Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
POTASH CORPORATION OF SASKATCHEWAN INC.
(Exact name of registrant as specified in its charter)
SASKATCHEWAN 1474
(State or other jurisdiction of incorporation or (Primary standard
organization) industrial code number)
N/A
(I.R.S. employer identification no.)
122 - 1st Avenue South
Saskatoon, Saskatchewan, Canada S7K 7G3
306-933-8500
(Address and telephone number of the registrant's principal executive offices)
PCS U.S. Employees' Savings Plan
(Full title of the plan)
William J. Doyle
Potash Corporation of Saskatchewan Inc.
122 - 1st Avenue South
Saskatoon, Saskatchewan, Canada S7K 7G3
306-933-8500
The Commission is requested to send copies of
all communications to:
Craig Brod
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, New York 10006
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Title of Securities to Amount to be Proposed maximum Proposed maximum Amount of
be Registered registered(1) offering price per aggregate offering registration fee
unit(2) price
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
<S> <C> <C> <C> <C>
Common Shares , no par 500,000 shares $46.875 $23,437,500 $6,187.50
value
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
</TABLE>
(1) Consists of Common shares of the registrant to be sold pursuant to the PCS
U.S. Employees' Savings Plan (the "Plan").
(2) Estimated solely for the purpose of determining the registration fee, based
upon the average of the high and low prices reported on the New York Stock
Exchange Composite Tape on December 23, 1999 pursuant to Rule 457(c) under
the Securities Act of 1933.
<PAGE>
Part I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
Item 1. Plan Information.*
Item 2. Registrant Information and Employee Plan Annual Information.*
- --------
* Information required by Part I to be contained in the Section 10(a) prospectus
is omitted from this Registration Statement in accordance with Rule 428 under
the Securities Act of 1933 and the Note to Part I of Form S-8.
Part II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents previously filed by the registrant with the
Commission, are incorporated by reference in this Prospectus:
(a) The Annual Report on Form 10-K of Potash Corporation of Saskatchewan
Inc. ("PCS" or the "Registrant") for the year ended December 31, 1998.
(b) The Registrant's Quarterly Report on Form 10-Q for the Quarters ended
March 31, 1999, June 30, 1999 and September 30, 1999.
(c) All of the Registrant's reports filed with the Commission pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), since the date of this Registration Statement and
prior to filing a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities then remaining
unsold shall be deemed to be incorporated by reference in the Registration
Statement and to be a part hereof from the date of filing of such reports.
(d) Description of PCS's Common Shares and Rights contained in PCS's
Registration Statement on Form S-4 filed with the Commission on December 13,
1996 (Registration No. 333-17841) and PCS's Proxy Circular dated March 26, 1998.
Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained in any subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Directors and Officers
Section 119 of The Business Corporations Act (Saskatchewan) authorizes
corporations to indemnify past and present directors and officers for
liabilities incurred in connection with their services as such (including
expenses and settlement payments) if the director or officer acted honestly and
in good faith with a view to the best interests of the corporation and, in the
case of a criminal or administrative proceeding, if the director or officer had
reasonable grounds for believing his or her conduct was lawful. In the case of a
suit by or on behalf of the corporation, a court must approve the
indemnification.
Section 10.04 of the Registrant's Bylaws provides that the Registrant shall
indemnify directors and officers to the extent permitted by law.
The Registrant has entered into agreements with its directors and officers
(each an "Indemnitee") to indemnify the Indemnitee, to the extent permitted by
law and subject to certain limitations, against all costs reasonably incurred by
an Indemnitee in an action or proceeding to which the Indemnitee was made a
party by reason of the Indemnitee being an officer and/or director of (i) the
Registrant or (ii) if at the request of the Registrant, of an organization of
which the Registrant is a shareholder or creditor.
The Registrant maintains insurance policies relating to certain liabilities
that its directors and officers may incur in such capacity.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
Exhibit
Number Description of Document
---------- -------------------------------------------------------
4.1 The PCS U.S. Employees' Savings Plan
23.2 Consent of Deloitte & Touche
24.1 Power of Attorney, included on signature pages
Item 9. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar amount of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the change in volume and price represent no more than a 20
percent change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement.
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished
to the Commission by the Registrant pursuant to Section 13 or 15(d) of the
Exchange Act of 1934 that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of the employee benefit plan's annual
report pursuant to section 15(d) of the Securities Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Saskatoon, Province of Saskatchewan, Canada, on this
29 day of December, 1999.
POTASH CORPORATION OF SASKATCHEWAN INC.
By: /s/ William J. Doyle
--------------------
William J. Doyle
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints William
J. Doyle, Wayne R. Brownlee and John L. M. Hampton, his or her true and lawful
attorney-in-fact and agent, each acting alone, with full power of substitution
and resubstitution, for him or her and in his or her name, place and stead, in
any and all capacities, to sign any or all Amendments (including post-effective
Amendments) to this 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 attorneys-in-fact and
agents, each acting alone full power and authority to do and perform each and
every act and thing appropriate or necessary to be done in connection therewith,
as fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorney-in-fact and agent, acting
alone, or his or her substitute or substitutes, any lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated and on the date indicated.
Signature Title Date
--------- ----- ----
/s/ CHARLES E. CHILDERS Chairman of December 29, 1999
Charles E. Childers the Board
/s/WAYNE R. BROWNLEE Senior Vice December 29, 1999
Wayne R. Brownlee President,
Finance and
Treasurer
Chief
Financial
Officer
/s/ ISABEL B. ANDERSON Director December 29, 1999
Isabel B. Anderson
/s/ DOUGLAS J. BOURNE Director December 29, 1999
Douglas J. Bourne
/s/ WILLIAM J. DOYLE Director December 29, 1999
William J. Doyle
/s/ WILLARD Z. ESTEY Director December 29, 1999
Willard Z. Estey
/s/JOHN HAMPTON Director December 29, 1999
John Hampton
/s/ DALLAS J. HOWE Director December 29, 1999
Dallas J. Howe
/s/ DONALD E. PHILLIPS Director December 29, 1999
Donald E. Phillips
/s/ PAUL J. SCHOENHALS Director December 29, 1999
Paul J. Schoenhals
/s/ DARYL K. SEAMAN Director December 29, 1999
Daryl K. Seaman
/s/ E. ROBERT STROMBERG Director December 29, 1999
E. Robert Stromberg
/s/ JACK G. VICQ Director December 29, 1999
Jack G. Vicq
/s/ BARRIE A. WIGMORE Director December 29, 1999
Barrie A. Wigmore
/s/ PAUL S. WISE Director December 29, 1999
Paul S. Wise
By: /s/ THOMAS J. WRIGHT Director December 29, 1999
Thomas J. Wright
PCS PHOSPHATE COMPANY, INC. Authorized December 29, 1999
By: /S/THOMAS J. REGAN Representative
Thomas J. Regan in the United
President States
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Document
---------- -------------------------------------------------------
4.1 The PCS U.S. Employees' Savings Plan
23.2 Consent of Deloitte & Touche
24.1 Power of Attorney, included on signature pages
PCS U.S. Employees'
Savings Plan
(January 1, 1999)
Contents
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Article 1. The Plan 1
1.1 The Plan 1
1.2 Applicability of the Plan 2
1.3 Purpose 2
Article 2. Definitions and Construction 3
2.1 Definitions 3
2.2 Termination of Employment 10
2.3 Applicable Law 10
2.4 Gender and Number 10
2.5 Severability 10
2.6 Headings 10
Article 3. Eligibility and Participation 11
3.1 Eligible Employees and Active Participation 11
3.2 Eligibility Service 12
3.3 Duration 12
3.4 Adoption of Plan by Affiliates 12
3.5 Annual Participant Notice 12
Article 4. Contributions, Accounts, and Vesting 14
4.1 Matched Contributions and Matched Contributions Account 14
4.2 Unmatched Contributions and Unmatched Contributions Accounts 14
4.3 Rollover Contributions and Account 15
4.4 Change or Suspension of Contributions 15
4.5 Employer Matching Contributions and Account 15
4.6 Vesting 16
4.7 Section 402(g) Limit on Before-Tax Contributions 16
4.8 Section 401(m) Limit on After-Tax Contributions 16
4.9 Section 415 Limitation on Annual Additions 20
4.10 Deductibility Limitation 22
4.11 Contributions for Reemployed Veterans 23
Article 5. Investments and Accounting 24
5.1 Investments 24
5.2 Plan Accounting and Allocation of Investment Earnings 25
5.3 Plan Expenses 25
Article 6. Distributions 26
6.1 Distributions After Termination and At Required Beginning Date 26
6.2 Distributions Upon Death Before Annuity Starting Date 27
6.3 Forms of Payment 30
6.4 Election of Forms of Payment 32
6.5 Beneficiary 35
Article 7. In-Service Withdrawals and Loans 37
7.1 In General 37
7.2 In-Service Withdrawals from the After-Tax Contributions Account 37
7.3 In-Service Withdrawals of Before-Tax Contributions 37
7.4 Hardship Withdrawals 38
7.5 In-Service Withdrawals from the Rollover Contributions Account 39
7.6 Loans 39
Article 8. Benefit Claims and Other Payment Rules 43
8.1 Application for Benefits 43
8.2 Denial of Claims 43
8.3 Due Date for Payments 44
8.4 Nonassignability 44
8.5 Missing Persons 44
8.6 Incapacity 44
8.7 Withholding Taxes 44
8.8 Direct Rollovers; Withholding 45
Article 9. Administration 47
9.1 The Committee and the Trustee 47
9.2 Employer Subcommittees 47
9.3 Compensation and Expenses 47
9.4 Manner of Action 47
9.5 Chairman, Secretary, Employment of Specialists 47
9.6 Administration 47
9.7 Expenses of Administration 49
9.8 Indemnity for Liability 49
Article 10. Financing 50
10.1 Trust Fund and Investment Policy 50
10.2 Contributions 51
10.3 Nonreversion 51
10.4 Transfer of Assets and Liabilities 51
Article 11. Top-Heavy Provisions 52
11.1 Application of Top-Heavy Provisions 52
11.2 Definitions 52
11.3 Minimum Contributions 54
11.4 Top-Heavy Limit on Annual Additions 55
Article 12. Amendment, Termination, and Merger 56
12.1 Amendments to Comply with Law 56
12.2 Other Amendments and Termination 56
12.3 Authority to Amend 56
12.4 Form of Amendment 57
12.5 Limitations on Amendments 57
12.6 Merger, Consolidation, or Transfer 57
Appendix A. The Employers 59
Supplement A. PCS Phosphate Company, Inc. 60
Supplement B. PCS Sales (USA), Inc. 61
<PAGE>
Article 1. The Plan
1.1 The Plan
Effective January 1, 1995, the Texasgulf Inc. Employee Savings Plan (previously
named the Elf Aquitaine, Inc. Savings Plan) was split into three plans, one of
which continued as this Plan under the same name and covering those persons who
were employees of Texasgulf Inc. or Moab Salt, Inc. on January 1, 1995 or at the
time of their most recent termination of employment. When Potash Corporation of
Saskatchewan ("Potash") acquired Texasgulf in 1995 from Elf Acquitaine, Inc.,
the Plan was continued by PCS Phosphate Company, Inc. ("Phosphate"), a wholly
owned subsidiary of Potash and the Plan was renamed PCS Phosphate Company, Inc.
Employee Savings Plan ("Phosphate Plan"), effective as of April 10, 1995.
In October 1995, Potash acquired White Springs Agricultural Chemical, Inc. from
Occidental Chemical Corporation. Effective as of November 1, 1995, White Springs
adopted this Plan and assets with respect to its employees were transferred from
the Occidental Petroleum Corporation Savings Plan to this Plan. Potash
Corporation of Saskatchewan Sales Limited was an Employer under the Plan from
May 10, 1995 through December 31, 1995. As of January 1, 1996, the Plan covered
eligible employees of PCS Phosphate Company, Inc., Moab Salt, Inc., PCS Sales
(USA), Inc., and White Springs Agricultural Chemicals, Inc.
In September 1996, Potash acquired the Arcadian Corporation, which was merged in
March 1997 into PCS Nitrogen, Inc. ("Nitrogen"), a wholly owned subsidiary of
Potash. Nitrogen became the sponsor of the Arcadian Corporation Employee Savings
and Investment Plan and the Arcadian Corporation Employee Stock Ownership Plan.
Those plans were merged into one plan effective as of December 31, 1997 and
renamed the PCS Nitrogen 401(k) Savings Plan ("Nitrogen Plan").
PCS Sales (USA), Inc., a wholly owned subsidiary of Potash, maintains the PCS
Sales (USA), Inc. 401(k) Plan ("Sales Plan", which covers certain employees of
PCS Sales (USA), Inc. and PCS Joint Venture, Ltd. (d/b/a Florida Favorite
Fertilizer).
Under resolutions and amendments approved in December 1998 by the foregoing
United States subsidiaries of Potash, their savings plans were redesigned and
consolidated. Effective as of December 31, 1998, the Phosphate Plan was amended
to discontinue contributions under the terms of its Plan in force before 1999, a
new contribution formula was established for the period after 1998, and the
Sales Plan was amended to discontinue contributions for those participants who
were not employed by PCS Joint Ventures, Ltd. Effective as of January 1, 1999,
PCS Administration (USA), Inc. became the sponsor and administrator of the
Phosphate Plan and this Plan (Phosphate Plan) was renamed the PCS U.S.
Employees' Savings Plan.
The Plan, as restated as of January 1, 1999, is intended to be a qualified plan
under Code section 401(a) and to meet the safe harbor discrimination testing
rules of Code sections 401(k)(12) and 401(m)(11). The Participants' right to
make Before-Tax Contributions is intended to be a cash or deferred arrangement
within the meaning of Code section 401(k). The Plan reflects the requirements of
the Internal Revenue Code of 1986, as amended through the Taxpayer Relief Act of
1997.
1.2 Applicability of the Plan
The provisions of the Plan are applicable to persons in the employ of an
Employer as of January 1, 1999 or in a communication to Participants or as
provided by law or regulation. Notwithstanding anything in a Plan to the
contrary, the effective date of a provision that constitutes an amendment shall
be subject to the limitation of section 12.5(b) (relating to cutbacks).
1.3 Purpose
The purpose of the Plan is to encourage Employees to accumulate capital on a
regular and long-term basis to supplement retirement income. The Plan and the
Trust Agreement that forms part of the Plan are intended to qualify as a plan
and trust which meet the requirements of sections 401(a) and 501(a) of the
Internal Revenue Code of 1986 and the provisions of the Employee Retirement
Income Security Act of 1974. The Plan is intended to be a profit sharing plan
within the meaning of Code section 401(a), and the cash or deferred participant
elections under a Plan are intended to satisfy Code section 401(k).
Article 2. Definitions and Construction
2.1 Definitions
Whenever used in the Plan, the following terms shall have the respective
meanings set forth below unless otherwise expressly provided.
