Registration No. 33-50573
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
DIAMOND SHAMROCK, INC.
(Exact name of registrant as specified in its charter)
Delaware 74-2456753
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
9830 Colonnade Boulevard
San Antonio, Texas 78230
(Address of Principal Executive (Zip Code)
Offices)
DIAMOND SHAMROCK, INC.
401(K) RETIREMENT SAVINGS PLAN
(Full title of the plan)
Timothy J. Fretthold
Senior Vice President/Group Executive
and General Counsel
9830 Colonnade Boulevard
San Antonio, Texas 78230
(Name and address of agent for service)
(210) 641-6800
(Telephone number, including area code, of agent for service)
This Post-Effective Amendment No. 1 to Form S-8 is being filed to include, as
Exhibit 4.1, the signed Diamond Shamrock, Inc. 401(k) Retirement Savings Plan.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 8. Exhibits
4.1 Diamond Shamrock, Inc.401(k) Retirement Savings Plan.
4.2 Rights Agreement between the Company and Ameritrust Company,
National Association, as Rights Agent, dated March 6, 1990
(Exhibit 2 to the Company's Form 8-A Registration Statement
dated March 6, 1990 (the "Form 8-A")).*
4.3 Certificate of Incorporation of the Company (Exhibit 3.1 to the
Company's Form 10 Registration Statement No. 1-9409 (the "Form
10")), as amended by a Certificate of Designations Establishing
$2.00 Convertible Exchangeable Preferred Stock (an amended form
of which is Exhibit 4.3 to the Company's Form S-1 Registration
Statement No. 33-21991) and by a Certificate of Designations
Establishing Series A Junior Participating Preferred Stock (a
form of which is Exhibit 3 to the Company's Form 8-A).*
4.4 By-laws of the Company (Exhibit 3.2 to the Form 10).*
15.1 Independent Accountants' Awareness Letter.**
23.1 Consent of Price Waterhouse LLP.**
24.1 Powers of Attorney of directors and officers of the Company.***
24.2 Certificate regarding resolutions of the Board of Directors of
the Company.**
* Each document marked by an asterisk is incorporated herein by reference
to the designated document previously filed with the Commission.
**Each document marked by two asterisks was previously filed as part of
Registration Statement No. 33-50573.
***Powers of Attorney of directors and officers of the Company were
previously filed as part of Registration Statement No. 33-50573, except
for the ones filed herewith.
SIGNATURES
Pursuant to the requirements of the 1933 Act, the Company 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 Post-Effective Amendment No. 1 to Form S-8
to be signed on its behalf by the undersigned, thereunto duly authorized, in
the City of San Antonio, Texas, on the 12th day of December, 1995.
DIAMOND SHAMROCK, INC.
By: * R.R. Hemminghaus
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the 1933 Act, this Post-Effective Amendment No.
1 to Form S-8 has been signed by the following persons in the capacities and on
the date indicated:
Signature Title Date
*R.R. Hemminghaus Chairman of the Board December 12, 1995
and Chief Executive
Officer
*R.C. Becker Vice President and December 12, 1995
Treasurer (Principal
Financial Officer)
*Gary E. Johnson Vice President and December 12, 1995
Controller(Principal
Accounting Officer)
*B. Charles Ames Director December 12, 1995
*E. Glenn Biggs Director December 12, 1995
*W.E. Bradford Director December 12, 1995
*Lauro F. Cavazos Director December 12, 1995
*W.H. Clark Director December 12, 1995
*William L. Fisher Director December 12, 1995
*Bob Marbut Director December 12, 1995
*Katherine D. Ortega Director December 12, 1995
Pursuant to the requirements of the Securities Act of 1933, the Diamond
Shamrock, Inc. Employee Benefits Committee has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Antonio, Texas, on December 12, 1995.
DIAMOND SHAMROCK, INC.
401(K) RETIREMENT SAVINGS PLAN
By: *William R. Klesse
Chairman, Diamond Shamrock, Inc.
Employee Benefits Committee
Timothy J. Fretthold, by signing his name hereto, does hereby sign this
Post-Effective Amendment No. 1 to Form S-8 on behalf of Diamond Shamrock, Inc.,
the Diamond Shamrock, Inc. Employee Benefits Committee, and each of the above-
named officers and directors of Diamond Shamrock, Inc. pursuant to powers of
attorney executed on behalf of the Company, the chairman of the Committee, and
each of such officers and directors.
*By: /s/ TIMOTHY J. FRETTHOLD
Timothy J. Fretthold
Attorney-in-fact
December 12, 1995
INDEX TO EXHIBITS
Exhibit
No.
Exhibit
4.1 Diamond Shamrock, Inc. Long-Term Incentive Plan, as amended effective
May 2, 1995.
4.2 Rights Agreement between the Company and Ameritrust Company, National
Association, as Rights Agent, dated March 6, 1990 (Exhibit 2 to the
Company's Form 8-A Registration Statement dated March 6, 1990 (the
"Form 8-A")).*
4.3 Certificate of Incorporation of the Company (Exhibit 3.1 to the
Company's Form 10 Registration Statement No. 1-9409 (the "Form 10")),
as amended by a Certificate of Designations Establishing $2.00
Convertible Exchangeable Preferred Stock (an amended form of which is
Exhibit 4.3 to the Company's Form S-1 Registration Statement No.
33-21991) and by a Certificate of Designations of Series A Junior
Participating Preferred Stock (a form of which is Exhibit 3 to the
Company's Form 8-A).*
4.4 By-laws of the Company (Exhibit 3.2 to the Form 10).*
15.1 Independent Accountants Awareness Letter.**
24.1 Powers of Attorney of directors and officers of the Company.***
24.2 Certificate regarding resolutions of the Board of Directors of the
Company.**
________________________________________________________________________
* Each document marked by an asterisk is incorporated herein by
reference to the designated document previously filed with the
Commission.
** Each document marked by two asterisks was previously filed as part
of Registration Statement No. 33-50573.
*** Powers of Attorney of directors and officers of the Company were
previously filed as part of Registration Statement No. 33-50573,
except for the one filed herewith.
W2788.LW
DIAMOND SHAMROCK, INC.
401(K) RETIREMENT SAVINGS PLAN
<PAGE>
DIAMOND SHAMROCK, INC. 401(K) RETIREMENT SAVINGS PLAN
Table Of Contents
ARTICLE I Definitions
ARTICLE II Service
ARTICLE III Eligibility, Enrollment and Participation
ARTICLE IV Contributions
ARTICLE V Limitations on Allocations
ARTICLE VI Distribution of Benefits
ARTICLE VII Retirement Benefits
ARTICLE VIII Joint and Survivor Requirements
ARTICLE IX Termination of Employment
ARTICLE X Withdrawals and Loans
ARTICLE XI Fiduciary Duties and Responsibilities
ARTICLE XII The Administrator
ARTICLE XIII Participants' Rights
ARTICLE XIV Amendment or Termination of the Plan
ARTICLE XV Substitution of Plans
ARTICLE XVI Miscellaneous
ARTICLE XVII Top-Heavy Provisions
ARTICLE XVIII Adoption of Plan by Subsidiary and Affiliated
Companies
<PAGE>
ARTICLE I
DEFINITIONS
1.1 ACCRUED BENEFIT. The term Accrued Benefit means the value on any
applicable date of the Participant's Account.
1.2 ACTIVE PARTICIPANT. The term Active Participant means any Participant
who (a) performs duties as an Employee for the Employer, and (b) is not an
Inactive Participant.
1.3 ACTUAL CONTRIBUTION PERCENTAGE. The term Actual Contribution
Percentage means the average of the Actual Contribution Ratios of a specified
group computed to the nearest one-hundredth of one percent.
1.4 ACTUAL CONTRIBUTION PERCENTAGE TEST.
(A) For each Plan Year, the Plan shall satisfy the contribution
percentage requirement described in section 401(m)(2) of the Code and the
regulations thereunder, which are incorporated herein.
The Plan satisfies the Actual Contribution Percentage Test if:
(1) The Actual Contribution Percentage for the group of
eligible Highly Compensated Employees is not more than the Actual Contribution
Percentage for the group of all other eligible Employees multiplied by 1.25; or
(2) The excess of the Actual Contribution Percentage for the
group of eligible Highly Compensated Employees over the Actual Contribution
Percentage for the group of all other eligible Employees is not more than two
percentage points, and the Actual Contribution Percentage for the group of
eligible Highly Compensated Employees is not more than the Actual Contribution
Percentage for the group of all other eligible Employees multiplied by two.
(B) Special Rules.
(1) Matching Contributions and Qualified Nonelective
Contributions will be considered for a Plan Year only if allocated to the
Employee's Account as of any date within the Plan Year being tested and only if
made before the last day of the twelve month period immediately following the
Plan Year to which such contributions relate.
(2) A Matching Contribution that is forfeited to correct
Excess Aggregate Contributions, or because the contribution to which it
relates is treated as an Excess Contribution, Excess Deferral, or Excess
Aggregate Contribution, shall not be taken into account for purposes of the
Actual Contribution Percentage Test.
(3) The Employer shall maintain records sufficient to
demonstrate satisfaction of the Actual Contribution Percentage Test,
including records showing the extent to which Qualified Nonelective
Contributions and Elective Deferral Contributions are taken into account.
1.5 ACTUAL CONTRIBUTION RATIO.
(A) An Employee's Actual Contribution Ratio is the sum of the
Contribution Percentage Amounts allocated to the Employee's Account for the Plan
Year (including any amounts required to be taken into account under
subparagraphs (B)(1) and (B)(2) of this section) divided by the Employee's
Compensation for the Plan Year. If no Matching Contributions, Qualified
Nonelective Contributions, or Elective Deferral Contributions are taken into
account with respect to an eligible Employee, the Actual Contribution Ratio of
the Employee is zero.
(B) Special Rules.
(1) In the event that this Plan is aggregated with one or
more plans for purposes of section 410(b) of the Code (other than for purposes
of the average benefit percentage test), or if one or more other plans satisfy
the requirements of section 410(b) of the Code (other than the average benefit
percentage test) only if aggregated with this Plan, then this section shall be
applied by determining the Actual Contribution Ratios of Employees as if all
such plans were a single plan. Plans may be aggregated only if they have the
same Plan Year.
(2) The Actual Contribution Ratio of a Highly Compensated
Employee who is eligible to participate in more than one plan of the Employer
to which employee contributions or Matching Contributions are made shall be
calculated by treating all such plans in which the Employee is eligible to
participate as one plan. For Plan Years beginning after December 31, 1988, if
a Highly Compensated Employee participates in two or more plans that have
different plan years, all plans ending with or within the same calendar year
shall be treated as a single plan. However, plans that are not permitted to be
aggregated under Treasury Regulation section 1.401(m)-1(b)(3)(ii) shall not be
aggregated for purposes of this section.
(3) For purposes of determining the Actual Contribution
Ratio of a Participant who is a 5 percent owner or one of the ten most
highly-paid Highly Compensated Employees, the Contribution Percentage Amounts
and Compensation of such Participant shall include the Contribution Percentage
Amounts (including any amounts required to be taken into account under
subparagraphs (B)(1) and (B)(2) of this section) and Compensation for the Plan
Year of all Family Members.
If the Participant is required to be aggregated as a member of more than one
family group under the Plan, all eligible Employees who are members of those
family groups that include that Employee are aggregated as one family group.
Family Members, with respect to Highly Compensated Employees, shall be
disregarded as separate Employees in determining the Actual Contribution
Ratio both for Participants who are Nonhighly Compensated Employees and for
Participants who are Highly Compensated Employees.
(4) The determination and treatment of the Actual
Contribution Ratio amounts of any Participant shall satisfy such other
requirements as may be prescribed by the Secretary of the Treasury.
1.6 ACTUAL DEFERRAL PERCENTAGE. The term Actual Deferral Percentage means
the average of the Actual Deferral Ratios of a specified group, computed to the
nearest one-hundredth of one percent.
1.7 ACTUAL DEFERRAL PERCENTAGE TEST.
(A) For each Plan Year, the Plan shall satisfy the Actual Deferral
Percentage Test described in section 401(k)(3) and the regulations
thereunder, which are herein incorporated by reference.
The Plan satisfies the Actual Deferral Percentage Test for a Plan Year only if:
(1) The Actual Deferral Percentage for the group of
eligible Highly Compensated Employees is not more than the Actual Deferral
Percentage for the group of all other eligible Employees multiplied by 1.25; or
(2) The excess of the Actual Deferral Percentage for the
group of eligible Highly Compensated Employees over the Actual Deferral
Percentage for the group of all other eligible Employees is not more than two
percentage points, and the Actual Deferral Percentage for the group of
eligible Highly Compensated Employees is not more than the Actual Deferral
Percentage for the group of all other eligible Employees multiplied by two.
(B) Special Rules.
(1) For purposes of determining the Actual Deferral
Percentage Test, Elective Deferral Contributions, Qualified Nonelective
Contributions, and Qualified Matching Contributions must be allocated to the
Employee's Account as of a date within the Plan Year being tested and must be
made before the last day of the twelve-month period immediately following the
Plan Year to which such contributions relate.
(2) The Excess Deferrals of a Highly Compensated Employee
shall be taken into account for purposes of the Actual Deferral Percentage
Test. Conversely, the Excess Deferrals of an Employee who is a Nonhighly
Compensated Employee shall not be taken into account for purposes of the
Actual Deferral Percentage Test.
(3) The Employer shall maintain records sufficient to
demonstrate satisfaction of the Actual Deferral Percentage Test, including the
extent to which Qualified Nonelective Contributions and Qualified
Matching Contributions are taken into account.
1.8 ACTUAL DEFERRAL RATIO.
(A) An Employee's Actual Deferral Ratio for the Plan Year is the
sum of the Employee's Deferral Percentage Amounts allocated to the Employee's
Account for the Plan Year (including any amounts required to be taken into
account under subparagraphs (B)(1) and (B)(2) of this section), divided by the
Employee's Compensation taken into account for the Plan Year. If an
eligible Employee makes no Elective Deferral Contributions, and no Qualified
Matching Contributions or Qualified Nonelective Contributions are taken into
account with respect to the Employee, the Actual Deferral Ratio of the
Employee is zero.
(B) Special Rules.
(1) In the event that this Plan is aggregated with one or
more plans for purposes of section 410(b) of the Code (other than for
purposes of the average benefit percentage test), or if one or more other plans
satisfy the requirements of section 410(b) of the Code (other than the average
benefit percentage test) only if aggregated with this Plan, then this section
shall be applied by determining the Actual Deferral Ratio of Employees as if all
such plans were a single plan. Plans may be aggregated only if they have the
same Plan Year.
(2) The Actual Deferral Ratio of a Highly Compensated
Employee who is eligible to participate in more than one cash or deferred
arrangement (as described in section 401(k) of the Code) of the same Employer
shall be calculated by treating all the cash or deferred arrangements in
which the Employee is eligible to participate as one arrangement. If the cash
or deferred arrangements that are treated as a single arrangement under the
preceding sentence are parts of plans that have different Plan Years, the cash
or deferred arrangements are treated as a single arrangement with respect to
the Plan Years ending with or within the same calendar year. However, plans
that are not permitted to be aggregated under Treasury Regulation section
1.401(k)-1(b)(3)(ii)(B) are not aggregated for purposes of this section.
(3) For purposes of determining the Actual Deferral Ratio of
a Participant who is a 5 percent owner or one of the 10 most Highly Compensated
Employees, the Deferral Percentage Amounts and Compensation of such Participant
shall include the Deferral Percentage Amounts (including any amounts required
to be taken into account under subparagraphs (B)(1) and (B)(2) of this section)
and Compensation for the Plan Year of Family Members.
If an Employee is required to be aggregated as a member of more than one family
group under the Plan, all eligible Employees who are members of those family
groups that include that Employee are aggregated as one family group.
Family Members, with respect to such Highly Compensated Employees, shall be
disregarded as separate Employees in determining the Actual Deferral
Percentage both for Participants who are Non-highly Compensated Employees and
for Participants who are Highly Compensated Employees.
(4) The determination and treatment of the Actual Deferral
Ratio amounts of any Participant shall satisfy such other requirements as may
be prescribed by the Secretary of the Treasury.
1.9 BENEFICIARY. The Participant's Spouse is the designated Beneficiary of
the Participant's entire Vested Interest. However, each Participant shall have
the right to designate another Beneficiary, subject to the requirements of the
"Qualified Election" provisions of Article VIII, Joint and Survivor
Requirements. The Participant may change the Beneficiary at any time,
subject to the requirements of the "Qualified Election" provisions of Article
VIII, Joint and Survivor Requirements.
If a Beneficiary has not been designated, or if a Beneficiary designation or
change of Beneficiary designation does not meet the requirements of the
"Qualified Election" provisions of Article VIII, Joint and Survivor
Requirements, (including any designation made prior to August 23, 1984 by a
named Participant who has an Hour of Service on or after August 23, 1984), or if
no designated Beneficiary survives the Participant, the Participant's
entire Vested Interest shall be distributed to the Participant's Spouse, if
living; otherwise in equal shares to any surviving children of the
Participant. In the event none of the above named individuals survives the
Participant, the Participant's entire Vested Interest shall be paid to the
executor or administrator of the Participant's estate.
1.10 BOARD OF DIRECTORS. The term Board of Directors means the
Employer's board of directors or other comparable governing body.
1.11 CODE. The term Code means the Internal Revenue Code of 1986, as
amended from time to time.
1.12 COMPENSATION.
(A) Except as otherwise provided in the Plan, the term Compensation
means wages, salaries, and fees for professional services and other amounts
received (without regard to whether or not an amount is paid in cash) for
personal services actually rendered in the course of employment with the
Employer maintaining the Plan to the extent that the amounts are includible in
gross income (including, but not limited to, commissions paid salesmen,
compensation for services on the basis of a percentage of profits, commissions
on insurance premiums, tips, bonuses, fringe benefits, and reimbursements, or
other expense allowances under a nonaccountable plan (as described in
1.62-2(c)), and foreign earned income (as defined in section 911(b) of the Code)
whether or not excludable from gross income under section 911 of the Code. The
term Compensation does not include:
(1) Employer contributions to a plan of deferred
compensation which are not includible in the Employee's gross income for the
taxable year in which contributed, or employer contributions under a simplified
employee pension plan to the extent such contributions are deductible by the
Employee, or any distributions from a plan of deferred compensation;
(2) Amounts realized (a) from the exercise of a
non-qualified stock option, or (b) when restricted stock (or property) held by
the Employee either becomes freely transferable or is no longer subject to
substantial risk of forfeiture or (c) from stock appreciation rights;
(3) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option; and
(4) Other amounts which received special tax benefits, or
contributions made by the Employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity contract described in
section 403(b) of the Code (whether or not the contributions are actually
excludable from the gross income of the Employee).
Notwithstanding the foregoing, Compensation shall be reduced by all of the
following items (even if includible in gross income): reimbursements or other
expense allowances, fringe benefits (cash and noncash), moving expenses,
separation pay, imputed compensation, FICA or FUTA gross up paid by the
Employer, deferred compensation, welfare benefits, medicare tax on excess plan
benefits and gross up of that amount, and any payments paid to the
Employee in connection with the Diamond Shamrock Work Injury Program.
(B) Compensation shall include only that Compensation which is
actually paid to the Participant during the determination period. Except as
provided elsewhere in the Plan, the determination period shall be the Plan
Year. However, for the Plan Year in which an Employee begins participation in
the Plan and the Plan Year in which an Employee ends participation in the Plan,
the determination period is the portion of the Plan Year during which the
Employee is a Participant in the Plan.
