligibility purposes.
Employees who are included in a unit of Employees covered by a
collective bargaining agreement between the Employees' representative and the
Employer shall be excluded from
II-1
participation in the Plan if retirement benefits were the subject of good faith
bargaining between the Employees' representative and the Employer and the
agreement does not require the Employer to include such Employees in this Plan.
For purposes of the preceding sentence, the term "Employees' representative"
shall not include any organization more than one-half of the members of which
are Employees who are owners, officers or executives of the Employer.
Employees who are nonresident aliens and who receive no earned income
(within the meaning of Section 911(d)(2) of the Code) from the Employer which
constitutes income from sources within the United States (within the meaning of
Section 861(a)(3) of the Code) shall be excluded from participation in the Plan.
Notwithstanding any other provision of the Plan to the contrary, (i)
any individual who was considered by the Employer to be an independent
contractor, but who is later reclassified as a common-law Employee (excluding
any Leased Employee described in clause (ii) below) of the Employer with respect
to any portion of the period in which such individual was paid by the Employer
as an independent contractor, or (ii) any Leased Employee, shall be excluded
from participation in the Plan with respect to the period in which any
individual described in clause (i) was considered to be an independent
contractor, or the period in which any individual described in clause (ii) is a
Leased Employee. The immediately preceding sentence shall fully apply only with
respect to Plan Years (or portions thereof) in which none of the individuals
described in such sentence is required to be covered in order to ensure that the
Plan is operated in compliance with the requirements of Section 401(a) and
410(b) of the Code. In the event that any individual who is included in the
class of reclassified independent contractors or Leased Employees described in
clause (i) or (ii) of the first sentence of this paragraph, must be covered with
respect to a Plan Year (or portion thereof) in order to ensure that the
requirements of the immediately preceding sentence are met, starting with the
class of reclassified independent contractors, only such number of individuals
within the class which includes the individual (beginning with the individuals
with the lowest Considered Compensation determined on an annualized basis) as is
necessary to ensure compliance with the requirements of the immediately
preceding sentence shall be covered in the Plan only for the Plan Year (or
portion thereof) that is necessary to ensure that the requirements of the
immediately preceding sentence are met.
2.2 CERTIFICATION AND NOTICE OF ELIGIBILITY: Eligibility shall be
determined and each Employee shall be notified of his admission as a Member by
the Administrative Committee.
2.3 FROZEN PARTICIPATION: While service with an Affiliated
Employer which is not an Employer is counted for purposes of determining Active
Service, no person shall authorize Elective Contributions to the Plan except for
the period(s) of service that he is actually employed in covered employment with
and paid by an Employer. If an Employee is (i) transferred from an Employer to
an Affiliated Employer which is not an Employer or (ii) otherwise ceases to be
employed in covered employment with and paid by an Employer, his Account shall
thereupon be frozen: he shall not be permitted to authorize contributions to the
Plan, and his Account shall not share in the allocation of any Employer
Contribution (except for the period(s) of service that he is actually employed
in covered employment with and paid by an Employer), but his Account
II-2
will continue to share in any appreciation or depreciation and income or loss
incurred by the Trust Fund during the period of time that he is employed by an
Affiliated Employer which is not an Employer or that he is otherwise excluded
from covered employment; provided, however, he shall continue to accrue Active
Service.
II-3
ARTICLE III
CONTRIBUTIONS
INDEX OF PLAN PROVISIONS COVERED IN ARTICLE III
SECTION OR SUBSECTION SECTION NUMBER
- --------------------- --------------
Compensation Deferral Agreements for Elective Contributions 3.1
Compensation Deferral Agreements 3.1(a)
Special Compensation Deferral Agreements 3.1(b)
Dollar Limit on Elective Deferrals 3.1(c)
Remedying Excess Deferrals 3.1(d)
Actual Deferral Percentage Test 3.3(g)
Excess Contributions over ADP Limits 3.3(h)
Qualified Non-Elective Contributions 3.3(c)
Rollover Contributions 3.2
Employer Contributions 3.3
Elective Contributions 3.3(a)
Thrift Contributions 3.3(b)
Restoration of Forfeited Benefits 3.3(d)
Top-Heavy Minimum Contribution 3.3(e)
Contribution Limits 3.3(f)
Actual Contribution Percentage Test 3.3(i)
Excess Aggregate Contributions over ACP Limits 3.3(k)
Prohibited Multiple Use of 2.0/2%
Alternative Limit for the ADP and ACP tests 3.3(j)
Composition of and Deadline for Payment of Employer
Contributions 3.4
Return of Contributions for Mistake, Disqualification
and Disallowance of Deduction 3.5
III-1
3.1 COMPENSATION DEFERRAL AGREEMENTS FOR ELECTIVE CONTRIBUTIONS:
(a) COMPENSATION DEFERRAL AGREEMENTS: Subject to
applicable conditions and limitations of the Plan, at such time or
times as may be permitted by the Board, and in such manner and amounts
as shall be consistent with the provisions of this Section 3.1, in lieu
of receipt of such amounts in cash, Members may authorize the Employer
to make Elective Contributions to the Plan on their behalf. Elective
Contributions shall be held, invested and distributed as provided under
applicable provisions of the Plan. Provided, however, no Compensation
Deferral Agreement (or any other deferral mechanism that may be
permitted under the Plan) may be adopted retroactively. In the event
Elective Contributions are permitted, the opportunity to authorize
Elective Contributions hereunder shall be announced and made available
to all Members upon an equal basis. Once Elective Contributions have
been permitted, if the Board determines to stop Elective Contributions,
an announcement shall be made to all Employees and the Elective
Contributions to the effective date of the announcement shall be
retained in the Plan subject to its terms and provisions.
From and after the date, if any, established by the Board
pursuant to the preceding paragraph of this Section 3.1, or the Entry
Date or other date with respect to which a Member is eligible to
participate, if later, each Member may execute a Compensation Deferral
Agreement in a form satisfactory to the Administrative Committee
whereunder the Member shall agree, subject to any necessary adjustments
pursuant to this Section and Sections 3.3 and 4.3, to a reduction
(expressed in whole percentages) of not less than one percent (1%) or
in a fixed dollar amount (not less than $20 per month), nor greater
than fifteen percent (15%), of his Considered Compensation (before such
authorized reduction) attributable to the applicable pay periods;
provided, however, on a non-discriminatory basis uniformly applied to
all Members, any Elective Contributions authorized in a fixed dollar
amount by any Member shall not be applied to any incentive pay earned
by such Member, which incentive pay would otherwise be included in
Considered Compensation for this purpose; but provided further that
Elective Contributions authorized in a fixed dollar amount may be
applied to unused vacation pay in excess of two weeks. The Employer
shall contribute (as an Elective Contribution) to the Plan, an amount
equal to the amount of the Member's authorized reduction, which
Elective Contribution shall be allocated and credited to the Member's
Employer Nonforfeitable Contributions Account.
III-2
Reductions authorized under Compensation Deferral Agreements
shall be irrevocable, except that Elective Contributions may be
increased or decreased on the first day of any periodic pay period
coincident with or next following any (i) subsequent first day of the
first or seventh month of the Plan Year (or such other date(s) as may
be prescribed by the Administrative Committee) or (ii) switch from
exempt to non-exempt payroll status, or vice-versa, with reasonable
notice as may be required by the Administrative Committee. Elective
Contributions may be discontinued at any time with reasonable notice as
may be required by the Administrative Committee; provided, however, if
Elective Contributions are discontinued at the request of a Member,
such Contributions may not be resumed until the first day of any
periodic pay period coincident with or next following the first day of
the first or seventh month of the Plan Year (or such other date(s) as
may be prescribed by the Administrative Committee) following receipt by
the Administrative Committee of such reasonable notice as may be
required by the Administrative Committee. Under special circumstances,
the Administrative Committee may permit different or additional
effective dates for increases or decreases of Elective Contributions
authorized under Compensation Deferral Agreements, or may waive the
otherwise applicable notice requirement, in order to prevent hardship
to any Member, provided that the waiver is not contrary to the
interests of the other Members.
(b) SPECIAL COMPENSATION DEFERRAL AGREEMENTS:
Notwithstanding the preceding subsection (a), unless the Administrative
Committee so determines in its sole discretion, prior to the first day
of the last month of the calendar year (or such other month during a
Plan Year as determined by the Administrative Committee), each Member
may execute a Compensation Deferral Agreement (in such form as is
satisfactory to the Administrative Committee and hereinafter referred
to as a "Special Compensation Deferral Agreement") providing for an
increase or a reduction of any part or all of the Member's Considered
Compensation for any part or all of a selected month during the Plan
Year; provided, however, (i) that such Special Compensation Deferral
Agreement shall be deemed to modify and override any prior Compensation
Deferral Agreement during the period covered by the Special
Compensation Deferral Agreement, (ii) that the deferrals authorized
under the Special Compensation Deferral Agreement may be increased,
reduced or revoked only if permitted by the Administrative Committee,
and (iii) that the Special Compensation Deferral Agreement shall
automatically terminate as of the earlier of (a) such time it is
revoked by the Member in accordance with nondiscriminatory rules
established by the Administrative Committee or (b) the last day of the
period with respect to which authorized reductions thereunder are
contributed to the Plan. All deferrals required under the Plan as a
result of the execution of the Special Compensation Deferral Agreement
shall otherwise be subject to all applicable terms, conditions, and
limitations of the Plan. As of the date that the Special Compensation
Deferral Agreement ceases to be operative, the Member's then otherwise
operative Compensation Deferral Agreement shall govern deferrals to be
made on behalf of the Member.
III-3
(c) DOLLAR LIMIT ON ELECTIVE DEFERRALS: Notwithstanding any
other provision of the Plan to the contrary, deferrals under the Plan
in lieu of cash Considered Compensation, pursuant to any Compensation
Deferral Agreement and Special Compensation Deferral Agreement, when
added to (i) any employer contribution under any other cash or deferred
arrangement (described in Section 401(k) of the Code) to the extent not
includible in gross income for the taxable year under Section 402(a)(8)
of the Code, (ii) any employer contribution (to a simplified pension
plan under a salary reduction agreement) to the extent not includible
in gross income for the taxable year under Section 402(h)(1)(B) of the
Code, (iii) any employer contribution to purchase an annuity contract
(described in Section 403(b) of the Code) under a salary reduction
agreement (within the meaning of Section 3121(a)(5)(D) of the Code) to
the extent not includable in gross income for the taxable year under
Section 403(b) of the Code, and (iv) any employer contribution
(pursuant to any election to defer under any eligible deferred
compensation plan) to the extent not includable in gross income under
Section 457 of the Code, are limited to $7,000 (as adjusted, as may be
determined by the Commissioner of Internal Revenue, at the same time
and in the same manner as prescribed in Section 415(d) of the Code). In
addition, without limiting the scope of the immediately preceding
sentence, Elective Contributions and/or any similar elective deferrals
(described in Section 402(g)(3) of the Code) to the Plan and/or any
other qualified plan, contract or arrangement which is described in the
immediately preceding sentence and is maintained by the Employer and/or
any Affiliated Employer shall not, in the aggregate, exceed the dollar
limitation (as adjusted) of the immediately preceding sentence and
Section 402(g) of the Code as in effect at the beginning of such
taxable year.
(d) REMEDYING EXCESS DEFERRALS: To the extent that a
Member's deferrals described in the preceding subsection (c) exceed the
applicable limit for the applicable year so that any amount otherwise
excludable from such Member's gross income for federal income tax
purposes is includible in his gross income, not later than the first
March 1 following the close of the taxable year of such excess
deferral, the Member shall notify the Administrative Committee in
writing of any portion of any such excess deferrals which the Member
has elected to allocate to the Plan. Such notice shall include the
Member's certified written claim for a specified amount of excess
deferrals for the preceding calendar year and shall be accompanied by
the Member's certified written statement that if such amounts are not
distributed, such excess deferrals, when added to amounts deferred
under other plans or arrangements described in Sections 401(k), 408(k),
403(b) or 457 of the Code, exceeds the limit imposed under Section
402(g) of the Code for the year in which the deferral occurred. In
accordance with Section 1.402(g)-1(e)(2) of the Income Tax Regulations,
to the extent that the Member only has elective deferrals for the
taxable year under the Plan and any other plan or arrangement described
in the previous sentence which is maintained by the same Employer, such
Employer may notify the Administrative Committee of any excess
deferrals made on behalf of the Member.
III-4
Following actual receipt by the Administrative Committee of
the notice described in the immediately preceding paragraph,
(notwithstanding any other provision of law or the Plan relating to
spousal consent), not later than the first April 15 immediately
following such March 1 deadline for written notification of the
Administrative Committee, the Plan shall distribute to such Member in a
lump sum (in cash or in kind) the amount of excess elective deferrals
allocated to the Plan (and any income allocable to such amount). Such
distribution shall be made first by distribution of nonmatched Employer
Elective Contributions, if any, allocated to the Member's Employer
Nonforfeitable Contributions Account, and, if necessary, next by
distribution of Employer Elective Contributions which were made on
behalf of the Member and were matched by Thrift Contributions. To the
extent that such excess deferrals are attributable to matched Elective
Contributions (and any income allocable thereto) which amounts are
distributed to the Member pursuant to the preceding provisions of this
Section, matching Thrift Contributions (and any income allocable
thereto) will be appropriately reduced and such reduced matching Thrift
Contributions (and any income allocable thereto) shall be applied as
forfeitures pursuant to Section 4.6. Such reduction shall be made by
reduction of matching Thrift contributions allocated to the Member's
Employer Contributions Account. The provisions of this paragraph (which
provide for reduction of Thrift Contributions made with respect to
Employer Elective Contributions which are distributed hereunder) are
intended to comply with the requirements of Sections 401(a), 401(k),
401(m) and 411 of the Code. To the extent that any provision of this
paragraph is inconsistent with the preceding sentence, such provision
shall be deemed to be inoperative and the plan shall be operated in a
manner that complies with the requirements of the immediately preceding
sentence.
Income or loss allocable to the portion of the Member's
Employer Nonforfeitable Contributions Account that is attributable to
excess elective deferrals (described below) shall be income or loss for
the taxable year allocable to the portion of Member's Employer
Nonforfeitable Contributions Account that is attributable to elective
deferrals multiplied by a fraction, the numerator of which is the
Member's excess elective deferrals for the year and the denominator of
which is the balance as of the end of such year of the portion of the
Member's Employer Nonforfeitable Contributions Account that is
attributable to elective deferrals reduced by any gain and increased by
any loss allocable to such balance for the taxable year. In the event
that a separate subaccount is not maintained with respect to elective
deferrals attributable to Elective Contributions (and any income
allocable thereto), the portion of the Employer Nonforfeitable
Contributions Account that is attributable to elective deferrals is
determined by multiplying the balance of the Member's Employer
Nonforfeitable Contributions Account by a fraction, the numerator of
which is the Employer Elective Contributions made to the Plan on behalf
of the Member and allocated and credited to the Member's Employer
Nonforfeitable Contributions Account less any withdrawals, and the
denominator of which is the sum of all Employer Contributions made to
the Plan on behalf of the Member and allocated and credited to the
Member's Employer Nonforfeitable Contributions Account less any
withdrawals. Similar rules apply with respect to
III-5
determination of Thrift Contributions allocated to the Employer
Contributions Account and any income allocable thereto. No income or
loss will be allocated for the gap period between the end of the
taxable year to the date of distribution for Plan Years beginning on or
after January 1, 1992 and, with respect to Plan Years beginning before
such date, income or loss shall be allocated in accordance with the
applicable Income Tax Regulations and Plan Document as then in effect.
Notwithstanding the preceding provisions of this subsection
(d), any Member who has excess elective deferrals for a taxable year
may receive a corrective distribution of such deferrals (and income
attributable thereto) during the same year if the Member notifies the
Administrative Committee of an excess deferral, the correcting
distribution is made after the date on which the Plan received the
excess deferral and the Plan designates and treats the distribution as
a distribution of an excess deferral. Any distribution described in the
immediately preceding sentence shall be made as soon as practicable,
but absent circumstances beyond the control of the Administrative
Committee, not later than 60 days after the first day of the month that
occurs on or after the later of (i) the actual receipt by
Administrative Committee of the Member's notification of an excess
deferral or (ii) the date that the Plan actually receives the excess
elective deferral. The income allocable to elective deferrals from the
first day of the taxable year to the date of the distribution shall be
determined by using the method described in the immediately preceding
paragraph.
Notwithstanding any other provision of this subsection (d) to
the contrary, the amount of excess deferrals that may be distributed
under this subsection shall be reduced by any excess contributions
(described in Section 3.3) over the ADP limit (described in Section
3.3) previously distributed with respect to a Member for the Plan Year
beginning with or within such Member's taxable year. In no event shall
any Member receive from the Plan a corrective distribution for the
taxable year of an amount in excess of the Member's total elective
deferrals under the Plan for the taxable year. Except as may be
otherwise required under Section 3.3, any excess deferral not timely
distributed shall remain in the Plan and shall be subject to otherwise
applicable conditions and limitations thereof. In addition, any excess
elective deferrals which are timely distributed under the preceding
provision of this subsection shall not be treated as an annual addition
under Section 4.3. Also, excess deferrals by Non-Highly Compensated
Employees shall not be taken into account under the ADP test of Section
3.3 to the extent such excess deferrals are made under the Plan or any
other qualified plan of the Employer or any Affiliated Employer. A
distribution of elective deferrals (and allocable income thereon) under
this subsection (d) shall not be considered as a distribution for
purposes of compliance with the minimum distribution provisions of
Section 6.6.
3.2 ROLLOVER CONTRIBUTIONS: Rollover Contributions on the part
of Employees shall be permitted from time to time as determined by the
Administrative Committee. In the event Rollover Contributions are
permitted, the opportunity to contribute shall be made available to all
Employees on a nondiscriminatory basis. An Employee who is permitted to
make a Rollover
III-6
Contribution shall not be entitled to authorize Elective Contributions
to the Plan or share in the allocation of any Employer Contributions or
forfeitures unless and until the Employee meets the requirements of
Sections 2.1, 3.1 and 4.2 of the Plan. Any such Rollover Contribution
made by an Employee shall be held in a separate Rollover Account for
such Employee which will share in any income or loss and appreciation
or depreciation of the Trust Fund. Rollover Contributions shall have no
effect on any limitation under the Plan based on Contributions.
3.3 EMPLOYER CONTRIBUTIONS:
(a) ELECTIVE CONTRIBUTIONS: Subject to the applicable
provisions of the Plan set forth below, each periodic pay period the
Employer shall contribute to the Trust (without regard to its Net
Income or accumulated earnings and profits) Elective Contributions for
each Member in an amount equal to the amount by which the Member's
Considered Compensation was reduced pursuant to the Compensation
Deferral Agreement (and, if applicable, Special Compensation Deferral
Agreement) executed by the Member pursuant to Section 3.1.
(b) THRIFT CONTRIBUTIONS: Subject to the applicable
provisions of the Plan set forth below, in addition to the Elective
Contributions described in the preceding subsection (a), with respect
to each Plan Year (or such shorter period as may be prescribed by the
Board), the Employer may, in the discretion of the Board, contribute to
the Trust (without regard to its Net Income or accumulated earnings and
profits) matching Thrift Contributions on behalf of each eligible
Member in an amount equal to a specified percentage for each dollar
contributed to the Plan as an Elective Contribution on behalf of the
Member for the Plan Year, in accordance with the following schedule:
MEMBER'S
ELECTIVE CONTRIBUTIONS MATCHING PERCENTAGE
---------------------- -------------------
$0 to $1,000 50%
$1,001 to $2,000 25%
$2,001 to annual dollar limit
pursuant to Section 3.1(c) 10%
Any decision to provide a Thrift Contribution for any Plan
Year (or such shorter period as may be prescribed by the Board) or any
change in the schedule of matching percentages set out above shall be
communicated to all eligible Employees at least seven (7) days prior to
the date on which eligible Employees are required to inform the
Administrative Committee of the amount of their authorized Elective
Contributions, or an increase or decrease in the amount of their
Elective Contributions, under a Compensation Deferral Agreement
pursuant to Section 3.1.
III-7
Thrift Contributions, if any, shall be made only on behalf of
each Member who remains in the employ of the Employer as of the last
day of the Plan Year (or such shorter period as may be prescribed by
the Board) and who is entitled to be credited with at least 1,000
"hours of service" (defined in the definition of Active Service) during
the Plan Year (or the pro rata portion of 1,000 hours for any shorter
period). For purposes of the preceding sentence, (i) any Member whose
employment terminates on account of retirement, Total and Permanent
Disability, or death, shall be deemed to be (A) in the employ of the
Employer on the last day of the Plan Year (or shorter period) in which
the termination of employment occurred and (B) credited with at least
1,000 hours of service during such period; and (ii) any Member who is,
on the last day of the Plan Year (or applicable shorter period), on a
leave of absence to which such Member is entitled under the Family and
Medical Leave Act of 1993 ("FMLA") shall be deemed to be in the employ
of the Employer on such last day unless final regulations issued under
the FMLA do not require such treatment for this purpose.
In addition, notwithstanding any other provision of the Plan
to the contrary, any Member (i) whose employment terminates prior to
the last day of the Plan Year, or who is not entitled to be credited
with at least 1,000 hours of service during the Plan Year, and (ii) who
would otherwise not be treated as employed in covered employment on the
last day of the Plan Year, or as being entitled to be credited with at
least 1,000 hours of service during the Plan Year, shall nevertheless
be treated as employed on the last day of the Plan Year, or as being
entitled to be credited with at least 1,000 hours of service during the
Plan Year, only to the extent necessary to ensure compliance with
Section 401(a)(4) and/or Section 401(a)(26) of the Code.
(c) QUALIFIED NON-ELECTIVE CONTRIBUTIONS: At the election
of the Board, in lieu of distributing excess Employer Contributions in
order to satisfy the ADP test or the ACP test, as described below in
this Section 3.3, the Employer may make Qualified Non-Elective
Contributions on behalf of Non-Highly Compensated Employees who are
Members in such amounts as are sufficient to satisfy the ADP test or
the ACP test, as applicable. Qualified Non-Elective Contributions, if
any, shall be made on behalf of each Member who (i) is a Non-Highly
Compensated Employee and (ii) remains in the employ of the Employer as
of the last day of the Plan Year and who is entitled to be credited
with at least 1,000 hours of service during such Plan Year. For
purposes of the preceding sentence, any Member whose employment
terminates on account of retirement, Total and Permanent Disability, or
death, shall be deemed to be in the employ of the Employer on the last
day of the Plan Year in which the termination of employment occurred
and to be credited with at least 1,000 hours of service during such
period.
III-8
In addition, notwithstanding any other provision of the Plan
to the contrary, any Member whose employment terminates prior to the
last day of the Plan Year, or who is not entitled to be credited with
at least 1,000 hours of service during the Plan Year, and who would
otherwise not be treated as employed in covered employment on the last
day of the Plan Year, or as being entitled to be credited with at least
1,000 hours of service during the Plan Year, shall, nevertheless, be
treated as employed on the last day of the Plan Year, or as being
entitled to be credited with at least 1,000 hours of service during the
Plan Year, only to the extent necessary to ensure compliance with
Section 401(a)(4), 401(a)(26) and/or 410(b) of the Code.
(d) RESTORATION OF FORFEITED BENEFITS: Not later than the
last day of the Plan Year in which occurs any repayment described in
Section 4.6, the Employer shall contribute (without regard to its Net
Income or accumulated earnings and profits) an amount which, when added
to previously unapplied and unallocated forfeitures, shall be equal to
the amount previously forfeited under applicable provisions of the Plan
by any Member entitled to have his Account restored in accordance with
the provisions of Section 4.6. In addition, as soon as administratively
practicable following receipt of a claim under circumstances described
in Section 6.7, the Employer shall contribute (without regard to its
Net Income or accumulated earnings and profits) an amount equal to the
value of forfeited benefits described in and payable under Section 6.7.
(e) TOP-HEAVY MINIMUM CONTRIBUTION: In the event the Plan
is a Top-Heavy Plan described in Article VII with respect to any Plan
Year, the Employer shall contribute (without regard to its Net Income
or accumulated earnings and profits) any amount necessary to ensure
that Members who are entitled to a minimum allocation pursuant to
Section 7.3(c) in fact receive such allocation.
(f) CONTRIBUTION LIMITS: No Contribution by the Employer
shall exceed a sum equal to fifteen percent (15%) of the total
compensation paid or accrued during its taxable year ending with or
within the Plan Year to all Members. No Contribution shall be made to
the Plan under circumstances which would result in any violation of the
limitations of Section 3.1, this Section 3.3 or Section 4.3 of the
Plan. The Employer shall maintain such records as may be necessary to
demonstrate compliance with the antidiscrimination tests of this
Section.
(g) ACTUAL DEFERRAL PERCENTAGE TEST: The actual deferral
percentage ("ADP") for all eligible Highly Compensated Employees shall
not exceed the greater of:
III-9
(i) the actual deferral percentage for the group
of all eligible Non-Highly Compensated Employees multiplied
by 1.25, or
(ii) the actual deferral percentage of the group
of all eligible Non-Highly Compensated Employees multiplied by
2.0; provided, however, that the actual deferral percentage
for the group of eligible Highly Compensated Employees may not
exceed the actual deferral percentage of the group of all
eligible Non-Highly Compensated Employees by more than two
percentage points.
For purposes of the immediately preceding sentence, the
provisions of Section 401(k)(3) of the Code and Section 1.401(k)-1 of
the Income Tax Regulations are hereby incorporated into the Plan for
all purposes. In addition, if (i) any Highly Compensated Employee is
eligible to authorize Employer Elective Contributions and to have
Thrift Contributions allocated with respect to the Employer Elective
Contributions, or (ii) such Highly Compensated Employee is eligible to
make elective deferrals (described in Section 402(g)(3) of the Code)
under any other cash or deferred arrangement (described in Section
401(k) of the Code), and/or to make employee contributions (described
in Section 401(m) of the Code) or to receive matching contributions
(described in Section 401(m) (4)(A) of the Code) under any other
qualified plan of the Employer and/or any Affiliated Employer
regardless of whether such Plan contains a cash or deferred
arrangement, the disparities between the actual deferral percentages of
the respective groups of eligible Highly Compensated Employees and
Non-Highly Compensated Employees shall be reduced as described in
Section 1.401(m)-2 of the Income Tax Regulations and subsection (h) of
this Section.
Subject to the other provisions of this Section set forth
below, the actual deferral percentage for a specified group of eligible
Employees for a Plan Year shall be the average of the actual deferral
ratios (calculated separately for each Employee in such group) of the
sum of Employer Elective Contributions and Employer Qualified
Non-Elective Contributions, if any, paid over to the Trust on behalf of
each such Employee for such Plan Year, and allocated to the Employee's
Employer Nonforfeitable Contributions Account as of a date within such
Plan Year, to the Employee's Compensation (described below) for the
Plan Year. Notwithstanding the immediately preceding sentence, an
Elective Contribution will be taken into account for purposes of the
ADP test only if it relates to Compensation that either (i) would have
been received by the Employee in the Plan Year but for the Employee's
deferral election or (ii) is attributable to services performed by the
Employee during the Plan Year and, but for the Employee's election to
defer, would have been received by the Employee within two and one-half
(2 1/2) months after the close of the Plan Year. For purposes of the
second preceding sentence an Elective Contribution will be considered
as having been allocated to the Employee's Employer Nonforfeitable
Contribution
III-10
Account as of a date within a Plan Year, and, thus, taken into account
for purposes of the ADP test for that Plan Year, if allocation of such
Elective Contribution is not contingent upon participation or
performance of services after such date during the Plan Year and the
Elective Contribution is actually paid to the Trust no later than
twelve (12) months after the Plan Year to which the contribution
relates. For the purposes of performing the ADP test, Compensation
shall mean all remuneration:
(i) that is (a) received during the Plan Year by
the eligible Employee from the Employer and is required to be
reported as wages on the eligible Employee's form W-2 (or its
successor) for federal income tax withholding purposes, but
determined without regard to any rules that limit the
remuneration included in wages based on the nature or location
of the employment or the services performed (such as the
exception for agricultural labor in Section 3401(a)(2) of the
Code), plus (b) any reduction under a compensation deferral
agreement under (1) a plan described in Section 401(k) or
408(k) of the Code, (2) an annuity described in Section 403(b)
of the Code or (3) an election under a cafeteria plan
described in Section 125 of the Code,
(ii) that, subject to clause (iv) below, is
actually paid to or is includible (within the meaning of
Section 1.415-2(d)(3) and (4) of the Income Tax Regulations)
in the gross income of the eligible Employee within the
relevant Plan Year, or would have been so paid or includible
but for a reduction described in clause (i) immediately
above,
(iii) that does not exceed (i) for Plan Years
beginning prior to January 1, 1994, $200,000 (as adjusted at
such time and in such manner as may be prescribed in Section
415(d) of the Code) and (ii) for Plan Years beginning on or
after January 1, 1994, $150,000 (as adjusted by the
Commissioner of Internal Revenue for increases in the cost of
living in accordance with Section 401(a)(17)(B) of the Code),
and
(iv) that is received by the eligible Employee
only while he is a Member.
For the purposes of the immediately preceding paragraph,
provided that the ADP test is satisfied both with and without exclusion
of these Elective Contributions, Elective Contributions shall include
excess elective deferrals over the annual dollar limit described in
Section 3.1 (even if distributed under Section 3.1) made by Highly
Compensated Employees, as well as all Elective Contributions made by
all Members that are not taken into account in the ACP test described
in a subsection below. In accordance with Section 1.402(g)-1(e)(iii) of
the Income Tax Regulations, excess elective deferrals described in
Section 3.1
III-11
made by Non-Highly Compensated Employees, to the extent made under the
Plan or a plan maintained by an Affiliated Employer, shall not be taken
into account under the ADP test described in this subsection.
For the purpose of calculating the actual deferral percentages
hereunder, subject to and in accordance with regulations or other
authority issued under Sections 401(k) and/or 401(m) of the Code by the
appropriate governmental authority, only such portion of the applicable
Contributions (as described in the second preceding paragraph) as may
be necessary to ensure compliance with the ADP test shall be taken into
account for purposes of that test. The actual deferral ratios of each
eligible Employee and the ADP of each group shall be calculated to the
nearest one-hundredth of one percent of the eligible Employee's
Compensation. The actual deferral ratio of an eligible Employee is zero
if no applicable Contributions were allocated to such Employee's
Employer Nonforfeitable Contributions Account for the Plan Year.