(a) "Account" means, collectively or individually as the context indicates and
as described in Article 4, a Participant's Matched Before-Tax Contributions
Account, Unmatched Before-Tax Contributions Account, Matched After-Tax
Contributions Account, Unmatched After-Tax Contributions Account, Rollover
Contributions Account, and Employer Matching Contributions Accounts, and
such other Accounts as the Committee deems advisable to administer the
Plan. Each Account reflects its allocable share of investment earnings,
gains, and losses (realized and unrealized) pursuant to section 5.2 and
plan expenses chargeable under section 5.3.
(b) "Active Participant" means an Eligible Employee who satisfies the
conditions of section 3.1(b).
(c) "Affiliate" means--
(1) a corporation that is a member of the same controlled group of
corporations (within the meaning of Code section 414(b)) as an
Employer,
(2) a trade or business (whether or not incorporated) that is under common
control with an Employer within the meaning of Code section 414(c),
(3) a member of the same affiliated service group (as defined in Code
section 414(m)) as an Employer, or
(4) another entity required to be aggregated with an Employer under Code
section 414(o).
(d) "After-Tax Contributions" and "After-Tax Contributions Account" means the
Matched After-Tax Contributions and the Unmatched After-Tax Contributions
and the related Accounts, as described in sections 4.1 and 4.2.
(e) "Annuity Starting Date" means--
(1) the first day of the first period for which an amount is payable as an
annuity, or
(2) in the case of a benefit not payable in the form of an annuity, the
first day on which all events have occurred which entitle a
Participant to a benefit,
whether or not payment is actually made on such day.
(f) "Before-Tax Contributions" and "Before-Tax Contributions Account" means the
Matched Before-Tax Contributions and the Unmatched Before-Tax Contributions
and the related Accounts, as described in sections 4.1 and 4.2.
(g) "Beneficiary" means the person specified under section 6.5.
(h) "Board of Directors" means the Board of Directors of the Sponsor.
(i) "Code" means the Internal Revenue Code of 1986, as amended.
(j) "Committee" means the committee described in section 9.1.
(k) "Compensation."
(1) In General. "Compensation" shall mean--
(A) all wages paid by an Employer to an Active Participant which are
subject to federal income tax withholding pursuant to Code section
3401(a) (but determined without regard to any rules that limit the
remuneration included in wages based on the nature or location of the
employment or the services performed), and
(B) reduced by the following amounts to the extent includable in
subparagraph (A): reimbursements or other expense allowances, fringe
benefits (cash and noncash), moving expenses, deferred compensation,
severance benefits, and other welfare benefits.
Subparagraph (B) shall not apply to section 4.9 (relating to the limitation
on annual additions).
(2) For Determining Contributions. For the purpose of sections 4.1, 4.2,
and 4.5 (relating to Employee and Employer Contributions),
Compensation means an Employee's base pay, including the amount of
Before-Tax Contributions or before-tax contributions that may be made
under a cafeteria plan under Code section 125.
(3) Elective Contributions. Elective contributions paid under a
Compensation Reduction Agreement or similar agreement pursuant to Code
sections 125 or 401(k) shall be included in Compensation. However, for
the purposes of applying the discrimination test of section 4.8, such
amounts may be excluded at the election of the Committee pursuant to
applicable law and regulations.
(4) Special Rules.
(A) No more than $160,000 of Compensation may be taken into account.
The foregoing amount shall be adjusted for changes in the cost of
living to the level prescribed by the Internal Revenue Service
for the calendar year in which the Plan Year begins. If the
period for determining Compensation is a short Plan Year, the
limitation of this paragraph shall be an amount equal to the
otherwise applicable limitation under this subparagraph
multiplied by a fraction with a numerator equal to the number of
the months in the short plan year and a denominator equal to 12.
(B) The Sponsor may elect an alternative method of determining
Compensation pursuant to regulations issued by the Internal
Revenue Service.
(l) "Compensation Reduction Agreement" means a written agreement between an
Eligible Employee and the Employer under which the Employer reduces the
Employee's Compensation in an amount determined by the Employee with
respect to services rendered after the execution of the agreement and the
Employer agrees to contribute an amount equal to the reduction to the Plan
on behalf of the Employee as a Before-Tax Contribution.
(m) "Disability" means a total disability within the meaning of the Employer's
long-term disability program.
(n) "Eligible Employee" means an Employee who meets the eligibility conditions
of section 3.1(a).
(o) "Employee" means--
(1) a common-law employee of an Employer or an Affiliate, or
(2) a Leased Employee of an Employer or an Affiliate to the extent
required by Code section 414(n).
(p) "Employer" means the Sponsor or an Affiliate of the Company that has
adopted a Plan for the benefit of certain of its Employees pursuant to
section 3.4. The Employers are listed in Appendix A.
(q) "Employer Contributions" means Employer Matching Contributions, and where
provided by a Supplement, other Employer contributions, such as profit
sharing contributions.
(r) "Employer Contributions Account" means the Employer Matching Contributions
Account, and where provided by a Supplement, such other accounts to which
other Employer Contributions are credited.
(s) "Employer Matching Contributions" and "Employer Matching Contributions
Account" means the contributions and the account described in section 4.5.
(t) "Entry Date" means the date prescribed in section 3.1(b).
(u) "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
(v) "Five-Percent Owner" means a "5-percent owner" within the meaning of Code
section 416(i)(1)(B).
(w) "Fund" means the investment funds established pursuant to section 5.1(a),
individually or collectively as the context indicates.
(x) "Highly Compensated Employee" or "Highly Compensated Participant" means,
effective as of the first Plan Year beginning after 1996, an Employee or
Participant who--
(1) was a Five-Percent Owner at any time during the Plan Year or the
preceding Plan Year, or
(2) for the preceding Plan Year--
(A) had Compensation from the Employer and Affiliates in excess of
$80,000 (as adjusted for changes in the cost of living), and
(B) if the Employer elects the application of this subparagraph for
such preceding Plan Year, was in the top-paid 20 percent of
Employees (determined by excluding the Employees specified in
Code section 414(q)(5)).
Employees who are nonresident aliens and who receive no earned income
(within the meaning of Code section 911(d)(2)) from an Employer which
constitutes income from sources within the United States shall not be
treated as Employees for the purpose of this subsection.
A former Employee shall be treated as a Highly Compensated Employee if
he or she was a Highly Compensated Employee at separation from service
or was a Highly Compensated Employee at any time after attaining age
55.
(y) "Hour of Service" means--
(1) an hour for which an Employee is paid, or entitled to payment, by an
Employer or an Affiliate for the performance of duties during the
applicable computation period for which the Employee's Hours of
Service are being determined;
(2) an hour for which an Employee is directly or indirectly paid, or
entitled to payment, by an Employer or an Affiliate, on account of a
period of time during which no duties are performed due to vacation,
holiday, illness, disability, layoff, jury duty, military duty, or
leave of absence. No more than 501 hours may be credited under this
paragraph on account of any single continuous period during which the
Employee performs no duties. An Hour of Service may not be credited on
account of a payment made under a plan maintained solely for the
purpose of complying with workers' compensation, unemployment
compensation, or disability insurance laws, or on account of a payment
that solely reimburses an Employee for medically-related expenses; and
(3) an hour for which back pay, irrespective of mitigation of damages, is
either awarded or agreed to by an Employer or an Affiliate, with no
duplication of credit for hours.
Hours of Service shall be credited to the appropriate computation period as
determined under Department of Labor regulation 2530.200(b)-2(c) and shall
be computed according to regulation 2530.200(b)-2(b). The Committee may use
any relevant personnel records to determine Hours of Service and its
determination shall be final and conclusive.
(z) "Installment Payout" means the form of payment described in section
6.3(b)(2).
(aa) "Joint and Spouse's Annuity" means the form of payment described in section
6.3(b)(6).
(bb) "Leased Employee."
(1) In General. "Leased Employee" means a person who is not a common law
Employee of an Employer or an Affiliate, but who provides services to
an Employer or an Affiliate ("Recipient") and--
(A) such services are provided pursuant to an agreement (written or
oral) between the Recipient and any other person ("leasing
organization"),
(B) such person has performed such services for the Recipient on a
substantially full-time basis for a period of at least one year,
and
(C) such services are performed under the primary direction or
control by the Recipient.
(2) Exception. A person shall not be deemed a Leased Employee if such
person is covered by a plan maintained by a leasing organization and
if--
(A) such plan is a money purchase pension plan with a nonintegrated
employer contribution rate for each Participant of at least 10
percent of Compensation,
(B) such plan provides for full and immediate vesting,
(C) each employee of the leasing organization immediately
participates in such plan, other than (i) employees who perform
substantially all of their services for the leasing organization
and (ii) employees whose total compensation from the leasing
organization is less than $1,000 in each plan year during the
four-year period ending with the plan year, and
(D) Leased Employees constitute 20 percent or less of the Recipient's
Non-Highly Compensated Employees.
(cc) "Life and Period Certain Annuity" means the form of payment described in
section 6.3(b)(5).
(dd) "Lump Sum Distribution" means the form of payment described in section
6.3(b)(1).
(ee) "Matched After-Tax Contributions" and "Matched After-Tax Contributions
Account" means the contributions and account described in section 4.1(b).
(ff) "Matched Before-Tax Contributions" and "Matched Before-Tax Contributions
Account" means the contributions and account described in section 4.1(a).
(gg) "Matched Contributions" means the Matched After-Tax Contributions and
Matched Before-Tax Contributions.
(hh) "Matching Limit" means the maximum amount of the aggregate Before-Tax and
After-Tax Contributions with respect to which an Employer will make an
Employer Matching Contribution.
(ii) "Non-Highly Compensated Employee" or "Non-Highly Compensated Participant"
means an Employee or a Participant who is not a Highly Compensated Employee
or a Highly Compensated Participant.
(jj) "Normal Retirement Age" means an Employee's sixty-fifth birthday.
(kk) "Partial Cash Distribution" means the form of payment described in section
6.3(b)(8).
(ll) "Participant" means a person with an amount credited to his or her Account.
(mm) "Payroll Deduction Agreement" means a written agreement between an Eligible
Employee and his or her Employer under which the Employer deducts from the
Employee's Compensation an amount determined by the Employee and the
Employer agrees to contribute the deducted amount to the Plan as an
After-Tax Contribution on behalf of the Employee.
(nn) "Period Certain Annuity" means the form of payment described in section
6.3(b)(4).
(oo) "Plan" means the PCS U.S. Employees' Savings Plan, the terms of which are
contained in this Plan document and in written amendments and resolutions
approved by the Sponsor.
(pp) "Plan Year" means the calendar year.
(qq) "Predecessor Plan" means the PCS Phosphate Company, Inc. Employee Savings
Plan and such other plans that are merged into this Plan.
(rr) "Required Beginning Date" means the date described in section 6.1(c).
(ss) "Retirement Age" means the Normal Retirement Age or the first date that a
Participant is eligible for early retirement benefits under the qualified
defined benefit pension plan in which he or she participates and that is
maintained by the Employer.
(tt) "Rollover Contributions" and "Rollover Contributions Account" means the
contributions and the account described in section 4.3.
(uu) "Single Life Annuity" means the form of payment described in section
6.3(b)(3).
(vv) "Sponsor" means PCS Administration (USA), Inc.
(ww) "Trust Agreement" means the agreement establishing a trust, which forms
part of a Plan, to receive, hold, invest, and dispose of the Trust Fund.
(xx) "Trust Fund" means the assets held under the Trust Agreement forming a part
of a Plan.
(yy) "Trustee" means the corporation or person acting as trustee under the Trust
Agreement.
(zz) "Unmatched After-Tax Contributions" and "Unmatched After-Tax Contributions
Account" means the contributions and account described in section 4.2(b).
(aaa) "Unmatched Before-Tax Contributions" and "Unmatched Before-Tax
Contributions Account" means the contributions and account described in
section 4.2(a).
(bbb) "Unmatched Contributions" means the Unmatched Before-Tax Contributions and
the Unmatched After-Tax Contributions Account.
(ccc) "Valuation Date" means each business day on which the Funds are valued,
except as provided by Committee rules.
2.2 Termination of Employment
Nothing contained in the Plan shall be construed to give any Employee the right
to be retained in the service of an Employer or an Affiliate or to interfere
with the right of an Employer or Affiliate to discharge any Employee at any
time. The Committee has the exclusive right to determine whether an Employee has
terminated for the purpose of the Plan and to determine the date of a
termination.
2.3 Applicable Law
To the extent not preempted by the laws of the United States, the laws of the
State of Illinois shall be the controlling law in all matters relating to the
Plan.
2.4 Gender and Number
Except when otherwise indicated by the context, any
masculine terminology shall also include the feminine, and the definition of any
term in the singular shall also include the plural.
2.5 Severability
If a provision of this Plan shall be held illegal or invalid, the illegality or
invalidity shall not affect the remaining parts of the Plan, and the Plan shall
be construed and enforced as if the illegal or invalid provision had not been
included in this Plan.
2.6 Headings
The headings of this Plan are inserted for convenience or reference only and are
not to be considered in the construction or the interpretation of the Plan.
Article 3. Eligibility and Participation
3.1 Eligible Employees and Active Participation
(a) Eligible Employees.
(1) In General. A person is an Eligible Employee if he or she--
(A) is an Employee of an Employer,
(B) is either--
(i) a Full-Time Employee (as defined below), or
(ii) a Part-Time Employee who is credited with at least one year
of Eligibility Service, and
(C) is not excluded under paragraph (2).
(2) Excluded Employees. A person is not eligible to participate if he or
she is--
(A) a Leased Employee,
(B) an Employee represented by a collective bargaining agent if
retirement benefits were the subject of good faith bargaining
between the Employer and the agent, unless the collective
bargaining process has provided for the eligibility of Employees
represented by such agent,
(C) a person who performs services as an independent contractor (as
determined by the Employer), or pursuant to a supplier agreement
or any other contract or agreement, under which such person
agrees or acknowledges that he or she is not eligible for
benefits,
(D) a person hired occasionally or at irregular times for a specific
project of limited duration (as determined by the Committee), or
(E) a co-op student.
(b) Entry Date and Active Participation. An Eligible Employee who has submitted
a completed application form with a Compensation Reduction Agreement or a
Payroll Deduction Agreement shall become an Active Participant on the first
day of the first payroll period following the processing of such form and
agreement by the Committee.
(c) Definitions.
(1) "Full-Time Employee" means an Employee who is regularly scheduled to
work at least 30 hours in a week.
(2) "Part-Time Employee" means an Employee who is not a Full-Time
Employee.
3.2 Eligibility Service
(a) Definition. An Employee will be credited with one year of Eligibility
Service on the last day of an eligibility computation period in which the
Employee is credited with at least 1,000 Hours of Service. An eligibility
computation period is (1) the one-year period commencing on the date the
Employee is credited with his or her first Hour of Service with an Employer
or an Affiliate, (2) the first Plan Year that begins after such date, and
(3) subsequent Plan Years.