(C) Compensation shall include any amount which is contributed by
the Employer pursuant to a salary reduction agreement and which is not
includible in the gross income of the employee under sections 125, 402(e)(3),
402(h), or 403(b) of the Code; Compensation deferred under an eligible deferred
compensation plan within the meaning of section 457(d) of the Code; and
employee contributions described in section 414(h)(2) of the Code that are
picked up by the employing unit and, thus, are treated as employer
contributions.
(D) The annual Compensation of each Participant taken into account
for determining all benefits provided under the Plan for any determination
period shall not exceed $150,000 or such other amount as adjusted by the
Secretary of the Treasury. If the period for determining Compensation used in
calculating an Employee's allocation for a determination period is a short Plan
Year (i.e., shorter than 12 months), the annual Compensation limit is an amount
equal to the otherwise applicable annual Compensation limit multiplied by a
fraction, the numerator of which is the number of months in the short Plan Year,
and the denominator of which is 12.
In determining the Compensation of a Participant for purposes of this
limitation, the rules of section 414(q)(6) of the Code shall apply, except in
applying such rules, the term "family" shall include only the Spouse of the
Participant and any lineal descendants of the Participant who have not
attained age 19 before the close of the year. If, as a result of the
application of such rules, the adjusted $150,000 (or such other amount as
adjusted by the Secretary of the Treasury) limitation is exceeded, then
either the limitation shall be prorated among the affected individuals in
proportion to each such individual's Compensation as determined under this
section prior to the application of this limitation, or the limitation shall be
allocated among the affected individuals in an objective and nondiscriminatory
manner based on a reasonable, good faith interpretation of section 401(a)(17)
of the Code. The method chosen in the preceding sentence shall be uniformly
applied to all affected individuals in a Plan Year and shall be applied
consistently from year to year.
If Compensation for any prior determination period is taken into account in
determining an Employee's allocations or benefits for the current determination
period, the Compensation for such prior determination period is subject to the
applicable annual Compensation limit in effect for that prior year.
1.13 CONSIDERED NET PROFITS. The term Considered Net Profits means the
entire amount of the accumulated or current operating profits (excluding
capital gains from the sale or involuntary conversion of capital or business
assets) of the Employer after all expenses and charges other than (i) the
contributions made by the Employer to the Plan, and (ii) federal or state or
local taxes based upon or measured by income, as determined by the Employer,
either on an estimated basis or a final basis, in accordance with the
generally accepted accounting principles used by the Employer. When the
amount of Considered Net Profits has been determined by the Employer, and the
contributions are made by the Employer on the basis of such determination, for
any Plan Year, such determination and contribution shall be final and
conclusive and shall not be subject to change because of any adjustments in
income or expense which may be required by the Internal Revenue Service or
otherwise. Such determination and contribution shall not be open to question
by any Participant either before or after the contributions by the Employer
have been made.
1.14 CONTRIBUTION PERCENTAGE AMOUNTS. The term Contribution Percentage
Amounts means the sum of the Matching Contributions and Qualified Matching
Contributions (to the extent not taken into account for purposes of the
Actual Deferral Percentage Test) made under the Plan on behalf of the
Employee for the Plan Year. The term Contribution Percentage Amounts also
includes Qualified Nonelective Contributions and Elective Deferral
Contributions treated as Matching Contributions and taken into account in
determining the Employee's Actual Contribution Ratio for the Plan Year.
1.15 CONTRIBUTION PERIOD. The term Contribution Period means that
regular period specified by the Employer in Article IV for which
contributions shall be made.
1.16 DEFERRAL PERCENTAGE AMOUNTS. The term Deferral Percentage Amounts
means an Employee's Elective Deferral Contributions for the Plan Year. The
term Deferral Percentage Amounts also includes Qualified Nonelective
Contributions and Qualified Matching Contributions treated as Elective
Deferral Contributions and taken into account in determining the Employee's
Actual Deferral Ratio for the Plan Year.
1.17 DISABILITY. The term Disability means a Participant's incapacity to
engage in any substantial gainful activity because of a medically determinable
physical or mental impairment which can be expected to result in death, or to be
of long, continued and indefinite duration. Such determination of Disability
shall be made by the Administrator with the advice of competent medical
authority. All Participants in similar circumstances will be treated alike.
1.18 DISABILITY RETIREMENT DATE. The term Disability Retirement Date means
the first day of the month after the Plan Administrator has determined that a
Participant's incapacity is a Disability.
1.19 EARLY RETIREMENT DATE. The term Early Retirement Date means the first
day of the month coinciding with or next following the date a Participant is
separated from Service with the Employer on or after the date he attains age 55
and has 5 Years of Service for any reason other than death or Disability,
provided that on such date the Participant has not attained his Normal
Retirement Age.
1.20 EFFECTIVE DATE. The term Effective Date means January 1, 1994.
1.21 ELECTIVE DEFERRAL CONTRIBUTION. The term Elective Deferral
Contribution means any Employer Contribution made to the Plan at the election
of the Participant, in lieu of cash compensation, and includes contributions
made pursuant to a Salary Deferral Agreement or other deferral mechanism.
Solely for purposes of the dollar limitation specified in section 402(g) of the
Code, with respect to any taxable year, a Participant's Elective Deferral
Contributions are the sum of all employer contributions made on behalf of such
Participant pursuant to an election to defer under any qualified cash or
deferred arrangement as described in section 401(k) of the Code, any simplified
employee pension cash or deferred arrangement described in section 402(h)(1)(B)
of the Code, any plan as described under section 501(c)(18) of the Code, and
any employer contributions made on behalf of a Participant for the purchase of a
tax sheltered annuity contract under section 403(b) of the Code pursuant to a
salary reduction agreement.
The term Elective Deferral Contribution shall not include any deferrals properly
distributed as excess annual additions.
1.22 EMPLOYEE. The term Employee means an individual who performs services
for the Employer and who is either a common law employee of the Employer or a
self-employed individual/owner employee treated as an Employee pursuant to Code
section 401(c)(1). The term Employee also includes a Leased Employee who is
treated as an Employee of the Employer-recipient pursuant to the provisions of
Code section 414(n) or 414(o). For purposes of determining the Highly
Compensated Employees, the Employer may elect, on a reasonable and consistent
basis, to treat such Leased Employees covered by a plan described in Code
section 414(n)(5) as Employees.
1.23 EMPLOYEE CONTRIBUTIONS. The term Employee Contributions means any
contributions to the Plan or any other plan that are designated or treated at
the time of contribution as after-tax Employee Contributions and are allocated
to a separate account to which the attributable earnings and losses are
allocated. Such term includes Employee Contributions applied to the purchase
of life insurance policies.
Such term does not include repayment of loans or buy-back of benefits described
in code section (411)(a)(7)(c) or employee contributions transferred to this
Plan.
1.24 EMPLOYER. The term Employer means Diamond Shamrock, Inc. or any
member of a controlled group of corporations (as defined in Code section
414(b)) of which Diamond Shamrock, Inc. is a member, or any trade or business
(whether or not incorporated) which is under common control with Diamond
Shamrock, Inc. (as defined in Code section 414(c)), or any member of an
affiliated service group (as defined in Code section 414(m)) of which Diamond
Shamrock, Inc. is a member. All such employers shall be considered a single
employer for purposes of participation, vesting, Top-Heavy provisions and
determination of Highly Compensated Employees. The term Employer shall also
include any successor employer which elects to continue the Plan.
1.25 EMPLOYER CONTRIBUTION. The term Employer Contribution means any
contribution made to the Plan by the Employer on behalf of a Participant, other
than a Rollover Contribution or a mandatory or voluntary contribution made to
the Plan by the Employee that is treated at the time of contribution as an
after-tax employee contribution.
1.26 ENTRY DATE. The term Entry Date means either the Effective Date or
the first day of the month thereafter when an Employee who has fulfilled the
eligibility requirements commences participation in the Plan.
If an Employee is not in the active Service of the Employer as of his initial
Entry Date, his subsequent Entry Date shall be the date he returns to the
active Service of the Employer, provided he still meets the eligibility
requirements. If an Employee does not enroll as a Participant as of his
initial Entry Date, his subsequent Entry Date shall be the applicable Entry
Date as specified above when the Employee actually enrolls as a Participant.
1.27 ERISA. The term ERISA means the Employee Retirement Income Security
Act of 1974 (PL 93-406) as it may be amended from time to time, and any
regulations issued pursuant thereto as such Act and such regulations affect
this Plan and Trust.
1.28 EXCESS AGGREGATE CONTRIBUTIONS.
(A) The term Excess Aggregate Contributions means, with respect to
any Plan Year, the excess of the aggregate amount of the Contribution
Percentage Amounts actually made on behalf of Highly Compensated Employees for
the Plan Year (including any amounts required to be taken into account under
subparagraphs (B)(1) and (B)(2) of Section 1.5 of the Plan), over the maximum
amount of contributions permitted under the Actual Contribution Percentage
Test. The amount of Excess Aggregate Contributions for each Highly Compensated
Employee is determined by using the method described in paragraph (B) of this
section.
(B) The amount of Excess Aggregate Contributions for a Highly
Compensated Employee for a Plan Year is the amount (if any) by which the
Employee's Matching Contributions must be reduced for the Employee's Actual
Contribution Ratio to equal the highest permitted Actual Contribution Ratio
under the Plan.
To calculate the highest permitted Actual Contribution Ratio under the Plan,
the Actual Contribution Ratio of the Highly Compensated Employee with the
highest Actual Contribution Ratio is reduced by the amount required to cause
the Employee's Actual Contribution Ratio to equal the ratio of the Highly
Compensated Employee with the next highest Actual Contribution Ratio. If a
lesser reduction would enable the Plan to satisfy the Actual Contribution
Percentage Test, only this lesser reduction may be made. This process shall be
repeated until the Plan satisfies the Actual Contribution Percentage Test. The
highest Actual Contribution Percentage Ratio remaining under the Plan after
leveling is the highest permitted Actual Contribution Ratio.
For each Highly Compensated Employee, the amount of Excess Aggregate
Contributions for a Plan Year is equal to the total Contribution Percentage
Amounts (including any amounts required to be taken into account under
subparagraphs (B)(1) and (B)(2) of Section 1.5 of the Plan), minus the amount
determined by multiplying the Employees's highest permitted Actual
Contribution Ratio (determined after application of this section) by the
compensation used in determining the ratio.
1.29 EXCESS CONTRIBUTION.
(A) The term Excess Contribution means, with respect to a Plan Year,
the excess of Deferral Percentage Amounts made on behalf of eligible Highly
Compensated Employees for the Plan Year (including any amounts required to be
taken into account under subparagraphs (B)(1) and (B)(2) of Section 1.8 of the
Plan) over the maximum amount of such contributions permitted under the Actual
Deferral Percentage Test for the Plan Year. The amount of Excess Contributions
for each Highly Compensated Employee is determined by using the method
described in paragraph (B) of this section.
(B) The amount of Excess Contributions for a Highly Compensated
Employee for a Plan Year is the amount (if any) by which the Employee's
Elective Deferral Contributions must be reduced for the Employee's Actual
Deferral Ratio to equal the highest permitted Actual Deferral Ratio under the
Plan.
To calculate the highest permitted Actual Deferral Ratio under the Plan, the
Actual Deferral Ratio of the Highly Compensated Employee with the highest
Actual Deferral Ratio is reduced by the amount required to cause the
Employee's Actual Deferral Ratio to equal the ratio of the Highly Compensated
Employee with the next highest Actual Deferral Ratio. If a lesser reduction
would enable the arrangement to satisfy the Actual Deferral Percentage Test,
only this lesser reduction shall be made. This process shall be repeated until
the cash or deferred arrangement satisfies the Actual Deferral Percentage Test.
The highest Actual Deferral Ratio remaining under the Plan after leveling is the
highest permitted Actual Deferral Ratio.
1.30 EXCESS DEFERRALS. The term Excess Deferrals means those Elective
Deferral Contributions that are includible in a Participant's gross income
under section 402(g) of the Code to the extent such Participant's Elective
Deferral Contributions for a taxable year exceed the dollar limitation under
such Code section.
1.31 FAIL-SAFE CONTRIBUTION. The term Fail-Safe Contribution means a
Nonelective Contribution, designated by the Employer at the time of contribution
as a Qualified Nonelective Contribution, which is contributed to the Plan solely
for the purposes of satisfying either the Actual Deferral Percentage Test or the
Actual Contribution Percentage Test and is made in accordance with the
provisions of Article IV of this Plan.
1.32 FAMILY MEMBER. The term Family Member means, with respect to any
Employee, such Employee's Spouse and lineal ascendants and descendants and the
spouses of such lineal ascendants and descendants.
1.33 FIDUCIARY. The term Fiduciary means any, or all, of the following, as
applicable:
(A) Any Person who exercises any discretionary authority or
control respecting the management of the Plan or its assets; or
(B) Any Person who renders investment advice for a fee or other
compensation, direct or indirect, respecting any monies or other property of
the Plan or has authority or responsibility to do so; or
(C) Any Person who has discretionary authority or responsibility
in the administration of the Plan; or
(D) Any Person who has been designated by a Named Fiduciary
pursuant to authority granted by the Plan, who acts to carry out a fiduciary
responsibility, subject to any exceptions granted directly or indirectly by
ERISA.
1.34 FORFEITURE. The term Forfeiture means the amount, if any, by which
the value of a Participant's Account exceeds his Vested Interest following such
Participant's Termination of Employment, and at the time specified in Section
9.1.
1.35 HIGHLY COMPENSATED EMPLOYEE. The term Highly Compensated Employee
means any Highly Compensated Active Employee or Highly Compensated Former
Employee as further defined herein.
For purposes of the determination of Highly Compensated Employees, the term
Compensation means Compensation as defined in Article V of the Plan, but
includes the amount of any elective contributions made by the Employer on the
Employee's behalf to a cafeteria plan established in accordance with the
provisions of Code section 125, a qualified cash or deferred arrangement in
accordance with the provisions of Code section 402(e)(3), a simplified
employee pension plan in accordance with the provisions of Code section
402(h), or a tax sheltered annuity plan maintained in accordance with the
provisions of Code section 403(b).
A "Highly Compensated Active Employee" is any Employee who performs services
for the Employer during the current Plan Year and who, during the current Plan
Year or the 12-month period immediately preceding such Plan Year:
(A) Owns (or is considered to own within the meaning of section 318
of the Code, as modified by section 416(i)(1)(B)(iii) of the Code), more than 5%
of the outstanding stock of the Employer or stock possessing more than 5% of the
total combined voting power of all stock of the Employer, or, if the Employer is
other than a corporation, owns more than 5% of the capital or profits interest
in the Employer. The determination of 5% ownership shall be made separately for
each member of a controlled group of corporations (as defined in Code section
414(b)), or of a group of trades or businesses (whether or not incorporated)
that are under common control (as defined in Code section 414(c)), or of an
affiliated service group (as defined in Code section 414(m)); or
(B) Receives Compensation in excess of $75,000 multiplied by the
applicable cost-of-living adjustment factor prescribed under Code section
415(d) and then prorated in the case of a short Plan Year, or
(C) Receives Compensation in excess of $50,000, as adjusted for
cost-of-living increases in accordance with Code section 415(d) and then
prorated in the case of a short Plan Year, and is in the top 20% of Employees
ranked by Compensation; or
(D) Is, at any time, an officer of the Employer and receives
Compensation in excess of 50% of the amount in effect under Code section
415(b)(1)(A) for the applicable period.
If no officer receives Compensation in excess of the amount specified above, the
highest paid officer for the applicable period shall be a Highly Compensated
Employee.
In no event if there are more than 500 Employees, shall more than 50 Employees
or, if there are less than 500 Employees, shall the greater of three Employees
or 10% of all Employees, be taken into account as officers.
In determining both the top 20% of Employees ranked by Compensation for purposes
of paragraph (C) above, and officers of the Employer for purposes of paragraph
(D) above, Employees who have not completed six months of Service by the end of
the applicable period, Employees who normally work less than 17-1/2 hours per
week, Employees who normally work less than six months during a year, Employees
who have not attained 21, and nonresident aliens who receive no earned income
from U.S. sources shall be excluded.
Also excluded under the above paragraph are Employees who are covered by an
agreement which the Secretary of Labor finds to be a collective bargaining
agreement. Such Employees will be excluded only if retirement benefits were
the subject of good faith bargaining, 90% of the Employees of the Employer are
covered by the agreement, and the Plan covers only Employees who are not covered
by the agreement.
Notwithstanding the above provisions, an Employee, other than a 5% owner as
described in paragraph (a) above who was not highly compensated during the 12-
month period immediately preceding the current Plan Year will not be considered
to be a Highly Compensated Employee in the current Plan Year unless such
Employee is one of the top 100 Employees ranked by Compensation for the current
Plan Year.
A "Highly Compensated Former Employee" is any former Employee who separated
from Service with the Employer in a Plan Year preceding the current Plan Year
and was a Highly Compensated Active Employee in either:
(A) the Plan Year in which his separation from Service occurred; or
(B) any Plan Year ending on or after such former Employee's 55th
birthday.
A former Employee is an Employee who performs no services for the Employer
during a Plan Year (for example, by reason of a leave of absence).
1.36 INACTIVE PARTICIPANT. The term Inactive Participant means any
Participant who does not currently meet the requirements to be an Active
Participant due to a suspension of the performance of duties for the
Employer.
In addition, a Participant who ceases to meet the eligibility requirements in
accordance with Section 3.1 shall be considered an Inactive Participant.
1.37 LATE RETIREMENT DATE. The term Late Retirement Date means the first
day of the month coinciding with or next following the date a Participant is
separated from Service with the Employer after his Nominal Retirement Age, for
any reason other than death.
1.38 LEASED EMPLOYEE. The term Leased Employee means any person (other
than an Employee of the recipient) who, pursuant to an agreement between the
recipient and any other person ("leasing organization"), has performed
services for the recipient (or for the Employer and related persons determined
in accordance with Code section 414(n)(6)) on a substantially full-time basis
for a period of at least one year, and such services are of a type historically
performed by employees in the business field of the recipient Employer.
1.39 MATCHING CONTRIBUTIONS. The term Matching Contributions means
contributions made by the Employer to the Plan on behalf of a Participant on
account of either Elective Deferral Contributions, if any, Employee
Contributions, if any, or required contributions, if any.
1.40 NAMED FIDUCIARY. The term Named Fiduciary means the Plan
Administrator, the Trustee and any other Fiduciary designated in writing by the
Employer, and any successor thereto.
1.41 NONHIGHLY COMPENSATED EMPLOYEE. The term Nonhighly Compensated
Employee means an Employee who is not a Highly Compensated Employee.
1.42 NONELECTIVE CONTRIBUTIONS. The term Nonelective Contributions means
contributions made by the Employer (other than Matching Contributions) that the
Participant may not elect to have paid in cash or other benefits instead of
being contributed to the Plan.
1.43 NORMAL RETIREMENT AGE. The term Normal Retirement Age means the date
the Participant attains age 65.
1.44 NORMAL RETIREMENT DATE. The term Normal Retirement Date means the
first day of the month coinciding with or next following the date a
Participant attains his Normal Retirement Age.
1.45 PARTICIPANT. The term Participant means any Employee of the Employer,
who is or becomes eligible to participate under this Plan in accordance with
its provisions and shall include an Active Participant and an Inactive
Participant.
1.46 PARTICIPANT'S ACCOUNT. The term Participant's Account means the sum
of the following sub-accounts held on behalf of each Participant:
Elective Deferral Contributions, if any, and
earnings thereon.
Matching Contributions, if any, and earnings
thereon.