In accordance with the requirements of Section
1.401(k)-1(b)(3) of the Income Tax Regulations, two or more cash or
deferred arrangements (as defined in Section 401(k) of the Code) may be
considered one such arrangement for purposes of determining whether
such arrangements satisfy the requirements of Sections 401(a)(4),
Section 401(k) and 410(b) of the Code. In such case, the cash or
deferred arrangements included in such plans and the plans including
such arrangements shall be treated as one arrangement and as one plan
for purposes of applying this Section 3.3 and Sections 401(a)(4),
401(k) and 410(b) of the Code. If the Employer and any Affiliated
Employer individually or collectively maintain two or more plans that
are treated as a single plan for purposes of Section 401(a)(4) or
410(b) of the Code (other than Section 410(b)(2)(A)(ii) of the Code as
in effect for Plan Years which begin after December 31, 1988), all cash
or deferred arrangements that are included in such plans are to be
treated as a single arrangement for purposes of this Section and
Sections 401(a)(4), 401(k) and 410(b) of the Code. Plans may be
aggregated under the preceding provisions of this paragraph only if
they have the same Plan Year. If any Highly Compensated Employee is a
participant under two or more cash or deferred arrangements (as defined
in Section 401(k) of the Code) of the Employer, for purposes of
determining the actual deferral ratio with respect to such Highly
Compensated Employee, all such cash or deferred arrangements shall be
treated as one cash or deferred arrangement. If a Highly Compensated
Employee participates in two or more cash or deferred arrangements that
have different plan years, the immediately preceding sentence shall be
applied by treating all cash or deferred arrangements with years ending
with or within the same calendar year as a single arrangement.
Contributions and allocations under an employee stock ownership plan
described in Section 4975(e)(7) of the Code may not be combined with
contributions or allocations under any plan not described in Section
4975(e)(7) of the Code.
III-12
With respect to Plan Years beginning prior to January 1, 1992,
the Plan or, if the Plan is aggregated with another cash or deferred
arrangement pursuant to the previous paragraph, such aggregated Plan
may, in the discretion of the Administrative Committee, be restructured
(in accordance with Sections 1.401(k)- 1(h)(3)(iii),
1.401(a)(4)-1(c)(8)(iii) and 1.401(a)(4)-9(c) of the Income Tax
Regulations) into two or more component plans for purposes of
determining whether the Plan or aggregated Plan satisfies Section
401(a))(4) of the Code and the actual deferral percentage test set
forth above. If each of the component plans of the Plan or aggregated
Plan satisfies all of the requirements of Sections 401(a)(4) and 410(b)
of the Code as if it were a separate Plan or aggregated Plan, then the
Plan or aggregated Plan is treated as satisfying Section 401(a)(4) of
the Code. If the Plan or aggregated Plan is restructured into component
plans for purposes of testing for compliance with Section 401(a)(4) of
the Code and the actual deferral percentage test, each component plan
resulting from such restructuring shall consist of all of the
allocations, accruals and other benefits, rights and features provided
to a group of Employees under the Plan or aggregated Plan. Each
Employee is permitted to be included in only one such component plan.
If an eligible Highly Compensated Employee is subject to the
family aggregation rules of Section 414(q)(6) of the Code (as described
in the third paragraph of the Highly Compensated Employee definition in
Article I) because such person is either a 5-percent owner (described
in the Highly Compensated Employee definition) or a Highly Compensated
Employee in the group consisting of the ten Highly Compensated
Employees paid the greatest compensation (as described in the Highly
Compensated Employee definition), the combined actual deferral ratio of
the family group (which is treated as one Highly Compensated Employee)
shall be determined by combining the Compensation, as well as
applicable Contributions (described above) which are allocated to the
Employer Nonforfeitable Contributions Accounts of all such eligible
family members described in this sentence. The Compensation, as well as
any Employer Elective Contributions and Qualified Non-Elective
Contributions actually paid over to the Trust for the Plan Year and
allocated to the Employer Nonforfeitable Contributions Accounts of all
eligible family members, are disregarded for purposes of determining
the ADP of the group of Non-Highly Compensated Employees. If any
eligible Employee is required to be aggregated as a member of more than
one family group, all eligible Employees who are members of those
family groups that include such Employee are aggregated as one family
group in accordance with the preceding provisions of this paragraph.
(h) EXCESS EMPLOYER CONTRIBUTIONS OVER ADP LIMITS: In the
event that with respect to any Plan Year, the aggregate amount of
Employer Contributions (taken into account in computing the ADP of
Highly Compensated Employees for the Plan Year) exceeds the maximum
amount of such Employer
III-13
Contributions permitted under the ADP test set out above, then (to the
extent another means of satisfying the ADP test is not implemented by
the Administrative Committee), within two and one-half months from the
end of the Plan Year or as soon as practicable, but not later than the
end of the Plan Year immediately following the Plan Year to which any
such excess Employer Contributions pertain, such excess (plus allocable
income or loss) shall be distributed to Highly Compensated Employees as
provided below.
The amount of such excess Employer Contributions for a Highly
Compensated Employee for a Plan Year shall be determined by the
following leveling method, under which the actual deferral ratio of the
Highly Compensated Employee with the highest actual deferral ratio is
reduced to the extent required to (i) enable the Plan to satisfy the
ADP test set out above, or (ii) cause such Highly Compensated
Employee's actual deferral ratio to equal the ratio of the Highly
Compensated Employee with the next highest actual deferral ratio. This
process shall be repeated until the Plan satisfies the ADP test. For
each Highly Compensated Employee, the amount of such excess Employer
Contributions is equal to the applicable Contributions that were
allocated to such Employee's Employer Nonforfeitable Contributions
Account and taken into account in computing his actual deferral ratio
(determined prior to the application of this and the immediately
preceding sentence), minus the amount determined by multiplying such
Employee's actual deferral ratio (determined after application of this
and the immediately preceding sentence) by his Compensation used in
determining such ratio. The amount of excess contributions that may be
distributed under this subsection to an affected Member for a Plan Year
shall be reduced by any excess deferrals that were previously
distributed to such Member with respect to his taxable year ending with
or within such Plan Year.
Any such excess Employer Contributions shall be allocated to
Members who are subject to the family member aggregation rules of
Section 414(q)(6) of the Code (described in the third paragraph of the
Highly Compensated Employee definition) in the manner prescribed under
Section 1.401(k)-1(f)(5) of the Income Tax Regulations (or any
successor regulations).
Any such excess Employer Contributions shall be treated as
annual additions under Section 4.3 of the Plan.
For purposes of this subsection, in accordance with Section
1.401(k)- 1(f)(4)(ii)(C) of the Income Tax Regulations, income or loss
that is allocable to excess Employer Contributions (described above)
for the Plan Year shall be income or loss allocable to the Member's
Employer Nonforfeitable Contributions Account (to the extent
attributable to applicable Contributions (described above) used in the
ADP test), multiplied by a fraction. The numerator of this fraction is
the Member's excess Employer Contributions for the Plan Year.
III-14
The denominator is the balance of the Member's Employer Nonforfeitable
Contributions Account (to the extent attributable to applicable
Contributions (described above) used in the ADP test), as of the
beginning of that Plan Year, plus the applicable Contributions
(described above) allocated to his Employer Nonforfeitable
Contributions Account for the Plan Year. No income or loss will be
allocated for the gap period between the end of the Plan Year to the
date of distribution for Plan Years beginning on or after January 1,
1992 and, with respect to Plan Years beginning before such date, income
or loss shall be allocated in accordance with the applicable Income Tax
Regulations and the Plan document as then in effect.
Excess Employer Contributions (and any income allocable
thereto) shall be distributed from the portion of the Employer
Nonforfeitable Contributions Account attributable to the Contributions
used in the ADP test. In addition, to the extent that such excess
Employer Contributions are attributable to Elective Contributions (and
any income allocable thereto) which amounts are distributed to the
Member pursuant to the preceding provisions of this subsection,
matching Thrift Contributions (and any income allocable thereto
determined in the same manner as for other contributions) will be
appropriately reduced and such reduced matching Thrift Contributions
(and any income allocable thereto) shall be applied as forfeitures
pursuant to Section 4.6. Such reduction shall be made by reduction of
matching Thrift Contributions allocated to the Member's Employer
Contributions Account. The provisions of this paragraph (which provide
for reduction of matching Thrift Contributions made with respect to
excess Elective Contributions which are distributed hereunder) are
intended to comply with the requirements of Section 401(a), 401(k),
401(m) and 411 of the Code. To the extent that any provision of this
paragraph is inconsistent with the preceding sentence, such provision
shall be deemed to be inoperative and the Plan shall be operated in a
manner that complies with the requirements of the immediately preceding
sentence.
(i) ACTUAL CONTRIBUTION PERCENTAGE TEST: The actual
contribution percentage ("ACP"), as determined for a Plan Year pursuant
to this subsection, for all eligible Highly Compensated Employees shall
not exceed the greater of:
(i) the ACP for the group of all eligible
Non-Highly Compensated Employees multiplied by 1.25, or
(ii) the ACP of the group of all eligible
Non-Highly Compensated Employees multiplied by 2.0; provided,
however, that the ACP for the group of eligible Highly
Compensated Employees may not exceed the ACP of the group of
all eligible Non-Highly Compensated Employees, by more than
two percentage points (2%).
III-15
For purposes of the immediately preceding sentence, the provisions of
Section 401(m) of the Code and Section 1.401(m)-1 of the Income Tax
Regulations are hereby incorporated into the Plan for all purposes.
If any Highly Compensated Employee is eligible to authorize
Elective Contributions under the Plan and to have Thrift Contributions
allocated with respect to the Elective Contributions, or if such Highly
Compensated Employee is eligible to make elective contributions
(described in Section 402(g)(3) of the Code) under any other cash or
deferred arrangement (described in Section 401(k) of the Code) and/or
to make employee contributions (described in Section 401(m) of the
Code) or to receive matching contributions (described in Section
401(m)(4)(A) of the Code) under any other qualified plan of the
Employer and/or any Affiliated Employer regardless of whether such plan
contains a cash or deferred arrangement, the disparities between the
ACPs of the respective groups of eligible Highly Compensated Employees
and Non-Highly Compensated Employees shall be reduced as described in
Section 1.401(m)-2 of the Income Tax Regulations and subsequent
provisions of this subsection.
Subject to the limitations set forth below, the ACP for a
specified group of eligible Employees for a Plan Year shall be the
average of the actual contribution ratios (calculated separately for
each Employee in such group) of the sum of any (i) Thrift Contributions
allocated to the Employee's Employer Contributions Account for the Plan
Year and (ii) to the extent taken into account under Section
1.401(m)-1(b)(5) of the Income Tax Regulations and this subsection, any
Elective Contributions and Qualified Non-Elective Contributions
allocated to the Employee's Employer Nonforfeitable Contributions
Account for such Plan Year, to the Employee's Compensation (defined
below) for the Plan Year. Notwithstanding anything in the preceding
sentence to the contrary, the ACP described in the preceding sentence
shall not include matching Thrift Contributions that are forfeited
either to correct excess aggregate contributions or because the
contributions to which they relate are excess deferrals, excess
contributions or excess aggregate contributions. To the extent that any
Contribution is required to satisfy the ADP test set forth above in
this Section, it may not be used to satisfy the ACP test. For the
purposes of performing the ACP test, Compensation shall mean all
remuneration:
(i) that is (a) received during the Plan Year by
the eligible Employee from the Employer and reported as wages
on the eligible Employee's form W-2 (or its successor) for
federal income tax withholding purposes, but determined
without regard to any rules that limit the remuneration
included in wages based on the nature or location of the
employment or the services performed (such as the exception
for agricultural labor in Section 3401(a)(2) of the Code),
plus (b) any reduction under a compensation deferral agreement
under (1) a plan
III-16
described in Section 401(k) or 408(k) of the Code, (2) an
annuity described in Section 403(b) of the Code or (3) an
election under a cafeteria plan described in Section 125 of
the Code,
(ii) that subject to clause (iv) below, is
actually paid to or is includible (within the meaning of
Section 1.415-2(d)(3) and (4) of the Income Tax Regulations)
in the gross income of the eligible Employee within the
relevant Plan Year, or would have been so paid or includible
but for a reduction described in clause (i) immediately above,
(iii) that does not exceed (i) for Plan Years
beginning prior to January 1, 1994, $200,000 (as adjusted at
such time and in such manner as may be prescribed in Section
415(d) of the Code), and (ii) for Plan Years beginning on or
after January 1, 1994, $150,000 (as adjusted by the
Commissioner of Internal Revenue for increases in the cost of
living in accordance with Section 401(a)(17)(B) of the Code),
and
(iv) that is received by the eligible Employee
only while he is a Member.
For purposes of computing the ACP ratios, Elective
Contributions shall include excess elective deferrals described in
Section 3.1 and any Elective Contributions that are not taken into
account in the ADP test, provided that the ADP test is satisfied both
with and without exclusion of these Elective Contributions. Any
Qualified Non-Elective Contributions allocated to the Member's Employer
Nonforfeitable Contributions Account, as provided above, shall be taken
into account for purposes of the ACP test to the extent that such
amounts are not needed to pass the ADP test. Such actual contribution
ratios of each eligible Employee and the ACP of each group shall be
calculated to the nearest one-hundredth of one percent of the eligible
Employee's Compensation. The actual contribution ratio of an eligible
Employee is zero if no Contributions which are used in computing actual
contribution ratios are allocated on behalf of such Employee.
If the Employer and any Affiliated Employer, individually or
collectively, maintain two or more plans that are treated as a single
plan for purposes of Section 401(a)(4) or 410(b) of the Code (other
than Section 410(b)(2)(A)(ii) of the Code as in effect for Plan Years
which began after December 31, 1988), all employee contributions and
matching contributions, as such contributions are defined in Section
1.401(m)-1(f) of the Income Tax Regulations, are to be treated as made
under a single plan for purposes of this Section and Sections
401(a)(4), 401(k) and 410(b) of the Code. Plans may be aggregated under
the preceding provisions of this paragraph only if they have the same
Plan Year. If any Highly Compensated Employee is a participant under
two or more plans of the Employer
III-17
or any Affiliated Employer which are subject to Section 401(m) of the
Code, for purposes of determining the actual contribution ratio with
respect to such Highly Compensated Employee, all employee and/or
matching contributions described in Section 1.401(m)-1(f) of the Income
Tax Regulations made under such plans must be aggregated. Contributions
and allocations under an employee stock ownership plan described in
Section 4975(e)(7) of the Code may not be combined with contributions
or allocations under any plan not described in Section 4975(e)(7) of
the Code.
With respect to Plan Years beginning prior to January 1, 1992,
the Plan or, if the Plan is aggregated with another plan pursuant to
the previous paragraph, such aggregated Plan may, in the discretion of
the Administrative Committee, be restructured (in accordance with
Sections 1.401(m)-1(g)(5), 1.401(a)(4)-1(c)(8)(iii) and
1.401(a)(4)-9(c) of the Income Tax Regulations) into two or more
component plans for purposes of determining whether the Plan or
aggregated Plan satisfies Section 401(a)(4) of the Code and the ACP
test set forth above. If each of the component plans of the Plan or
aggregated Plan satisfies all of the requirements of Sections 401(a)(4)
and 410(b) of the Code as if it were a separate Plan or aggregated
Plan, then the Plan or aggregated Plan is treated as satisfying Section
401(a)(4) of the Code. If the Plan or aggregated Plan is restructured
into component plans for purposes of testing for compliance with
Section 401(a)(4) of the Code and the ACP test, each component plan
resulting from such restructuring shall consist of all the allocations,
accruals, and other benefits, rights and features provided to a group
of Employees under the Plan or aggregated Plan. Each Employee is
permitted to be included in only one such component plan.
If an eligible Highly Compensated Employee is subject to the
family aggregation rules of Section 414(q)(6) of the Code (described in
the third paragraph of the Highly Compensated Employee definition in
Article I) because such person is either a 5-percent owner (as
described in the Highly Compensated Employee definition) or a Highly
Compensated Employee in the group consisting of the ten Highly
Compensated Employees paid the greatest compensation (as described in
the Highly Compensated Employee definition), the combined actual
contribution ratio of the family group (which is treated as one Highly
Compensated Employee) shall be determined by combining the
Compensation, as well as the applicable Contributions (described above)
which are allocated to the appropriate Accounts of all eligible family
members described in this sentence. The Compensation, as well as the
applicable Contributions (described above) which are allocated to the
appropriate Accounts of all eligible family members are disregarded for
purposes of determining the ACP of the group of Non-Highly Compensated
Employees. If any eligible Employee is required to be aggregated
III-18
as a member of more than one family group, all eligible Employees who
are members of those family groups that include that Employee shall be
aggregated as one family group in accordance with the preceding
provisions of this paragraph.
(j) PROHIBITED MULTIPLE USE OF 2.0/2% ALTERNATIVE LIMITS
FOR THE ADP AND ACP TESTS: Any disparity between the ADP or ACP of the
respective groups of Highly Compensated Employees and Non-Highly
Compensated Employees shall be reduced as described in Section
1.401(m)-2 of the Income Tax Regulations.
Without limiting the scope of the immediately preceding sentence, any
multiple use of the alternative methods of compliance with the ADP and
ACP tests (i.e., the 2.0/2% alternative limit which is described in
clauses (ii) and (iv) below and in Sections 401(k)(3)(A)(ii)(II) and
401(m)(2)(A)(ii) of the Code) shall be determined and corrected, as
appropriate, in accordance with the provisions of this subsection.
Multiple use of such alternative limitation shall occur if the
sum of (a) the ADP of the entire group of eligible Highly Compensated
Employees under the Plan or any other cash or deferred arrangement
(described in Section 401(k) of the Code) of the Employer or an
Affiliated Employer and (b) the ACP of the entire group of eligible
Highly Compensated Employees under the Plan or any other qualified plan
of the Employer or an Affiliated Employer that is subject to Section
401(m) of the Code, exceeds the greater of:
(i) 125 percent of the GREATER of (1) the ADP of
the group of Non-Highly Compensated Employees eligible under
the Plan (or other arrangement of the Employer or Affiliated
Employer that is subject to Section 401(k) of the Code) for
the Plan Year, or (2) the ACP of the group of Non-Highly
Compensated Employees under the Plan (or other plan of the
Employer or Affiliated Employer that is subject to Section
401(m) of the Code) for the Plan Year beginning with the Plan
III-19
Year of the Plan (or other arrangement that is subject to
Section 401(k) of the Code), plus
(ii) the number two (2) plus the LESSER of clause
(1) or (2) of (i) above; provided, however, in no event shall
the amount computed under this (ii) exceed 200 percent of the
lesser of clause (1) or (2) of (i) above; OR
(iii) 125 percent of the LESSER of (1) the ADP of
the group of Non-Highly Compensated Employees eligible under
the Plan (or other arrangement of the Employer or Affiliated
Employer that is subject to Section 401(k) of the Code) for
the Plan Year, or (2) the ACP of the group of Non-Highly
Compensated Employees under the Plan (or other plan of the
Employer or Affiliated Employer that is subject to Section
401(m) of the Code) for the Plan Year beginning with the Plan
Year of the Plan (or other arrangement that is subject to
Section 401(k) of the Code), plus
(iv) the number two (2) plus the GREATER of
clause (1) or (2) of (iii) above; provided, however, in no
event shall the amount computed under this (iv) exceed 200
percent of the lesser of clause (1) or (2) of (iii) above.
Notwithstanding the previous paragraph, multiple use of the
alternative limitation does not occur if (i) the ADP of the group of
Highly Compensated Employees does not exceed 1.25 multiplied by the ADP
of the group of NonHighly Compensated Employees, or (ii) the ACP of the
group of Highly Compensated Employees does not exceed the product of
1.25 multiplied by the ACP of the group of Non-Highly Compensated
Employees.
The ADP and ACP of the group of eligible Highly Compensated
Employees shall be determined after the use of all applicable
Contributions to meet the ADP test and after use of all applicable
Contributions to meet the requirements of the ACP test. In addition,
the ADP and the ACP of the group of eligible Highly Compensated
Employees shall be determined after any required corrective
distribution of excess deferrals, excess Employer Contributions or
excess aggregate Contributions (described below), without regard to the
rules hereunder relating to multiple use of the alternative methods of
compliance contained in this subsection and Sections
401(k)(3)(A)(ii)(II) and 401(m)(2)(A)(ii) of the Code.
If a multiple use of the alternative method of compliance with
Sections 401(k) and 401(m) occurs, in order to eliminate the multiple
use of such alternative method of compliance, the amount of the
reduction to the ADP of the entire group of eligible Highly Compensated
Employees under the Plan (and each other arrangement subject to Section
401(k) of the Code) shall be calculated in the manner described in
Section 3.3(h) of the Plan and Section 1.401(k)-1(f)(2) of the Income
Tax Regulations. Such required reduction shall be treated as an excess
contribution under the arrangement subject to Section 401(k) of the
Code. Instead of reducing the actual deferral ratios of Highly
Compensated Employees, the Employer may eliminate the multiple use of
the alternative limitation by making Qualified Non-Elective
Contributions on behalf of Non-Highly Compensated Employees (pursuant
to Section 3.3(c)) within twelve (12) months after the end of the Plan
Year.
(k) EXCESS AGGREGATE CONTRIBUTIONS OVER ACP LIMITS: In
the event that with respect to any Plan Year, the aggregate amount of
applicable Contributions taken into account under the ACP test (set
forth above) on behalf of Highly Compensated Employees exceeds the
maximum amount of such
III-20
Contributions permitted under the ACP test set out above (determined by
reducing such Contributions made on behalf of Highly Compensated
Employees in order of ACPs beginning with the highest of such
percentages), then, within two and one-half months from the end of the
Plan Year or as soon as practicable, but not later than the end of the
Plan Year immediately following the Plan Year to which any such excess
aggregate Contributions pertain, as described below, such excess (plus
allocable income or loss) shall be forfeited, if forfeitable, or
distributed to Highly Compensated Employees on the basis of the
respective portions of such excess aggregate contributions attributable
to each of the Highly Compensated Employees as provided below. In lieu
of forfeiture or distribution of excess aggregate contributions, within
twelve (12) months after the end of the Plan Year, the Employer may
make Qualified Non-Elective Contributions on behalf of NonHighly
Compensated Employees pursuant to Section 3.3(c) in an amount
sufficient to satisfy the ACP test for the Plan Year.
The amount of such excess aggregate contributions for a Highly
Compensated Employee for a Plan Year shall be determined by the
following leveling method, under which the actual contribution ratio of
the Highly Compensated Employee with the highest actual contribution
ratio is reduced to the extent required to (i) enable the Plan to
satisfy the ACP test, or (ii) cause such Highly Compensated Employee's
actual contribution ratio to equal the ratio of the Highly Compensated
Employee with the next highest actual contribution ratio. This leveling
process shall be repeated until the Plan satisfies the ACP test. For
each Highly Compensated Employee, the amount of such excess aggregate
contributions is equal to the applicable Contributions (described
above) that were taken into account in computing his actual
contribution ratio (determined prior to the application of this and the
immediately preceding sentence), minus the amount determined by
multiplying such Employee's actual contribution ratio (determined after
application of this and the immediately preceding sentence) by his
Compensation used in determining such ratio. Any such excess aggregate
contributions shall be allocated to Members who are subject to the
family member aggregation rules of Section 414(q)(6) of the Code
(described in the third paragraph of the Highly Compensated Employee
definition) in the manner prescribed under Section 1.401(k)-1(f)(5) of
the Income Tax Regulations.
For purposes of this subsection, in accordance with Section
1.401(m)- 1(e)(3)(ii)(C) of the Income Tax Regulations, income or loss
that is allocable excess aggregate contributions (described above) for
the Plan Year shall be income or loss allocable to the applicable
Contributions (described above)
III-21
used in the ACP test multiplied by a fraction. The numerator of this
fraction is the Member's excess aggregate contributions for the Plan
Year. The denominator is the balance in Member's Account to the extent
used in the ACP test as of the beginning of the Plan Year, plus the
applicable Contributions (described above) used in the ACP test for the
Plan Year. No income or loss will be allocated for the gap period
between the end of the Plan Year and the date of distribution for Plan
Years beginning on or after January 1, 1992 and, with respect to Plan
Years beginning before such date, income or loss shall be allocated in
accordance with the Income Tax Regulations and Plan document as then in
effect.
The Administrative Committee (on or before the fifteenth day
of the third month following the end of the Plan Year but, in any
event, before the end of the next Plan Year) shall direct the Trustee
to distribute to the Highly Compensated Employee having the highest
actual contribution ratio, his portion of the excess aggregate
contributions (and income allocable thereto) or, if forfeitable,
forfeit such non-vested excess aggregate contributions attributable to
Thrift Contributions (and income allocable thereto) pursuant to Section
4.6. This process shall be repeated until the ACP test is satisfied, or
until the actual contribution ratio of such Highly Compensated Employee
equals the actual contribution ratio of the Highly Compensated Employee
having the next highest actual contribution ratio. Vested Thrift
Contributions may not be forfeited to correct excess aggregate
contributions; provided, however, an otherwise vested Thrift
Contribution may be forfeited if the Elective Contribution to which
such Thrift Contribution relates is an excess contribution (above the
ADP limits of Section 401(k)(3) of the Code) or an excess deferral
(above the annual dollar limit of Section 402(g) of the Code). The
forfeiture or distribution of excess aggregate contributions (and
allocable income) shall be made in the following order:
(1) Forfeiture of non-vested Thrift Contributions, if
any; and
(2) Distribution of vested Thrift Contributions, if any.
Forfeitures of excess aggregate contributions (and income
allocable thereto) shall be administered in accordance with Section
4.6; provided, however, if forfeitures are allocated to Members under
Section 4.6, no forfeitures may be allocated to a Highly Compensated
Employee whose excess aggregate contributions were reduced pursuant to
the previous paragraph.
Excess aggregate contributions are still counted as Employer
Contributions, for purposes of Sections 404 and 415 of the Code, for
the Plan Year when made, even if distributed from the Plan. In
addition, forfeitures of excess Thrift Contributions to satisfy the ACP
test are still counted as annual additions under Section 415 of the
Code for the Plan Year when made on behalf of the applicable Highly
Compensated Employees from whose Accounts such amounts were forfeited.
If forfeitures are re-allocated to Members' Accounts pursuant to
Section 4.6, such forfeitures are also treated as annual additions
under Section 415 of the Code on behalf of such Members for the Plan
Year in which such amounts are re-allocated.
III-22
(l) MANDATORY DISAGGREGATION OF CERTAIN PLANS:
Notwithstanding any provision of this Section 3.3 to the contrary, the
Plan shall be operated in accordance with Section 1.401(k)-1(g)(11) of
the Income Tax Regulations concerning mandatory disaggregation of
certain types of plans. Subject to all the requirements of Section
1.401(k)-1(g)(11)(iii) of the Income Tax Regulations, the following
plans shall be treated as comprising separate plans:
(i) PLANS BENEFITING COLLECTIVE BARGAINING UNIT
EMPLOYEES. A plan that benefits employees who are included in
a unit of employees covered by a collective bargaining
agreement and employees who are not included in such a
collective bargaining unit is treated as comprising separate
plans.
(ii) ESOPS AND NON-ESOPS. For Plan Years
beginning on or after January 1, 1991, the portion of a plan
that is an employee stock ownership plan described in Section
4975(e) or 409 of the Code (an ESOP) and the portion of the
plan that is not an ESOP are treated as separate plans, except
as otherwise permitted under Section 54.4975-11(e) of the
Income Tax Regulations.
(iii) PLANS BENEFITING EMPLOYEES OF QUALIFIED
SEPARATE LINES OF BUSINESS. If an Employer is treated as
operating qualified separate lines of business for purposes of
Section 410(b) of the Code, the portion of a plan that
benefits employees of one qualified separate line of business
is treated as a separate plan from the portions of the same
plan that benefit employees of the other qualified separate
lines of business of the Employer.
(iv) PLANS MAINTAINED BY MORE THAN ONE EMPLOYER--
(A) MULTIPLE EMPLOYER PLANS. If a plan
benefits employees of more than one Employer and the
employees are not included in a unit of employees
covered by a collective bargaining agreement (a
multiple employer plan), the plan is treated as
comprising separate plans each of which is maintained
by a separate Employer.
(B) MULTIEMPLOYER PLANS. The portion of
a plan that benefits employees who are included in a
collective bargaining unit, the portion of a plan
that benefits employees who are included in another
collective bargaining unit and the portion of a plan
that benefits non-collective bargaining unit
employees are all treated as separate plans.
Consistent with Section 413(b) of the Code, the
portion of a plan that is maintained pursuant to a
III-23
collective bargaining agreement is treated as a
single plan maintained by a single employer that
employs all the employees benefiting under the same
benefit computation formula and covered pursuant to
that collective bargaining agreement. The
noncollectively bargained portion of the plan is
treated as maintained by one or more employers,
depending on whether the non-collective bargaining
unit employees who benefit under the plan are
employed by one or more employers.
3.4 COMPOSITION OF AND DEADLINE FOR PAYMENT OF EMPLOYER
CONTRIBUTIONS: Employer Contributions shall be paid to the Trustee in cash or in
kind (including shares of common stock of the Plan Sponsor). Should
contributions be made in the form of common stock of the Plan Sponsor, which is
not issued and purchased on the open market or otherwise, for purposes of
determining the number of shares to be contributed to the Plan, common stock of
the Plan Sponsor shall be valued at its closing price on the date last traded on
or prior to the most recent valuation date (or its closing price or average
closing prices on such other date(s) as may be prescribed by the Administrative
Committee under nondiscriminatory rules uniformly applied to all Members)
immediately preceding the date on which such shares are contributed to the Plan.
For purposes of the preceding sentence, in the event the shares of common stock
of the Employer are not readily readable on an established securities market,
with respect to activities carried on by the Plan, such shares shall be valued
by an independent appraiser (meeting the requirements similar to those contained
in Treasury regulations issued under Section 170(a)(1) of the Code) immediately
preceding the date on which the shares are to be contributed to the Plan.
Any Employer Elective Contributions made pursuant to Compensation
Deferral Agreements for the Plan Year shall be paid to the Trustee (in
installments based on the Employer's pay period and in an amount equal to the
amount by which all Members' Considered Compensation was reduced pursuant to
Compensation Deferral Agreements applicable to the pay period) not later than
thirty (30) days after the end of the Employer's pay period to which such
Contributions are attributable, while all other Contributions of an Employer for
each Plan Year shall be paid to the Trustee in one or more installments as the
Administrative Committee may from time to time determine; provided, however, the
Contribution may be paid not later than the time prescribed by law for filing
the Employer's federal income tax return (including extensions thereof) for such
Employer's taxable year ending with or within the Plan Year if (i) the
Contribution is treated by the Plan in the same manner that the Plan would treat
a Contribution actually received on the last day of such taxable year and (ii)
either of the following conditions are satisfied: (1) the Employer designates
the Contribution in writing to the Trustee as a payment on account of such
taxable year, or (2) the Employer claims such Contribution as a deduction on its
federal income tax return for such taxable year; and, further provided, that to
the extent required under regulations or other authority prescribed by the
appropriate governmental authority, any Contributions which are taken into
account for purposes of determining the ADP or ACP (defined in Section 3.3)
shall (in addition to the limitations thereon under the Plan with respect to
vesting and withdrawals) be paid to the Trustee not later than the last day of
the 12-month period that immediately follows the end of the Plan Year to which
such Contributions pertain. To the extent required under regulations or other
authority issued by the appropriate governmental authority, Thrift Contributions
which are taken into account for the ACP (defined in Section 3.3) shall
similarly be paid to the Trustee not later than the
III-24
last day of the 12-month period that immediately follows the end of the Plan
Year to which such Contributions pertain.