(b) Cancellation of Eligibility Service and Reemployment. An Employee's
Eligibility Service will be canceled if he or she incurs a "one-year break
in service." For the purpose of this subsection, a one-year break in
service will occur if an Employee is credited with less than 501 hours of
service in a Plan Year. If an Employee who has incurred a one-year break in
service returns to employment with an Employer or an Affiliate, the
Employee will be recredited with his or her prior Eligibility Service
effective as of the first Hour of Service following reemployment unless (1)
at the time the Employee terminated employment the Employee did not have a
vested interest in any portion of the Employer Contributions Account and
(2) the number of the Employee's one-year breaks in service equals or
exceeds the greater of five or the number of his or her years of credited
Eligibility Service at termination of employment. If a rehired Employee is
not recredited with his or her prior years of Eligibility Service, the
Employee will be treated as a new Employee.
3.3 Duration
A Participant will cease to be an Active Participant when he or she is no longer
an Eligible Employee or if the Participant has neither a Payroll Deduction
Agreement nor a Compensation Reduction Agreement in force pursuant to Article 4.
3.4 Adoption of Plan by Affiliates
An Affiliate may become an Employer through the adoption of a resolution adopted
by its Board of Directors. The Employer shall transmit a copy of the resolution
to the Sponsor.
3.5 Annual Participant Notice
(a) In General. At the time specified in subsection (b), each Eligible Employee
shall be furnished a written notice of the Employee's rights and
obligations under the Plan that--
(1) is sufficiently accurate and comprehensive to appraise the Employee of
such rights and obligations,
(2) is written in a manner calculated to be understood by the average
Eligible Employee, and
(3) includes a description of--
(A) the safe harbor matching or nonelective contribution formula
under the Plan (including a description of the levels of matching
contributions, if any),
(B) any other contributions under the Plan (including the potential
for discretionary matching contributions), and the conditions
under which such contributions are made,
(C) the type and amount of compensation that may be deferred under
the Plan,
(D) how to elect to make Before-Tax Contributions, including any
administrative requirements that may apply to such elections,
(E) the periods available under the Plan for making Before-Tax
Contributions, and
(F) withdrawal and vesting provisions that apply to contributions
under the Plan.
(b) Time of Notice. The Plan Administrator shall furnish each person who is an
Eligible Employee for each Plan Year the notice required by this section
within a reasonable period before the start of the Plan Year. In the case
of the first Plan Year in which an Employee becomes an Eligible Employee,
the notice shall be furnished within a reasonable period before the Entry
Date. The requirement of this subsection shall be deemed satisfied if the
notice is furnished during the period beginning on October 1 and ending on
November 30 preceding the start of the Plan Year. In the case of an
Employee who does not receive the notice within that period because the
Employee becomes an Eligible Employee after October 1, the requirement of
this subsection shall be deemed satisfied if the notice is furnished no
more than 90 days before the Employee becomes an Eligible Employee and no
later than the Entry Date.
The notice required for the 1999 Plan Year may be furnished before March 2,
1999.
Article 4. Contributions, Accounts, and Vesting
4.1 Matched Contributions and Matched Contributions Account
(a) Matched Before-Tax Contributions and Account. Subject to the limitations of
this Article, an Active Participant may elect pursuant to a Compensation
Reduction Agreement to reduce his or her Compensation by a whole
percentage. The sum of the percentages elected under this subsection and
subsection (b) may not exceed five percent of the Participant's
Compensation (Matching Limit) while an Active Participant. The Employer
shall contribute to the Plan on behalf of the Participant an amount equal
to 100 percent of the amount of the reduction in Compensation pursuant to
this paragraph. The contribution shall be made as soon as administratively
practicable but not later than 15 business days after the end of the
calendar month (or such other date permitted by law or regulation) such
amounts would otherwise have been payable to the Participant in cash in the
absence of the Compensation Reduction Agreement. The contribution shall be
credited to the Participant's Matched Before-Tax Contributions Account.
(b) Matched After-Tax Contributions and Account. Subject to the limitations of
this Article, an Active Participant may elect to contribute a whole
percentage of his or her Compensation to the Plan pursuant to a Payroll
Deduction Agreement. The sum of the percentages elected under this
subsection and subsection (a) shall not exceed five percent of the
Participant's Compensation while an Active Participant. The contribution
shall be made as soon as administratively practicable, but not later than
15 business days after the end of the calendar month (or such other date
permitted by law or regulation) such amount would otherwise have been
payable to the Participant in cash in the absence of the Payroll Deduction
Agreement. The contribution shall be credited to the Participant's Matched
After-Tax Contributions Account.
4.2 Unmatched Contributions and Unmatched Contributions Accounts
(a) Unmatched Before-Tax Contributions and Account. Subject to the limitations
of this Article, if the sum of an Active Participant's Matched Before-Tax
Contributions and Matched After-Tax Contributions (stated as a percentage
of Compensation) equals the Matching Limit, the Participant may elect to
reduce his or her Compensation (in addition to any reduction under section
4.1(a)) by a whole percentage pursuant to a Compensation Reduction
Agreement. The sum of the percentages elected under section 4.1, this
subsection, and subsection (b) shall not exceed 20 percent of the
Participant's Compensation while an Active Participant. The Employer shall
contribute to the Plan on behalf of the Participant an amount equal to the
amount of the Participant's reduction in Compensation. The contribution
shall be made as soon as administratively practicable but not later than 15
business days after the end of the calendar month (or such other date
permitted by law) such amounts would otherwise have been payable to the
Participant in cash in the absence of the Compensation Reduction Agreement.
The contribution shall be credited to the Participant's Unmatched
Before-Tax Contributions Account.
(b) Unmatched After-Tax Contributions and Account. Subject to the limitations
of this Article, if the sum of an Active Participant's Matched Before-Tax
and Matched After-Tax Contributions (stated as a percentage of
Compensation) equals the Matching Limit, the Participant may elect to
contribute to the Plan pursuant to a Payroll Deduction Agreement (in
addition to any Matched After-Tax Contributions under section 4.1(b)) a
whole percentage of his or her Compensation. The sum of the percentage
under section 4.1, this subsection, and subsection (a) shall not exceed 20
percent of the Participant's Compensation while an Active Participant. The
contribution shall be made as soon as administratively practicable, but not
later than 15 business days after the end of the calendar month (or such
other date permitted by law or regulation) such amount would otherwise have
been payable to the Participant in cash in the absence of the Payroll
Deduction Agreement. The amount of such contributions shall be credited to
the Participant's Unmatched After-Tax Contributions Account.
4.3 Rollover Contributions and Account
Pursuant to Committee rules, the Plan may accept a Participant's Rollover
Contributions (as defined in Code sections 402, 403, and 408) that a qualified
plan is permitted to receive. Such a contribution shall be credited to the
Participant's Rollover Contributions Account.
4.4 Change or Suspension of Contributions
(a) Change. In the manner and time prescribed by the Committee, an Active
Participant may instruct the Committee to change his or her Compensation
Reduction Agreement or Payroll Deduction Agreement. A change will be
effective on the first day of the calendar quarter that follows the receipt
of the Participant's instruction completed in the proper manner or such
other day as may be prescribed by Committee rule.
(b) Suspension. An Active Participant may suspend all contributions pursuant to
his or her Compensation Reduction Agreement or Payroll Deduction Agreement
as of the first day of a payroll period by filing a form in the manner
prescribed by the Committee at least 30 days before such first day.
4.5 Employer Matching Contributions and Account
Subject to the limitations of this Article, the Employer shall contribute an
amount on behalf of each Active Participant equal to 100 percent of the
Employee's Before-Tax and After-Tax Contributions for the entire Plan Year but
such Employer Matching Contribution may not exceed five percent of the
Employee's Compensation while an Active Participant during the Plan Year.
The Employer Matching Contributions shall be paid to the Trustee monthly to the
extent practicable, but in no event later than the earlier of the time required
for the filing of the Employer's federal income tax return for its fiscal year
in which the applicable Plan Year ends or 12 months after the close of the Plan
Year. Employer Matching Contributions shall be credited to the Participant's
Employer Matching Contributions Account.
4.6 Vesting
All amounts credited to a Participant's Accounts shall be fully and immediately
nonforfeitable. Notwithstanding the foregoing, to the extent permitted by law or
regulation, the Plan may refund or reallocate amounts credited to an Account to
satisfy a limitation imposed by the Plan or by law or regulation.
4.7 Section 402(g) Limit on Before-Tax Contributions
(a) In General. The Before-Tax Contributions with respect to a Participant for
a calendar year after 1997 shall not exceed $10,000 (or such other amount
specified by the Internal Revenue Service pursuant to Code section
402(g)(5)). This limit is applied by aggregating all plans and arrangements
maintained by the Employer and its Affiliates that provide for elective
deferrals as defined in Code section 402(g).
(b) Correction of Excess. Before-Tax Contributions made to the Plan in excess
of the limitation of subsection (a) (adjusted for gains and losses as
provided by regulations) shall be paid to the Participant not later than
April 15 of the taxable year which follows the taxable year in which the
excess amount arises.
Before-Tax Contributions that are refunded under this section may not be
treated as Annual Additions under section 4.9.
Employer Matching Contributions made with respect to Matched Before-Tax
Contributions that are repaid to a Participant shall be forfeited and used
as Employer Matching Contributions in the year in which the excess is paid
to the Participant.
4.8 Section 401(m) Limit on After-Tax Contributions
(a) In General. After-Tax Contributions for a Plan Year beginning after 1998
shall be limited to the extent necessary so that the Actual Contribution
Percentage (as defined in subsection (b)) for the group of Highly
Compensated Employees who are Eligible Employees is not more than the
greater of--
(1) the product of 1.25 and the Actual Contribution Percentage for the
Plan Year for the Eligible Employees who are Non-Highly Compensated
Employees for the Plan Year, or
(2) the lesser of--
(A) the product of two and the Actual Contribution Percentage for the
Plan Year for the Eligible Employees who are Non-Highly
Compensated Employees for the Plan Year, or
(B) the Actual Contribution Percentage for the Plan Year for the
Eligible Employees who are Non-Highly Compensated Employees for
the Plan Year plus two percentage points.
Since this section applies Code section 401(m) using the current year
testing method, it may not be aggregated under IRS regulation
1.410(b)-7(d) with a plan that uses the prior year testing method for
the same testing year.
If the limitation of this subsection is exceeded or is expected to be
exceeded, the excess (or the anticipated excess) may be eliminated
pursuant to subsection (c) or (d).
This section does not apply to Employees whose participation in a Plan
is provided through the collective bargaining process.
(b) Actual Contribution Percentage. The Actual Contribution Percentage for
a specified group of Employees for a Plan Year shall be the average of
the ratios (calculated separately for each Employee in such group)
of--
(1) the sum of the After-Tax Contributions, and to the extent taken
into account pursuant to subsection (e), the Matching and
Nonelective Employer Contributions on behalf of each such
Employee for such Plan Year, to
(2) the Employee's Compensation for such Plan Year.
Such ratios and the Actual Contribution Percentage for each group
shall be calculated to the nearest one-hundredth of 1 percent of an
Eligible Employee's Compensation.
To the extent permitted by Treasury regulations, the Committee may
elect to take Before-Tax Contributions into account in calculating the
Actual Contribution Percentage.
If a Highly Compensated Employee is a participant in two or more plans
containing matching employer contributions or after-tax employee
contributions within the meaning of Code section 401(m), for purposes
of determining the contribution percentage with respect to such
Employee, all such contributions shall be aggregated for the purpose
of this subsection.
(c) Reductions During Plan Year. If the Committee determines before the end of
a Plan Year that the limitation of subsection (a) might not be satisfied,
the Committee may reduce the future After-Tax Contributions of the Highly
Compensated Participants such that the amount of a Highly Compensated
Participant's future After-Tax Contributions does not exceed such
Contributions of any other Highly Compensated Participant, or to the extent
permitted by law, in such other manner as the Committee may decide.
(d) Reduction of Contributions After End of Plan Year. For a Plan Year that
begins after 1998, if the Committee determines after the end of the Plan
Year that the limitation of subsection (a) has not been satisfied, the Plan
shall first determine, in the manner described in paragraph (1), the
aggregate After-Tax (and any related Employer Matching Contributions) that
must be eliminated to satisfy the limitation of subsection (a), then shall
allocate and distribute the aggregate excess amount and allocable earnings
in the manner described in paragraphs (2) and (3).
(1) For the sole purpose of determining the amount of the aggregate excess
contributions to be distributed under paragraph (2) (and not the
amount to be distributed to a specific Highly Compensated Employee),
the aggregate amount of excess After-Tax and other Employer
Contributions is determined by--
(A) computing a reduction in the amount of the After-Tax and other
Employer Contributions of the Highly Compensated Participant with
the highest Actual Contribution Percentage so that such
percentage does not exceed the Actual Contribution Percentage of
the Highly Compensated Participant with the next highest Actual
Contribution Percentage, or if less, the amount necessary so that
the limitation of subsection (a) is satisfied; and
(B) if the amount of the reduction pursuant to subparagraph (A) is
insufficient to reduce the average Actual Contribution Percentage
for the Highly Compensated Employees so that it does not exceed
the limitation of subsection (a), then repeating the process
described in subparagraph (A) in descending order of the Actual
Contribution Percentages of the Highly Compensated Employees
until the average Actual Contribution Percentage for the group of
Highly Compensated Employees satisfies the limitation of
subsection (a).
(2) The limitation of subsection (a) is deemed to be satisfied if the
aggregate excess contributions determined under paragraph (1) is
eliminated by--
(A) distributing After-Tax Contributions and related Employer
Matching Contributions to the Highly Compensated Employee with
the highest dollar amount of such contributions until it equals
the dollar amount of such contributions of the Highly Compensated
Employee with the next highest dollar amount of such
contributions, or if less, the aggregate amount of the excess
amount determined under paragraph (1); and
(B) if the distribution described in subparagraph (A) does not
eliminate the excess amount determined under paragraph (1),
repeating the foregoing process in descending order of the dollar
amounts of the After-Tax and Employer Matching Contributions
until the aggregate excess amount under paragraph (1) has been
distributed.
If the distributions required by this paragraph are made, the
limitation of subsection (a) is satisfied notwithstanding that the
average Actual Contribution Percentage of the Highly Compensated
Employees recomputed after the distributions may still exceed the
limitation of subsection (a).
(e) Contributions Aggregated with After-Tax Contributions.
(1) Matching and Before-Tax Contributions. The Committee may elect to
apply this test by adding all Employer Matching Contributions to all
Eligible Employees' After-Tax Contributions or by adding all Employer
Matching Contributions that exceed 4 percent of an Employee's
Compensation. The election under Code section 401(m)(3) to treat
Before-Tax Contributions as Matching Employer Contributions may not be
made. Whether or not Matching Employer Contributions are taken into
account under this paragraph, they shall be distributed or forfeited
pursuant to IRS regulations to the extent that they match After-Tax
Employee Contributions that are refunded to a Participant.