Qualified Matching Contributions, if any, and
earnings thereon.
Qualified Nonelective Contributions, if any, and
earnings thereon.
Rollover Contributions, if any, and earnings
thereon.
A Participant's Account shall be invested in accordance with the rules
established by the Plan Administrator, which shall be applied in a consistent
and nondiscriminatory manner.
1.47 PARTICIPANT'S EMPLOYER STOCK ACCOUNT. The term Participant's Employer
Stock Account means that portion, if any, of the Participant's Account which is
invested in shares of the Employer's stock. Such Participant's Employer Stock
Account shall be credited with dividends paid, if any. Such Participant's
Employer Stock Account will be valued on the last day of each month that the
public exchange over which the Employer's stock is traded is open for
unrestricted trading.
Amounts which are to be invested in the Participant's Employer Stock Account
may be invested in any short term account prior to actual investment in the
Participant's Employer Stock Account.
1.48 PERSON. The term Person means any natural person, partnership,
corporation, trust or estate.
1.49 PLAN. The term Plan means The Diamond Shamrock, Inc. 401(k)
Retirement Savings Plan, the terms of which are set forth herein as it may be
amended from time to time.
1.50 PLAN ADMINISTRATOR. The terms Plan Administrator and Administrator
are used interchangeably throughout the Plan and mean the Person or Persons
designated by the Employer and any successor(s) thereto. If more than one
Person shall be designated, the committee thus formed shall be known as the
Administrative Committee and all references in the Plan to the Plan
Administrator or Administrator shall be deemed to apply to the Administrative
Committee. The Plan Administrator or Administrator shall signify in writing
his acceptance of his responsibility as a Named Fiduciary.
1.51 PLAN YEAR. The term Plan Year means the 12-month period commencing on
January 1 and ending on the following December 31.
1.52 QUALIFIED MATCHING CONTRIBUTIONS. The term Qualified Matching
Contributions shall mean Matching Contributions which are subject to the
distribution and nonforfeitability requirements under section 401(k) of the
Code when made.
1.53 QUALIFIED NONELECTIVE CONTRIBUTIONS. The term Qualified Nonelective
Contributions shall mean Nonelective Contributions which are subject to the
distribution and nonforfeitability requirements under section 401(k) of the
Code when made.
1.54 ROLLOVER CONTRIBUTION. The term Rollover Contribution means an amount
representing all or part of a distribution from a pension or profit-sharing
plan meeting the requirements of Code section 401(a) that is eligible for
rollover to this Plan in accordance with the requirements set forth in Code
section 402 or Code section 408(d)(3), whichever is applicable.
1.55 SALARY DEFERRAL AGREEMENT. The term Salary Deferral Agreement means
an agreement between a Participant and the Employer to defer the Participant's
Compensation for the purpose of making Elective Deferral Contributions to the
Plan.
1.56 TERMINATION OF EMPLOYMENT. The term Termination of Employment means a
severance of the Employer-Employee relationship which occurs prior to a
Participant's Normal Retirement Age for any reason other than Early Retirement,
Disability or death.
1.57 TRUST. The term Trust means the trust agreement entered into by the
Employer, the Administrator and the Trustee.
1.58 TRUSTEE. The term Trustee means one or more persons collectively
appointed and acting under the trust agreement, and any successor thereto.
1.59 VESTED INTEREST. The term Vested Interest on any date means the
nonforfeitable right to an immediate or deferred benefit in the amount which is
equal to the following:
(A) the value on that date of that portion of the Participant's
Account that is attributable to the following contributions:
Elective Deferral Contributions, if any
Rollover Contributions, if any
Qualified Matching Contributions, if any
Qualified Nonelective Contributions, if any
(B) plus the value on that date of that portion of the
Participant's Account that is attributable to and derived from:
Matching Contributions, if any.
1.60 VESTING PERCENTAGE. The term Vesting Percentage means the percentage
used to determine a Participant's Vested Interest in contributions made by the
Employer, plus the earnings thereon, credited to his Participant's Account that
are not 100% immediately vested. The Vesting Percentage for each Participant
shall be determined in accordance with the following schedule based on Years of
Service with the Employer:
Years of Service Vesting Percentage
Less than five 0%
Five or more 100%
However, if an Active Participant dies prior to attaining his Normal Retirement
Age, his Vesting Percentage shall be 100%.
ARTICLE II
SERVICE
2.1 SERVICE. The term Service means active employment with the Employer as
an Employee. For purposes of determining Service, employment with any company
which is under common control with the Employer as specified in section 414 of
the Internal Revenue Code shall be treated as employment with the Employer.
2.2 ABSENCE FROM EMPLOYMENT. Absence from employment on account of a leave
of absence authorized by the Employer pursuant to the Employer's established
leave policy will be counted as employment with the Employer provided that such
leave of absence is of not more than two years' duration. Absence from
employment on account of active duty with the Armed Forces of the United States
will be counted as employment with the Employer. If the Employee does not
return to active employment with the Employer, his Service will be deemed to
have ceased on the date the Administrator receives notice that such Employee
will not return to the active Service of the Employer. The Employer's leave
policy shall be applied in a uniform and nondiscriminatory manner to all
Participants under similar circumstances.
2.3 HOUR OF SERVICE. The term Hour of Service means a period of Service
during which an Employee shall be credited with one Hour of Service as
described in (A), (B), (C), and (D) below:
(A) Each hour for which an Employee is directly or indirectly paid,
or entitled to payment, by the Employer for the performance of duties. These
hours shall be credited to the Employee for the computation period or periods
in which the duties are performed; and
(B) Each hour for which an Employee is directly or indirectly paid,
or entitled to payment, by the Employer for reasons (such as vacation, sickness
or Disability) other than for the performance of duties. Hours under this
Subsection shall be calculated and credited pursuant to section 2530.200b-2 of
the Department of Labor Regulations which are incorporated herein by this
reference; and
(C) Each hour for which back pay, irrespective of mitigation of
damages, has been either awarded or agreed to by the Employer. These hours
shall be credited to the Employee for the computation period or periods to which
the award or agreement pertains rather than the computation period in which the
award, agreement or payment is made; and
(D) Each hour for which an Employee is on an authorized unpaid leave
(such as service with the Armed Forces, jury duty, educational leave). These
hours shall be credited to the Employee for the computation period or periods
in which such authorized leave takes place. However, no more than 501 hours
shall be credited under this subparagraph (D).
Each Employee whose Compensation is not determined on the basis of certain
amounts for each hour worked (such as salaried, commission and piecework
employees) and whose hours are not required to be counted and recorded by any
federal law (such as the Fair Labor Standards Act) shall be credited with 45
Hours of Service for each week in which the Employee would be credited with at
least one Hour of Service pursuant to this section.
Hours of Service will be credited for employment with other members of an
affiliated service group (under Internal Revenue Code section 414(m)), a
controlled group of corporations (under Internal Revenue Code section 414(b)),
or a group of trades or businesses under common control (under Internal Revenue
Code section 414(c)), of which the adopting employer is a member. Hours of
Service will also be credited for any individual considered an Employee under
Internal Revenue Code section 414(n).
Solely for purposes of determining whether a One-Year Break in Service, as
defined in Section 2.4, for participation and vesting purposes has occurred in
a computation period, an individual who is absent from work for maternity or
paternity reasons shall receive credit for the Hours of Service which would
otherwise have been credited to such individual but for such absence, or in any
case in which such hours cannot be determined, eight Hours of Service per day
of such absence. For purposes of this paragraph, an absence from work for
maternity or paternity reasons means an absence (1) by reason of the pregnancy
of the individual, (2) by reason of a birth of a child of the individual, (3)
by reason of the placement of a child with the individual in connection with the
adoption of such child by such individual, or (4) for purposes of caring for
such child for a period beginning immediately following such birth or
placement. The Hours of Service credited under this paragraph shall be
credited (1) in the computation period in which the absence begins if the
crediting is necessary to prevent a Break in Service in that period, or (2) in
all other cases, in the following computation period.
Notwithstanding the foregoing: (1) no more than 501 Hours of Service shall be
credited to an Employee under subsections (B), (C), or the paragraph immediately
above regarding absence from work for maternity or paternity reasons, on account
of any single continuous period of time during which no services are performed;
(2) an hour for which an Employee is directly or indirectly compensated or
entitled to compensation by the Employer on account of a period during which no
services are performed shall not constitute an Hour of Service hereunder if such
compensation is paid or due under a plan maintained solely for the purpose of
complying with applicable workers' compensation or disability insurance laws or
under the Diamond Shamrock Work Injury Program; and (3) the same Hour of Service
shall not be credited to an Employee both under subsection (A) or (B) and under
subsection (C).
The number of Hours of Service, if any, to be credited to an Employee under the
foregoing rules shall be determined in a uniform and non-discriminatory manner
and in accordance with applicable federal laws and regulations including,
without limitation, Department of Labor Regulations Section 2530.200b-2(b) and
(c).
2.4 ONE-YEAR BREAK IN SERVICE. Except as provided below regarding
eligibility, the term One-Year Break in Service means any Plan Year during
which an Employee fails to complete more than 500 Hours of Service.
2.5 DETERMINING VESTING PERCENTAGE. Vesting credit shall be given for each
Year of Service except those periods specified in Section 2.7. If a Participant
completes less than 1,000 Hours of Service during a Plan Year while remaining
in the Service of the Employer, his Vesting Percentage shall not be increased
for such Plan Year. However, at such time as the Participant again completes
at least 1,000 Hours of Service in any subsequent Plan Year, his Vesting
Percentage shall then take into account all Year(s) of Service with the
Employer except those specified in Section 2.7. If an individual who ceases to
be an Employee and is subsequently rehired as an Employee enrolls (or re-
enrolls) in the Plan, upon his participation (or subsequent participation) his
Vesting Percentage shall then take into account all Year(s) of Service except
those specified in Section 2.7.
2.6 YEAR(S) OF SERVICE. The term Year(s) of Service means a 12-consecutive-
month period during which an Employee has completed at least 1,000 Hours of
Service.
(A) Eligibility Computation Period.
For purposes of determining Years of Service and Breaks in Service for
eligibility, the initial twelve-consecutive-month period shall begin with the
date on which an Employee's employment commenced and, where additional
periods are necessary, the Plan Year shall become the measurement period for
eligibility, beginning with the Plan Year that overlaps the Employee's
initial twelve consecutive months of employment.
The eligibility requirement specified in Article III is one or more full
Years of Service. Such requirement shall be met upon completion of at least
1,000 Hours of Service for each Year of Service specified.
(B) Vesting Computation Period.
In computing Years of Service and Breaks in Service for vesting, the 12-
consecutive-month period shall be the Plan Year. However, active participation
as of the last day of the Plan Year is not required in order for a Participant
to be credited with a Year of Service for vesting purposes. For purposes of the
Vesting Computation Period, if any Plan Year is less than 12-consecutive months,
and if a Participant would have been credited with a Year of Service during the
12-consecutive-month period beginning on the first day of the short Plan Year,
then the Participant will receive a Year of Service for the short Plan Year.
The Participant receives credit for an additional Year of Service if the
Participant would have been credited with a Year of Service for the Plan Year
immediately following the short Plan Year.
2.7 EXCLUDED YEARS OF SERVICE. In determining the Vesting Percentage of an
Employee, all Years of Service with the Employer shall be taken into account
except:
Plan Years during which a Participant did not complete at least
1,000 Hours of Service.
2.8 PREDECESSOR ORGANIZATION SERVICE. For purposes of this Article,
Service with a predecessor organization of the Employer shall be treated as
Service with the Employer in any case in which the Employer maintains the Plan
of such predecessor organization.
ARTICLE III
ELIGIBILITY, ENROLLMENT AND PARTICIPATION
3.1 ELIGIBILITY. Each Employee of a Participating Company, excluding a
Leased Employee, shall be eligible to become a Participant as of the
Effective Date or the Entry Date thereafter when he first meets the following
requirement(s):
One Year of Service
Age 21
Not in a unit of Employees covered by an agreement which the
Secretary of Labor finds to be a collective bargaining agreement between
Employee representatives and the Employer, if there is evidence that
retirement benefits were the subject of good faith bargaining between such
Employee representatives and the Employer, unless the collective bargaining
agreement provides for coverage under this Plan.
3.2 ENROLLMENT AND PARTICIPATION. Each eligible Employee may enroll as of
his Entry Date by completing and delivering to the Administrator an enrollment
form and, if applicable, a Salary Deferral Agreement. He will then become a
Participant as of his Entry Date.
3.3 RE-EMPLOYED EMPLOYEE. In the case of an individual who ceases to be an
Employee and is subsequently rehired as an Employee, the following provisions
shall apply in determining his eligibility to again participate in the Plan:
(A) If the Employee had met the eligibility requirement(s)
specified in Section 3.1 prior to his separation from employment, he shall
become an Active Participant in the Plan as of the date he is re-employed,
after completing the applicable form(s), in accordance with Section 3.2.
(B) If the Employee had not met the eligibility requirement(s)
specified in Section 3.1 prior to his separation from employment, he shall be
eligible to participate in the Plan on the first Entry Date following his
fulfillment of such eligibility requirement(s).
For purposes of this Subsection, all Years of Service with the Employer,
including any Years of Service prior to any Breaks in Service, shall be taken
into account.
3.4 ELIGIBLE CLASS. In the event a Participant becomes ineligible to
participate because he is no longer a member of an eligible class of Employees,
such Employee shall participate immediately upon his return to an eligible
class of Employees.
In the event an Employee who is not a member of the eligible class of Employees
becomes a member of the eligible class, such Employee shall participate
immediately if such Employee has satisfied the minimum age and service
requirements and would have previously become a Participant had he been in the
eligible class.
ARTICLE IV
CONTRIBUTIONS
4.1 ELECTIVE DEFERRAL CONTRIBUTIONS. Each Active Participant may enter
into a written Salary Deferral Agreement with the Employer in an amount equal
to not less than 1% nor more than 15% of his Compensation for the Contribution
Period. In consideration of such agreement, the Employer will make a
contribution for each Contribution Period on behalf of the Participant in an
amount equal to the total amount by which the Participant's Compensation from
the Employer was deferred during the Contribution Period pursuant to the Salary
Deferral Agreement then in effect. Elective Deferral Contributions shall be
paid by the Employer to the Trust not less frequently than monthly, but in no
event later than 90 days following the date the amounts were deferred.
Salary Deferral Agreements shall be governed by the following provisions:
(A) Amounts contributed pursuant to a Salary Deferral Agreement
shall be 100% vested and non-forfeitable at all times.
(B) No Participant shall be permitted to have Elective Deferral
Contributions made under this Plan, or any other qualified plan maintained by
the Employer, during any taxable year, in excess of the dollar limitation
contained in section 402(g) of the Code in effect at the beginning of the
taxable year.
(C) Amounts contributed pursuant to a Salary Deferral Agreement,
which are not in excess of the limit described in Subsection (B) above, shall
be subject to the Limitations on Allocations in accordance with Article V.
Elective Deferral Contributions that are in excess of the limit described in
Subsection (B) shall also be subject to the Limitations on Allocations in
accordance with Article V.
(D) A Salary Deferral Agreement may be changed by a Participant
four times during the Plan Year, on January 1, April 1, July 1, and October 1,
by filing written notice thereof with the Administrator. Such notice
shall be effective, and the Salary Deferral Agreement shall be changed on the
date specified in such notice or as soon as administratively possible, which
date must be at least 15 days after such notice is filed.
(E) Elective Deferral Contributions shall be subject to the
Actual Deferral Percentage Test limitations.
(F) Correction of Excess Contributions.
(1) If the Employer determines prior to the end of the Plan
Year that the Actual Deferral Percentage Test may not be satisfied, the Employer
may take the corrective action specified in Section 4.10 of the Plan.
(2) If, after the end of the Plan Year, the Employer
determines that the Plan will fail the Actual Deferral Percentage Test, the
Employer shall take the corrective action specified in Section 4.12 or Section
4.15 of the Plan, or a combination of such corrective actions, in order to
ensure that the Plan does not fail the Actual Deferral Percentage Test for the
Plan Year being tested.
4.2 MATCHING CONTRIBUTIONS. The Employer shall make a Matching
Contribution in an amount equal to a discretionary amount to be determined by
the Employer for each $1.00 by which a Participant defers his Compensation
pursuant to a Salary Deferral Agreement, subject to the Limitations on
Allocations specified in Article V. The Matching Contribution shall be paid to
the Trust not less frequently than monthly. Matching Contributions shall be
subject to the Actual Contribution Percentage Test. The Employer may designate
at the time of contribution that all or a portion of such Matching Contributions
be treated as Qualified Matching Contributions.
If the Employer determines prior to the end of the Plan Year that the Actual
Contribution Percentage Test may not be satisfied, the Employer may take the
corrective action specified in Section 4.11 of the Plan.
If, after the end of the Plan Year, the Employer determines that the Plan will
fail the Actual Contribution Percentage Test, the Employer shall take the
corrective action specified in Section 4.13 or Section 4.15 of the Plan, or a
combination of such corrective actions, in order to ensure that the Plan does
not fail the Actual Contribution Percentage Test for the Plan Year being tested.
4.3 FAIL-SAFE CONTRIBUTION. The Employer reserves the right to make a
discretionary Nonelective Contribution to the Plan for any Plan Year, if the
Employer determines that such a contribution is necessary to ensure that either
the Actual Deferral Percentage Test or the Actual Contribution Percentage Test
will be satisfied for that Plan Year. Such amount shall be designated by the
Employer at the time of contribution as a Qualified Nonelective Contribution
and shall be known as a Fail-Safe Contribution.
The Fail-Safe Contribution shall be made on behalf of all eligible Non-Highly
Compensated Employees who are Participants and who are considered under the
Actual Deferral Percentage Test or the Actual Contribution Percentage Test.
This contribution shall be allocated to the Participant's Account of each such
Participant in an amount equal to a fixed percentage of such Participant's
Compensation. The fixed percentage shall be equal to the minimum fixed
percentage necessary to be contributed by the Employer on behalf of each
eligible non-Highly Compensated Employee who is a Participant so that the
Actual Deferral Percentage Test or the Actual Contribution Percentage Test is
satisfied.
The Fail-Safe Contribution for any Plan Year as determined above shall be paid
to the Trust at the end of the Plan Year, or as soon as possible on or after
the last day of such Plan Year, but in no event later than the date which is
prescribed by law for filing the Employer's income tax return, including any
extensions thereof.
4.4 PROFITS NOT REQUIRED. Contributions to this Plan shall not be
precluded because the Employer does not have Considered Net Profits.
Notwithstanding the existence of Considered Net Profits, the Employer may
determine in its sole discretion that it will make no contributions for such
Plan Year.
4.5 PAYMENT OF EXPENSES. The Employer may contribute to the Plan the
amount necessary, to pay any applicable expense charges and administration
charges. In lieu of the Employer's contributing the amount necessary to pay
such charges, these expenses may be paid from the Trust fund.
4.6 ALLOCATION OF FORFEITURES. The contributions made by the Employer
shall be reduced by any Forfeitures available as an Employer credit in
accordance with Section 9.3.
4.7 CREDITING OF ELECTIVE DEFERRAL AND OTHER CONTRIBUTIONS. Elective
Deferral Contributions and other contributions made by the Employer shall be
credited to the Participant Account of each Participant for whom such
contributions are made, in accordance with the provisions of Article XIII.
4.8 ROLLOVER CONTRIBUTIONS. The Plan may receive Rollover Contributions on
behalf of an Employee. Receipt of a Rollover Contribution shall be subject to
the approval of the Plan Administrator. Before approving the receipt of a
Rollover Contribution, the Plan Administrator may request any documents or other
information from an Employee or opinions of counsel which the Plan
Administrator deems necessary to establish that such amount is a Rollover
Contribution.