3.5 RETURN OF CONTRIBUTIONS FOR MISTAKE, DISQUALIFICATION OR
DISALLOWANCE OF DEDUCTION: The assets of the Trust herein created shall in no
event be paid to or revert to any Employer or be used for any purpose other than
the exclusive benefit of the Members and their Beneficiaries and the reasonable
expenses of administering the Plan except that:
(a) If an Employer makes a Contribution by mistake of
fact, such mistaken Contribution may revert and be repaid to the
Employer within one year after the payment of the Contribution;
(b) The Employer's Contribution for each Plan Year is
conditioned on the Plan's initial qualification under Section 401 of
the Code and the Employer's Contribution may revert and be repaid to
the Employer within one year after the date of denial of the initial
qualification of the Plan; and
(c) The Employer's Contribution is conditioned upon the
deductibility thereof under Section 404 of the Code and, to the extent
the deduction is disallowed, the Contribution may revert and be repaid
to the Employer within one year after the disallowance of the
deduction.
In any case hereinabove described in clauses (a), (b), or (c) of this
Section, the Employer shall, subject to the limitations set forth below, have
exclusive authority and absolute discretion to determine whether a Contribution,
or any part thereof, shall revert and be repaid to it or shall instead remain a
part of the Trust Fund. The amount which may be repaid to the Employer under
clauses (a) or (c) of this Section may not exceed the excess of (i) the amount
contributed over (ii) the amount that would have been contributed had there not
occurred a mistake of fact or a mistake in determining the deduction. Earnings
attributable to such excess contribution shall not be repaid, and losses
attributable thereto shall reduce the amount which may be returned. If the
repayment of the amount attributable to the mistaken Contribution would cause
the balance of any Member's Account to be reduced to less than the balance which
would have been in the Account had the mistaken amount not been contributed,
then the amount which may be repaid to the Employer shall be limited so as to
avoid such reduction.
III-25
ARTICLE IV
PARTICIPATION
4.1 PERIODIC CERTIFICATION BY EMPLOYER: As soon as practicable
after each Plan Year (or such shorter period as may be prescribed by the
Administrative Committee), each Employer shall certify to the Administrative
Committee the amount of any Elective, Thrift, and Qualified Non-Elective
Contributions that it made for the period then ended, the names of its Members
entitled to share in each type of Contribution, the number of years of Active
Service of its Members, the amount of Considered Compensation paid to each such
Member for such period, and the amount of Considered Compensation paid to all
its Members for such period. Such certification shall be conclusive evidence of
such facts.
4.2 ALLOCATION OF EMPLOYER CONTRIBUTIONS:
As of the end of each applicable pay period, Employer Elective
Contributions authorized by the Member for such pay period pursuant to a
Compensation Deferral Agreement and made by the Employer on behalf of the Member
shall be credited to the Member's Employer Nonforfeitable Contributions Account.
As of such last day of each Plan Year (or such shorter period as may be
prescribed by the Board) to which any Employer Thrift Contributions apply,
Employer Thrift Contributions described in Section 3.3(b) which are made by the
Employer on behalf of each Member who satisfies the requirements of Section
3.3(b) shall be credited to each such Member's Employer Contributions Account.
As of the end of the Plan Year to which any Employer Qualified
Non-Elective Contribution applies, the Administrative Committee shall allocate
the Employer Qualified Non-Elective Contribution for the Plan Year (made in
accordance with Section 3.3(c)) among each eligible Member who satisfies the
requirements of Section 3.3(c) in the proportion that the total Considered
Compensation of each such Member for the Plan Year bears to total Considered
Compensation for all such Members for such Plan Year, and shall credit each such
Member's proportionate share to his Employer Nonforfeitable Contributions
Account.
Notwithstanding any other provision of the Plan to the contrary, if the
Plan is a Top-Heavy Plan described in Article VII for the Plan Year, such
portion of the Employer's Contribution (made pursuant to Section 3.3(e)) shall
be allocated among the Employer's Members who are in its employ at the end of
the Plan Year (including Members who, except for Section 7.4(f) of the Plan, may
not otherwise be entitled to share in the allocation) as required to ensure that
each such Member is credited with an amount which, when added to any other
portion of the Employer Contribution allocated to his Account, will equal the
minimum allocation required under Section 7.3(c) of the Plan. Any such amount
shall be specially allocated pursuant hereto and credited to the Member's
Employer Contributions Account.
IV-1
The Administrative Committee shall allocate any Employer Contribution
(made in accordance with Section 3.3(d) to restore an Account in accordance with
Section 4.6) to the Account required to be restored under Section 4.6. The
Administrative Committee shall temporarily hold any Employer Contribution (made
in accordance with Section 3.3(d) to restore an Account in accordance with
Section 6.7) in an unallocated distribution account until it can be paid out in
accordance with Section 6.7. Distribution from the unallocated distribution
account to the appropriate person shall be made as soon as practicable.
If a Member has been Transferred during a pay period or the Plan Year,
such Member shall be entitled to have allocated to his Account a portion of the
Employer Contribution made by each Employer by whom such Member was employed
during such pay period or Plan Year, and such Member's share of each Employer's
Contribution shall be computed with respect to each such Employer in the manner
hereinabove provided.
4.3 LIMITATION ON ADDITIONS TO ACCOUNT:
Capitalized terms used in this Section which are not otherwise defined
in Article I of the Plan are defined in Section 4.3(d).
(a) MEMBER COVERED SOLELY IN THIS PLAN: This Section
4.3(a) applies only if the Member does not participate in, and has
never participated in, another qualified plan, a welfare benefit fund,
as defined in Section 419(e) of the Code, or an individual medical
account, as defined in Section 415(l)(2) of the Code, which is
maintained by the Employer and provides an Annual Addition during the
Limitation Year.
(i) If the Member does not participate in, and
has never participated in another qualified plan, a welfare
benefit fund, as defined in Section 419(e) of the Code, or an
individual medical account, as defined in Section 415(l)(2) of
the Code, maintained by the Employer, the amount of Annual
Additions which may be credited to the Member's Account as of
any allocation date for any Limitation Year will not exceed
the lesser of (1) the Maximum Permissible Amount or (2) any
other limitation contained in the Plan. If the Employer
Contribution that would otherwise be contributed or allocated
to the Member's Account would cause the Annual Additions for
the Limitation Year to exceed the Maximum Permissible Amount,
the amount contributed or allocated will be reduced so that
the Annual Additions for the Limitation Year will equal the
Maximum Permissible Amount.
(ii) Prior to the determination of the Member's
actual compensation for a Limitation Year, the Employer may
determine the Maximum Permissible Amount on the basis of a
reasonable estimation of
IV-2
the Member's annual Compensation for such Limitation Year,
uniformly determined for all Members similarly situated.
(iii) As soon as is administratively feasible
after the end of the Limitation Year, the Maximum Permissible
Amount for such Limitation Year shall be determined on the
basis of the Member's actual Compensation for such Limitation
Year.
(iv) Pursuant to Section 1.415-6(b)(6) of the
Income Tax Regulations, if, as a result of the allocation of
forfeitures, a reasonable error in estimating a Member's
annual compensation, a reasonable error in determining the
amount of elective deferrals (within the meaning of Section
3.1 of the Plan and Section 402(g)(3) of the Code) that may be
made with respect to a Member under the limits of Section 415
of the Code, or any other facts and circumstances as the
Internal Revenue Service determines justify the availability
of this Section 4.3(a)(iv), there is an Excess Amount with
respect to a Member for a Limitation Year, such Excess Amount
shall be disposed of as follows:
(1) First, if the Member is in the
service of the Employer at the end of the Limitation
Year, then such Excess Amounts in the Member's
Account must not be distributed to the Member, but
shall be reallocated to a temporary suspense account
and shall be reapplied to reduce future Employer
Contributions under the Plan for such Member in the
next Limitation Year, and for each succeeding
Limitation Year, if necessary.
(2) If after application of Section
4.3(a)(iv)(1) an Excess Amount still exists, and the
Member is not in the service of the Employer at the
end of the Limitation Year, then such Excess Amounts
in the Member's Account must not be distributed to
the Member, but shall be reallocated to a temporary
suspense account and shall be reapplied to reduce
future Employer Contributions for all remaining
Members in the next Limitation Year and each
succeeding Limitation Year if necessary.
(3) If a temporary suspense account is
in existence at any time during the Limitation Year
pursuant to this Section 4.3(a), it will not
participate in the allocation of the Trust's
investment gains and losses. If a suspense account is
in existence at any time during a Limitation Year,
all amounts in the suspense account must be applied
as set forth above before any Employer Contributions
may be made to the Plan for that Limitation Year.
Excess Amounts may not be distributed to Members or
former Members.
IV-3
If due to a reasonable error in determining the amount of
Elective Contributions that may be made within the limits of Section
415 of the Code, in accordance with Section 1.415-6(b)(6) of the Income
Tax Regulations, the Plan shall distribute Elective Contributions to
the extent that such distribution reduces the Excess Amount. Any such
amounts distributed shall not be taken into account for purposes of
computing (i) the dollar limit on Elective Contributions under Section
3.1 of the Plan and Section 402(g) of the Code, (ii) the ADP test under
Section 3.3 of the Plan and Section 401(k)(3) of the Code, and (iii)
the ACP test under Section 3.3 of the Plan and Section 401(m)(2) of the
Code.
(b) MEMBER COVERED UNDER DEFINED CONTRIBUTION PLAN: This
Section 4.3(b) applies if, in addition to the Plan, the Member is
covered under another qualified plan which is a defined contribution
plan, a welfare benefit fund, as defined in Section 419(e) of the Code,
or an individual medical account, as defined in Section 415(l)(2) of
the Code, maintained by the Employer during any Limitation Year, which
provides an Annual Addition during the Limitation Year.
(i) The Annual Additions which may be credited to
a Member's Account under the Plan for any such Limitation Year
will not exceed the lesser of (1) the Maximum Permissible
Amount reduced by the Annual Additions credited to a Member's
account under the other plans, welfare benefit funds and
individual medical accounts for the same Limitation Year or
(2) any other limitation contained in the Plan. If the Annual
Additions with respect to the Member under other defined
contribution plans, welfare benefit funds, and individual
medical accounts, maintained by the Employer are less than the
Maximum Permissible Amount and the Employer Contribution that
would otherwise be contributed or allocated to the Member's
Account under the Plan would cause the Annual Additions for
the Limitation Year to exceed this limitation, the amount
contributed or allocated will be reduced so that the Annual
Additions under all such plans and funds for the Limitation
Year will equal the Maximum Permissible Amount. If the Annual
Additions with respect to the Member under such other defined
contribution plans, welfare benefit funds, and individual
medical accounts, in the aggregate are equal to or greater
than the Maximum Permissible Amount, no amount will be
contributed or allocated to the Member's Account under the
Plan for the Limitation Year.
(ii) Prior to determining the Member's actual
Compensation for the Limitation Year, the Employer may
determine the Maximum Permissible Amount in the manner
described in Section 4.3(a)(ii).
(iii) As soon as is administratively feasible
after the end of the Limitation Year, the Maximum Permissible
Amount for the Limitation
IV-4
Year shall be determined on the basis of the Member's actual
Compensation for such Limitation Year.
(iv) Pursuant to Section 1.415-6(b)(6) of the
Income Tax Regulations, if, as a result of the allocation of
forfeitures, a reasonable error in estimating a Member's
annual compensation, a reasonable error in determining the
amount of elective deferrals (within the meaning of Section
3.1 of the Plan and Section 402(g)(3) of the Code) that may be
made with respect to a Member under the limits of Section 415
of the Code, or any other facts and circumstances as the
Internal Revenue Service determines justify the availability
of this Section 4.3(b)(iv), a Member's Annual Additions under
the Plan and all such other plans result in an Excess Amount,
such Excess Amount shall be deemed to consist of the Annual
Additions last allocated, except that Annual Additions
attributable to a welfare benefit fund will be deemed to have
been allocated first regardless of the actual allocation date.
(v) If an Excess Amount was allocated to a
Member's Account on an allocation date of the Plan which
coincides with an allocation date of another plan, the Excess
Amount attributed to the Plan will be the product of:
(1) the total Excess Amount allocated as
of such date, multiplied by
(2) the ratio of (A) the Annual
Additions allocated to the Member's Account for the
Limitation Year as of such date under the Plan,
divided by (B) the total Annual Additions allocated
to the Member's Account for the Limitation Year as of
such date under the Plan and all qualified defined
contribution plans.
(vi) Any Excess Amounts attributed to the Plan
shall be disposed of as provided in Section 4.3(a)(iv).
If due to a reasonable error in determining the
amount of Elective Contributions that may be made within the
limits of Section 415 of the Code, in accordance with Section
1.415-6(b)(6) of the Income Tax Regulations, the Plan shall
distribute Elective Contributions to the extent that such
distribution reduces the Excess Amount. Any such amounts
distributed shall not be taken into account for purposes of
computing (i) the dollar limit on Elective Contributions under
Section 3.1 of the Plan and Section 402(g) of the Code, (ii)
the ADP test under Section 3.3 of the Plan and Section
401(k)(3) of the Code, and (iii) the ACP test under Section
3.3 of the Plan and Section 401(m)(2) of the Code.
IV-5
(c) MEMBER COVERED UNDER DEFINED BENEFIT PLAN: If the
Employer maintains, or at any time maintained, a qualified defined
benefit plan covering any Member of the Plan, the sum of the Member's
Defined Benefit Fraction and Defined Contribution Fraction will not
exceed 1.0. For purposes of this Section 4.3, all defined contribution
plans of an Employer are to be treated as one defined contribution plan
and all defined benefit plans of an Employer are to be treated as one
defined benefit plan, whether or not such plans have been terminated.
If the sum of the Defined Contribution Fraction and Defined Benefit
Plan Fraction exceeds 1.0, the rate of accrual of the annual benefit of
the defined benefit plan(s) will be reduced so that the sum of the
fractions will not exceed 1.0. In no event will the annual benefit be
decreased below the amount of the accrued benefit to date. If
additional reductions are required for the sum of the fractions to
equal 1.0, the reductions will then be made to the Annual Additions of
the defined contribution plans. If the defined benefit plan does not
contain provisions which correspond to this provision, the Annual
Addition to the defined contribution plans for the Limitation Year will
be reduced so that the sum of the fractions will not exceed 1.0.
(d) DEFINITIONS: For purposes of this Section 4.3, the
following terms shall be defined as follows:
(i) ANNUAL ADDITION -- With respect to any
Member, an Annual Addition for the Limitation Year shall be
the sum of (1) all Employer Contributions allocated to his
Account; (2) any forfeitures allocated to his Account; and (3)
the amount of any nondeductible after-tax employee
contributions allocated to his Account. Moreover, any Excess
Amounts applied under Section 4.3(a)(iv) or 4.3(b)(vi) during
the Limitation Year to reduce Employer Contributions shall be
considered to be Annual Additions for such Limitation Year.
Subject to the correction rules of Section 4.3(a)(iv),
Contributions do not fail to be Annual Additions merely
because they are excess deferrals (described in Section 3.1(c)
of the Plan), excess contributions above the ADP limits
(described in Section 3.3(g) of the Plan), or excess aggregate
contributions above the ACP limits (described in Section
3.3(i) of the Plan); provided, however, excess deferrals which
are timely distributed by April 15 following the year of
deferral to the applicable Member pursuant to Section 3.1(d)
of the Plan are not Annual Additions.
Amounts allocated, after March 31, 1984, to an
individual medical account, as defined in Section 415(l) of
the Code, which is part of a defined benefit plan maintained
by the Employer, are treated as Annual Additions to a defined
contribution plan. Also, amounts derived from contributions
paid or accrued after December 31, 1985, in taxable years
ending after such date, which are attributable to
postretirement medical
IV-6
benefits allocated to the separate account of a key employee,
as defined in Section 419A(d)(3) of the Code, under a welfare
benefit fund, as defined in Section 419(e) of the Code,
maintained by the Employer, are treated as Annual Additions to
a defined contribution plan.
(ii) COMPENSATION -- For each Limitation Year, a
Member's wages (as defined in Section 3401(a) of the Code for
purposes of income tax withholding at the source) that are
paid (within the meaning of Section 1.415-2(d)(3) and (4) of
the Income Tax Regulations) to the Member by the Employer
during the Limitation Year for services performed and
reportable on the Member's form W-2 (or its successor), but
determined without regard to any rules that limit the
remuneration included in wages based on the nature or location
of the employment or the services performed (such as the
exception for agricultural labor in Section 3401(a)(2) of the
Code). For each Limitation Year commencing prior to January 1,
1991, Compensation for purposes of this Section shall be
defined by reference to Section 1.415-2(d)(1) and (2) of the
Income Tax Regulations.
(iii) DEFINED BENEFIT FRACTION -- A fraction, the
numerator of which is the sum of the Member's Projected Annual
Benefits under all the defined benefit plans (whether or not
terminated) maintained by the Employer and, subject to
application of Section 416(h) of the Code and Article VII of
the Plan relating to Top-Heavy Plans, the denominator of which
is the lesser of 125 percent of the dollar limitation in
effect for the Limitation Year under Section 415(b)(1)(A) and
Section 415(d) of the Code or 140 percent of the Highest
Average Compensation, including any adjustments under Section
415(b) of the Code.
(iv) DEFINED CONTRIBUTION FRACTION -- A fraction,
the numerator of which is the sum of the Annual Additions to
the Member's account under all the defined contribution plans
(whether or not terminated) maintained by the Employer for the
current and all prior Limitation Years (including the Annual
Additions attributable to the Member's nondeductible employee
contributions to all defined benefit plans, whether or not
terminated, maintained by the Employer, and the Annual
Additions to all welfare benefit funds as defined in Section
419(e) of the Code, and individual medical accounts, as
defined in Section 415(l)(2) of the Code, maintained by the
Employer), and the denominator of which is the sum of the
Maximum Aggregate Amounts for the current and all prior
Limitation Years of service with the Employer (regardless of
whether a defined contribution plan was maintained by the
Employer). Subject to application of Section 416(h) of the
Code and Article VII of the Plan relating to TopHeavy Plans,
the Maximum Aggregate Amount in any Limitation Year is
IV-7
the lesser of 125 percent of the dollar limitation in effect
under Section 415(c)(1)(A) of the Code or 35 percent of the
Member's Compensation for such year.
(v) EMPLOYER -- The Employer that adopts the
Plan. In the case of a group of Employers which constitutes a
controlled group of corporations (as defined in Section 414(b)
of the Code as modified by Section 415(h) of the Code) or
which constitutes trades or businesses (whether or not
incorporated) which are under common control (as defined in
Section 414(c) as modified by Section 415(h) of the Code) or
all members of an affiliated service group (as defined in
Section 414(m) of the Code) or any other entity required to be
aggregated with the Employer pursuant to regulations under
Section 414(o) of the Code, all such Employers shall be
considered a single Employer for purposes of applying the
limitations of this Section 4.3.
(vi) EXCESS AMOUNT -- The excess of the Annual
Additions credited to the Member's Account for the Limitation
Year over the Maximum Permissible Amount.
(vii) HIGHEST AVERAGE COMPENSATION -- The average
compensation for the three consecutive years of service with
the Employer that produces the highest average. A year of
service with the Employer is the 12-consecutive-month period
which corresponds with the Limitation Year.
(viii) LIMITATION YEAR -- The 12-consecutive-month
period which begins on the first day of the Plan Year and
anniversaries thereof. All qualified plans maintained by the
Employer must use the same Limitation Year. If the Limitation
Year is amended to a different 12-consecutive- month period,
the new Limitation Year must begin on a date within the
Limitation Year in which the amendment is made.
(ix) MAXIMUM PERMISSIBLE AMOUNT -- The Maximum
Permissible Amount with respect to any Member shall be the
lesser of (1) $30,000 (or, if greater, one-fourth of the
defined benefit dollar limitation set forth in Section
415(b)(1) of the Code as in effect for the Limitation Year) or
(2) except as otherwise provided below, 25 percent of his
actual Compensation for the Limitation Year. Effective on
January 1 of the calendar year prescribed in Section 415(d) of
the Code and each January 1 thereafter, the $30,000 limitation
above will be automatically adjusted to the new dollar
limitation determined by the Commissioner of Internal Revenue
for that calendar year in accordance with applicable
provisions of Sections 415(b), 415(c) and 415(d) of the Code.
The new
IV-8
limitation will apply to Limitation Years ending within the
calendar year of the date of the adjustment. The 25 percent of
actual Compensation limitation referred to above shall not
apply to any contribution for medical benefits (within the
meaning of Section 401(h) or Section 419A(f)(2) of the Code)
after separation from service which is otherwise treated as an
Annual Addition, or to any other amount otherwise treated as
an Annual Addition under Section 415(l)(1) or Section
419A(d)(2) of the Code.
If a short Limitation Year is created because of an
amendment changing the limitation to a different
12-consecutive-month period, the Maximum Permissible Amount
shall not exceed the defined contribution dollar limitation
for the short Limitation Year determined as follows: the
dollar limitation in effect for the calendar year in which the
short Limitation Year ends will be multiplied by a fraction,
the numerator of which is the number of months in the short
Limitation Year, and the denominator of which is 12.
(x) PROJECTED ANNUAL BENEFIT -- A Member's annual
retirement benefit (adjusted to the actuarial equivalent of a
straight life annuity if expressed in a form other than a
straight life or qualified joint and survivor annuity) to
which the Member would be entitled under the respective plan,
assuming that the Member will continue employment until the
later of current age or normal retirement age under the
respective plan, and that the participant's compensation for
the current Limitation Year and all other relevant factors
used to determine benefits under the respective plan will
remain constant for all future Limitation Years.
4.4 PERIODIC VALUATION OF TRUST FUND: Subject to Section 4.10, at
the end of each Plan Year (or such shorter accounting period as may be
prescribed by the Administrative Committee) the Trustee shall revalue the Trust
Fund (excluding any Contributions made to the Trust during such Plan Year) at
its then fair market value, determine the amount of income earned or loss
suffered by the Trust Fund and/or appreciation or depreciation in the Trust Fund
for the applicable accounting period then ended, and certify such information to
the Administrative Committee. With respect to Members' Accounts, the balances of
which have not been withdrawn, distributed or otherwise paid pursuant to
applicable provisions of the Plan as of the last day of the applicable
accounting period, the Administrative Committee shall allocate such income or
loss and any appreciation or depreciation of the Trust Fund among the Accounts
of each Member (without regard to whether the Member is employed by the Employer
at the end of the applicable accounting period) in the ratio that the balance
credited to such Accounts as of the first day of the applicable accounting
period bears to the total of the balances credited as of the first day of the
applicable accounting period of all such Accounts. Provided, however, that the
income or loss and appreciation or depreciation for the first Plan Year (or such
shorter accounting period as may be prescribed by the Administrative Committee)
only will be allocated
IV-9
to such Accounts on the basis of account balances as of the end of the first
Plan Year or other applicable accounting period.
Prior to the allocations described in this Section 4.4, Account
balances shall be reduced as appropriate by forfeitures, withdrawals, payments
or distributions, or other amounts properly chargeable to Members' Accounts
under the Plan during the applicable accounting period. Notwithstanding the
above, solely for purposes of the allocations made under this Section 4.4,
pursuant to nondiscriminatory rules which may be established by the
Administrative Committee, any Rollover Contributions credited to the Member's
Rollover Account, any direct transfers credited to the Member's Predecessor Plan
Account, and/or any Contributions credited to the Member's Employer Account,
shall be taken into account to ensure that such amounts transferred or
contributed to the Plan share in the allocations hereunder with respect to such
accounting period; provided, however, the Administrative Committee shall not be
required to establish any such rules.
4.5 EXTRAORDINARY VALUATION OF TRUST FUND: Subject to Section
4.10, at any time or times during a Plan Year (or such shorter accounting period
as may be prescribed by the Administrative Committee) that one or more of the
Members become eligible for a distribution hereunder, or one or more Members
request a withdrawal in accordance with applicable provisions of Article VI of
the Plan, and the Administrative Committee determines that because of such
distribution or withdrawal a revaluation of the Trust Fund, a determination of
the Trust Fund's income or loss and an interim allocation are necessary to
prevent discrimination against those Members who have not requested a
distribution or withdrawal, the Trustee shall revalue the Trust Fund (excluding
any Contributions made to the Trust during such Plan Year), as of a date
selected by the Administrative Committee (which is administratively practical
and is near the date of distribution or withdrawal), at its then fair market
value, determine the amount of income earned or loss suffered by the Trust for
the period then ended, and certify such information to the Administrative
Committee.
Subject to Section 4.10, with respect to Members' Accounts, the
balances of which have not been withdrawn, distributed or otherwise paid
pursuant to applicable provisions of the Plan as of the date that an
extraordinary valuation is required, the Administrative Committee shall allocate
such income or loss and appreciation or depreciation of the Trust Fund to each
Member's Account (without regard to whether the Member is employed by the
Employer on the date that an extraordinary valuation is required) in the ratio
that the balance credited to each Member's Account as of the first day of the
applicable accounting period bears to the total of the balances credited to all
such Members' Accounts as of the first day of the applicable accounting period.
The Administrative Committee shall then allocate the income or loss and
appreciation or depreciation which was allocated to each Member's Account among
each Member's individual accounts maintained under his Account in the ratio that
the balance credited to each individual account as of the first day of the
applicable accounting period bears to the total balance credited to his Account
as of the first day of the applicable accounting period.
IV-10
Prior to the allocations described in this Section, Account balances
shall be reduced as appropriate by forfeitures, withdrawals, payments or
distributions, or other amounts properly chargeable to Members' Accounts during
the applicable accounting period. Notwithstanding the above, solely for purposes
of the allocations made under this Section pursuant to nondiscriminatory rules
which may be established by the Administrative Committee, on or after the first
day of the applicable accounting period, any Rollover Contributions credited to
the Member's Rollover Account, any direct transfer allocated to the Member's
Predecessor Plan Account, and/or any Contributions credited to the Member's
Employer Account, shall be taken into account to ensure that such amounts
transferred or contributed to the Plan share in the allocations hereunder with
respect to such accounting period; provided, however, the Administrative
Committee shall not be required to establish any such rules.
4.6 FORFEITURES AND ALLOCATION THEREOF: In the event that a Member
terminates employment with any Employer and all Affiliated Employers, his vested
interest will be paid (or deemed to be paid in the case of a nonvested Member)
in accordance with Section 6.6, and any nonvested amount shall be immediately
forfeited. Not later than the last day of the Plan Year in which such
distribution (or deemed distribution) occurred, such forfeiture shall be applied
first to reinstate any Account required to be reinstated during the Plan Year
under the subsequent provisions of this Section, and any remaining forfeitures
shall then be applied to reduce any subsequent Contributions of the Employer
which contributed with respect to the amounts forfeited.
If a former Member who, pursuant to Section 6.6 (including Section 6.6
(d) relating to direct rollovers), received a distribution (or is deemed to have
received such distribution in the case of a nonvested former Member) which
includes the full amount of his entire vested interest in his Employer Account
as a result of his termination of participation in the Plan, which distribution
is $3,500 or less, or is more than $3,500 but is consented to, resumes
employment covered under the Plan, his Employer Account shall be restored if he
was not fully vested in such amount allocated to his Employer Account and if he
repays to the Trustee the full amount of such distribution attributable to
Employer Contributions prior to the earlier of (i) the date on which he incurs a
period of five (5) consecutive one year breaks in Active Service following the
date of the distribution, or (ii) five (5) years after the first date that the
Member is subsequently re-employed by the Employer. For purposes of this
Section, a distribution shall be deemed to be made as a result of termination of
participation in the Plan if it is made not later than the close of the second
Plan Year following the Plan Year in which such termination occurs.
Notwithstanding any other provision of the Plan to the contrary, in the event
that a Member does not actually or constructively receive a distribution before
the close of the second Plan Year following the Plan Year in which his
employment terminated, the otherwise applicable repayment and/or restoration
provisions of this Section shall not apply and (i) any amount remaining in his
Employer Contributions Account shall continue to be maintained in a separate
account and his nonvested interest in such account shall be determined with
reference to the formula set forth in Section 6.11 and (ii) the forfeitable
portion of such Member's separate Employer Contributions Account that is subject
to such formula shall be forfeited on the date on which the Member incurs a
period of five (5) consecutive one year breaks in Active Service.
IV-11
If a former Member did not have a vested interest in his Employer
Contributions Account at the time of his termination of participation in the
Plan and thus is deemed under Section 6.6 to have received a distribution of a
vested interest in his Employer Contributions Account equal to zero (thus
actually receiving no distribution from his Employer Contributions Account as a
result of his termination of participation in the Plan), his Employer
Contributions Account will be restored if he resumes employment covered under
the Plan prior to incurring a period of five (5) consecutive one year breaks in
Active Service following the date of the termination.
If (pursuant to applicable provisions of Section 6.6) a former Member
received a distribution which was less than the full amount of the Member's
entire vested interest in his Employer Account, which interest is $3,500 or
less, or is more than $3,500 but is consented to, his Employer Account shall be
restored without any requirement that he repay to the Trustee the full amount of
the distribution attributable to Employer Contributions if he resumes employment
covered under the Plan prior to incurring a period of five (5) consecutive one
year breaks in Active Service following the date of the termination. However,
any future distribution from the Employer Account shall be subject to Section
6.5 which concerns offsetting the amount of the prior distribution that was not
repaid against a future distribution when made.
The amount to be restored under the preceding provisions of this
Section shall be the amount credited to the Member's Employer Account, both the
vested and the nonvested portions, immediately prior to the Member's
distribution (or deemed distribution), unadjusted by any subsequent gains or
losses. The balance of the Member's Employer Account shall be restored (as soon
as administratively practicable after the later of the date the Member resumes
employment covered under the Plan or the date on which any required repayment is
completed) effective as of the end of the Plan Year coincident with or next
following the occurrence of the event which gives rise to the restoration of the
Member's Employer Account.
Except as otherwise provided above, a Member's Employer Account shall
not be restored upon resumption of employment covered under the Plan. Any
portion of the Trust Fund attributable to Active Service prior to resumption of
employment by a Member whose Employer Account has not been restored shall be
held and distributed in accordance with applicable provisions of the Plan and
elections made thereunder. A separate Account may be established and maintained
for Contributions allocable to such a Member after his resumption of employment
covered under the Plan.
4.7 EFFECTIVE DATE OF ALLOCATIONS AND ADJUSTMENTS: The
Administrative Committee will credit to each eligible Member's Account the
Member's portion of the Employer Contributions referred to in Section 4.2 so
that all Employer Contributions will become effective and will be credited to
each Member's Account as of the end of the Plan Year (or such shorter accounting
period as may be prescribed by the Administrative Committee) for which they are
attributable.