(2) Nonelective Employer Contributions. If the Committee determines that
the limitation of subsection (a) has been or may be exceeded, to the
extent permitted by regulations of the Internal Revenue Service, the
Employer may make an additional contribution on behalf of Non-Highly
Compensated Employees to satisfy the limitation of subsection (a).
Such contribution shall be fully and immediately vested and may not be
withdrawn pursuant to section 7.2 or 7.3 (relating to in-service
withdrawals).
(f) Multiple Use of Alternative Limitation; Aggregate Limitations.
(1) In General. If the Actual Deferral Percentage (as defined under Code
section 401(k)(3)(B)) for the group of Highly Compensated Employees
exceeds the limitation of Code section 401(k)(3)(A)(ii)(II)
("Alternative Limitation") and the Actual Contribution Percentage for
such group exceeds the amount in subsection (a)(2) then the sum of--
(A) the Actual Deferral Percentage for the group of Highly
Compensated Employees who are Eligible Employees, and
(B) the Actual Contribution Percentage for the group of Highly
Compensated Employees who are Eligible Employees shall not exceed
the Aggregate Limitation described in paragraph (2).
(2) Aggregate Limitation. The Aggregate Limitation shall be the limit
prescribed by the Internal Revenue Service pursuant to Code section
401(m)(9) to prevent the multiple use of the Alternative Limitation of
Code section 401(k) and the limitation of (a)(2) of this section.
(3) Correction of Excess. If the Aggregate Limitation in paragraph (2) is
exceeded, the Actual Contribution Percentages of the Highly
Compensated Participants shall be reduced by distributing After-Tax
Contributions or forfeiting Employer Matching Contributions (as
determined by the Committee subject to Treasury regulations) until the
excess is eliminated. Such distribution (adjusted for gains and losses
pursuant to Treasury regulations) may be paid to Participants within 2
1/2 months after the end of the Plan Year, but not later than the end
of the Plan Year following the Plan Year for which the Aggregate
Limitation is exceeded.
4.9 Section 415 Limitation on Annual Additions
(a) General Limitation. For each Limitation Year, the Annual Addition (as
defined in subsection (c) below) for a Participant shall not exceed the
lesser of--
(1) $30,000 adjusted for increases in the cost of living specified by the
Department of the Treasury, effective January 1 of each calendar year
and applicable with respect to the Limitation Year ending with or
within such calendar year; or
(2) 25 percent of the Participant's Compensation for the Limitation Year.
If the Limitation Year is changed, the limitations of this section shall be
separately applied to the short Limitation Year that begins with the first
day of the current Limitation Year and that ends on the day before the
first day of the first Limitation Year for which the change is effective.
The dollar limitation of subsection (a)(1) with respect to the short
Limitation Year is equal to the product of the applicable dollar limitation
for the calendar year in which the Limitation Year ends and a fraction with
a numerator equal to the number of months (including any fractional parts
of a month) in the Limitation Year and a denominator equal to 12.
(b) Coverage Under a Defined Benefit Plan.
(1) General. For Limitation Years beginning before 2000, if a Participant
is, or was, covered under a qualified defined benefit plan maintained
by any Employer or Affiliate (as defined in subsection (d)), the sum
of the Participant's Defined Benefit Fraction and Defined Contribution
Fraction (as defined in this subsection)may not exceed 1.0 in any
Limitation Year (as defined in subsection (d)).
(2) The Defined Benefit Fraction is a fraction, the numerator of which is
the sum of the Participant's Projected Annual Benefits under all
qualified defined benefit plans (whether or not terminated) maintained
by any Employer or Affiliate, and the denominator of which is the
lesser of--
(A) 1.25 times the dollar limitation of Code section 415(b)(1)(A) in
effect for the Limitation Year, or
(B) 1.4 times the Participant's average Compensation for the
three-consecutive Plan Years that produces the highest average.
Projected Annual Benefit means the annual benefit to which the Participant
would be entitled under the terms of the defined benefit plan, if the
Participant continued employment until normal retirement age (or current
age, if later) and the Participant's Compensation for the Limitation Year
and all other relevant factors used to determine such benefit remained
constant until normal retirement age (or current age, if later).
(3) The Defined Contribution Fraction is a fraction, the numerator of
which is the sum of the Annual Additions to the Participant's account
under all qualified defined contribution plans (whether or not
terminated) maintained by any Employer or Affiliate for the current
and all prior Limitation Years, and the denominator of which is the
sum of the lesser of the following amounts determined for such year
and for each prior year of service with any Employer or Affiliate--
(A) 1.25 times the dollar limitation in effect under Code section
415(c)(1)(A) for such year, or
(B) 1.4 times the amount which may be taken into account under Code
section 415(c)(1)(B).
In calculating the Defined Contribution Fraction, the Committee may,
at its discretion, make the election described in Code section
415(e)(7).
(c) Annual Addition means the sum of the following amounts for a
Limitation Year with respect to each Participant: Employer
Contributions, Before-Tax Contributions, forfeitures, excess amounts
treated as Employer Contributions pursuant to subsection (e), the
Participant's After-Tax Contributions, and similar amounts under other
qualified defined contribution plans maintained by any Employer or
Affiliate in which the Participant is a covered employee.
Amounts allocated to a post-retirement medical account described in
Code section 415(l)(2) or 419A(d)(2) shall be treated as an Annual
Addition when applying the dollar limitation of subsection (a)(1).
To the extent required by regulations, contributions do not fail to be
Annual Additions because they are excess deferrals within the meaning
of Code section 402(g), excess contributions within the meaning of
Code section 401(k), or excess aggregate contributions within the
meaning of Code section 401(m) which are distributed.
Rollover contributions and loan payments may not be treated as Annual
Additions.
(d) Additional Definitions. For the purpose of this section, Affiliate
means Affiliate as defined in section 2.1(c), except that the phrase
"more than 50 percent" shall be substituted for the phrase "at least
80 percent" each place it appears in Code section 1563(a)(1).
Limitation Year means the Plan Year.
(e) Excess Amounts. If, for any Limitation Year, it is necessary to limit
the allocation of an amount to a Participant's Account to comply with
subsection (a), the Plan--
(1) first, shall refund to the Participant, to the extent necessary
and as soon as is administratively feasible, the amount of the
Unmatched After-Tax Contributions and any earnings thereon;
(2) second, shall pay to the Participant, to the extent necessary and
as soon as administratively feasible, the Unmatched Before-Tax
Contributions, if any, made on behalf of the Participant and any
earnings thereon;
(3) third, shall pay to the Participant, to the extent necessary and
as soon as administratively feasible, the amount of the Matched
After-Tax Contributions made on the Participant's behalf and
earnings thereon. The Employer Matching Contributions made with
respect to such Matched After-Tax Contributions and earnings
thereon shall be held in a suspense account and used in the next
Limitation Year as an Employer Matching Contribution; and
(4) fourth, shall pay to the Participant, to the extent necessary and
as soon as administratively feasible, the amount of the Matched
Before-Tax Contributions made on the Participant's behalf and any
earnings thereon. The Employer Contributions made with respect to
such Matched Before-Tax Contributions and any earnings thereon
shall be held to a suspense account and used in the next
Limitation Year as an Employer Contribution.
If the limitation of subsection (b) is exceeded, the accrued benefit
of the Participant under the defined benefit plan shall be reduced to
the extent necessary to satisfy such limitation.
4.10 Deductibility Limitation
No Employer Contributions may be made to the Plan in excess of the amount that
may claimed as an income tax deduction under the Code.
4.11 Contributions for Reemployed Veterans
Effective December 12, 1994, make-up contributions on behalf of reemployed
members of the military services shall be made as required by the provisions of
the Uniformed Services Employment and Reemployment Rights Act of 1994 and Code
section 414(u).
Article 5. Investments and Accounting
5.1 Investments
(a) Funds; Company Stock Fund. The Committee shall identify to the Trustee
those Funds to be made available for the investment of contributions. The
Committee may also direct the Trustee to establish a Fund that is invested
primarily or entirely in qualifying employer securities as defined in ERISA
section 407(d)(5) ("Company Stock Fund"). Except for a Predecessor Plan
established before December 22, 1987, the benefits under a Company Stock
Fund may not be taken into account in determining the benefits payable to a
Participant under any defined benefit plan. Except as provided under ERISA
section 407(b)(2), Before-Tax Contributions made in Plan Years beginning
after 1998 may be invested in a Company Stock Fund only at the
Participant's direction. The Committee may limit the type and amount of
contributions that may be invested in the Company Stock Fund.
A Participant will be entitled to exercise all voting and other shareholder
rights with respect to his or her allocation portion of the shares of
common stock held by the Company Stock Fund. The instructions received by
the Trustee from individual Participants or Beneficiaries shall be held by
the Trustee in strict confidence and shall not be divulged to any person,
including Employees, officers, and directors of the Sponsor or any
Affiliate; provided, however, that, to the extent necessary for the
operation of the Plan, such instructions may be related or directed by the
Trustee to a recordkeeper, auditor, or other person providing services to
the Plan if such person (1) is not the Company, an Affiliate, or any
Employee, officer, or director thereof, and (2) agrees not to divulge such
directions to any other person, including Employees, officers, and
directors of the Sponsor and its Affiliates.
(b) Elections. A Participant may elect that his or her Before-Tax
Contributions, After-Tax Contributions, Employer Matching Contributions,
and Rollover Contributions be invested in increments of 1 percent in any
one or more of the Funds such that the total equals 100 percent. Each type
of contribution shall be invested in the same proportions.
When starting participation in a Plan, the Participant must file an
investment election in the manner prescribed by the Committee. A
Participant may change the investment election in the prescribed manner to
be effective as of the first business day of a calendar quarter or other
date prescribed by the Committee.
(c) Transfers Between Funds. A Participant may elect to transfer amounts from
one Fund to another in the manner and within the time prescribed by the
Committee. The transfer shall be effective on the first business day of the
first quarter (or other date prescribed by the Committee) following the
receipt of the Participant's election by the Committee. The amount to be
transferred shall be specified in a whole percentage or a dollar amount. A
specified percentage shall be applicable to each of the Participant's
Accounts that are invested in the specified Fund.
5.2 Plan Accounting and Allocation of Investment Earnings
The Accounts and Funds shall be valued as of each Valuation Date at their fair
value determined on the basis of generally accepted accounting principles.
Earnings, gains, and losses (realized or unrealized) for each Fund shall be
allocated to the portion ("subaccount") of a Participant's Account maintained
with respect to that Fund, in the same ratio that the value of the subaccount
bears to the sum of the values of all Participants' subaccounts maintained with
respect to that Fund.
The Committee shall adopt rules for determining the appropriate Valuation Dates
to be used to determine the amount of withdrawals and distributions.
Before-Tax Contributions and Employer Matching Contributions shall be credited
to Participants' Accounts as of a date not later than the last day of the Plan
Year for which the services relating to contributions were rendered. For the
purpose of Code section 404, Before-Tax Contributions and Employer Matching
Contributions shall be credited to Participants' Accounts as of a date not later
than the last day of the Employer's taxable year for which a federal income tax
deduction is claimed for such contributions.
Pursuant to rules and regulations of the Internal Revenue Service, the Committee
may adopt a rule designating all or certain Accounts as constituting a separate
contract for the purposes of Code section 72.
5.3 Plan Expenses
Brokerage fees, transfer taxes, and other expenses
incident to the purchase or sale of securities and other investments by the
Trustee shall be deemed to be part of the cost of such securities and
investments, or deducted in computing the proceeds of a sale, as the case may
be. All other investment expenses and expenses of administering and managing the
Plan, the Trust Agreement, and the Trust Fund shall be paid from the Trust Fund,
unless paid by the Employers.
Article 6. Distributions
6.1 Distributions After Termination and At Required Beginning Date
(a) In General. Except as otherwise provided in this section, a Participant who
terminates employment with all Employers and Affiliates or ceases active
employment on account of a Disability may receive a distribution of the
vested balance credited to his or her Account in one of the forms of
payment listed in section 6.3. A Participant who attains age 70 1/2 must
start benefit payments not later than the Required Beginning Date as
defined below.
For the purposes of this section, a transfer of the employment relationship
on account of a sale or other disposition of an Employer or an Affiliate or
a division thereof or on account of a corporate restructuring shall not be
considered to be a termination of employment, except where expressly stated
in a Plan.
(b) Deferral of Benefit Payments.
(1) In General. Except as provided in paragraph (2), a Participant who has
terminated employment with the Employer and all Affiliates may defer
the start of benefit payments until the Required Beginning Date.
(2) Small Amounts; Mandatory Cashouts.
(A) Persons Terminating After 1998. A Lump Sum Distribution shall be
paid to a Participant if--
(i) the Participant terminates employment from the Employer and
all Affiliates after 1998 or the Participant has an Annuity
Starting Date after 1998 following a termination of
employment, and
(ii) the amount of such Participant's entire balance under all
Accounts at such termination of employment or at such
Annuity Starting Date is $5,000 or less.
The Lump Sum Distribution shall be payable to the Participant as
of the first day of the month following the termination of
employment or as of such Annuity Starting Date. Except as
provided by law or regulation, if annuity payments to a
Participant have started, a Lump Sum Distribution is payable
under this paragraph only if the Participant consents.
(B) Persons Terminating Before 1999; Sweep Provision. A Lump Sum
Distribution shall be paid to a Participant as soon as
practicable after December 31, 1999 if--
(i) the Participant terminated employment from the Employer and
all Affiliates before 1999, but did not receive a Lump Sum
Distribution pursuant to the cashout provision in force
under the Predecessor Plan at the termination,
(ii) the Participant has not attained an Annuity Starting Date
before 2000, and
(iii) the amount of such Participant's entire balance under all
Accounts as of December 31, 1999 is $5,000 or less.
If clause (iii) is not applicable to a Participant, but the
balance as of an Annuity Starting Date after that December 31,
1999 is $5,000 or less, the entire balance shall be paid as a
Lump Sum Distribution as soon as administratively practicable
after that Annuity Starting Date.
(3) Consent to Distribution Before Required Beginning Date. If paragraph
(2) does not apply to a Participant, a distribution may be made to the
Participant before he or she attains the Required Beginning Date only
if the Participant elects the distribution in writing or in another
permissible manner prescribed by the Committee.
An election to receive a distribution of benefits before the Required
Beginning Date is valid only if the Participant is furnished with an
explanation of his or her right to start benefit payments at the
Required Beginning Date or an earlier date selected by the
Participant. The election and the explanation of the election shall be
as described in sections 6.4(b) and 6.4(b).