A Participant's Account shall be maintained on behalf of each Employee from
whom Rollover Contributions are received, regardless of such Employee's
eligibility to participate in the Plan in accordance with the requirements of
Article III, and Rollover Contributions may be invested in any manner authorized
under the provisions of this Plan.
Rollover Contributions received from an Employee who is not otherwise eligible
to participate in the Plan may not be withdrawn in accordance with the
provisions of Article X until such Employee becomes a Participant, except that
such Employee may receive a distribution of his Participant's Account if his
Termination of Employment occurs.
Rollover Contributions shall be credited to the Participant's Account and may
be invested in any manner authorized under the provisions of this Plan.
4.9 SUSPENSION OF ELECTIVE DEFERRAL CONTRIBUTIONS. The following provisions
shall apply with respect to suspension of Elective Deferral Contributions.
(A) Elective Suspension. An Active Participant may elect to
suspend his Salary Deferral Agreement for Elective Deferral Contributions by
filing a written notice thereof with the Administrator at any time. The Salary
Deferral Agreement shall be suspended on a date which is not more than 30 days
after such notice is filed with the Administrator. The notice shall specify
the period for which such suspension shall be effective. Such period may
extend indefinitely.
(B) Suspension for Leave. A Participant who is absent from
employment on account of an authorized unpaid leave of absence or military
leave shall have his Salary Deferral Agreement suspended during such leave.
Such suspension of contributions shall be effective on the date payment of
Compensation by the Employer to him ceases, and shall remain in effect until
payment of Compensation is resumed.
(C) Withdrawal Suspension. An Active Participant who elects a
withdrawal in accordance with Article X may have his Salary Deferral Agreement
suspended on the date such election becomes effective. Such suspension shall
remain in effect for the number of months specified therein.
(D) Non-Elective Suspension. An Active Participant who ceases to
meet the eligibility requirements as specified in Section 3.1 but who remains
in the employ of the Employer, shall have his Salary Deferral Agreement
suspended, effective as of the date he ceases to meet the eligibility
requirements. Such suspension shall remain in effect until he again meets such
eligibility requirements.
The Participant may elect to reactivate his Salary Deferral Agreement for
Elective Deferral Contributions by filing a written notice thereof with the
Plan Administrator, providing at least 30 days' notice of reactivation. The
Salary Deferral Agreement shall be reactivated on January 1, April 1, July 1
and October 1 following the receipt of timely notice and the expiration of the
suspension period described above.
4.10 LIMITATION OF ELECTIVE DEFERRAL CONTRIBUTIONS. If the Employer
determines prior to the end of the Plan Year that the Plan may not satisfy the
Actual Deferral Percentage Test for the Plan Year, the Employer may require that
the amount of Elective Deferral Contributions being allocated to the accounts of
Highly Compensated Employees be reduced to the extent necessary to prevent
Excess Contributions from being made to the Plan.
Although the Employer may reduce the amount of Elective Deferral Contributions
that may be allocated to the Participant's Account of Highly Compensated
Employees, the affected Employees shall continue to participate in the Plan.
When the situation that resulted in the reduction of Elective Deferral
Contributions ceases to exist, the Employer shall reinstate the amount of
Elective Deferral Contributions elected by the Participant in the Salary
Deferral Agreement to the fullest extent possible for all affected
Participants in a nondiscriminatory manner.
4.11 LIMITATION OF MATCHING CONTRIBUTIONS. If the Employer determines
prior to the end of the Plan Year that the Plan may not satisfy the Actual
Contribution Percentage Test for the Plan Year, the Employer may require that
the amount of Matching Contributions being allocated to the Accounts of Highly
Compensated Employees be reduced to the extent necessary to prevent Excess
Aggregate Contributions from being made to the Plan.
4.12 CORRECTIVE DISTRIBUTION OF EXCESS CONTRIBUTIONS.
(A) The Employer may distribute Excess Contributions (and income
allocable thereto) to the appropriate Highly Compensated Employee after the
close of the Plan Year in which the Excess Contribution arose and within 12
months after the close of that Plan Year.
(B) The income allocable to Excess Contributions is equal to the
sum of the allocable gain or loss for the Plan Year and shall be determined as
follows:
(1) The income allocable to Excess Contributions is
determined by multiplying the income for the Plan Year allocable to Deferral
Percentage Amounts by a fraction. The numerator of the fraction is the Excess
Contributions attributable to the Employee for the Plan Year. The denominator
of the fraction is equal to the sum of (A) the total account balance of the
Employee attributable to Deferral Percentage Amounts as of the beginning of the
Plan Year, plus (B) the Employee's Deferral Percentage Amounts for the Plan
Year.
(2) The allocable gain or loss for the period between the
end of the Plan Year and the date of distribution shall not be taken into
consideration when determining the income allocable to Excess Contributions.
(C) The amount of Excess Contributions to be distributed with
respect to an Employee for a Plan Year shall be reduced by Excess Deferrals
previously distributed to the Employee for the Employee's taxable year ending
with or within the Plan Year.
(D) The distribution of Excess Contributions made to the Family
Members of a family group that was combined for purposes of determining a
Highly Compensated Employee's Actual Deferral Ratio shall be allocated among
the Family Members in proportion to the Elective Deferral Contribution
(including any amounts required to be taken into account under subparagraphs
(B)(1) and (B)(2) of Section 1.8 of the Plan) of each Family Member that is
combined to determine the Actual Deferral Ratio.
(E) A corrective distribution of Excess Contributions (and income)
shall be made without regard to any Participant or spousal consent or any
notice otherwise required under sections 411(a)(11) and 417 of the Code.
(F) Any Matching Contributions or Qualified Matching Contributions
that relate to the Excess Contribution being distributed shall be forfeited.
The Matching Contribution so forfeited shall be in proportion to the applicable
Employee's vested and nonvested interest in Matching Contributions under the
Plan for the Plan Year in which the Excess Contribution arose. Forfeitures of
Matching Contributions or Qualified Matching Contributions that relate to
Excess Contributions shall be applied to reduce Employer contributions or pay
Plan expenses.
(G) In no case may the amount of Excess Contributions to be
distributed for a Plan Year with respect to any Highly Compensated Employee
exceed the amount of Elective Deferral Contributions made on behalf of the
Highly Compensated Employee for the Plan Year.
(H) In the event of a complete termination of the Plan during the
Plan Year in which an Excess Contribution arose, the corrective distribution
must be made as soon as administratively feasible after the date of the
termination of the Plan, but in no event later than 12 months after the date of
termination.
(I) Any distribution of less than the entire amount of Excess
Contributions with respect to any Highly Compensated Employee shall be treated
as a pro-rata distribution of Excess Contributions and allocable income or loss.
4.13 CORRECTION OF EXCESS AGGREGATE CONTRIBUTIONS.
(A) Excess Aggregate Contributions may be corrected using one of
the methods described in subparagraphs (1) and (2) below. The Employer shall
elect the method of correction to be used and shall apply such method to the
correction of the Excess Annual Contribution for the Plan Year.
(1) Method 1:
(a) The Excess Aggregate Contribution (and income)
shall be forfeited, if forfeitable, or distributed on a pro-rata basis from the
Employee's Account attributable to Contribution Percentage Amounts. The
distribution or forfeiture shall be made after the close of the Plan Year in
which the Excess Aggregate Contribution arose and within 12 months after the
close of that Plan Year. Whether an amount is distributed or forfeited under
this subparagraph (a) shall be determined based on the rules set forth in
paragraph (B) of this section.
(2) Method 2:
(a) Any Matching Contributions (and Qualified
Matching Contributions, to the extent not taken into account for purposes of
the Actual Deferral Percentage Test), and income allocable thereto, shall be
forfeited, if forfeitable, or distributed to the appropriate Highly Compensated
Employee. The distribution or forfeiture shall be made after the close of the
Plan Year in which the Excess Aggregate Contribution arose and within 12 months
after the close of that Plan Year. Whether an amount is forfeited or
distributed shall be determined under the rules set forth in paragraph (B) of
this section.
(B) Determination of Distributable and Forfeitable Amounts. For
purposes of paragraph (A) of this section:
(1) An Excess Aggregate Contribution attributable to
vested Matching Contributions, Qualified Matching Contributions (and, if
applicable, Qualified Nonelective Contributions and Elective Deferral
Contributions) shall be distributed to the appropriate Highly Compensated
Employee in accordance with the terms of this section.
(2) An Excess Aggregate Contribution attributable to an
Employee's nonvested Matching Contributions shall be forfeited in accordance
with the terms of this section.
(3) A Highly Compensated Employee's vested and nonvested
interest in Matching Contributions (and income allocable thereto) attributable
to Excess Aggregate Contributions shall be based on the proportion that
represents the Employee's Vested Interest in Matching Contributions under the
Plan for the Plan Year in which the Excess Aggregate Contribution arose.
(C) Forfeited Excess Aggregate Contributions. In accordance with
paragraph (B) of this section, the amount that represents the Employee's
nonvested interest in Matching Contributions (and income), and is attributable
to Excess Aggregate Contributions, shall be forfeited and, as such, shall be
applied to reduce Employer contributions or pay expenses.
(D) Income Allocable to Excess Aggregate Contributions. For
purposes of this section, the income allocable to Excess Aggregate Contributions
is equal to the sum of the allocable gain or loss for the Plan Year, and shall
be determined as follows:
(1) The income allocable to Excess Aggregate Contributions
is determined by multiplying the income for the Plan Year allocable to
Contribution Percentage Amounts by a fraction. The numerator of the fraction
is the Excess Aggregate Contributions for the Employee for the Plan Year. The
denominator of the fraction is equal to the sum of (A) the total account
balance of the Employee attributable to Contribution Percentage Amounts as of
the beginning of the Plan Year, plus (B) the Contribution Percentage Amounts
for the Plan Year.
(2) The allocable gain or loss for the period between the
end of the Plan Year and the date of correction shall not be taken into
consideration when determining the income allocable to Excess Aggregate
Contributions.
(E) The distribution of Excess Aggregate Contributions (and income)
made to Family Members of a family group that was combined for purposes of
determining a Highly Compensated Employee's Actual Contribution Ratio shall be
allocated among Family Members in proportion to the Contribution Percentage
Amounts (including any amounts required to be taken into account under
subparagraphs (B)(1) and (B)(2) of Section 1.5 of the Plan) of each Family
Member that are combined to determine the Actual Contribution Ratio.
(F) In the event of a complete termination of the Plan during the
Plan Year in which an Excess Aggregate Contribution arose, the corrective
distribution or forfeiture shall be made as soon as administratively feasible
after the date of termination of the Plan, but in no event later than 12
months after the date of termination.
(G) If the entire account balance of a Highly Compensated Employee
is distributed during the Plan Year in which the Excess Aggregate Contribution
arose, the distribution shall be deemed to have been a corrective distribution
of Excess Aggregate Contributions (and income) to the extent that a corrective
distribution would otherwise have been required.
(H) Any distribution of less than the entire amount of Excess
Aggregate Contributions (and income) shall be treated as a pro-rata
distribution of Excess Aggregate Contributions and allocable income or loss.
(I) In no case may the amount of Excess Aggregate Contributions
distributed to a Highly Compensated Employee exceed the amount of Matching
Contributions made on behalf of the Highly Compensated Employee for the Plan
Year.
(J) A distribution of Excess Aggregate Contributions (and income)
shall be made under this section without regard to any notice or consent
otherwise required under sections 411(a)(11) and 417 of the Code.
4.14 CORRECTIVE DISTRIBUTION OF EXCESS DEFERRALS. Notwithstanding any
other provision of the Plan, Excess Deferrals, plus any income and minus any
loss allocable thereto, may be distributed to any Participant to whose account
Excess Deferrals were allocated for the individual's taxable year. Such a
corrective distribution shall be made in accordance with this section.
(A) Correction of Excess Deferrals After Taxable Year.
(1) Not later than the March 15 following the close of a
Participant's taxable year, the Participant may notify the Plan of the amount of
Excess Deferrals received by the Plan during that taxable year. The
notification shall be in writing, shall specify the Participant's Excess
Deferrals, and shall be accompanied by the Participant's written statement that
if such amounts are not distributed, these amounts, when added to all other
Elective Deferral Contributions made on behalf of the Participant during the
taxable year, shall exceed the dollar limitation specified in section 402(g) of
the Code.
(2) The Participant is deemed to have notified the Plan
of Excess Deferrals if, not later than the March 15 following the close of a
Participant's taxable year, the Employer notifies the Plan on behalf of the
Participant of the Excess Deferrals. Such Excess Deferrals shall be calculated
by taking into account only Elective Deferral Contributions under the Plan and
any other plans of the Employer.
(3) Not later than the April 15 following the close of
the taxable year, the Plan shall distribute to the Participant the amount of
Excess Deferrals designated under subparagraphs (1) or (2) above.
(B) Correction of Excess Deferrals During the Taxable Year. A
Participant who has an Excess Deferral during a taxable year may receive a
corrective distribution during the same year. Such a corrective distribution
shall be made if:
(1) The Participant designates the distribution as an
Excess Deferral. The designation shall be made in the same manner as the
notification described in subparagraph (A)(1) of this section. The Participant
will be deemed to have designated the distribution as an Excess Deferral if the
Employer makes the designation on behalf of the Participant to the extent that
the Participant has Excess Deferrals for the taxable year calculated by taking
into account only Elective Deferral Contributions to the Plan and other plans
of the Employer.
(2) The corrective distribution is made after the date on
which the Plan received the Excess Deferral.
(3) The Plan designates the distribution as a distribution
of Excess Deferrals.
(C) If the Participant provides the Employer with satisfactory
evidence and written notice to demonstrate that all Elective Deferral
Contributions by the participant in this Plan and any other qualified plan
exceed the applicable limit under section 402(g) of the Code for such
individual's taxable year, then the Plan Administrator may (but is not required
to) distribute sufficient Elective Deferral Contributions (not to exceed the
amount of Elective Deferral Contributions actually contributed on behalf of the
Participant to this Plan during the Participant's taxable year) from this Plan
to allow the Participant to comply with the applicable limit. The evidence
provided by the Participant must establish clearly the amount of Excess
Deferrals. The Participant must present this evidence to the Plan
Administrator by the March 1 following the end of the calendar year in which
the Excess Deferrals occurred.
(D) Income Allocable to Excess Deferrals. The income allocable to
Excess Deferrals is equal to the sum of allocable gain or loss for the taxable
year of the individual and shall be determined as follows:
(1) The gain or loss allocable to Excess Deferrals is
determined by multiplying the income for the taxable year allocable to Elective
Deferral Contributions by a fraction. The numerator of the fraction is the
Excess Deferrals by the Employee for the taxable year. The denominator of the
fraction is equal to the sum of:
(a) The total account balance of the Employee
attributable to Elective Deferral Contributions as of the beginning of the Plan
Year, plus
(b) The Employee's Elective Deferral Contributions
for the taxable year.
(2) The income allocable to Excess Deferrals shall not
include the allocable gain or loss for the period between the end of the taxable
year and the date of distribution.
(E) No Employee or Spousal Consent Required. A corrective
distribution of Excess Deferrals (and income) shall be made without regard to
any notice or consent otherwise required under sections 411(a)(11) and 417 of
the Code.
(F) Any Matching Contributions or Qualified Matching Contributions
that relate to the Excess Deferral being distributed shall be forfeited. The
Matching Contribution so forfeited shall be in proportion to the applicable
Employee's vested and nonvested interest in Matching Contributions under the
Plan for the Plan Year in which the Excess Deferral arose. Forfeitures of
Matching Contributions or Qualified Matching Contributions that relate to
Excess Deferrals shall be applied to reduce Employer contributions or pay Plan
expenses.
4.15 QUALIFIED CONTRIBUTIONS. In lieu of distributing Excess Contributions
as provided in Section 4.12 of the Plan, or Excess Aggregate Contributions as
provided in Section 4.13 of the Plan, the Employer may take the actions
specified below in order to satisfy the Actual Deferral Percentage Test or the
Actual Contribution Percentage Test, or both, pursuant to the regulations under
the Code.
(A) At the election of the Employer, Qualified Nonelective
Contributions or Qualified Matching Contributions, or both, may be taken into
account as Elective Deferral Contributions for purposes of calculating the
Actual Deferral Ratio of a Participant.
The amount of Qualified Nonelective Contributions or Qualified Matching
Contributions made under the terms of this Plan and taken into account as
Elective Deferral Contributions for purposes of calculating the Actual Deferral
Ratio, subject to such other requirements as may be prescribed by the Secretary
of the Treasury, shall be such Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, that are needed to meet the Actual Deferral
Percentage Test.
(B) At the election of the Employer, Qualified Nonelective
Contributions or Elective Deferral Contributions, or both, may be taken into
account as Matching Contributions for purposes of calculating the Actual
Contribution Ratio of a Participant.
The amount of Qualified Nonelective Contributions or Elective Deferral
Contributions made under the terms of this Plan and taken into account for
purposes of calculating the Actual Contribution Ratio, subject to such other
requirements as may be prescribed by the Secretary of the Treasury, shall be
such Qualified Nonelective Contributions or Elective Deferral Contributions, or
both, that are needed to meet the Actual Contribution Percentage Test.
(C) Any Qualified Nonelective Contribution, Qualified Matching
Contribution, and Elective Deferral Contribution taken into account under
paragraphs (A) or (B) must be allocated to the Employee's Account as of a date
within the Plan Year in which the Excess Contribution or Excess Aggregate
Contribution arose and must be paid to the Plan no later than the 12-month
period immediately following the Plan Year to which the contribution relates.
4.16 MULTIPLE USE OF ALTERNATIVE LIMITATION.
(A) Multiple use of the alterative limitation occurs if all of the
conditions of this paragraph (A) are satisfied:
(1) One or more Highly Compensated Employee of the Employer
are eligible employees in both a cash or deferred arrangement subject to section
401(k) and a plan maintained by the Employer subject to section 401(m).
(2) The sum of the Actual Deferral Percentage of the
entire group of eligible Highly Compensated Employees under the arrangement
subject to section 401(k) and the Actual Contribution Percentage of the entire
group of eligible Highly Compensated Employees under the Plan subject to
section 401(m) exceeds the aggregate limit of paragraph (C) of this section.
(3) Actual Deferral Percentage of the entire group of
eligible Highly Compensated Employees under the arrangement subject to section
401(k) exceeds the amount described in section 401(k)(3)(A)(ii)(I).
(4) The Actual Contribution Percentage of the entire group
of eligible Highly Compensated Employees under the arrangement subject to
section 401(m) exceeds the amount described in section 401(m)(2)(A)(i).
(B) For purposes of this section, the aggregate limit is the
greater of:
(1) The sum of
(a) 1.25 times the greater of the relevant Actual
Deferral Percentage, and
(b) Two percentage points plus the lesser of the
relevant Actual Deferral Percentage or the relevant Actual Contribution
Percentage. In no event, however, may this amount exceed twice the lesser of
the relevant Actual Deferral Percentage or the Actual Contribution Percentage;
or
(2) The sum of
(a) 1.25 times the lesser of the relevant Actual
Deferral Percentage or the relevant Actual Contribution Percentage, and
(b) Two percentage points plus the greater of the
relevant Actual Deferral Percentage or the relevant Actual Contribution
Percentage. In no event, however, may this amount exceed twice the greater of
the relevant Actual Deferral Percentage or the relevant Actual Contribution
Percentage.