In addition, any amounts contributed to any Member's Rollover Account
or Predecessor Plan Account shall be credited to the appropriate Account as of
the end of the Plan Year (or
IV-12
such shorter accounting period as may be prescribed by the Administrative
Committee) to which they are attributable.
The Administrative Committee shall credit to each Member's Account such
Member's portion of the periodic adjustments and allocations required by Section
4.4 so that all periodic adjustments and allocations will become effective and
will be credited to each Member's Account as of the end of the Plan Year (or
such shorter accounting period as may be prescribed by the Administrative
Committee) for which they are attributable.
In the event that interim adjustments and allocations are required by
Section 4.5, they will become effective and will be entered in each Member's
Account as of the end of the applicable accounting period next preceding the
event requiring the interim adjustment and, additionally, allocation and
distribution of benefits during the applicable accounting period in which the
interim adjustment or allocation is made shall take into account the interim
adjustments and allocations.
4.8 ACCOUNTING FOR TRANSFERRED MEMBER: In the case of a Member who
is Transferred during a Plan Year, the Administrative Committee, as of the date
that the Member is Transferred, shall transfer on their books such Member's
Account (including that portion of the Trust Fund allocated thereto) so that
such Member's Account will always be reflected on the Administrative Committee's
books as being attributable to the Employer with whom such Member is currently
employed.
4.9 NO VESTING UNLESS OTHERWISE PRESCRIBED: No allocations,
adjustments, credits or transfers shall ever vest in any Member any right, title
or interest in the Trust Fund except at the times and upon the terms and
conditions herein set forth. Except as otherwise may be provided in Section
4.10, the Trust Fund shall be, as to all Member's Accounts, a commingled fund.
4.10 INVESTMENT ELECTIONS WITH RESPECT TO COMMINGLED FUNDS:
(a) INVESTMENT FUNDS ESTABLISHED: The assets of the Plan
shall be invested in one or more categories of assets (which conform to
any portfolio standards and guidelines established by the Trustee,
subject to the direction of the Administrative Committee), including
common stock issued by the Plan Sponsor, as may be determined from time
to time in the discretion of the Administrative Committee and announced
and made available on an equal basis to all Members subject to the
provisions of this Section 4.10. When the Trustee, subject to the
direction of the Administrative Committee, or any agent thereof (i)
receives funds to be invested or determines that assets from those
funds, if applicable, should be sold and the proceeds held for a period
of time pending reinvestment or other purpose, or (ii) has notice that
required or appropriate filings with the Securities and Exchange
Commission have not been timely accepted as filed and funds received
have been designated to be invested in shares of common stock issued
IV-13
by the Plan Sponsor, then, prior to completion of required or
appropriate filings with the Securities and Exchange Commission, such
funds may be held in cash or invested in short-term investments such as
U.S. Treasury bills, commercial paper, demand notes, money market
funds, any savings accounts, money market accounts, certificates of
deposit or like investments with the commercial department of any bank,
including any bank serving as Trustee, as long as they bear a
reasonable rate of interest and the bank is supervised by the United
States or a state, any common, pooled or collective trust funds which
any bank, including any bank serving as Trustee, or any other
corporation may now have or in the future may adopt for such short-term
investments (the governing document of such common, pooled or
collective trust fund(s) being hereby incorporated herein by
reference), and other similar assets which may be offered by the
federal government, or any national or state bank (whether or not
serving as Trustee hereunder), and as may be determined by the Trustee
(subject to the direction of the Administrative Committee), in its
discretion, which assets will remain a part of the fund to which they
would otherwise relate.
(b) ELECTION PROCEDURES ESTABLISHED: If Members are given
the right to designate the funds in which their Accounts are invested
pursuant to Section 4.10(a), on such form as shall be prescribed by the
Administrative Committee, each Member shall designate the percentage of
his Account (as such Account presently exists and the percentage of
future contributions, if any, to be allocated to such Account) to be
invested in any one or more funds, as such funds may be established
from time to time as set forth in Section 4.10(a). At such times as
shall be prescribed by the Administrative Committee in its discretion,
the percentage elected to be placed in any one fund may be changed by
the Member, which change will be effective after such period of time as
shall be established by the Administrative Committee. The
Administrative Committee shall determine whether any such change as to
investments will change the Member's Account as it presently exists or
whether it will be only effective as to succeeding investments of
Contributions; however, any such change, when made, shall continue to
be effective for all succeeding investments of Contributions until
revoked or changed in a like manner. The rules established and the
discretion exercised by the Administrative Committee hereunder shall
apply to all Members on a nondiscriminatory basis.
(c) INVESTMENT IN EMPLOYER SECURITIES: Notwithstanding
anything to the contrary herein, no investment shall be made by the
Trustee in any securities other than those permitted under applicable
provisions of The Securities Act of the State of Texas, amended from
time to time, so long as the transactions contemplated by this Plan
remain otherwise exempt from The Securities Act of the State of Texas
and the Trustee is not required to register the Plan as a security
under applicable provisions of such Act. In addition, unless the Plan
would not have to be registered under the federal Securities Act of
1933, no amount in
IV-14
excess of the Employer's Contributions (other than Elective
Contributions) shall be allocated to the purchase of securities issued
by the Employer or any company directly or indirectly controlling,
controlled by or under common control with the Employer.
(d) ALLOCATIONS ATTRIBUTABLE TO DIRECTED INVESTMENTS IN
COMMINGLED FUNDS: If Members are given the right to designate the fund
in which their Accounts are invested pursuant to Section 4.10(a), each
valuation and determination of income or loss and appreciation or
depreciation provided for hereunder shall reflect the value of the
different categories of assets separately. Appreciation, depreciation,
income, and loss attributable to each such category of assets among the
Members' various Accounts (each type of account being considered
separately) shall be allocated in the ratio that the amount in each
account which was invested in a particular category as of the first day
of the applicable accounting period bears to the amount in all accounts
which was invested in such category as of the first day of such
applicable accounting period.
IV-15
ARTICLE V
RETIREMENT
5.1 NORMAL RETIREMENT: A Member may retire on the last day of the
month ending coincident with or immediately following his normal retirement age.
A Member's normal retirement age shall be his sixty-fifth (65th) birthday, from
which time he shall henceforth be one hundred percent (100%) vested in his
Account.
5.2 LATE RETIREMENT: A Member may continue his employment after
he attains normal retirement age; provided, however, that he shall have the
right to retire on any day thereafter.
5.3 RIGHTS OF MEMBERS AND PROHIBITION OF UNAUTHORIZED
DISTRIBUTION: Until a Member retires or otherwise terminates service he shall be
accorded all rights as a Member under the Plan, but, subject to Section 6.6, he
shall receive no distribution until he actually retires or otherwise becomes
entitled to a distribution under the provisions of Article VI.
V-1
ARTICLE VI
DISTRIBUTION OF BENEFITS
Distributions under the Trust shall be made to Members, spouses,
Beneficiaries, executors or administrators, as the case may be, only upon the
following conditions and in the manner specified.
6.1 DEATH BENEFIT: On the death of a Member prior to complete
distribution of such Member's Account, his death benefit shall be (i) 100% of
the amount credited to his Account as of the end of the applicable accounting
period (for which the last valuation was made) coincident with or next preceding
the date of the Member's death, (ii) an amount equal to any Rollover
Contributions made by the Member after the end of such accounting period and any
direct transfers credited to the Member's Predecessor Plan Account after the end
of such accounting period, (iii) an amount equal to any Employer Contributions
made on behalf of such Member after the end of such accounting period, and, if
applicable, (iv) to the extent that the Member's Account has any undistributed
balance which has not been paid as of the end of the applicable accounting
period (for which the last valuation was made), that portion of the periodic
adjustments and allocations required by Article IV to be credited to the
Member's Account as of the end of the applicable accounting period next
preceding or coincident with payment of the benefits described above. Provided,
however, in accordance with Section 6.10, the death benefit described in the
immediately preceding sentence shall be reduced by any security interest held by
the Plan by reason of any outstanding loan to the Member.
The death benefit shall be paid to the Member's surviving spouse, or if
there is no surviving spouse or the surviving spouse consents in the manner
described below, to such Member's designated Beneficiary (other than such
surviving spouse). At any time, subject to the following provisions of this
Section, each Member shall have the right to designate any Beneficiary to
receive his death benefit and shall have the unrestricted right to revoke any
such designation; provided, however, subject to the subsequent provisions hereof
which permit the spouse to consent to the Member's waiver of the requirements of
this sentence, any new designation of a Beneficiary (other than the Member's
spouse) by a Member who is lawfully married (or deemed to be married under
applicable local law) shall require a new spousal consent. Each such designation
or revocation by a Member shall be evidenced by a written instrument which shall
be (i) limited to a benefit for at least one specific Beneficiary (including a
nonspouse Beneficiary, any class of Beneficiaries, or any contingent
Beneficiaries), (ii) filed with the Administrative Committee, (iii) signed by
the Member, and (iv) bear the signature of at least one person who shall be a
representative designated by the Administrative Committee or a Notary Public as
witnesses to his signature.
With respect to any Member who is lawfully married (or deemed to be
married under applicable local law), any such Member's designation of a
Beneficiary (other than the Member's spouse) to receive any portion of such
death benefit shall be deemed to be ineffective, unless the Member's spouse
consents to such designation and acknowledges the effect of such election,
VI-1
which consent and acknowledgement shall be evidenced by a written instrument
which shall be (i) limited to a benefit for at least one specific Beneficiary
which may not be changed without spousal consent (or the spouse's consent
expressly permits at least one additional designation of another Beneficiary
without any requirement of further consent by such spouse if such spouse's
consent expressly acknowledges that a more limited consent could be provided),
(ii) filed with the Administrative Committee, (iii) signed by the spouse and
(iv) bear the signature of at least one person who shall be a representative
designated by the Administrative Committee or a Notary Public as witnesses to
the signature. Notwithstanding the immediately preceding sentence, a Member's
designation of a Beneficiary (other than the Member's spouse) shall be effective
if it is established to the satisfaction of the Administrative Committee that
the consent required in the preceding sentence may not be obtained because (i)
there is no spouse, (ii) the spouse cannot be located, (iii) the Member has
provided a duly certified copy of a court order issued by a court of competent
jurisdiction which recognizes that the Member is legally separated or has been
abandoned (under applicable local law) and the Administrative Committee has not
received a duly certified copy of a qualified domestic relations order
(described in Section 414(p) of the Code) which requires spousal consent, or
(iv) there exists such other circumstances (as prescribed under Sections
401(a)(11) and 417(a)(2) of the Code) which obviate the necessity of obtaining
the consent described in the preceding sentence. In addition, if the surviving
spouse is not legally competent to give consent, such spouse's legal guardian,
which may be the Member, may give the consent required hereunder. Any consent by
a Member's spouse (or establishment that the consent of a Member's spouse may
not be obtained) shall be effective only with respect to such spouse.
Notwithstanding any other provision hereof to the contrary, any spousal
consent which expressly acknowledges that a more limited consent could be
provided, may expressly provide that the spouse consents to the designation by
the Member of any Beneficiary (or any number of specified Beneficiaries) without
any requirement of further spousal consent by the spouse and, in such event, no
further spousal consent shall be required, provided that any change of
Beneficiary by the Member does not exceed any limit contained in the spouse's
consent on such Member's right to change Beneficiaries. Any spousal consent
shall be deemed to be revocable unless it is expressly made irrevocable at the
election of the Member's spouse.
Any designation of a Beneficiary (other than the Member's spouse) which
otherwise meets the above requirements of this Section shall become inoperative
in the event that (i) the Member subsequently marries (or subsequently is deemed
to be married under applicable local law), (ii) any missing spouse is located or
(iii) any other circumstance which earlier precluded the necessity of obtaining
consent of the Member's spouse no longer exist. If no designation of Beneficiary
is on file with the Administrative Committee at the time of the Member's death,
or if the Administrative Committee for any reason determines that such
designation is ineffective, then such Member's spouse, if then living, or if
not, then the executor, administrator, or other personal representative of the
estate of such Member shall be conclusively deemed to be the Beneficiary
designated to receive such Member's death benefit.
VI-2
The provisions of this Section are intended to comply with the
requirements of Sections 401(a)(11) and 417(a)(2) of the Code. To the extent any
provision hereof is inconsistent with the preceding sentence, such provision
shall be deemed to be inoperative and the Plan shall be operated in a manner
which complies with the requirements of the immediately preceding sentence.
Whenever the Trustee is authorized by this Plan or by a designation of
Beneficiary to pay funds to a minor or an incompetent, the Trustee shall be
authorized to pay such funds to a parent of such minor, to a guardian of such
minor or incompetent, or directly to such minor, or to apply such funds for the
benefit of such minor or incompetent in such manner as the Administrative
Committee may in writing direct. The Trustee, Administrative Committee, and
Employer shall be fully discharged with respect to any payment made in
accordance with the preceding sentence.
6.2 RETIREMENT BENEFIT: Upon the retirement of a Member pursuant
to Article V, his retirement benefit shall be equal to the sum of: (i) 100% of
the amount credited to his Account as of the end of the applicable accounting
period (for which the last valuation was made) coincident with or next preceding
his retirement, (ii) an amount equal to any Rollover Contributions made by such
Member after the end of such accounting period and any direct transfers credited
to the Member's Predecessor Plan Account after the end of such accounting
period, (iii) the amount of any Employer Contributions made on behalf of such
Member after the end of such accounting period, and, if applicable, (iv) to the
extent that the Member's Account has any undistributed balance which has not
been paid as of the end of the applicable accounting period (for which the last
valuation was made), that portion of the periodic adjustments and allocations
required by Article IV to be credited to the Member's Account as of the end of
the applicable accounting period next preceding or coincident with payment of
benefits described above. Provided, however, in accordance with Section 6.10,
the retirement benefit described in the immediately preceding sentence shall be
reduced by any security interest held by the Plan by reason of any outstanding
loan to the Member.
6.3 TOTAL AND PERMANENT DISABILITY BENEFIT: In the event that the
Administrative Committee determines that a Member is suffering from a Total and
Permanent Disability, his disability benefit shall be equal to the sum of: (i)
100% of the amount credited to his Account as of the end of the applicable
accounting period (for which the last valuation was made) coincident with or
next preceding such determination, (ii) an amount equal to any Rollover
Contributions made by such Member after the end of such accounting period and
any direct transfers allocable to the Member's Predecessor Plan Account after
the end of such accounting period, (iii) the amount of any Employer
Contributions made on behalf of such Member after the end of such accounting
period, and, if applicable, (iv) to the extent that the Member's Account has any
undistributed balance which has not been paid as of the end of the applicable
accounting period (for which the last valuation was made), that portion of the
periodic adjustments and allocations required by Article IV to be credited to
the Member's Account as of the end of the applicable accounting period next
preceding or coincident with payment of benefits described above. The
Administrative Committee's determination as to whether there
VI-3
is a Total and Permanent Disability and the date on which such disability
occurred shall be based upon the opinion of a physician, and shall be final and
conclusive with respect to all persons and entities. Provided, however, in
accordance with Section 6.10, the disability benefit described herein shall be
reduced by any security interest held by the Plan by reason of any outstanding
loan to the Member.
6.4 SEVERANCE BENEFIT: Upon a Member's severance from employment
with the Employer and all Affiliated Employers, for any reason other than death,
retirement, or Total and Permanent Disability, his severance benefit shall be an
amount equal to the sum of: (i) 100% of the total amount credited to his
Employer Nonforfeitable Contributions Account, Rollover Account, if any, and
Predecessor Plan Account, if any, as of the end of the applicable accounting
period (for which the last valuation was made) coincident with or next preceding
the date of such Member's severance, together with an amount equal to (a) 100%
of any Elective Contributions and Qualified Non-elective Contributions made by
the Employer on behalf of the Member after the end of such accounting period
which were allocated to his Employer Nonforfeitable Contributions Account, (b)
any Rollover Contributions made by such Member after the end of such accounting
period, plus (c) any direct transfers allocable to the Member's Predecessor Plan
Account after the end of such accounting period, (ii) the percentage of the
total amount credited to his Employer Contributions Account as of the end of
such accounting period coincident with or next preceding the date of such
Member's severance, together with the percentage of the amount of any Thrift
Contributions made on behalf of the Member after the end of such accounting
period which were allocated to his Employer Contributions Account, as shown in
the table set out below for the total number of years of Active Service credited
to the Member immediately prior to his date of severance of employment, and, if
applicable, (iii) to the extent that the Member's Account has any undistributed
balance which has not been paid as of the end of the applicable accounting
period (for which the last valuation was made), that portion of the periodic
adjustments and allocations required by Article IV to be credited to the
Member's Account as of the end of the applicable accounting period next
preceding or coincident with payment of benefits described above. Provided,
however, in accordance with Section 6.10, the severance benefit described in the
immediately preceding sentence shall be reduced by any security interest held by
the Plan by reason of any outstanding loan to the Member.
Less than two years.........................................0%
Two years, but less than three years.......................20%
Three years, but less than four years......................40%
Four years, but less than five years.......................60%
Five years, but less than six years........................80%
Six years, or more........................................100%
The above vesting schedule is subject to, if applicable, the top-heavy vesting
schedule set out in Section 7.3(a) and automatic 100% vesting in the event of a
full or partial termination of the Plan pursuant to Section 11.5. The amount
credited to such Member's Account which is not vested upon distribution shall be
forfeited and applied as provided in Section 4.6.
VI-4
6.5 ACCOUNTING FOR DISTRIBUTIONS; OFFSETS IN SPECIAL
CIRCUMSTANCES: Subject to Section 4.6 governing restoration of Members' Accounts
and to Section 4.10 concerning individual investment direction, if applicable,
any distribution of any benefits under the Plan (and any forfeitures arising
incident thereto) shall be subtracted from the affected Member's Account balance
as of the end of the Plan Year (or such shorter accounting period as may be
prescribed by the Administrative Committee) coincident with or next preceding
the applicable accounting period in which such distribution was paid. Moreover,
notwithstanding any other provision of the Plan to the contrary, if after a
former Member's employment with the Employer and all other Affiliated Employers
terminates, such person is (i) reemployed by the Employer after receiving a
distribution pursuant to Section 6.6 and again becomes eligible for membership,
and (ii) has his Employer Account restored pursuant to Section 4.6, then any
benefits that such Member may become entitled to receive hereunder after reentry
in the Plan shall be reduced by any amounts distributed from his Employer
Account which were not repaid by such Member incident to restoration of his
Employer Account pursuant to Section 4.6.
6.6 DISTRIBUTIONS-SETTLEMENT OPTIONS:
(a) FORM AND METHOD OF PAYMENT OF BENEFITS:
Except in the event of a special circumstance described in
Sections 3.1, 3.3, 6.8, 6.11, 11.4, 11.7 or 12.3,
distributions shall be made under the Plan only upon the
occurrence of one of the events described in Sections 6.1
through 6.4. To the extent required by Section 401(k) of the
Code, the limits of this sentence shall continue to apply even
if Trust Fund assets attributable to any Member's Account are
transferred to another plan pursuant to applicable provisions
of Section 8.2 or Section 11.7. Subject to the following
provisions of this subsection (a) and Section 6.6(e),
distributions provided for in this Plan shall be made in the
form of a lump sum payment in cash.
With respect to any amounts invested in common stock
of the Plan Sponsor, distribution shall be paid in cash in an
amount equal to the value (as of the date or dates shares of
common stock of the Plan Sponsor credited to the Member's
Account are converted into cash) of the Member's vested
interest in shares of common stock of the Plan Sponsor
credited to such Members Account, or in whole shares of common
stock of the Plan Sponsor, or in any combination thereof as
elected by the Member. Any fractional shares of the Plan
Sponsor to which the Member may be entitled shall be valued
and paid in cash.
A Member must consent, in writing, to any required
distribution if the present value of the Member's vested
Account balance distributable under the Plan exceeds $3,500
and the Member has not attained the normal retirement age
described in Article V. After the Member's death, benefits may
be paid in accordance with applicable provisions of the Plan
without regard to the requirements of the immediately
preceding sentence.
VI-5
(b) DISTRIBUTABLE ACCOUNT BALANCE DOES NOT EXCEED
$3,500. If the present value of a Member's vested Account
balance which is distributable under the Plan does not exceed
$3,500, the Member's vested Account balance shall be
distributed in a lump sum payment. Any Member who receives a
distribution pursuant to the preceding sentence and who does
not have a vested interest in his Account balance (derived
from Employer Contributions) distributable under the Plan,
shall be deemed to have received a distribution of a vested
Account balance (derived from Employer Contributions) equal to
zero. Such distribution may be made without the necessity of
obtaining the consent of the Member and/or his spouse or any
other Beneficiary. Such payment may be made as soon as
practicable, but (absent circumstances beyond the control of
the Administrative Committee) in no event later than sixty
(60) days after the last day of the Plan Year in which the
Member's employment with the Employer and all Affiliated
Employers is terminated.
(c) DISTRIBUTABLE ACCOUNT BALANCE EXCEEDS $3,500:
If the present value of a Member's vested Account balance
which is distributable under the Plan is in excess of $3,500
and if the Member provides the Administrative Committee with
written consent to the distribution, the Administrative
Committee shall direct the Trustee to make settlement of the
Member's Account within the 60-day period (or as soon as
practicable) after the Administrative Committee receives such
consent, but (absent circumstances beyond the control of the
Administrative Committee) not later than sixty (60) days after
the last day of the Plan Year in which the Member's employment
with the Employer and all Affiliated Employers was terminated.
Except as provided in the immediately succeeding paragraph of
this Section 6.6(c), no such written consent shall be
considered valid unless (within the period which shall begin
no more than ninety (90) days before the annuity starting date
(described below) and end no less than thirty (30) days before
the annuity starting date) such Member has received a general
written explanation of the general features and values of the
form of payment available under the Plan, and has been
informed in writing of his right to defer receipt of the
distribution. Such written explanation may be provided by
mail, personal delivery, or other means which would normally
ensure or facilitate the continued attention of the Member
during the period prescribed below in which the Member is to
consent to the distribution or otherwise be deemed to have
elected to defer receipt (as set out below). Written consent
of the Member shall be invalid unless it is given after
receipt of the written explanation described above and not
more than ninety (90) days before the annuity starting date.
The term "annuity starting date" means the first day of the
first period for which an amount is paid pursuant to the
settlement option elected under the Plan.
Notwithstanding the provisions of the immediately
preceding paragraph of this Section 6.6(c), 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
VI-6
the notice required under Section 1.411(a)-11(c) of the Income
Tax Regulations is given, provided that:
(a) the Administrative Committee clearly
informs the Member that the Member 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) the Member, after receiving the
notice, affirmatively elects a distribution.
In addition, subject to a designated Beneficiary's
right to elect the date of settlement in the case of a Member
who dies prior to receipt of any benefits under the Plan, a
valid written consent to such distribution may be made by a
Member without the necessity of obtaining the consent of the
Member's spouse or any other Beneficiary.
If the Administrative Committee fails to receive the
Member's written consent to the distribution within 60 days
after his receipt of the written explanation described above,
absent circumstances beyond the control of the Administrative
Committee, the settlement shall be made within 60 days after
the last day of the Plan Year in which occurs the earlier of
the date the Member dies or attains the normal retirement age
set out in Section 5.1. The Account balance of any Member
described in the immediately preceding sentence shall continue
to be part of the Trust Fund and thus shall continue to be
allocated its proportionate share of any income, loss,
appreciation or depreciation pending distribution of such
Account balance; provided, however, no further Contributions
shall be credited to his Account.
If Members are permitted to direct the investment of
their Accounts in accordance with Section 4.10, a former
Member shall be entitled to direct the investment of his
Account after the Member becomes entitled to a distribution
under Article VI of the Plan.
(d) DISTRIBUTION REQUIREMENTS: The requirements
of this subsection (d) shall apply to any distribution of a
Member's or Beneficiary's vested Benefit and will take
precedence over any inconsistent provisions of the Plan. All
distributions required under Article VI shall be determined
and made in accordance with Section 401(a)(9) of the Code,
including the minimum distribution incidental benefit
requirement of Section 1.401(a)(9)-2 of the proposed Income
Tax Regulations or any successor or final regulation issued
with respect thereto.
VI-7
In addition, capitalized terms used in this subjection (d)
which are not otherwise defined in Article I are defined in
subpart (3) below.
(1) REQUIRED BEGINNING DATE.
Notwithstanding any other provision of the Plan to
the contrary, but subject to the next paragraph, the
Trustee must make full settlement or begin Benefit
payments to the Member not later than the 60th day
after the latest of the close of the Plan Year in
which: (a) the Member attains the normal retirement
age set out in Article V, (b) occurs the tenth (10th)
anniversary of the year in which the Member commenced
participation in the Plan, or (c) the Member
terminates employment with the Employer.
The entire vested Benefit payable to a
Member must be distributed no later than the Required
Beginning Date with respect to the Member's first
Distribution Calendar Year, and no later than
December 31 of each succeeding Distribution Calendar
Year, if applicable.
(2) MEMBER'S DEATH PRIOR TO RECEIPT OF
ALL VESTED BENEFITS.
5-YEAR RULE. In the event that the Member
dies prior to payment of Benefits hereunder, such
Member's entire vested Benefit shall be distributed
following the Member's date of death on, or as soon
as is administratively practicable following, the
date elected by the Member's Designated Beneficiary
(but in any event not later than December 31 of the
calendar year in which occurs the fifth (5th)
anniversary of the date of the Member's death) in the
form of a lump sum payment. Any such election must be
made (and shall be deemed irrevocable) as of December
31 of the calendar year in which occurs the fifth
(5th) anniversary of the Member's date of death.
Provided, however, if the present value of the
Member's vested Account balance which is
distributable on account of the death of the Member
does not exceed $3,500, such Member's entire vested
Account balance shall be distributed in a lump sum
payment, which payment shall be made as soon as
practicable, but (absent circumstances beyond the
control of the Administrative Committee) in no event
later than sixty (60) days after the last day of the
Plan Year in which the Member's date of death occurs.
(3) DEFINITIONS.
(A) DESIGNATED BENEFICIARY.
The individual who is designated as the
Beneficiary under the Plan in accordance
with Section 401(a)(9) of the Code.
VI-8
(B) BENEFIT.
(i) The Account Balance
as of the last valuation date in the
calendar year immediately preceding
the Distribution Calendar Year
(valuation calendar year) increased
by the amount of any Contributions
allocated to the Account as of dates
in the valuation calendar year after
the valuation date, and decreased by
distributions made in the valuation
calendar year after the valuation
date.
(ii) For purposes of
subsection (3)(B)(i) immediately
above, if any portion of the minimum
distribution for the first
Distribution Calendar Year is made
in the second Distribution Calendar
Year on or before the Required
Beginning Date, the amount of the
minimum distribution made in the
second Distribution Calendar Year
shall be treated as if it had been
made in the immediately preceding
Distribution Calendar Year.
(C) DISTRIBUTION CALENDAR YEAR.
A calendar year for which a minimum
distribution is required. For distributions
beginning before the Member's death, the
first Distribution Calendar Year is the
calendar year immediately preceding the
calendar year which contains the Member's
Required Beginning Date. For distributions
beginning after the Member's death, the
first Distribution Calendar Year is the
calendar year in which distributions are
required to begin pursuant to subsection
(d)(2) above.
(D) REQUIRED BEGINNING DATE.
(i) GENERAL RULE. The
Required Beginning Date of a Member
is the first day of April of the
calendar year following the calendar
year in which the Member attains age
70-1/2.
(ii) TRANSITIONAL
RULES. The Required Beginning Date
of a Member who attains age 70-1/2
before January 1, 1988, shall be
determined in accordance with (1) or
(2) below:
(1) NON-5-
PERCENT OWNERS. The
Required Beginning Date of
a Member who is not a
5-percent Owner (defined
below) is the first day of
April of
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the calendar year following
the calendar year in which
the later of retirement or
attainment of age 70-1/2
occurs.
The Required
Beginning Date of a Member
who is not a 5-percent
Owner who attains age 70-
1/2 during 1988 and who has
not retired as of January
1, 1989, is April 1, 1990.
(2) 5-PERCENT
OWNERS. The Required
Beginning Date of a Member
who is a 5-percent Owner
during any year beginning
after December 31, 1979, is
the first day of April
following the later of :
(A) the
calendar year in
which the Member
attains age
70-1/2, or
(B) the
earlier of the
calendar year with
or within which
ends the Plan Year
in which the
Member becomes a
5- percent Owner,
or the calendar
year in which the
Member retires.
(iii) 5-PERCENT OWNER. A
Member is treated as a 5-percent
Owner for purposes of this Section
if such Member is a 5-percent Owner
as defined in Section 416(i) of the
Code (determined in accordance with
Section 416 but without regard to
whether the Plan is Top-Heavy) at
any time during the Plan Year ending
with or within the calendar year in
which such owner attains age 66-1/2
or any subsequent Plan Year.
(iv) DISTRIBUTIONS
BEGUN TO 5-PERCENT OWNER. Once
distributions have begun to a
5-percent Owner under this Section,
they must continue to be
distributed, even if the Member
ceases to be a 5-percent Owner in a
subsequent year.
(e) SPECIAL RULES REGARDING ELIGIBLE ROLLOVER
DISTRIBUTIONS. Effective for distributions made after December
31, 1992, the Employer shall impose income tax withholding at
a flat rate of twenty percent (20%) on any "eligible rollover
distribution" (defined below) from the Plan that is not
transferred directly to an "eligible retirement plan" (defined
below). The Employer shall provide a
VI-10
notice to the recipient of a Plan distribution prior to making
the distribution, which notice shall generally explain the tax
withholding and rollover rules that apply to such
distribution. The requirements of this Section 6.6(e) shall be
construed in accordance with Section 401(a)(31) of the Code.
(i) Notwithstanding any provision of the
Plan to the contrary that would otherwise limit a
distributee's election under this Section 6.6(e), a
distributee may elect, at the time and in the manner
prescribed by the Administrative Committee, to have
all or any portion of an eligible rollover
distribution paid directly to an eligible retirement
plan specified by the distributee in a direct
rollover. The provisions of this Paragraph shall
apply only if the Member's eligible rollover
distributions during the Plan Year are reasonably
expected to total $200 or more or, if less than 100%
of the Member's eligible rollover distribution is to
be a direct rollover, the direct rollover is $500 or
more. Prior to any direct rollover pursuant to this
Paragraph, the distributee shall furnish the
Administrative Committee with a statement from the
plan administrator or trustee of the qualified plan,
or the trustee or custodian of the individual
retirement account or annuity, to which the direct
rollover is to be transferred that such plan, account
or annuity is, or is intended to be, an eligible
retirement plan.
(ii) DEFINITIONS.