(c) Required Beginning Date. Notwithstanding anything in the Plan to the
contrary, a Participant must start receiving benefit payments not later
than the Required Beginning Date in amounts that satisfy section 6.3(c)
(minimum distribution amounts). The Required Beginning Date shall be April
1 of the calendar year following the later of--
(1) the calendar year in which the Participant attains age 70 1/2, or
(2) effective January 1, 1997, in the case of a Participant who is not a
Five-Percent Owner, the calendar year in which the Participant
terminates employment from the Employer and all Affiliates.
6.2 Distributions Upon Death Before Annuity Starting Date
(a) In General. If a Participant dies before distributions from the Account
have started pursuant to section 6.1, the Beneficiary shall receive a Lump
Sum Distribution of the entire value credited to his or her Account, or the
Beneficiary may elect an installment payout over a period not to exceed the
life expectancy of the Beneficiary as determined under IRS regulation
1.72-9. The Beneficiary shall make the election within a reasonable period
following the Participant's death as specified by Committee rules. The
Beneficiary (including a spouse) may not defer the payment of the death
benefit.
The death benefit may be payable to a spousal Beneficiary as a Single Life
Annuity if subsection (b) or (c) applies.
(b) Elective Preretirement Spouse's Annuity. If assets are transferred to this
Plan from a Merged Plan that provided for a death benefit payable to a
surviving spouse of the Participant in the form of a life annuity (as
indicated in a Supplement to this Plan), this subsection will apply to the
entire balance credited under this Plan. The Lump Sum Distribution that
would otherwise be payable under subsection (a) may be applied, at the
election of the surviving spouse, to the purchase of an annuity contract
providing monthly annuity payments payable to the spouse for the spouse's
life if--
(1) the spouse is the Beneficiary,
(2) the Participant elected a form of payment with a life contingency
pursuant to section 6.3,
(3) the Participant dies before the Annuity Starting Date and the purchase
of the annuity contract,
(4) the Participant is married at death, and
(5) the balance to the Account exceeds $5,000 in the case of a Participant
who dies after 1998, or exceeds $3,500 in the case of a Participant
who dies before 1999.
(c) Automatic Preretirement Spouse's Annuity
(1) In General. The normal form for the payment of a death benefit will be
a Preretirement Spouse's Annuity if--
(A) the normal form of distribution with respect to assets
transferred from a Merged Plan is a form with a life contingency,
(B) the Participant dies before the Annuity Starting Date,
(C) the Participant was married at death, and
(D) the balance to the Account exceeds $5,000, in the case of a
Participant who dies after 1998, or exceeds $3,500, in the case
of a Participant who dies before 1999.
A "Preretirement Spouse's Annuity" means an annuity contract purchased
with the entire balance of the Participant's Account, payable in the
form of a Single Life Annuity to the spouse to whom the Participant
was married at the time of the Participant's death. If the balance to
the Participant's Account is less than the amount specified in
subparagraph (D), such balance shall be payable as a Lump Sum
Distribution to the spouse as of the first day of the month following
the Participant's death.
The Participant may reject the Preretirement Spouse's Annuity by
designating a nonspouse Beneficiary pursuant to paragraph (2) or the
spouse may reject the Preretirement Spouse's Annuity by electing a
Lump Sum Distribution in lieu of the Single Life Annuity.
If the Participant dies before age 65, payment of the benefit to the
spouse shall commence as of the date the Participant would have
attained age 65 if he or she had survived. However, the spouse may
elect to start benefit payments at an earlier date.
(2) Election to Reject the Preretirement Spouse's Annuity. The Participant
may reject the Preretirement Spouse's Annuity by designating a
nonspouse Beneficiary in writing and may revoke such rejection by
written notice at any time during the election period. The election
period shall begin when the Employee becomes a Participant in the Plan
and shall end on the Participant's Annuity Starting Date. If an
election to reject the Preretirement Spouse's Annuity is made before
the first day of the Plan Year in which the Participant attains age
35, the election shall become invalid on such day at which time a new
election may be made by the Participant.
A Participant's election to reject the Preretirement Spouse's Annuity
will be effective only if the requirements of paragraph (3) have been
satisfied.
If the Preretirement Spouse's Annuity is rejected, the Participant's
Account shall be payable as a Lump Sum Distribution to the nonspousal
Beneficiary.
(3) Spouse's Consent. An election by the Participant to reject the
Preretirement Spouse's Annuity will be effective only if--
(A) the spouse furnishes a written consent to the election, witnessed
by a notary public, which acknowledges the effect of the election
and, if applicable, the specific nonspouse Beneficiary,
contingent Beneficiary, or a class of Beneficiaries, or
(B) it is established to the satisfaction of a Plan representative or
notary public that the consent of the spouse under subparagraph
(A) cannot be obtained because the spouse cannot be located or if
the Participant furnishes a court order to the Plan decreeing
that the Participant and the spouse are legally separated or that
the spouse has abandoned the Participant. The preceding sentence
shall not apply to the extent provided in a qualified domestic
relations order under Code section 414(p).
(4) Notice of Election. The Plan shall furnish a Participant a notice
in writing (or such other media permitted under law or
regulations) that contains a nontechnical explanation of the
Preretirement Spouse's Annuity including a statement of the terms
and conditions of the annuity, the Participant's right to make,
and the effect of, an election to waive the annuity, and the
rights of the spouse under paragraph (3).
The notice shall be mailed, personally delivered, or otherwise
communicated pursuant to Treasury regulations so that it reaches
the attention of the Participant when commencing participation in
the Plan, when terminating employment before age 35 (if
applicable), and within the period beginning with the first day
of the Plan Year in which the Participant attains age 32 and
ending with the close of the Plan Year preceding the Plan Year in
which the Participant attains age 35 (if applicable).
6.3 Forms of Payment
(a) In General. The normal form of benefit payment shall be a Lump Sum
Distribution. In lieu of the normal form, a Participant (or the Beneficiary
in the case of a death benefit) may elect an Installment Payout pursuant to
section 6.4 or such other forms of payment that may be authorized for a
designated group of Participants as described in a Supplement to the Plan,
subject to the mandatory cashout provision under section 6.1(b)(2).
If an Account is invested in the Company Stock Fund, the Participant (or
the Beneficiary) may elect a distribution in (1) cash or (2) whole shares
of stock and uninvested cash allocated to the Fund, but not a combination
of (1) and (2). Cash shall be distributed in lieu of fractional shares. A
distribution of stock is available only if the distribution is payable as a
Lump Sum Distribution is elected.
Forms of payment are described in subsection (b), but a Participant may not
elect a form other than the Lump Sum Distribution or Installment Payout
unless authorized by a Supplement.
(b) Definitions--Forms of Payment.
(1) Lump Sum Distribution. A single payment equal to the entire amount
credited to the Participant's Accounts.
(2) Installment Payout. A series of monthly, quarterly, or annual cash
payments over a period designated by the Participant that may not
exceed the joint and last survivor life expectancies of the
Participant and the Beneficiary as determined under Treasury
regulation 1.72-9. Upon the death of the Participant, the remaining
balance of the Participant's Account shall continue to be payable to
the Beneficiary in installments or may be payable as a Lump Sum
Distribution. The amount distributable shall be subject to the minimum
distribution rules of subsection (c).
(3) Single Life Annuity. An annuity contract providing for monthly cash
payments for the life of the Participant, and where stated, may
provide for a cash refund upon the death of the Participant.
(4) Period Certain Annuity. An annuity contract providing for monthly
payments of cash for 60, 120, 180, 240, 300, and 360 months, as
elected by the Participant. If the Participant dies before payments
for the specified period have been made, payments shall be made to the
Beneficiary until total payments to the Participant and the
Beneficiary equal the specified number. The period certain designated
by the Participant may not exceed the joint and last survivor life
expectancies of the Participant and the Beneficiary as determined
under Treasury regulation 1.72-9 and may not exceed the prescribed
period under Treasury regulation 1.401(a)(9)-2 (pertaining to the
minimum distribution incidental benefit rule).
(5) Life and Period Certain Annuity. A combination of a life annuity as
described in paragraph (3) and a period certain in paragraph (4). If
the Participant dies before payments have been made for the specified
period, the payments shall continue to the Beneficiary until the total
number of payments to the Participant and the Beneficiary equal the
specified number.
(6) Joint and Spouse's Annuity Options. An annuity contract that is a
Joint and Survivor Annuity where the Beneficiary is the spouse to whom
the Participant was married at the Annuity Starting Date.
(7) Joint and Survivor Annuity Options. An annuity contract providing for
monthly cash payments for the life of the Participant, and upon the
death of the Participant, monthly payments to the designated
Beneficiary for the life of the Beneficiary. The amount payable to the
Beneficiary shall be 50 percent, 75 percent, or 100 percent (as
elected by the Participant) of the monthly benefit that was payable to
the Beneficiary. If the Beneficiary is not the spouse of the
Participant, the 75 percent Joint and Survivor Annuity Option may be
elected only if the Participant is not more than 19 years older than
the Beneficiary, and the 100 percent Joint and Survivor Annuity
Options may be elected only if the Participant is not more than 10
years older than the Beneficiary.
(8) Partial Cash Distribution. Subject to subsection (c), a Participant
who has not elected another form of payment may elect from time to
time pursuant to Plan rules to direct the Plan to distribute to the
Participant a cash amount as he or she may specify, but not in excess
of the vested balance credited to the Participant's Account.
(c) Minimum Distribution Amount.
(1) In General. A Participant who has attained the Required Beginning Date
shall receive a distribution for each calendar year that is not less
than the Minimum Distribution Amount described in paragraph (2). The
Minimum Distribution Amount for the first distribution year must be
paid by April 1 of the calendar year that follows the first
distribution year. Effective January 1, 1997, the first distribution
year means the later of the calendar year in which the Participant
attains age 70 1/2 or, in the case of a Participant who is not a
Five-Percent Owner, the calendar year in which the Participant
terminates employment. The Minimum Distribution Amount for the
calendar year that follows the first distribution year must be paid
not later than December 31 of such calendar year.
(2) Minimum Distribution Amount. The Minimum Distribution Amount for the
first distribution year is an amount determined by dividing the value
of the Participant's Account as of the end of the preceding calendar
year (as adjusted pursuant to Treasury regulations prescribed under
Code section 401(a)(9)) by the applicable life expectancy of the
Participant or the joint and last survivor life expectancy factor of
the Participant and his Beneficiary prescribed by Treasury
regulations. In subsequent years, the value of the Account as of the
end of the preceding calendar year (as adjusted) shall be used and the
life expectancy factor shall be the life expectancy factor with
respect to the first distribution year reduced by the numbers of years
that have elapsed since such year. If the Beneficiary is not the
Participant's spouse, the value shall be divided by the lesser of the
applicable life expectancy factor or the factor prescribed under
Treasury regulation 1.401(a)(9)-2 (relating to the incidental death
benefit rule).
6.4 Election of Forms of Payment
(a) In General.
(1) Election Only After Required Notice During Election Period. An
election of a form of payment or the revocation of a form of payment
may be made only after the notice described in this section has been
furnished to a Participant and only during the election period. No
Participant may elect a form of payment or reject a normal form before
the start of the election period. The Participant may revoke an
election during the election period. An election to receive payment in
a particular form of payment described in section 6.3 shall be made in
the manner prescribed by the Committee.
(2) Election of Life Annuity Forms by a Married Participant. If a married
Participant elects--
(A) to receive any annuity form based on a life contingency (Single
Life Annuity, Life and Period Certain Annuity, or a Joint and
Survivor Annuity), other than a Joint and Spouse's Annuity, or
(B) to rescind a prior election of a Joint and Spouse's Annuity,
the election will be effective only if the requirements of this
section concerning the consent of the spouse are satisfied.
The Committee may prescribe rules concerning a withdrawal or a loan by
a married Participant under Article 7 after the Participant has
elected an annuity based on a life contingency under this section.
(3) Normal Form with a Life Contingency. If the normal form of
distribution under a Plan contains a life contingency, then unless the
requirements of subsection (c) have been satisfied, a married
Participant may not elect any other option other than a Joint and
Spouse's Annuity.
(b) Time of Notice and Election Period.
(1) In General. Except as otherwise provided, the notice described in
subsection (d) shall be mailed, personally delivered, or otherwise
communicated so that it reaches the attention of the Participant not
more than 90 days before the Participant's Annuity Starting Date and
not less than 30 days before the Annuity Starting Date. The election
period during which a Participant may reject the normal form of
payment shall be the period starting 30 days after the required notice
has been furnished and ending on the Annuity Starting Date.
(2) 30-Day Waiting Period. If the prescribed notice cannot be furnished at
least 30 days before the Annuity Starting Date, it shall be furnished
as soon as administratively practicable. However, the Participant
shall have at least 30 days following the furnishing of the notice to
consider the available elections and no payment may be made to the
Participant until the 30-day period has expired.
(3) Waiver of 30-Day Waiting Period. Notwithstanding paragraphs (1) and
(2), the Committee rules may allow a Participant to affirmatively
elect to waive the 30-day period and to elect to receive an earlier
distribution if--
(A) the Participant is permitted to revoke the waiver and
distribution election at least until the Annuity Starting Date,
or, if later, at any time before the expiration of the 7-day
period that begins after the day after the notice is furnished to
the Participant, and
(B) the Plan makes no payment in accordance with the affirmative
election before the expiration of the 7-day period that begins
the day after the required notice is furnished to the
Participant.
(c) Spousal Consent. An election to reject Joint and Spouse's Annuity will be
effective only if--
(1) the spouse of the Participant consents in writing to such election,
the spouse's consent acknowledges the effect of such election
(including the specific nonspouse Beneficiary, if any) and it is
witnessed by a notary public or an authorized representative of the
Plan; or
(2) it is established to the satisfaction of the Plan that the consent
required under paragraph (1) may not be obtained because there is no
spouse, because the spouse cannot be located, or the Participant
furnishes the Plan with a court order decreeing that the Participant
and the spouse are legally separated or decreeing that the spouse has
abandoned the Participant (except as provided in a qualified domestic
relations order).
(d) Content of the Notice of Election. The Plan shall furnish to a Participant
a written notice that states in nontechnical language--
(1) a general description of the Joint and Spouse's Annuity forms (if
any);
(2) the circumstances under which they will be provided and the
availability of the election to reject the Joint and Spouse's Annuity
and the right to revoke the election;
(3) a general explanation of the relative financial effect on a
Participant's benefit of the election and the election of other
optional forms of payment;
(4) the rights of the Participant's spouse under this section; and
(5) a Participant's right to request in writing a more specific statement
of the conditions and financial effect of the Joint and Spouse's
Annuity.
The statement required by paragraph (5) shall describe the specific
financial effect of the election by the Participant in terms of dollars per
annuity payment. The statement shall be delivered or mailed (first class,
postage prepaid) to the Participant within 30 days after the date of the
Participant's written request.