(C) For purposes of paragraph (B) of this section, the term
"relevant Actual Deferral Percentage" means the Actual Deferral Percentage of
the group of Nonhighly Compensated Employees under the arrangement subject to
section 401(k) for the Plan Year, and the term "relevant Actual Contribution
Percentage" means the Actual Contribution Percentage of the group of Nonhighly
Compensated Employees eligible under the Plan subject to section 401(m) for the
Plan Year beginning with or within the Plan Year of the arrangement subject to
section 401(k).
(D) The Actual Deferral Percentage and Actual Contribution
Percentage of the group of eligible Highly Compensated Employees are determined
after use of Qualified Nonelective Contributions and Qualified Matching
Contributions to meet the requirements of the Actual Deferral Percentage Test
and after use of Qualified Nonelective Contributions and Elective Deferral
Contributions to meet the requirements of the Actual Contribution Percentage
Test. The Actual Deferral Percentage and Actual Contribution Percentage of the
group of Highly Compensated Employees are determined after any corrective
distribution or forfeiture of Excess Deferrals, Excess Contributions, or Excess
Aggregate Contributions and after recharacterization of Excess Contributions
required without regard to this section. Only plans and arrangements maintained
by the Employer are taken into account under paragraph (B). If the Employer
maintains two or more cash or deferred arrangements subject to section 401(k)
that must be mandatorily disaggregated pursuant to section 401(k)-1(g)(11)(iii)
multiple use is tested separately with respect to each plan.
(E) If multiple use of the alterative limit occurs with respect to
two or more plans or arrangements maintained by the Employer, it shall be
corrected by reducing the Actual Contribution Percentage of Highly Compensated
Employees in the manner described in paragraph (F) of this section. Instead of
making this reduction, the Employer may eliminate the multiple use of the
alterative limitation by making Qualified Nonelective Contributions to the Plan.
(F) The amount of the reduction by which each Highly Compensated
Employee's Actual Contribution Ratio is reduced shall be treated as an Excess
Aggregate Contribution. The Actual Contribution Percentage of all Highly
Compensated Employees under the plan subject to reduction shall be reduced so
that there is no multiple use of the alterative limitation.
ARTICLE V
LIMITATIONS ON ALLOCATIONS
5.1 LIMITATIONS ON ALLOCATIONS. Definitions - The following definitions
are atypical terms which refer only to terms used in the Limitations on
Allocations Sections of this Article V.
(A) Annual Additions. The term Annual Additions shall mean the
sum of the following amounts allocated on behalf of a Participant for a
Limitation Year:
(1) all contributions made by the Employer which
shall include:
Elective Deferral Contributions, if any;
Matching Contributions, if any;
Qualified Matching Contributions, if any;
Nonelective Contributions, if any;
Qualified Nonelective Contributions, if any;
(2) all Forfeitures, if any;
(3) all Employee Contributions, if any.
For the purposes of this Article, Excess Amounts reapplied under Section 5.2 (D)
shall also be included as Annual Additions. Also, for the purposes of this
Article, Employee Contributions are determined without regard to deductible
employee contributions within the meaning of section 72(o)(5) of the Code.
Amounts allocated after March 31, 1984, to an individual medical account, as
defined in Internal Revenue Code section 415(1)(1), 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 attributable to post-retirement medical benefits allocated to the
separate account of a key employee, as defined in Internal Revenue Code section
419A(d)(3), under a welfare benefit fund, as defined in Internal Revenue Code
section 419(e), maintained by the Employer, are treated as Annual Additions to
a defined contribution plan.
Contributions do not fail to be Annual Additions merely because they are Excess
Deferrals, Excess Contributions or Excess Aggregate Contributions or merely
because Excess Contributions or Excess Aggregate Contributions are corrected
through distribution or recharacterization. Excess Deferrals that are
distributed in accordance with Section 4.14 of the Plan are not Annual
Additions.
Forfeited Matching Contributions that are forfeited because the contributions
to which they relate are treated as Excess Aggregate Contributions, Excess
Contributions, or Excess Deferrals and that are reallocated to the Participant
Accounts of other Participants for the Plan Year in which the forfeiture occurs,
are treated as Annual Additions for the Participants to whose accounts they are
reallocated and for the Participants from whose accounts they are forfeited.
(B) Compensation. The term Compensation means wages, salaries,
and fees for professional services and other amounts received (without regard
to whether or not an amount is paid in cash) for personal services actually
rendered in the course of employment with the Employer maintaining the Plan to
the extent that the amounts are includible in gross income (including, but not
limited to, commissions paid salesmen, compensation for services on the basis
of a percentage of profits, commissions on insurance premiums, tips, bonuses,
fringe benefits, and reimbursements, or other expense allowances under a
nonaccountable plan (as described in 1.62-2(c)), and foreign earned income (as
defined in section 911(b) of the Code) whether or not excludable from gross
income under section 911 of the Code. The term Compensation does not include:
(1) Employer Contributions to a plan of deferred
compensation which are not includible in the employee's gross income for the
taxable year in which contributed, or Employer Contributions under a simplified
employee pension plan to the extent such contributions are deductible by the
employee, or any distributions from a plan of deferred compensation;
(2) Amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property) held by the Employee
either becomes freely transferable or is no longer subject to substantial risk
of forfeiture;
(3) Amounts realized from the sale, exchange, or other
disposition of stock acquired under a qualified stock option; and
(4) Other amounts which received special tax benefits, or
contributions made by the Employer (whether or not under a salary reduction
agreement) towards the purchase of an annuity contract described in section
403(b) of the Code (whether or not the contributions are actually excludable
from the gross income of the Employee).
For Limitation Years beginning after December 31, 1991, for purposes of applying
the limitations of this article, Compensation for a Limitation Year is the
Compensation actually paid or made available during such Limitation Year.
(C) Defined Contribution Dollar Limitation. The term Defined
Contribution Dollar Limitation shall mean $30,000 or, if greater, one-fourth of
the defined benefit dollar limitation set forth in Internal Revenue Code
section 415(b)(1) as in effect for the Limitation Year.
(D) Employer. The term Employer shall mean the Employer that
adopts this Plan. In the case of a group of employers which constitutes a
controlled group of corporations (as defined in Internal Revenue Code section
414(b) as modified by section 415(h)), or which constitutes trades or
business (whether or not incorporated) which are under common control (as
defined in section 414(c) as modified by section 415(h)), or affiliated service
groups (as defined in section 414(m)) of which the adopting Employer is a part,
all such employers shall be considered a single Employer for purposes of
applying the limitations of this Article.
(E) Excess Amount. The term Excess Amount shall mean the excess
of the Participant's Annual Additions for the Limitation Year over the Maximum
Permissible Amount.
(F) Limitation Year. The term Limitation Year shall mean the
calendar year.
(G) Maximum Permissible Amount. The term Maximum Permissible
Amount shall mean the lesser of (1) the Defined Contribution Dollar Limitation,
or (2) 25% of the Participant's Compensation for the Limitation Year. If a
short Limitation Year is created because of an amendment changing the Limitation
Year to a different period of 12 consecutive months, the Maximum Permissible
Amount for the short Limitation Year will be the lesser of (1) the Defined
Contribution Dollar Limitation 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, or (2) 25% of the Participant's Compensation for the short
Limitation Year.
5.2 LIMITATIONS ON ALLOCATIONS. If the Employer does not maintain any
qualified plan in addition to this Plan:
(A) The amount of Annual Additions which may be allocated under
this Plan on a Participant's behalf for a Limitation Year shall not exceed the
lesser of the Maximum Permissible Amount or any other limitation contained in
this Plan.
(B) Prior to the determination of the Participant's actual
Compensation for a Limitation Year, the Maximum Permissible Amount may be
determined on the basis of the Participant's estimated annual Compensation.
Such Compensation shall be determined on a reasonable basis and shall be
uniformly determined for all Participants similarly situated. Any employer
contributions based on estimated annual Compensation shall be reduced by any
Excess Amounts carried over from prior years.
(C) 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 Participant's actual Compensation for
such Limitation Year. In the event a Participant separates from the Service of
the Employer prior to the end of the Limitation Year, the Maximum Permissible
Amount for such Participant shall be determined prior to any distribution of
his Participant's Account on the basis of his actual Compensation. Any
Excess Amounts shall be disposed of in accordance with Section 5.2 (D).
(D) If there is an Excess Amount with respect to a Participant for
a Limitation Year as a result of a reasonable error in estimating the
Participant's annual compensation, an allocation of forfeitures, a reasonable
error in determining the amount of elective deferrals (within the meaning of
section 402(g)(3) of the Code) that may be made with respect to any individual
under the limits of section 415 of the Code, or under other limited facts and
circumstances which the commissioner finds justified, such Excess Amount shall
be disposed of as follows:
(1) If an Excess Amount exists, the Excess Amount in the
Participant's Account (excluding Elective Deferral Contributions) shall be held
unallocated in a suspense account for the Limitation Year and allocated and
reallocated in the next Limitation Year to all Participants in the Plan. The
excess amount must be used to reduce Employer Contributions for the next
Limitation Year (and succeeding Limitation Years, as necessary) for all of the
Participants in the Plan. For purposes of this subparagraph, the Excess Amount
may not be distributed to Participants or former Participants.
(2) If, after the application of subparagraph (1) an
Excess Amount still exists, then the Participant's Elective Deferral
Contributions (including earnings and losses thereon) allocated for the
Limitation Year shall be returned to the Participant to the extent that an
Excess Amount exists. This distribution shall be made as soon as
administratively feasible after the Excess Amount is determined. Any
Elective Deferral Contributions returned under this paragraph shall be
disregarded for purposes of the Actual Deferral Percentage Test.
(3) Alternatively, the Plan Administrator may elect to
dispose of the Excess Amount by applying the procedure in subparagraph (2)
before applying the procedure in subparagraph (1). If the Plan Administrator
makes this election, the Plan Administrator must apply it uniformly to all
Participants in a Limitation Year.
(4) If a suspense account is in existence at any time
during a Limitation Year pursuant to this section, it will not participate in
the allocation of investment gains or losses. If a suspense account is in
existence at any time during a particular Limitation Year, all amounts in the
suspense account must be allocated and reallocated to Participants' Accounts
before any Employer Contributions which would constitute Annual Additions may
be made to the Plan for that Limitation Year.
5.3 LIMITATIONS ON ALLOCATIONS. If the Employer maintains one or more
defined contribution plans in addition to this Plan:
(A) The amount of Annual Additions which may be allocated under
this Plan on a Participant's behalf for a Limitation Year, shall not exceed the
lesser of:
(1) The Maximum Permissible Amount, reduced by the sum of
any Annual Additions allocated to the Participant's Account for the same
Limitation Year under this Plan and such other defined contribution plan; or
(2) Any other limitation contained in this Plan.
Prior to the determination of the Participant's actual Compensation for the
Limitation Year, the amounts referred to in Subsection (1) above may be
determined on the basis of the Participant's estimated annual Compensation for
such Limitation Year. Such estimated annual Compensation shall be determined
for all Participants similarly situated.
Any contribution made by the Employer based on estimated annual Compensation
shall be reduced by any Excess Amounts carried over from prior years, if
applicable.
(B) As soon as is administratively feasible after the end of the
Limitation Year, the amounts referred to in Section 5.3 (A) shall be
determined on the basis of the Participant's actual Compensation for such
Limitation Year.
(C) If amounts are contributed to a Participant's Account under
this Plan on an allocation date which does not coincide with the allocation
date(s) for all such other plans, and if a Participant's Annual Additions under
this Plan and all such other plans result in an Excess Amount, such Excess
Amount shall be deemed to have derived from those contributions last allocated.
(D) If an Excess Amount was allocated to a Participant on an
allocation date of this Plan which coincides with an allocation date of
another plan, the Excess Amount attributable to this Plan will be the product of
(1) and (2) below:
(1) The total Excess Amount allocated as of such date
(including any amount which would have been allocated but for the limitations
of Internal Revenue Code section 415).
(2) The ratio of (1) the amount allocated to the
Participant as of such date under this Plan, divided by (2) the total amount
allocated as of such date under all qualified defined contribution plans
(determined without regard to the limitations of Internal Revenue Code
section 415).
(E) Any Excess Amounts attributed to this Plan shall be disposed
of as provided in Section 5.2 (D).
5.4 LIMITATIONS ON ALLOCATIONS. If the Employer maintains a defined
benefit plan in addition to this Plan:
(A) If an individual is a Participant at any time in both this
Plan and defined benefit plan maintained by the Employer, the sum of the
Defined Benefit Plan Fraction and the Defined Contribution Plan Fraction for
any year may not exceed 1.0. In the event that the sum of the Defined
Contribution Plan Fraction and the Defined Benefit Plan Fraction exceeds 1.0,
the Defined Contribution Plan Fraction will be reduced until the sum of the
Defined Contribution Plan Fraction and the Defined Benefit Plan Fraction does
not exceed 1.0.
If an individual was a Participant in this Plan or in any other defined
contribution plan maintained by the Employer which was in existence on July 1,
1982, the numerator of the Defined Contribution Plan Fraction will be
adjusted if the sum of the Defined Contribution Plan Fraction and the Defined
Benefit Plan Fraction would otherwise exceed 1.0 under the terms of this Plan.
Under the adjustment, an amount equal to the product of (1) the excess of the
sum of the Fractions over 1.0 times (2) the denominator of the Defined
Contribution Plan Fraction, will be permanently subtracted from the numerator of
the Defined Contribution Plan Fraction. The adjustment is calculated using the
Fractions as they would be computed as of the later of the end of the last
Limitation Year beginning before January 1, 1983, or June 30, 1983. This
adjustment also will be made if at the end of the last Limitation Year beginning
before January 1, 1984, the sum of the Fractions exceeds 1.0 because of accruals
or additions that were made before the limitations of this Article became
effective to any plans of the Employer in existence on July 1, 1982.
In addition, if an individual was a Participant in this Plan or in any other
defined contribution plan maintained by the Employer which was in existence on
May 6, 1986, the numerator of the Defined Contribution Plan Fraction will be
adjusted if the Employer's defined benefit plan was also in existence on May 6,
1986, and the sum of the Defined Contribution Plan Fraction and the Defined
Benefit Plan Fraction would otherwise exceed 1.0 under the terms of this
Plan. Under the adjustment, an amount equal to the product of (1) the excess of
the sum of the Fractions over 1.0 times (2) the denominator of the Defined
Contribution Plan Fraction, will be permanently subtracted from the numerator
of the Defined Contribution Plan Fraction. This adjustment is calculated using
the Fractions as they would be computed as of the end of the last Limitation
Year beginning before January 1, 1987. In the event that a Participant's
accrued benefit as of December 31, 1986, under the defined benefit plan exceeds
the defined benefit dollar limitation set forth in Internal Revenue Code section
415(b)(1), the amount of that accrued benefit shall be used in both the
numerator and the denominator of the Defined Benefit Plan Fraction in making
this adjustment.
For purposes of this Section 5.4, all defined benefit plans of the Employer,
whether or not terminated, will be treated as one defined benefit plan and all
defined contribution plans of the Employer, whether or not terminated, will be
treated as one defined contribution plan.
(B) The Defined Benefit Plan Fraction for any year is a fraction,
the numerator of which is the Participant's Projected Annual Benefit under the
defined benefit plan (determined as of the close of the Limitation Year), and
the denominator of which is the lesser of (1) or (2) below:
(1) 1.25 times the dollar limitation in effect under
Internal Revenue Code section 415(b)(1)(A) on the last day of the Limitation
Year, or
(2) 1.4 times the amount which may be taken into account
under Internal Revenue Code section 415(b)(1)(B) with respect to such
Participant for the Limitation Year.
Notwithstanding the above, if the Participant was a participant in one or more
defined benefit plans maintained by the Employer which were in existence on
July 1, 1982, the denominator of the Defined Benefit Plan Fraction will not be
less than 125% of the sum of the annual benefits under such plans which the
Participant had accrued as of the later of the end of the last Limitation Year
beginning before January 1, 1983 or June 30, 1983. The preceding sentence
applies only if the defined benefit plans individually and in the aggregate
satisfied the requirements of Internal Revenue Code section 415 as in effect at
the end of the 1982 Limitation Year.
(C) A Participant's Projected Annual Benefit is equal to the
annual benefit to which the Participant would be entitled under the terms of
the defined benefit plan based upon the following assumptions:
(1) The Participant will continue employment until reaching
Normal Retirement Age as determined under the terms of the plan (or current age,
if that is later);
(2) The Participant's Compensation for the Limitation Year
under consideration will remain the same until the date the Participant attains
the age described in sub-division (1) of this subparagraph; and
(3) All other relevant factors used to determine benefits
under the plan for the Limitation Year under consideration will remain
constant for all future Limitation Years.
(D) The Defined Contribution Plan Fraction for any Limitation Year
is a fraction, the numerator of which is the sum of the Annual Additions to the
Participant's Accounts in such Limitation Year and for all prior Limitation
Years, and the denominator of which is the lesser of (1) or (2) below for such
Limitation Year and for all prior Limitation Years of such Participant's
employment (assuming for this purpose, that Internal Revenue Code section 415(c)
had been in effect during such prior Limitation Years):
(1) 1.25 times the dollar limitation in effect under
Internal Revenue Code section 415(c)(1)(A) on the last day of the Limitation
Year; or
(2) 1.4 times the amount which may be taken into account
under Internal Revenue Code section 415(c)(1)(B) with respect to such
Participant for the Limitation Year.
For the purposes of determining these Limitations on Allocations, any non-
deductible employee contributions made under a defined benefit plan will be
considered to be a separate defined contribution plan and will be considered to
be past of the Annual Additions for the appropriate Limitation Year.
Annual Additions for any Limitation Year beginning before January 1, 1987,
shall not be recomputed to treat all Employee Contributions as Annual Additions.
(E) Notwithstanding the foregoing, at the election of the Plan
Administrator, in computing the Defined Contribution Plan Fraction with
respect to any Plan Year ending after December 31, 1982, the denominator
shall be an amount equal to the product of:
(1) the denominator of the Defined
Contribution Plan Fraction, computed in
accordance with the rules in effect for
the Plan Year ending in 1982; and
(2) the transition fraction, which is a
fraction
(a) the numerator of which is the
lesser of:
(i) $51,875, or
(ii) 1.4 times 25% of the
Compensation of the
Participant for the Plan Year
ending in 1981, and
(b) the denominator of which is the
lesser of
(i) $41,500, or
(ii) 25% of the Compensation of the
Participant for the Plan Year
ending in 1981.
ARTICLE VI
DISTRIBUTION OF BENEFITS
6.1 DISTRIBUTIONS IN GENERAL. Distributions from the Plan shall be made in
the form of a single sum payment. All distributions are subject to the
provisions of Article VIII, Joint and Survivor Requirements.
Distributions of Employer stock are limited to the value of the Participant's
Employer Stock Account and shall be made by the Trustee.
6.2 TIMING OF DISTRIBUTIONS. If the value of a Participant's Vested
Interest exceeds (or at the time of any prior distribution exceeded) $3,500 and
is immediately distributable (as defined in Section 8.5), the Participant must
consent to the distribution before it is made.
Instead of consenting to a distribution, the Participant may make a written
election to defer the distribution for a specified period of time ending no
later than the Participant's Normal Retirement Date.
If the Participant does not consent to a distribution or if no election to defer
is made within 90 days after receiving a written explanation of the right to
defer such distribution pursuant to Income Tax Regulation 1.411(a)(11), all
benefits shall be deferred to, and distribution shall be made as of the
Participant's Normal Retirement Age.
A Participant whose actual retirement date is on or after his Normal
Retirement Age may not elect to defer distribution of his benefit beyond the
date of his actual retirement.