(A) ELIGIBLE ROLLOVER DISTRIBUTION: An
eligible rollover distribution is any distribution of
all or any portion of the balance to the credit of
the distributee, except that an eligible rollover
distribution does not include: (I) any distribution
that is one of a series of substantially equal
periodic payments (not less frequently than annually)
made for the life (or life expectancy) of the
distributee or the joint lives (or joint life
expectancies) of the distributee and the
distributee's designated beneficiary, or for a
specified period of ten years or more; (II) any
distribution to the extent such distribution is
required under Section 401(a)(9) of the Code; (III)
the portion of any distribution that is not
includible in gross income (determined without regard
to the exclusion for net unrealized appreciation with
respect to employer securities); and (IV) any other
amounts that are treated as not being eligible
rollover distributions under Section 1.401(a)(31)-IT
of the Temporary Income Tax Regulations or other
guidance issued by applicable governmental authority
under Section 401(a)(31) of the Code.
(B) ELIGIBLE RETIREMENT PLAN: An
eligible retirement plan is an individual retirement
account described in Section 408(a) of the Code, an
individual retirement annuity described in Section
408(b) of the Code, an
VI-11
annuity plan described in Section 403(a) of the Code,
or a qualified trust described in Section 401(a) of
the Code, that accepts the distributee's eligible
rollover distribution. However, in the case of an
eligible rollover distribution to the surviving
spouse, an eligible retirement plan is an individual
retirement account or individual retirement annuity.
(C) DISTRIBUTEE: A distributee includes
an Employee or former Employee. In addition, the
Employee's or former Employee's surviving spouse and
the Employee's or former Employee's spouse or former
spouse who is the alternate payee under a qualified
domestic relations order, as defined in Section
414(p) of the Code and Section 6.11 hereof, are
distributees with regard to the interest of the
spouse or former spouse.
(D) DIRECT ROLLOVER: A direct rollover
is a payment by the Plan to the eligible retirement
plan specified by the distributee.
6.7 LOST MEMBERS OR BENEFICIARIES; ESCHEAT: If a former Member or
Beneficiary cannot be located within sixty (60) days of the date that any
benefits payable under the Plan should be paid or commence to be paid pursuant
to Section 6.6, the former Member's entire Account may be forfeited and
allocated as any other forfeiture pursuant to applicable provisions of Section
4.6. Notwithstanding the preceding sentence, if the former Member or Beneficiary
files a valid claim pursuant to Section 6.10 for such forfeited benefits under
the Plan, then (i) as soon as administratively practicable, the forfeited
benefits payable to such former Member or Beneficiary shall be reinstated
effective as of the date of receipt of the claim and (ii) as soon as
administratively practicable following the Employer's Contribution (pursuant to
Section 3.3(d)) of an amount equal in value to such forfeited benefits, the
value of the reinstated benefits shall be paid pursuant to Section 6.6.
Should the Plan be joined as a part to any escheat proceedings
concerning rights to any benefits payable to a former Member or Beneficiary
thereof, the Plan shall comply with any final judgment of the appropriate court
declaring that title to any benefits payable under the Plan to a former Member
or Beneficiary vests in the State by (i) treating the judgment as if it were a
claim filed by the former Member or Beneficiary on the effective date of the
final judgment and (ii) paying the State as if it were the former Member or
Beneficiary who filed the claim for benefits which the court determined to have
escheated to the State.
6.8 WITHDRAWALS BY MEMBERS: Upon giving thirty (30) days written
notice to the Administrative Committee, any Member who is suffering an immediate
and heavy financial hardship (i) because of expenses previously incurred, or
necessary to be incurred, for medical care described in Section 213(d) of the
Code (not covered by insurance or otherwise reimbursable from any other source)
of the Member, the Member's spouse or any other person who qualifies as a
dependent of the Member under Section 152 of the Code, (ii) due to lack of funds
required to pay expenses and/or other amounts required (excluding mortgage
payments)
VI-12
to effect the purchase of a principal residence for the Member, (iii) due to a
lack of funds required to make any payment required to avoid eviction from the
Member's principal residence, (iv) due to lack of funds required to make any
payment required to avoid foreclosure on the Member's principal residence, or
(v) due to a lack of funds to pay tuition or related educational fees for the
next twelve (12) months of post-secondary education for the Member, the Member's
spouse or dependents (described above), shall be entitled to withdraw from his
Account, in the order of priority set out below, an amount equal to the lesser
of (i) the amount needed to alleviate the hardship or (ii) subject to the next
sentence, the vested balance then credited to the Member's Account. To the
extent that amounts are to be withdrawn from the Member's Employer
Nonforfeitable Contributions Account, in accordance with Section
1.401(k)-1(d)(2)(ii) of the Income Tax Regulations only amounts attributable to
Elective Contributions may be withdrawn, and such withdrawable amounts may not
exceed the portion of such Employer Nonforfeitable Contributions Account which
is attributable to Elective Contributions, without any adjustment for Trust
income, gains, losses, appreciation and depreciation. The requested withdrawal
under clause (i) of the second preceding sentence may include an additional
amount necessary to pay any federal, state or local income taxes or penalties
(including additional taxes under Section 72(t) of the Code) that are reasonably
expected to result from the withdrawal.
Except as may otherwise be prescribed by the Administrative Committee
under nondiscriminatory rules, withdrawals permitted hereunder shall be made in
the following order: first, the Predecessor Plan Account, if any; second, the
Rollover Account, if any; third, the Employer Contributions Account, if any,
whereunder the Member shall effect such withdrawal from amounts attributable to
any Thrift Contributions and any income and increments thereon; and fourth, the
Employer Nonforfeitable Contributions Account, if any, whereunder the Member
shall effect such withdrawal only from amounts attributable to Elective
Contributions, net of any income or increments thereon. The entire withdrawable
balance then credited to the applicable account described in the previous
sentence must be withdrawn before withdrawals may be made from the next account.
All other amounts credited to the Member's Account and not withdrawn shall
remain in his Account.
If a withdrawal is made at a time when the Member is not fully vested
in his Employer Contributions Account and he can increase his vested percentage
in his Employer Contributions Account, such Member's vested interest in his
Employer Contributions Account at any relevant time will be determined under the
following formula: X = P(AB + D)-D. For purposes of applying the formula: P is
the vested percentage at the relevant time; AB is the Employer Contributions
Account balance at the relevant time; and D is the amount of the withdrawal.
A Member shall not be considered as suffering an immediate and heavy
financial hardship unless such Member submits to the Administrative Committee
(i) written evidence (satisfactory to the Administrative Committee) of such
hardship and the amount needed to alleviate the hardship (ii) and any other
written agreement or other documentation which the Administrative Committee
deems to be necessary or appropriate to ensure that the Member understands and
will comply with the requirements of this Section. Absent actual knowledge to
the contrary, any Member shall be deemed to have met the requirements of the
immediately preceding sentence
VI-13
if the Member complies with the requirements of the next sentence and if he
submits a written request in which he specifically identifies the hardship and
attaches a photocopy of (i) bills for medical care (described in the first
paragraph of this section) previously incurred or necessary to be incurred or
physician's reports and other evidence of medical care to be incurred, (ii) a
contract to purchase property which he represents to be his principal residence,
(iii) a notice or other evidence of imminent eviction from property which he
represents to be his principal residence, (iv) a notice or other evidence of
imminent foreclosure action with respect to property which he represents to be
his principal residence, (v) enrollment or registration forms or other evidence
of tuition and related educational fees due for the next twelve (12) months of
post-secondary education, or (vi) other evidence of the claimed hardship and the
amount of funds required to alleviate such hardship.
In addition, the Member must represent in writing that (i) his
financial need cannot be relieved through reimbursement or compensation by
insurance or otherwise, (ii) his financial need cannot be relieved through
liquidation of any of his remaining assets (or any remaining assets of his
spouse or minor children that are readily available to the Member) without such
liquidation itself causing an immediate and heavy financial hardship, (iii) his
financial need cannot be relieved through his cessation of any Elective
Contributions made on behalf of such Member, (iv) such Member has received or
applied for all other distributions available to him from plans maintained by
the Employer and any other employer, and such distributions have not or will not
relieve the claimed financial hardship, and (v) such Member has received or
applied for all nontaxable loans available to him from the Plan and any other
plan maintained by the Employer (or any other employer) and from commercial
sources, and such loans have not or will not relieve the claimed financial
hardship. For purposes of this paragraph, a need cannot reasonably be relieved
by one of the actions listed in items (i) through (v) above if the effect would
be to increase the amount of the need. For example, the need for funds to
purchase a principal residence cannot reasonably be relieved by a Plan loan if
the loan would disqualify the employee from obtaining other necessary financing.
The Administrative Committee shall have no duty or obligation to
independently investigate or verify the truth or accuracy of any representation
of the Member or the authenticity or accuracy of any documentary evidence
provided by the Member and, absent actual knowledge to the contrary, the
Administrative Committee shall assume that any such representation is true and
correct and any such documentary evidence is authentic and correct.
Any withdrawal hereunder shall result in suspension (for a period of 12
months after the Member's receipt of amounts withdrawn hereunder) of Elective
Contributions under the Plan and any elective deferrals (described in Section
402(g)(3) of the Code) and any employee contributions (described in Section
401(m) of the Code) under any other plan of deferred compensation maintained by
the Employer and/or any Affiliated Employer. The term "any other plan of
deferred compensation" as used in the immediately preceding sentence shall mean
any plan of deferred compensation maintained by the Employer or any Affiliated
Employer, including stock option, stock purchase and similar plans, as well as a
cash or deferred arrangement under a cafeteria plan described in Section 125 of
the Code, but excluding health
VI-14
or welfare benefit plans, and excluding the mandatory contributions portion of
any defined benefit plan maintained by the Employer or any Affiliated Employer.
Accordingly, as a prior condition of any hardship withdrawal, the Member shall
execute any written agreement or other document that the Administrative
Committee deems necessary to ensure that during the one-year suspension period,
the Member is on notice and will comply with requirements of Section 401(k) of
the Code.
In addition, under the Plan and any other plan maintained by the
Employer and/or any Affiliated Employer, the Member may not authorize Elective
Contributions or any other elective deferrals (described in Section 402(g)(3) of
the Code) for the Member's taxable year immediately following the taxable year
of receipt of the amount withdrawn hereunder, which deferrals are in excess of
the applicable dollar limit under Section 402(g) of the Code for such next
taxable year less the amount of the Member's Elective Contributions and any
other elective deferrals (described above) for the Member's taxable year of
receipt of the amount withdrawn hereunder.
No withdrawal hereunder shall result in any forfeiture of a Member's
vested Account balance, and no repayment of amounts withdrawn in order to wholly
or partially restore the Member's Account shall be permitted.
For the purposes of allocating appreciation or depreciation and income
or loss of the Trust Fund, a withdrawal shall be subtracted from the Member's
Account balance at the beginning of the applicable accounting period in which
the withdrawal is made. A Member shall not be allowed to make more than one
withdrawal from his Account under this Section during any given Plan Year.
6.9 CLAIMS PROCEDURE FOR BENEFITS: When a benefit is due under the
Plan, the Member must submit a claim to the personnel office of his Employer.
Under normal circumstances a final decision on a claimant's request for benefits
shall be made within ninety (90) days after receipt of the claim. However, if
special circumstances require an extension of time to process the claim, a final
decision may be deferred up to one hundred eighty (180) days after receipt of
the claim if, prior to the end of the initial ninety (90) day period, the
claimant is furnished with written notice of the special circumstances requiring
the extension and the anticipated date of a final decision. If the claim is
denied, within the applicable period of time set out above, the claimant shall
receive written notification of the denial, which notice shall set forth the
specific reasons for the denial, the relevant Plan provisions on which the
denial is based, and the claim review procedure under the Plan. In the event
that a claim is denied, or in the event no action is taken on the claim within
the above-described period(s) of time, the following review procedure shall be
used:
(a) First, in the event that the claimant does not timely
receive the above-described written notification, the claimant's
request for benefits shall be deemed to be denied as of the last day of
the relevant period and the claimant
VI-15
shall be entitled to a full review of his claim in accordance with the
following provisions of this Section.
(b) Second, a claimant is entitled to a full review of his
claim after actual or constructive notification of a denial. A claimant
desiring a review must make a written request to the Administrative
Committee for such a review, which request may include whatever
comments or arguments the claimant wishes to submit. Incident to the
review, the claimant may represent himself or appoint a representative
to do so, and will have the right to inspect all documents pertaining
to the issue. The Administrative Committee, in its sole discretion, may
schedule any meeting(s) with the claimant and/or the claimant's
representative that it deems necessary or appropriate to facilitate or
expedite its review of a denied claim.
A request for a review must be filed with the Administrative Committee within
ninety (90) days after the denial of the claim for benefits was actually or
constructively received by the claimant. If no request is received within the
90-day time limit, the denial of benefits will be final. However, if a request
for review of a denied claim is timely filed, the Administrative Committee must
render its decision under normal circumstances within sixty (60) days of the
receipt of the request for review. In special circumstances the decision may be
delayed if, prior to expiration of the initial 60-day period, the claimant is
notified of the extension, but must in any event be rendered no later than one
hundred twenty (120) days after the receipt of the request. If the decision on
review is not furnished to the claimant within the applicable time period(s) set
above, the claim shall be deemed denied on the last day of the relevant period.
All decisions of the Administrative Committee shall be in writing and shall
include specific reasons for whatever action has been taken, including the
specific Plan provisions on which the decision is based.
6.10 LOANS TO MEMBERS AND BENEFICIARIES:
(a) Loans may be permitted from time to time, as determined by the
Administrative Committee, to any (i) Member or (ii) former Member, Beneficiary,
or alternate payee under a qualified domestic relations order described in
Section 414(p) of the Code, who is a "party in interest," as defined in Section
3(14) of the Act, or a "disqualified person," as defined in Section 4975(e)(2)
of the Code, and (iii) on whose behalf an Account or subaccount is maintained
under the Plan (hereinafter an individual described in clause (i) or (ii) and
(iii) shall be referred to as a "Qualified Participant"). For purposes of this
Section, a "loan" shall include any renewal or modification to an existing loan
hereunder so long as, at the time of any such modification or extension, the
requirements of this Section are met. Any action taken by the Administrative
Committee shall be taken pursuant to applicable provisions of Article VIII and
shall be communicated to Qualified Participants at such time and in such manner
as shall be prescribed by the Administrative Committee.
A Qualified Participant may borrow from his vested Account balance
under the Plan, subject to the following provisions of this Section and to such
additional rules or guidelines as
VI-16
the Administrative Committee may adopt hereunder, by making prior written
application to the Administrative Committee on forms provided for that purpose
by the Administrative Committee. Such forms (hereinafter referred to as the
"application forms") shall (i) specify the terms pursuant to which the loan is
requested to be made, (ii) designate the extent, if any, that the loan will be
made from any one or more of any funds as may have been established under
Section 4.10 in which the Qualified Participant has an interest, (iii) authorize
the repayment of the loan through payroll deductions in accordance with
subsection (c) of this Section if the Qualified Participant is an Employee, or
authorize a procedure whereby the Qualified Participant is to be invoiced
monthly in accordance with subsection (c) of this Section if the Qualified
Participant is not an Employee, (iv) provide such additional information and
documentation as the Administrative Committee shall require, and (v) include a
note and security agreement, duly executed by the Qualified Participant,
pursuant to which the Qualified Participant promises to repay the note and
grants a security interest, as described in subsection (c) of this Section, to
secure repayment of the loan and the note.
(b) The Administrative Committee shall issue rules or guidelines
("Standards") which shall not be inconsistent with applicable provisions of the
Code and the Act and which shall be uniformly applicable to all Qualified
Participants similarly situated and shall govern the Administrative Committee's
approval or disapproval of completed application forms. Under such Standards,
the Administrative Committee shall consider the Qualified Participant's
credit-worthiness and credit history, fair market value and liquidity of the
Qualified Participant's collateral to be pledged as security for the loan, and
any other factors which the Administrative Committee determines are considered
in a normal commercial setting by a commercial lender. To the extent not
inconsistent with the requirements of applicable provisions of the Code and the
Act, the Standards shall prescribe the manner for determining the annual rate of
interest to be charged on each loan to a Qualified Participant under the Plan.
Without limiting the scope of the immediately preceding sentence, such annual
rate of interest for such loans must provide the Plan with an annual rate of
return commensurate with the prevailing interest rate charged on similar
commercial loans by persons in the business of lending money for loans which
would be made under similar circumstances. In addition, the Standards may
provide for assessment of a fee for processing loan application forms, obtaining
credit reports, collection and processing late payments, and similar
administrative expenses which amounts shall be charged directly to the Account
of the affected Qualified Participant. The Administrative Committee shall from
time to time prescribe such additional Standards that it deems to be necessary
or appropriate and which are consistent with proper lending practices.
(c) To the extent that loans are permitted under this Section,
subject to applicable provisions of this Section, following receipt by the
Administrative Committee of a properly completed application form, each
Qualified Participant who, pursuant to the above-described Standards, the
Administrative Committee determines to be credit worthy and to be able to
provide the requisite security shall be entitled to borrow from his Account an
amount which (when added to the outstanding balance of all other loans to the
Qualified Participant under all "qualified employer plans," as defined in
Section 72(p)(4) of the Code, of the Employer and any Affiliated Employers) is
not in excess of the lesser of (i) $50,000, reduced by the excess, if any,
VI-17
of (a) the highest outstanding balance of such loans during the one-year period
ending on the day before the latest date on which a loan was made, over (b) the
outstanding balance of such loans on the latest date on which a loan was made,
or (ii) one-half (1/2) of the present value of the vested account balance of the
Qualified Participant under the Plan as of the most recent valuation date. Any
renewal or modification of an existing loan hereunder shall be deemed to be a
new loan for purposes of this Section. Any such loan shall be secured by such
Qualified Participant's vested interest in his Account balance; provided
however, such security interest may not exceed one-half of such Account balance
immediately after the origination of each loan hereunder. In addition, any loan
originated, renewed or modified hereunder with respect to a Qualified
Participant who is an Employee shall be repaid by payroll deduction pursuant to
a substantially level amortization schedule as provided in the Standards issued
by the Administrative Committee (with payments not less frequently than
quarterly) over the term of the loan. Any such loan issued hereunder to a
Qualified Participant who is not an Employee shall be repaid pursuant to a
monthly invoice issued by the Administrative Committee requiring payment by the
Qualified Participant within 30 days of the Qualified Participant's receipt of
the monthly invoice and in accordance with a substantially level amortization
schedule as provided in the Standards issued by the Administrative Committee
(with payments not less frequently than quarterly) over the term of the loan. No
loan shall have a maturity date in excess of five (5) years, unless the loan is
used to acquire any dwelling unit which within a reasonable time is to be used
(determined at the time the loan is made) as a principal residence of the
Member.
Any loan may be prepaid without penalty, if the Qualified Participant
repays the full amount of the loan, plus all interest accrued and unpaid
thereon; provided, however, partial payments on a loan may be permitted by the
Administrative Committee in the nondiscriminatory exercise of its discretion
pursuant to rules established by the Administrative Committee which are
applicable to similarly situated Qualified Participants.
Notwithstanding any other provision to the contrary, (i) no loan shall
be made to any Qualified Participant who is or was either an "owner employee" or
is a "shareholder employee" of any Employer that is an S corporation within the
meaning of such terms under Section 4975(d) of the Code, (ii) no Qualified
Participant shall be entitled to a loan from the Trustee if the amount of the
loan is less than $500 or such greater amount, not to exceed $1,000, as may be
prescribed by the Administrative Committee from time to time and communicated to
Qualified Participants, (iii) except as may otherwise be prescribed by the
Administrative Committee from time to time and communicated to Qualified
Participants, no Qualified Participant shall be entitled to originate, renew or
modify more than one loan during any single Plan Year, and (iv) no Qualified
Participant shall be entitled to a loan from the Trustee if the making of the
loan would interfere with the orderly management of the Plan for the benefit of
all the Qualified Participants or otherwise contravene any applicable law or
regulation.
(d) Any loan or loans to a Qualified Participant hereunder shall
not be made as an investment of the Trust Fund but instead shall be considered
to be an earmarked investment of the Qualified Participant's Account. A
subaccount shall be established for the Qualified Participant and shall be
maintained until the loan or loans are repaid in full. Such loan or loans
VI-18
shall be the only investment of such subaccount and thus such subaccount shall
not be taken into account for purposes of determining or allocating income,
gains or losses of any commingled portion of the Trust Fund and all costs,
charges, fees or expenses in connection with acquisition and disposition of such
investment of the subaccount shall be charged directly to such subaccount;
provided however, such subaccount shall not be charged with any portion of
comparable costs, charges, fees or expenses incurred on behalf of Accounts which
are part of the commingled portion of the Trust Fund.
(e) The Administrative Committee shall, in accordance with its
established Standards, review and approve or disapprove completed application
forms as soon as practicable after its receipt thereof, and shall promptly
notify the applying Qualified Participant of the disposition of his application
form. The Administrative Committee shall have the authority to delegate the
power to review and approve or disapprove loans under this Section to such
agents or committees composed of persons appointed by the Administrative
Committee as the Administrative Committee shall deem proper, provided that any
such agents or committees shall act only in accordance with the Standards
established by the Administrative Committee pursuant to this Section. If the
Trustee, in its sole discretion, determines that it is not reasonably and
prudently able, in the interest of Qualified Participants, to liquidate the
necessary amount from any funds that may have been established under Section
4.10, the Trustee shall notify the Administrative Committee, and the amount to
be paid to each Qualified Participant whose completed application form
designated that a loan be made from such fund shall be reduced in proportion to
the ratio which the aggregate amount that the Trustee has advised the Committee
may prudently be liquidated bears to the aggregate amount which all such
Qualified Participants designated to be paid from such fund.
(f) Subject to subsection (e), the Administrative Committee, upon
approval of a completed application, shall direct the Trustee to convert all or
any part of the Qualified Participant's interest in the Trust Fund, or in each
affected fund which may have been established pursuant to Section 4.10, in the
aggregate amount necessary to make payment of the loan proceeds from the Trust
Fund, or each such fund as may have been established pursuant to Section 4.10,
to the extent designated in the completed application form, and shall direct the
Trustee to transfer cash to the Qualified Participant in such aggregate amount.
The Administrative Committee shall maintain sufficient records to permit an
accurate crediting of repayments of the loan in accordance with Subsection (j)
of this Section.
(g) The unpaid balance owed by a Qualified Participant on a loan
under the Plan shall not reduce the amount credited to his Account under the
Plan. However, from the time of payment of the proceeds of the loan to the
Qualified Participant, his Account balance shall be deemed invested, to the
extent of such unpaid loan balance, in such loan until the complete repayment
thereof or distribution from such Account. At the time a loan is made, the
amount loaned shall (i) first be deemed an investment of, and allocated to, the
Qualified Participant's Employer Nonforfeitable Contributions Account to the
extent that amounts allocated thereto are not already allocated to a loan,
assuming that such loan is derived first from the investment of amounts
attributable to any Qualified Non-Elective Contributions and any income and
increments
VI-19
thereon, and next from Elective Contributions and any income and increments
thereon; and (ii) to the extent that such loan is in excess of such amounts, it
shall then be deemed an investment of, and allocated to, the vested portion of
the Qualified Participant's Employer Contributions Account to the extent that
amounts allocated thereto are not already allocated to a loan, assuming that
such loan is derived first from the investment of amounts attributable to any
Thrift Contributions and any income and increments thereon; and (iii) to the
extent that such loan is in excess of such amounts, it shall then be deemed an
investment of, and allocated to, the Qualified Participant's Rollover Account to
the extent that amounts allocated thereto are not already allocated to a loan;
and (iv) to the extent that such loan is in excess of such amounts, it shall
then be deemed an investment of, and allocated to, the Qualified Participant's
Predecessor Plan Account to the extent that amounts allocated thereto are not
already allocated to a loan.
(h) Except in the event of application of a Qualified
Participant's Account balance to repayment of a loan in the event of a default
in accordance with subsection (k) of this Section, no withdrawal may be made by
a Qualified Participant under this Article VI of any amount deemed invested in
the outstanding balance of any loan made pursuant to this Section.
(i) The amount of any distribution otherwise payable to a
Qualified Participant shall be reduced by the amount owed (including any accrued
interest) on all loans of the Qualified Participant at the time of such
distribution. The Trustee shall apply the pledged portion of the Qualified
Participant's Account to be distributed or paid toward the liquidation of the
Qualified Participant's indebtedness to the Plan and the Trustee. Such reduction
shall constitute a complete discharge of all liability to the Plan and the
Trustee for the loan to the extent of such reduction.
(j) Repayment of all loans under the Plan shall be secured by the
Qualified Participant's vested Account balance in accordance with applicable
provisions of subsection (c) of this Section; provided, however, that repayment
shall be secured by the Qualified Participant's vested interest in his Account
only for such time and to the extent that a portion of such loan is allocated to
such Account. Any loan repayment shall first be credited as soon as practicable
to the Qualifying Participant's segregated subaccount and to that portion of the
loan allocated to the Qualified Participant's individual accounts in the same
order of priority as described in subsection (g) of this Section. Such credited
amounts shall be transferred as soon as practicable following receipt to the
individual accounts of the Qualified Participant from which the assets were
released upon establishment of the segregated subaccount, and shall thereafter
be invested as part of the Trust Fund. A Qualified Participant may prepay his
loan at any time, without penalty, provided that he pays the full amount of the
loan, including accrued interest.
If the Qualified Participant should cease to be an Employee for any
reason, but no distribution is made under the Plan with respect to such
Qualified Participant, or if the loan is to a Qualified Participant who is a
former Member or a Beneficiary, and no distribution is made under the Plan with
respect to such Qualified Participant, such Qualified Participant may make
VI-20
all repayments due on outstanding loans of such Qualified Participant by
personal check or money order in accordance with the Qualified Participant's
repayment schedule. Pursuant to applicable provisions of subsection (c), such
repayment shall be made within 30 days of receipt of a monthly invoice.
(k) In the event of failure to make any payment of principal or
interest under a loan when due, the loan shall be in default ("Default") and all
the unpaid balance owed by the Qualified Participant and all accrued but unpaid
interest shall be due and payable immediately. Following a Default, the
Administrative Committee and the Trustee may apply any pledged portion of the
vested Account balance of the Qualified Participant to pay the loan, in whole or
in part, and take any other action or remedy as allowed by law, provided that no
application of a Qualified Participant's vested Account balance shall occur
prior to the time such vested Account balance is otherwise distributable under
the terms of the Plan, except as permitted by the Code and the Act. The amount
of any withdrawal or distribution from the vested Account balance of a Qualified
Participant or Beneficiary following a Default shall then be reduced by the
amount of any loan in Default and such amount shall be applied to the unpaid
loan balance and any accrued but unpaid interest thereon.
6.11 DISTRIBUTIONS TO DIVORCED SPOUSE: Subject to the provisions of
Section 12.3 which pertain to qualified domestic relations orders ("QDRO") and
pursuant to the QDRO procedures of the Plan, in the event that the
Administrative Committee receives a domestic relations order that it determines
to be a valid QDRO, and if such QDRO provides that distribution of vested
benefits to an alternate payee described therein is not to commence or be made
immediately, but the QDRO provides for the apportionment of such benefits to be
made immediately, the Administrative Committee shall establish a separate
account under the Plan for the alternate payee. Subject to Section 12.3 and the
QDRO procedures of the Plan, if the Administrative Committee receives a domestic
relations order that it determines to be a valid QDRO, and if the QDRO provides
that distribution of vested benefits to an alternative payee described therein
is to commence or be made immediately, then the Administrative Committee shall
direct the Trustee to effect distribution to the alternate payee who, for the
purpose of effecting such distribution, shall be considered and treated as any
other Member who is entitled to receive a benefit payable under the Plan.
The Administrative Committee shall comply with the terms and provisions
of any QDRO, including orders which require distributions to an alternate payee
prior to a Member's "earliest retirement age" as such term is defined in Section
206(d)(3)(E)(ii) of the Act and Section 414(p)(4)(b) of the Code, and shall
establish appropriate procedures to effect the same.
In the event that the Administrative Committee receives notice that a
domestic relations order that is intended to be a qualified domestic relations
order is being prepared and will be provided to the Administrative Committee
within a reasonably short time, the Administrative Committee may place a
temporary hold on the distribution of benefits under the Plan to the affected
Member, pending (a) the determination of whether such order is a qualified
domestic
VI-21
relations order within the meaning of Section 414(p) of the Code, and (b) the
rights of the alternate payee under such order.
If any such distribution to an alternate payee is made at a time when
the Member is not fully vested in his Employer Contributions Account and the
Member can increase his vested percentage in his Employer Contributions Account,
the Member's vested interest in his Employer Contributions Account shall be
determined by the following formula: X = P(AB + D)-D. For purposes of applying
the formula: P is the vested percentage at the relevant time; AB is the Employer
Contributions Account balance at the relevant time; and D is the amount of the
distribution. For purposes of allocating income or loss and appreciation or
depreciation of the Trust Fund, such distribution shall be subtracted from the
Member's Account balance at the beginning of the Plan Year (or such other
accounting period prescribed by the Administrative Committee) in which the
distribution is made.
VI-22
ARTICLE VII
TOP-HEAVY PLAN PROVISIONS
Capitalized terms used in this Article VII which are not otherwise
defined in Article I of the Plan are defined in Section 7.4.
7.1 GENERAL RULES FOR DETERMINING TOP-HEAVY STATUS: In order to
determine whether the Plan is Top-Heavy for a Plan Year, it is necessary to
determine (i) whether the Employer must be aggregated with other employers which
will be treated as a single employer, (ii) what the Determination Date is for
the Plan Year, (iii) which Employees or former Employees or other individuals
who perform or performed services as owners or employees of any Affiliated
Employer which is not an Employer (whether or not Qualified Plan participants)
are, or formerly were, Key Employees, (iv) which former Employees or other
individuals who performed services as owners or employees of any Affiliated
Employer which is not an Employer (whether or not Qualified Plan participants)
have not performed any service for the Employer (or any Affiliated Employer
which is not an Employer) at any time during the five-year period ending on the
Determination Date, (v) if, at any time during the five-year period ending on
the Determination Date, the Employer and the Affiliated Employers maintain or
maintained Qualified Plans (whether or not terminated) in addition to the Plan,
which Qualified Plans (including the Plan) are required or permitted to be
aggregated to determine Top-Heavy status and (vi) the present value of accrued
benefits (including distributions made during the plan year of the Qualified
Plan(s) and the four preceding plan years of the Qualified Plan(s)) of Key
Employees, former Key Employees and non-Key Employees. For this purpose, the
Employer and all Affiliated Employers must be treated as one employer and the
Employees or former Employees or other individuals who perform or performed
services as owners or employees of any Affiliated Employer which is not an
Employer (whether or not participants in all Qualified Plans maintained by the
Employer and the Affiliated Employers) must be categorized as Key Employees,
former Key Employees or non-Key Employees. Former Key Employees are nonKey
Employees and are excluded entirely from the calculation used to determine if a
plan or aggregation group of plans is Top-Heavy.