6.5 Beneficiary
(a) General. Subject to subsection (b), "Beneficiary" means the person or
persons (who may be named contingently or successively), including a trust
or an estate, designated by a Participant, to whom the Participant's
Account will be paid on account of the Participant's death. Each
designation will revoke all prior designations by the same Participant. A
designation shall be made in the manner prescribed by the Committee, and
will be effective only when filed as prescribed by the Committee. If no
Beneficiary is designated or a designation is revoked in whole or in part,
or if a designated Beneficiary does not survive, the Account balance shall
be payable to the Participant's estate, or at the discretion of the
Committee, to the first class of the following classes of automatic
Beneficiaries then surviving and in equal shares if there are then more
than one in each class: the Participant's--
(1) surviving spouse;
(2) surviving children;
(3) surviving parents; and
(4) surviving brothers and sisters.
(b) Married Participants.
(1) General. Notwithstanding subsection (a), in the case of a married
Participant, the spouse of the Participant shall be the Beneficiary
unless--
(A) the Participant has designated another person as the Beneficiary,
(B) the spouse has consented to the designation of the specific
nonspouse Beneficiary, including any class of Beneficiaries or
any contingent Beneficiaries,
(C) the spouse acknowledges the effect of such election,
(D) the spouse's consent is in writing, and
(E) the consent is witnessed by a notary public or an authorized
representative of the Plan.
The spouse's consent is not required if the spouse cannot be located
or if the Participant furnishes the Company a court order decreeing
that the Participant and the spouse are legally separated or that the
spouse has abandoned the Participant. The preceding sentence does not
apply to the extent provided in a qualified domestic relations order
under Code section 414(p).
(2) Rejected Automatic Preretirement Spouse's Death Benefit. If the
automatic Preretirement Spouse's Death Benefit described in
section 6.2(c) applies under a Plan and the Participant has been
rejected it pursuant to that section by designating a nonspouse
Beneficiary before the first day of the Plan Year in which the
Participant attains age 35, the rejection will become invalid on
such day at which time the Participant may furnish a new
designation of a nonspouse Beneficiary pursuant to section
6.2(c).
Article 7. In-Service Withdrawals and Loans
7.1 In General
(a) Restriction on Withdrawals. Except as provided in this
Article or in a Supplement, no Participant may withdraw amounts from his or
her Accounts before terminating employment from the Employer and all
Affiliates. However, a Participant who remains employed by the Employer or
an Affiliate may withdraw without penalty all or a portion of his or her
Accounts after attaining age 59 1/2 or after suffering a Disability. A
request for a withdrawal shall be filed with the Plan at the time and the
manner prescribed by the Committee. Committee rules may require that the
amount of a withdrawal under this Article exceed a minimum amount that may
not exceed $1,000.
In a Plan Year, only two hardship withdrawals pursuant to section 7.4 and
only one withdrawal for other reasons are permitted, unless the Committee
rules provide otherwise.
(b) Order of Withdrawal.
(1) If a Participant requests a withdrawal under this Article from an
After-Tax Contributions Account, payment shall be made first from the
Unmatched After-Tax Contributions Account, and if that Account is
exhausted, then from the Matched After-Tax Contributions Account. If
the withdrawal is from the Before-Tax Contributions Account, payment
shall be made first from the Unmatched Before-Tax Contributions
Account, and if that Account is exhausted, then from the Matched
Before-Tax Contributions Account.
(2) No withdrawal may be made from the Before-Tax Contributions Account
unless the After-Tax Contributions Account has been exhausted.
(3) If an Account is invested in more than one Fund, Committee rules shall
determine the method of drawing on the Funds.
7.2 In-Service Withdrawals from the After-Tax Contributions Account
A Participant may request a withdrawal of amounts from the After-Tax
Contributions Accounts by filing a request with the Plan in the manner
prescribed by the Committee. The request may be filed at any time subject to
rules of the Committee concerning the frequency of such withdrawals. A
withdrawal on account of a hardship must satisfy the requirements of section
7.4.
7.3 In-Service Withdrawals of Before-Tax Contributions
(a) In General. A Participant may receive a distribution from the Before-Tax
Contributions Account before terminating employment from the Employer and
all Affiliates only if he or she has attained age 59 1/2, incurred a
Disability, or has satisfied the requirements for a hardship withdrawal
under section 7.4.
(b) Limitation on Amount of a Hardship Withdrawal. The amount of a hardship
distribution from the Before-Tax Contributions Account may not exceed the
sum of--
(1) the total Before-Tax Contributions made on behalf of the Participant
reduced by prior distributions, and
(2) the earnings credited to the Before-Tax Contributions Account as of
December 31, 1988.
7.4 Hardship Withdrawals
(a) In General. A Participant may receive an in-service distribution from the
After-Tax Contributions Account, and if that Account has been exhausted,
from the Before-Tax Contributions Account if--
(1) the withdrawal is on account of a financial need constituting a
hardship as described in subsection (b), and
(2) the withdrawal is necessary to satisfy the need as determined under
subsection (c).
After a withdrawal under this section, a Participant will cease to be an
Eligible Employee for the following 12 calendar months. No distribution
from the Employer Matching Contributions Account may be made pursuant to
this section.
(b) Financial Hardship. A financial hardship is deemed to exist as a result of
the following financial obligations:
(1) medical expenses described in Code section 213(d) previously incurred
by the Participant, the Participant's spouse, or any dependents of the
Participant (as defined in Code section 152), or necessary for these
persons to obtain medical care described in section 213(d);
(2) the costs (excluding mortgage payments) directly related to the
purchase of a principal residence for the Participant;
(3) payment of tuition and related fees for the next 12 months of
post-secondary education for the Participant, his or her spouse,
children, or dependents;
(4) the need to prevent the eviction of the Participant from his or her
principal residence or foreclosure on the mortgage of the
Participant's principal residence;
(5) the cost of a funeral for the Participant or a member of the
Participant's family; or
(6) the cost of a similar emergency.
(c) Necessity for Distribution. A distribution will not be treated as necessary
to satisfy an immediate and heavy financial need of the Participant to the
extent that it is in excess of the amount required to relieve the financial
need (including amounts necessary to pay any taxes or penalties reasonably
anticipated to result from the distribution) or to the extent such need may
be satisfied from other resources that are reasonably available to the
Participant. A Participant's resources will be deemed to include those
assets of his or her spouse and minor children that are reasonably
available to the Participant. A distribution will be deemed necessary to
satisfy a financial need described in subsection (b) if the Participant
represents in the manner prescribed by the Committee that the need cannot
be relieved--
(1) through reimbursement or compensation by insurance or otherwise,
(2) by reasonable liquidation of the Participant's assets to the extent
that such liquidation would not itself cause an immediate and heavy
financial need,
(3) by cessation of voluntary contributions under this Plan or any other
deferred compensation plan, or
(4) by other distributions or nontaxable loans from plans or by borrowing
from commercial sources on reasonable commercial terms.
7.5 In-Service Withdrawals from the Rollover Contributions Account
A Participant may request a withdrawal of amounts from the Rollover
Contributions Account at any time subject to rules concerning the frequency of
such withdrawal.
7.6 Loans
(a) Committee Authority. The Committee may adopt such rules as it may deem
necessary or appropriate to implement the provisions of this section, or
may adopt other rules for loans, consistent with applicable law and
regulations.
(b) Eligibility. Subject to subsection (d) (relating to frequency), a
Participant who is actively employed by an Employer or Affiliate shall be
eligible to request a loan for any reason pursuant to this section.
(c) Spousal Consent. If a Participant is married, a request for a loan must be
accompanied by the consent of the spouse.
(d) Frequency of Loans. The provisions of this subsection apply to all loans
unless the Committee rules provide otherwise. The Plan may make only one
loan to a Participant in any 12 calendar-month period. A Participant may
have only one General Purpose Loan and only one Home Loan may be
outstanding at the same time. No new Home Loan may be made to a Participant
unless any prior Home Loan has been fully discharged for 90 days, and no
new General Purpose Loan may be made unless any prior general purpose loan
has been fully discharged for 90 days.
(e) Term of a Loan. The term of a loan may not extend beyond the earlier of (1)
termination of employment or (2) in the case of a General Purpose Loan, the
fifth anniversary of the date of the loan, or in the case of a Home Loan,
the twentieth anniversary.
A Home Loan means a loan to be used to acquire a dwelling unit that, within
a reasonable time after the loan is made, will be used as the principal
residence of the Participant. The Plan shall require evidence that a loan
will be used for such purpose. Committee rules may deem a loan as incurred
to acquire a principal residence if expenditures to acquire the residence
are made within 90 days before or after the date that the loan is made. A
plan loan will not qualify as a Home Loan if it is used to construct,
rehabilitate, or improve a residence. A loan to repay an existing loan from
a third party will be deemed to be for a principal residence if the
proceeds of the third-party loan were used to acquire a principal residence
and the Plan loan is made within the 90-day period before or after the
expenditure to acquire the residence.
A General Purpose Loan means a loan that is not a Home Loan.
(f) Funding of a Loan; Loan Accounts. Upon the approval of a loan request, the
Plan shall liquidate all or a portion of the investments held in the
Participant's Accounts in the order prescribed by Committee rules. Any of a
Participant's Accounts may be used to fund a loan to the Participant.
If any Account to be liquidated is invested in more than one Fund, the
amount of a particular Fund to be liquidated is the product of the total
amount to be liquidated under the Account and a fraction with a numerator
equal to the amount of the Account invested in the Fund and a denominator
equal to the total balance credited to the Account.
The proceeds from the liquidation of the investments will be credited to a
Loan Account that is a subaccount of the Participant's Accounts. For the
purpose of the allocation of gains, losses, and earnings of the Trust Fund,
a Loan Account is deemed to be invested only in a loan to the Participant
and shall be increased by interest at the loan interest rate and decreased
by the portion of each payment allocable to the Loan Account. No in-service
distribution may be made from an Account in an amount that would exceed the
excess of the total balance credited to the Account over the amount of the
Loan Account under that Account.
Upon the receipt of the promissory note described below, a loan shall be
made from the Loan Account to the Participant.
(g) Loan Amount.
(1) In General. The minimum loan amount is $1,000, but the total amount
may not exceed the amount prescribed by paragraph (2).
(2) Maximum Loan Amount. The amount of a loan may not exceed the lesser
of--
(A) $50,000 reduced by the amount of the highest outstanding loan
balance in the prior 12 months, or
(B) 50 percent of the nonforfeitable amount of the Participant's
entire balance under all Accounts.
For the purpose of subparagraph (B), the balance of a Participant's
nonforfeitable Account is determined as of the most recent Valuation
Date within the 12-month period before the loan date, adjusted solely
for distributions and contributions made after such Valuation Date but
before the date of the loan.
(h) Interest. A loan shall bear a reasonable rate of interest, as determined by
the Committee, that will be fixed for the entire term of the loan. Such
rate is determined by taking into account the interest rates being charged
at the time the loan is granted on loans of a comparable nature. Unless
Committee rules provide otherwise, the interest rate for a loan requested
after the fourth day of a calendar quarter will be equal to the applicable
rate described below determined as of the last day of the calendar quarter
immediately preceding the date that the Participant's loan request is
received by the Committee. The applicable interest rate will be equal to--
(1) in the case of a General Purpose Loan, the sum of (A) the annual rate
for a five-year United States Treasury Note on the last day of the
calendar quarter immediately preceding the date that the Participant's
loan application is filed with the Plan and (B) two percentage points,
and
(2) in the case of a Home Loan, the standard lending rate for 20-year
fixed rate home mortgage loans of a major commercial bank designated
by the Committee.
The loan rate will not be changed for a calendar quarter if the foregoing
rules would produce a change in the rate of less than one-half of one
percentage point.
(i) Payments. Repayment of the loan principal and payment of the interest
thereon will be made by approximately equal payments that will permit
the loan to be fully amortized over the term of the loan.
Subject to Treasury regulations and Committee rules, the preceding
sentence will not apply to a period when a Participant is on an
authorized leave of absence without pay for up to one year.
A Participant shall make required payments by payroll deductions in
each payroll period. If a Participant's pay is insufficient to make
payments in full, the amount of the deficiency shall be paid by
personal check.
A prepayment of the entire remaining balance of the loan and accrued
interest may be made by personal check at any time without penalty. A
prepayment of a portion of the remaining balance may be made to the
extent permitted by Committee rules.
The portion of each payment that is attributable to repayment of the
principal of a loan will reduce a Participant's Loan Account under
each Account in the order that is converse to that prescribed pursuant
to subsection (c) and will be invested in accordance with the
Participant's current investment direction pursuant to section 5.1(b).
Pursuant to Code section 414(u), Committee rules may permit the
suspension of the obligation to repay a loan for a period during which
the Participant is performing services in the uniformed services of
the United States.
(j) Security and Default. A Participant's obligation to repay a loan and
interest thereon shall be secured by his or her Accounts. If a
Participant fails to make a required payment and the Committee
determines that the loan is in default, the unpaid balance of the loan
and accrued interest shall be deducted from the Loan Accounts and, if
necessary, from the remaining portion of each Account in the converse
order of that prescribed pursuant to subsection (c) until the total
amount of the unpaid balance and accrued interest has been reached.
The promissory note shall then be canceled. The amount deducted from
the Accounts shall be treated as a distribution to the Participant.
Notwithstanding the foregoing, no amount may be deducted from the
Accounts until an event that would otherwise entitle the Participant
to a distribution from that Account.
(k) Promissory Note. A loan shall be evidenced by a promissory note in
such form and containing such terms as the Committee shall direct,
subject to the provisions of this section.
Article 8. Benefit Claims and Other Payment Rules
8.1 Application for Benefits
Each person eligible for a benefit under the Plan shall apply for such benefit
in the manner prescribed by the Committee. Each such person shall also furnish
the Plan with such documents, evidence, data, or information in support of such
application as the Plan considers necessary or desirable.
8.2 Denial of Claims
If any claim for benefits under the Plan is wholly or partially denied, the
claimant shall be given notice in writing of such denial within 90 days after
receipt of the claim, setting forth the following information:
(a) the specific reason or reasons for the denial;
(b) specific reference to pertinent Plan provisions on which the denial is
based;
(c) 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;
(d) an explanation that a full and fair review by the Committee of the decision
denying the claim may be requested by the claimant or the claimant's
authorized representative by filing with the Committee, within 60 days
after such notice has been received, a written request for such review; and
(e) if such request is so filed, the claimant or the claimant's authorized
representative may review pertinent documents and submit issues and
comments in writing within the same 60-day period specified in subsection
(d) above.
If special circumstances require an extension of time beyond the 90-day period,
the claimant shall be so advised in writing within the initial 90-day period. An
extension may not exceed an additional 90 days.
The decision of the Committee shall be made promptly, and not later than 60 days
after the Committee's receipt of the request for review, unless special
circumstances require an extension of time for processing, in which case a
decision shall be rendered as soon as possible, but not later than 120 days
after receipt of the request for review. The claimant shall be given a copy of
the decision promptly. The decision 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.