If the value of a Participant's Vested Interest is $3,500 or less at the time it
becomes payable, the distribution shall be made upon such Participant's
Termination of Employment. Such a distribution may not be deferred.
Unless the Participant elects otherwise, the payment of benefits under this Plan
to the Participant shall begin not later than the 60th day after the close of
the Plan Year in which the later of (A) or (B), below, occurs:
(A) the date on which the Participant attains his Normal
Retirement Age or age 62, if later; or
(B) the date on which the Participant terminates his Service
(including Termination of Employment, death or Disability) with the Employer.
Notwithstanding the foregoing, the failure of a Participant and Spouse, if
required, to consent to a distribution while a benefit is immediately
distributable shall be deemed to be an election to defer commencement of
payment of any benefit sufficient to satisfy the above paragraph.
6.3 DISTRIBUTION LIMITATION. Elective Deferral Contributions, Qualified
Nonelective Contributions and Qualified Matching Contributions, and income
allocable to each, are not distributable to a Participant or a Beneficiary, in
accordance with such Participant's or Beneficiary's election, earlier than upon
the Participant's Termination of Employment, death, or disability.
Such amounts may also be distributed upon:
(A) Termination of the Plan without the establishment or
maintenance of a successor plan.
For purposes of this paragraph, a successor plan is any other defined
contribution plan maintained by the same employer. However, if fewer than two
percent 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(c) 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.
A distribution may be made under this paragraph only if it is a lump sum
distribution. The term "lump sum distribution" has the same meaning provided
in section 402(e)(4) of the Code, without regard to subparagraphs (A)(i)
through (iv), (B), and (H) of that section.
(B) The disposition by the Employer to an unrelated corporation of
substantially all the assets (within the meaning of section 409(b)(2) of the
Code) used in the trade or business of the Employer if the Employer continues
to maintain this Plan after the disposition. However, a distribution may be
made under this paragraph only to an Employee who continues employment with the
corporation acquiring such assets.
In addition, this requirement is satisfied only if the purchaser does not
maintain the Plan after the disposition. A purchaser maintains the plan of the
seller 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 the Plan that it maintains accepts rollover contributions
of amounts distributed by the Plan.
For purposes of this paragraph, the sale of "substantially all" the assets used
in a trade or business means the sale of at least 85 percent of the assets.
A distribution may be made under this paragraph only if it is a lump sum
distribution. The term "lump sum distribution" has the same meaning provided
in section 402(e)(4) of the Code, without regard to subparagraphs (A)(i)
through (iv), (B), and (H) of that section.
(C) The disposition by the Employer to an unrelated entity or
individual of the Employer's interest in a subsidiary (within the meaning of
section 409(d)(3) of the Code) if the Employer continues to maintain this Plan.
However, a distribution may be made under this paragraph only to an Employee who
continues employment with such subsidiary.
In addition, this requirement is satisfied only if the purchaser does not
maintain the Plan after the disposition. A purchaser maintains the plan of the
seller 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 the Plan that
it maintains accepts rollover contributions of amounts distributed by the Plan.
A distribution may be made under this paragraph only if it is a lump sum
distribution. The term "lump sum distribution" has the same meaning provided in
section 402(e)(4) of the Code, without regard to subparagraphs (A)(i) through
(iv), (B), and (H) of that section.
(D) In the case of Elective Deferral Contributions only, the
hardship of the Participant, as described in Section 10.1 of the Plan.
6.4 COMMENCEMENT OF DISTRIBUTIONS. Notwithstanding the provisions of the
preceding Timing of Distributions Section, distributions to a Participant will
commence no later than the date determined in accordance with the provisions of
this Section.
Distribution to a Participant must be made no later than the required beginning
date. The first required beginning date of a Participant is the first day of
April of the calendar year following the calendar year in which the Participant
attains age 70-1/2.
6.5 DISTRIBUTION REQUIREMENTS.
(A) Except as otherwise provided in Article VIII, the requirements
of this Section shall apply to any distribution of a Participant's Accrued
Benefit.
(B) All distributions required under this Article shall be
determined and made in accordance with the Income Tax Regulations under section
401(a)(9), including the minimum distribution incidental benefit requirement of
section 1.401(a)(9)-2 of the regulations.
(C) Limits on Settlement Options. Distributions will be made in a
lump sum.
6.6 NON-TRANSFERABLE. The Participant's right to any payments, benefits,
and refunds is not transferable and shall be free from the claims of all
creditors to the fullest extent permitted by law.
6.7 DEATH DISTRIBUTION PROVISIONS. If a Participant dies prior to his
commencement of benefits, his entire interest will be distributed no later than
five years after such Participant's death.
6.8 ALTERNATE PAYEE SPECIAL DISTRIBUTION. Distributions pursuant to
Section 16.8 may be made without regard to the age or employment status of the
Participant.
6.9 DIRECT ROLLOVERS. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a Distributee's election under this
Article, a Distributee may elect, at the time and in the manner prescribed by
the Plan Administrator, to have any portion of an Eligible Rollover
Distribution paid directly to an Eligible Retirement Plan specified by the
Distributee in a Direct Rollover, except as otherwise provided by the
Employer's administrative procedures as permitted by regulations. In addition,
a Distributee may not elect a Direct Rollover of an Offset Amount.
6.10 DEFINITIONS.
(A) Direct Rollover: A Direct Rollover is a payment by the plan
to the Eligible Retirement Plan specified by the Distributee.
(B) 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 who is the alternate payee under
a qualified domestic relations order, as defined in section 414(p) of the Code,
are Distributees with regard to the interest of the Spouse or former Spouse.
(C) Eligible Retirement Plan: An Eligible Retirement Plan is an
individual retirement account described in section 408(a) of the code, an
individual retirement annuity described in section 408(b) of the Code, an
annuity plan described in 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 an individual retirement annuity.
(D) Eligible Rollover Distribution: An Eligible Rollover
Distribution is any distribution of all or any portion of the balance to the
credit of the Distributee, except that an Eligible Rollover Distribution does
not include: any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life (or
life expectancy) of the Distributee 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; any distribution to the extent
such distribution is required under section 401(a)(9) of the Code; and the
opinion 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).
(E) Offset Amount: An Offset Amount is the amount by which a
Participant's Account is reduced to repay a loan from the Plan (including the
enforcement of the Plan's security interest in the Participant's Account).
ARTICLE VII
RETIREMENT BENEFITS
7.1 NORMAL RETIREMENT. A Participant who attains his Normal Retirement Age
shall have a Vesting Percentage of 100%. If a Participant retires from the
active Service of the Employer on his Normal Retirement Date, he shall be
entitled to receive a distribution of the entire value of his Participant's
Account as of his Normal Retirement Date.
7.2 EARLY RETIREMENT. A Participant who retires from the Service of the
Employer on his Early Retirement Date shall have a Vesting Percentage of 100%
and shall be entitled to receive a distribution of the entire value of his
Participant's Account as of his Early Retirement Date.
7.3 LATE RETIREMENT. A Participant may continue in the Service of the
Employer after his Normal Retirement Age, and in such event he shall retire on
his Late Retirement Date. Such Participant shall continue as a Participant
under this Plan until such Late Retirement Date. The Participant shall have a
Vesting Percentage of 100% and shall be entitled to receive a distribution of
the entire value of his Participant's Account as of his Late Retirement Date.
7.4 DISABILITY RETIREMENT. A Participant who retires from the Service of
the Employer on account of Disability shall continue to vest in accordance with
the Vesting Percentage set forth in Article I and shall be entitled to receive a
distribution of his Vested Interest in his Participant's Account as of his
Disability Retirement Date.
ARTICLE VIII
JOINT AND SURVIVOR REQUIREMENTS
8.1 GENERAL. The provisions of this Article shall take precedence over any
conflicting provision in this Plan.
8.2 SPECIAL RULE FOR PROFIT-SHARING PLANS. This Plan meets the following
two conditions: (1) the Participant cannot elect payments in the form of a Life
Annuity, and (2) on the death of the Participant, the Participant's Vested
Interest will be paid to the Participant's Surviving Spouse, but if there is no
Surviving Spouse, or, if the Surviving Spouse has already consented in a
manner conforming to a Qualified Election, then to the Participant's designated
Beneficiary. In addition, with the exception of Rollover Contributions as
permitted under the terms of Article IV, assets which are not attributable to
contributions made under the terms of this Plan may not be held hereunder and
therefore this Plan will not be a direct or indirect transferee of a defined
benefit plan, money purchase pension plan (including a target benefit plan),
stock bonus, or profit-sharing plan which would otherwise provide for a life
Annuity form of payment to the Participant.
8.3 QUALIFIED ELECTION. A Participant may designate a Beneficiary other
than his Spouse if the Spouse consents in a manner conforming to a Qualified
Election. The waiver must be in writing and must be consented to by the
Participant's Spouse. The Spouse's consent to a waiver must be in writing, must
acknowledge the financial effect of the waiver, and must be witnessed by a Plan
representative or notary public. If the Spouse's consent specifically
acknowledges a Beneficiary designated by the Participant and does not grant the
Participant the right to make future changes to this designation without spousal
consent, then the Participant may not subsequently designate another Beneficiary
without the further written consent of the Spouse. Alteratively, the Spouse's
consent may expressly allow the Participant to change his designation of a
Beneficiary without additional spousal consent. Notwithstanding this consent
requirement, if the Participant establishes to the satisfaction of a Plan
representative that such written consent may not be obtained because there is no
Spouse or the Spouse cannot be located, a waiver will be deemed a Qualified
Election. Any consent necessary under this
provision will be valid only with respect to the Spouse who signs the
consent, or in the event of a deemed Qualified Election, the designated
Spouse. Additionally, a revocation of a prior waiver may be made by a
Participant without the consent of the Spouse at any time before the
commencement of benefits. The number of revocations shall not be limited.
8.4 SPOUSE (SURVIVING SPOUSE). The Spouse or Surviving Spouse of the
Participant. A former Spouse may be treated as the Spouse or Surviving
Spouse to the extent provided under a Qualified Domestic Relations Order as
described in Internal Revenue Code section 414(p).
8.5 CONSENT REQUIREMENTS. The Participant's consent shall not be
required to the extent that a distribution is required to satisfy section
401(a)(9) or section 415 of the Code. An account balance is immediately
distributable if any part of the account balance could be distributed to the
Participant (or Surviving Spouse) before the Participant attains (or would have
attained, if not deceased) the later of the Normal Retirement Date or age 62.
ARTICLE IX
TERMINATION OF EMPLOYMENT
9.1 DISTRIBUTION. As of a Participant's Termination of Employment, he shall
be entitled to receive a distribution of his entire Vested Interest. Such
distribution shall be further subject to the terms and conditions of Article VI.
If at the time of his Termination of Employment the Participant's Vesting
Percentage is not 100% and the Participant does not take a distribution from the
portion of his Vested Interest subject to the Vesting Percentage, the non-vested
portion of his Participant's Account will become a Forfeiture upon the date the
participant incurs five consecutive One-Year Breaks in Service.
If at the time of his Termination of Employment the Participant's Vesting
Percentage is not 100% and such Participant does take a distribution from the
portion of his Vested Interest subject to the Vesting Percentage, or if the
Participant's Vesting Percentage is 0%, the non-vested portion of his
Participant's Account will become a Forfeiture immediately upon termination. A
Participant with a Vesting Percentage of 0% is deemed to be cashed out at
termination of employment.
If the Participant, whose non-vested portion of his Participant's Account became
a Forfeiture in accordance with the terms of the preceding paragraph, is later
rehired by the Employer and re-enrolls in the Plan, Subsection (A) or (B) below,
as applicable, will apply:
(A) If the Participant was 0% vested at his Termination of
Employment and did not incur five consecutive One-Year Breaks in Service after
such date, the amount which became a Forfeiture, if any, shall be restored by
the Employer at the time such Participant re-enrolls in the Plan. The
Forfeiture, so restored, shall be included as part of that portion of his
Participant's Account subject to the Vesting Percentage.
(B) If the Participant had incurred five consecutive One-Year
Breaks in Service after his Termination of Employment, the amount which
became a Forfeiture shall remain a Forfeiture and such Participant shall be
prohibited from repaying a distribution made at his Termination of Employment.
9.2 NO FURTHER RIGHTS OR INTEREST. A Participant shall have no further
interest in or any rights to any portion of his Participant's Account that
becomes a Forfeiture due to his Termination of Employment once the
Participant incurs five consecutive One-Year Breaks in Service in accordance
with Article II.
9.3 APPLICATION OF FORFEITURES. Any Forfeiture arising in accordance with
the provisions of Section 9.1 shall be used by the Employer to reduce and in
lieu of the contributions made by the Employer next due under Article IV, or to
pay Plan expenses, at the earliest opportunity after such Forfeiture becomes
available.
The provisions of the preceding sentence notwithstanding, in the event that a
former Participant is rehired by the Employer and the Employer is required by
the provisions of Section 9.1 of this Plan to restore the amount of a separate
account that had been created upon such Participant's prior Termination of
Employment and later forfeited, Forfeitures, if any, will first be used to
restore such separate account to its value as of such Participant's prior
Termination of Employment date. In the event that the available Forfeitures
are not sufficient to make such restoration, the Employer will make an
additional contribution sufficient to make such restoration.
ARTICLE X
WITHDRAWALS AND LOANS
10.1 WITHDRAWAL FOR SERIOUS FINANCIAL HARDSHIP OF ELECTIVE DEFERRAL
CONTRIBUTIONS. Distributions of Elective Deferral Contributions may be made to
a Participant in the event of a hardship. For purposes of this section, a
distribution is made on account of hardship only if the distribution is made
both on account of an immediate and heavy financial need of the Employee and is
necessary to satisfy the financial need. In addition, any distribution on
account of hardship shall be limited to the distributable amount described in
paragraph (C) of this section.
(A) The following are the only financial needs considered
immediate and heavy for purposes of this section:
(1) Expenses for medical care described in section 213(d)
of the Code previously incurred by the Employee, the Employee's Spouse, or any
dependents of the Employee (as defined in section 152 of the Code) or necessary
for these persons to obtain medical care described in section 213(d) of the
Code;
(2) Payment of tuition and related educational fees for the
next 12 months of post-secondary education for the Employee, his Spouse,
children, or dependents (as defined in section 152 of the Code);
(3) Costs directly related to the purchase of a principal
residence for the Employee (excluding mortgage payments); or
(4) Payments necessary to prevent the eviction of the
Employee from the Employee's principal residence or foreclosure on the
mortgage on that residence.
(B) The Participant shall specify on the application for a
hardship withdrawal whether the Participant elects the provision of (1) or (2)
below to be used in determining the necessity of the hardship.
(1) A distribution will be considered as necessary to
satisfy an immediate and heavy financial need of the Employee only if all of the
following requirements are satisfied:
(a) The hardship distribution is not in excess of
the amount of the immediate and heavy financial need of the Employee. The
amount of an immediate and heavy financial need may include the amounts
necessary to apply any federal, state, or local income taxes or penalties
reasonably anticipated to result from the distribution.
(b) The Employee had obtained all distributions,
other than hardship distributions, and all nontaxable (at the time of the loan)
loans currently available under all plans maintained by the Employer.
(c) The Employee is suspended from making Elective
Deferral Contributions to the Plan for at least 12 months after receipt of the
hardship distribution. In addition, the Employee must be prohibited under the
terms of the plan or an otherwise enforceable agreement from making Elective
Deferral Contributions and Employee Contributions to all other plans
maintained by the Employer for at least 12 months after receipt of the
hardship distribution.
For this purpose, the phrase "all other plans of the Employer" means all
qualified and nonqualified plans of deferred compensation maintained by the
Employer. The phrase includes a stock option, stock purchase, or similar plan,
or a cash or deferred arrangement that is part of a cafeteria plan within the
meaning of section 125 of the Code. However, it does not include the mandatory
employee contribution part of a defined benefit plan. It also does not include
a health or welfare benefit plan, including one that is part of a cafeteria plan
within the meaning of section 125 of the Code.
(d) The Employee may not make Elective Deferral
Contributions to the Plan for the Employee's taxable year immediately following
the taxable year of the hardship distribution in excess of the applicable limit
under section 402(g) of the Code for such taxable year less the amount of such
Employee's Elective Deferral Contributions for the taxable year of the hardship
distribution. In addition, all other plans maintained by the Employer must
limit the Employee's Elective Deferral Contributions for the next taxable year
to the applicable limit under section 402(g) of the Code for that year minus the
Employee's Elective Deferral Contributions for the year of the hardship
distribution.
(2) A distribution will be treated as necessary to
satisfy a financial need if the Employer relies upon the Employee's written
representation, unless the Employer has actual knowledge to the contrary, that
the need cannot reasonably be relieved:
(a) Through reimbursement or compensation by
insurance or otherwise;
(b) By liquidation of the Employee's assets;
(c) By cessation of Elective Deferral
Contributions under the Plan; or
(d) By other distributions or nontaxable (at the
time of the loan) loans from plans maintained by the Employer or by any other
employer, or by borrowing from commercial sources on reasonable commercial terms
in an amount sufficient to satisfy the need.
A need cannot reasonably be relieved by one of the actions listed above if the
effect would be to increase the amount of the need.
The amount of an immediate and heavy financial need may include any amounts
necessary to pay any federal, state, or local income taxes or penalties
reasonably anticipated to result from the distribution.
(C) The distributable amount is equal to the Employee's total
Elective Deferral Contribution as of the date of distribution, reduced by the
amount of previous distributions of Elective Deferral Contributions on account
of hardship. The Employee's total Elective Deferral Contributions shall not
include income allocable to such Elective Deferral Contributions. The minimum
distributable amount is $100.00.
10.2 WITHDRAWAL OF ROLLOVER CONTRIBUTIONS. Once every Plan Year a
Participant may elect to withdraw from his Participant's Account an amount up
to 100% of the value of that portion of his account attributable to his
Rollover Contributions as defined in Article IV. Such an election shall
become effective in accordance with the Notification Section below.
10.3 NOTIFICATION. The Participant shall notify the Administrator in
writing of his election to make a withdrawal under the preceding provisions of
this Article X. Any such election shall be effective as of the date specified
in such notice, which date must be at least 30 days after such notice is filed.
Payment of the withdrawal shall be subject to the terms and conditions of
Article VI.
10.4 NON-REPAYMENT. Withdrawals made in accordance with this Article X may
not be repaid.
10.5 LOANS TO PARTICIPANTS. The Plan Administrator may make a bona fide
loan to a Participant, in an amount which, when added to the outstanding
balance of all other loans to the Participant from all qualified plans of the
Employer, does not exceed the lesser of $50,000 reduced by the excess of the
Participant's highest outstanding loan balance during the 12 months preceding
the date on which the loan is made over the outstanding loan balance on the date
the new loan is made, or 50% of the Participant's Vested Interest in his
Participant's Account. The minimum loan amount under the Plan is $1,000.
The loan shall be made under such terms, security interest, and conditions as
the Plan Administrator deems appropriate, provided, however, that all loans
granted hereunder:
(A) are available to all Participants and Beneficiaries, who are
parties-in-interest pursuant to section 3(14) of ERISA, on a reasonably
equivalent basis;
(B) are not made available to Highly Compensated Employees on a
basis greater than the basis made available to other Employees;
(C) bear a reasonable rate of interest;
(D) are adequately secured;
(E) are made in accordance with and subject to all of the
provisions of this Article.