The accrued benefit of any individual who has not performed any
services for the Employer or any Affiliated Employer at any time during the
five-year period ending on the Determination Date shall be excluded from the
calculation used to determine if the plan or aggregation group of plans is
Top-Heavy. In addition, incident to testing whether any such Plan or group of
plans is Top-Heavy, an individual's present value of accrued benefits is used
only once. All Qualified Plans (of the Employer and the Affiliated Employers) in
which a Key Employee participates, and certain other Qualified Plans, must be
aggregated to form the Required Aggregation Group. Other Qualified Plans may be
aggregated with the Required Aggregation Group to form a Permissive Aggregation
Group. Once aggregated, all Qualified Plans that are required to be aggregated
will be Top-Heavy Plans only if the aggregation group is Top-Heavy. No Qualified
Plan in the Required Aggregation Group will be Top-Heavy if the Required
Aggregation Group is not Top-Heavy. If a Permissive Aggregation Group is Top-
VII-1
Heavy, only those Qualified Plans which are part of the Required Aggregation
Group shall be treated as Top-Heavy Plans subject to the provisions of this
Article VII.
7.2 COMPUTATION OF PRESENT VALUE OF ACCRUED BENEFITS:
(a) DEFINED CONTRIBUTION PLAN(S): The present value of
accrued benefits as of the Determination Date for any individual who is
a participant in a Qualified Plan which is (or is treated as) a defined
contribution plan is the sum of (i) the account balance as of the most
recent valuation date occurring within a 12-month period ending on the
Determination Date, and (ii) an adjustment for contributions due as of
the Determination Date. In the case of such a Qualified Plan not
subject to the minimum funding requirements of Section 412 of the Code,
the adjustment in (ii) is generally the amount of any contributions
actually made after the valuation date but on or before the
Determination Date. However, in the first plan year of the Qualified
Plan, the adjustment in (ii) should also reflect the amount of any
contributions made after the Determination Date that are allocated as
of a date in that first plan year of the plan. In the case of a
Qualified Plan that is a defined contribution plan and is subject to
the minimum funding requirements, the account balance in (i) should
include contributions that would be allocated as of a date not later
than the Determination Date, even though those amounts are not yet
required to be contributed. Thus, the account balance will include
contributions waived in prior years as reflected in the adjusted
account balance and contributions not paid that resulted in a funding
deficiency. The adjusted account balance is described in Rev. Rul.
78-223, 1978-1 C.B. 125. Also, the adjustment in (ii) should reflect
the amount of any contribution actually made (or due to be made) after
the valuation date but before the expiration of the extended payment
period in Section 412(c)(10) of the Code. The account balance of any
individual who has not performed services for the Employer at any time
during the 5-year period ending on the Determination Date shall be
disregarded.
(b) DEFINED BENEFIT PLANS: The present value of an accrued
benefit under a Qualified Plan that is a defined benefit plan as of the
Determination Date must be determined as of the most recent valuation
date which is within a 12- month period ending on the Determination
Date. In the first plan year of a plan, the accrued benefit for a
current participant must be determined either (i) as if the individual
terminated service as of the Determination Date (i.e., the last day of
plan year of the plan) or, (ii) as if the individual terminated service
as of the valuation date, but taking into account the estimated accrued
benefit as of the Determination Date. However, for any other year, the
accrued benefit for a current participant must be determined as if the
individual terminated service as of such valuation date. For this
purpose, the valuation date must be the same valuation date used for
computing plan costs for minimum funding, regardless of whether a
valuation is performed that year. For purposes of this paragraph,
present value shall be determined with reference to the interest rate
and mortality
VII-2
table used to determine Actuarial Equivalent optional benefits under
the defined benefit plan. The accrued benefit of a Member (other than a
Key Employee) shall be determined (i) under the method which is used
for accrual purposes for all plans of the Employer or (ii) or if there
is no method described in clause (i), as if such benefit occurred not
more rapidly than the slowest accrual rate permitted under Section
411(b)(1)(c) of the Code. The accrued benefit of any individual who has
not performed services for the Employer at any time during the 5-year
period ending on the Determination Date shall be disregarded.
(c) EMPLOYEE CONTRIBUTIONS: For purposes of determining
the present value of accrued benefits in either a defined benefit or
defined contribution plan, the accrued benefits attributable to
employee contributions are considered to be part of the accrued
benefits whether such contributions are mandatory or voluntary.
However, the amounts attributable to deductible employee contributions
are not considered to be part of the accrued benefits.
(d) DISTRIBUTIONS: For purposes of determining the present
value of accrued benefits, distributions made within the plan year of
the Qualified Plan that includes the Determination Date or within the
four preceding plan years of such plan are added to the present value
of accrued benefits in testing for topheaviness. However, in the case
of distributions made after the valuation date and prior to the
Determination Date, such distributions are not included as
distributions in Section 416(g)(3)(A) of the Code to the extent that
such distributions are included in the present value of the accrued
benefits as of the valuation date. In the case of the distribution of
an annuity contract, the amount of such distribution is deemed to be
the current actuarial value of the contract, determined on the date of
the distribution. Benefits paid on account of death are treated as
distributions hereunder to the extent such benefits do not exceed the
present value of accrued benefits immediately prior to death.
(e) ROLLOVER CONTRIBUTIONS AND PLAN-TO-PLAN TRANSFERS:
With respect to proper treatment of rollover contributions and
plan-to-plan transfers incident to determining the present value of
accrued benefits, it must first be determined whether the rollovers and
plan-to-plan transfers are unrelated (both initiated by the employee
and made from a plan maintained by one employer to a plan maintained by
another employer) or whether they are related (a rollover either not
initiated by the employee or made to a plan maintained by the same
employer). For purposes of determining whether the employer is the same
employer, all employers aggregated under Section 414(b), (c), (m) or
(o) of the Code are treated as the same employer. Thus, the Employer
and all Affiliated Employers are to be treated as a single employer. In
the case of unrelated rollovers, (i) the plan providing the
distributions shall count the distribution as a distribution under
Section 416(g)(3)(B) of the Code and (ii) the plan accepting the
rollover shall not consider the rollover part of the accrued benefit if
such rollover was accepted
VII-3
after December 31, 1983, but must consider it part of the accrued
benefit if such rollover was accepted prior to January 1, 1984. In the
case of related rollovers, the plan providing the rollover shall not
count the rollover as a distribution under Section 416(g)(3)(B) of the
Code and the plan accepting the rollover counts the rollover in the
present value of the accrued benefits. Rules for related rollovers do
not depend on whether the rollover was accepted prior to January 1,
1984.
7.3 SPECIAL RULES FOR PLAN YEARS THAT PLAN IS TOP-HEAVY:
Notwithstanding any other provision of the Plan and Trust to the contrary, if
the Plan is Top-Heavy for any Plan Year, then the following provisions shall be
applicable and shall supersede and override any conflicting provision of the
Plan for such Plan Year:
(a) VESTING: Vesting of accrued benefits (described in
Section 411(a)(7) of the Code, including benefits accrued before the
effective date of Section 416 of the Code and benefits accrued before
the Plan became Top-Heavy) under the Plan shall be determined in
accordance with the vesting table set out in Section 6.4.
(b) TOP-HEAVY COMPENSATION: Considered Compensation and
TopHeavy Compensation for any one Member for such Plan Year in excess
of (i) for Plan Years beginning prior to January 1, 1994, $200,000 (as
adjusted at such time and in such manner as may be prescribed in
Section 415(d) of the Code) and (ii) for Plan Years beginning on or
after January 1, 1994, $150,000 (as adjusted by the Commissioner of
Internal Revenue for increases in the cost of living in accordance with
Section 401(a)(17)(B) of the Code) shall be disregarded for any Plan
Year in which the Plan is Top-Heavy.
(c) MINIMUM ALLOCATIONS: Subject to the following
provisions hereof, for any Plan Year in which the Plan is Top-Heavy,
each Member shall receive an allocation of the Employer Contribution
and forfeitures, if any, for the Plan Year in an amount equal to the
lesser of (i) three percent (3%) of the Members' TopHeavy Compensation
and (ii) the largest percentage of Top-Heavy Compensation provided on
behalf of any Key Employee. The minimum allocation shall be made
without regard to any contribution to Social Security. To the extent
permitted under applicable law or other authority issued thereunder by
the appropriate governmental authority, in determining whether an
allocation of Employer Contributions equal to the required percentage
of Top-Heavy Compensation meets the requirements of this Section, all
benefits allocated under defined contribution plans required to be
aggregated under Section 7.1 shall be considered benefits allocated
under the Plan, and any Employer Contribution attributable to a salary
reduction or similar arrangement shall be taken into account.
Accordingly, for the purpose of clarity and without limiting the scope
of the immediately preceding sentence, (i) any elective deferral
(described in Section 402(g)(3) of the Code) under the Plan or any plan
described in the immediately preceding sentence on
VII-4
behalf of any Member who is not a key Employee shall not be treated as
an Employer Contribution for purposes of this Section, but will be
treated as an Employer Contribution for purposes of determining the
percentage at which Contributions are made for the Key Employee with
the highest percentage; (ii) qualified nonelective contributions
(described in Section 401(m)(4)(C) of the Code) under the Plan or any
plan described in the immediately preceding sentence on behalf of any
Member shall be treated as an Employer Contribution for purposes of
this Section; and (iii) any matching contribution (described in Section
401(m)(4)(A) of the Code) under the Plan or any plan described in the
immediately preceding sentence on behalf of any Member who is not a Key
Employee shall not be treated as an Employer Contribution for purposes
of this Section to the extent such matching contribution is treated as
an elective deferral for purposes of satisfying the ADP test of Section
401(k)(3) of the Code or a matching contribution for purposes of
satisfying the ACP of Section 401(m)(2) of the Code.
Notwithstanding the preceding paragraph, in the event that an
Employee is a Member of the Plan and another Qualified Plan which is a
defined benefit plan maintained by the Employer and/or any Affiliated
Employer, such Employee shall not receive both the minimum benefit
provided hereunder and the minimum benefit provided under the defined
benefit plan on account of such plans being Top-Heavy. Instead, the
aggregate minimum benefit requirement for any Employee who is a Member
under the Plan, and any defined benefit plan described in the preceding
sentence, shall be provided under the defined benefit plan, which
defined benefit minimum shall be offset by the value of the Member's
vested and nonforfeitable interest in his accrued benefit derived from
Employer Contributions under the Plan. If the defined benefit minimum
will be paid in the form of an annuity, the offset shall be effected by
converting the Member's vested accrued benefit derived from Employer
Contributions under the Plan into an annuity (payable in the same form
and commencing at the same time as the defined benefit minimum) which
can be provided by the Member's vested accrued benefit derived from
Employer Contributions using the interest rate and mortality table for
immediate annuities published by the Pension Benefit Guaranty
Corporation as in effect on the date the defined benefit minimum is to
commence. If the defined benefit minimum is paid in the form of a lump
sum, the lump sum value of the Member's accrued benefit derived from
Employer Contributions under the Plan shall be offset against the
single sum value of the defined benefit minimum calculated in
accordance with the applicable provisions of the defined benefit plan.
For purposes of this Section, a Member's accrued benefit derived from
Employer Contributions shall include any prior withdrawals or
distributions attributable thereto.
(d) SPECIAL RULES: For any Plan Year that the Plan is
(i) Top-Heavy and the additional minimum benefit described in Section
416(h) of the Code is not
VII-5
provided or (ii) Super Top-Heavy, the limitations of Section 4.3(d)(iv)
and (v) shall be applied by substituting "100 percent" for "125
percent" wherever it appears therein. Such substitution shall not cause
a reduction in any account balances attributable to Contributions for a
Plan Year prior to the Plan Year in which the Plan is Top-Heavy or
Super Top-Heavy.
7.4 DEFINITIONS: For purposes of this Article VII, the following
terms shall be defined as follows:
(a) AFFILIATED EMPLOYER: "Affiliated Employer" shall
mean the Affiliated Employer described in Article I of the Plan.
(b) DETERMINATION DATE: "Determination Date" shall mean
with respect to a single Qualified Plan, (i) the last day of the
preceding plan year of the Qualified Plan, or (ii) in the case of the
first plan year of the Qualified Plan, the last day of such plan year.
When aggregating Qualified Plans, the value of accrued benefits will be
calculated with reference to the Determination Dates that fall within
the same calendar year.
(c) EMPLOYEE: "Employee" shall mean the Employee
described in Article I of the Plan.
(d) EMPLOYER: "Employer" shall mean the Employer
described in Article I of the Plan.
(e) KEY EMPLOYEE: "Key Employee" shall mean with respect
to any Qualified Plan, any Employee or former Employee (or any other
person (i) who is or was employed by any Affiliated Employer or (ii)
who owns or owned any interest in any Affiliated Employer and who
derives or derived earned income from such Affiliated Employer or would
have derived earned income had such Affiliated Employer had net
profits), including any beneficiary described below, who, at any time
during the Qualified Plan's plan year containing the Determination Date
or any of the four (4) preceding plan years of such Qualified Plan, is:
(i) An officer of any Employer or any Affiliated
Employer treated separately, if such individual earns annual
compensation for a plan year (for services rendered to the
Employer and any Affiliated Employer during the relevant plan
year of the Qualified Plan) greater than fifty percent (50%)
of the amount in effect under Section 415(b)(1)(A) of the
Code; provided, however, subject to the last paragraph of this
Section 7.4(e), no more than fifty (50) individuals who are or
were Employees of the Employer and/or employees of an
Affiliated Employer or, if less,
VII-6
the greater of three (3) individuals who are Employees of the
Employer and/or employees of an Affiliated Employer or ten
percent (10%) of all such individuals, shall be considered Key
Employees by reason of being officers;
(ii) One of the ten (10) individuals owning (or
considered as owning within the meaning of Section 318 of the
Code) both more than a 1/2 percent interest and the largest
interests in the Employer or any Affiliated Employer, treated
separately, if such individual earns annual compensation for a
plan year (for services rendered to the Employer and any
Affiliated Employer during the relevant plan year of the
Qualified Plan) more than the maximum dollar limitation set
forth under Section 415(c)(1)(A) of the Code as in effect for
the calendar year in which such plan year ends; provided,
however, if two such individuals have the same interest in the
Employer or Affiliated Employer, treated separately, the
individual earning the greater compensation (for purposes of
this Section 7.4(e)(ii)) shall be treated as having a larger
interest;
(iii) Any individual owning (or considered as
owning within the meaning of Section 318 of the Code) more
than five percent (5%) of the outstanding stock of any
corporate Employer or any corporate Affiliated Employer
treated separately, or stock possessing more than five percent
(5%) of the total combined voting power of all stock of any
corporate Employer or any corporate Affiliated Employer,
treated separately, or, if the Employer or Affiliated Employer
is not a corporation, any individual owning more than five
percent (5%) of the capital or profits interest of such
Employer, or Affiliated Employer treated separately; or
(iv) Any individual whose aggregate annual
compensation for a plan year (for services rendered to the
Employer and any Affiliated Employer during the relevant plan
year of the Qualified Plan) is more than $150,000.00 and who
would be described in Section 7.4(e)(iii) if one percent (1%)
were substituted for five percent (5%) therein.
Any Beneficiary of an Employee who is a Key Employee or a
former Key Employee and any Beneficiary of any other individual
described above who is a Key Employee or former Key Employee shall be
treated as a Key Employee or former Key Employee, whichever is
applicable. Similarly, any Beneficiary of an Employee who is a former
non-Key Employee and any Beneficiary of any other
VII-7
individual described above who is a former non-Key Employee shall be
treated as a former non-Key Employee.
For purposes of applying Section 318 of the Code to the
provisions of this Section, subparagraph (C) of Section 318(a)(2) of
the Code shall be applied by substituting five percent (5%) for fifty
percent (50%). For purposes of this Section, annual compensation for
the plan year of the Qualified Plan shall include all remuneration
described in Treasury Regulation Section 1.415-2(d) and any successor
thereto, but including amounts contributed by the Employer or
Affiliated Employer pursuant to a salary reduction agreement which are
excludable from the individual's gross income under Section 125,
Section 402(a)(8), Section 402(h) or Section 403(b) of the Code.
In the event that the number of Key Employees determined under
Subsection (e)(i) of this Section would, but for the numerical
limitations of that Subsection, exceed the number determined under that
Subsection, then those officers having the largest annual compensation
during the plan year of the Qualified Plan and the four (4) preceding
plan years of such Qualified Plan shall be the Key Employees. Such term
shall not include any officer or employee of an entity referred to in
Section 414(d) of the Code. Notwithstanding any provision hereof to the
contrary, determination of who is a Key Employee shall be made in
accordance with Section 416(i)(1) of the Code.
(f) MEMBER: "Member" shall mean any Member described in
Article I of the Plan except that if the Plan is Top-Heavy, in addition
to Employees who would otherwise be considered to be Members under the
Plan, the following Employees shall be considered to be Members solely
for purposes of determining the individuals entitled to share in the
minimum benefit described in Section 7.3(c): (i) Members who have not
separated from service at the end of the Plan Year, (ii) individuals
who are otherwise eligible to participate in the Plan but who have
failed to complete 1000 hours of service (or the equivalent) during the
Plan Year, (iii) individuals who are otherwise eligible to participate
in the Plan but who declined to make any required Contributions to the
Plan or, in the case of a cash or deferred arrangement, any elective
contributions permitted or required under the Plan, or (iv) individuals
who are eligible to participate in the Plan but who have been excluded
from the Plan because each such individual's Considered Compensation is
less than a stated amount.
(g) PERMISSIVE AGGREGATION GROUP: "Permissive Aggregation
Group" shall mean a Required Aggregation Group plus one or more
Qualified Plans which are not part of the Required Aggregation Group
but which satisfy the requirements of Section 401(a)(4) and 410 when
considered together with the Required Aggregation Group.
VII-8
(h) QUALIFIED PLAN: "Qualified Plan" shall mean the Plan
and any other defined contribution plan (whether or not terminated)
described in Section 414(i) of the Code and/or any defined benefit plan
(whether or not terminated) described in Section 414(j) of the Code
which is/are (or with respect to any such plan which has been
terminated, was/were) maintained at any time during the five-year
period ending on the Determination Date by the Employer and/or the
Affiliated Employers and intended to meet the requirements of Section
401(a) of the Code; provided, however, a simplified employee pension
plan described in Section 408(k) of the Code shall be treated as a
defined contribution plan.
(i) REQUIRED AGGREGATION GROUP: "Required Aggregation
Group" shall mean a group of Qualified Plans, which group shall include
each Qualified Plan maintained by the Employer and/or the Affiliated
Employers in which a Key Employee participates in the relevant plan
year including the Determination Date, or any of the four preceding
plan years, and which group shall exclude any Qualified Plan in which a
Key Employee does not participate at any time during the plan year, or
any of the four preceding plan years, unless during such period such
Qualified Plan enables any Qualified Plan in which a Key Employee
participates to meet the requirements of Sections 401(a)(4) or 410 of
the Code.
(j) SUPER TOP-HEAVY: "Super Top-Heavy" shall mean
Top-Heavy except for purposes of this Section 7.4(j), "ninety percent
(90%)" shall be substituted for "sixty percent (60%)" wherever the
latter percent appears in Section 7.4(k).
(k) TOP-HEAVY: "Top-Heavy" shall mean with respect to any
Qualified Plan, which is not included in any aggregation group, any
such Qualified Plan whereunder, as of the Determination Date, the sum
of the present value of the accrued benefits for Key Employees is more
than sixty percent (60%) of the sum of the present value of the accrued
benefits of all Employees of the Employer plus, if applicable, all
employees (and self-employed individuals) of all Affiliated Employers,
excluding former Key Employees, and shall mean with respect to any
aggregation group, Required Aggregation Group or Permissive Aggregation
Group, whereunder as of the Determination Date, the sum of the present
value of the accrued benefits for Key Employees is more than sixty
percent (60%) of the sum of the present value of accrued benefits of
all Employees of the Employer plus all employees (and self-employed
individuals) of all Affiliated Employers, excluding former Key
Employees. For purposes of this Section 7.4(k), the accrued benefit of
any individual who is not a Key Employee, but who is a former Key
Employee will be disregarded, and the accrued benefit of any individual
described in this Section 7.4(k) who has not performed any service for
the Employer and any Affiliated Employer(s) maintaining any Qualified
Plan at any time during the five-year period ending on the
Determination Date shall be disregarded. In addition, when aggregating
Qualified Plans, the value of accrued
VII-9
benefits will be calculated with reference to the Determination Dates
that fall within the same calendar year.
(l) TOP-HEAVY COMPENSATION: "Top-Heavy Compensation" shall
mean (i) the wages (as defined in Section 3401(a) of the Code for
purposes of income tax withholding at the source) that are paid (within
the meaning of Section 1.415- 2(d)(3) and (4) of the Income Tax
Regulations) to the Employee by the Employer during the Plan Year for
services performed and reportable on the Employee's form W-2 (or its
successor), determined without regard to any rules that limit the
remuneration included in wages based on the nature or location of the
employment or the services performed (such as the exception for
agricultural labor in Section 3401(a)(2) of the Code), plus any
reduction under a compensation deferral agreement under (a) a plan
described in Section 401(k) or 408(k) of the Code, (b) an annuity
described in Section 403(b) of the Code or (c) an election under a
cafeteria plan described in Section 125 of the Code, (ii) that is
actually paid to or is includible in the gross income of the Member
within the relevant Plan Year, or would have been so paid or includible
but for a reduction described in clause (i) immediately above, and
(iii) that does not exceed (A) for Plan Years beginning before January
1, 1994, $200,000 (as adjusted at such time and in such manner as
prescribed in Section 415(d) of the Code), and (B) for Plan Years
beginning on or after January 1, 1994, $150,000 (as adjusted by the
Commissioner of Internal Revenue for increases in the cost of living in
accordance with Section 401(a)(17)(B) of the Code).
VII-10
ARTICLE VIII
ADMINISTRATIVE COMMITTEE
8.1 APPOINTMENT, TERM OF SERVICE AND REMOVAL: The Board of the
Plan Sponsor shall appoint an Administrative Committee of not less than two (2)
persons, the members of which shall serve until their resignation, death or
removal. Any member of the Administrative Committee may resign at any time by
mailing or delivering written notice of such resignation to the Board. Any
member of the Administrative Committee may be removed by the Board, with or
without cause, at any time by mailing or delivering written notice to such
person at the address set forth in the records of the Employer. Vacancies in the
Administrative Committee arising by resignation, death, removal or otherwise
shall be filled by such persons as may be appointed by the Board.
8.2 POWERS: The Administrative Committee shall be a fiduciary and
shall, in that capacity, have the exclusive responsibility for the general
administration of the Plan, according to its terms and provisions, and shall
have all discretion and powers necessary to accomplish such purposes, including,
but not by way of limitation, the right, power, and authority:
(a) To make nondiscriminatory rules and regulations for
the administration of the Plan which are not inconsistent with the
terms and provisions hereof;
(b) To construe all terms, provisions, conditions, and
limitations of the Plan; and its construction thereof, shall be final
and conclusive on all persons or entities;
(c) To correct any defect, supply any omission, or
reconcile any inconsistency which may appear in the Plan in such manner
and to such extent as it shall deem necessary or appropriate, and its
judgment in such matters shall be final and conclusive as to all
persons and entities;
(d) To select, employ, and compensate from time to time
such consultants, actuaries, accountants, attorneys, and other agents
and employees as the Administrative Committee may deem necessary or
advisable for the proper and efficient administration of the Plan; any
agent, firm or employee so selected by the Administrative Committee may
be a "disqualified person" or a "party in interest" but only if the
requirements of Section 4975(d) of the Code and Section 408(b) of the
Act have been satisfied;
(e) To determine all questions relating to the
eligibility of Employees to become Members, and to determine the period
of Active Service and the amount of Considered Compensation upon which
the benefits of each Member shall be calculated;
VIII-1
(f) To determine all controversies relating to the
administration of the Plan, including but not limited to: (i)
differences of opinion arising between an Employer and the Trustee or a
Member, or any combination thereof; and (ii) any questions it deems
advisable to determine in order to promote nondiscriminatory
administration of the Plan for the benefit of the Members and
Beneficiaries;
(g) Subject to portfolio standards and guidelines which
may be established by the Trustee from time to time, to direct and
instruct (or to appoint an investment manager which would have the
power to direct and instruct) the Trustee in all matters relating to
the preservation, investment, reinvestment, management and disposition
of the Trust Fund;
(h) To direct and instruct the Trustee in all matters
relating to the payment of Plan benefits and to determine the
entitlement of a Member or a Beneficiary to a benefit should he appeal
a denial of his claim, or any portion thereof;
(i) With the consent or ratification of the Board, to
take any action necessary or appropriate to cause to be directly
transferred to the Trustee any or all of the assets held with respect
to a Member under any other plan which expressly permits such transfer
and which otherwise satisfies the requirements for establishing a
Predecessor Plan Account described in Section 1.1. For the limited
purpose of being eligible to have a transfer described in the preceding
sentence made on behalf of an Employee who is not a Member, such
Employee shall be deemed to be a Member; provided, however, such
Employee shall not be entitled to authorize Elective Contributions to
the Plan or share in the allocation of any Employer Contributions or
forfeitures unless and until such Employee satisfies the applicable
eligibility requirements of the Plan. Any amounts transferred to such
Predecessor Plan Account shall not have any effect on limitations under
the Plan on Member or Employer Contributions under the Plan;
(j) To determine whether the requirements of Section
6.6(e) have been satisfied and, if it so determines, to direct and
instruct the Trustee to effect the direct rollover of an eligible
rollover distribution (as defined in Section 6.6(e) hereof) to the
trustee or custodian of an eligible retirement plan, as elected by the
distributee of such eligible rollover distribution;
(k) With the consent or ratification of the Board, to
direct the Trustee to enter into any agreement that the Administrative
Committee deems to be necessary or appropriate to effect any
transaction described in Section 8.2(i), 8.2(j) or 11.7; and
(l) To delegate by written notice such clerical and
recordation duties of the Administrative Committee under the Plan as
the Administrative Committee
VIII-2
may deem necessary or advisable for the proper and efficient
administration of the Plan or the Trust.
8.3 ORGANIZATION: The Administrative Committee shall select from
among its members a chairman, who shall preside at all of its meetings, and
shall select a secretary, who need not be a member of the Administrative
Committee and who shall keep all records, documents and data pertaining to its
supervision of the administration of the Plan.
8.4 QUORUM AND MAJORITY ACTION: A majority of the members of the
Administrative Committee constitutes a quorum for the transaction of business.
The majority vote of the members present at any meeting at which there is a
quorum will decide any question brought before that meeting. In addition, the
Administrative Committee may decide any question, taken without a meeting, by a
majority vote of all of its members, or by a consent executed by all of its
members.
8.5 SIGNATURES: The chairman, the secretary and any one or more of
the members of the Administrative Committee to which the Administrative
Committee has delegated the power, shall each, severally, have the power to
execute any document on behalf of the Administrative Committee, and to execute
any certificate or other written evidence of the action of the Administrative
Committee. The Trustee, after being notified of any such delegation of power in
writing, shall thereafter accept and may rely upon any document executed by such
member or members as representing the action of the Administrative Committee
until the Administrative Committee files with the Trustee a written revocation
of that delegation of power.
8.6 DISQUALIFICATION OF COMMITTEE MEMBER: A member of the
Administrative Committee who is also a Member or Beneficiary shall not vote or
act upon any matter relating solely to himself. With respect to any other matter
before the Administrative Committee, no member of the Administrative Committee
shall be deemed disqualified by reason of being a Member or Beneficiary or by
reason of an interest in any matter to be acted upon by the Administrative
Committee unless expressly so disqualified as to such matter by a resolution
adopted by the Board.
8.7 DISCLOSURE TO MEMBERS: The Administrative Committee shall make
available to each Member and Beneficiary for his examination such records,
documents and other data as are required under the Act, but only at reasonable
times during business hours. No Member or Beneficiary shall have the right to
examine any data or records reflecting the compensation paid to any other Member
or Beneficiary, and the Administrative Committee shall not be required to make
any other data or records available other than those required by the Act.
8.8 STANDARD OF PERFORMANCE: The Administrative Committee, and
each of its members, shall (i) use the care, skill, prudence and diligence under
the circumstances then prevailing that a prudent man acting in a like capacity
and familiar with such matters would use in conducting his business as the
administrator of the Plan; (ii) when exercising its power to direct investments,
diversify the investments of the Plan so as to minimize the risk of large
VIII-3
losses unless under the circumstances it is clearly prudent not to do so; and
(iii) otherwise act in accordance with the provisions of the Plan and the Act.
The Administrative Committee shall exercise its responsibility and
authority hereunder in a uniform and nondiscriminatory manner with respect to
all Members.
8.9 LIABILITY OF COMMITTEE AND LIABILITY INSURANCE: No member of
the Administrative Committee shall be liable for any act or omission of any
other member of the Administrative Committee, the Trustee, any investment
manager appointed by the Administrative Committee, or any other agent or
representative appointed by the Administrative Committee except to the extent
required by the Act and any other applicable state or federal law, which
liability cannot be waived. No member of the Administrative Committee shall be
liable for any act or omission on his own part except to the extent required by
the Act, and any other applicable state or federal law, and then only if and to
the extent such liability cannot be waived. It is the express intent of the Plan
to waive any such liability to the full extent permitted by law.
Further, it is specifically provided that, if directed by the
Administrative Committee, the Trustee may purchase out of the Trust Fund
insurance for the members of the Administrative Committee any other fiduciaries
appointed by the Administrative Committee and for the Trust Fund itself, to
cover liability or losses occurring by reason of the act or omission of any one
or more of the members of the Administrative Committee or any other appointed
fiduciary under the Plan or any other agents; provided, however, such insurance
permits recourse by the insurer against the members of the Administrative
Committee or the other concerned fiduciaries in the case of a breach of a
fiduciary obligation by one or more members of the Administrative Committee or
other fiduciary covered thereby.
8.10 EXEMPTION FROM BOND: No member of the Administrative Committee
shall be required to give bond for the performance of his duties hereunder,
unless required by the Act or by other law which cannot be waived.
8.11 NO COMPENSATION: The Administrative Committee shall serve
without compensation for its services, but shall be reimbursed for all expenses
properly and actually incurred in the performance of its duties under the Plan
pursuant to Section 8.14.
8.12 PERSONS SERVING IN DUAL FIDUCIARY ROLES: Any person, group of
persons, corporation, firm or other entity, may serve in more than one fiduciary
capacity with respect to the Plan, including the ability to serve both as
Trustee and as a member of the Administrative Committee.
8.13 ADMINISTRATOR: For all purposes of the Act, the Administrator
of the Plan shall be the Plan Sponsor. The Administrator of the Plan shall have
final responsibility for compliance with all reporting and disclosure
requirements imposed with respect to the Plan under any applicable federal or
state law, or under any regulations or other authority promulgated thereunder by
the appropriate governmental authority.