8.3 Due Date for Payments
(a) General. Except as otherwise provided and subject to subsection (b) below,
payments to a Participant or Beneficiary shall be made as soon as
practicable following the completion of the valuation process for the
Valuation Date which determines the amount of the payment.
(b) Deferral to Ascertain Benefit or Locate Participant. If payment cannot be
made on a date it is required to be made because the Committee, after
making reasonable efforts, cannot locate a Participant or Beneficiary or
the amount of the payment cannot be ascertained, a payment retroactive to
the required date shall be made no later than 60 days after the earliest
date on which the amount of the payment can be ascertained and the date on
which the Participant or Beneficiary has been located.
8.4 Nonassignability
No Account or benefit under this Plan may be anticipated, assigned (either at
law or in equity), alienated or subject to attachment, garnishment, levy,
execution, or other legal or equitable process (whether voluntary or
involuntary). However, an Account or benefit may be reduced, offset, or
transferred to the extent permitted under Code section 401(a)(13), including a
reduction or offset for taxes required to be withheld, amounts assigned by a
qualified domestic relations order, and amounts required to be paid to the Plan
pursuant to a judgment, order, decree, settlement agreement or other order to
pay that provides for an offset of benefits payable under the Plan.
The Committee shall establish a procedure to determine the qualified status of a
domestic relations order and to administer distributions under a qualified
order.
8.5 Missing Persons
If the Committee is unable to locate a proper payee within one year after an
Account becomes payable, the Committee may treat the balance credited to the
Account as a forfeiture; however, if a claim for benefits is subsequently
presented by a person entitled to a payment, the forfeited amount shall be
recredited to the Account upon verification of the claim, except for those
amounts that have been paid pursuant to an escheat or other applicable law.
Forfeitures restored under this section shall be paid from current forfeitures,
and if insufficient, from an additional Employer Contribution.
8.6 Incapacity
If, in the opinion of the Committee, any Participant (or Beneficiary) becomes
unable to handle properly any property distributable under the Plan, the
Committee may make any arrangement for distribution on such Participant's behalf
that it determines will be beneficial to such Participant, including (without
limitation) distribution to such Participant's guardian, conservator, spouse, or
dependent, and such distribution so made shall be a complete discharge of the
liabilities of the Plan with respect to the Participant.
8.7 Withholding Taxes
The Employer or Trustee may withhold from a Participant's compensation or any
payment under this Plan any taxes required to be withheld with respect to
contributions or benefits under this Plan and such sum as the Employer or
Trustee may reasonably estimate as necessary to cover any taxes for which they
may be liable and which may be assessed with respect to contributions or
benefits under this Plan.
8.8 Direct Rollovers; Withholding
(a) Direct Rollovers.
(1) In General. In the case of a distribution (or a withdrawal) that would
be an eligible rollover distribution within the meaning of Code
section 402 if made to the Participant or Beneficiary ("distributee"),
the distributee may elect (subject to spousal consent requirements if
applicable) to the extent required by law and regulation and in the
manner prescribed by the Committee, to have such distribution paid
directly to an eligible retirement plan (as defined in Code section
401(a)(31)). The amount of such direct rollover shall be limited to
the amount of the eligible rollover distribution that would otherwise
be includible in the distributee's gross income in the absence of a
direct transfer and without regard to the rollover rules of Code
sections 402 and 403. A distributee may make an election pursuant to
this section only after the distributee has received the notice
prescribed by paragraph (2).
(2) Notice. The Committee shall furnish to a distributee a notice in
writing or other media permitted by IRS regulations and at the time
prescribed in paragraph (3) that describes--
(A) the rules under which the distributee may elect to have an
eligible rollover distribution paid in a direct rollover to an
eligible retirement plan;
(B) the rules that require withholding of tax on the eligible
rollover distribution if it is not paid in a direct rollover;
(C) the rules under which the distributee will not be subject to tax
if the distribution is contributed to an eligible retirement plan
within 60 days of the distribution; and
(D) if applicable, special rules regarding the taxation of the
distribution as specified in Code sections 402(d) and (e)
(relating to income averaging and other tax rules).
(3) Notification Period. Except as provided by regulations, the notice
required by paragraph (2) shall be furnished to the distributee under
rules comparable to those specified in section 6.4(b) (concerning the
notice of available forms of payment). The Plan shall make no payment
for 30 days following the date the distributee has been furnished with
the notice unless the distributee, after receipt of the notice, has
affirmatively elected to make or not to make a direct rollover. A Plan
may not make a distribution before the date benefits are otherwise
payable under the rules of the Committee.
(b) Withholding. In the case of an eligible rollover distribution that is not
directly transferred to an eligible retirement plan pursuant to subsection
(a), the Plan shall reduce the amount of the distribution by the amount of
the tax required to be withheld by law and regulations.
Article 9. Administration
9.1 The Committee and the Trustee
The Board of Directors or its Chairman shall appoint a Committee (also known as
the Employee Benefits Committee) consisting of three or more members who shall
serve at the pleasure of the Board of Directors and its Chairman. The Committee
is the "named fiduciary" and the "plan administrator" as defined under ERISA.
The Committee shall have fiduciary responsibility for the general operations of
the Plan. The Trustee shall manage and control the assets of the Trust Fund
except to the extent that the Committee or its delegate, pursuant to section
10.1, directs the investment and management of the Trust Fund or to the extent
that the Committee selects one or more investment managers to invest and manage
the Trust Fund. The Committee may appoint or designate other fiduciaries and may
allocate fiduciary responsibilities among fiduciaries, including members of the
Committee. Except as provided by law, the Sponsor and its Affiliates shall have
no responsibility for the payment of benefits under the Plan and no
responsibility for the administration or investment of the Trust Fund.
9.2 Employer Subcommittees
The Committee may designate a subcommittee to carry out any of the Committee's
responsibilities with respect to a Plan.
9.3 Compensation and Expenses
If a member of the Committee (or a subcommittee) is an Employee of the Sponsor
or an Affiliate, the member will serve without compensation for his or her
services as a member. The Sponsor may reimburse the member for expenses properly
and actually incurred.
9.4 Manner of Action
A majority of the members of the Committee constitute a quorum for the
transaction of business. All resolutions adopted, and other actions taken by the
Committee shall be by vote of a majority of those present at a meeting and
constituting a quorum. Upon concurrence in writing of a majority of the members,
action of the Committee may be taken without a meeting.
9.5 Chairman, Secretary, Employment of Specialists
The members of the Committee shall elect one of the members as Chairman and
shall elect a Secretary who may, but need not, be a member of the Committee.
They may authorize one or more of the members or any agent to execute or deliver
any instrument in their behalf, and may employ such counsel, auditors, and other
specialists and such clerical and other services as they may require in carrying
out the provisions of the Plan.
9.6 Administration
(a) In General. The Committee is responsible for administering the Plan,
including instructing the Trustee concerning all payments that should be
made out of the Trust Fund pursuant to the provisions of the Plan. The
Committee shall have all such powers as may be necessary to carry out the
provisions of the Plan and may, from time to time, establish rules for
administering the Plan and transacting the Plan's business. In exercising
its authority, the Committee may not discriminate in favor of or against
any Participant in a manner prohibited by law. The Plan must be operated
for the exclusive benefit of Participants and Beneficiaries.
(b) Findings of Fact and Interpretation. The Committee shall have the exclusive
right to make any finding of fact necessary or appropriate for any purpose
under the Plan including, but not limited to, the determination of the
eligibility for, and the amount of, any benefit payable under the Plan. The
Committee shall have the exclusive right to interpret the terms and
provisions of the Plan and to determine any and all questions arising under
the Plan or in connection with its administration, including, without
limitation, the right to remedy or resolve possible ambiguities,
inconsistencies, or omissions, by general rule or particular decision. To
the extent permitted by law, all findings of fact, determinations,
interpretations, and decisions of the Committee shall be conclusive and
binding upon all persons having or claiming to have any interest or right
under the Plan.
(c) Reports and Filings. The Committee shall make all reports or other filings
necessary to meet the reporting and disclosure requirements that are the
responsibility of "plan administrators" under ERISA.
(d) Records. All resolutions, proceedings, acts, and determinations of the
Committee shall be recorded by the Secretary or under his or her
supervision, and all such records, together with such documents and
instruments as may be necessary for the administration of the Plan, shall
be preserved in the custody of the Secretary.
(e) Electronic and Other Media. Notwithstanding any provision of the Plan to
the contrary, to the extent permitted by law, the Committee may use
electronic media in addition to or in lieu of other media, as it deems
necessary or appropriate, to conduct transactions, maintain records, make
disclosures, reports, and filings, and to otherwise administer the Plan.
(f) Automatic and Default Elections. To the extent permitted by law, Committee
rules may provide that a Participant (or Beneficiary) election will remain
in force until the Participant notifies the Committee (in the manner and
time prescribed by the Committee) of a modification of such a continuing
election. If the Plan requires an affirmative election, the Committee rules
may specify that a failure to make a timely affirmative election will be
deemed to be a direction to the Plan to take such action specified by the
Committee rules. If the Committee adopts a rule pursuant to this
subsection, it shall be communicated to the affected Participants and
Beneficiaries in a manner that assures timely receipt and a reasonable
period for the Participant to modify a continuing election or to make an
affirmative election.
9.7 Expenses of Administration
The compensation of the Trustee, any reasonable and proper attorneys' or
management fee incurred in the administration of the Trust Fund or other
reasonable and proper Plan expenses shall be paid pursuant to section 5.3.
9.8 Indemnity for Liability
To the maximum extent allowed by law and to the extent not otherwise
indemnified, the Sponsor shall indemnify the members (and former members) of the
Committee, and any other current or former officer, director, or employee of the
Sponsor or an Affiliate, against any and all claims, losses, damages, expenses,
including counsel fees, incurred by such persons and any liability, including
any amounts paid in settlement with the Sponsor's approval, arising from such
person's action or failure to act.
Article 10. Financing
10.1 Trust Fund and Investment Policy
(a) General. The Sponsor shall maintain a Trust Fund as a part of the Plan in
order to implement and carry out the provisions of the Plan and to finance
the benefits under the Plan, by entering into one or more Trust Agreements.
Any Trust Agreement is designated as, and shall constitute, a part of a
Plan, and all rights that may accrue to any person under a Plan shall be
subject to all the terms and provisions of such Trust Agreement. The
Sponsor may modify any Trust Agreement from time to time to accomplish the
purpose of a Plan and may replace the Trustee and appoint a successor
Trustee. The assets of a Trust Fund shall not be used for or diverted to
purposes other than the exclusive benefit of Participants and
Beneficiaries.
(b) Investment Policy. The Committee shall establish an investment policy for
the investment of the Trust Fund in accordance with ERISA and the
provisions of the Plan. The Committee shall have the authority and
discretion to direct the Trustee, both generally and specifically, with
respect to the management and control of the Trust Fund and to appoint an
investment manager pursuant to subsection (c). The Trustee shall be subject
to the proper directions of the Committee that are made in accordance with
the terms of the Plan and that are not contrary to ERISA. The Committee
shall periodically review the performance of the Trustee and any investment
managers.
(c) Investment Manager. The Committee shall have the authority to select,
appoint, and monitor the performance of one or more investment managers
(within the meaning of ERISA section 3(38)) to manage or advise as to the
investment of all or any portion of the Trust Fund. Each such investment
manger shall satisfy the requirements of ERISA and shall act pursuant to
the terms of the applicable investment management agreement or investment
advisory agreement. An investment manager shall acknowledge in writing
delivered to the Plan and to the trustee its appointment as a fiduciary of
the Trust Fund. The investment manager may be terminated at will.
An investment manager appointed under this section shall have sole
investment responsibility for that portion of the Trust Fund which it is
appointed to manage. Other fiduciaries of the Plan shall be under no duty
to question any direction or lack of direction of any investment manager,
but may act, and shall be fully protected in acting in accordance with each
such direction of an investment manager. Other fiduciaries of the Plan
shall have no responsibility for the investment of any asset of the Trust
Fund, the management of which has been delegated to an investment manager,
or liability for any loss to or diminution in value of the Trust Fund
resulting from any action directed, taken, or omitted by an investment
manager.
10.2 Contributions
An Employer shall make such contributions to the Trust Fund as are required by
the provisions of the Plan, subject to the right of the Sponsor to terminate the
Plan or the Employer to withdraw from the Plan. Forfeitures arising under the
Plan for any reason shall be used as soon as possible to reduce the Employer's
contributions under the Plan.
10.3 Nonreversion
An Employer shall have no right, title, or interest in the contributions made to
the Trust Fund under the Plan and no part of the Trust Fund may revert to an
Employer, except that--
(a) If the Internal Revenue Service, upon an initial application, determines
that the Plan does not satisfy Code section 401(a), the Trust Fund shall
revert to the Employers within one year after such adverse determination;
provided that the application for initial qualification is filed by the
time prescribed by law for filing the Employers' return for the taxable
year in which the Plan is adopted, or such later date as prescribed by the
Internal Revenue Service.
(b) If a contribution is made to the Trust Fund by an Employer by a mistake of
fact, then such contribution (adjusted for losses but not earnings) may be
returned to the Employer within one year after the payment of the
contribution.
(c) All contributions are contingent on their deductibility. If a part or all
of a contribution is disallowed as a deduction under Code section 404, then
to the extent the contribution is disallowed, it shall be returned to the
Employer within one year after the disallowance (adjusted for losses but
not earnings).
10.4 Transfer of Assets and Liabilities
If a Participant in this Plan becomes a participant in another qualified defined
contribution plan maintained by the Employer or Affiliate, assets allocated to
the Participant's Account under this Plan may be transferred, at the direction
of the Committee, to his or her account under such other qualified plan. The
Plan shall have no further obligation to the Participant.
Article 11. Top-Heavy Provisions
11.1 Application of Top-Heavy Provisions
(a) Single Plan Determination. Except as provided in subsection (b)(2), if as
of a Determination Date, the sum of the amount of the Section 416 Accounts
of Key Employees and the Beneficiaries of deceased Key Employees exceeds 60
percent of the amount of the Section 416 Accounts of all Participants and
their Beneficiaries other than former Key Employees and their
Beneficiaries, the Plan is top-heavy and the provisions of this Article
shall become applicable.
If any individual has not performed services for an Employer or an
Affiliate at any time during the five-year period ending on the
Determination Date, the Section 416 Account of such individual or the
individual's Beneficiary shall be excluded from all computations under this
Article. However, if such an individual returns to employment with an
Employer or Affiliate, his or her Section 416 Account shall be included in
calculations under this section. The Section 416 Account of an individual
who was a Key Employee but is not a Key Employee for the Plan Year
containing the Determination Date and the preceding four Plan Years or the
Section 416 Account of the Beneficiary of such an individual shall be
excluded from all computations under this Article.
(b) Aggregation Group Determination.