10.6 LOAN PROCEDURES. The Plan Administrator shall establish a written set
of procedures, set forth in the summary plan description, by which all loans
will be administered. Such rules, which are incorporated herein by reference,
will include, but not be limited to, the following:
(A) the person or persons authorized to administer the loan
program, identified by name or position;
(B) the loan application procedure;
(C) the basis for approving or denying loans;
(D) any limits on the types of loans permitted;
(E) the procedure for determining a "reasonable" interest rate;
(F) acceptable collateral;
(G) default conditions; and
(H) steps which will be taken to preserve Plan assets in the event
of default.
ARTICLE XI
FIDUCIARY DUTIES AND RESPONSIBILITIES
11.1 GENERAL FIDUCIARY STANDARD OF CONDUCT. Each Fiduciary of the Plan
shall discharge his duties hereunder solely in the interest of the
Participants and their Beneficiaries and for the exclusive purpose of
providing benefits to Participants and their Beneficiaries and defraying
reasonable expenses of administering the Plan. Each Fiduciary shall act with
the care, skill, prudence, and diligence under the circumstances that a prudent
man acting in a like capacity and familiar with such matters would use in
conducting an enterprise of like character and with like aims, in accordance
with the documents and instruments governing this Plan, insofar as such
documents and instruments are consistent with this standard.
11.2 SERVICE IN MULTIPLE CAPACITIES. Any Person or group of persons may
serve in more than one fiduciary capacity with respect to this Plan.
11.3 LIMITATIONS ON FIDUCIARY LIABILITY. Nothing in this Plan shall be
construed to prevent any Fiduciary from receiving any benefit to which he may
be entitled as a Participant or Beneficiary in this Plan, so long as the
benefit is computed and paid on a basis which is consistent with the terms of
this Plan as applied to all other Participants and Beneficiaries. Nor shall
this Plan be interpreted to prevent any Fiduciary from receiving any reasonable
compensation for services rendered, or for the reimbursement of expenses
properly and actually incurred in the performance of his duties with the Plan;
except that no Person so serving who already receives full-time pay from an
Employer shall receive compensation from this Plan, except for reimbursement of
expenses properly and actually incurred.
11.4 INVESTMENT MANAGER. When an Investment Manager has been appointed, he
is required to acknowledge in writing that he has undertaken a Fiduciary
responsibility with respect to the Plan.
ARTICLE XII
THE ADMINISTRATOR
12.1 DESIGNATION AND ACCEPTANCE. The Employer shall designate a person or
persons to serve as Administrator under the Plan.
12.2 DUTIES AND AUTHORITY. The Administrator shall administer the Plan in a
nondiscriminatory manner for the exclusive benefit of Participants and their
Beneficiaries.
The Administrator shall perform all such duties as are necessary to operate,
administer, and manage the Plan in accordance with the terms thereof,
including but not limited to the following:
(A) To determine all questions relating to a Participant's
coverage under the Plan;
(B) To maintain all necessary records for the administration of the
Plan;
(C) To compute and authorize the payment of retirement income and
other benefit payments to eligible Participants and Beneficiaries;
(D) To interpret and construe the provisions of the Plan and to
make regulations which are not inconsistent with the terms thereof, and
(E) To advise or assist Participants regarding any rights,
benefits, or elections available under the Plan.
The Administrator shall take all such actions as are necessary to operate,
administer, and manage the Plan as a retirement program which is at all times
in full compliance with any law or regulation affecting this Plan.
The Administrator may allocate certain specified duties of plan
administration to an individual or group of individuals who, with respect to
such duties, shall have all reasonable powers necessary or appropriate to
accomplish them.
12.3 EXPENSES AND COMPENSATION. All expenses of administration may be paid
out of the Trust fund unless paid by the Employer. Such expenses shall include
any expenses incident to the functioning of the Administrator, including, but
not limited to, fees of accountants, counsel, and other specialists and their
agents, and other costs of administering the Plan. Until paid, the expenses
shall constitute a liability of the Trust fund. However, the Employer may
reimburse the Trust fund for any administration expense incurred. Any
administration expense paid to the Trust fund as a reimbursement shall not be
considered an Employer Contribution. Nothing shall prevent the Administrator
from receiving reasonable compensation for services rendered in administering
this Plan, unless the Administrator already receives full-time pay from any
Employer adopting the Plan.
12.4 INFORMATION FROM EMPLOYER. To enable the Administrator to perform his
functions, the Employer shall supply full and timely information to the
Administrator on all matters relating to this Plan as the Administrator may
require.
12.5 ADMINISTRATIVE COMMITTEE; MULTIPLE SIGNATURES. In the event that more
than one person has been duly nominated to serve on the administrative
committee, which is the Employee Benefits Committee, and has signified in
writing the acceptance of such designation, the signature(s) of one or more
persons may be accepted by an interested party as conclusive evidence that the
Employee Benefits Committee has duly authorized the action therein set forth and
as representing the will of and binding upon the whole Employee Benefits
Committee. No person receiving such documents or written instructions and
acting in good faith and in reliance thereon shall be obliged to ascertain the
validity of such action under the terms of this Plan. The Employee Benefits
Committee shall act by a majority of its members at the time in office and such
action may be taken either by a vote at a meeting or in writing without a
meeting.
12.6 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR. The
Administrator, or any member of the Employees Benefits Committee, may resign at
any time by delivering to the Employer a written notice of resignation, to take
effect at a date specified therein, which shall not be less than 30 days after
the delivery thereof, unless such notice shall be waived.
The Administrator or any member of the Employee Benefits Committee may be
removed with or without cause by the Employer by delivery of written notice of
removal, to take effect immediately.
The Employer, upon receipt of or giving notice of the resignation or removal of
the Administrator, shall promptly designate a successor Administrator who must
signify acceptance of this position in writing. In the event no successor is
appointed, the Board of Directors of the Employer will function as the
Employees Benefits Committee until a new Administrator has been appointed and
has accepted such appointment.
12.7 INVESTMENT MANAGER. The Administrator may appoint, in writing, an
Investment Manager or Managers to whom is delegated the authority to manage,
acquire, invest or dispose of all or any part of the Trust assets. With
regard to the assets entrusted to his care, the Investment Manager shall
provide written instructions and directions to the Trustee, who shall in turn
be entitled to rely upon such written direction. This appointment and
delegation shall be evidenced by a signed written agreement.
12.8 DELEGATION OF DUTIES. The Administrator shall have the power, to the
extent permitted by law, to delegate the performance of such Fiduciary and non-
Fiduciary duties, responsibilities and functions as the Administrator shall deem
advisable for the proper management and administration of the Plan in the best
interests of the Participants and their Beneficiaries.
ARTICLE XIII
PARTICIPANTS' RIGHTS
13.1 GENERAL RIGHTS OF PARTICIPANTS AND BENEFICIARIES. The Plan is
established and the Trust assets are held for the exclusive purpose of
providing benefits for such Employees and their Beneficiaries as have
qualified to participate under the terms of the Plan.
13.2 FILING A CLAIM FOR BENEFITS. A Participant or Beneficiary or the
Employer acting in his behalf, shall notify the Administrator of a claim of
benefits under the Plan. Such request shall be in writing to the
Administrator and shall set forth the basis of such claim and shall authorize
the Administrator to conduct such examinations as may be necessary to determine
the validity of the claim and to take such steps as may be necessary to
facilitate the payment of any benefits to which the Participant or Beneficiary
may be entitled under the terms of the Plan.
A decision by the Administrator shall be made promptly and not later than 90
days after the Administrator's receipt of the claim of benefits under the Plan,
unless special circumstances require an extension of the time for processing,
in which case a decision shall be rendered as soon as possible, but not later
than 180 days after the initial receipt of the claim of benefits.
13.3 DENIAL OF CLAIM. Whenever a claim for benefits by any Participant or
Beneficiary has been denied by a Plan Administrator, a written notice, prepared
in a manner calculated to be understood by the Participant, must be provided,
setting forth (1) the specific reasons for the denial; (2) the specific
reference to pertinent Plan provisions on which the denial is based; (3) a
description of any additional material or information necessary for the
claimant to perfect the claim and an explanation of why such material or
information is necessary; and (4) an explanation of the Plan's claim review
procedure.
13.4 REMEDIES AVAILABLE TO PARTICIPANTS. A Participant or Beneficiary may
(1) request a review by a Named Fiduciary, other than the Administrator, upon
written application to the Plan; (2) review pertinent Plan documents; and (3)
submit issues and comments in writing to a Named Fiduciary. A Participant or
Beneficiary shall have 60 days after receipt by the claimant of written
notification of a denial of a claim to request a review of a denied claim.
A decision by a Named Fiduciary shall be made promptly and not later than 60
days after the Named Fiduciary's receipt of a request for review, unless
special circumstances require an extension of the time for processing, in which
case a decision shall be rendered as soon as possible, but not later than 120
days after receipt of a request for review. The decision on review by a Named
Fiduciary shall be in writing and shall include specific reasons for the
decision, written in a manner calculated to be understood by the claimant, and
specific references to the pertinent Plan provisions on which the decision is
based.
A Participant or Beneficiary shall be entitled, either in his own name or in
conjunction with any other interested parties, to bring such actions in law or
equity or to undertake such administrative actions or to seek such relief as may
be necessary or appropriate to compel the disclosure of any required
information, to enforce or protect his rights, to recover present benefits due
to him, or to clarify his rights to future benefits under the Plan.
13.5 LIMITATION OF RIGHTS. Participation hereunder shall not grant any
Participant the right to be retained in the Service of the Employer or any other
rights or interest in the Plan or Trust fund other than those specifically
herein set forth.
13.6 PARTICIPANT CONTRIBUTIONS. Each Participant, regardless of his
length of Service with the Employer, shall be fully vested (100%) at all
times in any portion of his Participant's Account attributable to the
following:
Rollover Contributions.
13.7 MERGERS OR TRANSFERS. In the case of any merger or consolidation with
or transfer of assets or liabilities to any other qualified plan after September
2, 1974, the following conditions must be met:
(A) The sum of the account balances in each plan shall equal the
fair market value (determined as of the date of the merger or transfer as if the
plans had then terminated) of the entire plan assets.
(B) The assets of each plan shall be combined to form the assets of
the plan as merged (or transferred).
(C) Immediately after the merger (or transfer), each Participant in
the plan merged (or transferred) shall have an account balance equal to the sum
of the account balances the Participant had in the plans immediately prior to
the merger (or transfer).
(D) Immediately after the merger (or transfer) each Participant in
the plan merged (or transferred) shall be entitled to the same optional benefit
forms as he was entitled to immediately prior to the merger (or transfer).
In the case of any merger or consolidation with or transfer of assets or
liabilities to any defined benefit plan after September 2, 1974, one of the
plans before such merger, consolidation, or transfer shall be converted into the
other type of plan and either the rules described above, applicable to the
merger of two defined contribution plans, or the rules applicable to the merger
of two defined benefit plans, as appropriate, shall be applied.
13.8 PARTICIPANT'S ACCOUNT AND VALUATION. A Participant's Account shall be
maintained on behalf of each Participant until such account is distributed in
accordance with the terms of this Plan. At least once per year, as of the last
day of the Plan Year, each Participant's Account shall be adjusted for any
earnings, gains, losses, contributions, withdrawals, loans, and expenses,
attributable to such Plan Year, in order to obtain a new valuation of the
Participant's Account.
13.9 INVESTMENT OF CONTRIBUTIONS. Each Participant shall have the
exclusive authority to direct the investment of contributions made to his
Participant's Account among the investment funds designated by the Employer.
The Participant shall elect, by written notice to the Plan Administrator, to
have a specified percentage invested in one or more investment fund(s), as long
as the designated percentage for each fund is a whole number, and the sum of
the percentages allocated is equal to 100%.
At any time, the Participant may change the amount of the contributions
pursuant to the above paragraph to he invested in a particular investment fund,
subject to the rules of the investment funds in which the Participant's Account
is invested or is to be invested.
The Plan Administrator shall provide each Participant with a form which the
Participant may use to select among the investment funds designated by the
Employer.
13.10 TRANSFERS BETWEEN INVESTMENT FUNDS. A Participant may designate the
amount of the contributions pursuant to Section 13.9 above to be transferred
between the investment funds designated by the Employer at any time.
Notwithstanding the above, the transfer of amounts between investment funds
shall be subject to the rules of the investment funds in which the
Participant's Account is invested or is to be invested.
ARTICLE XIV
AMENDMENT OR TERMINATION OF THE PLAN
14.1 AMENDMENT OF PLAN. The Employer shall have the right from time to time
to modify or amend, in whole or in part, any or all provisions of the Plan,
provided that a Board of Directors' resolution pursuant to such modification or
amendment shall first be adopted and provided further that the modification or
amendment is signed by the Employer and the Administrator. Upon any such
modification or amendment the Administrator and the Trustee shall be furnished
a copy thereof. No amendment shall deprive any Participant or Beneficiary of
any Vested Interest hereunder. Any Participant having not less than three
Years of Service shall be permitted to elect, in writing, to have his Vesting
Percentage computed under the Plan without regard to such amendment.
The period during which the election must be made by the Participant shall begin
no later than the date the Plan Amendment is adopted and end no later than after
the latest of the following dates:
(A) The date which is 60 days after the day the amendment is
adopted; or
(B) The date which is 60 days after the day the amendment becomes
effective; or
(C) The date which is 60 days after the day the Participant is
issued written notice of the amendment by the Employer or Administrator.
Such written election by a Participant shall be made to the Administrator.
No amendment to the Plan shall decrease a Participant's Account balance or
eliminate an optional form of distribution. Notwithstanding the preceding
sentence, a Participant's Account balance may be reduced to the extent
permitted under Internal Revenue Code section 412(c)(8). Furthermore, no
amendment to the Plan shall have the effect of decreasing a Participant's
Vested Interest determined without regard to such amendment as of the
later of the date such amendment is adopted or the date it becomes effective.
14.2 CONDITIONS OF AMENDMENT. The Employer shall not make any amendment
which would cause the Plan to lose its status as a qualified plan within the
meaning of section 401(a) of the Code.
14.3 TERMINATION OF THE PLAN. The Employer intends to continue the Plan
indefinitely for the benefit of its Employees, but reserves the right to
terminate the Plan at any time by resolution of its Board of Directors. Upon
such termination, the liability of the Employer to make contributions hereunder
shall terminate.
14.4 FULL VESTING. Upon the termination or partial termination of the
Plan, or upon complete discontinuance of Employer contributions, the rights of
all affected Participants in and to the amounts credited to each such
Participant's Account shall be 100% vested and nonforfeitable.
14.5 DISTRIBUTIONS UPON PLAN TERMINATION. If this Plan is terminated and
the Employer does not maintain or establish another defined contribution plan,
pursuant to Code section 401(k)(10)(A)(i), each Participant shall receive a
total distribution, in the form of a lump-sum distribution as defined in Code
section 401(k)(10)(B)(ii), of his Participant's Account in accordance with the
terms and conditions of Article VI.
However, if this Plan is terminated and the Employer does maintain or establish
another defined contribution plan as discussed in the above paragraph, or if
the Plan is only partially terminated, each Participant shall receive a total
distribution of his Participant's Account, excluding any amounts attributable
to Elective Deferral Contributions and contributions made by the Employer
designated as 401(k) contributions in accordance with the terms and conditions
of Article VI. In such a situation, any amounts in a Participant's Account
attributable to Elective Deferral Contributions and contributions made by the
Employer designated as 401(k) contributions may be distributed only upon the
occurrence of an event described in Article VI.
No Participant consent will be required for a distribution where no successor
plan exists. However, if the Employer does maintain a successor plan,
Participant consent is required for a distribution exceeding $3,500. The
Participant's Account will be transferred to such successor plan if the
required consents are not received.
14.6 APPLICATION OF FORFEITURES. Upon the termination of the Plan, any
Forfeitures which have not been applied as of such termination to reduce the
contribution made by the Employer shall be credited on a pro rata basis to the
Participant's Account of the then Active Participants in the same manner as the
last contribution made by the Employer under the Plan.
14.7 APPROVAL BY THE INTERNAL REVENUE SERVICE. Notwithstanding any other
provisions of this Plan, the Employer's adoption of this Plan is subject to the
condition precedent that the Employer's Plan shall be approved and qualified by
the Internal Revenue Service as meeting the requirements of section 401(a) of
the Internal Revenue Code and that the Trust established in connection herewith
shall be entitled to exemption under the provisions of section 501(a). In the
event the Plan initially fails to qualify and the Internal Revenue Service
issues a final ruling that the Employer's Plan or Trust fails to so qualify as
of the Effective Date, all liability of the Employer to make further
contributions hereunder shall cease. The Plan Administrator, Trustee and any
other Named Fiduciary shall be notified immediately by the Employer, in writing,
of such failure to qualify. Upon such notification, the value of the
Participants' Accounts shall be distributed in cash to the Employer, subject to
the terms and conditions of Article VI.
That portion of such distribution which is attributable to Participant
Contributions as specified in Section 13.6, if any, shall be paid to the
Participant, and the balance of such distribution shall be paid to the
Employer.
14.8 SUBSEQUENT UNFAVORABLE DETERMINATION. If the Employer is notified
subsequent to initial favorable qualification that the Plan is no longer
qualified within the meaning of section 401(a) of the Internal Revenue Code, or
that the Trust is no longer entitled to exemption under the provisions of
section 501(a), and if the Employer shall fail within a reasonable time
to make any necessary changes in order that the Plan and/or Trust shall so
qualify, the Participants' Accounts shall be fully vested and nonforfeitable
and shall be disposed of as if the Plan had terminated, in the manner set forth
in this Article XIV.
ARTICLE XV
SUBSTITUTION OF PLANS
15.1 SUBSTITUTION OF PLANS. Subject to the provisions of Section 13.7 the
Employer may substitute an individually designed plan or a master or prototype
plan for this Plan without terminating this Plan as embodied herein and this
shall be deemed to constitute an amendment and restatement in its entirety of
this Plan as heretofore adopted by the Employer; provided, however, that the
Employer shall have certified to the Trustee that this Plan is being continued
on a restated basis which meets the requirements of section 401(a) of the
Internal Revenue Code and ERISA.
15.2 TRANSFER OF ASSETS. Upon 90 days written notification from the
Employer that a different plan meeting the requirements set forth in Section
15.1 above has been executed and entered into by the Administrator and the
Employer, and after the Trustee has been furnished the Employer's certification
in writing that the Employer intends to continue the Plan as a qualified Plan
under section 401(a) of the Internal Revenue Code and ERISA, assets which
represent the value of all Participant's Accounts may be transferred in
accordance with the instructions received from or on behalf of the Employer.
The Trustee may rely fully on the representations or directions of the Employer
with respect to any such transfer and shall be fully protected and discharged
with respect to any such transfer made in accordance with such representations,
instructions, or directions.
ARTICLE XVI
MISCELLANEOUS
16.1 NON-REVERSION. This Plan has been established by the Employer for the
exclusive benefit of the Participants and their Beneficiaries. Except as
otherwise provided in Sections 14.7, 16.7, and 16.8, under no circumstances
shall any funds contributed hereunder, at any time, revert to or be used by the
Employer, nor shall any such funds or assets of any kind be used other than for
the benefit of the Participants or their Beneficiaries.
16.2 GENDER AND NUMBER. When necessary to the meaning hereof, and except
when otherwise indicated by the context, either the masculine or the neuter
pronoun shall be deemed to include the masculine, the feminine, and the neuter,
and the singular shall be deemed to include the plural.
16.3 REFERENCE TO THE CODE AND ERISA. Any reference to any section of the
Internal Revenue Code, ERISA, or to any other statute or law shall he deemed to
include any successor law of similar import.