VIII-4
8.14 PAYMENT OF EXPENSES. All expenses incident to the
administration of the Plan and Trust, including but not limited to, legal,
accounting, Trustee fees, investment management, and record keeping, shall be
paid by the Trustee from the Trust Fund and, until paid, shall constitute a
claim against the Trust Fund which is paramount to the claims of Members and
beneficiaries; provided, however, that the obligation of the Trustee to pay an
expense from the Trust Fund shall cease to exist to the extent such expense is
paid by an Employer. To the extent that an administrative expense is to be paid
by an Employer, the Administrative Committee may allocate such expense among
each Employer based upon the approximate total amount in the Accounts of Members
employed by it as compared to the approximate total amount in the Accounts of
all Members.
8.15 INDEMNIFICATION OF PLAN ADMINISTRATION EMPLOYEES: To the full
extent permitted by law, the Plan Sponsor and each other adopting Employer of
the Plan (collectively, the "EMPLOYER") jointly and severally shall indemnify
and hold harmless each past, present and future member of the Administrative
Committee of the Plan and each other Employee who acts in the capacity of an
agent, delegate or representative of the Administrative Committee or the Company
under the Plan (hereafter, all such indemnified persons shall be jointly and
severally referred to as "PLAN ADMINISTRATION EMPLOYEE") against, and each Plan
Administration Employee shall be entitled without further act on his part to
indemnity from the Employer for, any and all losses, claims, damages, judgments,
settlements, liabilities, expenses and costs (and all actions in respect thereof
and any legal or other costs and expenses in giving testimony or furnishing
documents in response to a subpoena or otherwise), including the cost of
investigating, preparing or defending any pending threatened or anticipated
possible action, claim, suit or other proceeding, whether or not in connection
with litigation in which the Plan Administration Employee is a party,
(collectively, the "Losses"), as and when incurred, directly or indirectly,
relating to, based upon, arising out of, or resulting from his being or having
been a Plan Administration Employee; provided, however, that such indemnity
shall not include any Losses incurred by such Plan Administration Employee (i)
with respect to any matters as to which he is finally adjudged in any such
action, suit or proceeding to have been guilty of gross negligence, bad faith or
intentional misconduct in the performance of his duties as a Plan Administration
Employee, or (ii) with respect to any matter to the extent that a settlement
thereof is effected in an amount in excess of the amount approved by the
Employer (which approval shall not be unreasonably withheld), and, further, no
right of indemnification hereunder shall be available to, or enforceable by, any
such Plan Administration Employee unless, within sixty (60) days after his
actual receipt of service of process in any such action, suit or other
proceeding (or such longer period as may be approved by the Plan Sponsor), he
shall have offered the Plan Sponsor in writing, the opportunity to handle and
defend same at its sole expense, and the decision by the Plan Sponsor to handle
such proceeding shall conclusively determine that the Plan Administration
Employee is entitled to the indemnity provided herein. The foregoing right of
indemnification shall be in addition to any liability that the Employer may
otherwise have to the Plan Administration Employee.
THE EMPLOYER'S OBLIGATION HEREUNDER TO INDEMNIFY THE PLAN
ADMINISTRATION EMPLOYEE SHALL EXIST WITHOUT REGARD TO THE CAUSE OR CAUSES OF THE
MATTERS FOR WHICH
VIII-5
INDEMNITY IS OWED AND EXPRESSLY INCLUDES (BUT IS NOT LIMITED TO) THE LOSSES,
DIRECTLY OR INDIRECTLY, RELATING TO, BASED UPON, ARISING OUT OF, OR RESULTING
FROM ANY ONE OR MORE OF THE FOLLOWING:
(I) THE SOLE NEGLIGENCE OR FAULT OF ANY PLAN
ADMINISTRATION EMPLOYEE OR COMBINATION OF PLAN ADMINISTRATION
EMPLOYEES;
(II) THE SOLE NEGLIGENCE OR FAULT OF THE EMPLOYER;
(III) THE SOLE NEGLIGENCE OR FAULT OF THIRD PARTIES;
(IV) THE CONCURRENT NEGLIGENCE OR FAULT OR ANY COMBINATION
OF THE PLAN ADMINISTRATION EMPLOYEE AND/OR THE EMPLOYER AND/OR ANY
THIRD PARTY; AND
(V) ANY OTHER CONCEIVABLE OR POSSIBLE COMBINATION OR
FAULT OR NEGLIGENCE, IT BEING THE SPECIFIC INTENT OF THE EMPLOYER TO
PROVIDE THE MAXIMUM POSSIBLE INDEMNIFICATION PROTECTION HEREUNDER, BUT
EXCLUDING ANY SUCH LOSSES THAT ARE FOUND BY A COURT OF COMPETENT
JURISDICTION TO HAVE RESULTED SOLELY FROM GROSS NEGLIGENCE, BAD FAITH
OR INTENTIONAL MISCONDUCT.
The Plan Administration Employee shall have the right to retain counsel
of its own choice to represent it, however, such counsel shall be acceptable to
the Employer, which acceptance shall not be unreasonably withheld, and the
Employer shall pay the fees and expenses of such counsel; and such counsel shall
to the full extent consistent with its professional responsibilities cooperate
with the Employer and any counsel designated by it. The Employer shall be liable
for any settlement of any claim against the Plan Administration Employee made
with the written consent of the Employer, which consent shall not be
unreasonably withheld. The foregoing right of indemnification shall inure to the
benefit of the successors and assigns, and the heirs, executors, administrators
and personal representatives of each Plan Administration Employee, and shall be
in addition to all other rights to which the Plan Administration Employee may be
entitled as a matter of law, contract, or otherwise.
VIII-6
ARTICLE IX
TRUSTEE
9.1 APPOINTMENT: The office of the Trustee shall be comprised of
one or more individuals, or one corporation which is authorized to conduct a
trust business under applicable state law, as appointed from time to time by the
Board. When there are individual trustees, action by the individual trustees
shall be determined by the majority vote of the individuals then acting taken
with or without a meeting. Such action shall be binding upon all persons and
entities. Any act of the individual trustee or trustees shall be sufficiently
evidenced if certified by the individual trustee or trustees, and, if there is
more than one individual trustee, one of the individual trustees may be given
the authority to certify such acts and, generally, to perform all administrative
and ministerial duties on behalf of the individual trustees. An individual
trustee otherwise eligible to participate in the Plan shall not be excluded on
the basis that he is an individual trustee, however, in such event, he shall not
participate in any decisions pertaining solely to himself as a Member or
Beneficiary.
9.2 AUTHORITY: The Trustee shall be a fiduciary and, in that
capacity subject to the directions of the Administrative Committee, the Trustee
shall have the responsibility for and all powers necessary to receive, hold,
preserve, manage, invest and reinvest the Trust Fund as provided generally in
this Article, and to pay all costs and expenses incident thereto. By written
notice to the Trustee, the Administrative Committee or an investment manager (as
described in Section 3(38) of the Act) appointed by the Administrative Committee
shall direct the Trustee (i) in the management, investment and reinvestment of
the Trust Fund and (ii) with respect to the transfer or acceptance of assets,
and the Trustee shall be subject to all proper directions of the Administrative
Committee or its appointed investment manager, provided that such directions are
made in accordance with the Plan and the Act. The Trustee may from time to time
request direction from the Administrative Committee with respect to any issue
relating to the exercise of any of the Trustee's duties hereunder. An absence of
direction from the Administrative Committee will be deemed a direction to
refrain from taking any such action.
9.3 INVESTMENT POWERS: Subject to the direction of the
Administrative Committee, the Trustee shall have the following powers relating
to the receipt, preservation, management, investment and reinvestment of both
the principal and income of the Trust Fund, as it may be composed from time to
time, in addition to all of the powers, rights, options and privileges now or
hereafter provided for, vested in, or granted the Trustee under common law and
applicable provisions of the Texas Trust Code, as amended from time to time, and
all other applicable laws, except such as conflict with the terms and provisions
of the Plan or by the Act. To the extent possible, no subsequent legislation or
regulation shall be in limitation of the rights, powers or privileges granted
the Trustee hereunder or in the Texas Trust Code as it exists at the time of the
execution of the Plan and Trust.
(a) To handle, deal with, and dispose of the Trust
property and estate as if the Trustee were the fee simple owner of such
property and estate;
IX-1
(b) Except where prohibited by applicable law which
cannot be waived, to keep any and all securities or other property in
the name of some other person or entity, with a power of attorney for
their transfer attached, in bearer or Federal Reserve Book-Entry form,
or in the name of the Trustee, without disclosing the fiduciary
capacity of the Trustee;
(c) Subject to the direction of the Administrative
Committee or an investment manager described in Section 3(38) of the
Act, to exercise all voting rights with respect to any investments held
in the Trust Fund and to grant proxies, discretionary or otherwise,
with or without the power of substitution, with respect thereto; to the
extent not inconsistent with its fiduciary duties under the Act, the
Trustee shall not exercise its discretion with respect to voting any
securities under management of the Administrative Committee or, if
applicable, the investment manager, but shall exercise all voting
rights with respect thereto according to the directions of the
Administrative Committee or, if applicable, investment manager;
(d) To collect the principal and income of the Trust Fund
as the same may become due and payable and to give binding receipt
therefor;
(e) To take any action, whether by legal proceeding,
compromise, or otherwise, as the Administrative Committee, in its
discretion deems to be in the best interest of the Trust; subject to
the direction of the Administrative Committee, to settle, compromise or
submit to arbitration any claims, debts or damages due or owing the
Trust; subject to the direction of the Administrative Committee, to
commence or defend suits or legal proceedings to protect any interests
of the Trust, and to represent the Trust in all suits and other legal
proceedings in any court or before any body, board, agency, panel or
tribunal;
(f) To hold uninvested at any time, without liability for
interest thereon for a reasonable period of time, any amount of money
received by the Trustee or raised by the Trustee from the sale of
investments or otherwise until same can be reinvested or disbursed;
(g) Subject to Section 4.10 hereof and to the direction
of the Administrative Committee or an investment manager, to invest and
reinvest the Trust Fund assets, or any part thereof, in any property of
any kind or nature whatsoever, whether real, personal or mixed, whether
tangible or intangible or productive of income, or in any rights or
interests in property, or in any evidence or indicia of property,
including, but not limited to, the following types of properties or
interests therein, or anything of a similar kind, character, or class:
common or preferred stock, interests in so-called Massachusetts trusts,
insurance contracts, key-man or otherwise (provided that no payment
under any such contracts shall be made in contravention of applicable
provisions of Article VI of the Plan), fees, beneficial interests,
leaseholds, bonds, mortgages, leases, notes
IX-2
(including, but not limited to secured or unsecured notes of any kind),
obligations, oil and gas payments, oil and gas contracts, savings
accounts, certificates of deposit or like investments with the
commercial department of any bank (including any bank acting as Trustee
or its affiliates so long as they bear a reasonable interest rate and
the bank is supervised by the United States or a state), common,
pooled, collective or group trust funds which the Trustee or any of its
affiliates or any other entity may now have or in the future may adopt
for the collective investment of funds of trusts of employee benefit
plans qualified under Section 401(a) of the Code and exempt from
federal income taxes under Section 501(a) of the Code (the instrument
creating such common, pooled, collective or group trust fund, together
with any amendments thereto, being hereby incorporated in and made a
part of the Trust), in money market funds, or qualifying employer
securities and/or qualifying employer real property of the Employers up
to one hundred percent (100%) of the Trust Fund; provided, however,
unless the Plan would not have to be registered under the federal
Securities Act of 1933, only amounts attributable to Employer
Contributions (other than Elective Contributions) shall be used to
purchase qualifying employer securities and, to the extent the Trustee
is not independent of the issuer of such employer securities, the
issuer shall retain the services of an "agent independent of the
issuer" (as such term is defined in Rule 10b-18 promulgated under the
Securities Exchange Act of 1934) to effect such purchase and, further
provided, that the purchases are made in accordance with applicable
provisions of the Act;
(h) Subject to the direction of the Administrative
Committee, to lease and let all or any portion of the properties
possessed by the Trust Fund for the development or production of oil,
gas, sulphur or other minerals, or for any other purpose, on such
terms, times and conditions (including a term which will extend beyond
the term of this Trust), and for such consideration or royalties as the
Trustee deems proper;
(i) Subject to the direction of the Administrative
Committee, to borrow from or loan such sums as the Trustee considers
necessary or desirable (but not including loans to members without the
express direction from the Administration Committee) and, for that
purpose, to mortgage or pledge all or any part of the Trust Fund
property;
(j) If specifically directed by the Administrative
Committee, to purchase deposit administration contracts, individual
annuity contracts, or group annuity contracts from any insurance
company licensed in the State of Texas; provided, however, no payment
under any such contract shall be made in contravention of applicable
provisions of the Plan; and
(k) To employ such lawyers, accountants, actuaries,
brokers, banks, investment counsel or other agents or employees and to
delegate to them such
IX-3
duties, rights and powers of the Trustee hereunder (including the power
to vote shares of stock) as the Trustee deems advisable in
administering the Trust Fund.
The Trustee shall not be required to take any legal action to collect, preserve
or maintain any Trust Fund property unless the Trustee has been indemnified
either by the Trust itself, with the approval of the Administrative Committee,
or by an Employer, with respect to any expenses or losses to which the Trustee
may be subjected by taking such action. Any property acquired by the Trustee
through the enforcement or compromise of any claim the Trustee has as Trustee
will become a part of the Trust Fund. The Trustee shall be responsible only for
the property actually received by it hereunder. It shall have no duty or
authority to compute any amount to be paid to it by an Employer or a Member, or
to bring any action or proceeding to enforce the collection of any contribution
to the Trust Fund.
9.4 STANDARD OF PERFORMANCE: The Trustee in discharging the duties
of Trustee with respect to the management, investment and reinvestment of the
Trust Fund assets shall do so solely in the interest of the Members and
Beneficiaries, using the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent man acting in a like capacity and
familiar with such matters would use in the conduct of an enterprise of a like
character; shall diversify the investments of the Trust Fund so as to minimize
the risk of large losses unless under the circumstances it is clearly prudent
not to do so; and shall otherwise act in accordance with the provisions of the
Plan and the Act.
9.5 LIABILITY FOR INVESTMENTS: The Trustee shall not be liable to
the Trust, or to any person or entity having a beneficial interest in the Trust,
for any loss or decline in value which may be incurred upon any investment of
the Trust Fund assets, including, but not limited to, qualifying employer
securities and qualifying employer real property, or for failure of such assets
to produce any or greater earnings, interest, or profits, so long as the Trustee
acts in good faith and in accordance with the responsibilities, obligations and
duties placed on the Trustee under the Plan and the Act.
9.6 RELIANCE ON DIRECTIONS: When the Trustee acts in good faith,
the Trustee, in all matters pertaining to the Trustee's management and
investment of the Trust Fund, may rely upon any notice, resolution, instruction,
direction, order, certificate, opinion, letter, telegram or other document
believed by the Trustee to be genuine, to have been signed by a proper
representative of the Administrative Committee or an investment manager (as
described in Section 3(38) of the Act), if one is appointed, and to be the act
of the Administrative Committee or the investment manager, as the case may be.
The Trustee shall accept any notice or other instrument which reasonably appears
to be genuine and to have been signed by a proper representative of the
Administrative Committee or an investment manager, if one is appointed, which
purports to evidence an instruction, direction, or order of the Administrative
Committee or the investment manager, as the case may be, as conclusive evidence
thereof.
9.7 GENERAL LIABILITY OF THE TRUSTEE: The Trustee shall not be
liable for any act or omission by the Trustee because of a direction of the
Administrative Committee or an investment
IX-4
manager appointed by the Administrative Committee; nor for any act or omission
of the Administrative Committee, an investment manager appointed by the
Administrative Committee, or any other agent appointed by the Administrative
Committee, except to the extent required by the Act and any other applicable
state or federal law, which liability cannot be waived. The Trustee shall not be
liable for any act or omission on the Trustee's own part except to the extent
required by the Act and any other applicable state or federal law, which
liability cannot be waived. Further, it is specifically provided that the
Trustee may, with the written approval of the Administrative Committee, purchase
out of the Trust Fund insurance for the Trustee and for the Trust Fund itself to
cover liability and losses occurring by reason of the act or omission of the
Trustee, provided that such insurance permits recourse by the insurer against
the Trustee in the case of a breach of a fiduciary obligation by the Trustee.
To the full extent permitted by law, the Plan Sponsor and each other
adopting Employer of the Plan (collectively, the "Employer") jointly and
severally shall indemnify and hold harmless each Employee who serves or has
served in the capacity of Trustee (or as co-Trustee) against, and such
Employee/Trustee shall be entitled without further action on his part to
indemnity from the Employer for, any and all losses, claims, damages, judgments,
settlements, liabilities, expenses and costs (and all actions in respect thereof
and any legal or other costs and expenses in giving testimony or furnishing
documents in response to a subpoena or otherwise), including the cost of
investigating, preparing or defending any pending threatened or anticipated
possible action, claim, suit or other proceeding, whether or not in connection
with litigation in which the Trustee is a party (collectively, the "Losses"), as
and when incurred, directly or indirectly, relating to, based upon, arising out
of, or resulting from his being or having been a Trustee; provided, however,
that such indemnity shall not include any Losses incurred by such Trustee (i)
with respect to any matters as to which he is finally adjudged in any such
action, suit or proceeding to have been guilty of gross negligence, bad faith or
intentional misconduct in the performance of his duties as a Trustee, or (ii)
with respect to any matter to the extent that a settlement thereof is effected
in an amount in excess of the amount approved by the Employer (which approval
shall not be unreasonably withheld), and, further, no right of indemnification
hereunder shall be available to, or enforceable by, any such Trustee unless,
within sixty (60) days after his actual receipt of service of process in any
such action, suit or other proceeding (or such longer period as may be approved
by the Plan Sponsor), he shall have offered the Plan Sponsor in writing, the
opportunity to handle and defend same at its sole expense, and the decision by
the Plan Sponsor to handle such proceeding shall conclusively determine that the
Trustee is entitled to the indemnity provided herein. The foregoing right of
indemnification shall be in addition to any liability that the Employer may
otherwise have to the Employee who serves or has served as Trustee.
THE EMPLOYER'S OBLIGATION HEREUNDER TO INDEMNIFY THE TRUSTEE SHALL
EXIST WITHOUT REGARD TO THE CAUSE OR CAUSES OF THE MATTERS FOR WHICH INDEMNITY
IS OWED AND EXPRESSLY INCLUDES (BUT IS NOT LIMITED TO) THE LOSSES, DIRECTLY OR
INDIRECTLY, RELATING TO, BASED UPON, ARISING OUT OF, OR RESULTING FROM ANY ONE
OR MORE OF THE FOLLOWING:
(I) THE SOLE NEGLIGENCE OR FAULT OF THE TRUSTEE;
IX-5
(II) THE SOLE NEGLIGENCE OR FAULT OF THE EMPLOYER;
(III) THE SOLE NEGLIGENCE OR FAULT OF THIRD PARTIES;
(IV) THE CONCURRENT NEGLIGENCE OR FAULT OR ANY COMBINATION
OF THE TRUSTEE AND/OR ANY THIRD PARTY; AND
(V) ANY OTHER CONCEIVABLE OR POSSIBLE COMBINATION OR
FAULT OR NEGLIGENCE, IT BEING THE SPECIFIC INTENT OF THE EMPLOYER TO
PROVIDE THE MAXIMUM POSSIBLE INDEMNIFICATION PROTECTION HEREUNDER, BUT
EXCLUDING ANY SUCH LOSSES THAT ARE FOUND BY A COURT OF COMPETENT
JURISDICTION TO HAVE RESULTED SOLELY FROM GROSS NEGLIGENCE, BAD FAITH
OR INTENTIONAL MISCONDUCT.
The Trustee shall have the right to retain counsel of its own choice to
represent it, however, such counsel shall be acceptable to the Employer, which
acceptance shall not be unreasonably withheld, and the Employer shall pay the
fees and expenses of such counsel; and such counsel shall to the full extent
consistent with its professional responsibilities cooperate with the Employer
and any counsel designated by it. The Employer shall be liable for any
settlement of any claim against the Trustee made with the written consent of the
Employer, which consent shall not be unreasonably withheld. The foregoing right
of indemnification shall inure to the benefit of the successors and assigns, and
the heirs, executors, administrators and personal representatives of the
Trustee, and shall be in addition to all other rights to which the Trustee may
be entitled as a matter of law, contract, or otherwise.
9.8 PROOF OF TRUSTEE'S AUTHORITY: All persons dealing with the
Trustee are entitled to rely upon the representations of the Trustee as to the
Trustee's authority and are released from any duty to inquire into the Trustee's
authority for taking or omitting any action, or to verify that any money paid
for other property delivered to the Trustee is used by the Trustee for Trust
purposes. Any action of the Trustee under the Plan shall be conclusively
evidenced for all purposes by a certificate or other document signed by the
Trustee, and any such certificate or document shall be conclusive evidence of
the facts recited therein. Any person shall be fully protected when acting or
relying upon any notice, resolution, instruction, direction, order, certificate,
opinion, letter, telegram or other document believed by such person to be
genuine, to have been signed by the Trustee, and to be the act of the Trustee.
9.9 ACCOUNTING REQUIRED BY TRUSTEE. Within one hundred twenty
(120) days after the close of each Plan Year, and at such other times (or
shorter accounting periods) as requested in writing by the Administrative
Committee, and as of the date of the removal or resignation of the Trustee, the
Trustee shall render to each Employer and the Administrative Committee, an
accounting report of the Trust Fund covering the period since the previous
accounting report. The report shall reflect the transactions, expenses, and
earnings or losses for the period covered, and, as of the last day of such
period, the cost basis of the assets, the fair market value of the assets, and
the liabilities of the Trust Fund. The written approval of such accounting
report by the Administrative Committee or the affected Employer, or the failure
of the Administrative
IX-6
Committee or the affected Employer to notify the Trustee of its disapproval of
such report within ninety (90) days after receipt thereof, shall be final and
binding as to the Trustee's administration of the Trust for such period upon
such Employer and all Members (and Beneficiaries thereof) of such Employer who
have or may thereafter have an interest in the Trust, except with respect to (i)
any matter that the Administrative Committee or affected Employer could not
reasonably be expected to discover upon review of such accounting report, (ii)
any actions or omissions in violation of the Act or other applicable law, and
(iii) any actions or omissions that are determined by a court of competent
jurisdiction to constitute gross negligence or intentional or willful
misconduct.
9.10 RESIGNATION OR REMOVAL OF TRUSTEE: The Trustee may resign at
any time by giving at least sixty (60) days prior written notice to the Board,
unless the Board agrees to a shorter notice period. The Board may remove the
Trustee at any time by giving at least thirty (30) days prior written notice to
the Trustee, unless the Trustee agrees to a shorter notice period. Upon the
resignation or removal of the Trustee, the Trustee shall render to the
Administrative Committee and to each Employer a written account of the
administration of the Trust for the period following the period that was covered
by the last accounting report.
9.11 APPOINTMENT AND POWER OF SUCCESSOR TRUSTEE: Any vacancy in the
office of Trustee created by the resignation or removal of the Trustee shall not
terminate the Trust. In the event of such vacancy, the Board shall appoint a
successor Trustee; PROVIDED, HOWEVER, that in the event of the resignation or
removal of an individual serving as Trustee, the chief executive officer of the
Plan Sponsor shall have the power and authority to appoint an interim Trustee to
serve until such time as the appointment of a successor Trustee is approved by
the Board. The successor Trustee, and any interim Trustee, after acknowledging
acceptance of the Trust, the Trust Fund assets and liabilities, and the
accounting of the retiring Trustee, shall be vested with all the estates,
titles, rights, powers, duties, and discretions which were granted to the
retiring Trustee. The retiring Trustee shall execute and deliver all assignments
or other instruments as may be necessary or advisable in the discretion of the
successor Trustee, and any interim Trustee.
9.12 COMPENSATION OF TRUSTEE: Any corporate Trustee shall be
reimbursed for expenses properly and actually incurred in the performance of its
duties under the Plan pursuant to Section 8.14 and shall receive reasonable
compensation for services rendered as may be agreed upon, from time to time,
between the Trustee and the Administrative Committee. Any Employee or individual
serving as Trustee shall not receive any compensation for his services as
Trustee, but shall be reimbursed for all expenses properly and actually incurred
in the performance of his duties under the Plan pursuant to Section 8.14.
9.13 BONDING. The Trustee and each other fiduciary pursuant to the
Act, except a bank, insurance company or another person or entity which is
exempted under the Act, shall be bonded in an amount not less than ten percent
(10%) of the amount of funds that such fiduciary handles; provided, however, the
minimum bond shall be $1,000 and the maximum bond shall be $500,000. The amount
of funds handled shall be determined at the beginning of each Plan Year
IX-7
by the amount of funds handled by each covered fiduciary and their predecessors,
if any, during the preceding Plan Year, or if there is no preceding Plan Year,
then by the amount of funds to be handled during the current Plan Year. The bond
shall provide protection to the Trust against any loss by reason of the fraud or
dishonesty of the fiduciary acting alone or in connivance with others. The
surety shall be a corporate surety company (as such term is used in Section
412(a)(2) of the Act), and the bond shall be in a form approved by the U.S.
Secretary of Labor in regulations or other authority issued under the Act.
IX-8
ARTICLE X
ADOPTION OF PLAN BY OTHER EMPLOYERS
10.1 ADOPTION PROCEDURE: Any business organization may, with the
approval of the Board, adopt the Plan for all or any classification of its
Employees, as permitted by Section 401(a) of the Code, by depositing with the
Administrative Committee:
(a) A certified resolution or consent of the sole
proprietor, managing partner(s) or board of directors (or equivalent
governing authority) of the adopting Employer, or a duly executed
adoption instrument (adopted and approved by the sole proprietor,
managing partner(s) or board of directors (or equivalent governing
authority) of the adopting Employer)) setting forth its agreement to be
bound as an Employer by all the terms, provisions, conditions and
limitations of the Plan, except those, if any, specifically set forth
in the adoption instrument;
(b) All information required by the Administrative
Committee and the Trustee with reference to Employees or Members; and
(c) The written consent of the Board to the adoption of
this Plan. Any adoption may be made retroactive to the beginning of a
Plan Year by complying with the foregoing conditions on or before the
last day of that Plan Year.
10.2 NO JOINT VENTURE IMPLIED: The adoption instrument executed by
an Employer shall become, as to it and its Employees, a part of the Plan.
However, except as otherwise provided under the Plan, neither the adoption of
the Plan by an Employer, nor any act performed by it in relation to the Plan
shall ever create a joint venture or partnership relation between it and any
other Employer. Although the Accounts of Members employed by the Employers which
adopt the Plan shall be commingled for purposes of investment thereof, unless
the Administrative Committee and the Trustee are otherwise directed by the
Board, amounts held in the Trust Fund allocable to a particular Employer shall,
on an ongoing basis, be available to pay benefits to Members employed by that
Employer, and to pay benefits to Members employed by any other Employer which is
an Affiliated Employer required to be aggregated with the first such Employer,
but not otherwise. In addition, unless the Administrative Committee and Trustee
are otherwise directed by the Board, the Administrative Committee shall maintain
completely separate accounts and records for the Plan Sponsor and each other
Employer which is an Affiliated Employer required to be aggregated with the Plan
Sponsor (and Employees thereof who are Members), but otherwise the Plan shall be
maintained on a consolidated basis for the Plan Sponsor and all such other
Affiliated Employers. The Administrative Committee shall maintain completely
separate accounts and records for any Employer that is not an Affiliated
Employer, as distinguished from maintaining the Plan on a consolidated basis
with such other Employer.
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10.3 TRANSFER OF MEMBERS: If an Employee of one Employer is
Transferred to the service of another Employer, the Employee shall maintain all
of his rights under the Plan. Contributions to the Transferred Employee's
Employer Account shall be handled in accordance with the provisions of Sections
4.2 and 4.8, and his Active Service shall be considered uninterrupted, as if no
Transfer had occurred. Unless otherwise provided hereunder, Active Service with
any Employer shall count as Active Service with all Employers, whether before or
after the date that the Employer adopts the Plan.
X-2
ARTICLE XI
AMENDMENT AND TERMINATION
11.1 RIGHT TO AMEND AND LIMITATIONS THEREON: The Board shall have
the sole right to amend the Plan. Any amendment shall (i) be made by a written
instrument and executed by an appropriate officer of the Plan Sponsor, (ii) set
forth the nature of the amendment and its effective date (which may be
retroactive), and (iii) be supported by a certified copy of the resolution or
direction which authorized or ratified it. Although the Trustee shall be
expected to execute each amendment of the Plan, failure of the Trustee to
execute any such amendment shall not adversely affect the Plan Sponsor's
exclusive right to effectively amend the Plan without regard to any act or
forbearance on the part of the Trustee. No amendment shall:
(a) Except as otherwise specifically provided in the
Plan, cause or permit any Trust Fund assets to be diverted to any
purpose other than the exclusive benefit of the Members and their
Beneficiaries;
(b) Decrease the accrued benefit of any Member or
eliminate a protected form of benefit in violation of Section 411(d)(6)
of the Code;
(c) Materially increase the duties or liabilities of the
Trustee without its prior written consent; or
(d) Change the vesting schedule to one which would result
in the nonforfeitable percentage of the accrued benefit derived from
Employer Contributions (determined as of the later of the amendment's
adoption date or effective date) of any Member being less than such
nonforfeitable percentage computed under the Plan without regard to
such amendment. If the Plan's vesting schedule is amended, or if the
Plan is amended in any way that directly or indirectly affects the
computation of the Member's nonforfeitable percentage, or if the Plan
is deemed amended by an automatic change to or from a Top-Heavy vesting
schedule, each Member with at least three years of service with an
Employer may elect, within a reasonable period after the adoption of
the amendment or change, to have the nonforfeitable percentage computed
under the Plan without regard to such amendment or change. The period
during which the election may be made shall begin no later than the
date upon which the amendment is adopted or deemed to be made and shall
end no later than the latest of the following dates: (1) the date which
is sixty (60) days after the day the amendment is adopted or deemed to
be made; (2) the date which is sixty (60) days after the day that the
amendment becomes effective; or (3) the date which is sixty (60) days
after the day that the Member is issued written notice of the amendment
by the Employer.
XI-1
In the event of an amendment, each Employer will be deemed to have
consented to and adopted the amendment unless an Employer notifies the Plan
Sponsor, the Administrative Committee, and the Trustee to the contrary in
writing within thirty (30) days after receipt of a copy of the amendment, in
which case the rejection will constitute a withdrawal from the Plan by that
Employer.
11.2 MANDATORY AMENDMENTS: Except as otherwise provided in the
Plan, or except as otherwise prescribed by applicable law or other authority
prescribed thereunder by the appropriate governmental authority, the
Contributions of each Employer to the Plan are intended to be:
(a) Deductible under applicable provisions of the Code;
(b) Exempt from the federal Social Security Act, as
amended;
(c) Exempt from withholding under the Code; and
(d) Excludable from any Employee's regular rate of pay,
as that term is defined under the Fair Labor Standards Act of 1938, as
amended.
The Plan Sponsor shall make such amendments to the Plan as may be
necessary to carry out this intention, and all such amendments may be made
retroactively.