(1) If as of a Determination Date the Plan is part of an Aggregation Group
which is top-heavy, the provisions of this Article shall become
applicable. Top-heaviness for the purpose of this subsection shall be
determined with respect to the Aggregation Group in the same manner as
described in subsection (a) except that if the Aggregation Group
includes a defined benefit plan, the Section 416 Account shall include
the present value of the accrued benefit of a participant or a
beneficiary under such plan.
(2) If the Plan is top-heavy under subsection (a), but the Aggregation
Group is not top-heavy, this Article shall not be applicable.
(c) Committee. The Committee shall have responsibility to make all calculations
to determine whether the Plan is top-heavy.
11.2 Definitions
(a) "Aggregation Group" means the Plan and all other plans (including a frozen
plan) maintained by any Employer and its Affiliates that cover a Key
Employee or his or her Beneficiary and any other plan that enables a plan
covering a Key Employee or the Beneficiary to meet the requirements of Code
section 401(a)(4) or 410. A terminated plan shall be included in an
Aggregation Group if it was maintained by an Employer or an Affiliate
within the last five years ending on the Determination Date for the Plan
Year in question and would, but for the fact it was terminated, meet the
conditions of the preceding sentence. In addition, at the election of the
Committee, the Aggregation Group may be expanded to include any other
qualified plan maintained by any Employer or Affiliate if such expanded
Aggregation Group meets the requirements of Code sections 401(a)(4) and
410.
(b) "Determination Date" means the last day of the Plan Year immediately
preceding the Plan Year for which top-heaviness is to be determined.
(c) "Key Employee" means an Employee (or a former or deceased Employee) who,
for the Plan Year containing the Determination Date or any of the four
preceding Plan Years, is--
(1) an officer of an Employer or an Affiliate having annual Compensation
for a Plan Year greater than 50 percent of the amount in effect under
Code section 415(b)(1)(A) for the calendar year in which the Plan Year
ends; provided, however, that no more than the lesser of--
(A) 50 Employees, or
(B) the greater of (i) three Employees or (ii) 10 percent of the
greater number of Employees of the Employer and Affiliates for
the Plan Year containing the Determination Date and the preceding
four Plan Years;
shall be treated as officers, and such officers shall be those with
the highest annual Compensation in the five-year period;
(2) one of the ten Employees having an annual Compensation in excess of
the amount in effect under Code section 415(c)(1)(A) and owning (or
considered as owning within the meaning of Code section 318) both more
than a one-half of 1 percent interest in the Employer and the largest
interests in the Employer;
(3) a 5-percent owner of an Employer;
(4) a 1-percent owner of an Employer having an annual Compensation of more
than $150,000.
For the purpose of determining the number of officers to be taken into
account under subsection (c)(1), Employees described in Code section
414(q)(8) shall be excluded. For the purpose of subsection (c)(1)(B)(ii),
if 10 percent of the number of Employees is not an integer, the number
shall be increased to the nearest integer. For the purpose of subsection
(c)(2), if two Employees have the same interest in the Employer, the
Employee having the greater annual Compensation from the Employer shall be
treated as having the greater interest. For the purposes of subsection
(c)(3) and (c)(4), ownership shall be determined in accordance with Code
section 416(i)(1)(B) and (C).
(d) "Section 416 Account" means the excess of (1) over (2) where--
(1) is the sum of--
(A) the amount credited to a Participant's or Beneficiary's Account
under the Plan as of the most recent Valuation Date occurring
within the 12-month period ending on the Determination Date (or
the account under another qualified defined contribution plan
that is part of an Aggregation Group) including uncontributed
amounts due as of such Valuation Date but which are actually
contributed on or before the Determination Date;
(B) the present value of the accrued benefit credited as of a
Determination Date to a Participant or Beneficiary under a
qualified defined benefit plan that is part of an Aggregation
Group; and
(C) the amount of distributions to the Participant or Beneficiary
during the five-year period ending on the Determination Date,
including a distribution under a terminated plan that, if it had
not been terminated, would have been required to be included in
an Aggregation Group, and a distribution of Employee
contributions, but excluding a distribution which is a tax-free
rollover contribution (or similar transfer) that is not initiated
by the Participant or that is contributed to a plan which is
maintained by an Employer or an Affiliate; and
(2) is the amount of a rollover contribution (or similar transfer) which
is accepted by the Plan (or a plan forming part of an Aggregation
Group) after December 31, 1983, and which was initiated by the
Participant and derived from a plan not maintained by the Employer or
an Affiliate, and the earnings on such rollover contribution.
The Account of a Participant who was a Key Employee, but is not a Key
Employee for the Plan Year containing the Determination Date and the
preceding four Plan Years or the Account of a Beneficiary of such a
Participant is not a Section 416 Account and shall be excluded from all
computations under this Article.
11.3 Minimum Contributions
(a) General. If the Plan is determined to be top-heavy with respect to a Plan
Year, in the case of each Participant who is not a Key Employee and is an
Eligible Employee on the last day of the Plan Year, the sum of Employer
contributions and forfeitures under all qualified defined contribution
plans allocated to the accounts of such Participants in the Aggregation
Group shall not be less than 3 percent of such Participant's Compensation.
For the purpose of the preceding sentence, Employer Matching Contributions
used to satisfy the safe harbor requirements of Code section 401(k)(12) and
401(m)(11) and Before-Tax Contributions may not be taken into account as
Employer contributions.
This section shall not be applicable with respect to a Participant who is
also covered under a defined benefit plan maintained by an Employer or an
Affiliate that provides the minimum benefit specified by Code section
416(c)(1).
(b) Exception. The contribution rate specified in subsection (a) shall not
exceed the percentage at which Employer contributions (including Before-Tax
Contributions) and forfeitures are allocated under the plans of the
Aggregation Group to the account of the Key Employee for whom such
percentage is the highest for the Plan Year. For the purpose of this
subsection, the percentage for each Key Employee shall be determined by
dividing the Employer contributions and forfeitures for the Key Employee by
the amount of his Compensation for the year.
11.4 Top-Heavy Limit on Annual Additions
(a) General. If the Plan is determined to be top-heavy for a Plan Year,
sections 4.9(b)(2)(A) and 4.9(b)(3)(A) shall be applied by
substituting "1.0" for "1.25" in determining a Participant's Defined
Benefit Fraction and Defined Contributions Fraction.
(b) Exceptions. Subsection (a) shall not be applicable if--
(1) the amount of Employer contributions (other than elective
contributions excludable from income under Code section 402(e)(3) and
matching contributions) and forfeitures allocated under section 11.3
to the accounts of each Participant who is not a Key Employee is not
less than 4 percent of such Participant's Compensation; and
(2) the sum of the Section 416 Accounts of Key Employees and the
Beneficiaries of deceased Employees does not exceed 90 percent of the
sum of the amount of Section 416 Accounts of all Participants and
their Beneficiaries other than former Key Employees and their
Beneficiaries.
Notwithstanding the foregoing, subsection (a) does not apply to a
Participant who is also covered under a defined benefit plan maintained by
an Employer or an Affiliate that satisfies the provisions of Code section
416(h)(2)(B) and that provides the benefit specified by Code section
416(c)(1) as modified, to the extent applicable, by Code section
416(h)(2)(A)(ii).
(c) Transitional Rule. If, but for this subsection (c), subsection (a) would
begin to apply with respect to the Plan, the application of subsection (a)
shall be suspended with respect to a Participant so long as there are--
(1) no Employer contributions, forfeitures, or voluntary nondeductible
contributions allocated to such Participant, and
(2) no accruals under a qualified defined benefit plan for such
Participant.
Article 12. Amendment, Termination, and Merger
12.1 Amendments to Comply with Law
The Sponsor reserves the right to make by amendment such changes in, additions
to, and substitutions for the provisions of the Plan, to take effect
retroactively or otherwise, as is deemed necessary or advisable for the purpose
of conforming such Plans to Code section 401 or to any other present or future
federal law relating to trusts and plans of this or similar nature, and to the
administrative regulations promulgated pursuant to the Code and such laws.
12.2 Other Amendments and Termination
The Sponsor reserves the right to amend the Plan at any time for any purpose it
deems desirable including, but not by way of limitation, to change or modify
contributions under the Plan, and to change any provision relating to the
distribution or payment, or both, of any account balances. The Sponsor further
reserves the right to terminate a Plan at any time. No distribution may be made
on account of the termination of the Plan except as permitted by Code section
401(k)(10) and specific provisions of the Plan.
12.3 Authority to Amend
The Sponsor may amend the Plan at any time by a written resolution or other
written instrument approved by the Board of Directors. The Committee may amend
the Plan through a written resolution or other written instrument , without
submitting such amendment to the Board of Directors for approval if the
amendment does not--
(a) deprive the Sponsor or the Employers of their ability to make tax
deductible contributions to the Plan pursuant to the Code;
(b) violate section 12.5 (concerning the exclusive benefit and anticutback
rules);
(c) have the effect of terminating the Plan;
(d) increase the cost of providing benefits under the Plan by an amount
estimated to be more than $200,000 for each of the first five full Plan
Years that the amendment would be effective, unless the amendment is for
conforming the Plan with legislation, governmental regulations, rules, or
interpretive bulletins expressing a public policy or condition with which
the Plan must comply;
(e) revise this Article to increase the Committee's authority to amend the Plan
or derogate from the authority of the Board of Directors; and
(f) confer any special advantage whether economic or otherwise, whether present
or contingent, on the Committee or its members.
12.4 Form of Amendment
Any amendment shall be made by an instrument in writing, signed by a duly
authorized officer or officers of the Sponsor (as appropriate) certifying that
the amendment has been authorized by the Board of Directors or the Committee.
12.5 Limitations on Amendments
The provisions of this Article are subject to the following restrictions:
(a) No amendment may operate either directly or indirectly to give an Employer
an interest in a fund or property held by the Trustee under the terms of
this Plan, or to permit corpus or income of the Trust Fund to be used for
or diverted to purposes other than the exclusive benefit of persons who are
Participants or Beneficiaries.
(b) Except as permitted by Treasury regulations or to the extent necessary to
conform to laws and regulations, no amendment may operate either directly
or indirectly to deprive a Participant of the value of his or her
nonforfeitable interest, the value of the Account as of the date of the
amendment, or eliminate an optional form of benefit with respect to the
Account value immediately before the later of the adoption date or the
effective date of amendment, adjusted for subsequent earnings, gains, and
losses attributable to such values.
12.6 Merger, Consolidation, or Transfer
No merger or consolidation of Plan with, or any transfer of assets or
liabilities of the Plan to or from, any other plan may occur unless each
Participant in the Plan would be entitled to receive a benefit immediately after
the merger, consolidation, or transfer (if the Plan then terminated) which is
equal to or greater than the benefit the Participant would have been entitled to
receive immediately before the merger, consolidation, or transfer (if the Plan
had then terminated).
* * * * * * * * * *
<PAGE>
In Witness Whereof, the duly authorized officers of PCS Administration (USA),
Inc. have executed this instrument as of January 1, 1999.
PCS Administration (USA), Inc.
Attest:
By ___________________________
___________________________
By ____________________________
____________________________ (Corporate Seal)
<PAGE>
Appendix A. The Employers
The Employers under this Plan are--
PCS Administration (USA), Inc.
PCS Phosphate Company, Inc.
PCS Sales (USA), Inc.
White Springs Agricultural Chemicals, Inc.
Moab Salt, Inc.
PCS Nitrogen, Inc. and PCS Nitrogen Payroll Corporation, effective as of
January 1, 2000
<PAGE>
Supplement A. PCS Phosphate Company, Inc.
A.1 Transfer Accounts
(a) In General. For each Participant who had a balance credited to his or her
Employer Matching Contributions Account under this Plan on December 31,
1998, a separate Account ("Phosphate Transfer Account") will be maintained
with respect to such balance, as adjusted for subsequent earnings, gains,
and losses. Such a Participant may make in-service withdrawals from the
Phosphate Transfer Account as provided in subsection (b).
(b) In-Service Withdrawals from the Transfer Account. A Participant described
in subsection (a) may make an in-service withdrawal from the Employer
Matching Contributions Account that is part of a Phosphate Transferee
Account after--
(1) age 59 1/2 or a Disability, as provided in section 7.1(a), or
(2) the fifth anniversary of the date the Participant started
participation in the Plan.
(c) Oxy Transfer Accounts. In addition to the Lump Sum Distribution and
Installment Payout forms of payment made available under section 6.3(a), a
Participant who had a balance credited to his or her Oxy Transfer Account
(assets transferred from the Occidental Petroleum Corporation Savings Plan)
under the Plan on December 31, 1998 may elect payment under one of the
following forms, subject to the limitations imposed by section 6.3:
(1) a Partial Cash Distribution in a specified dollar amount. A
Participant may request a Partial Cash Distribution only after five
months have elapsed since the last such request by the Participant has
been processed;
(2) a Single Life Annuity;
(3) a 50%, 75%, or 100% Joint and Survivor Annuity; or
(4) a Life and 120 Months Certain Annuity.
<PAGE>
Supplement B. PCS Sales (USA), Inc.
B.1 Forms of Payment
(a) In General. This section applies to a Participant who had a balance
credited to his or her account under the PCS Sales (USA), Inc. 401(k) Plan
as of December 31, 1998 that was transferred to this Plan.
(b) Normal Form of Payment. If this section applies to a Participant, the
normal form of payment for a married Participant is a 50 percent Joint and
Spouse's Annuity. For an unmarried Participant, the normal form is a Single
Life Annuity. These normal forms apply to the Participant's entire Account
balance.
(c) Optional Forms of Payment. In lieu of the normal form of payment, a
Participant covered by this section may elect, subject to the limitations
imposed by section 6.3--
(1) a Lump Sum Distribution,
(2) an Installment Payout,
(3) a Single Life Annuity, or
(4) a Joint and Survivor Annuity.
(d) In-Service Withdrawals and Loans. A Participant may make in-service
withdrawals from his or her Accounts as provided under the Plan. However,
if a Participant is married, the Plan may make an in-service distribution
or make a loan to the Participant only if the spouse furnishes the Plan
with his or her written consent to the distribution or the loan.
(e) Preretirement Spouse's Annuity. If the Participant dies before the Annuity
Starting Date, the Preretirement Spouse's Annuity under section 6.2(c) will
apply unless the Participant (with the consent of the spouse) has elected
otherwise, or the if the spouse after the Participant's death, elects a
Lump Sum Distribution.
CONSENT OF INDEPENDENT CHARTERED ACCOUNTANTS
POTASH CORPORATION OF SASKATCHEWAN INC.
We hereby consent to the incorporation of our report dated February 10, 1999,
incorporated by reference in the Annual Report on Form 10-K of Potash
Corporation of Saskatchewan Inc. ("PCS") for the year ended December 31, 1998,
into this Registration Statement on Form S-8.
/s/ Deloitte & Touche, L.L.P.
- -----------------------------
DELOITTE & TOUCHE L.L.P.
Chartered Accountants
Saskatoon, Saskatchewan, Canada
December 29, 1999