16.4 GOVERNING LAW. The Plan and Trust shall be governed and construed in
accordance with the laws of the state where the Trustee has its principal
office if the Trustee is a corporation or an association, otherwise under the
laws of the state where the Employer has its principal office.
16.5 COMPLIANCE WITH THE CODE AND ERISA. This Plan is intended to comply
with all requirements for qualification under the Internal Revenue Code and
ERISA, and if any provision hereof is subject to more than one interpretation
or any term used herein is subject to more than one construction, such
ambiguity shall be resolved in favor of that interpretation or construction
which is consistent with the Plan being so qualified. If any provision of the
Plan is held invalid or unenforceable, such invalidity or unenforceability
shall not affect any other provisions, and this Plan shall be construed and
enforced as if such provision had not been included.
16.6 NON-ALIENATION. It is a condition of the Plan, and all rights of each
Participant shall be subject thereto, that no right or interest of any
Participant in the Plan shall be assignable or transferable in whole or in part,
either directly or by operation of law or otherwise, including, but without
limitation, execution, levy, garnishment, attachment, pledge, bankruptcy or in
any other manner, and no right or interest of any Participant in the Plan shall
be liable for or subject to any obligation or liability of such Participant.
The preceding sentence shall not preclude the enforcement of a federal tax levy
made pursuant to section 6331 of the Code or the collection by the United States
on a judgement resulting from an unpaid tax assessment.
16.7 CONTRIBUTION RECAPTURE. Notwithstanding any other provisions of this
Plan, (1) in the case of a contribution which is made by an Employer by a
mistake of fact, Section 16.1 shall not prohibit the return of such
contribution to the Employer within one year after the payment of the
contribution, and (2) if a contribution is conditioned upon the deductibility
of the contribution under section 404 of the Code, then, to the extent the
deduction is disallowed, Section 16.1 shall not prohibit the return to the
Employer of such contribution (to the extent disallowed) within one year after
the disallowance of the deduction. The amount which may be returned to the
Employer is the excess of (1) the amount contributed over (2) 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 the excess
contribution may not be returned to the Employer, but losses attributable
thereto must reduce the amount to be so returned. Furthermore, if the
withdrawal of the amount attributable to the mistaken contribution would cause
the balance of the individual account of any Participant 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 to be returned to the Employer would have
to be limited so as to avoid such reduction.
16.8 QUALIFIED DOMESTIC RELATIONS ORDERS. Notwithstanding any other
provisions of this Plan, the Participant's Account may be segregated and
distributed pursuant to a Qualified Domestic Relations Order within the meaning
of Internal Revenue Code section 414(p). The Plan Administrator shall establish
procedures for determining if a Domestic Relations Order is qualified within the
meaning of section 414(p).
ARTICLE XVII
TOP-HEAVY PROVISIONS
17.1 DEFINITIONS. The following definitions are a typical terms used only
in this Article XVII.
(A) Compensation. The term Compensation, whenever used in this
Article XVII, means Compensation as defined in Article V of the Plan, but
includes the amount of any elective contributions made by the Employer on the
Employee's behalf to a cafeteria plan established in accordance with the
provisions of Code section 125, a qualified cash or deferred arrangement in
accordance with the provisions of Code section 402(e)(3), a simplified employee
pension plan in accordance with the provisions of Code section 402(h), or a tax
sheltered annuity plan maintained in accordance with the provisions of Code
section 403(b).
(B) Key Employee. The term Key Employee means any Employee or former
Employee (including deceased Employees) of the Employer who at any time during
the Plan Year or the four preceding Plan Years was:
(1) An officer of the Employer, but in no event if there
are more than 500 Employees, shall more than 50 Employees be considered Key
Employees. If there are less than 500 Employees, in no event shall the greater
of three Employees or 10% of all Employees, be taken into account under this
Subsection as Key Employees. If the number of officers is limited by the terms
of the preceding sentence, the Employees with the highest Compensation will be
considered to be officers.
In no event shall an officer whose annual Compensation is less than 50% of the
dollar limitation in effect under Code section 415(b)(1)(A) as adjusted from
time to time, be a Key Employee for any such Plan Year.
In making a determination under this Subsection, Employees who have not
completed six months of Service by the end of the applicable Plan Year,
Employees who non-daily work less than 17-1/2 hours per week, Employees who
normally work less than six months during a year, Employees who have not
attained 21, and nonresident aliens who receive no earned income from U.S.
sources, shall be excluded.
Also excluded under the above paragraph are Employees who are covered by an
agreement which the Secretary of Labor finds to be a collective bargaining
agreement. Such Employees will be excluded only if retirement benefits were
the subject of good faith bargaining, 90% of the Employees of the Employer are
covered by the agreement, and the Plan covers only Employees who are not
covered by the agreement.
(2) One of the 10 Employees who has annual Compensation
greater than the amount in effect under Internal Revenue Code section
415(c)(1)(A) and who owns (or is considered to own within the meaning of
Internal Revenue Code section 318, as modified by section 416(i)(1)(B)(iii))
both more than 1/2% interest and the largest interest in the Employer. If two
or more Employees own equal interests in the Employer, the ranking of ownership
share will be in descending order of such Employees' Compensation. If the
Employer is other than a corporation, the term "interest" as used herein shall
refer to capital or profits interest.
(3) An Employee who owns (or is considered to own within
the meaning of Internal Revenue Code section 318, as modified by section
416(i)(1)(B)(iii)) more than 5% of the outstanding stock of the Employer or
stock possessing more than 5% of the total combined voting power of all stock
of the Employer. If the Employer is other than a corporation, an Employee who
owns, or is considered to own, more than 5% of the capital or profits interest
in the Employer. The determination of 5% ownership shall be made separately
for each member of a controlled group of corporations (as defined in Code
section 414(b)), or of a group of trades or businesses (whether or not
incorporated) that are under common control (as defined in Code section 414(c)),
or of an affiliated service group (as defined in Code section 414(m)).
(4) An Employee who owns (or is considered to own within
the meaning of Internal Revenue Code section 318, as modified by section
416(i)(1)(B)(iii)) more than 1% of the outstanding stock of the Employer or
stock possessing more than 1% of the total combined voting power of all stock
of the Employer, and whose annual Compensation is more than $150,000. If the
Employer is other than a corporation, an Employee who owns, or is considered to
own, more than 1% of the capital or profits interest in the Employer, and whose
annual Compensation is more than $150,000.
For the purposes of paragraphs (2), (3) and (4) above, if an Employee's
ownership interest changes during a given Plan Year, his ownership interest for
that Plan Year is the largest interest owned at any time during the Plan Year.
The Beneficiary of any deceased Employee who was a Key Employee shall be
considered a Key Employee for the same period as the deceased Employee would
have been so considered.
(C) Non-Key Employee. The term Non-Key Employee means any
Employee or former Employee of the Employer who is not a Key Employee. The
Beneficiary of any deceased Employee who is a Non-Key Employee shall be
considered a Non-Key Employee for the same period as the deceased Employee
would have been so considered.
(D) Determination Date. The term Determination Date means, with
respect to a Plan Year, the last day of the preceding Plan Year, or, in the
case of the first Plan Year of a plan, the last day of the first Plan Year.
(E) Valuation Date. The term Valuation Date means, with respect
to a Plan Year, the last day of the preceding Plan Year and is the date on
which Account Balances are valued for the purpose of determining the Plan's
Top-Heavy status.
(F) Account Balance. The term Account Balance means the value of
the Participant's Account standing to the credit of a Participant, a former
Participant, or the Beneficiary of a former Participant, as the case may be, as
of the Valuation Date. Such Account Balance shall include any contributions
due as of the Determination Date and all distributions made to the Participant
(or former Participant or Beneficiary, as the case may be) during the Plan Year
or the preceding four Plan Years, except for distributions of Related
Rollovers. However, the Account Balance shall not include any deductible
Employee Contributions made pursuant to Internal Revenue Code section 219 or
Unrelated Rollovers made to the Plan after December 31, 1983.
A Related Rollover is a Rollover Contribution or Transfer that either was not
initiated by the Employee or was made to a plan maintained by the same Employer.
An Unrelated Rollover is a Rollover Contribution or Transfer that was initiated
by the Employee and was made from a plan maintained by one employer to a plan
maintained by another employer.
For purposes of this Subsection (F), the term Employer shall include all
employers that are required to be aggregated in accordance with Internal
Revenue Code sections 414(b), (c) or (m).
(G) Required Aggregation Group. The term Required Aggregation
Group means all of the plans of the Employer which cover a Key Employee,
including any such plan maintained by the Employer pursuant to the terms of a
collective bargaining agreement, and each other plan of the Employer which
enables any plan in which a Key Employee participates to satisfy the
requirements of Internal Revenue Code sections 401(a)(4) or 410.
(H) Permissive Aggregation Group. The term Permissive Aggregation
Group means all of the plans of the Employer which are included in the Required
Aggregation Group plus any plans of the Employer which provide comparable
benefits to the benefits provided by the plans in the Required Aggregation Group
and are not included in the Required Aggregation Group, but which satisfy the
requirements of Internal Revenue Code sections 401(a)(4) and 410 when considered
together with the Required Aggregation Group, including any plan maintained by
the Employer pursuant to a collective bargaining agreement which does not
include a Key Employee.
(1) Top-Heavy Plan. The Plan is Top-Heavy if it meets the
requirements of Section 17.2.
(i) Super Top-Heavy Plan. The Plan is Super Top-
Heavy if it meets the requirements of Section 17.3.
(K) Terminated Plan. A plan shall be considered to be a
Terminated Plan if it:
(1) has been formally terminated;
(2) has ceased crediting service for benefit accruals and
vesting; or
(3) has been or is distributing all plan assets to
Participants (or Beneficiaries) as soon as administratively possible.
With the exception of the Minimum Employer Contribution Requirements and the
Minimum Vesting Requirements, the Top-Heavy provisions of this Article XVII
will apply to any Terminated Plan which was maintained at any time during the
five years ending on the Determination Date.
(L) Frozen Plan. A plan shall be considered to be a Frozen Plan
if all benefit accruals have ceased but all assets have not been distributed to
Participants or Beneficiaries. The Top-Heavy provisions of this Article XVII
will apply to any such Frozen Plan.
17.2 TOP-HEAVY PLAN STATUS. This Plan shall be determined to be Top-Heavy
if, as of the Determination Date, the aggregate of the Account Balances of Key
Employees exceeds 60% of the aggregate of the Account Balances of all Employees
covered by the Plan. The determination of whether the Plan is Top-Heavy shall
be made after aggregating all plans in the Required Aggregation Group, and
after aggregating any other Plans which are in the Permissive Aggregation Group,
if such permissive aggregation thereby eliminates the Top-Heavy status of any
plan within such Required Aggregation Group.
In determining whether this Plan is Top-Heavy, the Account Balance of a former
Key Employee who is now a Non-Key Employee will be disregarded. Likewise, for
Plan Years beginning after December 31, 1984, the Account Balance of any
Employee who has not performed an Hour of Service during the five-year period
ending on the Determination Date will be excluded.
17.3 SUPER TOP-HEAVY PLAN STATUS. This Plan shall be determined to be
Super Top-Heavy if, as of the Determination Date, the Plan would meet the test
specified in Section 17.2 above, if 90% were substituted for 60% in each place
where it appears. The Plan may be permissively aggregated in order to avoid
being Super Top-Heavy.
17.4 TOP-HEAVY REQUIREMENTS. Notwithstanding anything in the Plan to the
contrary, if the Plan is Top-Heavy with respect to any Plan Year beginning
after December 31, 1983, then the Plan shall meet the following requirements
for such Plan Year:
(A) Compensation Limit. The annual Compensation of each
Participant taken into account under the Plan shall not exceed $150,000;
however, such dollar limitation shall be adjusted to take into account any
adjustments made by the Secretary of the Treasury or his delegate pursuant to
Internal Revenue Code section 416(d)(2).
(B) Minimum Employer Contribution Requirements. A Minimum
Employer Contribution of 3% of each Eligible Employee's Compensation will be
made on behalf of each Eligible Employee in the Plan.
If the actual Employer Contribution made or required to be made for Key
Employees is less than 3%, the Minimum Employer Contribution required hereunder
shall not exceed the percentage contribution made for the Key Employee for whom
the percentage of Employer Contributions and Forfeitures relative to the first
$150,000 (or such other amount as adjusted by the Secretary of the Treasury) of
Compensation is the highest for the Plan Year after taking into account
contributions or benefits under other qualified plans in the Plan's Required
Aggregation Group.
However, if a Participant in this Plan is also a participant in a defined
benefit plan maintained by the Employer, such Participant shall receive the
Top-Heavy minimum benefit under the defined benefit plan in lieu of the Minimum
Employer Contribution described herein. Such minimum benefit will be equal to
the Participant's average yearly Compensation during his five highest-paid
consecutive years, multiplied by the lesser of 2% per Year of Service or 20%.
Compensation periods and Years of Service to be taken into account in the
calculation of this benefit shall be subject to any limitations set forth in
the defined benefit plan.
For any Limitation Year in which this Plan is Top-Heavy but not Super Top-Heavy,
the Minimum Employer Contribution shall be increased to 4% of each Eligible
Employee's Compensation in order to preserve the use of the factor 1.25 in the
denominators of the fractions described in Section 5.4 (B)(1) and Section 5.4
(D)(1).
A Participant who receives the Top-Heavy minimum benefit in lieu of the Minimum
Employer Contribution shall receive an increased minimum benefit equal to the
Participant's average yearly Compensation during his five highest-paid
consecutive years, multiplied by the lesser of 3% per Year of Service or 20%
plus one percentage point (to a maximum of 10 percentage points) for each year
that this Plan is maintained. Compensation periods and Years of Service to be
taken into account in the calculation of this increased minimum benefit shall
be subject to any limitations set forth in the defined benefit plan.
For any Limitation Year in which this Plan is Super Top-Heavy, the factor of
1.25 in the denominators of the fractions described in Sections 5.4(B)(1) and
5.4(D)(1) shall be reduced to 1.0. The Minimum Employer Contribution payable
in such years shall be 3% of each Eligible Employee's Compensation and the
defined benefit Top-Heavy minimum benefit shall be average Compensation
multiplied by the lesser of 2% per Year of Service or 20%.
Eligible Employees are all Non-Key Employees who are Participants in the Plan
as of the last day of the Plan Year regardless of whether they had completed
1,000 Hours of Service during the Plan Year. Also included are Non-Key
Employees who would have been Participants as of the last day of the Plan Year
except:
The Employee's Compensation was below a required minimum level; or
The Employee chose not to make Elective Deferral Contributions when he
was eligible to do so.
Elective Deferral Contributions and Matching Contributions made to Key
Employees shall be taken into account as Employer Contributions allocated to
such Key Employees when determining whether a lower Minimum Employer
Contribution is permissible for purposes of this section. However, Elective
Deferral Contributions made by Non-Key Employees shall not be used towards
satisfying the Minimum Employer Contribution required to be allocated to Non-Key
Employees pursuant to this section.
Matching Contributions made on behalf of Non-Key Employees may, at the option
of the Employer, be used to satisfy the Minimum Employer Contribution
requirement. However, to the extent that Matching Contributions are used for
this purpose, they shall not be used to satisfy the Actual Contribution
Percentage Test or Actual Deferral Percentage Test.
(C) Minimum Vesting Requirements. Vesting shall be determined in
accordance with the following schedule:
Years of Service Vesting Percentage
Less than 3 0%
3 or more 100%
In the event the Plan ceases to be Top-Heavy, the vesting schedule in this
Section 17.4 (C) shall continue to apply until the Plan is amended to provide
otherwise and any such amendment shall comply with the provisions of Section
14.1.
ARTICLE XVIII
ADOPTION OF PLAN BY SUBSIDIARY
AND AFFILIATED COMPANIES
18.1 ADOPTION PROCEDURE. Any company included in the term Employer may
become a Participating Company under the Plan provided that:
(a) The Board of Directors approves the adoption of the Plan by
the company and designates such company as a Participating Company;
(b) The company adopts the Plan together with all amendments then
in effect by appropriate resolutions of its board of directors; and
(c) The company adopts the Trust together with all amendments then
in effect by appropriate resolutions of its board of directors; and
(d) The company by appropriate resolutions of its board of
directors agrees to be bound by any other terms and conditions which may be
required by the Board of Directors, provided that such terms and conditions are
not inconsistent with the purposes of the Plan.
18.2 EFFECT OF ADOPTION BY AFFILIATED COMPANY. A company which adopts the
Plan pursuant to Section 18.1 shall be deemed to be a Participating Company for
all purposes hereunder, unless otherwise specified in the resolutions of the
Board of Directors designating the company as a Participating Company. In
addition, the Board of Directors may provide, in its discretion and by
appropriate resolution, that the employees of the company shall receive credit
for their employment with the company prior to the date it became a
Participating Company for purposes of determining the eligibility of such
employees to participate in the Plan, the determination of their Accrued
Benefits, and the vested and nonforfeitable interest of such Employees as
Participants under Article II, provided, however, that such credit shall be
applied in a uniform and nondiscriminatory manner with respect to all such
employees.
18.3 PARTICIPATING COMPANY. The term Participating Company means each
company included in the term Employer that has adopted the Plan in the manner
provided in Article 18 and each organizational unit of the Employer that is
designated as a Participating Company by the Board of Directors; excluding,
however, each organizational unit of the Employer that has adopted the Plan
that is designated as a nonparticipating unit by the Board of Directors.
DIAMOND SHAMROCK, INC.
By: /s/ WILLIAM R. KLESSE
WILLIAM R. KLESSE
Executive Vice President
W2440H.LW
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that, the undersigned hereby constitutes
and appoints Timothy J. Fretthold, Jerry D. King, and Lisa K. Wortham, and each
of them, his true and lawful attorney or attorneys-in-fact, with full power of
substitution and revocation, for him and in his name, place, and stead, in any
and all capacities (including as an officer and/or director of DIAMOND SHAMROCK,
INC. (the "Corporation")), to sign a post-effective amendment to a Registration
Statement on Form S-8 of the Corporation which, on October 6, 1993, registered,
pursuant to the Securities Act of 1933, as amended, (i) 100,000 shares of Common
Stock (and associated stock purchase rights) of the Corporation for issuance
pursuant to the Corporation's 401(k) Retirement Savings Plan (the "Plan") and
(ii) interests in the Plan, and to sign any or all additional post-effective
amendments to such Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission granting unto said attorney or
attorneys-in-fact, and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorney or
attorneys-in-fact or any of them or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
/s/ W. H. CLARK
W.H. Clark
Director
Dated: October 24, 1995
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that, the undersigned hereby constitutes
and appoints Timothy J. Fretthold, Jerry D. King, and Lisa K. Wortham, and each
of them, his true and lawful attorney or attorneys-in-fact, with full power of
substitution and revocation, for him and in his name, place, and stead, in any
and all capacities (including as an officer and/or director of DIAMOND SHAMROCK,
INC. (the "Corporation")), and as Chairman of the Corporation's Employee
Benefits Committee, to sign a post-effective amendment to a Registration
Statement on Form S-8 of the Corporation which, on October 6, 1993, registered,
pursuant to the Securities Act of 1933, as amended, (i) 100,000 shares of Common
Stock (and associated stock purchase rights) of the Corporation for issuance
pursuant to the Corporation's 401(k) Retirement Savings Plan (the "Plan") and
(ii) interests in the Plan, and to sign any or all additional post-effective
amendments to such Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission granting unto said attorney or
attorneys-in-fact, and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney or
attorneys-in-fact or any of them or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
/s/ WILLIAM R. KLESSE
William R. Klesse
Executive Vice President
Dated: December 6, 1995
W2789.LW