11.3 WITHDRAWAL OF AN EMPLOYER: An Employer may withdraw from the
Plan either by rejecting an amendment or by giving written notice of its intent
to withdraw to the Plan Sponsor, the Administrative Committee and the Trustee.
The Administrative Committee shall then determine, within ninety (90) days
following the receipt of the rejection or notice, the portion of the Trust Fund
that is attributable to the Members employed by the withdrawing Employer and
shall forward a copy of such determination to the Trustee. Upon receipt of the
determination, the Trustee shall immediately segregate those assets attributable
to the Members employed by the withdrawing Employer and shall transfer those
assets to the successor trustee when it receives a designation of such successor
from the withdrawing Employer.
The withdrawal from the Plan will not terminate the Plan with respect
to the withdrawing Employer. Instead, the withdrawing Employer shall, as soon as
practical, either appoint a successor trustee or trustees and reaffirm the Plan
as a new and separate plan and trust intended to qualify under Sections 401(a)
and 501(a) of the Code, or establish another plan and trust intended to qualify
under Sections 401(a) and 501(a) of the Code.
The determination of the Administrative Committee, in its sole
discretion, of the portion of the Trust Fund that is attributable to the Members
employed by the withdrawing Employer shall be final and binding upon all persons
or entities; and, the Trustee's transfer of those assets to the designated
successor Trustee shall relieve the Trustee of any further obligation, liability
XI-2
or duty to the withdrawing Employer, the Members employed by that Employer and
their Beneficiaries, and to the successor Trustee.
11.4 VOLUNTARY AND INVOLUNTARY TERMINATION: Any Employer may
terminate its participation in the Plan by executing and delivering to the
Administrative Committee and the Trustee a notice which specifies the date on
which its participation in the Plan shall terminate. Likewise, participation of
an Employer in the Plan will automatically terminate upon the general assignment
by that Employer to or for the benefit of its creditors or the liquidation or
dissolution of that Employer without a successor (whether or not as the result
of a bankruptcy proceeding).
Upon termination of participation in the Plan by any Employer without
provision for continuation of the portion thereof attributable to such Employer,
subject to the provisions of this Section, the Trustee shall distribute to each
Member employed by the terminating Employer the vested amounts certified by the
Administrative Committee as then credited to the Accounts of the Members
employed by the terminating Employer. If a Member's vested Account balance which
is distributable hereunder does not exceed $3,500, such Account balance shall be
distributed in the form of a lump sum payment which may be paid in cash or in
shares of Company Stock, or both, as elected by the Member in accordance with
applicable provisions of Section 6.6. Such distribution may be made without the
necessity of obtaining the consent of the Member. If a Member's vested Account
balance which is distributable hereunder is in excess of $3,500, and if the
Member consents to the distribution hereunder in the form of a lump sum payment,
the Administrative Committee shall direct the Trustee to make settlement of a
Member's Account as provided in the second preceding sentence. If a Member's
vested Account balance which is distributable hereunder is in excess of $3,500,
and if the Member fails to consent to the distribution hereunder, the
Administrative Committee shall direct the Trustee to make settlement of the
Member's Account by distribution of a deferred commercial annuity which can be
purchased (with the net proceeds of the Member's vested Account balance) from
any life insurance company licensed to conduct business in the State of the
situs of the Trust, provided that such annuity (i) shall provide the same
settlement provisions as are set out in Article VI and (ii) shall be issued or
endorsed as nontransferable so that the owner thereof cannot sell, assign,
discount, or pledge as collateral for a loan or as security for the performance
of an obligation or for any other purpose his interest in such contract to any
person, other than the issuer of such annuity upon the surrender thereof, and,
further provided, that in the event of any conflict between applicable
provisions of the Plan (regarding the timing or manner of payment of benefit)
and the terms and provisions of any such commercial annuity purchased hereunder,
the terms and provisions of the Plan shall control. Subject to subsequent
provisions hereof, distributions hereunder shall be made as soon as
administratively practicable, but in no event later than the time required under
applicable provisions of the Code.
In the event that (i) the Plan is maintained by the Plan Sponsor and at
least one other Employer which is an Affiliated Employer required to be
aggregated with the Plan Sponsor, (ii) on an ongoing basis, assets of the Plan
are available to pay benefits to any Employee who is a Member (and Beneficiaries
thereof) and thus the Plan should be viewed as a single plan for purposes of
Section 414(l) of the Code, and (iii) the Plan is operated on a consolidated
basis,
XI-3
then, in that event, should any Employer which is an Affiliated Employer
terminate participation in the Plan without provision for continuation of the
portion thereof attributable to such Employer, subject to application of Section
11.5 (relating to partial terminations), any forfeitures arising incident to the
distributions described above shall be allocated in accordance with Section 4.6
among the Plan Sponsor and each remaining Employer which is an Affiliated
Employer. Any unapplied portion (comprised of excess amounts arising from or
attributable to Contributions of such terminating Affiliated Employer) of any
suspense account described in Section 4.3 shall be applied pro-rata to reduce
future Contributions of the Plan Sponsor and any remaining Employer which is an
Affiliated Employer. Regardless of whether the Plan is operated on an ongoing
basis which should result in the Plan being viewed as a single plan for purposes
of Section 414(l) of the Code, in the event that the Plan is not operated on a
consolidated basis and separate accounts and records are maintained for each
separate Employer under the Plan, then should any Employer which is an
Affiliated Employer terminate participation in the Plan without provision for
continuation of the portion thereof attributable to such Employer, Members
employed by such terminating Employer as of the date of such termination of
participation in the Plan shall have a 100% vested and nonforfeitable interest
in their Accounts. Similar rules shall apply with respect to any other Employer
with respect to which the Plan is not operated on a consolidated basis.
If the Plan should terminate, or should an Employer terminate its
participation in the Plan without causing the Plan to terminate, the Trustee, as
directed by the Administrative Committee, shall notify the Internal Revenue
Service of such termination of the Plan or termination of participation in the
Plan by an Employer, and the Plan Sponsor shall apply to the Internal Revenue
Service for a determination letter with respect to said termination of the Plan
or termination of participation in the Plan by an Employer. The Trustee shall
not distribute the assets in the Trust Fund in violation of applicable
provisions of Article VI of the Plan or prior to receipt of a copy of a
determination letter from the Internal Revenue Service to the effect that an
immediate distribution of Plan assets will not adversely affect the prior
qualification of the Plan under Sections 401(a) of the Code and the exemption of
the Trust under Section 501(a) of the Code. Provided further, notwithstanding
any other provision of the Plan to the contrary, amounts allocated and credited
to the affected Members' Accounts may be distributed in any form authorized
hereunder which constitutes a lump sum distribution described in Section
401(k)(10) of the Code prior to such time such amounts would otherwise be
distributed if (i) the Plan is terminated without establishment of a successor
plan in contravention of Section 401(k)(10)(A)(i) of the Code, (ii) the Plan
Sponsor or other Employer effects a disposition (to an employer which is not an
Affiliated Employer) of substantially all of the assets (within the meaning of
Section 409(d)(2) of the Code) used by such Plan Sponsor or other Employer in a
trade or business of such Plan Sponsor or other Employer with respect to any
former Member who continues employment with the employer which acquires such
assets, and the Plan Sponsor or other Employer continues to maintain the Plan
after such disposition, or (iii) the Plan Sponsor or other Employer effects a
disposition (to an employer which is not an Affiliated Employer) of its interest
in a subsidiary (within the meaning of Section 409(d)(3) of the Code) with
respect to any former Member who continues employment with the subsidiary, and
the Plan Sponsor or other Employer continues to maintain the Plan after such
disposition.
XI-4
A distribution may be made under Section 401(k)(10) of the Code and clauses (ii)
and (iii) of this paragraph only if the Plan Sponsor or Employer continues to
maintain the Plan after the disposition. This requirement is satisfied only if
the purchaser does not maintain the Plan after the disposition. A purchaser
maintains the Plan if it adopts the Plan or otherwise becomes an employer whose
employees accrue benefits under the Plan. A purchaser also maintains the Plan if
the Plan is merged or consolidated with, or any assets or liabilities are
transferred from the Plan to, a plan maintained by the purchaser in a
transaction subject to Section 414(l)(1) of the Code. A purchaser is not treated
as maintaining the Plan merely because a plan that it maintains accepts rollover
contributions of amounts distributed by the Plan.
For purposes of the previous paragraph, in accordance with Section
1.401(k)-1(d)(3) of the Income Tax Regulations, a successor plan is any other
defined contribution plan maintained by the same employer. However, if fewer
than two percent (2%) of the employees who are eligible under the Plan at the
time of its termination are or were eligible under another defined contribution
plan at any time during the 24-month period beginning 12 months before the time
of the termination, the other plan is not a successor plan. The term "defined
contribution plan" means a plan that is a defined contribution plan as defined
in Section 414(i) of the Code, but does not include an employee stock ownership
plan as defined in Section 4975(e) or 409 of the Code or a simplified employee
pension as defined in Section 408(k) of the Code. A plan is a successor plan
only if it exists at the time the Plan is terminated or within the period ending
12 months after distribution of all assets from the Plan.
Pursuant to Section 11.5, the termination of participation in the Plan
by any one or more of the Employers will not constitute a termination of the
Plan with respect to any other remaining Employers. Upon satisfaction of all
liabilities to all Members and Beneficiaries hereunder, the Trust shall
terminate.
11.5 VESTING UPON DISCONTINUANCE OF EMPLOYER CONTRIBUTIONS, TOTAL
OR PARTIAL TERMINATION: Notwithstanding any other provision of the Plan, in the
event that there is a total or partial termination, or complete discontinuance
of the Employer Contributions hereunder, the vesting schedule contained in
Section 6.4 shall be inapplicable to the affected Members and each affected
Member thereupon shall have a full 100% vested interest in the amount credited
to his Account as of the end of the last Plan Year for which a substantial
Employer Contribution was made and in any amounts thereafter credited or
allocated to his Account; provided, however, that if the Employer shall
thereafter resume making substantial Contributions hereunder, all amounts
credited or allocated to an affected Member's Account with respect to the Plan
Year for which such Contributions are resumed, and the Plan Years for which they
are continued, shall vest only in accordance with the vesting schedule contained
in Section 6.4. During any such period of termination or complete discontinuance
of Employer Contributions, all other provisions of the Plan shall nevertheless
continue in full force and effect, other than provisions for Employer
Contributions and the allocation thereof to the affected Members' Accounts.
Except as otherwise provided in Section 11.4, the Plan shall not terminate
earlier than the effective date as of which the Plan is voluntarily terminated
by the Plan Sponsor or by the Plan Sponsor and the other Employers maintaining
the Plan.
XI-5
11.6 CONTINUANCE PERMITTED UPON SALE OR TRANSFER OF ASSETS: An
Employer's participation in the Plan will not automatically terminate in the
event that it consolidates, merges, and is not the surviving corporation; sells
substantially all of its assets; is a party to a reorganization and its
Employees and substantially all of its assets are transferred to another entity;
or liquidates or dissolves, if there is a successor entity. Instead, the
resulting successor person, firm, corporation, or other entity may assume and
continue the Plan and the Trust by executing a direction, entering into a
contractual commitment or adopting a resolution, as the case may be, providing
for the continuance of the Plan and the Trust simultaneous with or within one
hundred twenty (120) days after such consolidation, merger, sale,
reorganization, liquidation or dissolution. If after such one hundred twenty
(120) day period, the successor entity has not assumed and continued the Plan
and otherwise complied with the provisions of Section 11.3, the successor entity
shall be deemed to have given notice under Section 11.4 and its participation in
the Plan will then automatically terminate on the one hundred twenty-first
(121st) day and, in that event, the appropriate portion of the Trust Fund will
be distributed exclusively to the affected Members or their Beneficiaries as
soon as practicable pursuant to Section 11.4.
11.7 REQUIREMENT ON MERGER, TRANSFER, ETC.: Notwithstanding any
other provision hereof, in accordance with Section 414(l) of the Code, the Plan
will not be merged or consolidated with, nor shall any assets or liabilities of
the Plan be transferred to, any other plan unless each Member would receive (if
the Plan then terminated) a benefit immediately after the merger, consolidation,
or transfer which is equal to or greater than the benefit that he would have
been entitled to receive immediately before the merger, consolidation, or
transfer (if the Plan had then terminated). In addition, any accrued benefits
under the Plan which are subject to and protected under Section 411(d)(6) of the
Code shall not be reduced or eliminated in violation of Section 411(d)(6) of the
Code incident to (i) any merger, consolidation, spin-off or transfer of such
accrued benefits or (ii) any transaction involving an amendment or having the
effect of an amendment of the Plan to transfer such accrued benefits.
Subject to Sections 8.2(i), 8.2(j), 8.2(k) and 9.2, the Trustee, as
directed by the Administrative Committee, shall have the authority to enter into
(i) an agreement to merge or consolidate the Plan with another plan which meets
the requirements of Sections 401(a) and 501(a) of the Code or (ii) an agreement
to accept the direct transfer of assets from any such plan or to transfer Plan
assets to any such plan. Except in cases in which the Plan accepts direct
rollovers of eligible rollover contributions made in accordance with Section
401(a)(31) of the Code and Section 6.6(e) hereof, to the extent that any such
assets that are directly transferred to the Plan are comprised of amounts
attributable to elective deferrals (described in Section 402(g)(3) of the Code),
or qualified nonelective contributions (described in Section 401(m)(4)(C) of the
Code), or matching contributions (described in Section 401(m)(4)(A) of the Code)
that are treated as elective deferrals under Section 401(k) of the Code, such
amounts shall remain subject to any limitations on distribution thereof and,
thus, shall not be distributed under the Plan prior to such time as is permitted
under the transferor plan and Section 401(k) of the Code. Subject to the
Sections described in the immediately preceding sentence, if assets are accepted
on behalf of any Employee prior to the date that such Employee is eligible to
enter the Plan as an active Member, such Employee shall be deemed to be a
XI-6
Member; provided however, such Employee shall not be entitled to authorize
Contributions to the Plan or share in the allocation of any Employer
Contributions unless and until such Employee meets the applicable eligibility
requirements of the Plan.
The Trustee shall not consent or be a party to a merger, consolidation
or transfer of assets with a defined benefit plan, except with respect to a
Rollover Contribution or a transfer which the Administrative Committee has
determined to be an "elective transfer" (described below). The Trustee shall
hold, administer and distribute the transferred assets as a part of the Trust
Fund and the Administrative Committee shall maintain a separate Predecessor Plan
Account for the benefit of each Employee on whose behalf the Trustee accepted
the transfer in order to reflect the value of the transferred assets. Unless a
transfer of assets to the Plan is a Rollover Contribution or an "elective
transfer" (defined below), the Plan shall apply the optional forms of benefit
protections described in this Section and in Section 11.1 to all of the
transferred assets. A transfer is an elective transfer if: (i) the transfer
satisfies the preceding provisions of this Section; (ii) the transfer is
voluntary, under a fully informed election by the Member; (iii) the Member has
an alternative that retains his Code Section 411(d)(6) protected benefits
(including an option to leave his benefit in the transferor plan if that plan is
not terminating and the Member's transferor plan account exceeds $3,500); (iv)
the transfer satisfies the applicable spousal consent requirements of the Code;
(v) the transferor plan satisfies the qualified joint and survivor annuity
notice requirements of the Code, if the Member's transferred benefit is subject
to those requirements; (vi) the Member has the right to immediate distribution
from the transferor plan in lieu of the elective transfer; (vii) the transferred
benefit is the entire nonforfeitable accrued benefit under the transferor plan
(1) calculated to be at least the greater of the single sum distribution
provided by the transferor plan for which the Member is eligible or the present
value of the Member's accrued benefit under the transferor plan payable at that
plan's normal retirement age and (2) calculated by using an interest rate that
complies with the requirements of Section 417(e) of the Code and subject to the
overall limitations of Section 415 of the Code; (viii) the Member has 100%
vested interest in the transferred benefit; and (ix) the transfer otherwise
satisfies applicable regulations or other guidance issued under applicable
provisions of the Code by the appropriate governmental authority.
XI-7
ARTICLE XII
MISCELLANEOUS
12.1 PLAN NOT AN EMPLOYMENT CONTRACT: The adoption and maintenance
of the Plan shall not be deemed to be a contract between any Employer and its
Employees which gives any Employee the right to be retained in the employment of
any Employer; to interfere with the rights of any Employer to discharge any
Employee at any time; or to interfere with any Employee's right to terminate his
employment at any time.
12.2 BENEFITS PROVIDED SOLELY FROM TRUST FUND: All benefits payable
under the Plan shall be paid or provided for solely from the Trust Fund; neither
the Administrative Committee nor any Employer assumes any liability or
responsibility therefor. Each Member assumes all risks in connection with any
decrease in the market value of any common stocks or other investments held on
his behalf in accordance with the provisions of the Plan.
12.3 SPENDTHRIFT PROVISION: No principal or income payable, or to
become payable, from the Trust Fund will be subject to: (i) anticipation or
assignment by any Member or by any Beneficiary; (ii) attachment by, interference
with, or control of any creditor of a Member or Beneficiary; or (iii) being
taken or reached by any legal or equitable process in satisfaction of any debt
or liability of a Member or Beneficiary prior to its actual receipt by such
Member or Beneficiary. Any attempted conveyance, transfer, assignment, mortgage,
pledge, or encumbrance of the Trust Fund, any part or interest in it, by a
Member or Beneficiary prior to distribution will be void, whether that
conveyance, transfer, assignment, mortgage, pledge, hypothecation or encumbrance
is intended to take place or become effective before or after any distribution
of Trust Fund assets or the termination of the Trust. Furthermore, the Trustee
shall not be required to recognize any conveyance, transfer, assignment,
mortgage, pledge or encumbrance by a Member or Beneficiary of the Trust, any
part or interest in it, or to pay any money or thing of value to any creditor or
assignee of a Member or Beneficiary for any cause whatsoever.
This Section shall also apply to the creation, assignment, or
recognition of a right to any benefit payable with respect to a Member pursuant
to a domestic relations order, unless such order is determined to be a qualified
domestic relations order (as defined in Section 414(p) of the Code). In
addition, in the event that, pursuant to a qualified domestic relations order
described above, an Account or subaccount is established for the benefit of the
former spouse or dependent of a Member ("alternate payee"), and in the further
event that Members are entitled to direct the investment of their Accounts in
accordance with Section 4.10, unless the Administrative Committee otherwise
prescribes pursuant to uniformly applied nondiscriminatory rules formulated by
the Administrative Committee, any alternate payee shall be considered to be a
Member for purposes of Section 4.10 and, thus, shall be entitled to direct the
investment of such Account or subaccount.
XII-1
12.4 GENDER, TENSE AND HEADINGS: Whenever the context so requires,
words of the masculine gender used herein shall include the feminine and neuter,
and words used in the singular shall include the plural. The words "herein,"
"hereof," "hereunder," and other similar compounds of the word "here" shall
refer to the entire Plan, not to any particular Section or provision of the
Plan. Headings of Articles, Sections and subsections as used herein are inserted
solely for convenience and reference and constitute no part of the Plan.
12.5 GENERAL TRANSITION RULES RELATING TO AMENDMENT, RESTATEMENT
AND CONTINUATION OF PLAN: This Section shall generally apply to any Prior Plan.
(a) APPLICATION OF PLAN: Except as otherwise provided
under the Plan, in the event that the Employer adopts the Plan as an
amendment, restatement and continuation of a Prior Plan, the provisions
of the Plan shall apply only to Employees whose employment with the
Employer terminates after the effective date of the Plan. If an
Employee's employment with the Employer terminates prior to the
effective date of the Employer's adoption of the Plan, the former
Employee shall be entitled to benefits under the terms and provisions
of Employer's Prior Plan as that plan existed on the date of the
termination of employment.
(b) MAINTENANCE OF ACCOUNTS: Amounts credited to a
Member's accounts under the Prior Plan as in effect immediately prior
to the effective date of its amendment, restatement and continuation
hereunder shall constitute the opening balances of corresponding
Accounts established under the Plan. To the extent that individual
direction of investment of individual Accounts is no longer permitted
under the Plan after the effective date of the Employer's adoption
thereof, the Administrative Committee may direct that such Accounts
shall be liquidated and the proceeds shall establish opening Account
balances as of the date specified by the Administrative Committee,
whereupon such Accounts shall become part of the commingled Trust Fund
subject to otherwise applicable rules for allocating income, gain,
loss, appreciation or depreciation to Accounts.
(c) EMPLOYEE ELECTIONS: Employee elections (under the
Prior Plan as in effect immediately prior to the effective date of its
amendment, restatement and continuation hereunder) with respect to
Employee contribution rates, investment thereof, etc., shall continue
in effect under the Plan unless the Administrative Committee otherwise
directs. Similarly, any beneficiary designation in effect under the
Prior Plan immediately prior to its amendment, restatement and
continuation hereunder shall be deemed to be a valid designation filed
with the Administrative Committee under applicable provisions of the
Plan, to the extent consistent with the Plan and applicable law and
regulations or other authority issued thereunder by the appropriate
governmental authority, unless and until the Member revokes such
Beneficiary designation under applicable provisions of the Plan.
XII-2
(d) WITHDRAWALS AND LOANS: Except to the extent
inconsistent with applicable law and regulations or other authority
issued thereunder by the appropriate governmental authority, and unless
the Administrative Committee otherwise directs, any withdrawals
authorized and loans made under the Prior Plan, as in effect
immediately prior to the effective date of its amendment, restatement
and continuation hereunder, shall continue to be governed by the terms
and provisions of the Prior Plan as it existed on the date of the
withdrawal and/or loan. Provided, however, any withdrawals or loans
permitted under the Plan after its effective date shall be governed
solely by applicable terms and provisions of the Plan.
(e) ACCOUNTING: Unless the Administrative Committee
otherwise directs, Trust accounting for income, gain, loss,
appreciation and depreciation and forfeitures under the Prior Plan, as
in effect immediately prior to the effective date of its amendment,
restatement and continuation hereunder, shall not be affected by the
adoption of the Plan.
(f) DISTRIBUTION OF BENEFITS: Amounts being paid to a
former Member or Beneficiary under the Prior Plan, as in effect
immediately prior to the effective date of its amendment, restatement
and continuation hereunder, shall continue to be paid in accordance
with the terms and provisions of the Prior Plan.
(g) CONTINUED TERM OF PLAN OFFICIALS: Unless the
Administrative Committee otherwise directs, members of the committee
(or comparable administrator or governing authority) and the agent for
service of legal process under the Prior Plan shall not continue in
such capacities under the Plan.
12.6 SEVERABILITY: Each term and provision of the Plan is
severable, and the invalidity or unenforceability of any term or provision
hereof shall not affect the validity or enforceability of any other term or
provision.
12.7 GOVERNING LAW; PARTIES TO LEGAL ACTIONS: The terms and
provisions of the Plan shall be construed, administered, and governed under the
laws of the State of Texas and, to the extent applicable, by the laws of the
United States. The Trustee or any Employer may at any time initiate a legal
action or proceeding for the settlement of the account of the Trustee, for the
determination of any question, or for instructions. The only necessary parties
to any such action or proceeding are the Trustee, the Plan Sponsor or other
affected Employer; however, any other person may be included as a party at the
election of the Trustee, the Plan Sponsor or other affected Employer.
12.8 NOTICES: Except as otherwise specifically provided under the
Plan, any notice, description, explanation, direction, consent, election, waiver
or other information required or permitted to be given under the Plan shall be
sufficient if it is in writing and otherwise complies with the requirements of
applicable provisions of the Plan and rules established by the
XII-3
Administrative Committee and if hand-delivered to the Member, Beneficiary,
member of the Administrative Committee, Trustee or other person to whom such
communication is to be given, or if sent by registered mail (return receipt
requested) or by any other reasonable method to such person at the address last
furnished by such person. Any such communication described in the immediately
preceding sentence shall be effective as of the date of the postmark if mailed
via registered mail and the return receipt is received by the sender, or upon
actual receipt by the party receiving such communication in the event that (i)
such return receipt is not received by the sender or (ii) such communication was
given by in-hand delivery or by any other reasonable method.
12.9 COUNTERPARTS: This Plan and Trust may be executed in two or
more counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument. It shall not be necessary
that any single counterpart hereof be executed by all parties so long as each
party executes at least one counterpart.
IN WITNESS WHEREOF, the Plan Sponsor and the Trustee have caused this
amended and restated Plan to be executed this 19th day of December,1994, to be
effective as of January 1, 1993, except as may otherwise be provided under
certain terms or provisions of the Plan.
PROLER INTERNATIONAL CORP.
ATTEST: By: /s/Michael F. Loy
Name: Michael F. Loy
By: /s/David A. Juengel Title: Vice President - Finance
Name: David A. Juengel
Title: Vice President & Treasurer
TRUSTEE
ATTEST: /s/Carol Martin
Carol Martin
By: /s/ David A. Juengel
Name: David A. Juengel
Title: Vice President & Treasurer
XII-4
THE STATE OF TEXAS |
|--
COUNTY OF HARRIS |
This instrument was acknowledged before me on December 19, 1994 by
Michael F. Loy, Vice President - Finance of Proler International Corp., a
Delaware Corporation, on behalf of said Corporation.
/s/ Marisa Miller-Hegyesi
Notary Public in and for the State of Texas
Name: Marisa Miller-Hegyesi
My commission expires: June 17, 1999
THE STATE OF TEXAS |
|--
COUNTY OF HARRIS |
This instrument was acknowledged before me on December 19, 1994
by Carol Martin, an individual, as Trustee under the Proler International Corp.
Tax Deferred Savings and Retirement Plan and Trust.
/s/ Marisa Miller-Hegyesi
Notary Public in and for the State of Texas
Name: Marisa Miller-Hegyesi
My commission expires: June 17, 1999
XII-5
AGREEMENT FOR ADOPTION OF
PROLER INTERNATIONAL CORP.
TAX DEFERRED SAVINGS AND RETIREMENT PLAN AND TRUST
Prolerized Steel Corporation, a subsidiary of Proler International
Corp., hereby adopts the Proler International Corp. Tax Deferred Savings and
Retirement Plan and Trust, as amended and restated (the "Plan"), for the benefit
of its eligible employees who qualify for membership under the Plan, and hereby
agrees to be bound by the terms, provisions, limitations, and conditions of the
Plan to the same extent as if it had executed an identical plan; PROVIDED,
HOWEVER, that Prolerized Steel Corporation has also withdrawn as a participating
employer under the Plan effective as of March 1, 1994.
IN WITNESS WHEREOF, Prolerized Steel Corporation has caused this
adoption agreement to be executed this 19th day of December, 1994, to be
effective as of January 1, 1993 and continuing through February 28, 1994, except
as may otherwise be provided under certain terms or provisions of the Plan.
PROLERIZED STEEL CORPORATION
ATTEST:
By: /s/ David A. Juengel By: /s/ Michael F. Loy
Name: David A. Juengel Name: Michael F. Loy
Title: Treasurer Title: Vice President-Finance
Proler International Corp. hereby agrees and consents to the adoption
of the Plan by Prolerized Steel Corporation.
PROLER INTERNATIONAL CORP.
ATTEST:
By: /s/ David A. Juengel By: /s/ Michael F. Loy
Name: David A. Juengel Name: Michael F. Loy
Title: Vice President & Treasurer Title: Vice President - Finance
XII-6
Carol Martin, as Trustee under the Plan, hereby agrees and consents to
the adoption of the Plan by Prolerized Steel Corporation.
TRUSTEE
ATTEST: /s/ Carol Martin
Carol Martin
By: /s/ David A. Juengel
Name: David A. Juengel
Title: Treasurer
XII-7
AGREEMENT FOR ADOPTION OF
PROLER INTERNATIONAL CORP.
TAX DEFERRED SAVINGS AND RETIREMENT PLAN AND TRUST
Proler Environmental Services, Inc., a subsidiary of Proler
International Corp., hereby adopts the Proler International Corp. Tax Deferred
Savings and Retirement Plan and Trust, as amended and restated (the "Plan"), to
be effective as of January 1, 1995, for the benefit of its eligible employees
who qualify for membership under the Plan, and hereby agrees to be bound by the
terms, provisions, limitations, and conditions of the Plan to the same extent as
if it had executed an identical plan.
IN WITNESS WHEREOF, Proler Environmental Services, Inc. has caused this
adoption agreement to be executed this 19th day of december, 1994, to be
effective as of January 1, 1995 except as may otherwise be provided under
certain terms or provisions of the Plan.
PROLER ENVIRONMENTAL
SERVICES, INC.
ATTEST:
By: /s/ David A. Juengel By: /s/ Michael F. Loy
Name: David A. Juengel Name: Michael F. Loy
Title: Treasurer Title: Vice President - Finance
Proler International Corp. hereby agrees and consents to the adoption
of the Plan by Proler Environmental Services, Inc..
PROLER INTERNATIONAL CORP.
ATTEST:
By: /s/ David A. Juengel By: /s/ Michael F. Loy
Name: David A. Juengel Name: Michael F. Loy
Title: Vice President & Treasurer Title: Vice President - Finance
XII-8
Carol Martin, as Trustee under the Plan, hereby agrees and consents to
the adoption of the Plan by Proler Environmental Services, Inc.
TRUSTEE
ATTEST: /s/Carol Martin
Carol Martin
By:/s/David A. Juengel
Name:David A. Juengel
Title:Treasurer
XII-9
AGREEMENT FOR ADOPTION OF
PROLER INTERNATIONAL CORP.
TAX DEFERRED SAVINGS AND RETIREMENT PLAN AND TRUST
Proler Recycling, Inc., a subsidiary of Proler International Corp.,
hereby adopts the Proler International Corp. Tax Deferred Savings and Retirement
Plan and Trust, as amended and restated (the "Plan"), to be effective as of
January 1, 1995, for the benefit of its eligible employees who qualify for
membership under the Plan, and hereby agrees to be bound by the terms,
provisions, limitations, and conditions of the Plan to the same extent as if it
had executed an identical plan.
IN WITNESS WHEREOF, Proler Recycling, Inc. has caused this adoption
agreement to be executed this 19th day of December, 1994, to be
effective as of January 1, 1995 except as may otherwise be provided under
certain terms or provisions of the Plan.
PROLER RECYCLING, INC.
ATTEST:
By: /s/ David A. Juengel By: /s/ Michael F. Loy
Name: David A. Juengel Name: Michael F. Loy
Title: Treasurer Title: Vice President - Finance
Proler International Corp. hereby agrees and consents to the adoption
of the Plan by Proler Recycling, Inc..
PROLER INTERNATIONAL CORP.
ATTEST:
By: /s/ David A. Juengel By: /s/ Michael F. Loy
Name: David A. Juengel Name: Michael F. Loy
Title: Vice President & Treasurer Title: Vice President - Finance
XII-10
Carol Martin, as Trustee under the Plan, hereby agrees and consents to
the adoption of the Plan by Gulf Proler Recycling, Inc.
TRUSTEE
ATTEST: /s/Carol Martin
Carol Martin
By:/s/David A. Juengel
Name:David A. Juengel
Title:Treasurer
XII-11
